-----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, O9gXVxt3mNHoZ85/l/Lc87pAyWuM963dvaflKle4j8cbMC1KXRIsScFhY+GiBjAf 0VfVFApO7tLUrAvubX52yQ== 0001036050-98-001167.txt : 19980714 0001036050-98-001167.hdr.sgml : 19980714 ACCESSION NUMBER: 0001036050-98-001167 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 30 FILED AS OF DATE: 19980713 EFFECTIVENESS DATE: 19980713 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UAM FUNDS TRUST CENTRAL INDEX KEY: 0000924727 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 043236699 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 033-79858 FILM NUMBER: 98665181 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 811-08544 FILM NUMBER: 98665182 BUSINESS ADDRESS: STREET 1: 73 TREMONT STREET STREET 2: 8TH FLOOR CITY: BOSTON STATE: MA ZIP: 02108 BUSINESS PHONE: 8006387983 MAIL ADDRESS: STREET 1: 73 TREMONT STREET STREET 2: 8TH FLOOR CITY: BOSTON STATE: MA ZIP: 02108 FORMER COMPANY: FORMER CONFORMED NAME: REGIS FUND II DATE OF NAME CHANGE: 19940606 485BPOS 1 FORM N-1A As filed with the Securities and Exchange Commission on July 17, 1998 Securities Act File No. 33-79858 Investment Company Act of 1940 File No. 811-8544 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [_] POST-EFFECTIVE AMENDMENT NO. 24 [X] and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_] AMENDMENT NO. 25 [X] UAM FUNDS TRUST (Exact Name of Registrant as specified in Charter) c/o United Asset Management Corporation One International Place Boston, Massachusetts 02110 (Address of Principal Executive Offices) Registrant's Telephone Number (617) 330-8900 Michael E. DeFao, Secretary UAM Fund Services, Inc. 211 Congress Street Boston, Massachusetts 02110 (Name and Address of Agent for Service) --------------------------------------- COPY TO: Audrey C. Talley, Esq. Drinker Biddle & Reath LLP Philadelphia National Bank Building 1345 Chestnut Street Philadelphia, PA 19107-3469 IT IS PROPOSED THAT THIS FILING BECOME EFFECTIVE (CHECK APPROPRIATE BOX): [_] Immediately upon filing pursuant to Paragraph (b) [X] on July 17, 1998, pursuant to Paragraph (b) [_] 60 days after filing pursuant to paragraph (a) (1) [_] on (date) pursuant to paragraph (a) (1) [_] 75 days after filing pursuant to Paragraph (a) (2) [_] on (date) pursuant to Paragraph (a) (2) of Rule 485. PART A UAM FUNDS TRUST The following Prospectuses are included in this Post-Effective Amendment No. 24 filed on July 17, 1998: . BHM&S Total Return Bond Portfolio Institutional Class Shares . BHM&S Total Return Bond Portfolio Institutional Service Class Shares . Chicago Asset Management Intermediate Bond Portfolio Institutional Class Shares . Chicago Asset Management Value/Contrarian Portfolio Institutional Class Shares . FPA Crescent Portfolio Institutional Class Share . FPA Crescent Portfolio Institutional Service Class Shares . Hanson Equity Portfolio Institutional Class Shares . Jacobs International Octagon Portfolio Institutional Class Shares . MJI International Equity Portfolio Institutional Class Shares . MJI International Equity Portfolio Institutional Service Class Shares . TJ Core Equity Portfolio Institutional Service Class Shares The following Prospectuses are contained in Post-Effective Amendment No.23 filed July 2, 1998: . Clipper Focus Portfolio Institutional Class Shares . Clipper Focus Portfolio Institutional Service Class Shares The following Prospectus is contained in Post-Effective Amendment No.22 filed June 24, 1998: . PR Mid Cap Growth Portfolio Institutional Class Shares The following Prospectuses are contained in Post-Effective Amendment No.21 filed June 19, 1998: . Heitman Real Estate Portfolio Institutional Class Shares . Heitman Real Estate Portfolio Advisor Class Shares The following Prospectus is contained in Post-Effective Amendment No.18 filed January 23, 1998: . Cambiar Opportunity Portfolio Institutional Class Shares The following Prospectus is contained in Post-Effective Amendment No. 2 filed on November 25, 1994: . Dwight Principal Preservation Portfolio Institutional Class Shares PART B UAM FUNDS TRUST The following Statements of Additional Information are included in this Post- Effective Amendment No.24 filed on July 17, 1998: . BHM&S Total Return Bond Portfolio Institutional Class Shares and Institutional Service Class Shares . Chicago Asset Management Intermediate Bond Portfolio Institutional Class Shares and Chicago Asset Management Value/Contrarian Portfolio Institutional Class Shares . FPA Crescent Portfolio Institutional Class Share and Institutional Service Class Shares . Hanson Equity Portfolio Institutional Class Shares . Jacobs International Octagon Portfolio Institutional Class Shares . MJI International Equity Portfolio Institutional Class Shares and Institutional Service Class Shares . TJ Core Equity Portfolio Institutional Service Class Shares The following Statement of Additional Information is contained in Post-Effective Amendment No. 23 filed July 2, 1998: . Clipper Focus Portfolio Institutional Class Shares and Institutional Service Class Shares The following Statement of Additional Information is contained in Post-Effective Amendment No. 22 filed June 24, 1998: . PR Mid Cap Growth Portfolio Institutional Class Shares The following Statement of Additional Information is contained in Post-Effective Amendment No. 21 filed June 19, 1998: . Heitman Real Estate Portfolio Institutional Class Shares and Advisor Class Shares The following Statement of Additional Information is contained in Post-Effective Amendment No. 18 filed January 23, 1998: . Cambiar Opportunity Portfolio Institutional Class Shares The following Statement of Additional Information is contained in Post-Effective Amendment No. 2 filed on November 25, 1994: . Dwight Principal Preservation Portfolio Institutional Class Shares UAM Funds Prospectus July 17, 1998 BHM&S Total Return Bond Portfolio Institutional Class Shares [LOGO OF UAM FUNDS APPEARS HERE] TABLE OF CONTENTS Fund Expenses............................................................... 1 Prospectus Summary.......................................................... 3 Risk Factors................................................................ 4 Financial Highlights........................................................ 5 Investment Objective........................................................ 6 Investment Policies......................................................... 6 Other Investment Policies................................................... 7 Investment Limitations...................................................... 13 Purchase of Shares.......................................................... 14 Redemption of Shares........................................................ 18 Shareholder Services........................................................ 20 Valuation of Shares......................................................... 22 Performance Calculations.................................................... 22 Dividends, Capital Gains Distributions and Taxes............................ 23 Investment Adviser.......................................................... 24 Adviser's Historical Performance............................................ 26 Administrative Services..................................................... 28 Distributor................................................................. 28 Portfolio Transactions...................................................... 29 General Information......................................................... 29 UAM Funds -- Institutional Class Shares..................................... 32
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO INSTITUTIONAL CLASS SHARES - ------------------------------------------------------------------------------- PROSPECTUS -- JULY 17, 1998 UAM Funds Trust (the "Fund") is an open-end investment company known as a "mutual fund." The Fund consists of multiple series (known as "Portfolios"), each of which has different investment objectives and policies. The BHM&S To- tal Return Bond Portfolio currently offers two separate classes of shares: In- stitutional Class Shares and Institutional Service Class Shares ("Service Class Shares"). Shares of each class represent equal, pro-rata interests in a Portfolio and accrue dividends in the same manner except that Service Class Shares bear fees payable by the class to financial institutions for services they provide to the owners of such shares. The securities offered in this Pro- spectus are Institutional Class Shares of one diversified, no-load Portfolio of the Fund managed by Barrow, Hanley, Mewhinney & Strauss, Inc. BHM&S TOTAL RETURN BOND PORTFOLIO. BHM&S Total Return Bond Portfolio (the "Portfolio") seeks to provide maximum long-term total return consistent with reasonable risk to principal by investing in investment grade fixed income se- curities of varying maturities. Income return is expected to be a predominant portion of the Portfolio's total return. Any capital return on the Portfolio is dependent upon, among other factors, interest rate changes as well as the average maturity and duration of the Portfolio. The Adviser believes that by investing in undervalued securities with above average effective yields and capital appreciation potential, the Portfolio will generate superior returns over the long term while minimizing volatility and, therefore, downside risk. There can be no assurance that the Portfolio will achieve its stated objec- tive. Keep this Prospectus for future reference. It contains information that you should know before you invest. A "Statement of Additional Information" ("SAI") containing additional information about the Fund has been filed with the Secu- rities and Exchange Commission ("SEC"). The SAI is dated July 17, 1998 and has been incorporated by reference into this Prospectus. For a free copy of the SAI contact the UAM Funds Service Center at 1-800-638-7983. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FUND EXPENSES The following table illustrates expenses and fees that a shareholder of the Portfolio's Institutional Class Shares will incur. The Fund does not charge transaction fees. However, transaction fees may be charged if a broker-dealer or other financial intermediary deals with the Fund on your behalf. (See "PUR- CHASE OF SHARES.") SHAREHOLDER TRANSACTION EXPENSES
INSTITUTIONAL CLASS SHARES ------------- Sales Load Imposed on Purchases................................ NONE Sales Load Imposed on Reinvested Dividends..................... NONE Deferred Sales Load............................................ NONE Redemption Fees................................................ NONE Exchange Fee................................................... NONE
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) Investment Advisory Fees (After Fee Waiver)........................... 0.18% 12b-1 Fees............................................................ NONE Other Expenses (After Fee Waiver)..................................... 0.72% ---- Total Operating Expenses (After Fee Waiver)........................... 0.90%* ====
- ----------- * The Adviser intends to cap, to the extent of the current advisory fees, the Portfolio's Institutional Class Shares' Total Operating Expenses (excluding interest, taxes and extraordinary expenses), after the effect of expense offsets, at 0.90% of the average daily net assets through December 31, 1998. The figures above include the effect of expense offsets. If expense offsets were excluded, Total Operating Expenses of the Portfolio would not be af- fected. (See "FINANCIAL HIGHLIGHTS.") Absent the Adviser's and/or other service providers' waiver of fees, the Investment Advisory Fees, Other Ex- penses and Total Operating Expenses of the Portfolio's Institutional Class Shares would have been 0.35%, 0.85% and 1.20%, respectively, of average daily net assets. The Adviser and other service providers may change or dis- continue their fee waivers at any time. The table above shows various fees and expenses an investor may bear di- rectly or indirectly. The expenses and fees set forth above are based on the Portfolio's Institutional Class Shares' operations during the fiscal year ended April 30, 1998, as restated to reflect the current Investment Advisory Fees and Other Expenses. 1 EXAMPLE The following example illustrates expenses a shareholder would pay on a $1,000 investment over various time periods assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period. The Portfolio charges no redemption fees of any kind.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- BHM&S Total Return Bond Portfolio Institutional Class Shares................... $ 9 $29 $50 $111
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX- PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN ABOVE. 2 PROSPECTUS SUMMARY INVESTMENT ADVISER Barrow, Hanley, Mewhinney & Strauss, Inc. (the "Adviser") is a registered investment adviser specializing in the active management of stock, bond and balanced portfolios for institutional, tax-exempt clients. Founded in 1979, the firm is a wholly-owned subsidiary of United Asset Management Corporation. The Adviser currently has $33 billion in assets under management. (See "IN- VESTMENT ADVISER.") PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor") to investors at net asset value without a sales commission. Share purchases may be made by sending investments directly to the Fund. The minimum initial investment is $2,500. The minimum for subsequent investments is $100. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. Certain exceptions to the initial or minimum investment amounts may be permitted by the officers of the Fund (See "PURCHASE OF SHARES.") DIVIDENDS AND DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income in quarterly dividends. The Portfolio will distribute any realized net capital gains annually. Distributions will be reinvested in the Portfo- lio's shares automatically unless an investor elects to receive cash distribu- tions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") REDEMPTION AND EXCHANGES Shares of the Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemp- tion request. The redemption price may be more or less than the purchase price. Shares of the portfolio may be exchanged for shares of the same class of any other portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" and "EX- CHANGE PRIVILEGE.") ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As- set Management Corporation, is responsible for performing and overseeing ad- ministration, fund accounting, dividend disbursing and transfer agency serv- ices provided to the Fund and its Portfolios by third-party service providers. (See "ADMINISTRATIVE SERVICES.") 3 RISK FACTORS Prospective investors should consider the following: (1) The fixed income securities held by the Portfolio will be affected by general changes in inter- est rates resulting in increases or decreases in the value of the securities. The value of fixed income securities can be expected to vary inversely to the changes in prevailing interest rates, i.e., as interest rates decline, the market value of fixed income securities tends to increase and vice versa; (2) The Portfolio may purchase securities on a when-issued basis which do not earn interest until issued and may decline or appreciate in market value prior to their delivery to the Portfolio; (3) The Portfolio will invest in investment grade debt securities, but reserves the right to hold securities that have been downgraded. Adverse economic and corporate changes and changes in inter- est rates may have a greater impact on issuers of lower rated debt securities which the Portfolio may hold, which may lead to greater price volatility. Al- so, lower rated securities may be more difficult to value accurately or sell in the secondary market; (4) The Portfolio may invest in repurchase agreements which entail a risk of loss should the seller default on its transaction; (5) The Portfolio may lend its investment securities, which entails a risk of loss should a borrower fail financially. (See "OTHER INVESTMENT POLICIES.") 4 FINANCIAL HIGHLIGHTS The following table provides selected per share information for a share out- standing throughout the period presented for the Portfolio's Institutional Class Shares. This table is part of the Portfolio's Annual Financial State- ments, which are included in the Portfolio's 1998 Annual Report to Sharehold- ers. The Report is incorporated by reference into the Portfolio's SAI. The Portfolio's Annual Financial Statements have been audited by PricewaterhouseCoopers LLP whose unqualified opinion thereon is also incorpo- rated into the SAI. The following information should be read in conjunction with the Portfolio's 1998 Annual Report to Shareholders. Further information about the Portfolio's performance is contained in its Annual Report, which may be obtained without charge by calling the telephone number on the Prospectus cover page.
NOVEMBER 1, YEAR ENDED YEAR ENDED 1995*** TO APRIL 30, 1998++ APRIL 30, 1997++ APRIL 30, 1996^^^++ ---------------- ---------------- ------------------- NET ASSET VALUE, BEGINNING OF PERIOD.... $ 9.96 $ 9.85 $10.00 ------- ------- ------ INCOME FROM INVESTMENT OPERATIONS Net Investment Income.. 0.58 0.60 0.28 Net Realized and Unrealized Gain (Loss) on Investments.......... 0.41 0.05 (0.27) ------- ------- ------ Total from Investment Operations......... 0.99 0.65 0.01 ------- ------- ------ DISTRIBUTIONS Net Investment Income.. (0.55) (0.54) (0.16) Net Realized Gain...... (0.04) -- -- ------- ------- ------ Total Distributions.. (0.59) (0.54) (0.16) ------- ------- ------ NET ASSET VALUE, END OF PERIOD................. $ 10.36 $ 9.96 $ 9.85 ======= ======= ====== TOTAL RETURN+............ 10.16% 6.75% 0.08%** ======= ======= ====== RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (Thousands)... $19,927 $13,062 $2,445 Ratio of Expenses to Average Net Assets... 0.68% 0.57% 0.61%* Ratio of Net Investment Income to Average Net Assets............... 5.69% 6.01% 5.53%* Portfolio Turnover Rate................. 210% 151% 55% Ratio of Voluntary Waived Fees and Expenses Assumed by the Adviser to Average Net Assets... 0.52% 1.16% 4.63%* Ratio of Expenses to Average Net Assets Including Expense Offsets.............. 0.68% 0.55% 0.55%*
- ----------- * Annualized. ** Not Annualized. *** Commencement of Operations. + Total return would have been lower had certain fees not been waived and expenses assumed by the Adviser during the period. ++ Per share amounts are based on average outstanding shares. 5 INVESTMENT OBJECTIVE The objective of the Portfolio is to provide maximum long-term total return consistent with reasonable risk to principal by investing in investment grade fixed income securities of varying maturities. Income return is expected to be a predominant portion of the Portfolio's total return. Any capital return on the Portfolio is dependent upon, among other factors, interest rate changes as well as the average maturity and duration of the Portfolio. The Adviser be- lieves that by investing in undervalued securities with above average effec- tive yields and capital appreciation potential, the Portfolio will generate superior returns over the long term while minimizing volatility and, there- fore, downside risk. INVESTMENT POLICIES The Portfolio seeks to achieve its objective by investing at least 90% of its total assets in a diversified portfolio of the following dollar-denomi- nated investment grade issues of varying maturities, with an intermediate av- erage maturity: U.S. Treasuries and Agencies; zero coupon obligations; mort- gage-backed securities; asset-backed securities; corporate bonds; municipal bonds; and domestic, Yankee dollar and Eurodollar bonds (See "OTHER INVESTMENT POLICIES"). These issues may have fixed, variable or floating rates of inter- est. Bond and note futures may be used for hedging interest rate risk for the Portfolio to an average weighted duration comparable to the Salomon Brothers' Broad or Lehman Brothers Aggregate Indices. The Adviser expects to actively manage the Portfolio in order to meet the investment objective. To produce favorable returns, the Adviser will invest in securities that it believes to be undervalued, generating an effective yield advantage versus the market. To control the volatility of returns, the Portfo- lio will exhibit a high current yield, a high quality and a conservative matu- rity structure. The Adviser's decision process will focus on security selection, sector con- centration and yield curve positioning. The Adviser will not engage in eco- nomic forecasts in an attempt to "time the market" since it believes that there are too many economic and political variables on a domestic and interna- tional basis to do so successfully on a consistent basis. Therefore, the Port- folio will maintain a conservative intermediate maturity structure, with secu- rities being diversified along the yield curve. The Portfolio's average weighted maturity will generally be ten years or less, with the average weighted duration comparable to that of the Salomon Brothers' Broad Investment Grade Index which is approximately five years. Duration compares interest rate risk between securities with different coupons and different maturities, sum- marizing in a single number the price sensitivity of a bond--how a bond's ma- turity and coupon rate affect its exposure to interest rate risk. Duration in- volves the application of several principles: as the maturity of a bond in- creases, duration increases; as the coupon of a bond increases, duration de- creases; generally, the lower the coupon payment, the higher the duration; and duration decreases as the frequency of the coupon payment increases. General- ly, 10% or 6 less of the Portfolio's assets will be invested in various short-term invest- ments. Please see "SHORT-TERM INVESTMENTS" for a list of the short-term in- struments in which the Portfolio may invest. The Adviser's security selection process begins by analyzing a bond's yield to maturity premium (or spread) versus the most recently issued U.S. Treasury of similar maturity. Having identified bonds with an above-average premium, the Adviser will then evaluate factors that could influence the bond's future premium (i.e., credit quality, security structure, supply/demand relation- ships, etc.). The objective of this process is to identify those issues whose yield premium will compress or narrow over a wide range of potential interest rate change, supporting superior long term performance. Furthermore, the Ad- viser will concentrate the Portfolio's holdings in industry sectors and matu- rity ranges that it believes are undervalued while seeking a prudent level of diversification. The Portfolio will invest in investment grade bonds which have one of the four highest rating categories (i.e. Aaa, Aa, A or Baa by Moody's Investors Service ("Moody's") or AAA, AA, A or BBB by Standard & Poor's Ratings Services ("S&P"), Fitch IBCA, or Duff and Phelps Credit Rating Service) at the time of purchase. Bonds rated Baa or BBB have speculative characteristics and may be more sensitive to changes in the economy and the financial condition of is- suers than higher rated bonds. The Adviser also reserves the right to retain securities which are downgraded by one or both of the rating agencies if, in the Adviser's judgment, retention of the securities is warranted. The Portfo- lio's SAI contains a more detailed description of bond ratings. OTHER INVESTMENT POLICIES SHORT-TERM INVESTMENTS In order to earn a return on uninvested assets, meet anticipated redemp- tions, or for temporary defensive purposes, the Portfolio may invest a portion of its assets in domestic and foreign money market instruments including cer- tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob- ligations, U.S. Government agency securities, short-term corporate debt secu- rities, and commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by Moody's or if unrated, determined by the Adviser to be of comparable quality. Time deposits maturing in more than seven days will not be purchased by the Portfolio, and time deposits maturing from two business days through seven calendar days will not exceed 10% of the total assets of the Portfolio. The Portfolio will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, (ii) in the case of U.S. banks, it is a member of the Fed- eral Deposit Insurance Corporation, and (iii) in the case of foreign branches of U.S. banks, the security is, in the opinion of the Adviser, of an invest- ment quality comparable with other debt securities which may be purchased by the Portfolio. 7 The Fund has received permission from the SEC to deposit the daily uninvested cash balances of the Fund's Portfolios, as well as cash for invest- ment purposes, into one or more joint accounts and to invest the daily balance of the joint accounts in the following short-term investments: fully collater- alized repurchase agreements, interest-bearing or discounted commercial paper including dollar-denominated commercial paper of foreign issuers, and any other short-term money market instruments including variable rate demand notes and tax-exempt money instruments. By entering into these investments on a joint basis, the Portfolio may earn a higher rate of return on investments relative to what it could earn individually. The Fund has received permission from the SEC for each of its Portfolios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio. (See "INVESTMENT COMPANIES.") REPURCHASE AGREEMENTS The Portfolio may invest in repurchase agreements collateralized by U.S. Government securities, certificates of deposit, and certain bankers' accept- ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repurchase agreement, the Portfolio buys a security and simultaneously commits to sell that security back at an agreed upon price plus an agreed upon market rate of interest. Under a repurchase agreement, the seller is also required to maintain the value of securities subject to the agreement at not less than 100% of the repurchase price. The value of the securities purchased will be evaluated daily, and the Adviser will, if necessary, require the seller to maintain additional securities to ensure that the value is in compliance with the previous sentence. The use of repurchase agreements involves certain risks. For example, a default by the seller of the agreement may cause the Portfolio to experience a loss or delay in the liquidation of the collateral securing the repurchase agreement. The Portfolio might also incur disposition costs in liquidating the collateral. While the Fund's management acknowledges these risks, it is expected that they can be controlled through stringent counter-party selection criteria and careful monitoring procedures. The Fund has received permission from the SEC to pool daily uninvested cash balances of the Fund's Portfolios in order to invest in repurchase agreements on a joint basis. By entering into joint repurchase agreements, the Portfolio may incur lower transaction costs and earn higher rates of interest on joint repurchase agreements. The Portfolio's contribution would determine its return from a joint repurchase agreement. (See "SHORT-TERM INVESTMENTS.") LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified institutional investors as a means of earning income. The Portfolio will not loan securities to the extent that greater than one-third of its total assets at fair market value would be committed to loans. During the term of a loan, the Portfolio is subject to a gain or loss depending on any increase or decrease in the market price of the securities 8 loaned. Lending of securities is subject to review by the Fund's Board of Trustees. All relevant facts and circumstances, including the creditworthiness of the broker, dealer or institution, will be considered by the Adviser in making decisions about securities lending. An investment company may pay reasonable negotiated fees in connection with loaned securities so long as such fees are set forth in a written contract and approved by its Board of Trustees. The Portfolio will continue to retain any voting rights with respect to loaned securities. If a material event occurs affecting an investment on loan, the loan must be called and the securities voted. WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES The Portfolio may purchase and sell securities on a "when-issued," "delayed settlement," or "forward delivery" basis. "When-issued" or "forward delivery" 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 and forward delivery transactions may be expected to occur a month or more be- fore delivery is due. Delayed settlement is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by the Portfolio until it re- ceives delivery or payment from the other party to any of the above transac- tions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. The Portfolio will maintain a separate account of cash or liquid securities at least equal to the value of purchase commitments until payment is made. Typically, no income ac- crues on securities purchased on a delayed delivery basis prior to the time delivery is made although the Portfolio may earn income on securities it has deposited in a segregated account. The Portfolio may engage in these types of purchases in order to buy securi- ties that fit with its investment objectives at attractive prices -- not to increase its investment leverage. PORTFOLIO TURNOVER In addition to Portfolio trading costs, higher rates of portfolio turnover may result in the realization of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for more information on taxation). The Portfolio will not normally engage in short-term trading, but reserves the right to do so. The table set forth in "Financial Highlights" presents the Portfolio's histor- ical portfolio turnover rates. INVESTMENT COMPANIES The Portfolio reserves the right to invest up to 10% of its total assets, calculated at the time of investment, in the securities of other open-end or closed-end investment companies. No more than 5% of the investing Portfolio's total assets 9 may be invested in the securities of any one investment company, nor may it acquire more than 3% of the voting securities of any investment company. The Portfolio will indirectly bear its proportionate share of any management fees paid by an investment company in which it invests in addition to the advisory fee paid by the Portfolio. The Fund has received permission from the SEC, to allow each of its Portfo- lios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio provided that the in- vestment is consistent with the Portfolio's investment policies and restric- tions. Based upon the Portfolio's assets invested in the DSI Money Market Portfolio, the investing Portfolio's adviser will waive its investment advi- sory fee and any other fees earned as a result of the Portfolio's investment in the DSI Money Market Portfolio. The investing Portfolio will bear expenses of the DSI Money Market Portfolio on the same basis as all of its other share- holders. RESTRICTED AND ILLIQUID SECURITIES The Portfolio may purchase restricted securities that are not registered for sale to the general public but which are eligible for resale to qualified in- stitutional investors under Rule 144A of the Securities Act of 1933. Under the supervision of the Fund's Board of Trustees, the Adviser determines the li- quidity of such investments by considering all relevant factors. Provided that a dealer or institutional trading market in such securities exists, these re- stricted securities are not treated as illiquid securities for purposes of the Portfolio's investment limitations. The Portfolio may invest up to 15% of its net assets in illiquid securities. Prices realized from the sales of these se- curities could be more or less than those originally paid by the Portfolio or less than what may be considered the fair value of such securities. MORTGAGE-BACKED SECURITIES The Portfolio may invest in mortgage-backed securities. Mortgage-backed se- curities are collateralized by pools of mortgages assembled for subsequent sale to investors by various governmental agencies and sponsored organizations as well as by private issuers. The underlying assets collateralizing the mort- gage-backed securities may include single-family, multifamily and commercial properties. The two fundamental forms of mortgage-backed securities are pass- throughs and collateralized mortgage obligations ("CMOs"). Pass-throughs pro- duce monthly payments of principal and interest from the underlying mortgages. CMOs divide the cash flows generated from the underlying mortgages or mortgage pass-through securities into different segments known as "tranches" which are then retired sequentially over time in order of priority. The market value and yield of mortgage-backed securities will fluctuate due to market interest rate change and early prepayments of the underlying mortgages. As prepayment rates on mortgages vary widely, it is difficult to accurately predict the average maturity of a particular pool of mortgages 10 or tranches of CMOs. Although mortgage-backed securities may offer higher yields than those available from other types of securities, they may be less effective than other types of securities as a means of "locking in" an attrac- tive rate for an extended period because of the prepayment feature. Prepayment risk has two important effects. First, like bonds in general, mortgage-backed securities will generally decline when interest rates rise. Second, when in- terest rates fall and additional mortgage prepayments must be reinvested at lower interest rates, a Portfolio's rate of dividend income may be reduced. Mortgage-backed securities in which the Portfolio may invest will either carry a guarantee from an agency of the U.S. Government or a private issuer of the timely payment of principal and interest or will be suitably structured to be considered by the Adviser to be of investment grade quality. ASSET-BACKED SECURITIES The Portfolio may invest in asset-backed securities. Asset-backed securities are collateralized by short maturity loans such as automobile receivables, credit card receivables, or other types of receivables or assets, the payments from which are passed through to the security holder. Credit support for as- set-backed securities may be based on the underlying assets and/or provided through credit enhancements by a third party. Credit enhancement techniques include letters of credit, insurance bonds, limited guarantees (which are gen- erally provided by the issuer), senior-subordinated structures and over- collateralization. The value of these securities may be significantly affected by changes in interest rates, the market's perceptions of the issuers and the creditworthiness of the parties involved. MUNICIPAL OBLIGATIONS Municipal obligations include notes, bonds and other securities issued by or on behalf of states, territories and possessions of the U.S. and the District of Columbia and their political subdivisions, agencies and instrumentalities. The interest on such municipal obligations will normally be exempt from fed- eral income tax. These bonds may be general obligation bonds secured by the issuer's pledge of its full faith, credit and taxing power for the payment of principal and interest, or they may be revenue bonds payable from specific revenue sources, but are not generally backed by the issuers' taxing power. These obligations may include private activity bonds where payment is the re- sponsibility of the private industrial user of the facility financed by the bonds. Municipal notes are issued to meet short-term funding requirements of the issuer and include construction loan notes, short-term discount notes, tax-exempt commercial paper, demand notes and similar instruments. Municipal bonds will be rated investment grade by Moody's and S&P, as described above. Investment grade municipal notes will be rated MIG1, MIG2 or MIG3 by Moody's, or SP-1 or SP-2 by S&P or, if unrated, determined by the Adviser to be of com- parable quality. Please refer to the Portfolio's SAI for a detailed descrip- tion of municipal note ratings. 11 YANKEE DOLLAR AND EURODOLLAR SECURITIES Yankee dollar securities are U.S. dollar-based obligations issued inside the United States by foreign entities. Eurodollar securities are U.S. dollar-based obligations issued outside the United States by domestic or foreign entities. Investment in these securities involves certain risks which are not typically associated with investing in domestic securities. For example, non U.S.-based issuers are not subject to the same accounting, auditing and financial report- ing standards as are domestic issuers. There may be less publicly-available information about non-U.S.-based issuers which may make it difficult to make investment decisions. Political factors may have an impact in the form of con- fiscatory taxation, expropriation or political instability in international markets. Some foreign governments also levy withholding taxes against dividend and interest income. Although in some countries a portion of the taxes is re- coverable, the non-recovered portion of foreign withholding taxes will reduce the income the Portfolio receives from the companies comprising its invest- ments. ZERO COUPON SECURITIES A portion of the Portfolio may be invested in zero coupon securities which are fixed income securities that do not make regular interest payments. Zero coupon securities are sold at substantial discounts from their face value. The difference between a zero coupon security's issue or purchase price and its face value represents the imputed interest an investor will earn if the obli- gation is held until maturity. Zero coupon securities may offer the Portfolio the opportunity to earn higher yields than those available on ordinary inter- est paying obligations of similar credit quality and maturity. However, the prices of zero coupon securities may also exhibit greater price volatility than ordinary fixed income securities because of the manner in which their principal and interest are returned to the investor. The Portfolio will accrue income on such investments for tax and accounting purposes which is distribut- able to shareholders. Since no cash is received at the time of accrual, the Portfolio may be required to liquidate portfolio securities to satisfy its distribution obligations. FUTURES CONTRACTS AND OPTIONS In order to remain fully invested and to reduce transaction costs, the Port- folio may invest in bond futures, interest rate futures contracts and options. Because transaction costs associated with futures and options may be lower than costs of investing in bonds directly, the use of index futures and op- tions to facilitate cash flows may reduce a Portfolio's overall transaction costs. The Portfolio may enter into futures contracts provided that not more than 5% of the Portfolio's assets are required as a margin deposit to secure obligations under such contracts. The Portfolio will engage in futures and op- tions transactions for hedging purposes only and not for speculative purposes. 12 Futures and options can be volatile and involve various degrees and types of risk. If the Portfolio judges market conditions incorrectly or employs a strategy that does not correlate well with its investments, use of futures and options contracts could result in a loss. The Portfolio could also suffer losses if it is unable to liquidate its position due to an illiquid secondary market. In the opinion of the Trustees of the Fund, the risk that the Portfo- lio will be unable to close out a futures position or options contract will be minimized by only entering into futures contracts or options transactions traded on national exchanges and for which there appears to be a liquid sec- ondary market. INVESTMENT LIMITATIONS The Portfolio will not: (a) with respect to 75% of its assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed as to principal and in- terest by the U.S. Government or any of its agencies or instrumentali- ties); (b) with respect to 75% of its assets, purchase more than 10% of any class of the outstanding voting securities of any issuer; (c) invest more than 5% of its assets at the time of purchase in the secu- rities of companies that have (with predecessors) a continuous operat- ing history of less than 3 years; (d) invest more than 25% of its assets in companies within a single indus- try; however, there are no limitations on investments made in instru- ments issued or guaranteed by the U.S. Government and its agencies; (e) make loans except by purchasing debt securities in accordance with its investment objective and policies or entering into repurchase agree- ments or by lending its portfolio securities to banks, brokers, deal- ers and other financial institutions so long as the loans are made in compliance with the 1940 Act, as amended, or the Rules and Regulations or interpretations of the SEC; (f) (i) borrow, except from banks and as a temporary measure for extraor- dinary or emergency purposes and then, in no event, in excess of 33 1/3% of the Portfolio's gross assets valued at the lower of market or cost, and (ii) the Portfolio may not purchase additional securities when borrowings exceed 5% of total assets; or (g) pledge, mortgage or hypothecate any of its assets to an extent greater than 33 1/3% of its total assets at fair market value. The investment objectives of the Portfolio are fundamental and may be changed only with the approval of the holders of a majority of the outstanding shares of such Portfolio. Except for limitations (a), (b), (d), (e) and (f)(i), the Portfolio's investment limitations and policies described in this Prospectus and in 13 the SAI are not fundamental and may be changed by the Fund's Board of Trustees upon reasonable notice to investors. All other investment limitations de- scribed here and in the SAI are fundamental policies and may be changed only with the approval of the holders of a majority of the outstanding shares of the Portfolio. If a percentage limitation on investment or utilization of as- sets as set forth above is adhered to at the time an investment is made, a later change in percentage resulting from changes in the value or total cost of the Portfolio's assets will not be considered a violation of the restric- tion. PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), without a sales commission at the net asset value next deter- mined after an order is received by the Fund and payment is received by the Fund or its designated Service Agent. (See "VALUATION OF SHARES.") The minimum initial investment required is $2,500. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. Certain exceptions may be permitted by the officers of the Fund. Shares of the Portfolio may be purchased by customers of broker-dealers or other financial intermediaries ("Service Agents") which have established a shareholder servicing relationship with the Fund on behalf of their customers. Service Agents may impose additional or different conditions on purchases or redemptions of Portfolio shares and may charge transaction or other account fees. Each Service Agent is responsible for transmitting to its customers a schedule of any such fees and information regarding additional or different purchase or redemption conditions. Shareholders who are customers of Service Agents should consult their Service Agent for information regarding these fees and conditions. Amounts paid to Service Agents may include transaction fees and/or service fees paid by the Fund from the Fund assets attributable to the Service Agent, which would not be imposed if shares of the Portfolio were pur- chased directly from the Fund or the Distributor. Service Agents may provide shareholder services to their customers that are not available to a share- holder dealing directly with the Fund. A salesperson and any other person en- titled to receive compensation for selling or servicing Portfolio shares may receive different compensation with respect to one particular class of shares over another in the Fund. Service Agents or if applicable, their designees, that have entered into agreements with the Fund or its agent may enter confirmed purchase or redemp- tion orders on behalf of clients and customers, with payment to follow no later than a Portfolio's pricing on the following business day. If payment is not received by the Fund's Sub-Transfer Agent, Chase Global Funds Services Company ("CGFSC") by such time, the Service Agent could be held liable for re- sulting fees or losses. A Portfolio may be deemed to have received a purchase or redemption order when a Service Agent, or, if applicable, its authorized designee, accepts the order. Orders 14 received by the Fund in proper form will be priced at the Portfolio's net as- set value next computed after they are accepted by a Service Agent or its au- thorized designee. Service Agents are responsible to their customers and the Fund for timely transmission of all subscription and redemption requests, in- vestment information, documentation and money. INITIAL INVESTMENT BY MAIL . Complete and sign an Application, and mail it together with a check pay- able to "UAM Funds" to: UAM Funds Trust UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 Payment for purchases of shares received by mail will be credited to an ac- count at the next share price calculated for the Portfolio after receipt. Pay- ment does not need to be converted into Federal Funds (monies credited to the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it for investment. The Fund will not accept third-party checks to purchase shares of the Portfolio. If you purchase shares by check, please be sure that your check is made payable to "UAM Funds". BY WIRE . Telephone the UAM Funds Service Center and provide the account name, ad- dress, telephone number, social security or taxpayer identification num- ber, Portfolio selected, amount being wired, and the name of the bank wiring the funds. The call must be received prior to the close of regu- lar trading on the NYSE (generally 4:00 p.m. Eastern Time) to receive that day's price. An account number and a wire control number will be provided to you in addition to wiring instructions. Next, . instruct your bank to wire the specified amount to the Fund's Custodian: The Chase Manhattan Bank ABA #021000021 UAM Funds DDA Acct. #9102772952 Ref: Portfolio Name ____________ Your Account Number __________ Your Account Name _____________ Wire Control Number __________ (assigned by UAM Funds Service Center) 15 . Forward a completed Application to the UAM Funds Service Center at the address shown on the Form. Federal Funds purchases will be accepted only on days when the NYSE and the Custodian Bank are open for business. . To be sure that a bank wire order is received on the same day it is sent, an investor's bank should wire funds as early in the day as possi- ble. The bank sending funds may charge for this service. The Fund's agent reserves the right to charge investors for receipt of wired funds, but no charge is currently imposed by this service. It is necessary to obtain a new wire control number every time money is wired into an ac- count in a Portfolio. Wire control numbers are effective for one trans- action only and cannot be used more than once. Wired money that is not properly identified with a currently effective wire control number will be returned to the bank from which it was wired and will not be credited to the shareholder's account. ADDITIONAL INVESTMENTS Additional investments can be made at any time. The minimum additional in- vestment is $100. Shares can be purchased at net asset value by mailing a check to the UAM Funds Service Center (payable to "UAM Funds") or by wiring money to the Custodian Bank as outlined above. When making additional invest- ments, be sure that the account number, account name and the Portfolio to be purchased is identified on the check or wire. Prior to wiring additional in- vestments, notify the UAM Funds Service Center by calling the number on the cover of this Prospectus. Mail orders should include, when possible, the "In- vest by Mail" stub which accompanies any Fund confirmation statement. PURCHASE BY ACH If you have made this election, shares of the Portfolio may be purchased via Automated Clearing House ("ACH"). Investors purchasing via ACH should complete the bank information section on the Account Application and attach a voided check or deposit slip to the Account Application. This option must be estab- lished on your account at least 15 days prior to your initiating an ACH trans- action. (see "SHAREHOLDER SERVICES--AUTOMATIC INVESTMENT PLAN.") OTHER PURCHASE INFORMATION Investments received by the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be invested at the share price calculated after the NYSE closes on that day. Investments received after the close of the NYSE will be executed at the price computed on the next day the NYSE is open. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. The Portfolio is intended to be a long-term investment vehicle and is not de- signed to provide investors with a means of speculation on short-term market movements. A pattern of frequent purchases can be disruptive to efficient portfolio management and, 16 consequently, can be detrimental to a Portfolio's performance and its share- holders. Accordingly, if the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may re- ject in whole or part any purchase request with respect to such investor's ac- count. Such investor also may be barred from purchasing other portfolios of the UAM Funds. Purchases of shares will be made in full and fractional shares calculated to three decimal places. Certificates for whole shares will be issued upon writ- ten request by the shareholder. Certificates for fractional shares will not be issued. IN-KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in ex- change for securities which are eligible for acquisition by the Portfolio, as described in this Prospectus. Securities to be exchanged which are accepted by the Fund will be valued as described under "VALUATION OF SHARES" at the next determination of net asset value after acceptance. Shares issued by the Port- folio in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the investor upon receipt from the issuer. Securities acquired through an in-kind purchase will be acquired for invest- ment and not for immediate resale. The Fund will not accept securities in exchange for shares of the Portfolio unless: . at the time of exchange, such securities are eligible to be in- cluded in the Portfolio (current market quotations must be readily available for such securities); . the investor represents and agrees that all securities offered to be exchanged are liquid securities and not subject to any restric- tions upon their sale by the Portfolio under the Securities Act of 1933, or otherwise; and . the value of any such securities (except U.S. Government securi- ties) being exchanged together with other securities of the same issuer owned by the Portfolio will not exceed 5% of the net assets of the Portfolio immediately after the transaction. Investors who are subject to federal taxation upon exchange may realize a gain or loss for federal income tax purposes depending upon the cost of secu- rities or local currency exchanged. Investors interested in such exchanges should contact the Adviser. 17 REDEMPTION OF SHARES Shares of the Portfolio may be redeemed by mail or telephone, at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request. No charge is made for redemptions. Any re- demption may be more or less than the purchase price of your shares depending on the market value of the investment securities held by the Portfolio. BY MAIL Address requests for redemption to the UAM Funds Service Center. Requests to redeem shares must include: . share certificates, if issued; . a letter of instruction or an assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are regis- tered; . any required signature guarantees (see "SIGNATURE GUARANTEES"); and . any other necessary legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pen- sion and profit sharing plans and other organizations. BY TELEPHONE A redemption request by telephone requires the following: . establish the telephone redemption privilege (and if desired, the wire redemption privilege) by completing appropriate sections of the Application; and . call the Fund and instruct that the redemption proceeds be mailed to you or wired to your bank. The following tasks cannot be accomplished by telephone: . changing the name of the commercial bank or the account designated to receive redemption proceeds (this can be accomplished only by a written request signed by each shareholder, with each signature guaranteed); . redemption of certificated shares by telephone. The Fund and its Sub-Transfer Agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and they may be liable for any losses if they fail to do so. These procedures include re- quiring the investor to provide certain personal identification at the time an account is opened, as well as prior to effecting each transaction requested by telephone. All telephone transaction requests will be recorded and investors may be required to provide additional telecopied written instructions of such transaction requests. The Fund or 18 Sub-Transfer Agent may be liable for any losses due to unauthorized or fraudu- lent telephone instructions if the Fund or the Sub-Transfer Agent does not em- ploy the procedures described above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any loss, liability, cost or expense for follow- ing instructions received by telephone that it reasonably believes to be genu- ine. SIGNATURE GUARANTEES Signature guarantees are required for the following redemptions: . redemptions where the proceeds are to be sent to someone other than the registered shareowner(s); . redemptions where the proceeds are to be sent to someplace other than the registered address, or . share transfer requests. Signature guarantees will be accepted from any eligible guarantor institu- tion which participates in a signature guarantee program. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securi- ties exchanges, registered securities associations, clearing agencies and sav- ings associations. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. OTHER REDEMPTION INFORMATION The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the UAM Funds Service Center or a redemption request in proper form. Although the Fund will redeem shares purchased by check before the check clears, payment of the redemption proceeds may be delayed for a pe- riod of up to fifteen days after their purchase, pending determination that the check has cleared. Investors should consider purchasing shares using a certified or bank check or money order if they anticipate an immediate need for redemption proceeds. The Fund may suspend the right of redemption or post- pone the date at times when both the NYSE and Custodian Bank are closed, or under any emergency circumstances determined by the SEC. If the Board of Trustees determines that it would be detrimental to the best interests of remaining shareholders of the Fund to make payment wholly or partly in cash, the Fund may pay redemption proceeds in whole or in part by a distribution in-kind of liquid securities held by the Portfolio in lieu of cash in conformity with applicable rules of the SEC. Investors may incur bro- kerage charges on the sale of portfolio securities received in payment of re- demptions. The Portfolio reserves the right to liquidate any account that is below fifty percent of the required minimum initial investment amount for a Portfo- lio as set forth in the Prospectus, where the reduction in value has occurred due to a redemption or 19 exchange out of the account. If at any time your total investment does not have a value of at least fifty percent of the required minimum initial invest- ment amount, you may be notified that the value of your account is below the Portfolio's minimum account balance requirement. You would then be allowed 60 days to make an additional investment before the account is liquidated. Re- tirement accounts and certain other accounts will not be subject to automatic liquidation. Reductions in value that result solely from market activity will not trigger an involuntary redemption. SHAREHOLDER SERVICES EXCHANGE PRIVILEGE Institutional Class Shares of the Portfolio may be exchanged for Institu- tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo- lios of the UAM Funds at the end of this Prospectus.) Exchange requests should be made by contacting the UAM Funds Service Center. Any exchange will be based on the net asset value of the shares involved. There is no sales commission or charge of any kind for an exchange. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objectives of the Portfolio to be purchased. Call the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in which you are interested. Exchanges can only be made with Portfolios that are qualified for sale in a shareholder's state of residence. Exchange requests may be made either by mail or telephone. Telephone ex- changes will be accepted only if the certificates for the shares to be ex- changed have not been issued to the shareholder and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the NYSE will be processed on the next business day. The Fund may modify or terminate the exchange program at any time upon 60 days' written notice to shareholders, and may reject any exchange request. If the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any exchange request, with respect to such investor's account. Such investors also may be barred from exchanging into other portfolios of the UAM Funds. For additional information regarding responsibility for the authentic- ity of telephoned instructions, see "REDEMPTION OF SHARES BY TELEPHONE". An exchange into another UAM Funds Portfolio is a sale of shares and may result in a gain or loss for income tax purposes. AUTOMATIC INVESTMENT PLAN An Automatic Investment Plan permits shareholders of a Portfolio with a min- imum value of $2,500 or more to purchase shares automatically (minimum of 20 $100 per transaction) at regular intervals selected by the shareholder. Pro- vided the shareholder's bank or other financial institution allows automatic withdrawals, shares are purchased by transferring funds via the Automated Clearing House ("ACH"). Investment made through ACH will be automatically transferred from a shareholder's checking, bank money market or NOW account designated by the shareholder. Such withdrawals are made electronically, if the shareholder's bank or financial institution so permits, or by pre-autho- rized checks or drafts drawn on the shareholder's bank or other account. The bank or financial institution must be a member of ACH. At the shareholder's option, the account designated will be debited in the specified amount, and shares will be purchased monthly or quarterly. To establish an Automatic Investment Plan, a shareholder must complete the Optional Services Form available from the UAM Funds Service Center at 1-800- 638-7983 and mail it to Chase Global Funds Services Company. A shareholder may cancel his/her participation or change the amount of purchase at any time by mailing written notification to Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. Notification generally will be effective three business days following receipt. The Fund may modify or terminate this privilege at any time, or may charge a service fee, although no such fee cur- rently is contemplated. SYSTEMATIC WITHDRAWAL PLAN Any shareholder whose account balance totals at least $10,000 may establish a Systematic Withdrawal Plan under which an amount pre-determined by the shareholder (but at least $100) is automatically redeemed from the sharehold- er's account either monthly or quarterly. A shareholder may participate in the Systematic Withdrawal Plan by using ACH. Redemption made through ACH will be automatically transferred to the shareholder's bank or other similar financial institution account or a properly designated third party. The bank or finan- cial institution must be a member of ACH. Redemptions ordinarily are made on the third business day of the month and payments ordinarily will be transmit- ted within five business days after the redemption date. Because the prices of Fund shares fluctuate, the number of shares redeemed to finance systematic withdrawal payments or a given amount will vary from payment to payment. If a shareholder owns shares in more than one Portfolio, the shareholder must des- ignate the Portfolio from which the redemptions under a Systematic Withdrawal Plan should be made. An additional sheet may be attached to the Optional Serv- ices Form if a shareholder selects more than one Portfolio. A Systematic With- drawal Plan may be terminated or suspended at any time by the Fund. A share- holder may elect at any time, in writing, to terminate participation in the Systematic Withdrawal Plan. Such written election must be sent to and received by the Fund before a termination becomes effective. There is currently no charge to the shareholder for a Systematic Withdrawal Plan. 21 VALUATION OF SHARES The net asset value of each class of a Portfolio is determined by dividing the value of the Portfolio's assets attributable to the class, less any lia- bilities attributable to the class, by the number of shares outstanding at- tributable to the class. The net asset value per share of the Portfolio is de- termined as of the close of the NYSE on each day that the NYSE is open for business. Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the-counter market. Bonds and other fixed income securities may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost when the Board of Trustees determines that amortized cost reflects fair value. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Trustees. PERFORMANCE CALCULATIONS The Portfolio measures performance by calculating yield and total return. Both yield and total return figures are based on historical earnings and are not intended to indicate future performance. Yield and total return are calcu- lated separately for each class of a Portfolio. Yield refers to the income generated by an investment in the Portfolio over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all funds. As this differs from other accounting methods, the quoted yield may not equal the in- come actually paid to shareholders. Total return is the change in value of an investment in the Portfolio over a given period, assuming reinvestment of any dividends and capital gains. A cu- mulative or aggregate total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of re- turn that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Performance will be calculated separately for Institutional Class and Serv- ice Class Shares. Dividends paid by the Portfolio with respect to Institu- tional Class and Service Class Shares, to the extent any dividends are paid, will be calculated in the same manner at the same time on the same day and will be in the same amount, except that service fees, distribution charges and any additional transfer agency costs relating to Service Class Shares will be borne exclusively by that class. 22 The Portfolio's performance may be compared to data prepared by independent services which monitor the performance of investment companies, data reported in financial and industry publications, and various indices as further de- scribed in the Portfolio's SAI. This information may also be included in sales literature and advertising. The Portfolio's Annual Report to Shareholders for the most recent fiscal year end contains additional performance information that includes comparisons with appropriate indices. The Annual Report is available without charge. Con- tact the UAM Funds Service Center at the telephone number on the cover of this Prospectus. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS The Portfolio will normally distribute substantially all of its net invest- ment income (for tax purposes) to shareholders in quarterly dividends. If any net capital gains are realized, the Portfolio will normally distribute them annually. All dividends and capital gains distributions will be automatically reinvested in additional shares of the Portfolio unless the Fund is notified in writing that the shareholder elects to receive distributions in cash. FEDERAL TAXES The Portfolio intends to qualify as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, for federal in- come tax purposes and to meet all other requirements that are necessary for it (but not its shareholders) to be exempt from federal taxes on income and gains paid to shareholders in the form of dividends. To do this, the Portfolio must, among other things, distribute substantially all of its ordinary income and net capital gains on an annual basis and maintain a portfolio of investments which satisfies certain diversification criteria. Dividends paid by the Portfolio from net investment income, whether in cash or reinvested in shares, are taxable to shareholders as ordinary income. Short-term capital gains will be taxed as ordinary income. Long-term capital gains distributions are taxed as long-term capital gains. Shareholders will be notified annually of dividend income earned for tax purposes. Dividends declared in October, November and December to shareholders of rec- ord in such a month and paid in January of the following year will be treated as if they had been paid by the Fund and received by the shareholders on De- cember 31. The Fund is required by federal law to withhold 31% of reportable payments paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, you must certify that your Social Security or Taxpayer Identification Number provided is correct and that either you are not currently subject to backup withholding or you are exempt from backup withholding. This certification must be made on the Application or on a sepa- rate form supplied by the Fund. 23 Dividends and interest received by the Portfolio may give rise to withhold- ing and other taxes imposed by foreign countries. These taxes reduce the Port- folio's dividends but are included in the taxable income reported on your tax statement if the Portfolio qualifies for this tax treatment and elects to pass it through to you. Consult a tax adviser for more information regarding deduc- tions and credits for foreign taxes. INVESTMENT ADVISER The Adviser is a registered investment adviser formed in 1979. Its business offices are located at One McKinney Plaza, 3232 McKinney Avenue, 15th Floor, Dallas, Texas 75204. The Adviser is a wholly-owned subsidiary of United Asset Management Corporation ("UAM"), a holding company, and provides and offers in- vestment management services to corporate, public and Taft-Hartley employee benefit plans, foundations, endowments, health care and other institutions and investors. The Adviser currently has $33 billion in assets under management. The Portfolio pays an annual fee in monthly installments to the Adviser for advisory services. This fee is accrued daily and paid every month as a per- centage of the average net assets in the Portfolio for that month. The per- centage fee on an annual basis is 0.35%. The Adviser intends to waive a por- tion of its advisory fees, if necessary, to keep the Portfolio's Institutional Class Shares total operating expenses from exceeding 0.90% of average daily net assets through December 31, 1998. The Adviser will not be reimbursed by the Fund for any advisory fees which are waived for a given year. The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili- ates, may, at its own expense, compensate a Service Agent or other person for marketing, shareholder servicing, recordkeeping and/or other services per- formed with respect to the Fund, the Portfolio or any Class of Shares of the Portfolio. Payments made for any of these purposes may be made from the paying entity's revenues, its profits or any other source available to it. When such service arrangements are, in effect, they are made generally available to all qualified service providers. The Distributor, the Adviser and certain of their affiliates also partici- pate, at the date of this Prospectus, in an arrangement with Smith Barney Inc. ("Smith Barney") under which Smith Barney provides certain defined contribu- tion plan marketing and other shareholder services and receives from such en- tities 0.15 of 1% of the daily net asset value of Institutional Class Shares held by Smith Barney's eligible customer accounts in addition to amounts pay- able to all selling dealers. The Fund also compensates Smith Barney for serv- ices it provides to certain defined contribution plan shareholders that are not otherwise provided by UAMFSI. The investment professionals at the Adviser responsible for the day-to-day management of the Portfolio and their qualifications are as follows: 24 JOHN S. WILLIAMS -- Fixed Income Principal and the first fixed income port- folio manager at the Adviser in 1983. Mr. Williams has also managed balanced and municipal portfolios during his 21 year investment career. Prior to join- ing the Adviser, he was responsible for the management of all fixed income as- sets at Southland Trust, Dallas, Texas, and prior to that was a portfolio man- ager and securities analyst at InterFirst Bank Dallas Trust Department. Mr. Williams has served on the Advisory Committee for the Texas Teachers Retire- ment System and is an active member in the Dallas Investment Analysts Society. He currently is a Director of United Asset Management Corporation. Mr. Wil- liams is a Chartered Financial Analyst, earning his MBA in 1976 and BBA in 1975 from Texas Christian University. DAVID R. HARDIN -- Fixed Income Principal and portfolio manager. Prior to joining the Adviser in 1987, Mr. Hardin was the Vice President and Director of the Fixed Income Group of RepublicBank Dallas Trust Department. In that posi- tion, he was responsible for the management of all taxable and tax-exempt fixed income assets of the Trust Division, including all separately managed accounts, collective investment fund products, and the creation of and manage- ment of an SEC-registered mutual fund. Prior to attaining the Director's posi- tion, Mr. Hardin was a taxable portfolio manager and also served as the credit analyst for the Trust Division. He started his investment career as a private placement credit analyst while employed by American General Insurance Co. in Houston in 1976. Mr. Hardin received an M.Sc. from The London School of Eco- nomics in 1975 and a BBA from Texas Christian University in 1973. STEPHEN M. MILANO -- Fixed Income Principal and portfolio manager. Prior to joining the Adviser in 1990, Mr. Milano was employed at Salomon Brothers, Inc. in New York as a Vice President of the Fixed Income Strategy Group. In that role he was a specialist in developing portfolio structure and strategies for active management of taxable assets. While at Salomon he also served as Prod- uct Sales Manager for International Fixed Income Securities and as a Mortgage and Government Specialist. Prior to joining Salomon, Mr. Milano was employed as a portfolio manager and trader at Equitable Life Assurance Society. He re- ceived his BS in Economics with a concentration in Finance from the Wharton School of the University of Pennsylvania in 1980. J. SCOTT MCDONALD -- Fixed Income Principal and Portfolio Analyst/Trader. Mr. McDonald joined the Adviser in 1995 to serve as a security and portfolio specialist for the Fixed Income Group. In addition to security and portfolio analyst, he is responsible for systems analytics used in the evaluation of effective/option adjusted yield measurements for all securities and portfo- lios. He also serves as compliance monitor of all fixed income portfolios to ensure commonality of structure and diversification. Mr. McDonald previously served as the Senior Vice President and Portfolio Manager at Life Partners Group, Inc. in Dallas. While with Life Partners, he was responsible for imple- menting investment strategy 25 for $3 billion in assets. Additionally, he has been employed by Texas Commerce Bank Houston as a Credit Supervisor and Lending Officer. He received his MBA in 1991 from the University of Texas at Austin and his BBA from Southern Meth- odist University in 1986. MARK C. LUCHSINGER -- Fixed Income Principal and Portfolio Analyst/Trader. Mr. Luchsinger is the newest senior member of the fixed income product team. Prior to joining the Adviser in April of 1997, he had spent several years in fixed income sales at First Boston Corporation, PaineWebber and Morgan Keegan responsible for a wide array of security and client types. During Mr. Luchsinger's investment career, he has also served as Chief Investment Officer for Great American Reserve Insurance Company in Dallas, where he was responsi- ble for the management of over $1 billion in fixed income and equity portfo- lios; senior investment portfolio manager for Western Preferred Corporation in Fort Worth; and investment manager for Scor Reinsurance Company in Irving. Mr. Luchsinger is a Chartered Financial Analyst and earned his BBA from Bowling Green State University in 1980. DEBORAH J. ANDERSON -- Senior Portfolio Assistant. Ms. Anderson is responsi- ble for all administrative staff and their duties associated with the fixed income product management, including communication/liaison with all clients, custodial banks, and brokerage relationships. She supervises all operational aspects of fixed income security trading and works extensively with reporting requirements for all clients and regulatory agencies. Prior to joining the Ad- viser in 1988, Ms. Anderson served as a Trust Officer with Trust Company of Texas and its predecessor, Southland Trust Co. She received a BBA in Account- ing from the University of Texas at Arlington in 1974. ADVISER'S HISTORICAL PERFORMANCE Below are certain performance data provided by the Adviser pertaining to the composite of separately managed accounts of the Adviser that are managed with substantially similar (although not necessarily identical) objectives, poli- cies and strategies as those of the Portfolio. The performance data for the managed accounts is net of all fees and expenses. The investment returns of the Portfolio may differ from those of the separately managed accounts because such separately managed accounts may have fees and expenses that differ from those of the Portfolio. Further, the separately managed accounts are not sub- ject to investment limitations, diversification requirements and other re- strictions imposed by the Investment Company Act of 1940 and Internal Revenue Code; such conditions, if applicable, may have lowered the returns for sepa- rately managed accounts. The results presented are not intended to predict or suggest the return to be experienced by the Portfolio or the return an in- vestor might achieve by investing in the Portfolio. 26 BARROW, HANLEY, MEWHINNEY, & STRAUSS, INC.--BOND ACCOUNT (PERCENTAGE RETURNS NET OF MANAGEMENT FEES)
LEHMAN BROTHERS BARROW, HANLEY, MEWHINNEY & AGGREGATE CALENDAR YEARS STRAUSS, INC. BOND INDEX -------------- --------------------------- --------------- 1988.............................. 7.55% 7.89% 1989.............................. 14.52% 14.53% 1990.............................. 9.02% 8.96% 1991.............................. 16.52% 16.00% 1992.............................. 7.70% 7.40% 1993.............................. 10.86% 9.75% 1994.............................. (3.52)% (2.92)% 1995.............................. 17.68% 18.47% 1996.............................. 3.32% 3.63% 1997.............................. 9.60% 9.65% 3 months ended 3/31/98............ 1.63% 1.56% Annualized........................ 9.10% 9.11% Cumulative........................ 244.08% 244.35% Ten-Year Mean (1/1/88-12/31/97)............... 9.33% 9.34% Value of $1 invested during the period (1/1/88-3/31/98)......... $ 3.44 $ 3.44
Notes: 1. The annualized return is calculated from monthly data, allowing for com- pounding. Market Value of the account was the sum of the account's total assets, including cash, cash equivalents, short-term investments, and se- curities valued at current market prices. 2. The cumulative return means that $1 invested in that account on January 1, 1988 had grown to $3.44 by March 31, 1998. 3. The 10-year mean is the arithmetic average of the annual returns for the calendar years listed. 4. The Lehman Brothers Aggregate Bond Index is an unmanaged index which as- sumes reinvestment of dividends and is generally considered representative of securities similar to those invested in by the Adviser for the purpose of the composite performance numbers set forth above. 5. The Adviser's average annual management fee over the period shown (1/1/88- 3/31/98) was 0.29% or 29 basis points. During the period, fees on the Ad- viser's individual accounts ranged from 0.25% to 0.45% (25 basis points to 45 basis points). Net returns to investors vary depending on the manage- ment fee. 27 ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of UAM, is re- sponsible for performing and overseeing administrative, fund accounting, divi- dend disbursing and transfer agent services provided to the Fund and its Port- folios. UAMFSI's principal office is located at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is located at 73 Tremont Street, Boston, MA 02108. Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fees are calculated from the aggregate net assets of the Portfolio:
RATE ---- BHM&S Total Return Bond Portfolio...................................... 0.04%
CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined UAM Fund assets; 0.11 of 1% of the next $800 million of combined UAM Fund assets; 0.07 of 1% of combined UAM Fund assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined UAM Fund assets in excess of $3 billion. The UAM Fund fees are allocated among each of the Portfolios on the basis of their relative assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum annual fee increases by $20,000. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, with its principal office located at 211 Congress Street, Boston, Massachusetts 02110, distributes the shares of the Fund. Under the Fund's Distribution Agreement (the "Agreement"), the Distributor, as agent of the Fund, agrees to use its best efforts as sole distributor of the Fund's shares. The Distributor does not receive any fee or other compensation under the Agreement with respect to the Portfolio's Institutional Class Shares offered in this Prospectus. The Agreement continues in effect as long as it is approved at least annually by the Fund's Board of Trustees. Those approving the Agreement must include a majority of those Trustees who are neither parties to such Agreement nor interested persons of any such party. The 28 Agreement provides that the Fund will bear the costs of the registration of its shares with the SEC and various states and the printing of its prospectuses, its SAIs and its reports to shareholders. PORTFOLIO TRANSACTIONS The Advisory Agreement authorizes the Adviser to select the brokers or deal- ers that will execute the purchase and sale of investment securities for the Portfolios. The Agreement directs the Adviser to use its best efforts to ob- tain the best available price and most favorable execution for all transac- tions of the Portfolio. If consistent with the interests of the Portfolio, the Adviser may select brokers on the basis of the research, statistical and pric- ing services they provide to each Portfolio in addition to required services. Such brokers may be paid a higher commission than that which another qualified broker would have charged for effecting the same transaction, provided that such commissions are paid in compliance with the Securities Exchange Act of 1934, as amended, and that the Adviser determines in good faith that such com- mission is reasonable in terms either of the transaction or the overall re- sponsibility of the Adviser to a Portfolio and the Adviser's other clients. Although not a typical practice, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. If a purchase or sale of securities consistent with the investment policies of a Portfolio and one or more of these other clients served by the Adviser is considered at or about the same, transactions in such securities will be allo- cated among the Portfolio and clients in a manner deemed fair and reasonable by the Adviser. Although there is no specified formula for allocating such transactions, such allocations are subject to periodic review by the Fund's Trustees. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized as a Delaware business trust on May 18, 1994 under the name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial inter- est, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without fur- ther action by shareholders. At its discretion, the Board of Trustees may create additional Portfolios and classes of shares. The shares of each Portfolio are fully paid and nonas- sessable, and have no preference as to conversion, exchange, dividends, re- tirement or other features and no pre-emptive rights. They have noncumulative voting rights, which 29 means that holders of more than 50% of shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is enti- tled 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 Fund. As of June 15, 1998, Fleet National Bank, Trustee, FBO Austin Diagnostic Clinic Association 401k Profit Sharing Plan, held of record 28.1% of the out- standing shares of the Portfolio's Institutional Class for which benefical ownership is disclaimed or presumed disclaimed. The persons or organizations owning 25% or more of the outstanding shares of the Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) the Portfolio. As a re- sult, these persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of share- holders of the Portfolio. Both Institutional Class and Service Class Shares represent an interest in the same assets of a Portfolio. Service Class Shares bear certain expenses re- lated to shareholder servicing and the distribution of such shares, and have exclusive voting rights with respect to matters relating to such distribution expenditures. The Board of Trustees of the Fund has authorized a third class of shares, Advisor Class Shares, which is not currently being offered by this Portfolio. Information about the Service Class Shares of the Portfolio is available upon request by contacting the UAM Funds Service Center. Annual meetings will not be held except as required by the 1940 Act and other applicable laws. The Fund has undertaken that its Trustees will call a meeting of shareholders if such a meeting is requested in writing by the hold- ers of not less than 10% of the outstanding shares of the Fund. The Fund will assist shareholder communications in such matters. CUSTODIAN The Chase Manhattan Bank serves as custodian of the Fund's assets. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the independent accountant for the Fund. REPORTS Investors will receive unaudited semi-annual financial statements and annual financial statements audited by PricewaterhouseCoopers LLP. SHAREHOLDER INQUIRIES Shareholder inquiries may be made by contacting the UAM Funds Service Center at the telephone number listed on the cover of this Prospectus. 30 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF AD- DITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RE- LIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CON- STITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. 31 UAM FUNDS -- INSTITUTIONAL CLASS SHARES Acadian Emerging Markets Portfolio Acadian International Equity Portfolio BHM&S Total Return Bond Portfolio Cambiar Opportunity Portfolio Chicago Asset Management Intermediate Bond Portfolio Chicago Asset Management Value/Contrarian Portfolio C&B Balanced Portfolio C&B Equity Portfolio C&B Equity Portfolio for Taxable Investors C&B Mid Cap Equity Portfolio DSI Balanced Portfolio DSI Disciplined Value Portfolio DSI Limited Maturity Bond Portfolio DSI Money Market Portfolio FMA Small Company Portfolio FPA Crescent Portfolio Hanson Equity Portfolio Heitman Real Estate Portfolio ICM Equity Portfolio ICM Fixed Income Portfolio ICM Small Company Portfolio Jacobs International Octagon Portfolio McKee Domestic Equity Portfolio McKee International Equity Portfolio McKee Small Cap Equity Portfolio McKee U.S. Government Portfolio MJI International Equity Portfolio NWQ Balanced Portfolio NWQ Small Cap Value Portfolio NWQ Special Equity Portfolio NWQ Value Equity Portfolio Rice, Hall James Small Cap Portfolio Rice, Hall James Small/Mid Cap Portfolio SAMI Preferred Stock Income Portfolio Sirach Bond Portfolio Sirach Equity Portfolio Sirach Growth Portfolio Sirach Special Equity Portfolio Sirach Strategic Balanced Portfolio Sterling Partners' Balanced Portfolio Sterling Partners' Equity Portfolio Sterling Partners' Small Cap Value Portfolio TS&W Balanced Portfolio TS&W Equity Portfolio TS&W Fixed Income Portfolio TS&W International Equity Portfolio 32 UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 1-800-638-7983 Investment Adviser Barrow, Hanley, Mewhinney & Strauss, Inc. One McKinney Plaza, 3232 McKinney Avenue, 15th Floor, Dallas, Texas 75204 Distributor UAM Fund Distributors, Inc. 211 Congress Street Boston, MA 02110 PROSPECTUS July 17, 1998 UAM Funds Prospectus July 17, 1998 BHM&S Total Return Bond Portfolio Institutional Service Class Shares [LOGO OF UAM FUNDS APPEARS HERE] TABLE OF CONTENTS
PAGE ---- Fund Expenses.............................................................. 1 Prospectus Summary......................................................... 3 Risk Factors............................................................... 4 Financial Highlights....................................................... 5 Investment Objective....................................................... 6 Investment Policies........................................................ 6 Other Investment Policies.................................................. 7 Investment Limitations..................................................... 13 Purchase of Shares......................................................... 14 Redemption of Shares....................................................... 18 Shareholder Services....................................................... 20 Service and Distribution Plans............................................. 22 Valuation of Shares........................................................ 23 Performance Calculations................................................... 24 Dividends, Capital Gains Distributions and Taxes........................... 24 Investment Adviser......................................................... 25 Adviser's Historical Performance........................................... 28 Administrative Services.................................................... 29 Distributor................................................................ 30 Portfolio Transactions..................................................... 30 General Information........................................................ 30 UAM Funds -- Institutional Service Class Shares............................ 33
UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO INSTITUTIONAL SERVICE CLASS SHARES - ------------------------------------------------------------------------------- PROSPECTUS -- JULY 17, 1998 UAM Funds Trust (the "Fund") is an open-end investment company known as a "mutual fund." The Fund consists of multiple series (known as "Portfolios"), each of which has different investment objectives and policies. The BHM&S To- tal Return Bond Portfolio offers two separate classes of shares: Institutional Class Shares and Institutional Service Class Shares ("Service Class Shares"). Shares of each class represent equal, pro rata interests in a Portfolio and accrue dividends in the same manner except that the Service Class Shares bear fees payable by the class (at the rate of .25% per annum) to financial insti- tutions for services they provide to the owners of such shares (see "Service and Distribution Plans"). The securities offered in this Prospectus are Serv- ice Class Shares of one diversified, no-load Portfolio of the Fund managed by Barrow, Hanley, Mewhinney & Strauss, Inc. BHM&S TOTAL RETURN BOND PORTFOLIO. BHM&S Total Return Bond Portfolio (the "Portfolio") seeks to provide maximum long term total return consistent with reasonable risk to principal by investing in investment grade fixed income se- curities of varying maturities. Income return is expected to be a predominant portion of the Portfolio's total return. Any capital return on the Portfolio is dependent upon, among other factors, interest rate changes as well as the average maturity and duration of the Portfolio. The Adviser believes that by investing in undervalued securities with above average effective yields and capital appreciation potential, the Portfolio will generate superior returns over the long term while minimizing volatility and, therefore, downside risk. There can be no assurance that the Portfolio will achieve its stated objec- tive. Keep this Prospectus for future reference. It contains information that you should know before you invest. A "Statement of Additional Information" ("SAI") containing additional information about the Fund has been filed with the Secu- rities and Exchange Commission ("SEC"). The SAI is dated July 17, 1998 and has been incorporated by reference into this Prospectus. For a free copy of the SAI contact the UAM Funds Service Center at 1-800-638-7983. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FUND EXPENSES The following table illustrates expenses and fees that a shareholder of the Portfolios' Service Class Shares will incur. The Fund does not charge transac- tion fees. However, transaction fees may be charged if a broker-dealer or other financial intermediary deals with the Fund on your behalf. (See "PUR- CHASE OF SHARES.") SHAREHOLDER TRANSACTION EXPENSES
SERVICE CLASS SHARES -------------------- Sales Load Imposed on Purchases......................... NONE Sales Load Imposed on Reinvested Dividends.............. NONE Deferred Sales Load..................................... NONE Redemption Fees......................................... NONE Exchange Fee............................................ NONE
ANNUAL FUND OPERATING EXPENSES (As A Percentage of Average Net Assets)
SERVICE CLASS SHARES -------------------- Investment Advisory Fees (After Fee Waiver)............ 0.18% 12b-1 Fees (Including Shareholder Servicing Fees)+..... 0.25% Other Expenses (After Fee Waiver)...................... 0.72% ---- Total Operating Expenses (After Fee Waiver)............ 1.15%* ====
- ----------- + The Service Class Shares may bear service fees of 0.25% of average daily net assets of the Portfolio. Long-term shareholders may pay more than the eco- nomic equivalent of the maximum front end sales charge permitted by the Na- tional Association of Securities Dealers, Inc. (See "SERVICE AND DISTRIBU- TION PLANS.") * The Adviser intends to cap, to the extent of the current advisory fees, the Portfolio's Service Class Shares' Total Operating Expenses (excluding interest, taxes and extraordinary expenses), after the effect of expense offsets, at 1.15% of average daily net assets through December 31, 1998. The figures above include the effect of expense offsets. If expense offsets were excluded, Total Operating Expenses of the Portfolio would not be affected. (See "FINANCIAL HIGHLIGHTS.") Absent the Adviser's and/or other service providers waiver of fees, the Investment Advisory Fees, Other Expenses and Total Operating Expenses of the Portfolio's Service Class Shares would have been 0.35%, 0.85% and 1.45%, respectively of average daily net assets. The Adviser and other service providers may change or discontinue their fee waivers at any time. 1 The table above shows various fees and expenses an investor would bear di- rectly or indirectly. The expenses and fees listed above are based on the Portfolio's Service Class Shares' operations during the fiscal year ended April 30, 1998, as restated to reflect the current Investment Advisory Fees, Other Expenses, and Total Operating Expenses of the Portfolio. EXAMPLE The following example illustrates expenses a Service Class shareholder would pay on a $1,000 investment over various time periods assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period. The Portfo- lio charges no redemption fees of any kind.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- BHM&S Total Return Bond Portfolio Service Class Shares............................ $12 $37 $63 $140
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX- PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN ABOVE. 2 PROSPECTUS SUMMARY INVESTMENT ADVISER Barrow, Hanley, Mewhinney & Strauss, Inc. (the "Adviser") is a registered investment adviser founded in 1979 specializing in the active management of stock, bond and balanced portfolios for institutional, tax-exempt clients. Founded in 1979, the firm is a wholly-owned subsidiary of United Asset Manage- ment Corporation. The Adviser currently has $33 billion in assets under man- agement. (See "INVESTMENT ADVISER.") PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor") at net asset value without a sales commission. Share purchases may be made by sending investments directly to the Fund. The minimum initial investment is $2,500. The minimum for subsequent investments is $100. The min- imum initial investment for IRA accounts is $500. The minimum initial invest- ment for spousal IRA accounts is $250. Certain exceptions to the initial or minimum investment amounts may be permitted by the officers of the Fund. (See "PURCHASE OF SHARES.") DIVIDENDS AND DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income in quarterly dividends. The Portfolio will distribute any realized net capital gains annually. Distributions will be reinvested in the Portfo- lio's shares automatically unless an investor elects to receive cash distribu- tions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") REDEMPTIONS AND EXCHANGES Shares of the Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemp- tion request. The redemption price may be more or less than the purchase price. Shares of the portfolio may be exchanged for shares of the same class of any other portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" and "EX- CHANGE PRIVILEGE.") ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As- set Management Corporation, is responsible for performing and overseeing ad- ministration, fund accounting, dividend disbursing and transfer agency serv- ices provided to the Fund and its Portfolios by third-party service providers. (See "ADMINISTRATIVE SERVICES.") 3 RISK FACTORS Prospective investors should consider the following: (1) The fixed income securities held by the Portfolio will be affected by general changes in inter- est rates resulting in increases or decreases in the value of the securities. The value of fixed income securities can be expected to vary inversely to the changes in prevailing interest rates, i.e., as interest rates decline, the market value of fixed income securities tends to increase and vice versa; (2) The Portfolio may purchase securities on a when-issued basis which do not earn interest until issued and may decline or appreciate in market value prior to their delivery to the Portfolio; (3) The Portfolio will invest in investment grade debt securities, but reserves the right to hold securities that have been downgraded. Adverse economic and corporate changes and changes in inter- est rates may have a greater impact on issuers of lower rated debt securities that the Portfolio may hold, which may lead to greater price volatility. Also, lower rated securities may be more difficult to value accurately or sell in the secondary market; (4) The Portfolio may invest in repurchase agreements which entail a risk of loss should the seller default on its transaction; (5) The Portfolio may lend its investment securities, which entails a risk of loss should a borrower fail financially. (See "OTHER INVESTMENT POLICIES.") 4 FINANCIAL HIGHLIGHTS The following table provides selected per share information for a share out- standing throughout the period presented for the Portfolio's Service Class Shares. This table is part of the Portfolio's Annual Financial Statements in- cluded in the Portfolio's 1998 Annual Report to Shareholders. The Report is incorporated by reference into the Portfolio's SAI. The Portfolio's Annual Fi- nancial Statements have been audited by PricewaterhouseCoopers LLP whose un- qualified opinion thereon is also incorporated into the SAI. The following in- formation should be read in conjunction with the Portfolio's 1998 Annual Re- port to Shareholders. Further information about the Portfolio's performance is contained in its Annual Report, which may be obtained without charge by call- ing the telephone number on the Prospectus cover page.
NOVEMBER 1, YEAR ENDED YEAR ENDED 1995*** APRIL 30, APRIL 30, TO APRIL 30, 1998++ 1997++ 1996++ ---------- ---------- ------------ NET ASSET VALUE, BEGINNING OF PERIOD....... $ 9.95 $ 9.84 $10.00 ------- ------ ------ INCOME FROM INVESTMENT OPERATIONS Net Investment Income.................... 0.56 0.57 0.27 Net Realized and Unrealized Gain (Loss) on Investments......................... 0.40 0.05 (0.27) ------- ------ ------ Total from Investment Operations....... 0.96 0.62 -- ------- ------ ------ DISTRIBUTIONS Net Investment Income.................... (0.53) (0.51) (0.16) Net Realized Gain........................ (0.04) -- -- ------- ------ ------ Total Distributions.................... (0.57) (0.51) (0.16) ------- ------ ------ NET ASSET VALUE, END OF PERIOD............. $ 10.34 $ 9.95 $ 9.84 ======= ====== ====== TOTAL RETURN+.............................. 9.85% 6.47% (0.07)%** ======= ====== ====== RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (Thousands).... $15,732 $4,045 $2,871 Ratio of Expenses to Average Net Assets.. 0.95% 0.82% 0.83%* Ratio of Net Investment Income to Average Net Assets............................. 5.42% 5.78% 5.44%* Portfolio Turnover Rate.................. 210% 151% 55% Ratio of Voluntary Waived Fees and Expenses Assumed by the Adviser to Average Net Assets..................... 0.45% 1.43% 3.99%* Ratio of Expenses to Average Net Assets Including Expense Offsets.............. 0.94% 0.80% 0.80%*
- ----------- * Annualized. ** Not Annualized. *** Commencement of Operations. + Total return would have been lower had certain fees not been waived and expenses assumed by the Adviser during the period. ++ Per share amounts are based on average outstanding shares. 5 INVESTMENT OBJECTIVE The objective of the Portfolio is to provide maximum long-term total return consistent with reasonable risk to principal by investing in investment grade fixed income securities of varying maturities. Income return is expected to be a predominant portion of the Portfolio's total return. Any capital return on the Portfolio is dependent upon, among other factors, interest rate changes as well as the average maturity and duration of the Portfolio. The Adviser be- lieves that by investing in undervalued securities with above average effec- tive yields and capital appreciation potential, the Portfolio will generate superior returns over the long term while minimizing volatility and, there- fore, downside risk. INVESTMENT POLICIES The Portfolio seeks to achieve its objective by investing at least 90% of its total assets in a diversified portfolio of the following dollar-denomi- nated investment grade issues of varying maturities, with an intermediate av- erage maturity: U.S. Treasuries and Agencies; zero coupon obligations; mort- gage-backed securities; asset-backed securities; corporate bonds; municipal bonds; and domestic, Yankee dollar and Eurodollar bonds (See "OTHER INVESTMENT POLICIES."). These issues may have fixed, variable or floating rates of inter- est. Bond and note futures may be used for hedging interest rate risk for the Portfolio to an average weighted duration comparable to the Salomon Brothers' Broad or Lehman Brothers Aggregate Indices. The Adviser expects to actively manage the Portfolio in order to meet the investment objective. To produce favorable returns, the Adviser will invest in securities that it believes to be undervalued, generating an effective yield advantage versus the market. To control the volatility of returns, the Portfo- lio will exhibit a high current yield, a high quality and a conservative matu- rity structure. The Adviser's decision process will focus on security selection, sector con- centration and yield curve positioning. The Adviser will not engage in eco- nomic forecasts in an attempt to "time the market" since it believes that there are too many economic and political variables on a domestic and interna- tional basis to do so successfully on a consistent basis. Therefore, the Port- folio will maintain a conservative intermediate maturity structure, with secu- rities being diversified along the yield curve. The Portfolio's average weighted maturity will generally be ten years or less, with the average weighted duration comparable to that of the Salomon Brothers' Broad Investment Grade Index which is approximately five years. Duration compares interest rate risk between securities with different coupons and different maturities, sum- marizing in a single number the price sensitivity of a bond -- how a bond's maturity and coupon rate affect its exposure to interest rate risk. Duration involves the application of several principles: as the maturity of a bond in- creases, duration increases; as the coupon of a bond increases, duration de- creases; generally, the lower the coupon payment, the higher the duration; and duration 6 decreases as the frequency of the coupon payment increases. Generally, 10% or less of the Portfolio's assets will be invested in various short-term invest- ments. Please see "SHORT-TERM INVESTMENTS" for a list of the short-term in- struments in which the Portfolio may invest. The Adviser's security selection process begins by analyzing a bond's yield to maturity premium (or spread) versus the most recently issued U.S. Treasury of similar maturity. Having identified bonds with an above-average premium, the Adviser will then evaluate those factors that will influence the bond's future premium (i.e., credit quality, security structure, supply/demand rela- tionships, etc.). The objective of this process is to identify those issues whose yield premium will compress or narrow over a wide range of potential in- terest rate change, supporting superior long term performance. Furthermore, the Adviser will concentrate the Portfolio's holdings in industry sectors and maturity ranges that it believes are undervalued while seeking a prudent level of diversification. The Portfolio will invest in investment grade bonds which have one of the four highest rating categories (i.e. Aaa, Aa, A or Baa by Moody's Investors Service ("Moody's"), AAA, AA, A or BBB by Standard & Poor's Ratings Services ("S&P"), Fitch IBCA, or Duff and Phelps Credit Rating Service) at the time of purchase. Bonds rated Baa or BBB have speculative characteristics and may be more sensitive to changes in the economy and the financial condition of is- suers than higher rated bonds. The Adviser also reserves the right to retain securities which are downgraded by one or both of the rating agencies if, in the Adviser's judgment, retention of the securities is warranted. The Portfo- lio's SAI contains a more detailed description of bond ratings. OTHER INVESTMENT POLICIES SHORT-TERM INVESTMENTS In order to earn a return on uninvested assets, meet anticipated redemp- tions, or for temporary defensive purposes, the Portfolio may invest a portion of its assets in domestic and foreign money market instruments including cer- tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob- ligations, U.S. Government agency securities, short-term corporate debt secu- rities, and commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by Moody's or if unrated, determined by the Adviser to be of comparable quality. Time deposits maturing in more than seven days will not be purchased by the Portfolio, and time deposits maturing from two business days through seven calendar days will not exceed 10% of the total assets of the Portfolio. The Portfolio will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, (ii) in the case of U.S. banks, it is a member of the Fed- eral Deposit Insurance Corporation, and 7 (iii) in the case of foreign branches of U.S. banks, the security is, in the opinion of the Adviser, of an investment quality comparable with other debt securities which may be purchased by the Portfolio. The Fund has received permission from the SEC to deposit the daily uninvested cash balances of the Fund's Portfolios, as well as cash for invest- ment purposes, into one or more joint accounts and to invest the daily balance of the joint accounts in the following short-term investments: fully collater- alized repurchase agreements, interest-bearing or discounted commercial paper including dollar-denominated commercial paper of foreign issuers, and any other short-term money market instruments including variable rate demand notes and tax-exempt money instruments. By entering into these investments on a joint basis, the Portfolio may earn a higher rate of return on investments relative to what it could earn individually. The Fund has received permission from the SEC for each of its Portfolios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio. (See "INVESTMENT COMPANIES.") REPURCHASE AGREEMENTS The Portfolio may invest in repurchase agreements collateralized by U.S. Government securities, certificates of deposit, and certain bankers' accept- ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repurchase agreement, the Portfolio buys a security and simultaneously commits to sell that security back at an agreed upon price plus an agreed upon market rate of interest. Under a repurchase agreement, the seller is also required to maintain the value of securities subject to the agreement at not less than 100% of the repurchase price. The value of the securities purchased will be evaluated daily, and the Adviser will, if necessary, require the seller to maintain additional securities to ensure that the value is in compliance with the previous sentence. The use of repurchase agreements involves certain risks. For example, a default by the seller of the agreement may cause the Portfolio to experience a loss or delay in the liquidation of the collateral securing the repurchase agreement. The Portfolio might also incur disposition costs in liquidating the collateral. While the Fund's management acknowledges these risks, it is expected that they can be controlled through stringent counter-party selection criteria and careful monitoring procedures. The Fund has received permission from the SEC to pool daily uninvested cash balances of the Fund's Portfolios in order to invest in repurchase agreements on a joint basis. By entering into joint repurchase agreements, the Portfolio may incur lower transaction costs and earn higher rates of interest on joint repurchase agreements. The Portfolio's contribution would determine its return from a joint repurchase agreement. (See "SHORT-TERM INVESTMENTS.") 8 LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified institutional investors as a means of earning income. The Portfolio will not loan securities to the extent that greater than one-third of its total assets at fair market value would be committed to loans. During the term of a loan, the Portfolio is subject to a gain or loss depending on any increase or decrease in the market price of the securities loaned. Lending of securities is subject to review by the Fund's Board of Trustees. All relevant facts and circumstances, including the creditworthiness of the broker, dealer or institution, will be considered by the Adviser in making decisions about securities lending. An investment company may pay reasonable negotiated fees in connection with loaned securities so long as such fees are set forth in a written contract and approved by its Board of Trustees. The Portfolio will continue to retain any voting rights with respect to loaned securities. If a material event occurs affecting an investment on loan, the loan must be called and the securities voted. WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES The Portfolio may purchase and sell securities on a "when-issued," "delayed settlement," or "forward delivery" basis. "When-issued" or "forward delivery" 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 and forward delivery transactions may be expected to occur a month or more be- fore delivery is due. Delayed settlement is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by the Portfolio until it re- ceives delivery or payment from the other party to any of the above transac- tions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. The Portfolio will maintain a separate account of cash or liquid securities at least equal to the value of purchase commitments until payment is made. Typically, no income ac- crues on securities purchased on a delayed delivery basis prior to the time delivery is made although the Portfolio may earn income on securities it has deposited in a segregated account. The Portfolio may engage in these types of purchases in order to buy securi- ties that fit with its investment objectives at attractive prices -- not to increase its investment leverage. PORTFOLIO TURNOVER In addition to Portfolio trading costs, higher rates of portfolio turnover may result in the realization of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for more information on taxation). The Portfolio will not normally engage in short-term trading, but reserves the right to do so. 9 The table set forth in "Financial Highlights" presents the Portfolio's histor- ical portfolio turnover rates. INVESTMENT COMPANIES The Portfolio reserves the right to invest up to 10% of its total assets, calculated at the time of investment, in the securities of other open-end or closed-end investment companies. No more than 5% of the investing Portfolio's total assets may be invested in the securities of any one investment company nor may it acquire more than 3% of the voting securities of any investment company. The Portfolio will indirectly bear its proportionate share of any management fees paid by an investment company in which it invests in addition to the advisory fee paid by the Portfolio. The Fund has received permission from the SEC to allow each of its Portfo- lios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio provided that the in- vestment is consistent with the Portfolio's investment policies and restric- tions. Based upon the Portfolio's assets invested in the DSI Money Market Portfolio, the investing Portfolio's adviser will waive its investment advi- sory fee and any other fees earned as a result of the Portfolio's investment in the DSI Money Market Portfolio. The investing Portfolio will bear expenses of the DSI Money Market Portfolio on the same basis as all of its other share- holders. RESTRICTED AND ILLIQUID SECURITIES The Portfolio may purchase restricted securities that are not registered for sale to the general public but which are eligible for resale to qualified in- stitutional investors under Rule 144A of the Securities Act of 1933. Under the supervision of the Fund's Board of Trustees, the Adviser determines the li- quidity of such investments by considering all relevant factors. Provided that a dealer or institutional trading market in such securities exists, these re- stricted securities are not treated as illiquid securities for purposes of the Portfolio's investment limitations. The Portfolio may invest up to 15% of its net assets in illiquid securities. Prices realized from the sales of these se- curities could be more or less than those originally paid by the Portfolio or less than what may be considered the fair value of such securities. MORTGAGE-BACKED SECURITIES The Portfolio may invest in mortgage-backed securities. Mortgage-backed se- curities are collateralized by pools of mortgages assembled for subsequent sale to investors by various governmental agencies and sponsored organizations as well as by private issuers. The underlying assets collateralizing the mort- gage-backed securities may include single-family, multifamily and commercial properties. The two fundamental forms of mortgage-backed securities are pass- throughs and collateralized mortgage obligations ("CMOs"). Pass-throughs pro- duce monthly payments of principal and interest from the underlying mortgages. CMOs divide the 10 cash flows generated from the underlying mortgages or mortgage pass-through securities into different segments known as "tranches" which are then retired sequentially over time in order of priority. The market value and yield of mortgage-backed securities will fluctuate due to market interest rate change and early prepayments of the underlying mortgages. As prepayment rates on mortgages vary widely, it is difficult to accurately predict the average matu- rity of a particular pool of mortgages or tranches of CMOs. Although mortgage- backed securities may offer higher yields than those available from other types of securities, they may be less effective than other types of securities as a means of "locking in" an attractive rate for an extended period because of the prepayment feature. Prepayment risk has two important effects. First, like bonds in general mortgage-backed securities will generally decline when interest rates rise. Second, when interest rates fall and additional mortgage prepayments must be reinvested at lower interest rates, a Portfolio's rate of dividend income may be reduced. Mortgage-backed securities in which the Port- folio may invest will either carry a guarantee from an agency of the U.S. Gov- ernment or a private issuer of the timely payment of principal and interest or are suitably structured to be considered by the Adviser to be of investment grade quality. ASSET-BACKED SECURITIES The Portfolio may invest in asset-backed securities. Asset-backed securities are collateralized by short maturity loans such as automobile receivables, credit card receivables, or other types of receivables or assets, the payments from which are passed through to the security holder. Credit support for as- set-backed securities may be based on the underlying assets and/or provided through credit enhancements by a third party. Credit enhancement techniques include letters of credit, insurance bonds, limited guarantees (which are gen- erally provided by the issuer), senior-subordinated structures and over- collateralization. The value of these securities may be significantly affected by changes in interest rates, the market's perceptions of the issuers and the creditworthiness of the parties involved. MUNICIPAL OBLIGATIONS Municipal obligations include notes, bonds and other securities issued by or on behalf of states, territories and possessions of the U.S. and the District of Columbia and their political subdivisions, agencies and instrumentalities. The interest on such municipal obligations will normally be exempt from fed- eral income tax. These bonds may be general obligation bonds secured by the issuer's pledge of its full faith, credit and taxing power for the payment of principal and interest, or they may be revenue bonds payable from specific revenue sources, but are not generally backed by the issuer's taxing power. These obligations may include private activity bonds where payment is the re- sponsibility of the private industrial user of the facility financed by the bonds. Municipal notes are issued to meet short-term funding requirements of the issuer and include construction loan notes, short-term 11 discount notes, tax-exempt commercial paper, demand notes and similar instru- ments. Municipal bonds will be rated investment grade by Moody's and S&P, as described above. Investment grade municipal notes will be rated MIG1, MIG2 or MIG3 by Moody's, or SP-1 or SP-2 by S&P or, if unrated, determined by the Ad- viser to be of comparable quality. Please refer to the Portfolio's SAI for a detailed description of municipal note ratings. YANKEE DOLLAR AND EURODOLLAR SECURITIES Yankee dollar securities are U.S. dollar-based obligations issued inside the United States by foreign entities. Eurodollar securities are U.S. dollar-based obligations issued outside the United States by domestic or foreign entities. Investment in these securities involves certain risks which are not typically associated with investing in domestic securities. For example, non U.S.-based issuers are not subject to the same accounting, auditing and financial report- ing standards as are domestic issuers. There may be less publicly-available information about non-U.S.-based issuers which may make it difficult to make investment decisions. Political factors may have an impact in the form of con- fiscatory taxation, expropriation or political instability in international markets. Some foreign governments also levy withholding taxes against dividend and interest income. Although in some countries a portion of the taxes is re- coverable, the non-recovered portion of foreign withholding taxes will reduce the income the Portfolio receives from the companies comprising its invest- ments. ZERO COUPON SECURITIES A portion of the Portfolio may be invested in zero coupon securities which are fixed income securities that do not make regular interest payments. Zero coupon securities are sold at substantial discounts from their face value. The difference between a zero coupon security's issue or purchase price and its face value represents the imputed interest an investor will earn if the obli- gation is held until maturity. Zero coupon securities may offer the Portfolio the opportunity to earn higher yields than those available on ordinary inter- est paying obligations of similar credit quality and maturity. However, the prices of zero coupon securities may also exhibit greater price volatility than ordinary fixed income securities because of the manner in which their principal and interest are returned to the investor. The Portfolio will accrue income on such investments for tax and accounting purposes which is distribut- able to shareholders. Since no cash is received at the time of accrual, the Portfolio may be required to liquidate portfolio securities to satisfy its distribution obligations. FUTURES CONTRACTS AND OPTIONS In order to remain fully invested and to reduce transaction costs, the Port- folio may invest in bond futures, interest rate futures contracts and options. Because transaction costs associated with futures and options may be lower than costs of investing in bonds directly, the use of index futures and op- tions to facilitate cash flows may reduce a Portfolio's overall transaction costs. The Portfolio may enter 12 into futures contracts provided that not more than 5% of the Portfolio's as- sets are required as a margin deposit to secure obligations under such con- tracts. The Portfolio will engage in futures and options transactions for hedging purposes only and not for speculative purposes. Futures and options can be volatile and involve various degrees and types of risk. If the Portfolio judges market conditions incorrectly or employs a strategy that does not correlate well with its investments, use of futures and options contracts could result in a loss. The Portfolio could also suffer losses if it is unable to liquidate its position due to an illiquid secondary market. In the opinion of the Trustees of the Fund, the risk that the Portfo- lio will be unable to close out a futures position or options contract will be minimized by only entering into futures contracts or options transactions traded on national exchanges and for which there appears to be a liquid sec- ondary market. INVESTMENT LIMITATIONS The Portfolio will not: (a) with respect to 75% of its assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed as to principal and in- terest by the U.S. Government or any of its agencies or instrumentali- ties); (b) with respect to 75% of its assets, purchase more than 10% of any class of the outstanding voting securities of any issuer; (c) invest more than 5% of its assets at the time of purchase in the secu- rities of companies that have (with predecessors) a continuous operat- ing history of less than 3 years; (d) invest more than 25% of its assets in companies within a single indus- try; however, there are no limitations on investments made in instru- ments issued or guaranteed by the U.S. Government and its agencies. (e) make loans except by purchasing debt securities in accordance with its investment objective and policies or entering into repurchase agree- ments or by lending its portfolio securities to banks, brokers, deal- ers and other financial institutions so long as the loans are made in compliance with the 1940 Act, as amended, or the Rules and Regulations or interpretations of the SEC; (f) (i) borrow, except from banks and as a temporary measure for extraor- dinary or emergency purposes and then, in no event, in excess of 33 1/3% of the Portfolio's gross assets valued at the lower of market or cost, and (ii) the Portfolio may not purchase additional securities when borrowings exceed 5% of total assets; or (g) pledge, mortgage or hypothecate any of its assets to an extent greater than 33 1/3% of its total assets at fair market value. 13 The investment objectives of the Portfolio are fundamental and may be changed only with the approval of the holders of a majority of the outstanding shares of the Portfolio. Except for limitations (a), (b), (d), (e) and (f)(i), the Portfolio's investment limitations and policies described in this Prospec- tus and in the SAI are not fundamental and may be changed by the Fund's Board of Trustees upon reasonable notice to investors. All other investment limita- tions described here and in the SAI are fundamental policies and may be changed only with the approval of the holders of a majority of the outstanding shares of the Portfolio. If a percentage limitation on investment or utiliza- tion of assets as set forth above is adhered to at the time an investment is made, a later change in percentage resulting from changes in the value or to- tal cost of the Portfolio's assets will not be considered a violation of the restriction. PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), without a sales commission at the net asset value next deter- mined after an order is received by the Fund and payment is received by the Fund or its designated Service Agent. (See "VALUATION OF SHARES.") The minimum initial investment required is $2,500. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. Certain exceptions may be permitted by the officers of the Fund. The Portfolio issues two classes of shares: Institutional Class and Service Class. The two classes of shares each represent interests in the same portfo- lio of investments, have the same rights and are identical in all respects, except that the Service Class Shares offered by this Prospectus bear share- holder servicing expenses and distribution plan expenses and have exclusive voting rights with respect to the Rule 12b-1 Distribution Plan pursuant to which the distribution fee may be paid. The two classes have different ex- change privileges. (See "SHAREHOLDER SERVICES--EXCHANGE PRIVILEGE") The net income attributable to Service Class Shares and the dividends payable on Serv- ice Class Shares will be reduced by the amount of the shareholder servicing and distribution fees; accordingly, the net asset value of the Service Class Shares will be reduced by such amounts. Shares of the Portfolio may be purchased by customers of broker/dealers or other financial intermediaries ("Service Agents") that have established a shareholder servicing relationship with the Fund on behalf of their customers. Service Agents also impose additional or different conditions or other account fees on the purchase and redemption of Portfolio shares, which are not subject to the Rule 12b-1 Service and Distribution Plans. They may include transaction fees and/or service fees paid by the Fund from the Fund assets attributable to the Service Agent and, would not be imposed if shares of the Portfolio were purchased directly from the Fund or the Distributor. The Service Agents may provide shareholder services to their customers that are not available to a shareholder dealing directly with the 14 Fund. Each Service Agent is responsible for transmitting to its customers a schedule of any such fees and information regarding any additional or differ- ent purchases and redemptions conditions. Shareholders who are customers of Service Agents should consult their Service Agent for information regarding these fees and conditions. A salesperson and any other person entitled to re- ceive compensation for selling or servicing Portfolio shares may receive dif- ferent compensation with respect to one particular class of shares over an- other in the Fund. Service Agents or if applicable, their designees, that have entered into agreements with the Fund or its agent may enter confirmed purchase or redemp- tion orders on behalf of clients and customers, with payment to follow no later than a Portfolio's pricing on the following business day. If payment is not received by the Fund's Sub-Transfer Agent, Chase Global Funds Services Company ("CGFSC") by such time, the Service Agent could be held liable for re- sulting fees or losses. A Portfolio may be deemed to have received a purchase or redemption order when a Service Agent, or, if applicable, its authorized designee, accepts the order. Orders received by the Fund in proper form will be priced at the Portfolio's net asset value next computed after they are ac- cepted by a Service Agent or its authorized designee. Service Agents are re- sponsible to their customers and the Fund for timely transmission of all sub- scription and redemption requests, investment information, documentation and money. INITIAL INVESTMENT BY MAIL . Complete and sign an Application, and mail it together with a check pay- able to "UAM Funds," to: UAM Funds Trust UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 Payment for purchases of shares received by mail will be credited to an ac- count at the next share price calculated for the Portfolio after receipt. Pay- ment does not need to be converted into Federal Funds (monies credited to the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it for investment. The Fund will not accept third-party checks to purchase shares of the Portfolio. If you purchase shares by check, please be sure that your check is made payable to "UAM Funds." BY WIRE . Telephone the UAM Funds Service Center and provide the account name, ad- dress, telephone number, social security or taxpayer identification num- ber, Portfolio selected, amount being wired, and the name of the bank 15 wiring the funds. The call must be received prior to the close of regu- lar trading on the NYSE (generally 4:00 p.m. Eastern Time) to receive that day's price. An account number and a wire control number will be provided to you in addition to wiring instructions. Next, . instruct your bank to wire the specified amount to the Fund's Custodian: The Chase Manhattan Bank ABA #021000021 UAM Funds DDA Acct. #9102772952 Ref: Portfolio Name Your Account Number Your Account Name Wire Control Number (assigned by UAM Funds Service Center) . Forward a completed Application to the UAM Funds Service Center at the address shown on the Form. Federal Funds purchases will be accepted only on days when the NYSE and the Custodian Bank are open for business. . To be sure that a bank wire order is received on the same day it is sent, an investor's bank should wire funds as early in the day as possi- ble. The bank sending funds may charge for this service. The Fund's agent reserves the right to charge investors for receipt of wired funds, but no charge is currently imposed for this service. It is necessary to obtain a new wire control number every time money is wired into an ac- count in a Portfolio. Wire control numbers are effective for one trans- action only and cannot be used more than once. Wired money that is not properly identified with a currently effective wire control number will be returned to the bank from which it was wired and will not be credited to the shareholder's account. ADDITIONAL INVESTMENTS Additional investments can be made at any time. The minimum additional in- vestment is $100. Shares can be purchased at net asset value by mailing a check to the UAM Funds Service Center (payable to "UAM Funds") or by wiring money to the Custodian Bank as outlined above. When making additional invest- ments, be sure that the account number, account name and the Portfolio to be purchased is identified on the check or wire. Prior to wiring additional in- vestments, notify the UAM Funds Service Center by calling the number on the cover of this Prospectus. Mail orders should include, when possible, the "In- vest by Mail" stub which accompanies any Fund confirmation statement. PURCHASE BY ACH If you have made this election, shares of the Portfolio may be purchased via Automated Clearing House ("ACH"). Investors purchasing via ACH should complete the bank information section on the Account Application and attach a voided 16 check or deposit slip to the Account Application. This option must be estab- lished on your account at least 15 days prior to your initiating an ACH trans- action (see "SHAREHOLDER SERVICES--AUTOMATIC INVESTMENT PLAN"). OTHER PURCHASE INFORMATION Investments received by the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be invested at the share price calculated after the NYSE closes on that day. Investments received after the close of the NYSE will be executed at the price computed on the next day the NYSE is open. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. The Portfolio is intended to be a long-term investment vehicle and is not de- signed to provide investors with a means of speculation on short-term market movements. A pattern of frequent purchases can be disruptive to efficient portfolio management and, consequently, can be detrimental to a Portfolio's performance and its shareholders. Accordingly, if the Fund's management deter- mines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any purchase request with respect to such investor's account. Such investor also may be barred from pur- chasing other portfolios of the UAM Funds. Purchases of shares will be made in full and fractional shares calculated to three decimal places. Certificates for whole shares will be issued upon writ- ten request by the shareholder. Certificates for fractional shares will not be issued. IN-KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in ex- change for securities which are eligible for acquisition by the Portfolio, as described in this Prospectus. Securities to be exchanged which are accepted by the Fund will be valued as described under "VALUATION OF SHARES" at the next determination of net asset value after acceptance. Shares issued by the Port- folio in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the investor upon receipt from the issuer. Securities acquired through an in-kind purchase will be acquired for invest- ment and not for immediate resale. The Fund will not accept securities in exchange for shares of the Portfolio unless: . at the time of exchange, such securities are eligible to be in- cluded in the Portfolio (current market quotations must be readily available for such securities); . the investor represents and agrees that all securities offered to be exchanged are liquid securities and not subject to any restric- tions upon 17 their sale by the Portfolio under the Securities Act of 1933, or otherwise; and . the value of any such securities (except U.S. Government securities) being exchanged together with other securities of the same issuer owned by the Portfolio will not exceed 5% of the net assets of the Portfolio immediately after the transaction. Investors who are subject to federal taxation upon exchange may realize a gain or loss for federal income tax purposes depending upon the cost of secu- rities or local currency exchanged. Investors interested in such exchanges should contact the Adviser. REDEMPTION OF SHARES Shares of the Portfolio may be redeemed by mail or telephone, at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request. No charge is made for redemptions. Any re- demption may be more or less than the purchase price of your shares depending on the market value of the investment securities held by the Portfolio. BY MAIL Address requests for redemption to the UAM Funds Service Center. Requests to redeem shares must include: . share certificates, if issued; . a letter of instruction or an assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are regis- tered; . any required signature guarantees (see "SIGNATURE GUARANTEES"); and . any other necessary legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pen- sion and profit sharing plans and other organizations. BY TELEPHONE A redemption request by telephone requires the following: . establish the telephone redemption privilege (and if desired, the wire redemption privilege) by completing appropriate sections of the Application; and . call the Fund and instruct that the redemption proceeds be mailed to you or wired to your bank. The following tasks cannot be accomplished by telephone: . changing the name of the commercial bank or the account designated to receive redemption proceeds (this can be accomplished only by a written request signed by each shareholder, with each signature guaranteed); . redemption of certificated shares by telephone. 18 The Fund and its Sub-Transfer Agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and they may be liable for any losses if they fail to do so. These procedures include re- quiring the investor to provide certain personal identification at the time an account is opened, as well as prior to effecting each transaction requested by telephone. All telephone transaction requests will be recorded and investors may be required to provide additional telecopied written instructions of such transaction requests. The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent does not employ the procedures described above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili- ty, cost or expense for following instructions received by telephone that it reasonably believes to be genuine. SIGNATURE GUARANTEES Signature guarantees are required for the following redemptions: . redemptions where the proceeds are to be sent to someone other than the registered shareowner(s); . redemptions where the proceeds are to be sent to someplace other than the registered address, or . share transfer requests. Signature guarantees will be accepted from any eligible guarantor institu- tion which participates in a signature guarantee program. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securi- ties exchanges, registered securities associations, clearing agencies and sav- ings associations. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. OTHER REDEMPTION INFORMATION The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the UAM Funds Service Center or a redemption request in proper form. Although the Fund will redeem shares purchased by check before the check clears, payment of the redemption proceeds may be delayed for a pe- riod of up to fifteen days after their purchase, pending determination that the check has cleared. Investors should consider purchasing shares using a certified or bank check or money order if they anticipate an immediate need for redemption proceeds. The Fund may suspend the right of redemption or post- pone the date at times when both the NYSE and Custodian Bank are closed, or under any emergency circumstances determined by the SEC. If the Board of Trustees determines that it would be detrimental to the best interests of remaining shareholders of the Fund to make payment wholly or partly in cash, the Fund may pay redemption proceeds in whole or in part by a distribution 19 in-kind of liquid securities held by the Portfolio in lieu of cash in confor- mity with applicable rules of the SEC. Investors may incur brokerage charges on the sale of portfolio securities received in payment of redemptions. The Portfolio reserves the right to liquidate any account that is below fifty percent of the required minimum initial investment amount for a Portfo- lio as set forth in the Prospectus, where the reduction in value has occurred due to a redemption or exchange out of the account. If at any time your total investment does not have a value of at least fifty percent of the required minimum initial investment amount, you may be notified that the value of your account is below the Portfolio's minimum account balance requirement. You would then be allowed 60 days to make an additional investment before the ac- count is liquidated. Retirement accounts and certain other accounts will not be subject to automatic liquidation. Reductions in value that result solely from market activity will not trigger an involuntary redemption. SHAREHOLDER SERVICES EXCHANGE PRIVILEGE Service Class Shares of the Portfolio may be exchanged for Service Class Shares of any other UAM Funds Portfolio. (See the list of Portfolios of the UAM Funds at the end of this Prospectus.) Exchange requests should be made by contacting the UAM Funds Service Center. Any exchange will be based on the net asset value of the shares involved. There is no sales commission or charge of any kind for an exchange. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objectives of the Portfolio to be purchased. Call the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in which you are interested. Exchanges can only be made with Portfolios that are qualified for sale in a shareholder's state of residence. Exchange requests may be made either by mail or telephone. Telephone ex- changes will be accepted only if the certificates for the shares to be ex- changed have not been issued to the shareholder and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the NYSE will be processed on the next business day. The Fund may modify or terminate the exchange program at any time upon 60 days' written notice to shareholders, and may reject any exchange request. If the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any exchange request, with respect to such investor's account. Such investors also may be barred from exchanging into other portfolios of the UAM Funds. For additional information regarding responsibility 20 for the authenticity of telephoned instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE". An exchange into another UAM Funds Portfolio is a sale of shares and may result in a gain or loss for income tax purposes. AUTOMATIC INVESTMENT PLAN An Automatic Investment Plan permits shareholders of a Portfolio with a min- imum value of $2,500 or more to purchase shares automatically (minimum of $100 per transaction) at regular intervals selected by the shareholder. Provided the shareholder's bank or other financial institution allows automatic with- drawals, shares are purchased by transferring funds via the Automated Clearing House ("ACH"). Investments made through ACH will be automatically transferred from a shareholder's checking, bank money market or NOW account designated by the shareholder. Such withdrawals are made electronically, if the sharehold- er's bank or financial institution so permits, or by pre-authorized checks or drafts drawn on the shareholder's bank or other account. The bank or financial institution must be a member of ACH. At the shareholder's option, the account designated will be debited in the specified amount, and shares will be pur- chased monthly or quarterly. To establish an Automatic Investment Plan, a shareholder must complete the Optional Services Form available from the UAM Funds Service Center at 1-800- 638-7983 and mail it to Chase Global Funds Service Company. A shareholder may cancel his/her participation or change the amount of purchase at any time by mailing written notification to Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. Notification generally will be effective three business days following receipt. The Fund may modify or terminate this privi- lege at any time, or may charge a service fee, although no such fee currently is contemplated. SYSTEMATIC WITHDRAWAL PLAN Any shareholder whose account balance totals at least $10,000 may establish a Systematic Withdrawal Plan under which an amount pre-determined by the shareholder (but at least $100) is automatically redeemed from the sharehold- er's account either monthly or quarterly. A shareholder may participate in the Systematic Withdrawal Plan by using ACH. Redemption made through ACH will be automatically transferred to the shareholder's bank or other similar financial institution account or a properly designated third party. The bank or finan- cial institution must be a member of ACH. Redemptions ordinarily are made on the third business day of the month and payments ordinarily will be transmit- ted within five business days after the redemption date. Because the prices of Fund shares fluctuate, the number of shares redeemed to finance systematic withdrawal payments or a given amount will vary from payment to payment. If a shareholder owns shares in more than one Portfolio, the shareholder must des- ignate the Portfolio from which the redemptions under a Systematic Withdrawal Plan should be made. An additional sheet may be attached to the Optional Serv- ices Form if a shareholder selects more than one Portfolio. A Systematic With- drawal Plan may be terminated or suspended at any 21 time by the Fund. A shareholder may elect at any time, in writing, to termi- nate participation in the Systematic Withdrawal Plan. Such written election must be sent to and received by the Fund before a termination becomes effec- tive. There is currently no charge to the shareholder for a Systematic With- drawal Plan. SERVICE AND DISTRIBUTION PLANS Under the Service Plan for Service Class Shares, the Fund may enter into service agreements with Service Agents (broker-dealers or other financial in- stitutions) who receive fees with respect to the Fund's Service Class Shares owned by shareholders for whom the Service Agent is the dealer or holder of record, or for whom the Service Agent performs personal services and/or share- holder account maintenance. These fees are paid out of the assets allocable to Service Class Shares to the Distributor, to the Service Agent directly or through the Distributor. The Fund reimburses the Distributor or the Service Agent, as the case may be, for payments made at an annual rate of up to 0.25 of 1% of the average daily value of each Service Class Share. Each item for which a payment may be made under the Service Plan constitutes personal serv- ice and/or shareholder account maintenance and may constitute an expense of distributing Fund Service Class shares as the SEC construes such term under Rule 12b-1. The fees payable for servicing reflect actual expenses incurred up to the limits described herein. Banks are engaged to act as Service Agent only to perform administrative and shareholder servicing functions, including transaction-related agency services for their customers. If a bank is prohibited from so acting, alternative means for continuing the servicing of its shareholders would be sought and the shareholder clients of the bank would remain Fund shareholders. The Distribution Plan and Service Plan (the "Plans") provide generally that the Portfolio may incur distribution and service costs under the Plans which may not exceed in the aggregate 0.75% per annum of the Portfolio's net assets. The Board has currently limited payments under the Plans to 0.50% per annum of the Portfolio's net assets. The Service Class Shares offered by this Prospec- tus currently are not making payments under the Distribution Plan. Upon imple- mentation, the Distribution Plan would permit payments to the Distributor, broker-dealers, other financial institutions, sales representatives or other third parties who render promotional and distribution services, for items such as sales compensation and marketing and overhead expenses. The Plans were adopted pursuant to Rule 12b-1 under the 1940 Act. Although the Plans may be amended by the Board of Trustees, any change in the Plans which would materially increase the amounts authorized to be paid under the Plans must be approved by shareholders of the class involved. The Plans may be terminated by the Board of Trustees or Service Class shareholders. The amounts and purposes of expenditures under the Plans are reported to the Board of Trustees quarterly. 22 The amounts allowable under the Plans for each class of Shares of the Portfo- lio are limited by the terms of such Plan and under certain rules of the Na- tional Association of Securities Dealers, Inc. In addition to payments by the Fund under the Plans, the Distributor, United Asset Management Corporation, the parent company of UAMFSI, and of the Adviser or any of their affiliates, may, at its own expense, compensate a Service Agent or other person for marketing, shareholder servicing, recordkeeping and/or other services performed with respect to the Fund, a Portfolio or any Class of Shares of a Portfolio. The person making such payments may do so out of its revenues, its profits or any other source available to it. Such serv- ices arrangements, when in effect, are made generally available to all quali- fied service providers. The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Distributor, the Adviser and certain of their other affiliates also par- ticipate, at the date of this Prospectus, in an arrangement with Smith Barney Inc. ("Smith Barney") under which Smith Barney provides certain defined con- tribution plan marketing and shareholder services and receives from such enti- ties an amount equal to up to 33.3% of the portion of the investment advisory fees attributable to the invested assets of Smith Barney's eligible customer accounts without regard to any expense limitation in addition to amounts pay- able to all selling dealers. The Fund also compensates Smith Barney for serv- ices it provides to certain defined contribution plan shareholders that are not otherwise provided by UAMFSI. VALUATION OF SHARES The net asset value of each class of a Portfolio is determined by dividing the value of the Portfolio's assets attributable to the class, less any lia- bilities attributable to the class, by the number of shares outstanding at- tributable to the class. The net asset value per share of the Portfolio is de- termined as of the close of the NYSE on each day that the NYSE is open for business. Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the-counter market. Bonds and other fixed income securities may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost when the Board of Trustees determines that amortized cost reflects fair value. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Fund's Board of Trustees. 23 PERFORMANCE CALCULATIONS The Portfolio measures performance by calculating yield and total return. Both yield and total return figures are based on historical earnings and are not intended to indicate future performance. Yield and total return are calcu- lated separately for each class of a Portfolio. Yield refers to the income generated by an investment in the Portfolio over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all bond funds. As this differs from other accounting methods, the quoted yield may not equal the income actually paid to shareholders. Total return is the change in value of an investment in the Portfolio over a given period, assuming reinvestment of any dividends and capital gains. A cu- mulative or aggregate total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of re- turn that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Performance will be calculated separately for Institutional Class and Serv- ice Class Shares. Dividends paid by the Portfolio with respect to Institu- tional Class and Service Class Shares, to the extent any dividends are paid, will be calculated in the same manner at the same time on the same day and will be in the same amount, except that service fees, distribution charges and any incremental transfer agency costs relating to Service Class Shares will be borne exclusively by that class. The Portfolio's performance may be compared to data prepared by independent services which monitor the performance of investment companies, data reported in financial and industry publications, and various indices as further de- scribed in the Portfolio's SAI. This information may also be included in sales literature and advertising. The Portfolio's Annual Report to Shareholders for the most recent fiscal year end contains additional performance information that includes comparisons with appropriate indices. The Annual Report is available without charge. Con- tact the UAM Funds Service Center at the telephone number on the cover of this Prospectus. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income (for tax purposes) to shareholders in quarterly dividends. If any net capital gains are realized, the Portfolio will normally distribute them annually. All dividends and capital gains distributions will be automatically reinvested in additional 24 shares of the Portfolio unless the Fund is notified in writing that the share- holder elects to receive distributions in cash. FEDERAL TAXES The Portfolio intends to qualify as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, for federal in- come tax purposes and to meet all other requirements that are necessary for it (but not its shareholders) to be exempt from federal taxes on income and gains paid to shareholders in the form of dividends. To do this, the Portfolio must, among other things, distribute substantially all of its ordinary income and net capital gains on an annual basis and maintain a portfolio of investments which satisfies certain diversification criteria. Dividends paid by the Portfolio from net investment income, whether in cash or reinvested in shares, are taxable to shareholders as ordinary income. Short-term capital gains will be taxed as ordinary income. Long-term capital gains distributions are taxed as long-term capital gains. Shareholders will be notified annually of dividend income earned for tax purposes. Dividends declared in October, November and December to shareholders of rec- ord in such a month and paid in January of the following year will be treated as if they had been paid by the Fund and received by the shareholders on De- cember 31. The Fund is required by federal law to withhold 31% of reportable payments paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, you must certify that your Social Security or Taxpayer Identification Number you have provided is correct and that either you are not currently subject to backup withholding or you are exempt from backup withholding. This certification must be made on the Application or on a separate form supplied by the Fund. Dividends and interest received by each Portfolio may give rise to withhold- ing and other taxes imposed by foreign countries. These taxes reduce the Port- folio's dividends but are included in the taxable income reported on your tax statement if the Portfolio qualifies for this tax treatment and elects to pass it through to you. Consult a tax adviser for more information regarding deduc- tions and credits for foreign taxes. INVESTMENT ADVISER The Adviser is a registered investment adviser formed in 1979. Its business offices are located at One McKinney Plaza, 3232 McKinney Avenue, 15th Floor, Dallas, Texas 75204. The Adviser is a wholly-owned subsidiary of United Asset Management Corporation ("UAM"), a holding company, and provides and offers 25 investment management services to corporate, public and Taft-Hartley employee benefit plans, foundations, endowments, health care and other institutions and investors. The Adviser currently has $33 billion in assets under management. The Portfolio pays an annual fee in monthly installments to the Adviser for advisory services. This fee is accrued daily and paid every month as a per- centage of the average net assets in the Portfolio for that month. The per- centage fee on an annual basis is 0.35%. The Adviser intends, to waive a por- tion of its advisory fees, if necessary, to keep the Portfolio's Service Class Shares total operating expenses from exceeding 1.15% of average daily net as- sets through December 31, 1998. The Adviser will not be reimbursed by the Fund for any advisory fees which are waived for a given year. The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Adviser and its parent company may also make payments to unaffiliated brokers who perform distribution, marketing, shareholder and other services with respect to the Portfolio. The investment professionals at the Adviser responsible for the day-to-day management of the Portfolio and their qualifications are as follows: JOHN S. WILLIAMS -- Fixed Income Principal and the first fixed income port- folio manager at the Adviser in 1983. Mr. Williams has also managed balanced and municipal portfolios during his 21 year investment career. Prior to join- ing the Adviser, he was responsible for the management of all fixed income as- sets at Southland Trust, Dallas, Texas, and prior to that was a portfolio man- ager and securities analyst at InterFirst Bank Dallas Trust Department. Mr. Williams has served on the Advisory Committee for the Texas Teachers Retire- ment System and is an active member in the Dallas Investment Analysts Society. He currently is a Director of United Asset Management Corporation. Mr. Wil- liams is a Chartered Financial Analyst, earning his MBA in 1976 and BBA in 1975 from Texas Christian University. DAVID R. HARDIN -- Fixed Income Principal and portfolio manager. Prior to joining the Adviser in 1987, Mr. Hardin was the Vice President and Director of the Fixed Income Group of RepublicBank Dallas Trust Department. In that posi- tion, he was responsible for the management of all taxable and tax-exempt fixed income assets of the Trust Division, including all separately managed accounts, collective investment fund products, and the creation of and manage- ment of an SEC-registered mutual fund. Prior to attaining the Director's posi- tion, Mr. Hardin was a taxable portfolio manager and also served as the credit analyst for the Trust Division. He started his investment career as a private placement credit analyst while employed by American General Insurance Co. in Houston in 1976. Mr. 26 Hardin received an M.Sc. from The London School of Economics in 1975 and a BBA from Texas Christian University in 1973. STEPHEN M. MILANO -- Fixed Income Principal and portfolio manager. Prior to joining the Adviser in 1990, Mr. Milano was employed at Salomon Brothers, Inc. in New York as a Vice President of the Fixed Income Strategy Group. In that role he was a specialist in developing portfolio structure and strategies for active management of taxable assets. While at Salomon he also served as Prod- uct Sales Manager for International Fixed Income Securities and as a Mortgage and Government Specialist. Prior to joining Salomon, Mr. Milano was employed as a portfolio manager and trader at Equitable Life Assurance Society. He re- ceived his BS in Economics with a concentration in Finance from the Wharton School of the University of Pennsylvania in 1980. J. SCOTT MCDONALD -- Fixed Income Principal and Portfolio Analyst/Trader. Mr. McDonald joined the Adviser in 1995 to serve as a security and portfolio specialist for the Fixed Income Group. In addition to security and portfolio analyst, he is responsible for systems analytics used in the evaluation of effective/option adjusted yield measurements for all securities and portfo- lios. He also serves as compliance monitor of all fixed income portfolios to ensure commonality of structure and diversification. Mr. McDonald previously served as the Senior Vice President and Portfolio Manager at Life Partners Group, Inc. in Dallas. While with Life Partners, he was responsible for imple- menting investment strategy for $3 billion in assets. Additionally, he has been employed by Texas Commerce Bank Houston as a Credit Supervisor and Lend- ing Officer. He received his MBA in 1991 from the University of Texas at Aus- tin and his BBA from Southern Methodist University in 1986. MARK C. LUCHSINGER -- Fixed Income Principal and Portfolio Analyst/Trader. Mr. Luchsinger is the newest senior member of the fixed income team. Prior to joining the Adviser in April of 1997, he had spent several years in fixed in- come sales at First Boston Corporation, PaineWebber and Morgan Keegan respon- sible for a wide array of security and client types. During Mr. Luchsinger's investment career, he has also served as Chief Investment Officer for Great American Reserve Insurance Company in Dallas, where he was responsible for the management of over $1 billion in fixed income and equity portfolios, senior investment portfolio manager for Western Preferred Corporation in Fort Worth; and investment manager for Scor Reinsurance Company in Irving. Mr. Luchsinger is a Chartered Financial Analyst and earned his BBA from Bowling Green State University in 1980. DEBORAH J. ANDERSON -- Senior Portfolio Assistant. Ms. Anderson is responsi- ble for all administrative staff and their duties associated with the fixed income product management, including communication/liaison with all clients, custodial banks, and brokerage relationships. She supervises all operational aspects 27 of fixed income security trading and works extensively with reporting require- ments for all clients and regulatory agencies. Prior to joining the Adviser in 1988, Ms. Anderson served as a Trust Officer with Trust Company of Texas and its predecessor, Southland Trust Co. She received a BBA in Accounting from the University of Texas at Arlington in 1974. ADVISER'S HISTORICAL PERFORMANCE Below are certain performance data provided by the Adviser pertaining to the composite of separately managed accounts of the Adviser that are managed with substantially similar (although not necessarily identical) objectives, poli- cies and strategies as those of the Portfolio. The performance data for the managed accounts is net of all fees and expenses. The investment returns of the Portfolio may differ from those of the separately managed accounts because such separately managed accounts may have fees and expenses that differ from those of the Portfolio. Further, the separately managed accounts are not sub- ject to investment limitations, diversification requirements and other re- strictions imposed by the Investment Company Act of 1940 and Internal Revenue Code; such conditions, if applicable may have lowered the returns for the sep- arately managed accounts. The results presented are not intended to predict or suggest the return to be experienced by the Portfolio or the return an in- vestor might achieve by investing in the Portfolio. BARROW, HANLEY, MEWHINNEY & STRAUSS, INC. -- BOND ACCOUNT (PERCENTAGE RETURNS NET OF MANAGEMENT FEES)
BARROW, HANLEY, MEWHINNEY & LEHMAN BROTHERS AGGREGATE CALENDAR YEARS STRAUSS, INC. BOND INDEX -------------- --------------------------- ------------------------- 1988.................... 7.55% 7.89% 1989.................... 14.52% 14.53% 1990.................... 9.02% 8.96% 1991.................... 16.52% 16.00% 1992.................... 7.70% 7.40% 1993.................... 10.86% 9.75% 1994.................... (3.52)% (2.92)% 1995.................... 17.68% 18.47% 1996.................... 3.32% 3.63% 1997.................... 9.60% 9.65% 3 months ended 3/31/98.. 1.63% 1.56% Annualized.............. 9.10% 9.11% Cumulative.............. 244.08% 244.35% Ten-Year Mean (1/1/88- 12/31/97)............. 9.33% 9.34% Value of $1 invested during the period (1/1/88-3/31/98)...... $ 3.44 $ 3.44
28 Notes: 1. The annualized return is calculated from monthly data, allowing for com- pounding. Market Value of the account was the sum of the account's total assets, including cash, cash equivalents, short-term investments, and se- curities valued at current market prices. 2. The cumulative return means that $1 invested in the account on January 1, 1988 had grown to $3.44 by March 31, 1998. 3. The 10-year mean is the arithmetic average of the annual returns for the calendar years listed. 4. The Lehman Brothers Aggregate Bond Index is an unmanaged index, which as- sumes reinvestment of dividends and is generally considered representative of securities similar to those invested in by the Adviser for the purpose of the composite performance numbers set forth above. 5. The Adviser's average annual management fee over the period shown (1/1/88- 3/31/98) was 0.29% or 29 basis points. During the period, fees on the Ad- viser's individual accounts ranged from 0.25% to 0.45% (25 basis points to 45 basis points). Net returns to investors vary depending on the manage- ment fee. ADMINISTRATIVE SERVICES UAM Fund Services Inc. ("UAMFSI"), a wholly-owned subsidiary of UAM, is re- sponsible for performing and overseeing administrative, fund accounting, divi- dend disbursing and transfer agent services provided to the Fund and its Port- folios. UAMFSI's principal office is located at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is located at 73 Tremont Street, Boston, MA 02108. Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fees are calculated from the aggregate net assets of the Portfolio:
RATE ---- BHM&S Total Return Bond Portfolio...................................... 0.04%
CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined UAM Fund assets; 0.11 of 1% of the next $800 million of combined UAM Fund assets; 0.07 of 1% of combined UAM Fund assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined UAM Fund assets in excess of $3 billion. The UAM Fund fees are allocated among each of the Portfolios on the basis of their relative assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum annual fee increases by $20,000. 29 DISTRIBUTOR UAM Fund Distributors, Inc. a wholly-owned subsidiary of UAM, with its prin- cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis- tributes the shares of the Fund. Under the Fund's Distribution Agreement (the "Agreement"), the Distributor, as agent of the Fund, agrees to use its best efforts as sole distributor of the Fund's shares. The Distributor does not re- ceive any fee or other compensation under the Agreement with respect to the Portfolio's Service Class Shares (except as described under "Service and Dis- tribution Plans" above). The Agreement continues in effect as long as it is approved at least annually by the Fund's Board of Trustees. Those approving the Agreement must include a majority of those Trustees who are neither par- ties to such Agreement nor interested persons of any such party. The Agreement provides that the Fund will bear the costs of the registration of its shares with the SEC and various states and the printing of its prospectuses, its SAIs and its reports to shareholders. PORTFOLIO TRANSACTIONS The Advisory Agreement authorizes the Adviser to select the brokers or deal- ers that will execute the purchase and sale of investment securities for the Portfolio. The Agreement directs the Adviser to use its best efforts to obtain the best available price and most favorable execution for all transactions of the Portfolio. If consistent with the interests of the Portfolio, the Adviser may select brokers on the basis of the research, statistical and pricing serv- ices they provide to each Portfolio in addition to required services. Such brokers may be paid a higher commission than that which another qualified bro- ker would have charged for effecting the same transaction, provided that such commissions are paid in compliance with the Securities Exchange Act of 1934, as amended, and that the Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to a Portfolio and the Adviser's other clients. Although not a typical practice, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. If a purchase or sale of securities consistent with the investment policies of a Portfolio and one or more of these other clients served by the Adviser 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 reason- able by the Adviser. Although there is no specified formula for allocating such transactions, such allocations are subject to periodic review by the Fund's Trustees. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized as a Delaware business trust on May 18, 1994 under the name "The Regis Fund II." On October 31, 1995, the name of the Fund was 30 changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial inter- est, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without fur- ther action by shareholders. At its discretion, the Board of Trustees may create additional Portfolios and classes of shares. The shares of each Portfolio are fully paid and nonas- sessable, and have no preference as to conversion, exchange, dividends, re- tirement or other features and no pre-emptive rights. They have noncumulative voting rights, which means that holders of more than 50% of shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. As of June 15, 1998, Fleet National Bank, Trustee, FBO Austin Diagnostic Clinic Association 401K Profit Sharing Plan, held of record 28.1% of the out- standing shares of the Portfolio's Institutional Class for which beneficial ownership is disclaimed or presumed disclaimed. The persons or organizations owning 25% or more of the outstanding shares of the Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) the Portfolio. As a re- sult, these persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of share- holders of such Portfolio. Both Institutional Class and Service Class Shares represent an interest in the same assets of a Portfolio. Service Class Shares bear certain expenses re- lated to shareholder servicing and the distribution of such shares, and have exclusive voting rights with respect to matters relating to such distribution expenditures. The Board of Trustees of the Fund has authorized a third class of shares, Advisor Class Shares, which is not currently being offered by this Portfolio. Information about the Institutional Class Shares of the Portfolio is available upon request by contacting the UAM Funds Service Center. Annual meetings will not be held except as required by the 1940 Act and other applicable laws. The Fund has undertaken that its Trustees will call a meeting of shareholders if such a meeting is requested in writing by the hold- ers of not less than 10% of the outstanding shares of the Fund. The Fund will assist shareholder communications in such matters. CUSTODIAN The Chase Manhattan Bank serves as custodian of the Fund's assets. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the independent accountant for the Fund. 31 REPORTS Investors will receive unaudited semi-annual financial statements and annual financial statements audited by PricewaterhouseCoopers LLP. SHAREHOLDER INQUIRIES Shareholder inquiries may be made by contacting the UAM Funds Service Center at the telephone number listed on the cover of this Prospectus. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PRO- SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OF- FERING MAY NOT BE LAWFULLY MADE. 32 UAM FUNDS -- INSTITUTIONAL SERVICE CLASS SHARES BHM&S Total Return Bond Portfolio DSI Disciplined Value Portfolio FMA Small Company Portfolio FPA Crescent Portfolio MJI International Equity Portfolio NWQ Balanced Portfolio NWQ Small Cap Value Portfolio NWQ Special Equity Portfolio NWQ Value Equity Portfolio Sirach Bond Portfolio Sirach Equity Portfolio Sirach Growth Portfolio Sirach Special Equity Portfolio Sirach Strategic Balanced Portfolio Sterling Partners' Balanced Portfolio Sterling Partners' Equity Portfolio Sterling Partners' Small Cap Value Portfolio TJ Core Equity Portfolio 33 UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 1-800-638-7983 Investment Adviser Barrow, Hanley, Mewhinney & Strauss, Inc. One McKinney Plaza, 3232 McKinney Avenue, 15th Floor, Dallas, Texas 75204 Distributor UAM Fund Distributors, Inc. 211 Congress Street Boston, MA 02110 PROSPECTUS July 17, 1998 UAM Funds Prospectus July 17, 1998 Chicago Asset Management Intermediate Bond Portfolio Institutional Class Shares [LOGO OF UAM FUNDS APPEARS HERE] TABLE OF CONTENTS
PAGE ---- Fund Expenses.............................................................. 1 Prospectus Summary......................................................... 3 Risk Factors............................................................... 4 Financial Highlights....................................................... 5 Investment Objective....................................................... 6 Investment Policies........................................................ 6 Other Investment Policies.................................................. 8 Investment Limitations..................................................... 15 Purchase of Shares......................................................... 16 Redemption of Shares....................................................... 20 Shareholder Services....................................................... 22 Valuation of Shares........................................................ 24 Performance Calculations................................................... 25 Dividends, Capital Gains Distributions and Taxes........................... 25 Investment Adviser......................................................... 26 Adviser's Historical Performance........................................... 28 Administrative Services.................................................... 29 Distributor................................................................ 30 Portfolio Transactions..................................................... 30 General Information........................................................ 31 UAM Funds -- Institutional Class Shares.................................... 33
UAM FUNDS CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO INSTITUTIONAL CLASS SHARES - -------------------------------------------------------------------------------- PROSPECTUS -- JULY 17, 1998 UAM Funds Trust (the "Fund") is an open-end investment company known as a "mutual fund." The Fund consists of multiple series (known as "Portfolios"), each of which has different investment objectives and policies. The Chicago As- set Management Intermediate Bond Portfolio currently offers only one class of shares. The securities offered in this Prospectus are Institutional Class Shares of one diversified, no-load Portfolio of the Fund managed by Chicago As- set Management Company. CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO. Chicago Asset Manage- ment Intermediate Bond Portfolio (the "Portfolio") seeks a high level of cur- rent income consistent with moderate interest rate exposure by investing pri- marily in investment grade bonds with an average weighted maturity between 3 and 10 years. There can be no assurance that the Portfolio will achieve its stated objec- tive. Keep this Prospectus for future reference. It contains information that you should know before you invest. A "Statement of Additional Information" ("SAI") containing additional information about the Fund has been filed with the Secu- rities and Exchange Commission ("SEC"). The SAI is dated July 17, 1998 and has been incorporated by reference into this Prospectus. For a free copy of the SAI contact the UAM Funds Service Center at 1-800-638-7983. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FUND EXPENSES The following table illustrates expenses and fees that a shareholder of the Portfolio's Institutional Class Shares will incur. The Fund does not charge transaction expenses. However, transaction fees may be charged if a broker- dealer or other financial intermediary deals with the Fund on your behalf. (See "PURCHASE OF SHARES.") SHAREHOLDER TRANSACTION EXPENSES Sales Load Imposed on Purchases......................................... NONE Sales Load Imposed on Reinvested Dividends.............................. NONE Deferred Sales Load..................................................... NONE Redemption Fees......................................................... NONE Exchange Fees........................................................... NONE
ANNUAL FUND OPERATING EXPENSES (As a Percentage of Average Net Assets) Investment Advisory Fees (After Fee Waivers).......................... 0.00% 12b-1 Fees............................................................ NONE Other Expenses (After Expenses Assumed or Waived)..................... 0.80% ---- Total Operating Expenses (After Fee Waiver and Expenses Assumed)...... 0.80%* ====
- ----------- * Absent the fees waived and expenses assumed, Investment Advisory Fees, Other Expenses and Total Operating Expenses for the Portfolio would have been 0.48%, 1.25% and 1.73%, respectively. The Total Operating Expenses includes the effect of expense offsets. If expense offsets were excluded, Total Oper- ating Expenses of the Portfolio would not be affected. Until further notice, the Adviser and certain other service providers have voluntarily agreed to waive their fees and/or to assume certain operating expenses to keep the Portfolio's total annual operating expenses (excluding interest, taxes and extraordinary expenses), after the effect of expense offsets, from exceeding 0.80% of average daily net assets. The Adviser and certain other service providers may change or discontinue their fee waivers and expense assump- tions at any time. The table above shows various fees and expenses an investor would bear di- rectly or indirectly. The expenses and fees set forth above are based on the Portfolio's operations during the fiscal year ended April 30, 1998. 1 EXAMPLE The following example illustrates expenses a shareholder would pay on a $1,000 investment over various time periods assuming (1) a 5% annual rate of return and (2) redemption at the end of the time period indicated. The Portfo- lio charges no redemption fees of any kind.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- Chicago Asset Management Intermediate Bond Portfolio Institutional Class Shares.... $ 8 $26 $44 $99
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX- PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 2 PROSPECTUS SUMMARY INVESTMENT ADVISER Chicago Asset Management Company (the "Adviser") is a registered investment adviser, founded in 1983 and specializing in the active management of stocks, bonds and balanced portfolios for institutional, tax-exempt clients. As of De- cember 31, 1987, the Adviser had over $2 billion in assets under management. (See "INVESTMENT ADVISER.") PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor") to investors at net asset value without a sales commission. Share purchases may be made by sending investments directly to the Fund. The minimum initial investment is $2,000. The minimum for subsequent investments is $100. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. Certain exceptions to the initial or minimum investment amounts may be permitted by the officers of the Fund. (See "PURCHASE OF SHARES.") DIVIDENDS AND DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income in quarterly dividends. The Portfolio will distribute any realized net capital gains annually. Distributions will be reinvested in Portfolio shares automatically unless an investor elects to receive cash distributions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") REDEMPTIONS AND EXCHANGES Shares of the Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemp- tion request. The redemption price may be more or less than the purchase price. Shares of the Portfolio may be exchanged for shares of the same class of any other portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" and "EX- CHANGE PRIVILEGE.") ADMINISTRATIVE SERVICES UAM Fund Services Inc. ("UAMFSI"), a wholly-owned subsidiary of United Asset Management Corporation, is responsible for performing and overseeing adminis- tration, fund accounting, dividend disbursing and transfer agency services provided to the Fund and its Portfolios by third-party service providers. (See "ADMINISTRATIVE SERVICES.") 3 RISK FACTORS The value of the Portfolio's shares will fluctuate in response to changes in market and economic conditions as well as the financial conditions and pros- pects of the issuers in which the Portfolio invests. Prospective investors should consider the following: (1) The Portfolio may engage in various strate- gies to seek to hedge its investments against movements in security prices, interest rates, and currency exchange rates by the use of derivatives includ- ing options and futures as well as options on futures. Such strategies are commonly referred to as "derivatives" and involve the risk of imperfect corre- lation in movements in the price of options and futures and movements in the price of securities, interest rates or currencies which are the subject of the hedge. To the extent these transactions involve foreign securities or curren- cies, they are also subject to the risk factors associated with foreign in- vestments generally. There can be no assurance that a liquid secondary market for options and futures contracts will exist at any specific time; (2) The Portfolio may invest up to 10% of its assets in securities rated lower than Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's Ratings Services ("S&P"). These securities carry a high degree of credit risk, and are considered speculative by the major credit rating agencies and are sometimes referred to as "junk bonds" and "high risk/high yield" securities; (3) The Portfolio may invest up to 10% of its assets in foreign issuers, which may involve greater risks than investments in domestic securities, such as foreign currency risk; (4) The Portfolio may invest in repurchase agreements which entail a risk of loss should the seller default on its transaction. (5) The Portfolio may lend its investment securities which entails a risk of loss should a borrower fail financially; (6) The Portfolio may purchase secu- rities on a when-issued basis which does not earn interest until issued and may decline or appreciate in market value prior to their delivery to the Port- folio. See "OTHER INVESTMENT POLICIES." 4 FINANCIAL HIGHLIGHTS The following table provides selected per share information for a share out- standing throughout the periods presented for the Portfolio. This table is part of the Portfolio's Annual Financial Statements, which are included in the Portfolio's 1998 Annual Report to Shareholders. The Report is incorporated by reference into the Portfolio's SAI. The Portfolio's Annual Financial State- ments have been audited by PricewaterhouseCoopers LLP whose unqualified opin- ion thereon is also incorporated into the Portfolio's SAI. The following in- formation should be read in conjunction with the Portfolio's 1998 Annual Re- port to Shareholders. Further information about the Portfolio's performance is contained in its Annual Report, which may be obtained without charge by tele- phoning the number on the Prospectus cover page.
JANUARY 24, YEAR ENDED YEAR ENDED YEAR ENDED 1995*** TO APRIL 30, APRIL 30, APRIL 30, APRIL 30, 1998 1997 1996 1995 ---------- ---------- ---------- ----------- NET ASSET VALUE, BEGINNING OF PERIOD......................... $ 10.30 $ 10.39 $10.33 $10.00 ------- ------- ------ ------ INCOME FROM INVESTMENT OPERATIONS Net Investment Income.......... 0.57 0.61 0.64 0.17 Net Realized and Unrealized Gain on Investments........... 0.24 (0.05) 0.14++ 0.26 ------- ------- ------ ------ Total from Investment Operations.................... 0.81 0.56 0.78 0.43 ------- ------- ------ ------ DISTRIBUTIONS Net Investment Income.......... (0.57) (0.62) (0.64) (0.10) Net Realized Gain.............. -- (a) (0.03) (0.08) -- ------- ------- ------ ------ Total Distributions............ (0.57) (0.65) (0.72) (0.10) ------- ------- ------ ------ NET ASSET VALUE, END OF PERIOD.. $ 10.54 $ 10.30 $10.39 $10.33 ======= ======= ====== ====== TOTAL RETURN+................... 8.08% 5.53% 7.62% 4.31%** ======= ======= ====== ====== RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (Thousands).................... $13,261 $10,044 $7,981 $5,267 Ratio of Expenses to Average Net Assets......................... 0.80% 0.80% 0.84% 0.80%* Ratio of Net Investment Income to Average Net Assets.......... 5.64% 5.88% 6.17% 6.20%* Portfolio Turnover Rate......... 40% 31% 24% 0% Ratio of Voluntary Waived Fees and Expenses Assumed by the Adviser to Average Net Assets.. 0.93% 1.39% 1.20% 2.78%* Ratio of Expenses to Average Net Assets Including Expense Offsets........................ 0.80% 0.80% 0.80% 0.80%*
- ----------- * Annualized. ** Not annualized. *** Commencement of Operations. + Total return would have been lower had certain fees not been waived and expenses assumed by the Adviser during the periods indicated. ++ The amount shown for a share outstanding throughout the year does not ac- cord with the aggregate net losses on investments for that year because of the timing of sales and repurchases of the Portfolio shares in relation to fluctuating market value of the investments of the Portfolio. (a) Amount is less than $0.01 per share. 5 INVESTMENT OBJECTIVE The Portfolio seeks a high level of current income consistent with moderate interest rate exposure by investing primarily in investment grade bonds with an average weighted maturity between 3 and 10 years. There can be no assurance that the Portfolio will achieve its stated objective. The Adviser seeks to re- duce the risk that is inherent in the fast-changing bond market while adding to the return available from a bond market index. INVESTMENT POLICIES The Portfolio seeks to achieve its objective by investing at least 65% of its total assets under normal circumstances in intermediate-term investment grade notes or bonds with an average weighted maturity between 3 and 10 years. Investment grade bonds are generally considered to be those bonds having one of the four highest grades assigned by Moody's (Aaa, Aa, A or Baa) or S&P ("S&P") (AAA, AA, A or BBB), or, if unrated, of equivalent quality in the Ad- viser's judgment. Bonds rated Baa or BBB have speculative characteristics and may be more sensitive to changes in the economy and the financial condition of issuers than higher rated bonds. The Portfolio may invest no more than 10% of its assets in debt securities that at the time of purchase are rated lower than investment grade. These are commonly referred to as "junk bonds". See the discussion of high yield securities in "OTHER INVESTMENT POLICIES" below. The Adviser also reserves the right to retain securities which are downgraded by one or both of the rating agencies, if in the Adviser's judgment, the reten- tion of securities is warranted. The Portfolio's SAI contains a more detailed description of corporate bond ratings. The Adviser will seek to achieve the Portfolio's objective by investing in the following securities: corporate notes and bonds, mortgage-backed securi- ties including collateralized mortgage obligations and asset-backed securities which are deemed by the Adviser and the rating agencies cited above to be of investment grade quality; variable rate and fixed rate debt securities which at the time of purchase are rated as investment grade; short-term securities deemed by the Adviser to have comparable ratings; and securities of, or guar- anteed by, the U.S. government, its agencies or instrumentalities. While the Adviser anticipates that the majority of the assets in the Portfo- lio will be U.S. dollar denominated securities, it reserves the right to pur- chase obligations of foreign governments, agencies, or corporations denomi- nated either in U.S. dollars or foreign currencies. The credit quality stan- dards applied to foreign obligations are the same as those applied to the se- lection of U.S. based securities. For temporary defensive purposes, the Portfolio may reduce its holdings of fixed income securities and increase, up to 100%, its holdings in short-term investments. The Adviser may employ a defensive investment posture during ad- verse 6 market conditions. See "SHORT-TERM INVESTMENTS" below for a description of the types of short-term instruments in which the Portfolio may invest for tempo- rary defensive purposes. When the Portfolio is in a temporary defensive posi- tion, it may not necessarily be pursuing its stated investment objective. The Portfolio is managed to control the risk of investing in the bond mar- ket. The Adviser's investment approach offers some protection from fluctuation in bond prices or volatility. Bond prices fluctuate dramatically due, most visibly, to changes in interest rates. Other factors impact the value of bonds held in the Portfolio, as well, including changes in: . Investors' perception of the value of certain broad classes of bonds, such as corporate, government or mortgage-backed securities (sector positioning); . The relationship between long-term and short-term interest rates (the yield curve); . The correlation between yields offered on different types of bonds (spreads); . The likelihood that bonds will be redeemed before maturity (option- adjusted spreads); and . The fact that the credit outlook for a specific security can change over time. Since so many different factors affect bond prices, it has been difficult, historically, for bond fund managers to outperform a bond market index. The Adviser believes this is particularly true of bond managers who try to predict interest rate movements. It has observed that these managers often change in- vestment strategy at the top or bottom of the market, adding to long-term bond holdings when interest rates are low and shoring up short-term positions when interest rates are high. This tendency naturally causes portfolio performance to vary widely. Therefore, the Adviser does not depend on the use of interest rate forecasting in managing the Portfolio. At market tops and bottoms, market psychology tends to drive bond prices to extremes, overshooting their long-term equilibrium levels. As a result, "con- ventional wisdom" about a given security or sector's price movement or rela- tive value, is often wrong. The Adviser believes it will be possible to add to the Portfolio's return by taking a contrarian approach and also focusing its efforts on the more traditional aspects of portfolio management. In particu- lar, the Adviser scrutinizes sector valuations, coupons, call features and the shape of the yield curve in making its investment decisions. 7 OTHER INVESTMENT POLICIES The Portfolio may also, under normal circumstances, invest up to 35% of its assets, unless restricted by additional limitations described below or in the Portfolio's SAI, in the following securities, investments or investment tech- niques. SHORT-TERM INVESTMENTS In order to earn a return on uninvested assets, meet anticipated redemp- tions, or for temporary defensive purposes, the Portfolio may invest a portion of its assets in domestic and foreign money market instruments including cer- tificates of deposit, bankers' acceptances, time deposits, U.S. government ob- ligations, U.S. government agency securities, short-term corporate debt secu- rities, and commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by Moody's, or if unrated, determined by the Adviser to be of comparable quality. Time deposits maturing in more than seven days will not be purchased by the Portfolio, and time deposits maturing from two business days through seven calendar days will not exceed 10% of the total assets of the Portfolio. The Portfolio will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, (ii) in the case of U.S. banks, it is a member of the Fed- eral Deposit Insurance Corporation, and (iii) in the case of foreign branches of U.S. banks, the security is, in the opinion of the Adviser, of an invest- ment quality comparable with other debt securities which may be purchased by the Portfolio. The Fund has received permission from the Securities and Exchange Commission (the "SEC") to deposit the daily uninvested cash balances of the Fund's Port- folios, as well as cash for investment purposes, into one or more joint ac- counts and to invest the daily balance of the joint accounts in the following short-term investments: fully collateralized repurchase agreements, interest- bearing or discounted commercial paper including dollar-denominated commercial paper of foreign issuers, and any other short-term money market instruments including variable rate demand notes and tax-exempt money instruments. By en- tering into these investments on a joint basis the Portfolio may earn a higher rate of return on investments relative to what it could earn individually. The Fund has received permission from the SEC for each of its Portfolios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio. (See "INVESTMENT COMPANIES.") REPURCHASE AGREEMENTS The Portfolio may invest in repurchase agreements collateralized by U.S. Government securities, certificates of deposit, and certain bankers' accept- ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a 8 repurchase agreement, the Portfolio buys a security and simultaneously commits to sell that security back at an agreed upon price plus an agreed upon market rate of interest. Under a repurchase agreement, the seller is also required to maintain the value of securities subject to the agreement at not less than 100% of the repurchase price. The value of the securities purchased will be evaluated daily, and the Adviser will, if necessary, require the seller to maintain additional securities to ensure that the value is in compliance with the previous sentence. The use of repurchase agreements involves certain risks. For example, a default by the seller of the agreement may cause the Portfolio to experience a loss or delay in the liquidation of the collateral securing the repurchase agreement. The Portfolio might also incur disposition costs in liquidating the collateral. While the Fund's management acknowledges these risks, it is expected that they can be controlled through stringent counter-party selection criteria and careful monitoring procedures. The Fund has received permission from the SEC to pool daily uninvested cash balances of the Fund's Portfolios in order to invest in repurchase agreements on a joint basis. By entering into joint repurchase agreements, the Portfolio may incur lower transaction costs and earn higher rates of interest on joint repurchase agreements. The Portfolio's contribution would determine its return from a joint repurchase agreement. (See "SHORT-TERM INVESTMENTS.") LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified institutional investors as a means of earning income. The Portfolio will not loan securities to the extent that greater than one-third of its total assets at fair market value would be committed to loans. During the term of a loan, the Portfolio is subject to a gain or loss depending on any increase or decrease in the market price of the securities loaned. Lending of securities is subject to review by the Fund's Board of Trustees. All relevant facts and circumstances, including the creditworthiness of the broker, dealer or institution, will be considered by the adviser in making decisions about securities lending. An investment company may pay reasonable negotiated fees in connection with loaned securities so long as such fees are set forth in a written contract and approved by its Board of Trustees. The Portfolio will continue to retain any voting rights with respect to loaned securities. If a material event occurs affecting an investment on loan, the loan must be called and the securities voted. WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES The Portfolio may purchase and sell securities on a "when-issued," "delayed settlement," or "forward delivery" basis. "When-issued" or "forward delivery" 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 and forward delivery transactions may be expected to occur a month or more be- fore 9 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 the Portfolio until it receives delivery or payment from the other party to any of the above transactions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. The Portfolio will maintain a separate account of cash or liquid securities at least equal to the value of purchase commitments until payment is made. Typically, no income accrues on securities purchased on a delayed delivery basis prior to the time delivery is made although the Portfolio may earn income on securities it has deposited in a segregated account. The Portfolio may engage in these types of purchases in order to buy securi- ties that fit with its investment objectives at attractive prices -- not to increase its investment leverage. PORTFOLIO TURNOVER In addition to Portfolio trading costs, higher rates of portfolio turnover may result in the realization of capital gains. See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for more information on taxation. The Portfolio will not normally engage in short-term trading, but reserves the right to do so. The table set forth in "Financial Highlights" presents the Portfolio's histor- ical portfolio turnover rates. INVESTMENT COMPANIES The Portfolio reserves the right to invest up to 10% of its total assets, calculated at the time of investment, in the securities of other open-end or closed-end investment companies. No more than 5% of the investing Portfolio's total assets may be invested in the securities of any one investment company, nor may it acquire more than 3% of the voting securities of any other invest- ment company. The Portfolio will indirectly bear its proportionate share of any management fees paid by an investment company in which it invests in addi- tion to the advisory fee paid by the Portfolio. The Fund has received permission from the SEC to allow each of its Portfo- lios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio, provided that the investment is consistent with the Portfolio's investment policies and restric- tions. Based upon the Portfolio's assets invested in the DSI Money Market Portfolio, the investing Portfolio's adviser will waive its investment advi- sory fee and any other fees earned as a result of the Portfolio's investment in the DSI Money Market Portfolio. The investing Portfolio will bear expenses of the DSI Money Market Portfolio on the same basis as all of its other share- holders. 10 FOREIGN INVESTMENTS Investing in foreign companies may involve additional risks and considera- tions which are not typically associated with investing in U.S. companies. Since stocks of foreign companies are normally denominated in foreign curren- cies, 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. As non-U.S. companies are not generally subject to uniform accounting, au- diting and financial reporting standards and practices comparable to those ap- plicable to U.S. companies, comparable information may not be readily avail- able about certain foreign companies. Securities of some non-U.S. companies may be less liquid and more volatile than securities of comparable U.S. compa- nies. In addition, in certain foreign countries, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments which could affect U.S. investments in those coun- tries. RESTRICTED AND ILLIQUID SECURITIES The Portfolio may purchase restricted securities that are not registered for sale to the general public but which are eligible for resale to qualified in- stitutional investors under Rule 144A of the Securities Act of 1933. Under the supervision of the Fund's Board of Trustees, the Adviser determines the li- quidity of such investments by considering all relevant factors. Provided that a dealer or institutional trading market in such securities exists, these re- stricted securities are not treated as illiquid securities for purposes of the Portfolio's investment limitations. The Portfolio may also invest up to 15% of its net assets in securities that are illiquid. Prices realized from the sales of these securities could be more or less than those originally paid by the Portfolio or less than what may be considered the fair value of such securi- ties. MORTGAGE-BACKED SECURITIES The Portfolio may invest in mortgage-backed securities. Mortgage-backed se- curities are collateralized by pools of mortgages assembled for subsequent sale to investors by various governmental agencies and sponsored organizations as well as by private issuers. The underlying assets collateralizing the mort- gage-backed securities may include single-family, multi-family and commercial properties. The two fundamental forms of mortgage-backed securities are pass- throughs and collateralized mortgage obligations ("CMOs"). Pass-throughs pro- duce monthly payments of principal and interest from the underlying mortgages. CMOs divide the cash flows generated from the underlying mortgages or mortgage pass-through securities into different segments known as "tranches," which are then retired sequentially over time in order of priority. The market value and yield of mortgage-backed securities will fluctuate due to market interest rate change and prepayment variability of the underlying mortgages. As prepayment rates on mortgages vary widely, it 11 is difficult to accurately predict the average maturity of a particular pool of mortgages or tranches of CMOs. Although mortgage-backed securities may of- fer higher yields than those available from other types of securities, they may be less effective than other types of securities as a means of "locking in" an attractive rate for an extended period because of the prepayment fea- ture. Prepayment risk has two important effects. First, like bonds in general, mortgage-backed securities will generally decline in price when interest rates rise. Second, when interest rates fall and additional mortgage prepayments must be reinvested at lower interest rates, a Portfolio's rate of dividend in- come may be reduced. Mortgage-backed securities in which the Portfolio may in- vest will either carry a guarantee from an agency of the U.S. Government or a private issuer of the timely payment of principal and interest or will be suitably structured to be considered by the Adviser to be of investment grade quality. ASSET-BACKED SECURITIES The Portfolio may invest in asset-backed securities. Asset-backed securities are collateralized by short maturity loans such as automobile receivables, credit card receivables, or other types of receivables or assets, the payments from which are passed through to the security holder. Credit support for as- set-backed securities may be based on the underlying assets and/or provided through credit enhancements by a third party. Credit enhancement techniques include letters of credit, insurance bonds, limited guarantees, (which are generally provided by the issuer), senior-subordinated structures and over- collateralization. The value of these securities may be significantly affected by changes in interest rates, the market's perceptions of the issuers and the creditworthiness of the parties involved. HIGH YIELD/HIGH RISK SECURITIES The Portfolio may invest up to 10% of its assets in high yield securities which are rated below investment grade or are unrated. Lower rated or unrated securities are more likely to react to developments affecting market and credit risk than are more highly rated securities, which react primarily to movements in the general level of interest rates. The market values of fixed- income securities tend to vary inversely with the level of interest rates. Yields and market values of high yield securities will fluctuate over time, reflecting not only changing interest rates, but also the market's perception of credit quality and the outlook for economic growth. When economic condi- tions appear to be deteriorating, medium to lower rated securities may decline in value due to heightened concern over credit quality, regardless of prevail- ing interest rates. The Adviser will consider both credit risk and market risk in selecting fixed income securities for the Portfolio. The high yield securities market is still relatively new and its recent growth paralleled a long period of economic expansion and an increase in merg- er, acquisition and leveraged buyout activity. Adverse economic developments may disrupt 12 the market for high yield securities, and severely affect the ability of is- suers, especially highly leveraged issuers, to service their debt obligations or to repay their obligations upon maturity. In addition, the secondary market for high yield securities, which is concentrated in relatively few market mak- ers, may not be as liquid as the secondary market for more highly rated secu- rities. As a result, the Adviser could find it more difficult to sell these securities or may be able to sell the securities only at prices lower than if such securities were widely traded. Prices realized upon the sale of such lower rated or unrated securities, under these circumstances, may be less than the prices used in calculating the Portfolio's net asset value. Prices for high yield securities may be affected by legislative and regula- tory developments. These laws could adversely affect the Portfolio's net asset value and investment practices, the secondary market for high yield securi- ties, the financial condition of issuers of these securities and the value of outstanding high yield securities. For example, federal legislation requiring the divestiture by federally insured savings and loan associations of their investments in high yield bonds and limiting the deductibility of interest by certain corporate issuers of high yield bonds adversely affected the market in recent years. Lower rated or unrated debt obligations also present risks based on payment expectations. If an issuer calls the obligations for redemption, the Fund may have to replace the security with a lower yielding security, resulting in a decreased return for investors. If the Portfolio experiences unexpected net redemptions, it may be forced to sell its higher rated securities, resulting in a decline in the overall credit quality of the Portfolio's investment port- folio and increasing the exposure of the Portfolio to the risks of high yield securities. HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS The Portfolio may use options (both exchange-traded and over-the-counter) to attempt to enhance income. To reduce the overall risk of its investments (hedge), the Portfolio may use options, futures contracts, options on futures contracts, and forward currency contracts. These instruments are commonly re- ferred to as derivatives. Hedging strategies may also be used in an attempt to manage the Portfolio's exposure to changing interest rates, security prices and currency exchange rates. The Portfolio may buy or sell futures contracts, write covered call options and buy put and call options on any security, index or currency including options and futures traded on foreign exchanges and op- tions not traded on exchanges. The Portfolio's ability to use these strategies may be limited by market conditions, regulatory limits and tax considerations. The Portfolio's obligation under such hedging strategies will be covered by the maintenance of a segregated account consisting of cash or liquid securi- ties equal to at least 100% of the Portfolio's commitment. The SAI contains further information on all of these strategies and the risks associated with them. 13 The Portfolio may write or purchase options in privately negotiated transac- tions ("OTC Options") as well as listed options. OTC Options can be closed out only by agreement with the other party to the transaction. Any OTC Option pur- chased by the Portfolio is considered an illiquid security. Any OTC Option written by the Portfolio will be with a qualified dealer pursuant to an agree- ment under which the Portfolio may repurchase the option at a formula price. Such options are considered illiquid to the extent that the formula price ex- ceeds the intrinsic value of the option. The Portfolio may not purchase or sell futures contracts or related options for which the aggregate initial mar- gin and premiums exceed 5% of the fair market value of the Portfolio's assets. In order to prevent leverage in connection with the purchase of futures con- tracts or call options thereon by the Portfolio, an amount of cash, cash equivalents or liquid securities equal to the market value of the obligation under the futures contracts or options (less any related market deposits) will be maintained in a segregated account with the Fund's Custodian Bank. The Portfolio may not invest more than 15% of its net assets in illiquid securi- ties and repurchase agreements which have a maturity of longer than seven days. A more complete discussion of the potential risks involved in transac- tions in options or futures contracts and related options is contained in the SAI. The Portfolio may enter into forward currency contracts for the purchase or sale of a specified currency at a specified future date either with respect to specific transactions or with respect to portfolio positions. The Portfolio also may enter into a forward contract to sell an amount of a foreign currency approximating the value of some or all of the Portfolio's securities denomi- nated in such currency. The Portfolio may use forward contracts in one currency or a basket of cur- rencies to hedge against fluctuations in the value of another currency when the Adviser anticipates there will be a correlation between the two and may use forward currency contracts to shift the Portfolio's exposure to foreign currency fluctuations from one country to another. The purpose of entering into these contracts is to minimize the risk to the Portfolio from adverse changes in the relationship between the U.S. dollar and foreign currencies. The Portfolio may enter into interest rate protection transactions, which consist of interest rate swaps and interest rate caps, collars and floors, for hedging purposes. These transactions are commonly referred to as derivatives. A swap is an agreement to exchange the return generated by one instrument for the return generated by another instrument. The swaps in which the Portfolio may also engage include interest rate caps, floors and collars under which one party pays a single or periodic fixed amount (or premium), and the other party pays periodic amounts on movement of a specified index. The Portfolio may enter into interest rate protection transactions to pre- serve a return or spread on a particular investment or portion of its portfo- lio or to protect against any increase in the price of securities it antici- pates purchasing at a later 14 date. The Portfolio will enter into interest rate protection transactions only with banks and recognized securities dealers believed by the Adviser to pres- ent minimal credit risks in accordance with guidelines established by the Fund's Board of Trustees. Interest rate swaps, caps, floors and collars will be treated as illiquid securities and will therefore, be subject to the Port- folio's investment restriction limiting investment in illiquid securities to no greater than 15% of its net assets. RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging strategies described above, and there can be no assurance that any strategy used will succeed. If the Adviser incorrectly forecasts interest rates, market values or other economic factors in utilizing a hedging strategy for the Port- folio, the Portfolio would be in a better position if it had not hedged at all. In addition, the Portfolio will pay commissions and other costs in con- nection with such hedging strategies, which may increase the Portfolio's ex- penses and reduce its return. The use of these strategies involves certain risks, including (1) the fact that skills needed to use hedging instruments are different from those needed to select the Portfolio's securities, (2) possible imperfect correlation, or even no correlation, between price movements of hedging instruments and price movements of the investments being hedged, (3) the fact that, while hedging strategies can reduce the risk of loss, they can also reduce the opportunity for gain, or even result in losses, by offsetting favorable price movements in hedged investments and (4) the possible inability of the Portfolio to purchase or sell a portfolio security at a time that otherwise would be favorable for it to do so, or the possible need for the Portfolio to sell a portfolio secu- rity at a disadvantageous time, due to the need for it to maintain "cover" or to segregate securities in connection with hedging transactions and the possi- ble inability of the Portfolio to close out or to liquidate its hedged posi- tion. INVESTMENT LIMITATIONS The Portfolio will not: (a) with respect to 75% of its assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed as to principal and in- terest by the U.S. Government or any of its agencies or instrumentali- ties); (b) with respect to 75% of its assets, purchase more than 10% of any class of the outstanding voting securities of any issuer; (c) invest more than 5% of its assets at the time of purchase in the secu- rities of companies that have (with predecessors) a continuous operat- ing history of less than 3 years; (d) invest more than 25% of its assets in companies within a single indus- try; however, there are no limitations on investments made in instru- ments issued or guaranteed by the U.S. Government and its agencies. 15 (e) make loans except by purchasing debt securities in accordance with its investment objective and policies or entering into repurchase agree- ments or by lending its portfolio securities to banks, brokers, deal- ers and other financial institutions so long as the loans are made in compliance with the 1940 Act, as amended, or the Rules and Regulations or interpretations of the SEC; (f) (i) borrow, except from banks and as a temporary measure for extraor- dinary or emergency purposes and then, in no event, in excess of 33 1/3% of the Portfolio's gross assets valued at the lower of market or cost, and (ii) the Portfolio may not purchase additional securities when borrowings exceed 5% of total assets; or (g) pledge, mortgage or hypothecate any of its assets to an extent greater than 33 1/3% of its total assets at fair market value. The investment objective of the Portfolio is fundamental and may be changed only with the approval of the holders of a majority of the outstanding shares of the Portfolio. Except for limitations (a), (b), (d), (e) and (f)(i), the Portfolio's investment limitations and policies described in this Prospectus and in the SAI are not fundamental and may be changed by the Fund's Board of Trustees upon reasonable notice to investors. All other investment limitations described here and in the SAI are fundamental policies and may be changed only with the approval of the holders of a majority of the outstanding shares of the Portfolio. If a percentage limitation on investment or utilization of as- sets as set forth above is adhered to at the time an investment is made, a later change in percentage resulting from changes in the value or total cost of the Portfolio's assets will not be considered a violation of the restric- tion. PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), without a sales commission at the net asset value next deter- mined after an order is received by the Fund and payment is received by the Fund or its designated Service Agent (See "VALUATION OF SHARES.") The minimum initial investment required is $2,000. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. Certain exceptions may be permitted by the officers of the Fund. Shares of the Portfolio may be purchased by customers of broker-dealers or other financial intermediaries ("Service Agents") that have established a shareholder servicing relationship with the Fund on behalf of their customers. Service Agents may impose additional or different conditions or on purchase and redemption of Portfolio shares and may charge transaction or other account fees by their customers. Each Service Agent is responsible for transmitting to its customers a 16 schedule of any such fees and information regarding additional or different purchase and redemption conditions. Shareholders who are customers of Service Agents should consult their Service Agent for information regarding these fees and conditions. Amounts paid to Service Agents may include transaction fees and/or service fees paid by the Fund from the Fund assets attributable to the Service Agent, and would not be imposed if shares of the Portfolio were pur- chased directly from the Fund or the Distributor. The Service Agents may pro- vide shareholder services to their customers that are not available to a shareholder dealing directly with the Fund. A salesperson and any other person entitled to receive compensation for selling or servicing Portfolio shares may receive different compensation with respect to one particular class of shares over another in the Fund. Service Agents or if applicable, their designees, that have entered into agreements with the Fund or its agent may enter confirmed purchase orders on behalf of clients and customers, with payment to follow no later than a Port- folio's pricing on the following business day. If payment is not received by the Fund's Sub-Transfer Agent, Chase Global Funds Services Company ("CGFSC") by such time, the Service Agent could be held liable for resulting fees or losses. A Portfolio may be deemed to have received a purchase or redemption order when a Service Agent, or, if applicable, its authorized designee, ac- cepts the order. Orders received by the Fund in proper form will be priced at the Portfolio's net asset value next computed after they are accepted by a Service Agent or its authorized designee. Service Agents are responsible to their customers and the Fund for timely transmission of all subscription and redemption requests, investment information, documentation and money. INITIAL INVESTMENT BY MAIL .Complete and sign an Application, and mail it together with a check payable to "UAM Funds" to: UAM Funds Trust UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 Payment for purchases of shares received by mail will be credited to an ac- count at the next share price calculated for the Portfolio after receipt. Pay- ment does not need to be converted into Federal Funds (monies credited to the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it for investment. The Fund will not accept third party checks to purchase shares of the Portfolio. If you purchase shares by check, please be sure that your check is made payable to "UAM Funds." 17 BY WIRE . Telephone the UAM Funds Service Center and provide the account name, ad- dress, telephone number, social security or taxpayer identification num- ber, Portfolio selected, amount being wired and the name of the bank wiring the funds. The call must be received prior to the close of regu- lar trading on the NYSE (generally 4:00 p.m. Eastern Time) to receive that days price. An account number and a wire control number will then be provided to you in addition to wiring instructions. Next, . instruct your bank to wire the specified amount to the Fund's Custodian: The Chase Manhattan Bank ABA #021000021 UAM Funds DDA Acct. #9102772952 Ref: Portfolio Name Your Account Number Your Account Name Wire Control Number (assigned by the UAM Funds Service Center) . Forward a completed Application to the Fund at the address shown on the form. Federal Funds purchases will be accepted only on a day on which both the NYSE and the Custodian Bank are open for business. . To be sure that a bank wire order is received on the same day it is sent, an investor's bank should wire funds as early in the day as possi- ble. The bank sending funds may charge for this service. The Fund's agent reserves the right to charge investors for receipt of wired funds, but no charge is currently imposed for this service. It is necessary to obtain a new wire control number every time money is wired into an ac- count in a Portfolio. Wire control numbers are effective for one trans- action only and cannot be used more than once. Wired money that is not properly identified with a currently effective wire control number will be returned to the bank from which it was wired and will not be credited to the shareholder's account. ADDITIONAL INVESTMENTS Additional investments can be made at any time. The minimum additional in- vestment is $100. Shares can be purchased at net asset value by mailing a check to the UAM Funds Service Center (payable to "UAM Funds") or by wiring money to the Custodian Bank as outlined above. When making additional invest- ments, be sure that the account number, account name and the Portfolio to be purchased are identified on the check or wire. Prior to wiring additional in- vestments, please notify the UAM Funds Service Center by calling the number on the cover of this prospectus. Mail orders should include, when possible, the "Invest by Mail" stub which accompanies any Fund confirmation statement. 18 PURCHASE BY ACH If you have made this election, shares of the Portfolio may be purchased via Automated Clearing House ("ACH"). Investors purchasing via ACH should complete the bank information section on the Account Application and attach a voided check or deposit slip to the Account Application. This option must be estab- lished on your account at least 15 days prior to your initiating an ACH trans- action (see "SHAREHOLDER SERVICES--AUTOMATIC INVESTMENT PLAN"). OTHER PURCHASE INFORMATION Investments received by the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be invested at the share price calculated after the NYSE closes on that day. Investments received after the close of the NYSE will be executed at the price computed on the next day the NYSE is open. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of each Portfolio or to reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. The Portfolios are intended to be long-term investment vehicles and are not designed to provide investors with a means of speculation on short-term market movements. A pattern of frequent purchases can be disruptive to effi- cient portfolio management and, consequently, can be detrimental to a Portfo- lio's performance and its shareholders. Accordingly, if the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any purchase request with respect to such investor's account. Such investor also may be barred from pur- chasing other portfolios of the UAM Funds. Purchases of the Portfolio's shares will be made in full and fractional shares of the Portfolio calculated to three decimal places. Certificates for fractional shares will not be issued. Certificates for whole shares will not be issued except at the written request of the shareholder. IN-KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in ex- change for securities which are eligible for acquisition by the Portfolio, as described in this Prospectus. Securities to be exchanged which are accepted by the Fund will be valued as described under "VALUATION OF SHARES" at the next determination of net asset value after acceptance. Shares issued by the Port- folio in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the investor upon receipt from the issuer. Securities acquired through an in-kind purchase will be acquired for invest- ment and not for immediate resale. 19 The Fund will not accept securities in exchange for shares of the Portfolio unless: . at the time of exchange, such securities are eligible to be in- cluded in the Portfolio (current market quotations must be readily available for such securities); . the investor represents and agrees that all securities offered to be exchanged are liquid securities and not subject to any restric- tions upon their sale by the Portfolio under the Securities Act of 1933, or otherwise; and . the value of any such securities (except U.S. Government securi- ties) being exchanged together with other securities of the same issuer owned by the Portfolio will not exceed 5% of the net assets of the Portfolio immediately after the transaction. Investors who are subject to federal taxation upon exchange may realize a gain or loss for federal income tax purposes depending upon the cost of secu- rities or local currency exchanged. Investors interested in such exchanges should contact the Adviser. REDEMPTION OF SHARES Shares of the Portfolio may be redeemed by mail or telephone, at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request. No charge is made for redemptions. Any re- demption may be more or less than the purchase price of your shares depending on the market value of the investment securities held by the Portfolio. BY MAIL Address requests for redemption to the UAM Funds Service Center. Requests to redeem shares must include: . share certificates, if issued; . a letter of instruction or an assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are regis- tered; . any required signature guarantees (see "SIGNATURE GUARANTEES"); and . any other necessary legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pen- sion and profit sharing plans and other organizations. 20 BY TELEPHONE A redemption request by telephone requires the following: . establish the telephone redemption privilege (and if desired, the wire redemption privilege) by completing appropriate sections of the Application; and . call the Fund and instruct that the redemption proceeds be mailed to you or wired to your bank. The following tasks cannot be accomplished by telephone: . changing the name of the commercial bank or the account designated to receive redemption proceeds (this can be accomplished only by a written request signed by each shareholder, with each signature guaranteed); . redemption of certificated shares by telephone. The Fund and its Sub-Transfer Agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and they may be liable for any losses if they fail to do so. These procedures include re- quiring the investor to provide certain personal identification at the time an account is opened, as well as prior to effecting each transaction requested by telephone. All telephone transaction requests will be recorded and investors may be required to provide additional telecopied written instructions of such transaction requests. The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent does not employ the procedures described above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili- ty, cost or expense for following instructions received by telephone that it reasonably believes to be genuine. SIGNATURE GUARANTEES Signature guarantees are required for the following redemptions: . redemptions where the proceeds are to be sent to someone other than the registered shareholder(s) . redemptions where the proceeds are to be sent to an address which is not the registered address; or . share transfer requests. Signature guarantees will be accepted from any eligible guarantor institu- tion which participates in a signature guarantee program. Eligible guarantor institutions include banks, as well as through most brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. Broker-dealers guaranteeing signa- tures must be a member of a 21 clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. OTHER REDEMPTION INFORMATION The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the UAM Funds Service Center of a redemption request in proper form. Although the Fund will redeem shares purchased by check before the check clears, payment of the redemption proceeds may be delayed for a pe- riod of up to fifteen days after their purchase, pending determination that the check has cleared. Investors should consider purchasing shares using a certified or bank check or money order if they anticipate an immediate need for redemption proceeds. The Fund may suspend the right of redemption or post- pone the date at times when both the NYSE and Custodian Bank are closed, or under any emergency circumstances as determined by the SEC. If the Fund's Board of Trustees determines that it would be detrimental to the best interests of the remaining shareholders of the Fund to make payments wholly or partly in cash, the Fund may pay the redemption proceeds in whole or in part by a distribution in-kind of liquid securities held by the Portfolio in lieu of cash in conformity with applicable rules of the SEC. Investors may incur brokerage charges when they sell portfolio securities received in pay- ment of redemptions. The Portfolios reserve the right to liquidate any account that is below fifty percent of the required minimum initial investment amount for a Portfo- lio as set forth in the Prospectus, where the reduction in value has occurred due to a redemption or exchange out of the account. If at any time your total investment does not have a value of at least fifty percent of the required minimum initial investment amount, you may be notified that the value of your account is below the Portfolio's minimum account balance requirement. You would then be allowed 60 days to make an additional investment before the ac- count is liquidated. Retirement accounts and certain other accounts will not be subject to automatic liquidation. Reductions in value that result solely from market activity will not trigger an involuntary redemption. SHAREHOLDER SERVICES EXCHANGE PRIVILEGE Institutional Class Shares of each Portfolio may be exchanged for Institu- tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo- lios of the UAM Funds at the end of this Prospectus.) Exchange requests should be made by contacting the UAM Funds Service Center. Any exchange will be based on the net asset value of the shares involved. There is no sales commission or charge of any kind for an exchange. Before 22 making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objectives of the Portfolio to be purchased. Call the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in which you are interested. Exchanges can only be made with Portfolios that are qualified for sale in a shareholder's state of residence. Exchange requests may be made either by mail or telephone. Telephone ex- changes will be accepted only if the certificates for the shares to be ex- changed have not been issued to the shareholder and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading on the NYSE (generally 4 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the NYSE will be processed on the next busi- ness day. The Fund may modify or terminate the exchange program at any time upon 60 days' written notice to shareholders, and may reject any exchange re- quest. If the Fund's management determines that an investor is engaged in ex- cessive trading, the Fund, with or without prior notice, may reject in whole or part any exchange request, with respect to such investor's account. Such investors also may be barred from exchanging into other portfolios of the UAM Funds. For additional information regarding responsibility for the authentic- ity of telephoned instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE." An exchange into another UAM Funds Portfolio is a sale of shares and may result in a gain or loss for income tax purposes. AUTOMATIC INVESTMENT PLAN An Automatic Investment Plan permits shareholders of a Portfolio with a min- imum value of $2,500 or more to purchase shares automatically (minimum of $100 per transaction) at regular intervals selected by the shareholder. Provided the shareholder's bank or other financial institution allows automatic with- drawals, shares are purchased by transferring funds via the Automated Clearing House ("ACH"). Investment made through ACH will be automatically transferred from a shareholder's checking, bank money market or NOW account designated by the shareholder. Such withdrawals are made electronically, if the sharehold- er's bank or financial institution so permits, or by pre-authorized checks or drafts drawn on the shareholder's bank or other account. The bank or financial institution must be a member of ACH. At the shareholder's option, the account designated will be debited in the specified amount, and shares will be pur- chased monthly or quarterly. To establish an Automatic Investment Plan, a shareholder must complete the Optional Services Form available from the UAM Funds Service Center at 1-800- 638-7983 and mail it to Chase Global Funds Services Company. A shareholder may cancel his/her participation or change the amount of purchase at any time by mailing written notification to Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. Notification generally will be effective three business 23 days following receipt. The Fund may modify or terminate this privilege at any time, or may charge a service fee, although no such fee currently is contem- plated. SYSTEMATIC WITHDRAWAL PLAN Any shareholder whose account balance totals at least $10,000 may establish a Systematic Withdrawal Plan under which an amount pre-determined by the shareholder (but at least $100) is automatically redeemed from the sharehold- er's account either monthly or quarterly. A Shareholder may participate in the Systematic Withdrawal Plan by using ACH. Redemption made through ACH will be automatically transferred to the shareholder's bank or other similar financial institution account or a properly designated third party. The bank or finan- cial institution must be a member of ACH. Redemptions ordinarily are made on the third business day of the month and payments ordinarily will be transmit- ted within five business days after the redemption date. Because the prices of Fund shares fluctuate, the number of shares redeemed to finance systematic withdrawal payments or a given amount will vary from payment to payment. If a shareholder owns shares in more than one Portfolio, the shareholder must des- ignate the Portfolio from which the redemptions under a Systematic Withdrawal Plan should be made. An additional sheet may be attached to the Optional Serv- ices Form if a shareholder selects more than one Portfolio. A Systematic With- drawal Plan may be terminated or suspended at any time by the Fund. A share- holder may elect at any time, in writing, to terminate participation in the Systematic Withdrawal Plan. Such written election must be sent to and received by the Fund before a determination becomes effective. There is currently no charge to the shareholder for a Systematic Withdrawal Plan. VALUATION OF SHARES The net asset value of a Portfolio is determined by dividing the value of the Portfolio's assets, less any liabilities, by the number of shares out- standing. The net asset value per share of the Portfolio is determined as of the close of the NYSE on each day that the NYSE is open for business. Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the-counter market. Bonds and other fixed income securities may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost when the Board of Trustees determines that amortized cost reflects fair value. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Trustees. 24 PERFORMANCE CALCULATIONS The Portfolio measures performance by calculating yield and total return. Both yield and total return figures are based on historical earnings and are not intended to indicate future performance. Yield and total return are calcu- lated separately for each class of a Portfolio. Yield refers to the income generated by an investment in the Portfolio over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all funds. As this differs from other accounting methods, the quoted yield may not equal the in- come actually paid to shareholders. Total return is the change in value of an investment in the Portfolio over a given period, assuming reinvestment of any dividends and capital gains. A cu- mulative or aggregate total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of re- turn that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. The Portfolio's performance may be compared to data prepared by independent services which monitor the performance of investment companies, data reported in financial and industry publications, and various indices as further de- scribed in the Portfolio's SAI. This information may also be included in sales literature and advertising. The Portfolio's Annual Report to Shareholders for the most recent fiscal year end contains additional performance information that includes comparisons with appropriate indices. The Annual Report is available without charge. Con- tact the UAM Funds Service Center at the address or phone number on the cover of this Prospectus. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS The Portfolio will normally distribute substantially all of its net invest- ment income (for tax purposes) to shareholders in quarterly dividends. If any net capital gains are realized, the Portfolio will normally distribute such gains annually. All dividends and capital gains distributions will be automat- ically reinvested in additional shares of the Portfolio unless the Fund is no- tified in writing that the shareholder elects to receive distributions in cash. FEDERAL TAXES The Portfolio intends to qualify as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, for federal in- come tax purposes and to meet all other requirements that are necessary for it 25 (but not its shareholders) to be exempt from federal taxes on income and gains paid to shareholders in the form of dividends. To do this, the Portfolio must, among other things, distribute substantially all of its ordinary income and net capital gains on an annual basis and maintain a portfolio of investments which satisfies certain diversification criteria. Dividends paid by the Portfolio from net investment income, whether in cash or reinvested in shares, are taxable to shareholders as ordinary income. Short-term capital gains will be taxed as ordinary income. Long-term capital gains distributions are taxed as long-term capital gains. Shareholders will be notified annually of dividend income earned for tax purposes. Dividends declared in October, November and December to shareholders of rec- ord in such a month and paid in January of the following year will be treated as if they had been paid by the Fund and received by the shareholders on De- cember 31. The Fund is required by federal law to withhold 31% of reportable payments paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, you must certify that your Social Security or Taxpayer Identification Number you have provided is correct and that either you are not currently subject to backup withholding or you are exempt from backup withholding. This certification must be made on the Application or on a separate form supplied by the Fund. Dividends and interest received by each Portfolio may give rise to withhold- ing and other taxes imposed by foreign countries. These taxes reduce the Port- folio's dividends but are included in the taxable income reported on your tax statement if the Portfolio qualifies for this tax treatment and elects to pass it through to you. Consult a tax adviser for more information regarding deduc- tions and credits for foreign taxes. INVESTMENT ADVISER Chicago Asset Management Company (the "Adviser") is a registered investment adviser formed in 1983. Its business offices are located at 70 West Madison Street, 56th Floor, Chicago, IL 60602. The Adviser is a wholly-owned subsidi- ary of United Asset Management Corporation ("UAM"), a holding company, and provides and offers investment management and advisory services to corpora- tions, unions, pensions and profit-sharing plans, trusts, estates and other institutions and investors. As of December 31, 1997, the Adviser had over $2 billion in assets under management. The Portfolio pays an annual fee in monthly installments to the adviser for advisory services. This fee is accrued daily and paid monthly as a percentage of the average daily net assets in the Portfolio for that month. The percent- age fee on an annual basis is 0.48%. The Adviser has agreed to waive a portion of its advisory fees and to assume certain operating expenses in order to keep the Portfolio's total operating expenses from exceeding 0.80% of average daily net assets. 26 The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili- ates, may, at its own expense, compensate a Service Agent or other person for marketing, shareholder servicing, record-keeping and/or other services per- formed with respect to the Fund, a Portfolio or any Class of Shares of a Port- folio. Payments for such services may be made from the paying entity's reve- nues, its profits or any other source available to it. When such service ar- rangements are in effect, they are made generally available to all qualified service providers. The Distributor, the Adviser, and certain of their affiliates also partici- pate, at the date of this prospectus, in an arrangement with Smith Barney, Inc. under which Smith Barney provides certain defined contribution plan mar- keting and shareholder services of its Consulting Group and receives .15% of 1% of the daily net asset value of Institutional Class Shares held by Smith Barney's eligible customer accounts in addition to amounts payable to all selling dealers. The Fund also compensates Smith Barney for services it pro- vided to certain defined contribution plan shareholders that are not otherwise provided by UAMFSI. The investment professionals at the Adviser responsible for the day-to-day management of the Portfolio and their qualifications are as follows: Jon F. Holsteen, President, CEO and Chief Investment Officer Education: Lake Forest College, BA Experience: Founded Chicago Asset Management Company in 1983. William W. Zimmer, Executive Vice President and Chief Fixed Income Portfolio Manager Education: Cornell College (Iowa), BA Cornell University (New York), MBA Experience: Joined Chicago Asset Management Company in 1988. Gary R. Dhein, CFA, Vice President and Senior Portfolio Manager Education: Loyola University, BA University of Chicago, MBA Experience: Bank of America (1978 to 1997) Joined Chicago Asset Management Company in 1997. Frank F. Holsteen, Vice President Education: Lake Forest College, BA Experience: Joined Chicago Asset Management Company in 1993.
27 ADVISER'S HISTORICAL PERFORMANCE Below are certain performance data provided by the Adviser pertaining to the composite of separately managed accounts of the Adviser that are managed with substantially similar (although not necessarily identical) objectives, poli- cies and strategies as those of the Portfolio. The performance data for the managed accounts is net of all fees and expenses The investment returns of the Portfolio may differ from those of the separately managed accounts because such separately managed accounts may have fees and expenses that differ from those of the Portfolio. Further, the separately managed accounts are not sub- ject to investment limitations, diversification requirements and other re- strictions imposed by the Investment Company Act of 1940 and Internal Revenue Code; such conditions, if applicable, may have lowered the returns for sepa- rately managed accounts. The results presented are not intended to predict or suggest the return to be experienced by the Portfolio or the return an in- vestor might achieve by investing in the Portfolio. CHICAGO ASSET MANAGEMENT COMPANY-- INTERMEDIATE BOND + CASH COMPOSITE RETURNS (PERCENTAGE RETURNS NET OF MANAGEMENT FEES)
CHICAGO LEHMAN BROTHERS ASSET INTERMEDIATE MANAGEMENT GOVERNMENT/CORPORATE CALENDAR YEARS COMPANY INDEX -------------- ---------- -------------------- 1985......................................... 22.0% 18.1% 1986......................................... 15.2% 13.1% 1987......................................... 0.7% 3.7% 1988......................................... 7.0% 6.7% 1989......................................... 13.0% 12.8% 1990......................................... 8.8% 9.2% 1991......................................... 17.1% 14.7% 1992......................................... 8.6% 7.2% 1993......................................... 10.2% 8.8% 1994......................................... (2.4)% (1.9)% 1995......................................... 15.8% 15.3% 1996......................................... 3.9% 4.1% 1997......................................... 7.7% 7.9% 3 months ended 3/31/98....................... 1.5% 1.6% Annualized through 3/31/98................... 9.6% 9.0% Cumulative through 3/31/98................... 234.9% 214.4% Thirteen-Year Mean........................... 9.8% 9.2% Value of $1 invested (1/1/85-3/31/98)........................... $3.35 $3.14
28 CHICAGO ASSET MANAGEMENT COMPANY-- INTERMEDIATE BOND + CASH RETURNS FOR VARIOUS PERIODS ENDED 3/31/98 (PERCENTAGE RETURNS NET OF MANAGEMENT FEES) (UNAUDITED)
LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE PERIODS ENDED 3/31/98 ADVISER INDEX - --------------------- ------- -------------------- One-year period.................................... 9.5% 9.7% Three-year period (average annual)................. 7.9% 8.0% Five-year period (average annual).................. 6.3% 6.2% Ten-year period (average annual)................... 8.6% 8.2%
- ----------- Notes: 1. The annualized return is calculated from monthly data, allowing for com- pounding. Market Value of the account was the sum of the account's total assets, including cash, cash equivalents, short-term investments, and se- curities valued at current market prices. 2. The cumulative return means that $1 invested in the composite account on January 1, 1985 had grown to $3.35 by March 31, 1998. 3. The thirteen-year mean is the arithmetic average of the annual returns for the years listed. 4. The Lehman Brothers Intermediate Government/Corporate Index is an unman- aged index which assumes reinvestment of dividends and is generally con- sidered representative of securities similar to those invested in by the Adviser for the purpose of the composite performance numbers set forth above. 5. The Adviser's average annual management fee over the period shown was 0.30% or 30 basis points. During the period, fees on the Adviser's indi- vidual accounts ranged from 0.26% to 0.625% (26 basis points to 62.5 basis points). Net returns to investors vary depending on the management fee. 6. The intermediate fixed income + cash composite includes every separate discretionary intermediate fixed income account as of 3/31/98. No accounts were excluded. As of 3/31/98, this composite included all 11 intermediate fixed income portfolios, including the intermediate fixed income + cash portions of balanced accounts, totaling $269 million. Leverage has not been used in any portfolios included in this composite. A list of all com- posites of the firm is available upon request. ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As- set Management Corporation, is responsible for performing and overseeing ad- ministrative, fund accounting, dividend disbursing and transfer agent services provided to the Fund and its Portfolios. UAMFSI's principal office is located at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these 29 services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is located at 73 Tremont Street, Boston, MA 02108. Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fees are calculated from the aggregate net assets of the Portfolio: RATE ---- Chicago Asset Management Intermediate Bond Portfolio............... 0.04% CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined UAM Fund assets; 0.11 of 1% of the next $800 million of combined UAM Fund assets; 0.07 of 1% of combined UAM Fund assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined UAM Fund assets in excess of $3 billion. Fees are allocated among each of the Portfolios on the basis of their rela- tive assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum an- nual fee increases by $20,000. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin- cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis- tributes the shares of the Fund. Under the Fund's Distribution Agreement (the "Agreement"), the Distributor, as agent of the Fund, agrees to use its best efforts as sole distributor of the Fund's shares. The Distributor does not re- ceive any fee or other compensation under the Agreement with respect to this Portfolio. The Agreement continues in effect as long as such continuance is approved at least annually by the Fund's Board of Trustees. Those approving the Agreement must include a majority of the Trustees who are neither parties to the Agreement nor interested persons of any such party. The Agreement pro- vides that the Fund will bear the costs of the registration of its shares with the SEC and various states and the printing of its prospectuses, its SAIs and its reports to shareholders. PORTFOLIO TRANSACTIONS The Advisory Agreement authorizes the Adviser to select the brokers or deal- ers that will execute the purchase and sale of investment securities for the Portfolio. The Agreement directs the Adviser to use its best efforts to obtain the best available 30 price and most favorable execution for all transactions of the Portfolio. If consistent with the interests of the Portfolio, the Adviser may select brokers on the basis of the research, statistical and pricing services they provide to the Portfolio in addition to required services. Such brokers may be paid a higher commission than that which another qualified broker would have charged for effecting the same transaction, provided that such commissions are paid in compliance with the Securities Exchange Act of 1934, as amended, and that the Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Portfolio and the Adviser's other clients. Although not a typical practice, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. If a purchase or sale of securities consistent with the investment policies of the Portfolio and one or more of these other clients served by the Adviser 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 rea- sonable by the Adviser. Although there is no specified formula for allocating such transactions, such allocations are subject to periodic review by the Fund's Trustees. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized as a Delaware business trust on May 18, 1994 under the name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial inter- est, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without fur- ther action by shareholders. At its discretion, the Board of Trustees may create additional Portfolios and classes of shares. The shares of each Portfolio are fully paid and nonas- sessable, and have no preference as to conversion, exchange, dividends, re- tirement or other features and no pre-emptive rights. They have noncumulative voting rights, which means that holders of more than 50% of shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. As of June 15, 1998, John D. Curran and Francis McMartin, Trustees, FBO Pipefitters Pension Fund Local 597, held of record 89.4% of the outstanding shares of the CAM Intermediate Bond Portfolio Institutional Class for which beneficial ownership is disclaimed or presumed disclaimed. The persons or or- ganizations owning 25% or more of the outstanding shares of a Portfolio may be presumed to 31 "control" (as that term is defined in the 1940 Act) such Portfolio. As a re- sult, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of share- holders of such Portfolio. Both Institutional and Service Class Shares represent an interest in the same assets of a Portfolio. Service Class Shares bear certain expenses related to shareholder servicing and the distribution of such shares and have exclu- sive voting rights with respect to matters relating to distribution expendi- tures. The Board of Trustees of the Fund has authorized a third class of shares, Advisor Class Shares, which is not currently being offered by this Portfolio. Annual meetings will not be held except as required by the 1940 Act and other applicable laws. The Fund has undertaken that its Trustees will call a meeting of shareholders if such a meeting is requested in writing by the hold- ers of not less than 10% of the outstanding shares of the Fund. The Fund will assist shareholder communications in such matters to the extent required by the undertaking. CUSTODIAN The Chase Manhattan Bank serves as custodian of the Fund's assets. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the independent accountant for the Fund. REPORTS Investors will receive unaudited semi-annual financial statements and annual financial statements audited by PricewaterhouseCoopers LLP. SHAREHOLDER INQUIRIES Shareholder inquiries may be made by contacting the UAM Funds Service Center at the telephone number listed on the cover page of this Prospectus. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PRO- SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OF- FERING MAY NOT BE LAWFULLY MADE. 32 UAM FUNDS -- INSTITUTIONAL CLASS SHARES Acadian Emerging Markets Portfolio Acadian International Equity Portfolio Cambiar Opportunity Portfolio BHM&S Total Return Bond Portfolio Chicago Asset Management Intermediate Bond Portfolio Chicago Asset Management Value/Contrarian Portfolio C&B Balanced Portfolio C&B Equity Portfolio C&B Equity Portfolio for Taxable Investors C&B Mid Cap Equity Portfolio DSI Balanced Portfolio DSI Disciplined Value Portfolio DSI Limited Maturity Bond Portfolio DSI Money Market Portfolio FMA Small Company Portfolio FPA Crescent Portfolio Hanson Equity Portfolio Heitman Real Estate Portfolio ICM Equity Portfolio ICM Fixed Income Portfolio ICM Small Company Portfolio Jacobs International Octagon Portfolio McKee Domestic Equity Portfolio McKee International Equity Portfolio McKee Small Cap Equity Portfolio McKee U.S. Government Portfolio MJI International Equity Portfolio NWQ Balanced Portfolio NWQ Small Cap Value Portfolio NWQ Special Equity Portfolio NWQ Value Equity Portfolio Rice, Hall James Small Cap Portfolio Rice, Hall James Small/Mid Cap Portfolio SAMI Preferred Stock Income Portfolio Sirach Bond Portfolio Sirach Equity Portfolio Sirach Growth Portfolio Sirach Special Equity Portfolio Sirach Strategic Balanced Portfolio Sterling Partners' Balanced Portfolio Sterling Partners' Equity Portfolio Sterling Partners' Small Cap Value Portfolio TS&W Balanced Portfolio TS&W Equity Portfolio TS&W Fixed Income Portfolio TS&W International Equity Portfolio 33 UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 1-800-638-7983 Investment Adviser Chicago Asset Management Company 70 West Madison Street 56th Floor Chicago, IL 60602 Distributor UAM Fund Distributors, Inc. 211 Congress Street Boston, MA 02110 PROSPECTUS July 17, 1998 UAM Funds Prospectus July 17, 1998 Chicago Asset Management Value/Contrarian Portfolio Institutional Class Shares [LOGO OF UAM FUNDS APPEARS HERE] TABLE OF CONTENTS
PAGE ---- Fund Expenses............................................................ 1 Prospectus Summary....................................................... 3 Risk Factors............................................................. 4 Financial Highlights..................................................... 5 Investment Objective..................................................... 6 Investment Policies...................................................... 6 Other Investment Policies................................................ 8 Investment Limitations................................................... 14 Purchase of Shares....................................................... 15 Redemption of Shares..................................................... 19 Shareholder Services..................................................... 21 Valuation of Shares...................................................... 23 Performance Calculations................................................. 23 Dividends, Capital Gains Distributions and Taxes......................... 24 Investment Adviser....................................................... 25 Adviser's Historical Performance......................................... 26 Administrative Services.................................................. 28 Distributor.............................................................. 28 Portfolio Transactions................................................... 29 General Information...................................................... 29 UAM Funds -- Institutional Class Shares.................................. 32
UAM FUNDS CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO INSTITUTIONAL CLASS SHARES - -------------------------------------------------------------------------------- PROSPECTUS -- JULY 17, 1998 UAM Funds Trust (the "Fund") is, an open-end investment company known as a "mutual fund." The Fund consists of multiple series (known as "Portfolios"), each of which has different investment objectives and policies. The Chicago As- set Management Value/Contrarian Portfolio currently offers only one class of shares. The securities offered in this Prospectus are Institutional Class Shares of one diversified, no-load Portfolio of the Fund managed by Chicago As- set Management Company. CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO. Chicago Asset Management Value/Contrarian Portfolio (the "Portfolio") seeks capital appreciation by in- vesting primarily in the common stock of large companies. The common stocks in which the Portfolio invests are generally ones which have performed poorly over the recent past but which may have the potential for better-than-average per- formance in the future. There can be no assurance that the Portfolio will achieve its stated objec- tive. Keep this Prospectus for future reference. It contains information that you should know before you invest. A "Statement of Additional Information" ("SAI") containing additional information about the Fund has been filed with the Secu- rities and Exchange Commission ("SEC"). The SAI is dated July 17, 1998 and has been incorporated by reference into this Prospectus. For a free copy of the SAI contact the UAM Funds Service Center at 1-800-638-7983. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FUND EXPENSES The following table illustrates expenses and fees that a shareholder of the Portfolio's Institutional Class Shares will incur. The Fund does not charge transaction expenses. However, transaction fees may be charged if a broker- dealer or other financial intermediary deals with the Fund on your behalf. (See "PURCHASE OF SHARES.") SHAREHOLDER TRANSACTION EXPENSES Sales Load Imposed on Purchases......................................... NONE Sales Load Imposed on Reinvested Dividends.............................. NONE Deferred Sales Load..................................................... NONE Redemption Fees......................................................... NONE Exchange Fee............................................................ NONE
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) Investment Advisory Fees (After Fee Waiver)......................... 0.000% 12b-1 Fees.......................................................... NONE Other Expenses (After Expenses Assumed or Waived)................... 0.950% ----- Total Operating Expenses (After Fee Waiver and Expenses Assumed).... 0.950 %* =====
- ----------- * Absent the fees waived and expenses assumed, Investment Advisory Fees, Other Expenses and Total Operating Expenses for the Portfolio would have been 0.625%, 0.965% and 1.590%, respectively. The Total Operating Expenses in- cludes the effect of expense offsets. If expense offsets were excluded, To- tal Operating Expenses of the Portfolio would not be affected. Until further notice, the Adviser and certain other service providers have voluntarily agreed to waive their fees and/or to assume certain operating expenses to keep the Portfolio's total annual operating expenses (excluding interest, taxes and extraordinary expenses), after the effect of expense offsets, from exceeding 0.950% of average daily net assets. The Advisor and certain other service providers may change or discontinue their fee waivers and expense assumptions at any time. The table above shows various fees and expenses an investor would bear di- rectly or indirectly. The expenses and fees set forth above are based on the Portfolio's operations during the fiscal year ended April 30, 1998. 1 EXAMPLE The following example illustrates expenses a shareholder would pay on a $1,000 investment over various time periods assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- Chicago Asset Management Value/Contrarian Portfolio Institutional Class Shares.... $ 10 $ 30 $ 53 $ 117
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX- PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 2 PROSPECTUS SUMMARY INVESTMENT ADVISER Chicago Asset Management Company (the "Adviser") is a registered investment adviser founded in 1983 specializing in the active management of stocks, bonds and balanced portfolios for institutional, tax-exempt clients. As of December 3, 1997, the Adviser had over $2 billion in assets under management. (See "IN- VESTMENT ADVISER.") PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor") to investors at net asset value without a sales commission. Share purchases may be made by sending investments directly to the Fund. The minimum initial investment is $2,000. The minimum for subsequent investments is $100. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. Certain exceptions to the initial or minimum investment amounts may be permitted by the officers of the Fund. (See "PURCHASE OF SHARES.") DIVIDENDS AND DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income in quarterly dividends. The Portfolio will distribute any realized net capital gains annually. Distributions will be reinvested in Portfolio shares automatically unless an investor elects to receive cash distributions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") REDEMPTIONS AND EXCHANGES Shares of the Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemp- tion request. The redemption price may be more or less than the purchase price. Shares of the Portfolio may be exchanged for shares of the same class of any other portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" and "EX- CHANGE PRIVILEGE.") ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As- set Management Corporation, is responsible for performing and overseeing ad- ministration, fund accounting, dividend disbursing and transfer agency serv- ices provided to the Fund and its Portfolios by third-party service providers. (See "ADMINISTRATIVE SERVICES.") 3 RISK FACTORS The value of the Portfolio's shares will fluctuate in response to changes in market and economic conditions as well as the financial conditions and pros- pects of the issuers in which the Portfolio invests. Prospective investors should consider the following: (1) The Portfolio may engage in various strate- gies to seek to hedge its investments against movements in security prices, interest rates and currency exchange rates by the use of derivatives including options and futures as well as options on futures. Such strategies are com- monly referred to as "derivatives" and involve the risk of imperfect correla- tion in movements in the price of options and futures and movements in the price of securities, interest rates or currencies which are the subject of the hedge. To the extent these transactions involve foreign securities or curren- cies, they are also subject to the risk factors associated with foreign in- vestments generally. There can be no assurance that a liquid secondary market for options and futures contracts will exist at any specific time; (2) The Portfolio may invest up to 10% of its assets in foreign issuers, which may in- volve greater risks than investments in domestic securities, such as foreign currency risk; (3) The Portfolio may invest in repurchase agreements which en- tail a risk of loss should the seller default on its transaction; (4) The Portfolio may lend its investment securities which entails a risk of loss should a borrower fail financially; (5) The Portfolio may purchase securities on a when-issued basis which do not earn interest until issued and may decline or appreciate in market value prior to their delivery to the Portfolio. (See "OTHER INVESTMENT POLICIES.") 4 FINANCIAL HIGHLIGHTS The following table provides selected per share information for a share out- standing throughout the periods presented for the Portfolio. This table is part of the Portfolio's Annual Financial Statements, which are included in the Portfolio's 1998 Annual Report to Shareholders. The Report is incorporated by reference into the Portfolio's SAI. The Portfolio's Annual Financial State- ments have been audited by PricewaterhouseCoopers LLP whose unqualified opin- ion thereon is also incorporated into the Portfolio's SAI. The following in- formation should be read in conjunction with the Portfolio's 1998 Annual Re- port to Shareholders. Further information about the Portfolio's performance is contained in its Annual Report, which may be obtained without charge by call- ing the telephone number on the Prospectus cover page.
DECEMBER 16, YEAR ENDED YEAR ENDED YEAR ENDED 1994*** TO APRIL 30, 1998 APRIL 30, 1997 APRIL 30, 1996 APRIL 30, 1995 -------------- -------------- -------------- -------------- NET ASSET VALUE, BEGINNING OF PERIOD... $ 13.07 $ 13.67 $ 11.14 $ 10.00 ------- ------- -------- ------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income.. 0.17 0.18 0.19 0.05 Net Realized and Unrealized Gain on Investments.......... 3.84 0.30 2.86 1.13 ------- ------- -------- ------- Total from Investment Operations.......... 4.01 0.48 3.05 1.18 ------- ------- -------- ------- DISTRIBUTIONS Net Investment Income.. (0.18) (0.24) (0.23) (0.04) Net Realized Gain...... (0.94) (0.84) (0.29) -- ------- ------- -------- ------- Total Distributions... (1.12) (1.08) (0.52) (0.04) ------- ------- -------- ------- NET ASSET VALUE, END OF PERIOD................ $ 15.96 $ 13.07 $ 13.67 $ 11.14 ======= ======= ======== ======= TOTAL RETURN+........... 31.71% 3.72% 28.00% 11.81%** ======= ======= ======== ======= RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (Thousands).... $22,552 $13,804 $ 892 $ 696 Ratio of Expenses to Average Net Assets.... 0.95% 0.95% 1.06% 0.95%* Ratio of Net Investment Income to Average Net Assets................ 1.16% 1.89% 1.51% 1.54%* Portfolio Turnover Rate.................. 55% 21% 33% 4% Average Commission Rate#................. $0.0552 $0.0574 $ 0.0600 N/A Ratio of Voluntarily Waived Fees and Expenses Assumed by the Adviser to Average Net Assets............ 0.64% 6.32% 12.20% 17.05%* Ratio of Expenses to Average Net Assets Including Expense Offsets............... 0.95% 0.95% 0.95% 0.95%*
- ----------- * Annualized. ** Not annualized. *** Commencement of Operations + Total return would have been lower had certain fees not been waived and expenses assumed by the Adviser during the periods indicated. # Beginning with fiscal year 1996, the Portfolio is required to disclose the average commission rate per share it paid for portfolio trades, on which commissions were charged, during the period. 5 INVESTMENT OBJECTIVE The Portfolio seeks capital appreciation by investing primarily in the com- mon stock of large companies. The common stocks in which the Portfolio invests are generally ones which have performed poorly over the recent past but which may have the potential for better than average performance in the future. There can be no assurance that the Portfolio will achieve its stated objec- tive. INVESTMENT POLICIES The Adviser focuses mainly on choosing individual stocks rather than trying to forecast the overall strength of the stock market. In particular, the Ad- viser seeks to invest in large, established quality companies whose stocks can be bought at attractive prices because of the market's misperceptions about the companies' value. As a contrarian, the Adviser seeks to invest by going against the consensus opinion on individual stocks. To discover the appropriate contrarian position, the Adviser stays in contact with stock market research analysts and takes their assumptions into account in determining whether stocks are undervalued or overvalued. The Portfolio will invest primarily in the common stock of large capitaliza- tion companies which are defined as those with equity capitalizations greater than $1 billion at the time of purchase. The Portfolio may also invest in se- curities convertible into common stock. There is no particular percentage of the Portfolio's assets to be invested in any one type of security, and it has the ability to purchase other securities that may produce capital appreciation such as non-convertible preferred stocks, rights and warrants to purchase com- mon stocks, and bonds. However, under normal circumstances, the Adviser antic- ipates no more than 5% of the Portfolio's total assets will be invested in in- vestment grade bonds which are generally considered to be those bonds having one of the four highest grades assigned by Moody's Investors Service ("Moody's") (Aaa, Aa, A or Baa) or Standard & Poor's Ratings Services ("S&P") (AAA, AA, A or BBB), or if unrated, of equivalent quality in the Adviser's judgment. The Adviser also reserves the right to retain securities which are downgraded by one or both of the rating agencies, if in the Adviser's judg- ment, the retention of securities is warranted. The Portfolio's SAI contains a detailed description of corporate bond ratings. The Portfolio seeks to outperform the market during most time periods, not by taking advantages of shifts in the overall direction of the market, but by identifying attractive stocks. The Portfolio will invest primarily in estab- lished, high-quality companies whose stock is selling at attractive prices due to short-term market misperceptions. Consistent with avoiding market timing is maintaining most individual common stock holdings in a somewhat equally weighted position in the 6 Portfolio. This is sometimes accomplished by rebalancing current holdings in response to a change in the market value of individual holdings over time. A portion of a holding which has become larger due to market value change may be sold. Conversely an additional purchase of shares of a current holding may be made if market value change has reduced the holding size in the total portfo- lio. The Adviser's investment style is categorized as large cap, bottom-up, val- ue-oriented and contrarian. Its investment philosophy and process is qualita- tive rather than quantitative, and its investment approach has four distin- guishing characteristics. First, it emphasizes large company stocks. Second, it employs a bottom-up approach which means that it will construct the Portfo- lio by focusing on individual stocks rather than industry groups or sectors. (Top-down investors would first decide which industries or sectors they wanted to emphasize and then would look for stocks that fit those requirements.) Third, it is value-oriented. This means that it invests in stocks which are perceived to be priced below their true value because the market does not rec- ognize their potential. And fourth, it is contrarian in that it goes against the common consensus when it invests. To maintain an effective contrarian pos- ture, it closely monitors market opinion-makers, such as research analysts and commentators, and then evaluates the impact of their opinions on stock prices, in identifying securities which are perceived to be undervalued or overvalued. This results in active contrarian rebalancing of current holdings. The Adviser selects individual issues which offer a combination of some of the following characteristics: . they are out-of-favor among market analysts; . they are priced below the mid-point of their trading range over the past year; . the issuing companies have maintained sound financial credit qual- ity as measured by their balance sheets or they are expected to significantly improve; . they are large companies with market values over $1 billion; . they have reasonable (based on normalized expected earnings) price- to-earnings ratios; and . they pay or may become able to pay a dividend. When the Adviser believes that market conditions warrant a defensive posi- tion, up to 100% of the Portfolio's assets may be held in cash and short-term investments. See "SHORT-TERM INVESTMENTS AND REPURCHASE AGREEMENTS" below for a description of the types of short-term instruments in which the Portfolio may invest for temporary defensive purposes. When the Portfolio is in a defen- sive position, it may not necessarily be pursuing its stated investment objec- tive. 7 OTHER INVESTMENT POLICIES The Portfolio may also, under normal circumstances, invest up to 35% of its assets, unless restricted by additional limitations described below or in the Portfolio's SAI, in the following securities, investments or investment tech- niques. SHORT-TERM INVESTMENTS In order to earn a return on uninvested assets, meet anticipated redemp- tions, or for temporary defensive purposes, the Portfolio may invest a portion of its assets in domestic and foreign money market instruments including cer- tificates of deposit, bankers' acceptances, time deposits, U.S. government ob- ligations, U.S. government agency securities, short-term corporate debt secu- rities, and commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by Moody's or, if unrated, determined by the Adviser to be of comparable quality. Time deposits maturing in more than seven days will not be purchased by the Portfolio, and time deposits maturing from two business days through seven calendar days will not exceed 10% of the total assets of the Portfolio. The Portfolio will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, (ii) in the case of U.S. banks, it is a member of the Fed- eral Deposit Insurance Corporation, and (iii) in the case of foreign branches of U.S. banks, the security is, in the opinion of the Adviser, of an invest- ment quality comparable with other debt securities which may be purchased by the Portfolio. The Fund has received permission from the Securities and Exchange Commission (the "SEC") to deposit the daily uninvested cash balances of the Fund's Port- folios, as well as cash for investment purposes, into one or more joint ac- counts and to invest the daily balance of the joint accounts in the following short-term investments: fully collateralized repurchase agreements, interest- bearing or discounted commercial paper including dollar-denominated commercial paper of foreign issuers, and any other short-term money market instruments including variable rate demand notes and tax-exempt money instruments. By en- tering into these investments on a joint basis, the Portfolio may earn a higher rate of return on investments relative to what it could earn individu- ally. The Fund has received permission from the SEC for each of its Portfolios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the Fund's DSI Money Market Portfolio. (See "INVESTMENT COMPANIES.") REPURCHASE AGREEMENTS The Portfolio may invest in repurchase agreements collateralized by U.S. Government securities, certificates of deposit, and certain bankers' accept- ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a 8 repurchase agreement, the Portfolio buys a security and simultaneously commits to sell that security back at an agreed upon price plus an agreed upon market rate of interest. Under a repurchase agreement, the seller is also required to maintain the value of securities subject to the agreement at not less than 100% of the repurchase price. The value of the securities purchased will be evaluated daily, and the Adviser will, if necessary, require the seller to maintain additional securities to ensure that the value is in compliance with the previous sentence. The use of repurchase agreements involves certain risks. For example, a default by the seller of the agreement may cause the Portfolio to experience a loss or delay in the liquidation of the collateral securing the repurchase agreement. The Portfolio might also incur disposition costs in liquidating the collateral. While the Fund's management acknowledges these risks, it is expected that they can be controlled through stringent counter-party selection criteria and careful monitoring procedures. The Fund has received permission from the SEC to pool daily uninvested cash balances of the Fund's Portfolios in order to invest in repurchase agreements on a joint basis. By entering into joint repurchase agreements, the Portfolio may incur lower transaction costs and earn higher rates of interest on joint repurchase agreements. The Portfolio's contribution would determine its return from a joint repurchase agreement. (See "SHORT-TERM INVESTMENTS.") LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified institutional investors as a means of earning income. The Portfolio will not loan securities to the extent that greater than one-third of its total assets at fair market value would be committed to loans. During the term of a loan, the Portfolio is subject to a gain or loss depending on any increase or decrease in the market price of the securities loaned. Lending of securities is subject to review by the Fund's Board of Trustees. All relevant facts and circumstances, including the creditworthiness of the broker, dealer or institution, will be considered by the Adviser in making decisions about securities lending. An investment company may pay reasonable negotiated fees in connection with loaned securities so long as such fees are set forth in a written contract and approved by its Board of Trustees. The Portfolio will continue to retain any voting rights with respect to loaned securities. If a material event occurs affecting an investment on a loan, the loan must be called and the securities voted. WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES The Portfolio may purchase and sell securities on a "when-issued," "delayed settlement," or "forward delivery" basis. "When-issued" or "forward delivery" 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 and forward delivery transactions may be expected to occur a month or more be- fore 9 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 the Portfolio until it receives delivery or payment from the other party to any of the above transactions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. The Portfolio will maintain a separate account of cash or liquid securities at least equal to the value of purchase commitments until payment is made. Typically, no income accrues on securities purchased on a delayed delivery basis prior to the time delivery is made although the Portfolio may earn income on securities it has deposited in a segregated account. The Portfolio may engage in these types of purchases in order to buy securi- ties that fit with its investment objectives at attractive prices -- not to increase its investment leverage. PORTFOLIO TURNOVER In addition to Portfolio trading costs, higher rates of portfolio turnover may result in the realization of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for more information on taxation.) The Portfolio will not normally engage in short-term trading, but reserves the right to do so. The table set forth in "Financial Highlights" presents the Portfolio's histor- ical portfolio turnover rates. INVESTMENT COMPANIES The Portfolio reserves the right to invest up to 10% of its total assets, calculated at the time of investment, in the securities of other open-end or closed-end investment companies. No more than 5% of the investing Portfolio's total assets may be invested in the securities of any one investment company, nor may it acquire more than 3% of the voting securities of any other invest- ment company. The Portfolio will indirectly bear its proportionate share of any management fees paid by an investment company in which it invests in addi- tion to the advisory fee paid by the Portfolio. The Fund has received permission from the SEC to allow each of its Portfo- lios to invest the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio for cash management purposes provided that the in- vestment is consistent with the Portfolio's investment policies and restric- tions. Based upon the Portfolio's assets invested in the DSI Money Market Portfolio, the investing Portfolio's adviser will waive its investment advi- sory fee and any other fees earned as a result of the Portfolio's investment in the DSI Money Market Portfolio. The investing Portfolio will bear expenses of the DSI Money Market Portfolio on the same basis as all of its other share- holders. 10 FOREIGN INVESTMENTS Investing in foreign companies may involve additional risks and considera- tions which are not typically associated with investing in U.S. companies. Since stocks of foreign companies are normally denominated in foreign curren- cies, 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. As non-U.S. companies are not generally subject to uniform accounting, au- diting and financial reporting standards and practices comparable to those ap- plicable to U.S. companies, comparable information may not be readily avail- able about certain foreign companies. Securities of some non-U.S. companies may be less liquid and more volatile than securities of comparable U.S. compa- nies. In addition, in certain foreign countries, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic develop- ments which could affect U.S. investments in those countries. RESTRICTED AND ILLIQUID SECURITIES The Portfolio may purchase restricted securities that are not registered for sale to the general public but which are eligible for resale to qualified in- stitutional investors under Rule 144A of the Securities Act of 1933. Under the supervision of the Fund's Board of Trustees, the Adviser determines the li- quidity of such investments by considering all relevant factors. Provided that a dealer or institutional trading market in such securities exists, these re- stricted securities are not treated as illiquid securities for purposes of the Portfolio's investment limitations. The Portfolio may also invest up to 15% of its net assets in securities that are illiquid. Prices realized from the sales of these securities could be more or less than those originally paid by the Portfolio or less than what may be considered the fair value of such securi- ties. HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS To reduce the overall risk of its investments (hedge), the Portfolio may use options, futures contracts, options on futures contracts, and forward currency contracts. These instruments are commonly referred to as derivatives. Hedging strategies may also be used in an attempt to manage the Portfolio's exposure to changing interest rates, security prices and currency exchange rates. The Portfolio's ability to use these strategies may be limited by market condi- tions, regulatory limits and tax considerations. The Portfolio's obligation under such hedging strategies will be covered by the maintenance of a segre- gated account consisting of cash or liquid securities equal to at least 100% of the Portfolio's commitment. The Portfolio may buy or sell futures con- tracts, write covered call options and buy put and call options on any securi- ty, index or currency including options and futures traded on foreign 11 exchanges and options not traded on exchanges. The Portfolio's SAI contains further information on all of these strategies and the risks associated with them. The Portfolio may write or purchase options in privately negotiated transac- tions ("OTC Options") as well as listed options. OTC Options can be closed out only by agreement with the other party to the transaction. Any OTC Option pur- chased by the Portfolio is considered an illiquid security. Any OTC Option written by the Portfolio will be with a qualified dealer pursuant to an agree- ment under which the Portfolio may repurchase the option at a formula price. Such options are considered illiquid to the extent that the formula price ex- ceeds the intrinsic value of the option. The Portfolio may not purchase or sell futures contracts or related options for which the aggregate initial mar- gin and premiums exceed 5% of the fair market value of the Portfolio's assets. In order to prevent leverage in connection with the purchase of futures con- tracts or call options thereon by the Portfolio, an amount of cash, cash equivalents or liquid securities equal to the market value of the obligation under the futures contracts or options (less any related market deposits) will be maintained in a segregated account with the Fund's Custodian Bank. The Portfolio may not invest more than 15% of its net assets in illiquid securi- ties and repurchase agreements which have a maturity of longer than seven days. A more complete discussion of the potential risks involved in transac- tions in options or futures contracts and related options is contained in the Portfolio's SAI. The Portfolio may enter into forward currency contracts for the purchase or sale of a specified currency at a specified future date either with respect to specific transactions or with respect to portfolio positions. The Portfolio also may enter into a forward contract to sell an amount of a foreign currency approximating the value of some or all of the Portfolio's securities denomi- nated in such currency. The Portfolio may use forward contracts in one currency or a basket of cur- rencies to hedge against fluctuations in the value of another currency when the Adviser anticipates there will be a correlation between the two and may use forward currency contracts to shift the Portfolio's exposure to foreign currency fluctuations from one country to another. The purpose of entering into these contracts is to minimize the risk to the Portfolio from adverse changes in the relationship between the U.S. dollar and foreign currencies. The Portfolio may enter into interest rate protection transactions, which consist of interest rate swaps and interest rate caps, collars and floors, for hedging purposes. These transactions are commonly referred to as derivatives. A swap is an agreement to exchange the return generated by one instrument for the return generated by another instrument. The swaps in which the Portfolio may also engage include interest rate caps, floors and collars under which one party pays a single or periodic fixed amount (or premium), and the other party pays periodic amounts on movement of a specified index. 12 The Portfolio may enter into interest rate protection transactions to pre- serve a return or spread on a particular investment or portion of its portfo- lio or to protect against any increase in the price of securities it antici- pates purchasing at a later date. The Portfolio will enter into interest rate protection transactions only with banks and recognized securities dealers be- lieved by the Adviser to present minimal credit risks in accordance with guidelines established by the Fund's Board of Trustees. Interest rate swaps, caps, floors and collars will be treated as illiquid securities and will therefore, be subject to the Portfolio's investment restriction limiting in- vestment in illiquid securities to no greater than 15% of its net assets. RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging strategies described above, and there can be no assurance that any strategy used will succeed. If the Adviser incorrectly forecasts interest rates, market values or other economic factors in utilizing a hedging strategy for the Port- folio, the Portfolio would be in a better position if it had not hedged at all. In addition, the Portfolio will pay commissions and other costs in con- nection with such hedging strategies which may increase the Portfolio's ex- penses and reduce its return. The use of these strategies involves certain risks, including (1) the fact that skills needed to use hedging instruments are different from those needed to select the Portfolio's securities, (2) possible imperfect correlation, or even no correlation, between price movements of hedging instruments and price movements of the investments being hedged, (3) the fact that, while hedging strategies can reduce the risk of loss, they can also reduce the opportunity for gain, or even result in losses, by offsetting favorable price movements in hedged investments and (4) the possible inability of the Portfolio to purchase or sell a security at a time that otherwise would be favorable for it to do so, or the possible need for the Portfolio to sell a security at a disadvanta- geous time due to the need for it to maintain "cover" or to segregate securi- ties in connection with hedging transactions and the possible inability of the Portfolio to close out or to liquidate its hedged position. AMERICAN DEPOSITARY RECEIPTS ADRs are depositary receipts typically used by a U.S. bank or trust company which evidence ownership of underlying securities issued by a foreign corpora- tion. Generally, ADRs in registered form are designed for use in the U.S. se- curities market and ADRs in bearer form are designed for use in securities markets outside the United States. ADRs may not necessarily be denominated in the same currency as the underlying securities into which they may be convert- ed. ADRs may be issued pursuant to sponsored or unsponsored programs. In spon- sored 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 13 creation of a sponsored program. Accordingly, there may be less information programs available regarding issuers of securities underlying unsponsored pro- grams and there may not be a correlation between such information and the mar- ket value of the depositary receipts. ADRs also involve the risks of other in- vestments in foreign securities, as discussed in the Prospectus. For purposes of the Portfolio's investment policies, the Portfolio's investment in deposi- tary receipts will be deemed to be investments in the underlying securities and will not exceed 25% of the Portfolio assets. INVESTMENT LIMITATIONS The Portfolio will not: (a) with respect to 75% of its assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed as to principal and in- terest by the U.S. Government or any of its agencies or instrumentali- ties); (b) with respect to 75% of its assets, purchase more than 10% of any class of the outstanding voting securities of any issuer; (c) invest more than 5% of its assets at the time of purchase in the secu- rities of companies that have (with predecessors) a continuous operat- ing history of less than 3 years; (d) invest more than 25% of its assets in companies within a single indus- try; however, there are no limitations on investments made in instru- ments issued or guaranteed by the U.S. Government and its agencies. (e) make loans except by purchasing debt securities in accordance with its investment objective and policies or entering into repurchase agree- ments or by lending its portfolio securities to banks, brokers, deal- ers and other financial institutions so long as the loans are made in compliance with the 1940 Act, as amended, or the Rules and Regulations or interpretations of the SEC; (f) (i) borrow, except from banks and as a temporary measure for extraor- dinary or emergency purposes and then, in no event, in excess of 33 1/3% of the Portfolio's gross assets valued at the lower of market or cost, and (ii) the Portfolio may not purchase additional securities when borrowings exceed 5% of total assets; or (g) pledge, mortgage or hypothecate any of its assets to an extent greater than 33 1/3% of its total assets at fair market value. The investment objective of the Portfolio is fundamental and may be changed only with the approval of the holders of a majority of the outstanding shares of such Portfolio. Except for limitations (a), (b), (d), (e) and (f)(i), the Portfolio's investment limitations and policies described in this Prospectus and in the SAI are not 14 fundamental and may be changed by the Fund's Board of Trustees upon reasonable notice to investors. All other investment limitations described here and in the SAI are fundamental policies and may be changed only with the approval of the holders of a majority of the outstanding shares of the Portfolio. If a percentage limitation on investment or utilization of assets as set forth above is adhered to at the time an investment is made, a later change in per- centage resulting from changes in the value or total cost of the Portfolio's assets will not be considered a violation of the restriction. PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), without a sales commission at the net asset value next deter- mined after an order is received by the Fund and payment is received by the Fund or its designated Service Agent (See "VALUATION OF SHARES.") The minimum initial investment required is $2,000. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. Certain exceptions may be permitted by the officers of the Fund. Shares of the Portfolio may be purchased by customers of broker-dealers or other financial intermediaries ("Service Agents") which have established a shareholder servicing relationship with the Fund on behalf of their customers. Service Agents may impose additional or different conditions on purchases or redemption of Portfolio shares and may charge transaction or other account fees. Each Service Agent is responsible for transmitting to its customers a schedule of any such fees and information regarding any additional or differ- ent purchase and redemption conditions. Shareholders who are customers of Service Agents should consult their Service Agent for information regarding these fees and conditions. Amounts paid to Service Agents may include transac- tion fees and/or service fees paid by the Fund from the Fund assets attribut- able to the Service Agent, and would not be imposed if shares of the Portfolio were purchased directly from the Fund or the Distributor. The Service Agents may provide shareholder services to their customers that are not available to a shareholder dealing directly with the Fund. A salesperson and any other per- son entitled to receive compensation for selling or servicing Portfolio shares may receive different compensation with respect to one particular class of shares over another in the Fund. Service Agents or if applicable, their designees, that have entered into agreements with the Fund or its agent may enter confirmed purchase orders on behalf of clients and customers, with payment to follow no later than a Port- folio's pricing on the following business day. If payment is not received by the Fund's Sub-Transfer Agent, Chase Global Funds Services Company ("CGFSC") by such time, the Service Agent could be held liable for resulting fees or losses. A Portfolio may be deemed to have received a purchase or redemption order when a Service Agent, 15 or, if applicable, its authorized designee, accepts the order. Orders received by the Fund in proper form will be priced at the Portfolio's net asset value next computed after they are accepted by a Service Agent or its authorized designee. Service Agents are responsible to their customers and the Fund for timely transmission of all subscription and redemption requests, investment information, documentation and money. INITIAL INVESTMENT BY MAIL . Complete and sign an Application, and mail it along with a check payable to "UAM Funds" to: UAM Funds Trust UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 Payment for purchases of shares received by mail will be credited to an account at the next share price calculated for the Portfolio after receipt. Payment does not need to be converted into Federal Funds (monies credited to the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will ac- cept it for investment. The Fund will not accept third party checks to pur- chase shares of the Portfolio. If you purchase shares by check, please be sure that your check is made payable to "UAM Funds." BY WIRE . Telephone the UAM Funds Service Center and provide the name, address, telephone number, social security or taxpayer identification number, Portfolio selected, amount being wired, and the name of the bank wiring the funds. The call must be received prior to the close of regular trad- ing on the NYSE (generally 4:00 p.m. Eastern Time) to receive that days' price. An account number and a wire control number will be provided to you, in addition to wiring instructions. Next, 16 . instruct your bank to wire the specified amount to the Fund's custodian: The Chase Manhattan Bank ABA #021000021 UAM Funds Credit DDA Acct. #9102772952 Ref: Portfolio Name Your Account Name Your Account Number Wire Control Number (assigned by UAM Funds Service Center) . Forward a completed Application to the UAM Funds Service Center. Federal Funds purchases will be accepted only on days when the NYSE and the Cus- todian Bank are open for business. . To be sure that a bank wire order is received on the same day it is sent, an investor's bank should wire funds as early in the day as possi- ble. The bank sending funds may charge for this service. The Fund's agent reserves the right to charge investors for receipt of wired funds, but no charge is currently imposed for this service. It is necessary to obtain a new wire control number every time money is wired into an ac- count in a Portfolio. Wire control numbers are effective for one trans- action only and cannot be used more than once. Wired money that is not properly identified with a currently effective wire control number will be returned to the bank from which it was wired and will not be credited to the shareholder's account. ADDITIONAL INVESTMENTS Additional investments can be made at any time. The minimum additional in- vestment is $100. Shares can be purchased at net asset value by mailing a check to the UAM Funds Service Center (payable to "UAM Funds") or by wiring money to the Custodian Bank as outlined above. When making additional invest- ments, be sure that the account number, account name and the Portfolio to be purchased is identified on the check or wire. Prior to wiring additional in- vestments, please notify the UAM Funds Service Center by calling the number on the cover of this Prospectus. Mail orders should include, when possible, the "Invest by Mail" stub which accompanies any Fund confirmation statement. PURCHASE BY ACH If you have made this election, shares of the Portfolio may be purchased via Automated Clearing House ("ACH"). Investors purchasing via ACH should complete the bank information section on the Account Application and attach a voided check or deposit slip to the Account Application. This option must be estab- lished on your account at least 15 days prior to your initiating an ACH trans- action. (See "SHAREHOLDER SERVICES--AUTOMATIC INVESTMENT PLAN.") 17 OTHER PURCHASE INFORMATION Investments received by the close of regular trading on the NYSE (generally 4:00 p.m., Eastern Time) will be invested at the share price calculated after the NYSE closes on that day. Investments received after the close of the NYSE will be executed at the price computed on the next day the NYSE is open. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of each Portfolio or to reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. The Portfolios are intended to be long-term investment vehicles and are not designed to provide investors with a means of speculation on short-term market movements. A pattern of frequent purchases can be disruptive to effi- cient portfolio management and, consequently, can be detrimental to a Portfo- lio's performance and its shareholders. Accordingly, if the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any purchase request with respect to such investor's account. Such investor also may be barred from pur- chasing other portfolios of the UAM Funds. Purchases of a Portfolio's shares will be made in full and fractional shares of the Portfolio calculated to three decimal places. Certificates for frac- tional shares will not be issued. Certificates for whole shares will not be issued except at the written request of the shareholder. IN-KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in ex- change for securities which are eligible for acquisition by the Portfolio, as described in this Prospectus. Securities to be exchanged which are accepted by the Fund will be valued as described under "VALUATION OF SHARES" at the next determination of net asset value after acceptance. Shares issued by a Portfo- lio in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights per- taining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the investor upon receipt from the issuer. Securi- ties acquired through an in-kind purchase will be acquired for investment and not for immediate resale. The Fund will not accept securities in exchange for shares of the Portfolio unless: . at the time of exchange, such securities are eligible to be in- cluded in the Portfolio (current market quotations must be readily available for such securities); . the investor represents and agrees that all securities offered to be exchanged are liquid securities and not subject to any restric- tions upon their sale by the Portfolio under the Securities Act of 1933, or otherwise; and 18 . the value of any such securities (except U.S. Government securi- ties) being exchanged together with other securities of the same issuer owned by the Portfolio will not exceed 5% of the net assets of the Portfolio immediately after the transaction. Investors who are subject to federal taxation upon exchange may realize a gain or loss for federal income tax purposes depending upon the cost of secu- rities or local currency exchanged. Investors interested in such exchanges should contact the Adviser. REDEMPTION OF SHARES Shares of the Portfolio may be redeemed by mail or telephone, at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request. No charge is made for redemptions. Any re- demption may be more or less than the purchase price of your shares depending on the market value of the investment securities held by the Portfolio. BY MAIL Address requests for redemption to the UAM Funds Service Center. Requests to redeem shares must include: . share certificates, if issued; . a letter of instruction or stock assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are regis- tered; . any required signature guarantees (see "SIGNATURE GUARANTEES"); and . any other necessary legal documents, if required in the case of es- tates, trusts, guardianships, custodianships, corporations, pension and profit-sharing plans and other organizations. BY TELEPHONE A redemption request by telephone requires the following: . establish the telephone redemption privilege (and if desired, the wire redemption privilege) by completing appropriate sections of the Application; and . call the Fund and instruct that the redemption proceeds be mailed to you or wired to your bank. The following tasks cannot be accomplished by telephone: . changing the name of the commercial bank or the account designated to receive redemption proceeds (this can be accomplished only by a written request signed by each shareholder, with each signature guaranteed); and 19 . redemption of certificated shares by telephone. The Fund and its Sub-Transfer Agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and they may be liable for any losses if they fail to do so. These procedures include re- quiring the investor to provide certain personal identification at the time an account is opened, as well as prior to effecting each transaction requested by telephone. All telephone transaction requests will be recorded and investors may be required to provide additional telecopied written instructions of such transaction requests. The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent does not employ the procedures described above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili- ty, cost or expense for following instructions received by telephone that it reasonably believes to be genuine. SIGNATURE GUARANTEES Signature guarantees are required for the following redemptions: . redemptions where the proceeds are to be sent to someone other than the registered shareholder(s) . redemption where the proceeds are to be sent to an address which is not the registered address; or . share transfer requests. Signature guarantees will be accepted from any eligible guarantor institu- tion which participates in a signature guarantee program. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securi- ties exchanges, registered securities associations, clearing agencies and sav- ings associations. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. OTHER REDEMPTION INFORMATION The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the UAM Funds Service Center or a redemption request in proper form. Although the Fund will redeem shares purchased by check before the check clears, payment of the redemption proceeds may be delayed for a pe- riod of up to fifteen days after their purchase, pending determination that the check has cleared. Investors should consider purchasing shares using a certified or bank check or money order if they anticipate an immediate need for redemption proceeds. The Fund may suspend the right of redemption or post- pone the date at times when either the NYSE or Custodian Bank are closed, or under any emergency circumstances as determined by the SEC. If the Fund's Board of Trustees determines that it would be detrimental to the best interests of the remaining shareholders of the Fund to make payments wholly 20 or partly in cash, the Fund may pay the redemption proceeds in whole or in part by a distribution in-kind of liquid securities held by the Portfolio in lieu of cash in conformity with applicable rules of the SEC. Investors may in- cur brokerage charges when they sell portfolio securities received in payment of redemptions. The Portfolios reserve the right to liquidate any account that is below fifty percent of the required minimum initial investment amount for a Portfo- lio as set forth in the Prospectus, where the reduction in value has occurred due to a redemption or exchange out of the account. If at any time your total investment does not have a value of at least fifty percent of the required minimum initial investment amount, you may be notified that the value of your account is below the Portfolio's minimum account balance requirement. You would then be allowed 60 days to make an additional investment before the ac- count is liquidated. Retirement accounts and certain other accounts will not be subject to automatic liquidation. Reductions in value that result solely from market activity will not trigger an involuntary redemption. SHAREHOLDER SERVICES EXCHANGE PRIVILEGE Institutional Class Shares of the Portfolio may be exchanged for Institu- tional Class Shares of any other Portfolio of the UAM Funds. (See the list of Portfolios of the UAM Funds at the end of this Prospectus.) Exchange requests should be made by contacting the UAM Funds Service Center. Any exchange will be based on the net asset value of the shares involved. There is no sales commission or charge of any kind for an exchange. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objectives of the Portfolio to be purchased. Call the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in which you are interested. Exchanges can only be made with Portfolios that are qualified for sale in a shareholder's state of residence. Exchange requests may be made either by mail or telephone. Telephone ex- changes will be accepted only if the certificates for the shares to be ex- changed have not been issued to the shareholder and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the NYSE will be processed on the next business day. The Fund may modify or terminate the exchange program at any time upon 60 days' written notice to shareholders, and may reject any exchange request. If the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any exchange request, with respect to such investor's account. Such investors also may be barred from exchanging into other 21 portfolios of the UAM Funds. For additional information regarding responsibil- ity for the authenticity of telephoned instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE." An exchange into another UAM Funds Portfolio is a sale of shares and may result in a gain or loss for income tax purposes. AUTOMATIC INVESTMENT PLAN An Automatic Investment Plan permits shareholders of a Portfolio with a min- imum value of $2,500 or more to purchase shares automatically (minimum of $100 per transaction) at regular intervals selected by the shareholder. Provided the shareholder's bank or other financial institution allows automatic with- drawals, shares are purchased by transferring funds via the Automated Clearing House ("ACH"). Investments made through ACH will be automatically transferred from a shareholder's checking, bank money market or NOW account designated by the shareholder. Such withdrawals are made electronically, if the sharehold- er's bank or financial institution so permits, or be pre-authorized checks or drafts drawn on the shareholder's bank or other account. The bank or financial institution must be a member of ACH. At the shareholder's option, the account designated will be debited in the specified amount, and shares will be pur- chased monthly or quarterly. To establish an Automatic Investment Plan, a shareholder must complete the Optional Services Form available from the UAM Funds Service Center at 1-800- 638-7983 and mail it to Chase Global Funds Service Company. A shareholder may cancel his/her participation or change the amount of purchase at any time by mailing written notification to Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. Notification generally will be effective three business days following receipt. The Fund may modify or terminate this privi- lege at any time, or may charge a service fee, although no such fee currently is contemplated. SYSTEMATIC WITHDRAWAL PLAN Any shareholder whose account balance totals at least $10,000 may establish a Systematic Withdrawal Plan under which an amount pre-determined by the shareholder (but at least $100) is automatically redeemed from the sharehold- er's account either monthly or quarterly. A shareholder may participate in the Systematic Withdrawal Plan by using ACH. Redemption made through ACH will be automatically transferred to the shareholder's bank or other similar financial institution account or a properly designated third party. The bank or finan- cial institution must be a member of ACH. Redemptions ordinarily are made on the third business day of the month and payments ordinarily will be transmit- ted within five business days after the redemption date. Because the prices of Fund shares fluctuate, the number of shares redeemed to finance systematic withdrawal payments or a given amount will vary from payment to payment. If a shareholder owns shares in more than one Portfolio, the shareholder must des- ignate the Portfolio from which the redemptions under a Systematic Withdrawal Plan should be made. An additional sheet may be 22 attached to the Optional Services Form if a shareholder selects more than one Portfolio. A Systematic Withdrawal Plan may be terminated or suspended at any time by the Fund. A shareholder may elect at any time, in writing, to termi- nate participation in the Systematic Withdrawal Plan. Such written election must be sent to and received by the Fund before a termination becomes effec- tive. There is currently no charge to the shareholder for a Systematic With- drawal Plan. VALUATION OF SHARES The net asset value of the Portfolio is determined by dividing the value of the Portfolio's assets, less any liabilities, by the number of shares out- standing. The net asset value per share of the Portfolio is determined as of the close of the NYSE on each day that the NYSE is open for business. Equity securities listed on a securities exchange for which market quota- tions are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed secu- rities not traded on the valuation date for which market quotations are read- ily available are valued neither exceeding the current ask prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars quoted by any major bank or by a broker. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost when the Board of Trustees determines that amortized cost reflects fair value. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Trustees. PERFORMANCE CALCULATIONS The Portfolio measures performance by calculating yield and total return. Both yield and total return figures are based on historical earnings and are not intended to indicate future performance. Yield and total return are calcu- lated separately for each class of a Portfolio. Yield refers to the income generated by an investment in the Portfolio over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all funds. As this differs from other accounting methods, the quoted yield may not equal the in- come actually paid to shareholders. Total return is the change in value of an investment in the Portfolio over a given period, assuming reinvestment of any dividends and capital gains. A cu- mulative or aggregate total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of re- turn that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. 23 The Portfolio's performance may be compared to data prepared by independent services which monitor the performance of investment companies, data reported in financial and industry publications, and various indices as further de- scribed in the Portfolio's SAI. This information may also be included in sales literature and advertising. The Portfolio's Annual Report to Shareholders for the most recent fiscal year end contains additional performance information that includes comparisons with appropriate indices. The Annual Report is available without charge. Con- tact the UAM Funds Service Center at the address or telephone number on the cover of this Prospectus. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS The Portfolio will normally distribute substantially all of its net invest- ment income (for tax purposes) to shareholders in quarterly dividends. If any net capital gains are realized, the Portfolio will normally distribute such gains annually. All dividends and capital gains distributions will be automat- ically reinvested in additional shares of the Portfolio unless the Fund is no- tified in writing that the shareholder elects to receive distributions in cash. FEDERAL TAXES The Portfolio intends to qualify as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, for federal in- come tax purposes and to meet all other requirements that are necessary for it (but not its shareholders) to be exempt from federal taxes on income and gains paid to shareholders in the form of dividends. To do this, the Portfolio must, among other things, distribute substantially all of its ordinary income and net capital gains on an annual basis and maintain a portfolio of investments which satisfies certain diversification criteria. Dividends paid by the Portfolio from net investment income, whether in cash or reinvested in shares, are taxable to shareholders as ordinary income. Short-term capital gains will be taxed as ordinary income. Long-term capital gains distributions are taxed as long-term capital gains. Shareholders will be notified annually of dividend income earned for tax purposes. Dividends declared in October, November and December to shareholders of rec- ord in such a month and paid in January of the following year will be treated as if they had been paid by the Fund and received by the shareholders on De- cember 31. The Fund is required by federal law to withhold 31% of reportable payments paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, you must certify that your Social Security or Tax - 24 payer Identification Number you have provided is correct and that you are not currently subject to backup withholding or that you are exempt from backup withholding. This certification must be made on the Application or on a sepa- rate form supplied by the Fund. Dividends and interest received by each Portfolio may give rise to withhold- ing and other taxes imposed by foreign countries. These taxes reduce the Port- folio's dividends but are included in the taxable income reported on your tax statement if the Portfolio qualifies for this tax treatment and elects to pass it through to you. Consult a tax adviser for more information regarding deduc- tions and credits for foreign taxes. INVESTMENT ADVISER Chicago Asset Management Company (the "Adviser") is a registered investment adviser formed in 1983. Its business offices are located at 70 West Madison Street, 56th Floor, Chicago, IL 60602. The Adviser is a wholly-owned subsidi- ary of United Asset Management Corporation ("UAM"), a holding company, and provides and offers investment management and advisory services to corpora- tions, unions, pensions and profit-sharing plans, trusts, estates and other institutions and investors. As of December 31, 1997, the Adviser had over $2 billion in assets under management. The Portfolio pays an annual fee in monthly installments to the adviser for advisory services. This fee is accrued daily and paid monthly as a percentage of the average daily net assets in the Portfolio for that month. The percent- age fee on an annual basis is 0.625%. The Adviser has agreed to waive a por- tion of its advisory fees and to assume certain operating expenses in order to keep the Portfolio's total operating expenses from exceeding 0.950% of average daily net assets. The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili- ates, may, at its own expense, compensate a Service Agent or other person for marketing, shareholder servicing, recordkeeping and/or other services per- formed with respect to the Fund, the Portfolio or any Class of Shares of the Portfolio. Payments for such services may be made out of the paying entities revenues, its profits or any other source available to it. When such service arrangements are in effect, they are made generally available to all qualified service providers. The Distributor, the Adviser, and certain of their affiliates also partici- pate, at the date of this prospectus, in an arrangement with Smith Barney Inc. under which Smith Barney provides certain defined contribution plan marketing and shareholder services of its Consulting Group and receives .15% of 1% of the daily net asset value of Institutional Class Shares held by Smith Barney's eligible customer accounts in addition to amounts payable to all selling deal- ers. The Fund also compensates Smith Barney for services it provided to cer- tain defined contribution plan shareholders that are not otherwise provided by UAMFSI. 25 The investment professionals at the Adviser responsible for the day-to-day management of the Portfolio and their qualifications are as follows: Jon F. Holsteen, President, CEO and Chief Investment Officer Education: Lake Forest College, BA Experience: Founded Chicago Asset Management Company in 1983. Kevin J. McGrath, Senior Vice President and Senior Portfolio Manager-- Equities Education: Regis College, BA St. Thomas College, MBA Experience: Joined Chicago Asset Management Company in 1991. Vice President, Smith Barney, Harris Upham, Inc. 1985-1991. Donald G. Adams, Vice-President Education: College of DuPage, AD Experience: Joined Chicago Asset Management Company in 1996. Vice President, Zurich Insurance 1986-1996.
ADVISER'S HISTORICAL PERFORMANCE Below are certain performance data provided by the Adviser pertaining to the composite of separately managed accounts of the Adviser that are managed with substantially similar (although not necessarily identical) objectives, poli- cies and strategies as those of the Portfolio. The performance data for the managed accounts is net of all fees and expenses. The investment returns of the Portfolio may differ from those of the separately managed accounts because such separately managed accounts may have fees and expenses that differ from those of the Portfolio. Further, the separately managed accounts are not sub- ject to investment limitations, diversification requirements and other re- strictions imposed by the Investment Company Act of 1940 and Internal Revenue Code; such conditions, if applicable, may have lowered the returns for sepa- rately managed accounts. The results presented are not intended to predict or suggest the return to be experienced by the Portfolio or the return an in- vestor might achieve by investing in the Portfolio. CHICAGO ASSET MANAGEMENT COMPANY -- EQUITY + CASH COMPOSITE RETURNS (Percentage Returns Net of Management Fees)
CHICAGO ASSET MANAGEMENT CALENDAR YEARS COMPANY S & P 500 -------------- ---------- --------- 1985.................................................... 36.1% 32.0% 1986.................................................... 21.9% 18.4% 1987.................................................... 4.7% 5.2% 1988.................................................... 26.4% 16.8%
26
CHICAGO ASSET MANAGEMENT CALENDAR YEARS COMPANY S & P 500 -------------- ---------- --------- 1989.................................................... 21.5% 31.6% 1990.................................................... (8.1)% (3.2)% 1991.................................................... 29.3% 30.6% 1992.................................................... 14.4% 7.6% 1993.................................................... 13.4% 10.1% 1994.................................................... 7.6% 1.3% 1995.................................................... 30.3% 37.6% 1996.................................................... 15.0% 23.0% 1997.................................................... 19.4% 33.4% 3 Months ended 3/31/98.................................. 11.7% 14.0% Annualized through 3/31/98.............................. 17.9% 18.9% Cumulative through 3/31/98.............................. 784.3% 886.9% Thirteen-Year Mean...................................... 17.8% 18.8% Value of $1 invested during (1/1/85-3/31/98)............ $8.84 $9.87
CHICAGO ASSET MANAGEMENT COMPANYEQUITY + CASH RETURNS FOR VARIOUS PERIODS ENDED 3/31/98 (Percentage Returns Net of Management Fees)
PERIODS ENDED 3/31/98 ADVISER S&P 500 --------------------- ------- ------- One-year period................................................. 36.7% 48.0% Three-year period (average annual).............................. 22.4% 32.8% Five-year period (average annual)............................... 18.4% 22.4% Ten-year period (average annual)................................ 16.4% 18.9%
- ----------- Notes: 1. The ANNUALIZED return is calculated from monthly data, allowing for com- pounding Market Value of the account was the sum of the account's total assets, including cash, cash equivalents, short-term investments, and se- curities valued at current market prices. 2. The CUMULATIVE RETURN means that $1 invested in the account on January 1, 1985 had grown to $8.84 by March 31, 1998. 3. The 13-YEAR MEAN is the arithmetic average of the annual returns for the calendar years listed. 4. The S&P 500 is an unmanaged index which assumes reinvestment of dividends and is generally considered representative of securities similar to those invested in by the Adviser for the purpose of the composite performance numbers set forth above. 5. The Adviser's average annual management fee over the period shown (1/1/85- 3/31/98) was 0.40% or 40 basis points. During the period, fees on the Advis - 27 er's individual accounts ranged from 0.25% to 1.00% (25 basis points to 100 basis points). Net returns to investors vary depending on the manage- ment fee. 6. The equity + cash composite includes every separate discretionary equity account as of 3/31/98. As of 3/31/98, this composite included all 35 eq- uity portfolios, including the equity + cash portions of balanced ac- counts, totaling $1.4 billion. Leverage has not been used in any portfo- lios included in this composite. A list of all composites of the Adviser is available upon request. ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of UAM, is re- sponsible for performing and overseeing administrative, fund accounting, divi- dend disbursing and transfer agent services provided to the Fund and its Port- folios. UAMFSI's principal office is located at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is located at 73 Tremont Street, Boston, MA 02108. Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fees are calculated from the aggregate net assets of the Portfolio: Rate ----- Chicago Asset Management Value/Contrarian Portfolio............... 0.06% CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined UAM Fund assets; 0.11 of 1% of the next $800 million of combined UAM Fund assets; 0.07 of 1% of combined UAM Fund assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined UAM Fund assets in excess of $3 billion. Fees are allocated among each of the Portfolios on the basis of their rela- tive assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum an- nual fee increases by $20,000. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin- cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis- 28 tributes the shares of the Fund. Under the Fund's Distribution Agreement (the "Agreement"), the Distributor, as agent of the Fund, agrees to use its best efforts as sole distributor of the Fund's shares. The Distributor does not re- ceive any fee or other compensation under the Agreement with respect to this Portfolio. The Agreement continues in effect as long as such continuance is approved at least annually by the Fund's Board of Trustees. Those approving the Agreement must include a majority of Trustees who are neither parties to the Agreement nor interested persons of any such party. The Agreement provides that the Fund will bear the costs of the registration of its shares with the SEC and various states and the printing of its prospectuses, its SAIs and its reports to shareholders. PORTFOLIO TRANSACTIONS The Advisory Agreement authorizes the Adviser to select the brokers or deal- ers that will execute the purchase and sale of investment securities for the Portfolios. The Agreements direct the Adviser to use its best efforts to ob- tain the best available price and most favorable execution for all transac- tions of the Portfolios. If consistent with the interests of the Portfolios, the Adviser may select brokers on the basis of the research, statistical and pricing services they provide to each Portfolio in addition to required serv- ices. Such brokers may be paid a higher commission than that which another qualified broker would have charged for effecting the same transaction, pro- vided that such commissions are paid in compliance with the Securities Ex- change Act of 1934, as amended, and that the Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to a Portfolio and the Adviser's other clients. Although not a typical practice, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. If a purchase or sale of securities consistent with the investment policies of a Portfolio and one or more of these other clients served by the Adviser 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 reason- able by the Adviser. Although there is no specified formula for allocating such transactions, such allocations are subject to periodic review by the Fund's Trustees. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized as a Delaware business trust on May 18, 1994 under the name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial inter- est, without par value. The Trustees have the power to designate one or more series 29 ("Portfolios") or classes of shares of beneficial interest without further ac- tion by shareholders. At its discretion, the Board of Trustees may create additional Portfolios and classes of shares. The shares of each Portfolio are fully paid and nonas- sessable, and have no preference as to conversion, exchange, dividends, re- tirement or other features and no pre-emptive rights. They have noncumulative voting rights, which means that holders of more than 50% of shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. As of June 15, 1998, UMBSC & Co., FBO Interstate Brands Conservative Growth and UMBSC & Co., FBO Interstate Brands Moderate Growth, held of record 47.8% and 28.0%, respectively, of the outstanding shares of the Portfolio's Institu- tional Class for which beneficial ownership is disclaimed or presumed dis- claimed. The persons or organizations owning 25% or more of the outstanding shares of the Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) the Portfolio. As a result, these persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of the Portfolio. Both Institutional and Service Class Shares represent an interest in the same assets of a Portfolio. Service Class Shares bear certain expenses related to shareholder servicing and the distribution of such shares and have exclu- sive voting rights with respect to matters relating to distribution expendi- tures. The Board of Trustees of the Fund has authorized a third class of shares, Advisor Class Shares, which is not currently being offered by this Portfolio. Annual meetings will not be held except as required by the 1940 Act and other applicable laws. The Fund has undertaken that its Trustees will call a meeting of shareholders if such a meeting is requested in writing by the holders of not less than 10% of the outstanding shares of the Fund. The Fund will assist shareholder communications in such matters. CUSTODIAN The Chase Manhattan Bank serves as custodian of the Fund's assets. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the independent accountant for the Fund. REPORTS Investors will receive unaudited semi-annual financial statements and annual financial statements audited by PricewaterhouseCoopers LLP. 30 SHAREHOLDER INQUIRIES Shareholder inquiries may be made by contacting the UAM Funds Service Center at the telephone number listed on the cover page of this Prospectus. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PRO- SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OF- FERING MAY NOT BE LAWFULLY MADE. 31 UAM FUNDS -- INSTITUTIONAL CLASS SHARES Acadian Emerging Markets Portfolio Acadian International Equity Portfolio BHM&S Total Return Bond Portfolio Cambiar Opportunity Portfolio Chicago Asset Management Intermediate Bond Portfolio Chicago Asset Management Value/Contrarian Portfolio C&B Balanced Portfolio C&B Equity Portfolio C&B Equity Portfolio for Taxable Investors C&B Mid Cap Equity Portfolio DSI Balanced Portfolio DSI Disciplined Value Portfolio DSI Limited Maturity Bond Portfolio DSI Money Market Portfolio FMA Small Company Portfolio FPA Crescent Portfolio Hanson Equity Portfolio Heitman Real Estate Portfolio ICM Equity Portfolio ICM Fixed Income Portfolio ICM Small Company Portfolio Jacobs International Octagon Portfolio McKee Domestic Equity Portfolio McKee International Equity Portfolio McKee Small Cap Equity Portfolio McKee U.S. Government Portfolio MJI International Equity Portfolio NWQ Balanced Portfolio NWQ Small Cap Value Portfolio NWQ Special Equity Portfolio NWQ Value Equity Portfolio Rice, Hall James Small Cap Portfolio Rice, Hall James Small/Mid Cap Portfolio SAMI Preferred Stock Income Portfolio Sirach Bond Portfolio Sirach Equity Portfolio Sirach Growth Portfolio Sirach Special Equity Portfolio Sirach Strategic Balanced Portfolio Sterling Partners' Balanced Portfolio Sterling Partners' Equity Portfolio Sterling Partners' Small Cap Value Portfolio TS&W Balanced Portfolio TS&W Equity Portfolio TS&W Fixed Income Portfolio TS&W International Equity Portfolio 32 UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 1-800-638-7983 Investment Adviser Chicago Asset Management Company 70 West Madison Street 56th Floor Chicago, IL 60602 Distributor UAM Fund Distributors, Inc. 211 Congress Street Boston, MA 02110 PROSPECTUS July 17, 1998 UAM Funds Prospectus July 17, 1998 FPA Crescent Portfolio Institutional Class Shares [LOGO OF UAM FUNDS APPEARS HERE] TABLE OF CONTENTS
PAGE ---- Fund Expenses.............................................................. 1 Prospectus Summary......................................................... 3 Risk Factors............................................................... 4 Financial Highlights....................................................... 5 Investment Objective....................................................... 6 Investment Policies........................................................ 6 Other Investment Policies.................................................. 8 Purchase of Shares......................................................... 15 Redemption of Shares....................................................... 19 Shareholder Services....................................................... 21 Valuation of Shares........................................................ 23 Performance Calculations................................................... 23 Dividends, Capital Gains Distributions and Taxes........................... 24 Investment Adviser......................................................... 25 Administrative Services.................................................... 27 Distributor................................................................ 27 Portfolio Transactions..................................................... 28 General Information........................................................ 28 UAM Funds -- Institutional Class Shares.................................... 30
UAM FUNDS FPA CRESCENT PORTFOLIO INSTITUTIONAL CLASS SHARES - -------------------------------------------------------------------------------- PROSPECTUS -- JULY 17, 1998 UAM Funds Trust (the "Fund") is an open-end investment company known as a "mutual fund." The Fund consists of multiple series (known as Portfolios), each of which has different investment objectives and policies. The FPA Crescent Portfolio (the "Portfolio") offers two separate classes of shares: Institu- tional Class Shares and Institutional Service Class Shares ("Service Class Shares"). Shares of each class represent equal, pro rata interests in a Portfo- lio and accrue dividends in the same manner except that Service Class Shares bear fees payable by the class to financial institutions for services they pro- vide to the owners of such shares. The securities offered in this Prospectus are Institutional Class Shares of one diversified, no-load Portfolio of the Fund managed by First Pacific Advisors, Inc. FPA CRESCENT PORTFOLIO. The FPA Crescent Portfolio's investment objective is to provide, through a combination of income and capital appreciation, a total return consistent with reasonable risk. The Portfolio seeks to achieve its ob- jective by investing primarily in equity securities (common and preferred stocks) and fixed income obligations. There can be no assurance that the Portfolio will achieve its objective. Keep this Prospectus for future reference. It contains information that you should know before you invest. A Statement of Additional Information ("SAI") containing additional information about the Fund has been filed with the Secu- rities and Exchange Commission ("SEC"). The SAI is dated July 17, 1998 and has been incorporated by reference into this Prospectus. For a free copy of the SAI contact the UAM Funds Service Center at 1-800-638-7983. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE- SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FUND EXPENSES The following table illustrates expenses and fees that a shareholder of the Portfolio's Institutional Class Shares will incur. The Fund does not charge Transaction fees. However, transaction fees may be charged if a broker-dealer or other financial intermediary deals with the Fund on your behalf. (See "PUR- CHASE OF SHARES.") SHAREHOLDER TRANSACTION EXPENSES Sales Load Imposed on Purchases....................................... NONE Sales Load Imposed on Reinvested Dividends............................ NONE Deferred Sales Load................................................... NONE Redemption Fees....................................................... NONE Exchange Fee.......................................................... NONE ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) Investment Advisory Fees.............................................. 1.00% 12b-1 Fees (Including Shareholder Servicing Fees)..................... NONE Other Expenses........................................................ 0.45% ---- Total Operating Expenses.............................................. 1.45%* ====
- ----------- * The Adviser has voluntarily agreed to waive all or a portion of its advisory fees and to assume operating expenses to keep the Portfolio's Institutional Class Shares' total annual operating expenses (excluding interest, taxes and extraordinary expenses), after the effect of expense offsets, from exceeding 1.85% of average daily net assets until further notice. The figures above include the effect of expense offsets. If expense offsets were excluded, To- tal Operating Expenses of the Portfolio would not be affected. The Adviser may change or discontinue its fee waivers and expense assumptions at any time. The table above shows various fees and expenses an investor would bear di- rectly or indirectly. The fees and expenses set forth above are based upon the Portfolio's Institutional Class Shares' operations during the fiscal year ended March 31, 1998. 1 EXAMPLE The following example illustrates expenses a shareholder would pay on a $1,000 investment over various time periods assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period. The Portfolio charges no redemption fees of any kind.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- FPA Crescent Portfolio Institutional Class Shares................. $15 $46 $79 $174
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX- PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN ABOVE. 2 PROSPECTUS SUMMARY INVESTMENT ADVISER First Pacific Advisors, Inc. (the "Adviser") acts as the Portfolio's Adviser and has its origins dating back to 1954. It currently has over $4.5 billion in assets under management. The Adviser is an indirect wholly-owned subsidiary of United Asset Management Corporation ("UAM"). (See "INVESTMENT ADVISER.") PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), to investors at net asset value without a sales commission. Share purchases may be made by sending investments directly to the Fund. The minimum initial investment is $2,500. The minimum for subsequent investments is $100. The minimum initial investment for IRA accounts is $1,000. Certain exceptions to the initial or minimum investment amounts may be permitted by the officers of the Fund. (See "PURCHASE OF SHARES.") DIVIDENDS AND DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income in the form of dividends in June and December. Any realized net capital gains will be distributed at least annually. Distributions will be re- invested in the Portfolio's shares automatically unless an investor elects to receive cash distributions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") REDEMPTIONS AND EXCHANGES Shares of the Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemp- tion request. The redemption price may be more or less than the purchase price. Shares of the Portfolio may be exchanged for shares of the same class of any other portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" and "EX- CHANGE PRIVILEGE.") ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of UAM, is re- sponsible for performing and overseeing administration, fund accounting, divi- dend disbursing and transfer agency services provided to the Fund and its Portfolios by third-party service providers. (See "ADMINISTRATIVE SERVICES.") 3 RISK FACTORS Prospective investors should understand that the Portfolio's performance will be affected by a variety of factors since it invests in both stocks and fixed-income securities. The value of the Portfolio's investments will vary from day to day, generally reflecting global market, economic and political developments; conditions in global and national markets; changes in currency exchange rates; factors affecting individual stocks in the Portfolio; and shifts in interest rates. . The Portfolio may invest significantly in lower rated fixed-income secu- rities, which typically offer higher coupon interest rates than invest- ment grade securities, but also involve greater risks of default and market volatility. Such securities are sometimes referred to as "junk bonds" and are considered speculative by rating agencies. . The Portfolio may engage in short sales of securities, which involve the risk of loss if the securities increase in price between the time the Portfolio sells them short and repurchases them. . The Portfolio may invest in repurchase agreements which entail a risk of loss should the seller default on its transaction. . The Portfolio may lend its investment securities which entails a risk of loss should a borrower fail financially. . The Portfolio may purchase securities on a when-issued basis which do not earn interest until issued and may decline or appreciate in market value prior to their delivery to the Portfolio. . The Portfolio may engage in various hedging, currency and related strat- egies to seek to hedge its investments against movements in security prices, interest rates, and exchange rates by the use of derivatives, including forward contracts, options and futures as well as options on futures. These strategies involve the risk of imperfect correlation in movements in the price of options and futures and movements in the price of securities, interest rates or currencies which are the subject of the hedge. These transactions are also subject to the risk factors associ- ated with foreign investments generally. There can be no assurance that a liquid secondary market for these hedging techniques will exist at any specific time. The use of derivatives, if employed incorrectly, may ad- versely affect the Portfolio. Further information about each of the above risk factors and others is con- tained in the "OTHER INVESTMENT POLICIES" section of this Prospectus. 4 FINANCIAL HIGHLIGHTS The following table provides selected per share information for a share out- standing throughout the period presented of the Portfolio's Institutional Class Shares. This table is part of the Portfolio's Annual Financial State- ments, which are included in the Portfolio's 1998 Annual Report to Sharehold- ers. The Report is incorporated by reference into the Portfolio's SAI. The Portfolio's Annual Financial Statements have been audited by Tait, Weller & Baker, independent accountants, for the fiscal years ended 1994, 1995 and 1996, and by PricewaterhouseCoopers LLP for the fiscal years ended March 31, 1997 and 1998, whose unqualified opinion thereon is incorporated in the Port- folio's SAI. The following information should be read in conjunction with the Portfolio's 1998 Annual Report. The Report is incorporated into the SAI. Fur- ther information about the Portfolio's performance is contained in its Annual Report, which may be obtained without charge by calling the telephone number on the Prospectus cover page.
JUNE 2, YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 1993+ TO MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, 1998++ 1997 1996 1995 1994 ---------- ---------- ---------- ---------- --------- NET ASSET VALUE, BEGINNING OF PERIOD.... $ 13.46 $ 12.67 $ 11.23 $ 10.96 $ 10.00 -------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income.. 0.55 0.31 0.40 0.21 0.13 Net Realized and Unrealized Gain on Investments........... 2.88 2.16 2.29 0.77 0.99 -------- ------- ------- ------- ------- Total From Investment Operations............ 3.43 2.47 2.69 0.98 1.12 -------- ------- ------- ------- ------- DISTRIBUTIONS Net Investment Income.. (0.40) (0.34) (0.37) (0.18) (0.10) Net Realized Gains..... (0.26) (1.34) (0.88) (0.53) (0.06) -------- ------- ------- ------- ------- Total Distributions.... (0.66) (1.68) (1.25) (0.71) (0.16) -------- ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD................. $ 16.23 $ 13.46 $ 12.67 $ 11.23 $ 10.96 ======== ======= ======= ======= ======= TOTAL RETURN............ 25.96% 20.61% 24.71% 9.35% 11.40%** ======== ======= ======= ======= ======= RATIOS/SUPPLEMENTAL DATA: NET ASSETS, END OF PERIOD (THOUSANDS)..... $247,833 $65,619 $22,025 $15,990 $10,174 RATIO OF EXPENSES TO AVERAGE NET ASSETS: Before Expense Reimbursement and Offset................ 1.45% 1.60% 1.59% 1.65% 1.86%* After Expense Reimbursement and Offset................ 1.45% 1.57% 1.59% 1.65% 1.85%* RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS: Before Expense Reimbursement and Offset................ 3.62% 2.77% 3.35% 2.16% 1.60%* After Expense Reimbursement and Offset................ 3.62% 2.80% 3.35% 2.16% 1.61%* Portfolio Turnover Rate................... 18% 45% 100% 101% 89%** Average Commission Rate Paid#.................. $ 0.0564 $0.0521 N/A N/A N/A
- ----------- * Annualized. ** Not Annualized. + Commencement of Operations. ++ Per share amounts for the year ended March 31, 1998 are based on average outstanding shares. # For fiscal years ending on or after September 1, 1995, a fund is required to disclose its average commission rate per share for security trades on which commissions are charged. 5 INVESTMENT OBJECTIVE The investment objective of the Portfolio is to provide, through a combina- tion of income and capital appreciation, a total return consistent with rea- sonable investment risk. The Portfolio seeks to achieve its objective by in- vesting in a combination of equity securities and fixed-income obligations. There is, of course, no assurance that the Portfolio's objective will be achieved. Because prices of common stocks and fixed-income securities fluctu- ate, the value of an investment in the Portfolio will vary, as the market value of its investment portfolio changes. The Portfolio actively seeks value in all parts of a company's capital structure, including common and preferred stocks, as well as corporate and convertible bonds. The Portfolio will typically have between 50% and 70% of its total assets invested in equity securities with the balance comprised of fixed-income securities and cash and equivalents. INVESTMENT POLICIES EQUITY SECURITIES The Adviser utilizes a contrarian investment style, which often leads the Adviser to invest in "what other people do not wish to own." The Adviser searches for common stocks, preferred stocks, warrants and convertible securi- ties that reflect low price/earnings ratios (P/Es) and trade at discounts to private market value. The Adviser selects equity securities for the Portfolio which it believes offer superior investment value. The Adviser deems the following important in its stock selection process: .High return on capital .Solid balance sheet .Meaningful cash flow .Active share repurchase program .Insider buying .Superior management seeking to maximize shareholder value .Projected earnings growth exceeding the stock market average In the Adviser's view, the stock market prices securities efficiently in the long term, rewarding companies which successfully grow their earnings and pe- nalizing those which do not. The Adviser's investment philosophy is based on the conviction that the market valuation of securities is often inefficient in the short-term. When reacting to current economic or company information, in- vestors frequently make purchase or sale decisions hastily. These decisions could cause a particular security, industry group or the entire market to be- come underpriced or overpriced in the short-term thereby creating an excellent opportunity to either buy or sell. 6 This contrarian style leads to those investments that offer absolute value, rather than relative value. Absolute value is an investment that trades at substantial discount to private market value, rather than one that might ap- pear inexpensive based on a discount to its peer group or the market average. Attention is directed toward those companies offering the best combination of such quality criteria as strong market share, good management and high normal- ized return on capital. A company purchased might not look inexpensive, con- sidering current earnings and return on capital; however, this may reflect such conditions as a weak economy, an increase in their raw material costs, poor management, or any number of other temporary considerations. The price drops caused by such developments can and often do provide buying opportuni- ties. Intensive research identifies these opportunities. The process includes looking for ideas by reviewing stock price or industry group under-perfor- mance, insider purchases, management changes and corporate spin-offs. Funda- mental analysis is the foundation of the Adviser's investment approach. Re- searching a prospective investment involves communicating directly with com- pany management, suppliers, and customers, better defining future potential, financial strength and the company's competitive position. Fundamental analy- sis provides a thorough view of financial and business characteristics, al- lowing for the determination of absolute value. In addition to common stocks, equity securities purchased for the Portfolio may include preferred stocks, convertible preferred stocks and warrants. FIXED-INCOME OBLIGATIONS Through fixed-income investments, the Adviser seeks a reliable and recurring stream of income for the Portfolio, while preserving its capital. The Adviser attempts to identify the current interest rate trends and invests funds ac- cordingly. Usually, a defensive interest rate strategy is employed, with in- vestments made at different points along the yield curve in an attempt to keep the average maturity of fixed-income investments less than or equal to ten years. The Adviser's approach is to invest in U.S. Treasury obligations, U.S. Gov- ernment Agency and mortgage-backed securities, and corporate and convertible bonds. The Adviser considers yield spread relationships and their underlying factors such as credit quality, investor perception and liquidity on a contin- uous basis to determine which sector offers the best investment value. When combined with equity securities, the ownership of fixed-income securities not only broadens the universe of opportunities, but offers additional diversifi- cation and can help lower portfolio volatility. The Adviser may invest in corporate bonds with yields substantially higher than those of government securities. Opportunities frequently present them- selves in parts of the capital structure of a company beyond common and pre- ferred stock, 7 including convertible and high yield bonds. Generally, these investments pro- vide a return in excess of government securities and can provide potential for capital appreciation. Historic returns for high yield bonds have been greater than government securities. The Adviser's analysis includes studying interest expense coverage, business value/debt coverage and current business trends. The Portfolio may purchase investment-grade corporate debt securities. Secu- rities rated BBB by Standard & Poor's Ratings Services ("S&P") or Moody's In- vestors Service ("Moody's") are investment grade, but Moody's considers secu- rities rated Baa to have speculative characteristics. Changes in economic con- ditions or other circumstances are more likely to lead to a weakened capacity for such securities to make principal and interest payments than is the case for higher-rated debt securities. OTHER INVESTMENT POLICIES LOWER RATED SECURITIES The Portfolio may invest in debt securities that are rated below investment grade, but will limit that investment to no more than 30% of its total assets. Such securities, sometimes referred to as "junk bonds," typically carry higher coupon rates than investment grade securities but also involve higher risks and are described as speculative by both Moody's and S&P. They may be subject to greater market price fluctuations, less liquidity, and greater risk of in- come or principal, including a greater possibility of default or bankruptcy of the issuer of such securities, than are more highly rated debt securities. Lower rated fixed income securities also are likely to be more sensitive to adverse economic or company developments and more subject to price fluctua- tions in response to changes in interest rates. The market for lower-rated debt issues generally is thinner and less active than that for higher quality securities, which may limit the Portfolio's ability to sell such securities at fair value in response to changes in the economy or financial markets. The Adviser seeks to reduce the risk associated with investing in such secu- rities by limiting the Portfolio's holdings in such securities and by the depth of its own credit analysis. In selecting below investment grade securi- ties, the Adviser seeks securities in companies with improving cash flows and balance sheet prospects, whose credit ratings the Adviser views as likely to be upgraded. The Adviser believes that such securities can produce returns similar to equities, but with less risk. See the SAI for further discussion of lower rated securities. REPURCHASE AGREEMENTS The Portfolio may enter into repurchase agreements in order to earn addi- tional income on available cash, or as a defensive investment in periods when the Portfolio is primarily in short-term maturities. A repurchase agreement is a short-term investment in which the purchaser (i.e., the Portfolio) acquires ownership of a security (which may be of any maturity) and the seller agrees to repurchase that obligation 8 at a future time at a set price, thereby determining the yield during the pur- chaser's holding period (usually not more than seven days from the date of purchase). Any repurchase transaction in which the Portfolio engages will re- quire full collateralization of the seller's obligation during the entire term of the repurchase agreement. In the event of a bankruptcy or other default of the seller, the Portfolio could experience both delays in liquidating the un- derlying security and losses in value. However, the Portfolio intends to enter into repurchase agreements only with banks with assets of $500 million or more that are insured by the Federal Deposit Insurance Corporation and the most creditworthy registered securities dealers pursuant to procedures adopted and regularly reviewed by the Fund's Board of Trustees. The Adviser monitors the creditworthiness of the banks and securities dealers with whom the Portfolio engages in repurchase transactions. The Fund has received permission from the SEC to pool daily uninvested cash balances of the Fund's Portfolios in order to invest in repurchase agreements on a joint basis. By entering into joint repurchase agreements, the Portfolio may incur lower transaction costs and earn higher rates of interest on joint repurchase agreements. The Portfolio's contribution would determine its return from a joint repurchase agreement. ILLIQUID AND RESTRICTED SECURITIES The Portfolio may not invest more than 15% of its net assets in illiquid se- curities, including (i) securities for which there is no readily available market; (ii) securities the disposition of which would be subject to legal re- strictions (so-called "restricted securities"); and (iii) repurchase agree- ments having more than seven days to maturity. A considerable period of time may elapse between the Portfolio's decision to dispose of such securities and the time when the Portfolio is able to dispose of them, during which time the value of the securities could decline. Restricted securities do not include those which meet the requirements of Securities Act Rule 144A and which the Trustees have determined to be liquid based on the applicable trading markets. FOREIGN SECURITIES The Portfolio may invest up to 20% of its total assets in securities of for- eign issuers. The Adviser usually buys securities of larger foreign companies that have well recognized franchises and are selling at a discount to the se- curities of similar domestic businesses. There may be less publicly available information about these issuers than is available about companies in the U.S. and foreign auditing requirements may not be comparable to those in the U.S. In addition, the value of the foreign securities may be adversely affected by movements in the exchange rates be- tween foreign currencies and the U.S. dollar, as well as other political and economic developments, including the possibility of expropriation, confisca- tory taxation, exchange controls or other foreign governmental restrictions. The Portfolio may also invest without limit in securities of foreign issuers which are listed on a domestic national 9 securities exchange. Additionally, there may be difficulty in obtaining and enforcing judgments against foreign issuers. SHORT SALES The Portfolio may engage in short sales of securities. In a short sale, the Portfolio sells stock which it does not own, making delivery with securities "borrowed" from a broker. The Portfolio is then obligated to replace the secu- rity borrowed by purchasing it at the market price at the time of replacement. This price may or may not be less than the price at which the security was sold by the Portfolio. Until the security is replaced, the Portfolio is re- quired to pay to the lender any dividends or interest which accrue during the period of the loan. In order to borrow the security, the Portfolio may also have to pay a fee which would increase the cost of the security sold. The pro- ceeds of the short sale will be retained by the broker, to the extent neces- sary to meet margin requirements, until the short position is closed out. The Portfolio also must deposit in a segregated account an amount of cash or liquid assets equal to the difference between (a) the market value of the se- curities sold short at the time they were sold short and (b) the value of the collateral deposited with the broker in connection with the short sale (not including the proceeds from the short sale). While the short position is open, the Portfolio must maintain daily the segregated account at such a level that (1) the amount deposited in it plus the amount deposited with the broker as collateral equals the current market value of the securities sold short and (2) the amount deposited in it plus the amount deposited with the broker as collateral is not less than the market value of the securities at the time they were sold short. The Portfolio will incur a loss as a result of the short sale if the price of the security increases between the date of the short sale and date on which the Portfolio replaces the borrowed security. The Portfolio will realize a gain if the security declines in price between those dates. The amount of any gain will be decreased and the amount of any loss will be increased by any in- terest the Portfolio may be required to pay in connection with the short sale. The dollar amount of short sales at any one time (not including short sales against the box) may not exceed 25% of the net assets of the Portfolio. A short sale is "against-the-box" if at all times when the short position is open the Portfolio owns an equal amount of the securities or securities con- vertible into, or exchangeable without further consideration for, securities of the same issue as the securities sold short. OPTIONS AND FUTURES The Portfolio may purchase and write call and put options on securities, se- curities indexes and on foreign currencies, and enter into futures contracts and use 10 options on futures contracts. The Portfolio may use these techniques to hedge against changes in interest rates, foreign currency exchange rates or securi- ties prices or as part of its overall investment strategies. The Portfolio is subject to regulatory limitations on the use of such techniques and is re- quired to maintain segregated accounts consisting of cash or liquid securities (or, as permitted by applicable regulation, enter into certain offsetting po- sitions) to cover its obligations under options and futures contracts to avoid leveraging of the Portfolio. The Portfolio may buy or sell interest rate futures contracts, options on interest rate futures contracts and options on debt securities for the purpose of hedging against changes in the value of securities which the Fund owns or anticipates purchasing due to anticipated changes in interest rates. The Port- folio also may engage in currency exchange transactions by means of buying or selling foreign currency on a spot basis, entering into foreign currency for- ward contracts, and buying and selling foreign currency options, futures and options on futures. Foreign currency exchange transactions may be entered into for the purpose of hedging against foreign currency exchange risk arising from the Portfolio's investment or anticipated investment in securities denominated in foreign currencies. See the SAI for further information regarding characteristics of and risks involved in the use of these instruments. U.S. GOVERNMENT SECURITIES The Portfolio may invest in U.S. Government securities. U.S. Government se- curities include direct obligations issued by the U.S. Treasury, such as Trea- sury bills, certificates of indebtedness, notes and bonds. U.S. Government agencies and instrumentalities that issue or guarantee securities include, but are not limited to, the Federal National Mortgage Association ("FNMA"), Gov- ernment National Mortgage Association ("GNMA"), Federal Home Loan Bank, Fed- eral Financing Bank, and Student Loan Marketing Association. All Treasury securities are backed by the full faith and credit of the United States. Obligations of U.S. Government agencies and instrumentalities may or may not be supported by the full faith and credit of the United States. Some, such as the Federal Home Loan Bank, are backed by the right of the agency or instrumentality to borrow from the Treasury. Others, such as securi- ties issued by the Federal National Mortgage Association, are supported only by the credit of the instrumentality and not by the Treasury. If the securi- ties are not backed by the full faith and credit of the United States, the owner of the securities must look principally to the agency issuing the obli- gation for repayment and may not be able to assert a claim against the United States in the event that the agency or instrumentality does not meet its com- mitment. INFLATION-INDEXED BONDS Inflation-indexed bonds are securities whose principal value is periodically adjusted to reflect the rate of inflation. Such bonds are generally issued at an 11 interest rate lower than comparable non-indexed bonds, but are expected to re- tain their principal value over time. The interest rate on these bonds is fixed at issuance, but over the life of the bond this interest may be paid on an increasing principal value, which has been adjusted for inflation. Infla- tion indexed-bonds issued by the U.S. Treasury have maturities of ten years, although it is anticipated that securities with other maturities will be is- sued in the future. If the periodic adjustment rate measuring inflation falls, the principal value of inflation-indexed bonds will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds, even during a period of deflation. However, the current market value of the bonds is not guaranteed, and will fluctuate. Any increase in the principal amount of an inflation-indexed bond is considered taxable ordinary income, even though investors do not receive their principal until maturity. MORTGAGE BACKED SECURITIES The Portfolio may invest in mortgage-backed securities. Mortgage-backed se- curities are collateralized by pools of mortgages assembled for subsequent sale to investors by various governmental agencies and sponsored organizations as well as by private issuers. The underlying assets collateralizing the mort- gage-backed securities may include single-family, multi-family and commercial properties. The two fundamental forms of mortgage-backed securities are pass- throughs and collateralized mortgage obligations ("CMOs"). Pass-throughs pro- duce monthly payments of principal and interest from the underlying mortgages. CMOs divide the cash flows generated from the underlying mortgages or mortgage pass-through securities into different segments known as "tranches," which are then retired sequentially over time in order of priority. The market value and yield of mortgage-backed securities will fluctuate due to market interest rate change and prepayment variability of the underlying mortgages. As prepayment rates on mortgages vary widely, it is difficult to accurately predict the av- erage maturity of a particular pool of mortgages or tranches of CMOs. Although mortgage-backed securities may offer higher yields than those available from other types of securities, they may be less effective than other types of se- curities as means of "locking in" an attractive rate for an extended period because of the prepayment feature. Prepayment risk has two important effects. First, like bonds in general, mortgage-backed securities will generally de- cline in price when interest rates rise. Second, when interest rates fall and additional mortgage prepayments must be reinvested at lower interest rates, a Portfolio's rate of interest income may be reduced. Mortgage-backed securities in which the Portfolio may invest will either carry a guarantee from an agency of the U.S. Government or a private issuer of the timely payment of principal and interest or will be suitably structured to be considered by the Adviser to be of investment grade quality. 12 PORTFOLIO TURNOVER In general, the Adviser will not consider the rate of portfolio turnover to be a limiting factor in determining when or whether to purchase or sell secu- rities in order to achieve the Portfolio's objective. The table set forth in "Financial Highlights" presents the Portfolio's historical turnover rates. In addition to portfolio trading costs, higher rates of portfolio turnover may result in the realization of capital gains. To the extent net short-term capi- tal gains are realized, any distributions resulting from such gains are con- sidered ordinary income for federal income tax purposes. See "DIVIDENDS, CAPI- TAL GAINS DISTRIBUTIONS AND TAXES" for more information on taxation. SHORT-TERM INVESTMENTS In order to earn a return on uninvested assets, meet anticipated redemp- tions, or for temporary defensive purposes, the Portfolio may invest a portion of its assets in domestic and foreign money market instruments including cer- tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob- ligations, U.S. Government agency securities, short-term corporate debt secu- rities, and commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by Moody's or if unrated, determined by the Adviser to be of comparable quality. Time deposits maturing in more than seven days will not be purchased by the Portfolio, and time deposits maturing from two business days through seven calendar days will not exceed 10% of the total assets of the Portfolio. The Portfolio will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, (ii) in the case of U.S. banks, it is a member of the Fed- eral Deposit Insurance Corporation, and (iii) in the case of foreign branches of U.S. banks, the security is, in the opinion of the Adviser, of an invest- ment quality comparable with other debt securities which may be purchased by the Portfolio. The Fund has received permission from the SEC to deposit the daily uninvested cash balances of the Fund's Portfolios, as well as cash for investment purposes, into one or more joint accounts and to invest the daily balance of the joint accounts in the following short-term investments: fully collateralized repurchase agreements, interest-bearing or discounted commercial paper including dollar-denominated commercial paper of foreign issuers, and any other short-term money market instruments including variable rate demand notes and other tax-exempt money instruments. By entering into these investments on a joint basis, the Portfolio may earn a higher rate of return on investments relative to what it could earn individually. The Fund has received permission from the SEC for each of its Portfolios to invest for cash management purposes the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio. (See "INVESTMENT COMPANIES.") 13 WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES The Portfolio may purchase and sell securities on a "when-issued," "delayed settlement," or "forward delivery" basis. "When-issued" or "forward delivery" 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 and forward delivery transactions may be expected to occur a month or more be- fore delivery is due. "Delayed settlement" is a term used to describe settle- ment of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by the Portfolio until it receives delivery or payment from the other party to any of the above transactions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. The Portfolio will maintain a separate account of cash or liquid securities at least equal to the value of the purchase commitments until payment is made. Typically, no income accrues on securities purchased on a delayed delivery basis prior to the time delivery of the securities is made although the Portfolio may earn income on securities it has deposited in a segregated account. The Portfolio engages in these types of purchases in order to buy securities that fit with its investment objectives at attractive prices--not to increase its investment leverage. Securities purchased on a when-issued basis may decline or appreciate in market value prior to their actual delivery to the Portfolio. LENDING OF PORTFOLIO SECURITIES The Portfolio may lend its investment securities to qualified institutional investors as a means of earning income. The Portfolio will not loan portfolio securities to the extent that greater than one-third of its total assets at fair market value, would be committed to loans. By lending its investment se- curities, the 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. All relevant facts and circumstances, including the credit- worthiness of the broker, dealer or institution, will be considered by the Ad- viser in making decisions with respect to the lending of securities, subject to review by the Fund's Board of Trustees. An investment company may pay reasonable negotiated fees in connection with loaned securities so long as such fees are set forth in a written contract and approved by the investment company's Board of Trustees. The Portfolio will continue to retain any voting rights with respect to the loaned securities. If a material event occurs affecting an investment on loan, the loan must be called and the securities voted. 14 INVESTMENT COMPANIES As permitted by the 1940 Act, the Portfolio reserves the right to invest up to 10% of its total assets, calculated at the time of investment, in the secu- rities of other open-end or closed-end investment companies. No more than 5% of the investing Portfolio's total assets may be invested in the securities of any one investment company nor may it acquire more than 3% of the voting secu- rities of any other investment company. The Portfolio will indirectly bear its proportionate share of any management fees paid by an investment company in which it invests in addition to the advisory fee paid by the Portfolio. The Fund has received permission from the SEC to allow each of its Portfo- lios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio provided that the in- vestment is consistent with the Portfolio's investment policies and restric- tions. Based upon the Portfolio's assets invested in the DSI Money Market Portfolio, the investing Portfolio's adviser will waive its investment advi- sory fee and any other fees earned as a result of the Portfolio's investment in the DSI Money Market Portfolio. The investing Portfolio will bear expenses of the DSI Money Market Portfolio on the same basis as all of its other share- holders. The Portfolio has adopted certain investment restrictions, which are de- scribed fully in the SAI. Like the Portfolio's investment objective, most of these restrictions are fundamental and may be changed only by a majority vote of the Portfolio's outstanding shares. PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), without a sales commission at the net asset value per share next determined after an order is received by the Fund and payment is received by the Fund or its designated Service Agent. (See "VALUATION OF SHARES.") The minimum initial investment required is $2,500. The minimum initial investment for IRA accounts is $1,000. Certain exceptions may be made by the officers of the Fund. Shares of the Portfolio may be purchased by customers of broker-dealers or other financial intermediaries ("Service Agents") which have established a shareholder servicing relationship with the Fund on behalf of their customers. Service Agents may impose additional or different conditions on purchases or redemptions of Portfolio shares and may charge transaction or other account fees. Each Service Agent is responsible for transmitting to its customers a schedule of any such fees and information regarding additional or different purchase or redemption conditions. Shareholders who are customers of Service Agents should consult their Service Agent for information regarding these fees and conditions. Amounts paid to Service Agents may include transaction fees and/or service fees paid by the Fund 15 from the Fund assets attributable to the Service Agent, which would not be im- posed if shares of the Portfolio were purchased directly from the Fund or the Distributor. Service Agents may provide shareholder services to their custom- ers that are not available to a shareholder dealing directly with the Fund. A salesperson and any other person entitled to receive compensation for selling or servicing Portfolio shares may receive different compensation with respect to one particular class of shares over another in the Fund. Service Agents or if applicable, their designees, that have entered into agreements with the Fund or its agent may enter confirmed purchase orders on behalf of clients and customers, with payment to follow no later than the close of regular trading on the New York Stock Exchange ("Exchange") on the following business day. If payment is not received by the Fund's Sub-Transfer Agent, Chase Global Funds Services Company ("CGFSC"), by such time, the Serv- ice Agent could be held liable for resulting fees or losses. A Portfolio may be deemed to have received a purchase or redemption order when a Service Agent, or, if applicable, its authorized designee, accepts the order. Orders received by the Fund in proper form will be priced at the Portfolio's net as- set value next computed after they are accepted by a Service Agent or its au- thorized designee. Service Agents are responsible to their customers and the Fund for timely transmission of all subscription and redemption requests, in- vestment information, documentation and money. INITIAL INVESTMENTS BY MAIL . Complete and sign an Application and mail it together with a check made payable to "UAM Funds" to: UAM Funds Trust UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 Payment for purchases of shares received by mail will be credited to an ac- count at the next share price calculated for the Portfolio after receipt. Pay- ment does not need to be converted into Federal Funds (monies credited to the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it for investment. The Fund will not accept third-party checks to purchase shares of the Portfolio. If you purchase shares by check, please be sure your check is made payable to "UAM Funds". BY WIRE . Telephone the UAM Funds Service Center and provide the account name, ad- dress, telephone number, social security or taxpayer identification num- ber, Portfolio selected, amount being wired and the name of the bank wiring 16 the funds. The call must be received prior to the close of regular trad- ing on the Exchange (generally 4:00 p.m. Eastern Time) to receive that day's price. An account number and wire control number will then be pro- vided to you in addition to wiring instructions. Next, . Instruct your bank to wire the specified amount to the Fund's Custodian: The Chase Manhattan Bank ABA #021000021 UAM Funds DDA Acct. #9102772952 Ref: Portfolio Name Your Account Number Your Account Name Wire Control Number (assigned by UAM Funds Service Center) . Forward a completed Application to the Fund at the address shown on the form. Federal Funds purchases will be accepted only on a day on which both the Exchange and the Custodian Bank are open for business. . To be sure that a bank wire order is received on the same day it is sent, an investors bank should wire funds as early in the day as possi- ble. The bank sending funds may charge for this service. The Fund's agent reserves the right to charge investors for receipt of wired funds, but no charge is currently imposed for this service. It is necessary to obtain a new wire control number every time money is wired into an ac- count in a Portfolio. Wire control numbers are effective for one trans- action only and cannot be used more than once. Wired money that is not properly identified with a currently effective wire control number will be returned to the bank from which it was wired and will not be credited to the shareholder's account. ADDITIONAL INVESTMENTS Additional investments can be made at any time. The minimum additional in- vestment is $100. Shares can be purchased at net asset value by mailing a check to the UAM Funds Service Center (payable to "UAM Funds") or by wiring money to the Custodian Bank as outlined above. When making additional invest- ments, be sure that the account number, account name and the Portfolio to be purchased are identified on the check or wire. Prior to wiring additional in- vestments, notify the UAM Funds Service Center by calling the number on the cover of this Prospectus. Mail orders should include, when possible, the "In- vest by Mail" stub which accompanies any Fund confirmation statement. PURCHASE BY ACH If you have made this election, shares of the Portfolio may be purchased via Automated Clearing House ("ACH"). Investors purchasing via ACH should com - 17 plete the bank information section on the Account Application and attach a voided check or deposit slip to the Account Application. This option must be established on your account at least 15 days prior to your initiating an ACH transaction (see "SHAREHOLDER SERVICES - AUTOMATIC INVESTMENT PLAN"). OTHER PURCHASE INFORMATION Investments received by the close of regular trading on the Exchange (gener- ally 4:00 p.m. Eastern Time) will be invested at the share price calculated after the Exchange closes on that day. Investments received after the close of the Exchange will be executed at the price computed on the next day the Ex- change is open. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or to reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. The Portfolio is intended to be a long-term investment vehicle and is not designed to provide investors with a means of speculation on short-term market movements. A pattern of frequent purchases can be disruptive to effi- cient portfolio management and, consequently, can be detrimental to a Portfo- lios performance and its shareholders. Accordingly, if the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any purchase request with respect to such investor's account. Such investor also may be barred from pur- chasing other portfolios of the UAM Funds. Purchases of the Portfolio's shares will be made in full and fractional shares of the Portfolio calculated to three decimal places. Certificates for fractional shares will not be issued. Certificates for whole shares will not be issued except at the written request of the shareholder. IN-KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in ex- change for securities which are eligible for acquisition by the Portfolio, as described in this Prospectus. Securities to be exchanged which are accepted by the Fund will be valued as described under "VALUATION OF SHARES" at the next determination of net asset value after acceptance. Shares issued by the Port- folio in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the investor upon receipt from the issuer. Securities acquired through an in-kind purchase will be acquired for invest- ment and not for immediate resale. The Fund will not accept securities in exchange for shares of the Portfolio unless: . at the time of exchange, such securities are eligible to be included in the Portfolio (current market quotations must be readily available for such securities); 18 . the investor represents and agrees that all securities offered to be ex- changed are liquid securities and not subject to any restrictions upon their sale by the Portfolio under the Securities Act of 1933, or other- wise; and . the value of any such securities (except U.S. Government securities) be- ing exchanged together with other securities of the same issuer owned by the Portfolio will not exceed 5% of the net assets of the Portfolio im- mediately after the transaction. Investors who are subject to federal taxation upon exchange may realize a gain or loss for federal income tax purposes depending upon the cost of secu- rities or local currency exchanged. Investors interested in such exchanges should contact the Adviser. REDEMPTION OF SHARES Shares of the Portfolio may be redeemed by mail or telephone at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request. Any redemption may be more or less than the purchase price of the shares depending on the market value of investment secu- rities held by the Portfolio. BY MAIL Address requests for redemption to the UAM Funds Service Center. Requests to redeem shares must include: . share certificates, if issued; . a letter of instruction or an assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are registered; . any required signature guarantees (see "SIGNATURE GUARANTEES"); and . any other necessary legal documents, if required, in the case of es- tates, trusts, guardianships, custodianships, corporations, pension and profit sharing plans and other organizations. BY TELEPHONE A redemption request by telephone requires the following: . establish the telephone redemption privilege (and if desired, the wire redemption privilege) by completing appropriate sections of the Applica- tion; and . call the Fund and instruct that the redemption proceeds be mailed to you or wired to your bank. 19 The following tasks cannot be accomplished by telephone: . changing the name of the commercial bank or the account designated to receive redemption proceeds (this can be accomplished only by a written request signed by each shareholder, with each signature guaranteed); and . redemption of certificated shares by telephone. The Fund and its Sub-Transfer Agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and they may be liable for any losses if they fail to do so. These procedures include re- quiring the investor to provide certain personal identification at the time an account is opened, as well as prior to effecting each transaction requested by telephone. All telephone transaction requests will be recorded and investors may be required to provide additional telecopied written instructions of such transaction requests. The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent do not employ the procedures described above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili- ty, cost or expense for following instructions received by telephone that it reasonably believes to be genuine. SIGNATURE GUARANTEES Signature guarantees are required for the following redemptions: . redemptions where the proceeds are to be sent to someone other than the registered shareowner(s); . redemptions where the proceeds are to be sent to someplace other than the registered address; or . share transfer requests. Signature guarantees will be accepted from any eligible guarantor institu- tion which participates in a signature guarantee program. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securi- ties exchanges, registered securities associations, clearing agencies and sav- ings associations. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. OTHER REDEMPTION INFORMATION The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the UAM Funds Service Center of a redemption request in proper form. Although the Fund will redeem shares purchased by check before the check clears, payment of the redemption proceeds may be delayed for a pe- riod of up to fifteen days after their purchase, pending determination that the check has cleared. Investors should consider purchasing shares using a certified or bank check or money order if they anticipate an immediate need for redemption proceeds. The 20 Fund may suspend the right of redemption or postpone the date at times when both the Exchange and Custodian Bank are closed, or under any emergency cir- cumstances determined by the SEC. If the Fund's Board of Trustees determines that it would be detrimental to the best interests of remaining shareholders of the Fund to make payment wholly or partly in cash, the Fund may pay redemption proceeds in whole or in part by a distribution in-kind of liquid securities held by the Portfolio in lieu of cash in conformity with applicable rules of the SEC. Investors may in- cur brokerage charges on the sale of portfolio securities received in payment of redemptions. The Portfolio reserves the right to liquidate any account that is below fifty percent of the required minimum initial investment amount for a Portfo- lio as set forth in the Prospectus, where the reduction in value has occurred due to a redemption or exchange out of the account. If at any time your total investment does not have a value of at least fifty percent of the required minimum initial investment amount, you may be notified that the value of your account is below the Portfolio's minimum account balance requirement. You would then be allowed 60 days to make an additional investment before the ac- count is liquidated. Retirement accounts and certain other accounts will not be subject to automatic liquidation. Reductions in value that result solely from market activity will not trigger an involuntary redemption. SHAREHOLDER SERVICES EXCHANGE PRIVILEGE Institutional Class Shares of the Portfolio may be exchanged for Institu- tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo- lios of the UAM Funds at the end of this Prospectus.) Exchange requests should be made by contacting the UAM Funds Service Center. Any exchange will be based on the net asset value of the shares involved. There is no sales commission or charge of any kind for an exchange. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objectives of the Portfolio to be purchased. Call the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in which you are interested. Exchanges can only be made with Portfolios that are qualified for sale in a shareholder's state of residence. Exchange requests may be made either by mail or telephone. Telephone ex- changes will be accepted only if the certificates for the shares to be ex- changed have not been issued to the shareholder and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading on the Exchange (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests re- ceived after the close of regular 21 trading on the Exchange will be processed on the next business day. The Fund may modify or terminate the exchange program at any time upon 60 days' written notice to shareholders, and may reject any exchange request. If the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice may reject in whole or part any exchange request, with respect to such investor's account. Such investors also may be barred from exchanging into other portfolios of the UAM Funds. For additional information regarding responsibility for the authenticity of telephoned in- structions, see "REDEMPTION OF SHARES -- BY TELEPHONE." An exchange into an- other UAM Funds Portfolio is a sale of shares and may result in a gain or loss for income tax purposes. AUTOMATIC INVESTMENT PLAN An Automatic Investment Plan permits shareholders of a Portfolio with a min- imum value of $2,500 or more to purchase shares automatically (minimum of $100 per transaction) at regular intervals selected by the shareholder. Provided the shareholder's bank or other financial institution allows automatic with- drawals, shares are purchased by transferring funds via the Automated Clearing House ("ACH"). Investment made through ACH will be automatically transferred from a shareholder's checking, bank money market or NOW account designated by the shareholder. Such withdrawals are made electronically, if the sharehold- er's bank or financial institution so permits, or by pre-authorized checks or drafts drawn on the shareholder's bank or other account. The bank or financial institution must be a member of ACH. At the shareholder's option, the account designated will be debited in the specified amount, and shares will be pur- chased monthly or quarterly. To establish an Automatic Investment Plan, a shareholder must complete the Optional Services Form available from the UAM Funds Service Center at 1-800- 638-7983 and mail it to Chase Global Funds Service Company. A shareholder may cancel his/her participation or change the amount of purchase at any time by mailing written notification to Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. Notification generally will be effective three business days following receipt. The Fund may modify or terminate this privi- lege at any time, or may charge a service fee, although no such fee currently is contemplated. SYSTEMATIC WITHDRAWAL PLAN Any shareholder whose account balance totals at least $10,000 may establish a Systematic Withdrawal Plan under which an amount pre-determined by the shareholder (but at least $100) is automatically redeemed from the sharehold- er's account either monthly or quarterly. A shareholder may participate in the Systematic Withdrawal Plan by using ACH. Redemption made through ACH will be automatically transferred to the shareholder's bank or other similar financial institution account or a properly designated third party. The bank or finan- cial institution must be a member of ACH. Redemptions ordinarily are made on the third business day of the month and payments ordinarily will be transmit- ted within five business days 22 after the redemption date. Because the value of the Portfolio's shares fluctu- ate, the number of shares redeemed to finance systematic withdrawal payments or a given amount will vary from payment to payment. If a shareholder owns shares in more than one Portfolio, the shareholder must designate the Portfo- lio from which the redemptions under a Systematic Withdrawal Plan should be made. An additional sheet may be attached to the Optional Services Form if a shareholder selects more than one Portfolio. A Systematic Withdrawal Plan may be terminated or suspended at any time by the Fund. A shareholder may elect at any time, in writing, to terminate participation in the Systematic Withdrawal Plan. Such written election must be sent to and received by the Fund before a termination becomes effective. There is currently no charge to the shareholder for a Systematic Withdrawal Plan. VALUATION OF SHARES The net asset value of each class of a Portfolio is determined by dividing the value of the Portfolio's assets attributable to the class, less any lia- bilities attributable to the class, by the number of shares outstanding at- tributable to the class. The net asset value per share of the Portfolio is de- termined as of the close of the Exchange on each day that the Exchange is open for business. Equity securities listed on a securities exchange for which market quota- tions are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed secu- rities not traded on the valuation date are valued neither exceeding the cur- rent ask prices nor less than the current bid prices. The prices for securi- ties denominated in a foreign currency are converted to U.S. dollars based upon the bid price of the foreign currency against U.S. dollars quoted by any major bank or by a broker. Bonds and other fixed-income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the-counter market. Bonds and other fixed-income securities may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost. 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 of Trustees. PERFORMANCE CALCULATIONS The Portfolio measures performance by calculating yield and total return. Both yield and total return figures are based on historical earnings and are not intended 23 to indicate future performance. Yield and total return are calculated sepa- rately for each class of the Portfolio. Yield refers to the income generated by an investment in the Portfolio over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all funds. As this differs from other accounting methods, the quoted yield may not equal the in- come actually paid to shareholders. Total return is the change in value of an investment in the Portfolio over a given period, assuming reinvestment of any dividends and capital gains. A cu- mulative or aggregate total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of re- turn that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Performance will be calculated separately for Institutional Class and Serv- ice Class Shares. Dividends paid by the Portfolio with respect to Institu- tional Class and Service Class Shares, to the extent any dividends are paid, will be calculated in the same manner at the same time on the same day and will be in the same amount, except that service and distribution fees and any incremental transfer agency costs relating to Service Class Shares will be borne exclusively by that class. The Portfolio's performance may be compared to data prepared by independent services which monitor the performance of investment companies, data reported in financial and industry publications, and various indices as further de- scribed in the Portfolio's SAI. This information may also be included in sales literature and advertising. The Portfolio's Annual Report to Shareholders for the most recent fiscal year end contains additional performance information that includes comparisons with appropriate indices. The Annual Report is available without charge. Con- tact the UAM Funds Service Center at the address or telephone number on the cover of this Prospectus. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income (for tax purposes) to shareholders in dividends in June and Decem- ber. If any net capital gains are realized, the Portfolio will normally dis- tribute them in June, with a supplemental distribution in December of any un- distributed capital gains earned during the 12 month period ended each Octo- ber. All dividends and capital gains distributions will be automatically rein- vested in additional shares of the Portfolio unless the Fund is notified in writing that the shareholder elects to receive the distributions in cash. 24 FEDERAL TAXES The Portfolio intends to qualify as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, for federal in- come tax purposes and to meet all other requirements that are necessary for it (but not its shareholders) to be exempt from federal taxes on income and gains paid to shareholders in the form of dividends. To do this, the Portfolio must, among other things, distribute substantially all of its ordinary income and net capital gains on an annual basis and maintain a portfolio of investments which satisfies certain diversification criteria. Dividends paid by the Portfolio from net investment income, whether in cash or reinvested in shares, are taxable to shareholders as ordinary income. Short-term capital gains will be taxed as ordinary income. Long-term capital gains distributions are taxed as long-term capital gains. Shareholders will be notified annually of the tax status of dividends and capital gain distribu- tions received. Dividends declared in October, November and December to shareholders of rec- ord in such a month and paid in January of the following year will be treated as if they had been paid by the Fund and received by the shareholders on De- cember 31. The Fund is required by federal law to withhold 31% of reportable payments paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, you must certify that the Social Security or Taxpayer Identification Number you have provided is correct and that either you are not currently subject to backup withholding or you are exempt from backup withholding. This certification must be made on the Application or on a separate form supplied by the Fund. Dividends and interest received by the Portfolio may give rise to withhold- ing and other taxes imposed by foreign countries. These taxes reduce the Port- folio's dividends but are included in the taxable income reported on your tax statement if the Portfolio qualifies for this tax treatment and elects to pass it through to you. Consult a tax adviser for more information regarding deduc- tions and credits for foreign taxes. INVESTMENT ADVISER First Pacific Advisors, Inc., located at 11400 West Olympic Blvd., Suite 1200, Los Angeles, CA 90064, acts as the Portfolio's Adviser; Mr. Steven Romick is primarily responsible for management of the Portfolio. Mr. Romick has 13 years of experience in the investment management business. He is cur- rently a Senior Vice President of the Adviser. From 1990-1996, Mr. Romick was chairman of Crescent Management, an investment advisory firm he founded. Cres- cent Management served as the Portfolio's adviser until the firm was merged with the current Adviser. 25 Under an Investment Advisory Agreement dated as of September 30, 1996, the Adviser provides the Portfolio with advice on buying and selling securities, manages the investments of the Portfolio, furnishes the Portfolio with office space and certain administrative services, and provides most of the personnel needed by the Portfolio. As compensation, the Portfolio pays the Adviser a monthly management fee (accrued daily) based upon the average daily net assets of the Portfolio at the rate of 1.00% annually. The Adviser, together with its predecessors, has been in the investment ad- visory business since 1954. Presently, the Adviser manages assets of approxi- mately $4.5 billion for seven investment companies, including one closed-end investment company, and more than 25 institutional accounts. The Adviser is an indirect wholly-owned subsidiary of UAM, an Exchange-listed holding company principally engaged, through affiliated firms, in providing institutional in- vestment management and acquiring institutional investment management firms. The Portfolio is responsible for its own operating expenses. The Adviser has voluntarily agreed to waive all or a portion of its advisory fees and to as- sume operating expenses to keep the Portfolio's Institutional Class Shares' total annual operating expenses (excluding interest, taxes and extraordinary expenses), after the effect of expense offsets, from exceeding 1.85% of aver- age daily net assets until further notice. To the extent the Adviser performs a service for which the Portfolio is obligated to pay, the Portfolio shall re- imburse the Adviser for its costs incurred in rendering such service. The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili- ates, may, at their own expense, compensate a Service Agent or other person for marketing, shareholder servicing, recordkeeping and/or other services per- formed with respect to the Fund, the Portfolio or any Class of Shares of the Portfolio. The person making such payments may do so out of its revenues, its profits or any other source available to it. Such service arrangements, when in effect, are made generally available to all qualified service providers. The Distributor, the Adviser and certain of their other affiliates also par- ticipate, at the date of this Prospectus, in an arrangement with Smith Barney Inc. under which Smith Barney provides certain defined contribution plan mar- keting and other shareholder services and receives from such entities .15 of 1% of the daily net asset value of Institutional Class Shares held by Smith Barney's eligible customer accounts in addition to amounts payable to all selling dealers. The Fund also compensates Smith Barney for services it pro- vides to certain defined contribution plan shareholders that are not otherwise provided by the Administrator. 26 ADMINISTRATIVE SERVICES UAMFSI, a wholly-owned subsidiary of UAM, is responsible for performing and overseeing administrative, fund accounting, dividend disbursing and transfer agent services provided to the Fund and its Portfolios. UAMFSI's principal of- fice is located at 211 Congress Street, Boston, MA 02110. UAMFSI has subcon- tracted some of these services to CGFSC, an affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is lo- cated at 73 Tremont Street, Boston, MA 02108. Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fees are calculated from the aggregate net assets of the Portfolio:
RATE ---- FPA Crescent Portfolio............................................... 0.06%
CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined UAM Fund assets; 0.11 of 1% of the next $800 million of combined UAM Fund assets; 0.07 of 1% of combined UAM Fund assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined UAM Funds assets in excess of $3 billion. Fees are allocated among each of the Portfolios on the basis of their rela- tive assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum an- nual fee increases by $20,000. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, with its principal office located at 211 Congress Street, Boston, MA 02110, distributes shares of the Fund. Under the Distribution Agreement (the "Agreement"), the Distributor, as agent of the Fund, agrees to use its best efforts as sole dis- tributor of Fund shares. The Distributor does not receive any fee or other compensation under the Agreement with respect to the Portfolio's Institutional Class Shares offered in this Prospectus. The Agreement continues in effect as long as it is approved at least annually by the Fund's Board of Trustees. Those approving the Agreement must include a majority of Trustees who are nei- ther parties to the Agreement nor interested persons of any such party. The Agreement provides that the Fund will bear costs of registration of its shares with the SEC and various states and the printing of its prospectuses, its SAIs and its reports to shareholders. 27 PORTFOLIO TRANSACTIONS The Advisory Agreement authorizes the Adviser to select the brokers or deal- ers that will execute the purchase and sale of investment securities for the Portfolio. The Agreement directs the Adviser to use its best efforts to obtain the best available price and most favorable execution for all transactions of the Portfolio. If consistent with the interests of the Portfolio, the Adviser may select brokers on the basis of the research, statistical and pricing serv- ices they provide to the Portfolio in addition to required services. Such bro- kers may be paid a higher commission than that which another qualified broker would have charged for effecting the same transaction, provided that such com- missions are paid in compliance with the Securities Exchange Act of 1934, as amended, and that the Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Portfolio and the Adviser's other clients. Although not a typical practice, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. If a purchase or sale of securities consistent with the investment policies of the Portfolio and one or more of these other clients served by the Adviser is considered at or about the same, transactions in such securities will be allocated among the Portfolio and other clients in a manner deemed fair and reasonable by the Adviser. Although there is no specified formula for allocat- ing such transactions, such allocations are subject to periodic review by the Fund's Trustees. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized as a Delaware business trust on May 18, 1994 under the name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial inter- est, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without fur- ther action by shareholders. At its discretion, the Board of Trustees may create additional Portfolios and classes of shares. The shares of each Portfolio are fully paid and nonas- sessable, and have no preference as to conversion, exchange, dividends, re- tirement or other features and no pre-emptive rights. They have noncumulative voting rights, which means that holders of more than 50% of shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. As of June 15, 1998, Charles Schwab & Co., Inc., Reinvest Account, held of record 48.8% of the outstanding shares of the Portfolio's Institutional Class 28 and Wilmington Trust Co., Trustee, FBO FIGGIE Institutional Retirement & Profit Sharing Trust, held of record 41.5% of the outstanding shares of the Portfolio's Service Class for which beneficial ownership is disclaimed or pre- sumed disclaimed. The persons or organizations owning 25% or more of the out- standing shares of a Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organi- zations could have the ability to vote a majority of the shares of the Portfo- lio on any matter requiring the approval of shareholders of such Portfolio. Both Institutional Class and Service Class Shares represent an interest in the same assets of the Portfolio. Service Class Shares bear certain expenses related to shareholder servicing and the distribution of such shares and have exclusive voting rights for matters relating to such distribution expendi- tures. The Board of Trustees of the Fund has authorized a third class of shares, Advisor Class Shares, which is not currently being offered by this Portfolio. For information about the Service Class Shares of the Portfolio, contact the UAM Funds Service Center. Annual meetings will not be held except as required by the 1940 Act and other applicable laws. The Fund has undertaken that its Trustees will call a meeting of shareholders if such a meeting is requested in writing by the hold- ers of not less than 10% of the outstanding shares of the Fund. The Fund will assist shareholder communications in such matters. CUSTODIAN The Chase Manhattan Bank serves as custodian of the Fund's assets. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the independent accountant for the Fund. REPORTS Investors will receive unaudited semi-annual financial statements and annual financial statements audited by PricewaterhouseCoopers LLP. SHAREHOLDER INQUIRIES Shareholder inquiries may be made by contacting the UAM Funds Service Center at the telephone number listed on the cover of this Prospectus. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE. 29 UAM FUNDS -- INSTITUTIONAL CLASS SHARES Acadian Emerging Markets Portfolio Acadian International Equity Portfolio BHM&S Total Return Bond Portfolio Cambiar Opportunity Portfolio Chicago Asset Management Intermediate Bond Portfolio Chicago Asset Management Value/Contrarian Portfolio C&B Balanced Portfolio C&B Equity Portfolio C&B Equity Portfolio for Taxable Investors C&B Mid Cap Equity Portfolio DSI Balanced Portfolio DSI Disciplined Value Portfolio DSI Limited Maturity Bond Portfolio DSI Money Market Portfolio FMA Small Company Portfolio FPA Crescent Portfolio Hanson Equity Portfolio Heitman Real Estate Portfolio ICM Equity Portfolio ICM Fixed Income Portfolio ICM Small Company Portfolio Jacobs International Octagon Portfolio McKee Domestic Equity Portfolio McKee International Equity Portfolio McKee Small Cap Equity Portfolio McKee U.S. Government Portfolio MJI International Equity Portfolio NWQ Balanced Portfolio NWQ Small Cap Portfolio NWQ Special Equity Portfolio NWQ Value Equity Portfolio Rice, Hall James Small Cap Portfolio Rice, Hall James Small/Mid Cap Portfolio SAMI Preferred Stock Income Portfolio Sirach Bond Portfolio Sirach Growth Portfolio Sirach Special Equity Portfolio Sirach Strategic Balanced Portfolio Sterling Partners' Balanced Portfolio Sterling Partners' Equity Portfolio Sterling Partners' Small Cap Value Portfolio TS&W Balanced Portfolio TS&W Equity Portfolio TS&W Fixed Income Portfolio TS&W International Equity Portfolio 30 UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 1-800-638-7983 Investment Adviser First Pacific Advisors, Inc. 11400 West Olympic Boulevard Suite 1200 Los Angeles, CA 90064 Distributor UAM Fund Distributors, Inc. 211 Congress Street Boston, MA 02110 PROSPECTUS July 17, 1998 UAM Funds Prospectus July 17, 1998 FPA Crescent Portfolio Institutional Service Class Shares [LOGO OF UAM FUNDS APPEARS HERE] TABLE OF CONTENTS
PAGE ---- Fund Expenses.............................................................. 1 Prospectus Summary......................................................... 3 Risk Factors............................................................... 4 Financial Highlights....................................................... 5 Investment Objective....................................................... 6 Investment Policies........................................................ 6 Other Investment Policies.................................................. 8 Purchase of Shares......................................................... 16 Redemption of Shares....................................................... 20 Service and Distribution Plans............................................. 22 Shareholder Services....................................................... 24 Valuation of Shares........................................................ 25 Performance Calculations................................................... 26 Dividends, Capital Gains Distributions and Taxes........................... 27 Investment Adviser......................................................... 28 Administrative Services.................................................... 29 Distributor................................................................ 30 Portfolio Transactions..................................................... 30 General Information........................................................ 31 UAM Funds -- Institutional Service Class Shares............................ 33
UAM FUNDS FPA CRESCENT PORTFOLIO INSTITUTIONAL SERVICE CLASS SHARES - ------------------------------------------------------------------------------- PROSPECTUS -- July 17, 1998 UAM Funds Trust (the "Fund") is an open-end investment company known as a "mutual fund." The Fund consists of multiple series (known as Portfolios), each of which has different investment objectives and policies. The FPA Cres- cent Portfolio (the "Portfolio") offers two separate classes of shares: Insti- tutional Class Shares and Institutional Service Class Shares ("Service Class Shares"). Shares of each class represent equal, pro rata interests in a Port- folio and accrue dividends in the same manner except that Service Class Shares bear fees payable by the class (at the rate of .25% per annum) to financial institutions for services they provide to the owners of such shares. (See "SERVICE AND DISTRIBUTION PLANS.") The securities offered in this Prospectus are Service Class Shares of one diversified, no-load Portfolio of the Fund managed by First Pacific Advisors, Inc. FPA CRESCENT PORTFOLIO. The FPA Crescent Portfolio's investment objective is to provide, through a combination of income and capital appreciation, a total return consistent with reasonable risk. The Portfolio seeks to achieve its ob- jective by investing primarily in equity securities (common and preferred stocks) and fixed income obligations. There can be no assurance that the Portfolio will achieve its objective. Keep this Prospectus for future reference. It contains information that you should know before you invest. A Statement of Additional Information ("SAI") containing additional information about the Fund has been filed with the Secu- rities and Exchange Commission ("SEC"). The SAI is dated July 17, 1998 and has been incorporated by reference into this Prospectus. For a free copy of the SAI contact the UAM Funds Service Center at 1-800-638-7983. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE-SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FUND EXPENSES The following table illustrates expenses and fees that a shareholder of the Portfolio's Service Class Shares will incur. The Fund does not charge transac- tion fees. However, transaction fees may be charged if a broker-dealer or other financial intermediary deals with the Fund on your behalf. (See "PUR- CHASE OF SHARES.") SHAREHOLDER TRANSACTION EXPENSES Sales Load Imposed on Purchases......................................... NONE Sales Load Imposed on Reinvested Dividends.............................. NONE Deferred Sales Load..................................................... NONE Redemption Fees......................................................... NONE Exchange Fee............................................................ NONE
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) Investment Advisory Fees ............................................ 1.00% 12b-1 Fees (Including Shareholder Servicing Fees)*................... 0.25% Other Expenses....................................................... 0.48% ---- Total Operating Expenses ............................................ 1.73%** ====
- ----------- * The Service Class Shares may bear service fees of 0.25% of average daily net assets of the Portfolio. (See "SERVICE AND DISTRIBUTION PLANS.") Long- term shareholders may pay more than the economic equivalent of the maximum front-end sales charge permitted by rules of the National Association of Securities Dealers, Inc. ** The Adviser has voluntarily agreed to waive all or a portion of its advi- sory fees and to assume operating expenses to keep the Portfolio's Service Class Shares' total annual operating expenses (excluding interest, taxes and extraordinary expenses), after the effect of expense offsets, from ex- ceeding 2.10% of average daily net assets until further notice. The fig- ures above include the effect of expense offsets. If expense offsets were excluded, Total Operating Expenses of the Portfolio would not be affected. The Adviser may change or discontinue its fee waivers and expense assump- tions at any time. The table above shows various fees and expenses an investor would bear di- rectly or indirectly. The fees and expenses set forth above are based upon the Portfolio's Service Class Shares' operations during the fiscal year ended March 31, 1998. 1 EXAMPLE The following example illustrates expenses a shareholder would pay on a $1,000 investment over various time periods assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period. The Portfolio charges no redemption fees of any kind.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- FPA Crescent Portfolio Service Class Shares....................... $18 $54 $94 $204
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX- PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN ABOVE. 2 PROSPECTUS SUMMARY INVESTMENT ADVISER First Pacific Advisors, Inc. (the "Adviser") acts as the Portfolio's Adviser and has its origins dating back to 1954. It currently has over $4.5 billion in assets under management. The Adviser is an indirect wholly-owned subsidiary of United Asset Management Corporation ("UAM"). (See "INVESTMENT ADVISER.") PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), to investors at net asset value without a sales commission. Share purchases may be made by sending investments directly to the Fund. The minimum initial investment is $2,500. The minimum for subsequent investments is $100. The minimum initial investment for IRA accounts is $1,000. Certain exceptions to the initial or minimum investment amounts may be permitted by the officers of the Fund. (See "PURCHASE OF SHARES.") DIVIDENDS AND DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income in the form of dividends in June and December. Any realized net capital gains will be distributed annually or more often. Distributions will be reinvested in the Portfolio's shares automatically unless an investor elects to receive cash distributions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBU- TIONS AND TAXES.") REDEMPTIONS AND EXCHANGES Shares of the Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemp- tion request. The redemption price may be more or less than the purchase price. Shares of the Portfolio may be exchanged for shares of the same class of any other portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" and "EX- CHANGE PRIVILEGE.") ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of UAM, is re- sponsible for performing and overseeing administration, fund accounting, divi- dend disbursing and transfer agency services provided to the Fund and its Portfolios by third-party service providers. (See "ADMINISTRATIVE SERVICES.") 3 RISK FACTORS Prospective investors should understand that the Portfolio's performance will be affected by a variety of factors since it invests in both stocks and fixed-income securities. The value of the Portfolio's investments will vary from day to day, generally reflecting global market, economic and political developments; conditions in global and national markets; changes in currency exchange rates; factors affecting individual stocks in the Portfolio; and shifts in interest rates. . The Portfolio may invest significantly in lower rated fixed-income secu- rities, which typically offer higher coupon interest rates than invest- ment grade securities, but also involve greater risks of default and market volatility. Such securities are sometimes referred to as "junk bonds" and are considered speculative by rating agencies. . The Portfolio may engage in short sales of securities, which involve the risk of loss if the securities increase in price between the time the Portfolio sells them short and repurchases them. . The Portfolio may invest in repurchase agreements which entail a risk of loss should the seller default on its transaction. . The Portfolio may lend its investment securities which entails a risk of loss should a borrower fail financially. . The Portfolio may purchase securities on a when-issued basis which do not earn interest until issued and may decline or appreciate in market value prior to their delivery to the Portfolio. . The Portfolio may engage in various hedging, currency and related strat- egies to seek to hedge its investments against movements in security prices, interest rates, and exchange rates by the use of derivatives, including forward contracts, options and futures as well as options on futures. These strategies involve the risk of imperfect correlation in movements in the price of options and futures and movements in the price of securities, interest rates or currencies which are the subject of the hedge. These transactions are also subject to the risk factors associ- ated with foreign investments generally. There can be no assurance that a liquid secondary market for these hedging techniques will exist at any specific time. The use of derivatives, if employed incorrectly, may ad- versely affect the Portfolio. Further information about each of the above risk factors and others is con- tained in the "OTHER INVESTMENT POLICIES" section of this Prospectus. 4 FINANCIAL HIGHLIGHTS The following table provides selected per share information for a share out- standing throughout the period presented of the Portfolio. The table is part of the Portfolio's Annual Financial Statements, which are included in the Portfolio's 1998 Annual Report to Shareholders. The Report is incorporated by reference into the Portfolio's SAI. The Portfolio's Annual Financial State- ments have been audited by PricewaterhouseCoopers LLP whose unqualified opin- ion thereon is also incorporated into the Portfolio's SAI. This information should be read in conjunction with the Portfolio's 1998 Annual Report. Further information about the Portfolio's performance is contained in its Annual Re- port, which may be obtained without charge by telephoning the number on the Prospectus cover page.
JANUARY 24, 1997+ YEAR ENDED TO MARCH 31, 1998++ MARCH 31, 1997 ---------------- ----------------- NET ASSET VALUE, BEGINNING OF PERIOD....... $ 13.43 $ 13.12 ------- ------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income..................... 0.53 0.03 Net Realized and Unrealized Gain on Investments............................. 2.84 0.28 ------- ------- Total from Investment Operations......... 3.37 0.31 ------- ------- DISTRIBUTIONS: Net Investment Income..................... (0.39) -- Net Realized Gain......................... (0.26) -- ------- ------- Total Distributions...................... (0.65) -- ------- ------- NET ASSET VALUE, END OF PERIOD............. $ 16.15 $ 13.43 ======= ======= TOTAL RETURN............................... 25.55% 2.36%** ======= ======= Ratios and Supplemental Data Net Assets, End of Period (Thousands)...... $18,900 $ 32 Ratio of Expenses to Average Net Assets.... 1.73% 1.85%* Ratio of Net Investment Income to Average Net Assets............................... 3.44% 2.56%* Portfolio Turnover Rate.................... 18% 45%* Average Commission Rate Paid............... $0.0564 $0.0521
- ----------- * Annualized. ** Not Annualized. + Commencement of Operations. ++ Per share amounts for the year ended March 31, 1998 are based on average outstanding shares. 5 INVESTMENT OBJECTIVE The investment objective of the Portfolio is to provide, through a combina- tion of income and capital appreciation, a total return consistent with rea- sonable investment risk. The Portfolio seeks to achieve its objective by in- vesting in a combination of equity securities and fixed-income obligations. There is, of course, no assurance that the Portfolio's objective will be achieved. Because prices of common stocks and fixed-income securities fluctu- ate, the value of an investment in the Portfolio will vary, as the market value of its investment portfolio changes. The Portfolio actively seeks value in all parts of a company's capital structure, including common and preferred stocks, as well as corporate and convertible bonds. The Portfolio will typically have between 50% and 70% of its total assets invested in equity securities with the balance comprised of fixed-income securities and cash and equivalents. INVESTMENT POLICIES EQUITY SECURITIES The Adviser utilizes a contrarian investment style, which often leads the Adviser to invest in "what other people do not wish to own." The Adviser searches for common stocks, preferred stocks, warrants and convertible securi- ties that reflect low price/earnings ratios (P/Es) and trade at discounts to private market value. The Adviser selects equity securities for the Portfolio which it believes offer superior investment value. The Adviser deems the following important in its stock selection process: .High return on capital .Solid balance sheet .Meaningful cash flow .Active share repurchase program .Insider buying .Superior management seeking to maximize shareholder value .Projected earnings growth exceeding the stock market average In the Adviser's view, the stock market prices securities efficiently in the long term, rewarding companies which successfully grow their earnings and pe- nalizing those which do not. The Adviser's investment philosophy is based on the conviction that the market valuation of securities is often inefficient in the short-term. When reacting to current economic or company information, in- vestors frequently make purchase or sale decisions hastily. These decisions could cause a particular security, industry group or the entire market to be- come underpriced or overpriced in the short-term thereby creating an excellent opportunity to either buy or sell. 6 This contrarian style leads to those investments that offer absolute value, rather than relative value. Absolute value is an investment that trades at substantial discount to private market value, rather than one that might ap- pear inexpensive based on a discount to its peer group or the market average. Attention is directed toward those companies offering the best combination of such quality criteria as strong market share, good management and high normal- ized return on capital. A company purchased might not look inexpensive, con- sidering current earnings and return on capital; however, this may reflect such conditions as a weak economy, an increase in their raw material costs, poor management, or any number of other temporary considerations. The price drops caused by such developments can and often do provide buying opportuni- ties. Intensive research identifies these opportunities. The process includes looking for ideas by reviewing stock price or industry group under-perfor- mance, insider purchases, management changes and corporate spin-offs. Funda- mental analysis is the foundation of the Adviser's investment approach. Re- searching a prospective investment involves communicating directly with com- pany management, suppliers, and customers, better defining future potential, financial strength and the company's competitive position. Fundamental analy- sis provides a thorough view of financial and business characteristics, al- lowing for the determination of absolute value. In addition to common stocks, equity securities purchased for the Portfolio may include preferred stocks, convertible preferred stocks and warrants. FIXED-INCOME OBLIGATIONS Through fixed-income investments, the Adviser seeks a reliable and recurring stream of income for the Portfolio, while preserving its capital. The Adviser attempts to identify the current interest rate trends and invests funds ac- cordingly. Usually, a defensive interest rate strategy is employed, with in- vestments made at different points along the yield curve in an attempt to keep the average maturity of fixed-income investments less than or equal to ten years. The Adviser's approach is to invest in U.S. Treasury obligations, U.S. Gov- ernment Agency and mortgage-backed securities, and corporate and convertible bonds. The Adviser considers yield spread relationships and their underlying factors such as credit quality, investor perception and liquidity on a contin- uous basis to determine which sector offers the best investment value. When combined with equity securities, the ownership of fixed-income securities not only broadens the universe of opportunities, but offers additional diversifi- cation and can help lower portfolio volatility. The Adviser may invest in corporate bonds with yields substantially higher than those of government securities. Opportunities frequently present them- selves 7 in parts of the capital structure of a company beyond common and preferred stock, including convertible and high yield bonds. Generally, these invest- ments provide a return in excess of government securities and can provide po- tential for capital appreciation. Historic returns for high yield bonds have been greater than government securities. The Adviser's analysis includes studying interest expense coverage, business value/debt coverage and current business trends. The Portfolio may purchase investment-grade corporate debt securities. Secu- rities rated BBB by Standard & Poor's Ratings Services ("S&P") or Moody's In- vestors Service ("Moody's") are investment grade, but Moody's considers secu- rities rated Baa to have speculative characteristics. Changes in economic con- ditions or other circumstances are more likely to lead to a weakened capacity for such securities to make principal and interest payments than is the case for higher-rated debt securities. OTHER INVESTMENT POLICIES LOWER RATED SECURITIES The Portfolio may invest in debt securities that are rated below investment grade, but will limit that investment to no more than 30% of its total assets. Such securities, sometimes referred to as "junk bonds," typically carry higher coupon rates than investment grade securities but also involve higher risks and are described as speculative by both Moody's and S&P. They may be subject to greater market price fluctuations, less liquidity, and greater risk of in- come or principal, including a greater possibility of default or bankruptcy of the issuer of such securities, than are more highly rated debt securities. Lower rated fixed income securities also are likely to be more sensitive to adverse economic or company developments and more subject to price fluctua- tions in response to changes in interest rates. The market for lower-rated debt issues generally is thinner and less active than that for higher quality securities, which may limit the Portfolio's ability to sell such securities at fair value in response to changes in the economy or financial markets. The Adviser seeks to reduce the risk associated with investing in such secu- rities by limiting the Portfolio's holdings in such securities and by the depth of its own credit analysis. In selecting below investment grade securi- ties, the Adviser seeks securities in companies with improving cash flows and balance sheet prospects, whose credit ratings the Adviser views as likely to be upgraded. The Adviser believes that such securities can produce returns similar to equities, but with less risk. See the SAI for further discussion of lower rated securities. REPURCHASE AGREEMENTS The Portfolio may enter into repurchase agreements in order to earn addi- tional income on available cash, or as a defensive investment in periods when the Portfolio is primarily in short-term maturities. A repurchase agreement is a short-term 8 investment in which the purchaser (i.e., the Portfolio) acquires ownership of a security (which may be of any maturity) and the seller agrees to repurchase that obligation at a future time at a set price, thereby determining the yield during the purchaser's holding period (usually not more than seven days from the date of purchase). Any repurchase transaction in which the Portfolio en- gages will require full collateralization of the seller's obligation during the entire term of the repurchase agreement. In the event of a bankruptcy or other default of the seller, the Portfolio could experience both delays in liquidating the underlying security and losses in value. However, the Portfo- lio intends to enter into repurchase agreements only with banks with assets of $500 million or more that are insured by the Federal Deposit Insurance Corpo- ration and the most creditworthy registered securities dealers pursuant to procedures adopted and regularly reviewed by the Fund's Board of Trustees. The Adviser monitors the creditworthiness of the banks and securities dealers with whom the Portfolio engages in repurchase transactions. The Fund has received permission from the SEC to pool daily uninvested cash balances of the Fund's Portfolios in order to invest in repurchase agreements on a joint basis. By entering into joint repurchase agreements, the Portfolio may incur lower transaction costs and earn higher rates of interest on joint repurchase agree- ments. The Portfolio's contribution would determine its return from a joint repurchase agreement. ILLIQUID AND RESTRICTED SECURITIES The Portfolio may not invest more than 15% of its net assets in illiquid se- curities, including (i) securities for which there is no readily available market; (ii) securities the disposition of which would be subject to legal re- strictions (so-called "restricted securities"); and (iii) repurchase agree- ments having more than seven days to maturity. A considerable period of time may elapse between the Portfolio's decision to dispose of such securities and the time when the Portfolio is able to dispose of them, during which time the value of the securities could decline. Restricted securities do not include those which meet the requirements of Securities Act Rule 144A and which the Trustees have determined to be liquid based on the applicable trading markets. FOREIGN SECURITIES The Portfolio may invest up to 20% of its total assets in securities of for- eign issuers. The Adviser usually buys securities of larger foreign companies that have well recognized franchises and are selling at a discount to the se- curities of similar domestic businesses. There may be less publicly available information about these issuers than is available about companies in the U.S. and foreign auditing requirements may not be comparable to those in the U.S. In addition, the value of the foreign securities 9 may be adversely affected by movements in the exchange rates between foreign currencies and the U.S. dollar, as well as other political and economic devel- opments, including the possibility of expropriation, confiscatory taxation, exchange controls or other foreign governmental restrictions. The Portfolio may also invest without limit in securities of foreign issuers which are listed on a domestic national securities exchange. Additionally, there may be difficulty in obtaining and enforcing judgments against foreign issuers. SHORT SALES The Portfolio may engage in short sales of securities. In a short sale, the Portfolio sells stock which it does not own, making delivery with securities "borrowed" from a broker. The Portfolio is then obligated to replace the secu- rity borrowed by purchasing it at the market price at the time of replacement. This price may or may not be less than the price at which the security was sold by the Portfolio. Until the security is replaced, the Portfolio is re- quired to pay to the lender any dividends or interest which accrue during the period of the loan. In order to borrow the security, the Portfolio may also have to pay a fee which would increase the cost of the security sold. The pro- ceeds of the short sale will be retained by the broker, to the extent neces- sary to meet margin requirements, until the short position is closed out. The Portfolio also must deposit in a segregated account an amount of cash or liquid assets equal to the difference between (a) the market value of the se- curities sold short at the time they were sold short and (b) the value of the collateral deposited with the broker in connection with the short sale (not including the proceeds from the short sale). While the short position is open, the Portfolio must maintain daily the segregated account at such a level that (1) the amount deposited in it plus the amount deposited with the broker as collateral equals the current market value of the securities sold short and (2) the amount deposited in it plus the amount deposited with the broker as collateral is not less than the market value of the securities at the time they were sold short. The Portfolio will incur a loss as a result of the short sale if the price of the security increases between the date of the short sale and date on which the Portfolio replaces the borrowed security. The Portfolio will realize a gain if the security declines in price between those dates. The amount of any gain will be decreased and the amount of any loss will be increased by any in- terest the Portfolio may be required to pay in connection with the short sale. The dollar amount of short sales at any one time (not including short sales against the box) may not exceed 25% of the net assets of the Portfolio. A short sale is "against-the-box" if at all times when the short position is open the Portfolio owns an equal amount of the securities or securities con- vertible into, or exchangeable without further consideration for, securities of the same issue as the securities sold short. 10 OPTIONS AND FUTURES The Portfolio may purchase and write call and put options on securities, se- curities indexes and on foreign currencies, and enter into futures contracts and use options on futures contracts. The Portfolio may use these techniques to hedge against changes in interest rates, foreign currency exchange rates or securities prices or as part of its overall investment strategies. The Portfo- lio is subject to regulatory limitations on the use of such techniques and is required to maintain segregated accounts consisting of cash or liquid securi- ties, (or, as permitted by applicable regulation, enter into certain offset- ting positions) to cover its obligations under options and futures contracts to avoid leveraging of the Portfolio. The Portfolio may buy or sell interest rate futures contracts, options on interest rate futures contracts and options on debt securities for the purpose of hedging against changes in the value of securities which the Fund owns or anticipates purchasing due to anticipated changes in interest rates. The Port- folio also may engage in currency exchange transactions by means of buying or selling foreign currency on a spot basis, entering into foreign currency for- ward contracts, and buying and selling foreign currency options, futures and options on futures. Foreign currency exchange transactions may be entered into for the purpose of hedging against foreign currency exchange risk arising from the Portfolio's investment or anticipated investment in securities denominated in foreign currencies. See the SAI for further information regarding characteristics of and risks involved in the use of these instruments. U.S. GOVERNMENT SECURITIES The Portfolio may invest in U.S. Government securities. U.S. Government se- curities include direct obligations issued by the U.S. Treasury, such as Trea- sury bills, certificates of indebtedness, notes and bonds. U.S. Government agencies and instrumentalities that issue or guarantee securities include, but are not limited to, the Federal National Mortgage Association ("FNMA"), Gov- ernment National Mortgage Association ("GNMA"), Federal Home Loan Bank, Fed- eral Financing Bank, and Student Loan Marketing Association. All Treasury securities are backed by the full faith and credit of the United States. Obligations of U.S. Government agencies and instrumentalities may or may not be supported by the full faith and credit of the United States. Some, such as the Federal Home Loan Bank, are backed by the right of the agency or instrumentality to borrow from the Treasury. Others, such as securi- ties issued by the Federal National Mortgage Association, are supported only by the credit of the instrumen- 11 tality and not by the Treasury. If the securities are not backed by the full faith and credit of the United States, the owner of the securities must look principally to the agency issuing the obligation for repayment and may not be able to assert a claim against the United States in the event that the agency or instrumentality does not meet its commitment. INFLATION-INDEXED BONDS Inflation-indexed bonds are securities whose principal value is periodically adjusted to reflect the rate of inflation. Such bonds are generally issued at an interest rate lower than comparable non-indexed bonds, but are expected to retain their principal value over time. The interest rate on these bonds is fixed at issuance, but over the life of the bond this interest may be paid on an increasing principal value, which has been adjusted for inflation. Infla- tion indexed-bonds issued by the U.S. Treasury have maturities of ten years, although it is anticipated that securities with other maturities will be is- sued in the future. If the periodic adjustment rate measuring inflation falls, the principal value of inflation-indexed bonds will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds, even during a period of deflation. However, the current market value of the bonds is not guaranteed, and will fluctuate. Any increase in the principal amount of an inflation-indexed bond is considered taxable ordinary income, even though investors do not receive their principal until maturity. MORTGAGE-BACKED SECURITIES The Portfolio may invest in mortgage-backed securities. Mortgage-backed se- curities are collateralized by pools of mortgages assembled for subsequent sale to investors by various governmental agencies and sponsored organizations as well as by private issuers. The underlying assets collateralizing the mort- gage-backed securities may include single-family, multi-family and commercial properties. The two fundamental forms of mortgage-backed securities are pass- throughs and collateralized mortgage obligations ("CMOs"). Pass-throughs pro- duce monthly payments of principal and interest from the underlying mortgages. CMOs divide the cash flows generated from the underlying mortgages or mortgage pass-through securities into different segments known as "tranches," which are then retired sequentially over time in order of priority. The market value and yield of mortgage-backed securities will fluctuate due to market interest rate change and prepayment variability of the underlying mortgages. As prepayment rates on mortgages vary widely, it is difficult to accurately predict the av- erage maturity of a particular pool of mortgages or tranches of CMOs. Although mortgage-backed securities may offer higher yields than those available from other types of securities, they may be less effective 12 than other types of securities as a means of "locking in" an attractive rate for an extended period because of the prepayment feature. Prepayment risk has two important effects. First, like bonds in general, mortgage-backed securi- ties will generally decline in price when interest rates rise. Second, when interest rates fall and additional mortgage prepayments must be reinvested at lower interest rates, a Portfolio's rate of interest income may be reduced. Mortgage-backed securities in which the Portfolio may invest will either carry a guarantee from an agency of the U.S. Government or a private issuer of the timely payment of principal and interest or are suitably structured to be con- sidered by the Adviser to be of investment grade quality. PORTFOLIO TURNOVER In general, the Adviser will not consider the rate of portfolio turnover to be a limiting factor in determining when or whether to purchase or sell secu- rities in order to achieve the Portfolio's objective. The table set forth in "Financial Highlights" presents the Portfolio's historical portfolio turnover rates. In addition to portfolio trading costs, higher rates of portfolio turn- over may result in the realization of capital gains. To the extent net short- term capital gains are realized, any distributions resulting from such gains are considered ordinary income for federal income tax purposes. See "DIVI- DENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for more information on taxa- tion. SHORT-TERM INVESTMENTS In order to earn a return on uninvested assets, meet anticipated redemp- tions, or for temporary defensive purposes, the Portfolio may invest a portion of its assets in domestic and foreign money market instruments including cer- tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob- ligations, U.S. Government agency securities, short-term corporate debt secu- rities, and commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by Moody's or if unrated, determined by the Adviser to be of comparable quality. Time deposits maturing in more than seven days will not be purchased by the Portfolio, and time deposits maturing from two business days through seven calendar days will not exceed 10% of the total assets of the Portfolio. The Portfolio will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, (ii) in the case of U.S. banks, it is a member of the Fed- eral Deposit Insurance Corporation, and (iii) in the case of foreign branches of U.S. banks, the security is, in the opinion of the Adviser, of an invest- ment quality comparable with other debt securities which may be purchased by the Portfolio. The Fund has received permission from the SEC to deposit the daily uninvested cash balances of the Fund's Portfolios, as well as cash for invest- ment 13 purposes, into one or more joint accounts and to invest the daily balance of the joint accounts in the following short-term investments: fully collateral- ized repurchase agreements, interest-bearing or discounted commercial paper including dollar-denominated commercial paper of foreign issuers, and any other short-term money market instruments including variable rate demand notes and other tax-exempt money instruments. By entering into these investments on a joint basis, the Portfolio may earn a higher rate of return on investments relative to what it could earn individually. The Fund has received permission from the SEC for each of its Portfolios to invest for cash management purposes the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio. (See "INVESTMENT COMPANIES.") WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES The Portfolio may purchase and sell securities on a "when-issued," "delayed settlement," or "forward delivery" basis. "When-issued" or "forward delivery" 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 and forward delivery transactions may be expected to occur a month or more be- fore delivery is due. Delayed settlement is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by the Portfolio until it re- ceives delivery or payment from the other party to any of the above transac- tions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. The Portfolio will maintain a separate account of cash or liquid securities at least equal to the value of the purchase commitments until payment is made. Typically, no income accrues on securities purchased on a delayed delivery basis prior to the time delivery of the securities is made although the Portfolio may earn income on securities it has deposited in a segregated account. The Portfolio engages in these types of purchases in order to buy securities that fit with its investment objectives at attractive prices--not to increase its investment leverage. Securities purchased on a when-issued basis may decline or appreciate in market value prior to their actual delivery to the Portfolio. LENDING OF PORTFOLIO SECURITIES The Portfolio may lend its investment securities to qualified institutional investors as a means of earning income. The Portfolio will not loan portfolio securi- 14 ties to the extent that greater than one-third of its total assets at fair market value, would be committed to loans. By lending its investment securi- ties, the Portfolio attempts to increase its income through the receipt of in- terest 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. All relevant facts and circumstances, including the credit- worthiness of the broker, dealer or institution, will be considered by the Ad- viser in making decisions with respect to the lending of securities, subject to review by the Fund's Board of Trustees. An investment company may pay reasonable negotiated fees in connection with loaned securities so long as such fees are set forth in a written contract and approved by the investment company's Board of Trustees. The Portfolio will continue to retain any voting rights with respect to the loaned securities. If a material event occurs affecting an investment on loan, the loan must be called and the securities voted. INVESTMENT COMPANIES As permitted by the 1940 Act, the Portfolio reserves the right to invest up to 10% of its total assets, calculated at the time of investment, in the secu- rities of other open-end or closed-end investment companies. No more than 5% of the investing Portfolio's total assets may be invested in the securities of any one investment company nor may it acquire more than 3% of the voting secu- rities of any other investment company. The Portfolio will indirectly bear its proportionate share of any management fees paid by an investment company in which it invests in addition to the advisory fee paid by the Portfolio. The Fund has received permission from the SEC for each of its Portfolios to invest for cash management purposes the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio provided that the investment is consistent with the Portfolio's investment policies and restrictions. Based upon the Portfolio's assets invested in the DSI Money Market Portfolio, the investing Portfolio's adviser will waive its investment advisory fee and any other fees earned as a result of the Portfolio's investment in the DSI Money Market Portfolio. The investing Portfolio will bear expenses of the DSI Money Market Portfolio on the same basis as all of its other shareholders. The Portfolio has adopted certain investment restrictions, which are de- scribed fully in the SAI. Like the Portfolio's investment objective, most of these restrictions are fundamental and may be changed only by a majority vote of the Portfolio's outstanding shares. 15 PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), without a sales commission at the net asset value per share next determined after an order is received by the Fund and payment is received by the Fund or its designated Service Agent. (See "VALUATION OF SHARES.") The minimum initial investment required is $2,500. The minimum initial investment for IRA accounts is $1,000. Certain exceptions may be permitted by the offi- cers of the Fund. The Portfolio issues two classes of shares: Institutional Class and Service Class. The two classes of shares each represent interests in the same portfo- lio of investments, have the same rights and are identical in all respects, except that the Service Class Shares offered by this Prospectus bear share- holder servicing expenses and distribution plan expenses, and have exclusive voting rights with respect to the Rule 12b-1 Distribution Plan pursuant to which the distribution fee may be paid. The two classes have different ex- change privileges. (See "SHAREHOLDER SERVICES--EXCHANGE PRIVILEGE.") The net income attributable to Service Class Shares and the dividends payable on Serv- ice Class Shares will be reduced by the amount of the shareholder servicing and distribution fees; accordingly, the net asset value of the Service Class Shares will be reduced by such amounts. Some Service Agents may also impose additional or different conditions or other account fees on the purchase and redemption of Portfolio shares, which are not subject to the Rule 12b-1 Service and Distribution Plans. These may include transaction fees and/or service fees paid by the Fund from the Fund assets attributable to the Service Agent and, would not be imposed if shares of the Portfolio were purchased directly from the Fund or the Distributor. Service Agents may provide shareholder services to their customers that are not available to a shareholder dealing directly with the Fund. Each Service Agent is responsible for transmitting to its customers a schedule of any such fees and information regarding any additional or different conditions regard- ing purchases and redemptions. Shareholders who are customers of Service Agents should consult their Service Agent for information regarding these fees and conditions. A salesperson and any other person entitled to receive compen- sation for selling or servicing Portfolio shares may receive different compen- sation with respect to one particular class of shares over another in the Fund. Service Agents or if applicable, their designees, that have entered into agreements with the Fund or its agent may enter confirmed purchase orders on behalf of clients and customers, with payment to follow no later than the close of regular trading on the New York Stock Exchange ("Exchange") on the following business day. If payment is not received by the Fund's Sub-Transfer Agent, Chase Global Funds Services Company ("CGFSC"), by such time, the Serv- ice Agent could be 16 held liable for resulting fees or losses. A Portfolio may be deemed to have received a purchase or redemption order when a Service Agent, or, if applica- ble, its authorized designee, accepts the order. Orders received by the Fund in proper form will be priced at the Portfolio's net asset value next computed after they are accepted by a Service Agent or its authorized designee. Service Agents are responsible to their customers and the Fund for timely transmission of all subscription and redemption requests, investment information, documen- tation and money. INITIAL INVESTMENTS BY MAIL . Complete and sign an Application and mail it together with a check made payable to "UAM Funds" to: UAM Funds Trust UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 Payment for purchases of shares received by mail will be credited to an ac- count at the next share price calculated for the Portfolio after receipt. Pay- ment does not need to be converted into Federal Funds (monies credited to the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it for investment. The Fund will not accept third-party checks to purchase shares of a Portfolio. If you purchase shares by check, please be sure that your check is made payable to "UAM Funds." BY WIRE . Telephone the UAM Funds Service Center and provide the account name, ad- dress, telephone number, social security or taxpayer identification num- ber, Portfolio selected, amount being wired and the name of the bank wiring the funds. The call must be received prior to the close of regu- lar trading on the Exchange (generally 4:00 p.m. Eastern Time) to re- ceive that day's price. An account number and a wire control number will then be provided to you in addition to wiring instructions. Next, 17 . Instruct your bank to wire the specified amount to the Fund's Custodian: The Chase Manhattan Bank ABA #021000021 UAM Funds DDA Acct. #9102772952 Ref: Portfolio Name _______ Your Account Number _______ Your Account Name _______ Wire Control Number _______ (assigned by UAM Funds Service Center) . Forward a completed Application to the Fund at the address shown on the form. Federal Funds purchases will be accepted only on a day on which both the Exchange and the Custodian Bank are open for business. . To be sure that a bank wire order is received on the same day it is sent, an investors bank should wire funds as early in the day as possi- ble. The bank sending funds may charge for this service. The Fund's agent reserves the right to charge investors for receipt of wired funds, but no charge is currently imposed for this service. It is necessary to obtain a new wire control number every time money is wired into an ac- count in a Portfolio. Wire control numbers are effective for one trans- action only and cannot be used more than once. Wired money that is not properly identified with a currently effective wire control number will be returned to the bank from which it was wired and will not be credited to the shareholder's account. ADDITIONAL INVESTMENTS Additional investments can be made at any time. The minimum additional in- vestment is $100. Shares can be purchased at net asset value by mailing a check to the UAM Funds Service Center (payable to "UAM Funds") or by wiring money to the Custodian Bank as outlined above. When making additional invest- ments, be sure that the account number, account name and the Portfolio to be purchased are identified on the check or wire. Prior to wiring additional in- vestments, notify the UAM Funds Service Center by calling the number on the cover of this Prospectus. Mail orders should include, when possible, the "In- vest by Mail" stub which accompanies any Fund confirmation statement. PURCHASE BY ACH If you have made this election, shares of the Portfolio may be purchased via Automated Clearing House ("ACH"). Investors purchasing via ACH should complete the bank information section on the Account Application and attach a voided check or deposit slip to the Account Application. This option must be estab- lished on your account at least 15 days prior to your initiating an ACH trans- action (see "SHAREHOLDER SERVICES--AUTOMATIC INVESTMENT PLAN"). 18 OTHER PURCHASE INFORMATION Investments received by the close of regular trading on the Exchange (gener- ally 4:00 p.m. Eastern Time) will be invested at the share price calculated after the Exchange closes on that day. Investments received after the close of the Exchange will be executed at the price computed on the next day the Ex- change is open. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or to reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. The Portfolio is intended to be a long-term investment vehicle and is not designed to provide investors with a means of speculation on short-term market movements. A pattern of frequent purchases can be disruptive to effi- cient portfolio management and, consequently, can be detrimental to a Portfo- lio's performance and its shareholders. Accordingly, if the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any purchase request with respect to such investor's account. Such investor also may be barred from pur- chasing other portfolios of the UAM Funds. Purchases of the Portfolio's shares will be made in full and fractional shares of the Portfolio calculated to three decimal places. Certificates for fractional shares will not be issued. Certificates for whole shares will not be issued except at the written request of the shareholder. IN-KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in ex- change for securities which are eligible for acquisition by the Portfolio, as described in this Prospectus. Securities to be exchanged which are accepted by the Fund will be valued as described under "VALUATION OF SHARES" at the next determination of net asset value after acceptance. Shares issued by the Port- folio in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the investor upon receipt from the issuer. Securities acquired through an in-kind purchase will be acquired for invest- ment and not for immediate resale. The Fund will not accept securities in exchange for shares of the Portfolio unless: . at the time of exchange, such securities are eligible to be in- cluded in the Portfolio (current market quotations must be readily available for such securities); . the investor represents and agrees that all securities offered to be exchanged are liquid securities and not subject to any restric- tions upon 19 their sale by the Portfolio under the Securities Act of 1933, or otherwise; and . the value of any such securities (except U.S. Government securi- ties) being exchanged together with other securities of the same issuer owned by the Portfolio will not exceed 5% of the net assets of the Portfolio immediately after the transaction. Investors who are subject to federal taxation upon exchange may realize a gain or loss for federal income tax purposes depending upon the cost of secu- rities or local currency exchanged. Investors interested in such exchanges should contact the Adviser. REDEMPTION OF SHARES Shares of the Portfolio may be redeemed by mail or telephone at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request. No charge is made for redemptions. Any re- demption may be more or less than the purchase price of the shares depending on the market value of investment securities held by the Portfolio. BY MAIL Address requests for redemption to the UAM Funds Service Center. Requests to redeem shares must include: . share certificates, if issued; . a letter of instruction or an assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are regis- tered; . any required signature guarantees (see "SIGNATURE GUARANTEES"); and . any other necessary legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pen- sion and profit sharing plans and other organizations. BY TELEPHONE A redemption request by telephone requires the following: . establish the telephone redemption privilege (and if desired, the wire redemption privilege) by completing appropriate sections of the Application; and . call the Fund and instruct that the redemption proceeds be mailed to you or wired to your bank. 20 The following tasks cannot be accomplished by telephone: . changing the name of the commercial bank or the account designated to receive redemption proceeds (this can be accomplished only by a written request signed by each shareholder, with each signature guaranteed); and . redemption of certificated shares by telephone. The Fund and its Sub-Transfer Agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and they may be liable for any losses if they fail to do so. These procedures include re- quiring the investor to provide certain personal identification at the time an account is opened, as well as prior to effecting each transaction requested by telephone. All telephone transaction requests will be recorded and investors may be required to provide additional telecopied written instructions of such transaction requests. The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent do not employ the procedures described above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili- ty, cost or expense for following instructions received by telephone that it reasonably believes to be genuine. SIGNATURE GUARANTEES Signature guarantees are required for the following redemptions: . redemptions where the proceeds are to be sent to someone other than the registered shareowner(s); . redemptions where the proceeds are to be sent to someplace other than the registered address; or . share transfer requests. Signature guarantees will be accepted from any eligible guarantor institu- tion which participates in a signature guarantee program. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securi- ties exchanges, registered securities associations, clearing agencies and sav- ings associations. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. OTHER REDEMPTION INFORMATION The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the UAM Funds Service Center of a redemption request in proper form. Although the Fund will redeem shares purchased by check before the check clears, payment of the redemption proceeds may be delayed for a pe- riod of 21 up to fifteen days after their purchase, pending determination that the check has cleared. Investors should consider purchasing shares using a certified or bank check or money order if they anticipate an immediate need for redemption proceeds. The Fund may suspend the right of redemption or postpone the date at times when both the Exchange and Custodian Bank are closed, or under any emer- gency circumstances determined by the SEC. If the Fund's Board of Trustees determines that it would be detrimental to the best interests of remaining shareholders of the Fund to make payment wholly or partly in cash, the Fund may pay redemption proceeds in whole or in part by a distribution in-kind of liquid securities held by a Portfolio in lieu of cash in conformity with applicable rules of the SEC. Investors may in- cur brokerage charges on the sale of portfolio securities received in payment of redemptions. The Portfolio reserves the right to liquidate any account that is below fifty percent of the required minimum initial investment amount for a Portfo- lio as set forth in the Prospectus, where the reduction in value has occurred due to a redemption or exchange out of the account. If at any time your total investment does not have a value of at least fifty percent of the required minimum initial investment amount, you may be notified that the value of your account is below the Portfolio's minimum account balance requirement. You would then be allowed 60 days to make an additional investment before the ac- count is liquidated. Retirement accounts and certain other accounts will not be subject to automatic liquidation. Reductions in value that result solely from market activity will not trigger an involuntary redemption. SERVICE AND DISTRIBUTION PLANS Under the Service Plan for Service Class Shares, the Fund may enter into service agreements with Service Agents (broker-dealers or other financial in- stitutions) who receive fees with respect to the Fund's Service Class Shares owned by shareholders for whom the Service Agent is the dealer or holder of record, or for whom the Service Agent performs personal services and/or share- holder account maintenance. These fees are paid out of the assets allocable to Service Class Shares to the Distributor, to the Service Agent directly or through the Distributor. The Fund reimburses the Distributor or the Service Agent for payments made at an annual rate of up to 0.25 of 1% of the average daily value of Service Class Shares. Each item for which a payment may be made under the Service Plan constitutes personal service and/or shareholder account maintenance and may constitute an expense of distributing Fund shares as the SEC construes such term under Rule 12b-1. The fees payable for servicing re- flect actual expenses incurred up to the limits described herein. Banks are engaged to act as Service Agents only to perform administrative and shareholder servicing functions, including transaction-related agency services 22 for their customers. If a bank is prohibited from acting as a service agent, alternative means for continuing the servicing of its shareholders would be sought and the shareholder clients of the bank would remain Fund shareholders. The Distribution Plan and Service Plan (the "Plans") provide generally that a Portfolio may incur distribution and service costs under the Plans which may not exceed in the aggregate 0.75% per annum of that Portfolio's net assets. The Board has currently limited aggregate payments under the Plans to 0.50% per annum of a Portfolio's net assets. Upon implementation, the Distribution Plan would permit payments to the Distributor, broker-dealers, other financial institutions, sales representatives or other third parties who render promo- tional and distribution services, for items such as sales compensation and marketing and overhead expenses. The Plans were adopted pursuant to Rule 12b-1 under the 1940 Act. Although the Plans may be amended by the Board of Trustees, any changes in the Plans which would materially increase the amounts authorized to be paid under the Plans must be approved by shareholders of the Class involved. The Plans may be terminated by the Board of Trustees or Service Class shareholders. The amounts and purposes of expenditures under the Plans are reported to the Board of Trustees quarterly. The amounts allowable under the Plans for the Service Class of Shares of the Portfolios are limited by the terms of such Plan and under certain rules of the National Association of Securities Dealers, Inc. In addition to payments by the Fund under the Plans, the Distributor, United Asset Management Corporation, the parent company of UAMFSI, and of the Adviser or any of their affiliates, may, at its own expense, compensate a Service Agent or other person for marketing, shareholder servicing, recordkeeping and/or other services performed with respect to the Fund, the Portfolio or any Class of Shares of the Portfolio. The person making such payments may do so out of its revenues, its profits or any other source available to it. Such service arrangements, when in effect, are made generally available to all qualified service providers. The Adviser may compensate its affiliated compa- nies for referring investors to the Portfolio. The Distributor, the Adviser and certain of their other affiliates also par- ticipate, at the date of this Prospectus, in an arrangement with Smith Barney Inc. under which Smith Barney provides certain defined contribution plan mar- keting and shareholder services and receives from such entities an amount equal to up to 33.3% of the portion of the investment advisory fees attribut- able to the invested assets of Smith Barney's eligible customer accounts with- out regard to any expense limitation in addition to amounts payable to all selling dealers. The Fund also compensates Smith Barney for services it pro- vides to certain defined contribution plan shareholders that are not otherwise provided by UAMFSI. 23 SHAREHOLDER SERVICES EXCHANGE PRIVILEGE Service Class Shares of the Portfolio may be exchanged for Service Class Shares of any other UAM Funds Portfolio. (See the list of Portfolios of the UAM Funds at the end of this Prospectus.) Exchange requests should be made by contacting the UAM Funds Service Center. Any exchange will be based on the net asset value of the shares involved. There is no sales commission or charge of any kind for an exchange. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objectives of the Portfolio to be purchased. Call the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in which you are interested. Exchanges can only be made with Portfolios that are qualified for sale in a shareholder's state of residence. Exchange requests may be made either by mail or telephone. Telephone ex- changes will be accepted only if the certificates for the shares to be ex- changed have not been issued to the shareholder and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading on the Exchange (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests re- ceived after the close of regular trading on the Exchange will be processed on the next business day. The Fund may modify or terminate the exchange program at any time upon 60 days' written notice to shareholders, and may reject any exchange request. If the Fund's management determines that an investor is en- gaged in excessive trading, the Fund, with or without prior notice may reject in whole or part any exchange request, with respect to such investor's ac- count. Such investors also may be barred from exchanging into other portfolios of the UAM Funds. For additional information regarding responsibility for the authenticity of telephoned instructions, see "REDEMPTION OF SHARES--BY TELE- PHONE". An exchange into another UAM Funds Portfolio is a sale of shares and may result in a gain or loss for income tax purposes. AUTOMATIC INVESTMENT PLAN An Automatic Investment Plan permits shareholders of a Portfolio with a min- imum value of $2,500 or more to purchase shares automatically (minimum of $100 per transaction) at regular intervals selected by the shareholder. Provided the shareholder's bank or other financial institution allows automatic with- drawals, shares are purchased by transferring funds via the Automated Clearing House ("ACH"). Investment made through ACH will be automatically transferred from a shareholder's checking, bank money market or NOW account designated by the shareholder. Such withdrawals are made electronically, if the sharehold- er's bank or financial institution so permits, or by pre-authorized checks or drafts drawn on 24 the shareholder's bank or other account. The bank or financial institution must be a member of ACH. At the shareholder's option, the account designated will be debited in the specified amount, and shares will be purchased monthly or quarterly. To establish an Automatic Investment Plan, a shareholder must complete the Optional Services Form available from the UAM Funds Service Center at 1-800- 638-7983 and mail it to Chase Global Funds Service Company. A shareholder may cancel his/her participation or change the amount of purchase at any time by mailing written notification to Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. Notification generally will be effective three business days following receipt. The Fund may modify or terminate this privi- lege at any time, or may charge a service fee, although no such fee currently is contemplated. SYSTEMATIC WITHDRAWAL PLAN Any shareholder whose account balance totals at least $10,000 may establish a Systematic Withdrawal Plan under which an amount pre-determined by the shareholder (but at least $100) is automatically redeemed from the sharehold- er's account either monthly or quarterly. A shareholder may participate in the Systematic Withdrawal Plan by using ACH. Redemption made through ACH will be automatically transferred to the shareholder's bank or other similar financial institution account or a properly designated third party. The bank or finan- cial institution must be a member of ACH. Redemptions ordinarily are made on the third business day of the month and payments ordinarily will be transmit- ted within five business days after the redemption date. Because the value of the Portfolio's shares fluctuate, the number of shares redeemed to finance systematic withdrawal payments or a given amount will vary from payment to payment. If a shareholder owns shares in more than one Portfolio, the share- holder must designate the Portfolio from which the redemptions under a System- atic Withdrawal Plan should be made. An additional sheet may be attached to the Optional Services Form if a shareholder selects more than one Portfolio. A Systematic Withdrawal Plan may be terminated or suspended at any time by the Fund. A shareholder may elect at any time, in writing, to terminate participa- tion in the Systematic Withdrawal Plan. Such written election must be sent to and received by the Fund before a termination becomes effective. There is cur- rently no charge to the shareholder for a Systematic Withdrawal Plan. VALUATION OF SHARES The net asset value of each class of a Portfolio is determined by dividing the value of the Portfolio's assets attributable to the class, less any lia- bilities attributable to the class, by the number of shares outstanding at- tributable to the class. The net asset value per share of the Portfolio is de- termined as of the close of the Exchange on each day that the Exchange is open for business. 25 Equity securities listed on a securities exchange for which market quota- tions are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed secu- rities not traded on the valuation date are valued neither exceeding the cur- rent ask prices nor less than the current bid prices. The prices for securi- ties denominated in a foreign currency are converted to U.S. dollars based upon the bid price of the foreign currency against U.S. dollars quoted by any major bank or by a broker. Bonds and other fixed-income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the-counter market. Bonds and other fixed-income securities may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost. 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 of Trustees. PERFORMANCE CALCULATIONS The Portfolio measures performance by calculating yield and total return. Both yield and total return figures are based on historical earnings and are not intended to indicate future performance. Yield and total return are calcu- lated separately for each class of the Portfolio. Yield refers to the income generated by an investment in the Portfolio over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all funds. As this differs from other accounting methods, the quoted yield may not equal the in- come actually paid to shareholders. Total return is the change in value of an investment in the Portfolio over a given period, assuming reinvestment of any dividends and capital gains. A cu- mulative or aggregate total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of re- turn that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Performance will be calculated separately for Institutional Class and Serv- ice Class Shares. Dividends paid by the Portfolio with respect to Institu- tional Class and Service Class Shares, to the extent any dividends are paid, will be calculated in the same manner at the same time on the same day and will be in the same amount, 26 except that service and distribution fees and any incremental transfer agency costs relating to Service Class Shares will be borne exclusively by that class. The Portfolio's performance may be compared to data prepared by independent services which monitor the performance of investment companies, data reported in financial and industry publications, and various indices as further de- scribed in the Portfolio's SAI. This information may also be included in sales literature and advertising. The Portfolio's Annual Report to Shareholders for the most recent fiscal year end contains additional performance information that includes comparisons with appropriate indices. The Annual Report is available without charge. To receive an Annual Report, contact the UAM Funds Service Center at the address or telephone number on the cover of this Prospectus. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income (for tax purposes) to shareholders in dividends in June and Decem- ber. If any net capital gains are realized, the Portfolio will normally dis- tribute them in June, with a supplemental distribution in December of any un- distributed capital gains earned during the 12 month period ended each Octo- ber. All dividends and capital gains distributions will be automatically rein- vested in additional shares of the Portfolio unless the Fund is notified in writing that the shareholder elects to receive the distributions in cash. FEDERAL TAXES The Portfolio intends to qualify as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, for federal in- come tax purposes and to meet all other requirements that are necessary for it (but not its shareholders) to be exempt from federal taxes on income and gains paid to shareholders in the form of dividends and distributions. To do this, the Portfolio must, among other things, distribute substantially all of its ordinary income and net capital gains on an annual basis and maintain a port- folio of investments which satisfies certain diversification criteria. Dividends paid by the Portfolio from net investment income, whether in cash or reinvested in shares, are taxable to shareholders as ordinary income. Short-term capital gains will be taxed as ordinary income. Long-term capital gains distributions are taxed as long-term capital gains. Shareholders will be notified annually of the tax status of dividends and capital gain distribu- tions received. 27 Dividends declared in October, November and December to shareholders of rec- ord in such a month and paid in January of the following year will be treated as if they had been paid by the Fund and received by the shareholders on De- cember 31. The Fund is required by federal law to withhold 31% of reportable payments paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, you must certify that the Social Security or Taxpayer Identification Number you have provided is correct and that either you are not currently subject to backup withholding or you are exempt from backup withholding. This certification must be made on the Application or on a separate form supplied by the Fund. Dividends and interest received by the Portfolio may give rise to withhold- ing and other taxes imposed by foreign countries. These taxes reduce the Port- folio's dividends but are included in the taxable income reported on your tax statement if the Portfolio qualifies for this tax treatment and elects to pass it through to you. Consult a tax adviser for more information regarding deduc- tions and credits for foreign taxes. INVESTMENT ADVISER First Pacific Advisors, Inc., located at 11400 West Olympic Blvd., Suite 1200, Los Angeles, CA 90064, acts as the Portfolio's Adviser; Mr. Steven Romick is primarily responsible for management of the Portfolio. Mr. Romick has 13 years of experience in the investment management business. He is cur- rently a Senior Vice President of the Adviser. From 1990-1996, Mr. Romick was Chairman of Crescent Management, an investment advisory firm he founded. Cres- cent Management served as the Portfolio's adviser until the firm was merged with the current Adviser. Under an Investment Advisory Agreement dated as of September 30, 1996, the Adviser provides the Portfolio with advice on buying and selling securities, manages the investments of the Portfolio, furnishes the Portfolio with office space and certain administrative services, and provides most of the personnel needed by the Portfolio. As compensation, the Portfolio pays the Adviser a monthly management fee (accrued daily) based upon the average daily net assets of the Portfolio at the rate of 1.00% annually. The Adviser, together with its predecessors, has been in the investment ad- visory business since 1954. Presently, the Adviser manages assets of approxi- mately $4.5 billion for seven investment companies, including one closed-end investment company, and more than 25 institutional accounts. The Adviser is an indirect wholly-owned subsidiary of UAM, an Exchange-listed holding company principally en- 28 gaged, through affiliated firms, in providing institutional investment manage- ment and acquiring institutional investment management firms. The Portfolio is responsible for its own operating expenses. The Adviser has voluntarily agreed to waive all or a portion of its advisory fees and to as- sume operating expenses to keep the Portfolio's Service Class Shares' total annual operating expenses (excluding interest, taxes and extraordinary ex- penses), after the effect of expense offsets, from exceeding 2.10% of average daily net assets until further notice. To the extent the Adviser performs a service for which the Portfolio is obligated to pay, the Portfolio shall reim- burse the Adviser for its costs incurred in rendering such service. The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Distributor, UAM, the Adviser, or any of its affiliates, may, at their own expense, compensate a Service Agent or other person for mar- keting, shareholder servicing, recordkeeping and/or other services performed with respect to the Fund, the Portfolio or any Class of Shares of the Portfo- lio. The person making such payments may do so out of its revenues, its prof- its or any other source available to it. Such service arrangements, when in effect, are made generally available to all qualified service providers. The Distributor, the Adviser and certain of their other affiliates also par- ticipate, at the date of this Prospectus, in an arrangement with Smith Barney Inc. under which Smith Barney provides certain defined contribution plan mar- keting and other shareholder services and receives from such entities .15 of 1% of the daily net asset value of Institutional Class Shares held by Smith Barney's eligible customer accounts in addition to amounts payable to all selling dealers. The Fund also compensates Smith Barney for services its pro- vides to certain defined contribution plan shareholders that are not otherwise provided by the Administrator. ADMINISTRATIVE SERVICES UAMFSI, a wholly-owned subsidiary of UAM, is responsible for performing and overseeing administrative, fund accounting, dividend disbursing and transfer agent services provided to the Fund and its Portfolios. UAMFSI's principal of- fice is located at 211 Congress Street, Boston, MA 02110. UAMFSI has subcon- tracted some of these services to CGFSC, an affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is lo- cated at 73 Tremont Street, Boston, MA 02108. 29 Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fees are calculated from the aggregate net assets of the Portfolio:
RATE ---- FPA Crescent Portfolio............................................... 0.06%
CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined UAM Fund assets; 0.11 of 1% of the next $800 million of combined UAM Fund assets; 0.07 of 1% of combined UAM Fund assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined UAM Fund assets in excess of $3 billion. Fees are allocated among each of the Portfolios on the basis of their rela- tive assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum an- nual fee increases by $20,000. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, with its principal office located at 211 Congress Street, Boston, MA 02110, distributes shares of the Fund. Under the Distribution Agreement (the "Agreement"), the Distributor, as agent of the Fund, agrees to use its best efforts as sole dis- tributor of Fund shares. The Distributor does not receive any fee or other compensation under the Agreement with respect to the Shares offered in this Prospectus (except as described under "SERVICE AND DISTRIBUTION PLANS"). The Agreement continues in effect as long as it is approved at least annually by the Fund's Board of Trustees. Those approving the Agreement must include a ma- jority of Trustees who are neither parties to the Agreement nor interested persons of any such party. The Agreement provides that the Fund will bear costs of registration of its shares with the SEC and various states and the printing of its prospectuses, its SAIs and its reports to shareholders. PORTFOLIO TRANSACTIONS The Advisory Agreement authorizes the Adviser to select the brokers or deal- ers that will execute the purchase and sale of investment securities for the Portfolio. The Agreement directs the Adviser to use its best efforts to obtain the best available price and most favorable execution for all transactions of the Portfolio. If consistent with the interests of the Portfolio, the Adviser may select brokers on the basis of 30 the research, statistical and pricing services they provide to the Portfolio in addition to required services. Such brokers may be paid a higher commission than that which another qualified broker would have charged for effecting the same transaction, provided that such commissions are paid in compliance with the Securities Exchange Act of 1934, as amended, and that the Adviser deter- mines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Portfolio and the Adviser's other clients. Although not a typical practice, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. If a purchase or sale of securities consistent with the investment policies of the Portfolio and one or more of these other clients served by the Adviser is considered at or about the same, transactions in such securities will be allocated among the Portfolio and other clients in a manner deemed fair and reasonable by the Adviser. Although there is no specified formula for allocat- ing such transactions, such allocations are subject to periodic review by the Fund's Trustees. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized as a Delaware business trust on May 18, 1994 under the name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial inter- est, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without fur- ther action by shareholders. At its discretion, the Board of Trustees may create additional Portfolios and classes of shares. The shares of each Portfolio are fully paid and nonas- sessable, and have no preference as to conversion, exchange, dividends, re- tirement or other features and no pre-emptive rights. They have noncumulative voting rights, which means that holders of more than 50% of shares voting for the election of Trustees can elect 100% of the Trustees, if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. As of June 15, 1998, Charles Schwab & Co. Inc., Reinvest Account, held of record 48.8% of the outstanding shares of the Portfolio's Institutional Class and Wilmington Trust Co., Trustee, FBO FIGGIE Institutional Retirement & Profit Sharing Trust, held of record 41.5% of the outstanding shares of the Portfolio's Service Class for which beneficial ownership is disclaimed or pre- sumed disclaimed. The persons or organizations owning 25% or more of the out- standing shares of a Portfolio may be presumed to "control" (as that term is defined in the 31 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any mat- ter requiring the approval of shareholders of such Portfolio. Both Institutional Class and Service Class Shares represent an interest in the same assets of the Portfolio. Service Class Shares bear certain expenses related to shareholder servicing and the distribution of such shares and have exclusive voting rights for matters relating to such distribution expendi- tures. The Board of Trustees of the Fund has authorized a third class of shares, Advisor Shares, which is not currently being offered by this Portfo- lio. For information about the Institutional Class Shares of the Portfolio, contact the UAM Funds Service Center. Annual meetings will not be held except as required by the 1940 Act and other applicable laws. The Fund has undertaken that its Trustees will call a meeting of shareholders if such a meeting is requested in writing by the hold- ers of not less than 10% of the outstanding shares of the Fund. The Fund will assist shareholder communications in such matters. CUSTODIAN The Chase Manhattan Bank serves as custodian of the Fund's assets. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the independent accountant for the Fund. REPORTS Investors will receive unaudited semi-annual financial statements and annual financial statements audited by PricewaterhouseCoopers LLP. SHAREHOLDER INQUIRIES Shareholder inquiries may be made by contacting the UAM Funds Service Center at the telephone number listed on the cover of this Prospectus. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE. 32 UAM FUNDS -- INSTITUTIONAL SERVICE CLASS SHARES BHM&S Total Return Bond Portfolio DSI Disciplined Value Portfolio FMA Small Company Portfolio FPA Crescent Portfolio MJI International Equity Portfolio NWQ Balanced Portfolio NWQ Small Cap Value Portfolio NWQ Special Equity Portfolio NWQ Value Equity Portfolio Sirach Bond Portfolio Sirach Equity Portfolio Sirach Growth Portfolio Sirach Special Equity Portfolio Sirach Strategic Balanced Portfolio Sterling Partners' Balanced Portfolio Sterling Partners' Equity Portfolio Sterling Partners' Small Cap Value Portfolio TJ Core Equity Portfolio 33 UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 1-800-638-7983 Investment Adviser First Pacific Advisors, Inc. 11400 West Olympic Boulevard Suite 1200 Los Angeles, CA 90064 Distributor UAM Fund Distributors, Inc. 211 Congress Street Boston, MA 02110 PROSPECTUS July 17, 1998 UAM Funds Prospectus July 17, 1998 Hanson Equity Portfolio Institutional Class Shares [LOGO OF UAM FUNDS APPEARS HERE] TABLE OF CONTENTS
PAGE ---- Fund Expenses.............................................................. 1 Prospectus Summary......................................................... 2 Risk Factors............................................................... 3 Financial Highlights....................................................... 3 Investment Objective....................................................... 4 Investment Policies........................................................ 4 Other Investment Policies.................................................. 5 Investment Limitations..................................................... 9 Purchase of Shares......................................................... 9 Redemption of Shares....................................................... 13 Shareholder Services....................................................... 15 Valuation of Shares........................................................ 17 Performance Calculations................................................... 18 Dividends, Capital Gains Distributions and Taxes........................... 18 Investment Adviser......................................................... 19 Adviser's Historical Performance........................................... 21 Administrative Services.................................................... 24 Distributor................................................................ 24 Portfolio Transactions..................................................... 25 General Information........................................................ 25 UAM Funds -- Institutional Class Shares.................................... 27
UAM FUNDS HANSON EQUITY PORTFOLIO INSTITUTIONAL CLASS SHARES - -------------------------------------------------------------------------------- PROSPECTUS -- JULY 17, 1998 Hanson Equity Portfolio is one of a series of investment portfolios available through UAM Funds Trust ("UAM Funds"), an open-end investment company known as a "mutual fund." Each of the Portfolios that make up the Fund have different investment objectives and policies. Hanson Equity Portfolio currently offers only one class of shares. The securities offered in this Prospectus are Insti- tutional Class Shares of one diversified, no-load Portfolio of the Fund managed by Hanson Investment Management Company. HANSON EQUITY PORTFOLIO. The Hanson Equity Portfolio (the "Portfolio") seeks to achieve maximum long-term total return, consistent with reasonable risk to principal, by investing in a diversified portfolio of equity securities, pri- marily the common stock of large, U.S.-based companies with outstanding finan- cial characteristics and strong growth prospects that can be purchased at rea- sonable valuations. There can be no assurance that the Portfolio will achieve its stated objec- tive. Keep this Prospectus for future reference. It contains information that you should know before you invest. A Statement of Additional Information ("SAI") containing additional information about the Fund has been filed with the Secu- rities and Exchange Commission ("SEC"). The SAI is dated July 17, 1998 and has been incorporated by reference into this Prospectus. For a free copy of the SAI contact the UAM Funds Service Center at 1-800-638-7983. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FUND EXPENSES The following table illustrates expenses and fees that a shareholder of the Portfolio's Institutional Class Shares will incur. The Fund does not charge transaction fees. However, transaction fees may be charged if a broker-dealer or other financial intermediary deals with the Fund on your behalf. (See "PUR- CHASE OF SHARES.") SHAREHOLDER TRANSACTION EXPENSES Sales Load Imposed on Purchases......................................... NONE Sales Load Imposed on Reinvested Dividends.............................. NONE Deferred Sales Load..................................................... NONE Redemption Fees......................................................... NONE Exchange Fee............................................................ NONE
ESTIMATED ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) Investment Advisory Fees.............................................. 0.70% 12b-1 Fees............................................................ NONE Other Expenses........................................................ 0.69% ---- Total Operating Expenses.............................................. 1.39%* ====
The table above shows various fees and expenses an investor would bear di- rectly or indirectly. The expenses and fees set forth above for the Portfolio are estimates. For purposes of calculating the fees set forth above, the table assumes that the Portfolio's average daily net assets will be $21 million. *The figures above include the effect of expense offsets. If expense offsets were excluded, Total Operating Expenses of the Portfolio would not be affected. EXAMPLE The following example illustrates expenses a shareholder would pay on a $1,000 investment over various time periods assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period. The Portfolio charges no redemption fees of any kind.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- Hanson Equity Portfolio...................... $14 $44 $76 $167
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX- PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN ABOVE. 1 PROSPECTUS SUMMARY INVESTMENT ADVISER Hanson Investment Management Company (the "Adviser") is a registered invest- ment adviser. Founded in 1973, the firm currently has over $1.1 billion in as- sets under management. The firm is a wholly-owned subsidiary of United Asset Management Corporation. (See "INVESTMENT ADVISER.") PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor") to investors at net asset value without a sales commission. Share purchases may be made by sending investments directly to the Fund. The minimum initial investment is $2,500. The minimum for subsequent investments is $100. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. Certain exceptions to the initial or minimum investment amounts may be permitted by the officers of the Fund. (See "PURCHASE OF SHARES.") DIVIDENDS AND DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income in quarterly dividends. The Portfolio will distribute any realized net capital gains annually. Distributions will be reinvested in Portfolio shares automatically unless an investor elects to receive cash distributions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") REDEMPTIONS AND EXCHANGES Shares of the Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemp- tion request. The redemption price may be more or less than the purchase price. Shares of the Portfolio may be exchanged for shares of the same class of any other portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" and "EX- CHANGE PRIVILEGE.") ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As- set Management Corporation, is responsible for performing and overseeing ad- ministration, fund accounting, dividend disbursing and transfer agency serv- ices provided to the Fund and its Portfolios by third-party service providers. (See "ADMINISTRATIVE SERVICES.") 2 RISK FACTORS The value of the Portfolio's shares will fluctuate in response to changes in market and economic conditions as well as the financial conditions and pros- pects of the issuers in which the Portfolio invests. Prospective investors should consider the following: (1) The Portfolio may invest in repurchase agreements which entail a risk of loss should the seller default on its trans- action; (2) The Portfolio may lend its investment securities which entails a risk of loss should a borrower fail financially; (3) The Portfolio's perfor- mance may depend on the ability of the Adviser who has substantial experience as an investment adviser but limited experience as an adviser to a mutual fund. FINANCIAL HIGHLIGHTS The following table provides selected per share information for a share out- standing throughout the period presented. This table is part of the Portfo- lio's Annual Financial Statements included in the Portfolio's 1998 Annual Re- port to Shareholders. The Report is incorporated by reference into the Portfo- lio's SAI. The Portfolio's Annual Financial Statements have been audited by PricewaterhouseCoopers LLP whose unqualified opinion thereon is also incorpo- rated into the Portfolio's SAI. The following information should be read in conjunction with the Portfolio's 1998 Annual Report to Shareholders. Further information about the Portfolio's performance is contained in its Annual Re- port, which may be obtained without charge by telephoning the number on the Prospectus cover page.
OCTOBER 3, 1997* TO APRIL 30, 1998 ----------------- NET ASSET VALUE, BEGINNING OF PERIOD......................... $ 10.00 ------- INCOME FROM INVESTMENT OPERATIONS Net Investment Loss......................................... (0.02) Net Realized and Unrealized Gain on Investments............. 1.40 ------- Total from Investment Operations........................... 1.38 ------- NET ASSET VALUE, END OF PERIOD............................... $ 11.38 ======= TOTAL RETURN................................................. 13.80 %*** ======= RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (Thousands)....................... $25,690 Ratio of Expenses to Average Net Assets..................... 1.56 %** Ratio of Net Investment Loss to Average Net Assets.......... (0.35)%** Portfolio Turnover Rate..................................... 11 % Average Commission Rate..................................... $0.0598 Ratio of Expenses to Average Net Assets including Expense Offsets................................................... 1.56 %**
- ----------- * Commencement of Operations ** Annualized *** Not Annualized 3 INVESTMENT OBJECTIVE The Portfolio seeks to achieve maximum long-term total return, consistent with reasonable risk to principal, by investing in a diversified portfolio of equity securities, primarily the common stock of large, U.S.-based companies with outstanding financial characteristics and strong growth prospects that can be purchased at reasonable valuations. There can be no assurance that the Portfolio will achieve its stated objective. INVESTMENT POLICIES In seeking its investment objective, the Portfolio will, under normal cir- cumstances, invest at least 80% of its total assets in equity securities, pri- marily the common stock of large capitalization, U.S.-based companies. Large capitalization companies are defined as those companies with market capital- izations greater than $1 billion at the time of purchase. Equity securities include common stock, preferred stock, rights and warrants. The Portfolio may also invest in short-term investments, convertible preferred stock and con- vertible bonds. Under unusual circumstances, when the Adviser believes that market condi- tions warrant a defensive position, up to 100% of the Portfolio's assets may be held in cash and short-term investments. (See "SHORT-TERM INVESTMENTS" and "REPURCHASE AGREEMENTS.") When the Portfolio is in a defensive position, it may not necessarily be pursuing its stated investment objective. The basis of the Adviser's investment philosophy is to "buy the company, not the stock." The Adviser believes that superior long-term results can be achieved by investing in a select number of well-managed companies that have clear business plans, specific financial goals, above-average earnings and dividend growth rates, and whose shares can be purchased at reasonable valua- tions. The Adviser's stock selection process is a bottom-up approach which means that it will construct the Portfolio by focusing on individual stocks rather than industry groups or sectors. (Top-down investors would first decide which industries or sectors they want to emphasize and then would look for stocks that fit those requirements.) In determining a suitable equity invest- ment, the Adviser evaluates a prospective company using the following process: 1.The Adviser asks three questions: .Does the Adviser understand the company's business? .Is the company's management shareholder-conscious? .Is the company's long-term outlook favorable? 2. The Adviser subjects the company to a screen designed to select companies with the following characteristics: .reasonable price-to-earnings ratio 4 .above-average total return potential .leader in its industry .highly profitable .financially strong 3. Finally, the potential investment is put through an intensive review by the Investment Committee before it is added to the Portfolio. The Adviser sells equity investments when: (a) the company fails to meet the Adviser's investment criteria; (b) a more attractive investment is found; or (c) the company's share price rises to a level that cannot be justified. OTHER INVESTMENT POLICIES Under normal circumstances, the Portfolio may invest up to 20% of its as- sets, unless restricted by additional limitations described below or in the Portfolio's SAI, in the following securities or investment techniques: SHORT-TERM INVESTMENTS In order to earn a return on uninvested assets, meet anticipated redemp- tions, or for temporary defensive purposes, the Portfolio may invest a portion of its assets in domestic and foreign money market instruments including cer- tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob- ligations, U.S. Government agency securities, short-term corporate debt secu- rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Ratings Services or Prime-1 or Prime-2 by Moody's Investors Service or if unrated, de- termined by the Adviser to be of comparable quality. Time deposits maturing in more than seven days will not be purchased by the Portfolio, and time deposits maturing from two business days through seven calendar days will not exceed 10% of the total assets of the Portfolio. The Portfolio will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, (ii) in the case of U.S. banks, it is a member of the Fed- eral Deposit Insurance Corporation, and (iii) in the case of foreign branches of U.S. banks, the security is, in the opinion of the Adviser, of an invest- ment quality comparable with other debt securities which may be purchased by the Portfolio. The Fund has received permission from the SEC to deposit the daily uninvested cash balances of the Fund's Portfolios, as well as cash for invest- ment purposes, into one or more joint accounts and to invest the daily balance of the joint accounts in the following short-term investments: fully collater- alized repurchase agreements, interest-bearing or discounted commercial paper including dollar-denominated commercial paper of foreign issuers, and any other short-term mone y market instruments including variable rate demand notes and tax-exempt money 5 instruments. By entering into these investments on a joint basis, the Portfo- lio may earn a higher rate of return on investments relative to what it could earn individually. The Fund has received permission from the SEC for each of its Portfolios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio. (See "INVESTMENT COMPANIES.") REPURCHASE AGREEMENTS The Portfolio may invest in repurchase agreements collateralized by U.S. Government securities, certificates of deposit, and certain bankers' accept- ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repurchase agreement, the Portfolio buys a security and simultaneously commits to sell that security back at an agreed upon price plus an agreed upon market rate of interest. Under a repurchase agreement, the seller is required to maintain the value of securities subject to the agreement at not less than 100% of the repurchase price. The value of the securities purchased will be evaluated daily, and the Adviser will, if necessary, require the seller to maintain additional securities to ensure that the value is in compliance with the previous sentence. The use of repurchase agreements involves certain risks. For example, a default by the seller of the agreement may cause the Portfolio to experience a loss or delay in the liquidation of the collateral securing the repurchase agreement. The Portfolio might also incur disposition costs in liquidating the collateral. While the Fund's management acknowledges these risks, it is expected that they can be controlled through stringent counter-party selection criteria and careful monitoring procedures. The Fund has received permission from the SEC to pool daily uninvested cash balances of the Fund's Portfolios in order to invest in repurchase agreements on a joint basis. By entering into joint repurchase agreements, the Portfolio may incur lower transaction costs and earn higher rates of interest on joint repurchase agreements. The Portfolio's contribution would determine its return from a joint repurchase agreement. (See "SHORT-TERM INVESTMENTS.") LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified institutional investors as a means of earning income. The Portfolio will not loan securities to the extent that greater than one-third of its total assets at fair market value would be committed to loans. During the term of a loan, the Portfolio is subject to a gain or loss depending on any increase or decrease in the market price of the securities loaned. Lending of securities is subject to review by the Fund's Board of Trustees. All relevant facts and circumstances, including the creditworthiness of the broker, dealer or institution, will be considered by the Adviser in making decisions about securities lending. 6 An investment company may pay reasonable negotiated fees in connection with loaned securities so long as such fees are set forth in a written contract and approved by its Board of Trustees. The Portfolios will continue to retain any voting rights with respect to loaned securities. If a material event occurs affecting an investment on loan, the loan must be called and the securities voted. WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES The Portfolio may purchase and sell securities on a "when-issued," "delayed settlement," or "forward delivery" basis. "When-issued" or "forward delivery" 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 and forward delivery transactions may be expected to occur a month or more be- fore delivery is due. Delayed settlement is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by the Portfolio until it re- ceives delivery or payment from the other party to any of the above transac- tions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. The Portfolio will maintain a separate account of cash or liquid securities at least equal to the value of purchase commitments until payment is made. Typically, no income ac- crues on securities purchased on a delayed delivery basis prior to the time delivery is made although the Portfolio may earn income on securities it has deposited in a segregated account. The Portfolio may engage in these types of purchases in order to buy securi- ties that fit with its investment objectives at attractive prices--not to in- crease its investment leverage. PORTFOLIO TURNOVER In addition to Portfolio trading costs, higher rates of portfolio turnover may result in the realization of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for more information on taxation). The Portfolio will not normally engage in short-term trading, but reserves the right to do so. The historical turnover rate for the Portfolio is set forth in the "Financial Highlights" table. INVESTMENT COMPANIES The Portfolio reserves the right to invest up to 10% of its total assets, calculated at the time of investment, in the securities of other open-end or closed-end investment companies. No more than 5% of the investing Portfolio's total assets may be invested in the securities of any one investment company nor may it acquire more than 3% of the voting securities of any other invest- ment company. The Portfolio will indirectly bear its proportionate share of any management fees paid by an investment company in which it invests in addi- tion to the advisory fee paid by the Portfolio. 7 The Fund has received permission from the SEC to allow each of its Portfo- lios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio provided that the in- vestment is consistent with the Portfolio's investment policies and restric- tions. Based upon the Portfolio's assets invested in the DSI Money Market Portfolio, the investing Portfolio's adviser will waive its investment advi- sory fee and any other fees earned as a result of the Portfolio's investment in the DSI Money Market Portfolio. The investing Portfolio will bear expenses of the DSI Money Market Portfolio on the same basis as all of its other share- holders. RESTRICTED SECURITIES The Portfolio may purchase restricted securities that are not registered for sale to the general public but which are eligible for resale to qualified in- stitutional investors under Rule 144A of the Securities Act of 1933. Under the supervision of the Fund's Board of Trustees, the Adviser determines the li- quidity of such investments by considering all relevant factors. Provided that a dealer or institutional trading market in such securities exists, these re- stricted securities are not treated as illiquid securities for purposes of a Portfolio's investment limitations. The Portfolio may also invest up to 15% of its net assets in illiquid securities. Prices realized from sales of these se- curities could be more or less than those originally paid by the Portfolio or less than what may be considered the fair value of such securities. AMERICAN DEPOSITARY RECEIPTS ADRs are depositary receipts typically used by a U.S. bank or trust company which evidence ownership of underlying securities issued by a foreign corpora- tion. Generally, ADRs in registered form are designed for use in the U.S. se- curities market and ADRs in bearer form are designed for use in securities markets outside the United States. ADRs may not necessarily be denominated in the same currency as the underlying securities into which they may be convert- ed. ADRs may be issued pursuant to sponsored or unsponsored programs. In spon- sored 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. Ac- cordingly, there may be less information programs available regarding issuers of securities underlying unsponsored programs and there may not be a correla- tion between such information and the market value of the depositary receipts. ADRs also involve the risks of other investments in foreign securities, as discussed in the Prospectus. For purposes of the Portfolio's investment poli- cies, the Portfolio's investment in depositary receipts will be deemed to be investments in the underlying securities. 8 INVESTMENT LIMITATIONS The Portfolio will not: (a) with respect to 75% of its assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed as to principal and in- terest by the U.S. Government or any of its agencies or instrumentali- ties); (b) with respect to 75% of its assets, purchase more than 10% of any class of the outstanding voting securities of any issuer; (c) invest more than 5% of its assets at the time of purchase in the secu- rities of companies that have (with predecessors) a continuous operat- ing history of less than 3 years; (d) invest more than 25% of its assets in companies within a single indus- try; however, there are no limitations on investments made in instru- ments issued or guaranteed by the U.S. Government and its agencies; (e) make loans except by purchasing debt securities in accordance with its investment objective and policies or entering into repurchase agree- ments or by lending its portfolio securities to banks, brokers, deal- ers and other financial institutions so long as the loans are made in compliance with the 1940 Act, as amended, or the Rules and Regulations or interpretations of the SEC; (f) (i) borrow, except from banks and as a temporary measure for extraor- dinary or emergency purposes and then, in no event, in excess of 33 1/3% of the Portfolio's gross assets valued at the lower of market or cost, and (ii) the Portfolio may not purchase additional securities when borrowings exceed 5% of total assets; or (g) pledge, mortgage or hypothecate any of its assets to an extent greater than 33 1/3% of its total assets at fair market value. The Portfolio's investment objective and investment limitations (a), (b), (d), (e) and (f)(i) listed above are fundamental policies and may be changed only with the approval of the holders of a majority of the outstanding voting securities of the Portfolio. The other investment limitations described here and those not specified as fundamental in the SAI as well as the Portfolio's investment policies are not fundamental and the Fund's Board of Trustees may change them without shareholder approval. PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), without a sales commission at the net asset value per share next determined after an order is received by the Fund and payment is received by the Fund or its designated Service Agent. (See "VALUATION OF SHARES.") The 9 minimum initial investment required is $2,500. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA ac- counts is $250. Certain exceptions may be permitted by the officers of the Fund. Shares of the Portfolio may be purchased by customers of broker-dealers or other financial intermediaries ("Service Agents") which have established a shareholder servicing relationship with the Fund on behalf of their customers. Service Agents may impose additional or different conditions on purchases or redemptions of Portfolio shares and may charge transaction or other account fees. Each Service Agent is responsible for transmitting to its customers a schedule of any such fees and information regarding additional or different purchase or redemption conditions. Shareholders who are customers of Service Agents should consult their Service Agent for information regarding these fees and conditions. Amounts paid to Service Agents may include transaction fees and/or service fees paid by the Fund from the Portfolio's assets attributable to the Service Agent, which would not be imposed if shares of the Portfolio were purchased directly from the Fund or the Distributor. Service Agents may provide shareholder services to their customers that are not available to a shareholder dealing directly with the Fund. A salesperson and any other person entitled to receive compensation for selling or servicing Portfolio shares may receive different compensation with respect to one particular class of shares over another in the Fund. Service Agents or, if applicable, their designees, that have entered into agreements with the Fund or its agent may enter confirmed purchase orders on behalf of clients and customers, with payment to follow no later than a Port- folio's pricing on the following business day. If payment is not received by the fund's Sub-Transfer Agent, Chase Global Funds Services Company ("CGFSC") by such time, the Service Agent could be held liable for resulting fees or losses. A Portfolio may be deemed to have received a purchase or redemption order when a Service Agent, or, if applicable, its authorized designee, ac- cepts the order. Orders received by the Fund in proper form will be priced at the Portfolio's net asset value next computed after they are accepted by Serv- ice Agent or its authorized designee. Service Agents are responsible to their customers and the Fund for timely transmission of all subscription and redemp- tion requests, investment information, documentation and money. INITIAL INVESTMENTS BY MAIL . Complete and sign an Application and mail it together with a check made payable to "UAM" Funds to: UAM Funds Trust UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 10 Payment for purchases of shares received by mail will be credited to an ac- count at the next share price calculated for the Portfolio after receipt. Pay- ment does not need to be converted into Federal Funds (monies credited to the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it for investment. The Fund will not accept third-party checks to purchase shares of the Portfolio. If you purchase shares by check, please be sure that your check is made payable to "UAM Funds". BY WIRE . Telephone the UAM Funds Service Center and provide the account name, ad- dress, telephone number, social security or taxpayer identification num- ber, Portfolio selected, amount being wired and the name of the bank wiring the funds. The call must be received prior to the close of regu- lar trading on the NYSE (generally 4:00 p.m. Eastern Time) to receive that day's price. An account number and a wire control number will then be provided to you in addition to wiring instructions. Next, . instruct your bank to wire the specified amount to the Fund's Custodian: The Chase Manhattan Bank ABA #021000021 UAM Funds DDA Acct. #9102772952 Ref: Portfolio Name ____________ Your Account Number ____________ Your Account Name _____________ Wire Control Number ____________ (assigned by UAM Funds Service Center) . Forward a completed Application to the Fund at the address shown on the form. Federal Funds purchases will be accepted only on a day on which both the NYSE and the Custodian Bank are open for business. . To be sure that a bank wire order is received on the same day it is sent, an investors bank should wire funds as early in the day as possi- ble. The bank sending funds may charge for this service. The Fund's agent reserves the right to charge investors for receipt of wired funds, but no charge is currently imposed for this service. It is necessary to obtain a new wire control number every time money is wired into an ac- count in a Portfolio. Wire control numbers are effective for one trans- action only and cannot be used more than once. Wired money that is not properly identified with a currently effective wire control number will be returned to the bank from which it was wired and will not be credited to the shareholder's account. 11 ADDITIONAL INVESTMENTS Additional investments can be made at any time. The minimum additional in- vestment is $100. Shares can be purchased at net asset value by mailing a check to the UAM Funds Service Center (payable to "UAM Funds") or by wiring money to the Custodian Bank as outlined above. When making additional invest- ments, be sure that the account number, account name and the Portfolio to be purchased are identified on the check or wire. Prior to wiring additional in- vestments, notify the UAM Funds Service Center by calling the number on the cover of this Prospectus. Mail orders should include, when possible, the "In- vest by Mail" stub which accompanies any Fund confirmation statement. PURCHASE BY ACH If you have made this election, shares of the Portfolio may be purchased via Automated Clearing House ("ACH"). Investors purchasing via ACH should complete the bank information section on the Account Application and attach a voided check or deposit slip to the Account Application. This option must be estab- lished on your account at least 15 days prior to your initiating an ACH trans- action (see "SHAREHOLDER SERVICES - AUTOMATIC INVESTMENT PLAN"). OTHER PURCHASE INFORMATION Investments received by the close of regular trading on the NYSE (generally 4:00 p.m., Eastern Time) will be invested at the share price calculated after the NYSE closes on that day. Investments received after the close of the NYSE will be executed at the price computed on the next day the NYSE is open. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or to reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. The Portfolio is intended to be long-term investment vehicles and is not designed to provide investors with a means of speculation on short-term market movements. A pattern of frequent purchases can be disruptive to efficient portfolio management and, consequently, can be detrimental to a Portfolio's performance and its shareholders. Accordingly, if the Fund's management deter- mines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any purchase request with respect to such investor's account. Such investor also may be barred from pur- chasing other portfolios of the UAM Funds. Purchases of the Portfolio's shares will be made in full and fractional shares of the Portfolio calculated to three decimal places. Certificates for fractional shares will not be issued. Certificates for whole shares will not be issued except at the written request of the shareholder. IN-KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in ex- change for securities which are eligible for acquisition by the Portfolio, as described in this 12 Prospectus. Securities to be exchanged which are accepted by the Fund will be valued as described under "VALUATION OF SHARES" at the next determination of net asset value after acceptance. Shares issued by the Portfolio in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Portfolio and must be deliv- ered to the Fund by the investor upon receipt from the issuer. Securities ac- quired through an in-kind purchase will be acquired for investment and not for immediate resale. The Fund will not accept securities in exchange for shares of the Portfolio unless: . at the time of exchange, such securities are eligible to be in- cluded in the Portfolio (current market quotations must be readily available for such securities); . the investor represents and agrees that all securities offered to be exchanged are liquid securities and not subject to any restric- tions upon their sale by the Portfolio under the Securities Act of 1933, or otherwise; and . the value of any such securities (except U.S. Government securi- ties) being exchanged together with other securities of the same issuer owned by the Portfolio will not exceed 5% of the net assets of the Portfolio immediately after the transaction. Investors who are subject to federal taxation upon exchange may realize a gain or loss for federal income tax purposes depending upon the cost of secu- rities or local currency exchanged. Investors interested in such exchanges should contact the Adviser. REDEMPTION OF SHARES Shares of the Portfolio may be redeemed by mail or telephone at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request. No charge is made for redemptions. Any re- demption may be more or less than the purchase price of the shares depending on the market value of investment securities held by the Portfolio. BY MAIL Address requests for redemption to the UAM Funds Service Center. Requests to redeem shares must include: . share certificates, if issued; . a letter of instruction or an assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are regis- tered; . any required signature guarantees (see "SIGNATURE GUARANTEES"); and 13 . any other necessary legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pen- sion and profit sharing plans and other organizations. BY TELEPHONE A redemption request by telephone requires the following: . establish the telephone redemption privilege (and if desired, the wire redemption privilege) by completing appropriate sections of the Application; and . call the Fund and instruct that the redemption proceeds be mailed to you or wired to your bank. The following tasks cannot be accomplished by telephone: . changing the name of the commercial bank or the account designated to receive redemption proceeds (this can be accomplished only by a written request signed by each shareholder, with each signature guaranteed); and . redemption of certificated shares by telephone. The Fund and its Sub-Transfer Agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and they may be liable for any losses if they fail to do so. These procedures include re- quiring the investor to provide certain personal identification at the time an account is opened, as well as prior to effecting each transaction requested by telephone. All telephone transaction requests will be recorded and investors may be required to provide additional telecopied written instructions of such transaction requests. The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent do not employ the procedures described above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili- ty, cost or expense for following instructions received by telephone that it reasonably believes to be genuine. SIGNATURE GUARANTEES Signature guarantees are required for the following redemptions: . redemptions where the proceeds are to be sent to someone other than the registered shareowner(s); . redemptions where the proceeds are to be sent to someplace other than the registered address; or . share transfer requests. Signature guarantees will be accepted from any eligible guarantor institu- tion which participates in a signature guarantee program. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securi- ties exchanges, registered securities associations, clearing agencies and sav- ings associations. Broker- 14 dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. OTHER REDEMPTION INFORMATION The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the UAM Funds Service Center or a redemption request in proper form. Although the Fund will redeem shares purchased by check before the check clears, payment of the redemption proceeds may be delayed for a pe- riod of up to fifteen days after their purchase, pending determination that the check has cleared. Investors should consider purchasing shares using a certified or bank check or money order if they anticipate an immediate need for redemption proceeds. The Fund may suspend the right of redemption or post- pone the date at times when both the NYSE and Custodian Bank are closed, or under any emergency circumstances determined by the SEC. If the Fund's Board of Trustees determines that it would be detrimental to the best interests of remaining shareholders of the Fund to make payment wholly or partly in cash, the Fund may pay redemption proceeds in whole or in part by a distribution in-kind of liquid securities held by the Portfolio in lieu of cash in conformity with applicable rules of the SEC. Investors may in- cur brokerage charges on the sale of portfolio securities received in payment of redemptions. The Portfolio reserves the right to liquidate any account that is below fifty percent of the required minimum initial investment amount for the Port- folio as set forth in the Prospectus, where the reduction in value has oc- curred due to a redemption or exchange out of the account. If at any time your total investment does not have a value of at least fifty percent of the re- quired minimum initial investment amount, you may be notified that the value of your account is below the Portfolio's minimum account balance requirement. You would then be allowed 60 days to make an additional investment before the account is liquidated. Retirement accounts and certain other accounts will not be subject to automatic liquidation. Reductions in value that result solely from market activity will not trigger an involuntary redemption. SHAREHOLDER SERVICES EXCHANGE PRIVILEGE Institutional Class Shares of the Portfolio may be exchanged for Institu- tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo- lios of the UAM Funds at the end of this Prospectus.) Exchange requests should be made by contacting the UAM Funds Service Center. Any exchange will be based on the net asset value of the shares involved. There is no sales commission or charge of any kind for an exchange. Before 15 making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objectives of the Portfolio to be purchased. Call the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in which you are interested. Exchanges can only be made with Portfolios that are qualified for sale in a shareholder's state of residence. Exchange requests may be made either by mail or telephone. Telephone ex- changes will be accepted only if the certificates for the shares to be ex- changed have not been issued to the shareholder and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the NYSE will be processed on the next business day. The Fund may modify or terminate the exchange program at any time upon 60 days' written notice to shareholders, and may reject any exchange request. If the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any exchange request, with respect to such investor's account. Such investors also may be barred from exchanging into other portfolios of the UAM Funds. For additional information regarding responsibility for the authentic- ity of telephoned instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE". An exchange into another UAM Funds Portfolio is a sale of shares and may result in a gain or loss for income tax purposes. AUTOMATIC INVESTMENT PLAN An Automatic Investment Plan permits shareholders of a Portfolio with a min- imum value of $2,500 or more to purchase shares automatically (minimum of $100 per transaction) at regular intervals selected by the shareholder. Provided the shareholder's bank or other financial institution allows automatic with- drawals, shares are purchased by transferring funds via the Automated Clearing House ("ACH"). Investment made through ACH will be automatically transferred from a shareholder's checking, bank money market or NOW account designated by the shareholder. Such withdrawals are made electronically, if the sharehold- er's bank or financial institution so permits, or be pre-authorized checks or drafts drawn on the shareholder's bank or other account. The bank or financial institution must be a member of ACH. At the shareholder's option, the account designated will be debited in the specified amount, and shares will be pur- chased monthly or quarterly. To establish an Automatic Investment Plan, a shareholder must complete the Optional Services Form available from the UAM Funds Service Center at 1-800-638-7983 and mail it to Chase Global Funds Service Company. A share- holder may cancel his/her participation or change the amount of purchase at any time by mailing written notification to Chase Global Funds Services Compa- ny, P.O. Box 2798, Boston, MA 02208-2798. Notification generally will be ef- fective 16 three business days following receipt. The Fund may modify or terminate this privilege at any time, or may charge a service fee, although no such fee cur- rently is contemplated. SYSTEMATIC WITHDRAWAL PLAN Any shareholder whose account balance totals at least $10,000 may establish a Systematic Withdrawal Plan under which an amount pre-determined by the shareholder (but at least $100) is automatically redeemed from the sharehold- er's account either monthly or quarterly. A shareholder may participate in the Systematic Withdrawal Plan by using ACH. Redemption made through ACH will be automatically transferred to the shareholder's bank or other similar financial institution account or a properly designated third party. The bank or finan- cial institution must be a member of ACH. Redemptions ordinarily are made on the third business day of the month and payments ordinarily will be transmit- ted within five business days after the redemption date. Because the prices of Fund shares fluctuate, the number of shares redeemed to finance systematic withdrawal payments or a given amount will vary from payment to payment. If a shareholder owns shares in more than one Portfolio, the shareholder must des- ignate the Portfolio from which the redemptions under a Systematic Withdrawal Plan should be made. An additional sheet may be attached to the Optional Serv- ices Form if a shareholder selects more than one Portfolio. A Systematic With- drawal Plan may be terminated or suspended at any time by the Fund. A share- holder may elect at any time, in writing, to terminate participation in the Systematic Withdrawal Plan. Such written election must be sent to and received by the Fund before a termination becomes effective. There is currently no charge to the shareholder for a Systematic Withdrawal Plan. VALUATION OF SHARES The net asset value of each class of a Portfolio is determined by dividing the value of the Portfolio's assets attributable to the class, less any lia- bilities attributable to the class, by the number of shares outstanding. The net asset value per share of the Portfolio is determined as of the close of the NYSE on each day that the NYSE is open for business. Equity securities listed on a securities exchange for which market quota- tions are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed secu- rities not traded on the valuation date for which market quotations are read- ily available are valued neither exceeding the current ask prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars quoted by any major bank or by a broker. 17 The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Trustees. PERFORMANCE CALCULATIONS The Portfolio measures performance by calculating yield and total return. Both yield and total return figures are based on historical earnings and are not intended to indicate future performance. Yield and total return are calcu- lated separately for each class of Portfolio. Yield refers to the income generated by an investment in the Portfolio over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all funds. As this differs from other accounting methods, the quoted yield may not equal the in- come actually paid to shareholders. Total return is the change in value of an investment in the Portfolio over a given period, assuming reinvestment of any dividends and capital gains. A cu- mulative or aggregate total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of re- turn that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. The Portfolio's performance may be compared to data prepared by independent services which monitor the performance of investment companies, data reported in financial and industry publications, and various indices as further de- scribed in the Portfolio's SAI. This information may also be included in sales literature and advertising. The Portfolio's Annual Report to Shareholders for the most recent fiscal year end will contain additional performance information that includes compar- isons with appropriate indices. The Annual Report will be available without charge. Contact the UAM Funds Service Center at the address or telephone num- ber on the cover of this Prospectus. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income (for tax purposes) to shareholders in quarterly dividends. If any net capital gains are realized, each Portfolio will normally distribute them annually. All dividends and capital gains distributions will be automatically reinvested in additional shares of the Portfolio unless the Fund is notified in writing that the shareholder elects to receive the distributions in cash. 18 FEDERAL TAXES The Portfolio intends to qualify as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, for federal in- come tax purposes and to meet all other requirements that are necessary for it (but not its shareholders) to be exempt from federal taxes on income and gains paid to shareholders in the form of dividends. To do this, the Portfolio must, among other things, distribute substantially all of its ordinary income and net capital gains on an annual basis and maintain a portfolio of investments which satisfies certain diversification criteria. Dividends paid by the Portfolio from net investment income, whether in cash or reinvested in shares, are taxable to shareholders as ordinary income. Short-term capital gains will be taxed as ordinary income. Long-term capital gains distributions are taxed as long-term capital gains. Shareholders will be notified annually of dividend income earned for tax purposes. Dividends declared in October, November and December to shareholders of rec- ord in such a month and paid in January of the following year will be treated as if they had been paid by the Fund and received by the shareholders on De- cember 31. The Fund is required by federal law to withhold 31% of reportable payments paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, you must certify that your Social Security or Taxpayer Identification Number you have provided is correct and that either you are not currently subject to backup withholding or you are exempt from backup withholding. This certification must be made on the Application or on a separate form supplied by the Fund. Dividends and interest received by the Portfolio may give rise to withhold- ing and other taxes imposed by foreign countries. These taxes reduce the Port- folio's dividends but are included in the taxable income reported on your tax statement if the Portfolio qualifies for this tax treatment and elects to pass it through to you. Consult a tax adviser for more information regarding deduc- tions and credits for foreign taxes. INVESTMENT ADVISER Hanson Investment Management Company (the "Adviser") is a registered invest- ment adviser formed in 1973. Its business offices are located at 4000 Civic Center Drive, Suite 200, San Rafael, CA 94903. The Adviser is a wholly-owned subsidiary of United Asset Management Corporation ("UAM") and provides and of- fers investment management and advisory services to corporations, unions, pen- sions and profit-sharing plans, trusts, estates and other institutions and in- vestors. The Adviser currently has over $1.1 billion in assets under manage- ment. 19 The Portfolio pays an annual fee in monthly installments to the Adviser for advisory services. This fee is accrued daily and paid every month as a per- centage of the average net assets in the Portfolio for that month. The per- centage fee on an annual basis is 0.70%. The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili- ates, may, at its own expense, compensate a Service Agent or other person for marketing, shareholder servicing, recordkeeping and/or other services per- formed with respect to the Fund, a Portfolio or any Class of Shares. Payments made for any of these purposes may be made from its revenues, its profits or any other source available to it. When such service arrangements are in ef- fect, they are made generally available to all qualified service providers. The Distributor, the Adviser and certain of their other affiliates also par- ticipate, at the date of this Prospectus, in an arrangement with Smith Barney Inc. under which Smith Barney provides certain defined contribution plan mar- keting and other shareholder services of its consulting group and receives from such entities .15 of 1% of the daily net asset value of Institutional Class Shares held by Smith Barney's eligible customer accounts in addition to amounts payable to all selling dealers. The Fund also compensates Smith Barney for services it provides to certain defined contribution plan shareholders that are not otherwise provided by UAMFSI. The investment professionals at the Adviser who comprise the Investment Com- mittee and who are responsible for the day-to-day management of the Portfolio and their qualifications are as follows: CHARLES H. RAVEN, CHAIRMAN. Charles H. Raven joined Hanson Investment Man- agement Company in 1983 as a principal of the firm. Prior to joining the firm, Mr. Raven was a senior portfolio manager for McCullough & Andrews and before that was Vice President, Investments at Lionel D. Edie & Company where he worked for fourteen years. Previously, he worked in commercial banking with Bank of America. He received a BA from Stanford University and an MBA from Harvard Business School. DAVID E. POST, CHIEF EXECUTIVE OFFICER AND PORTFOLIO MANAGER. David E. Post joined Hanson Investment Management Company in 1994 as a portfolio manager. Mr. Post heads Adviser's Management Committee. Prior to joining HIMCO, Mr. Post directed the investment of all managed assets at CSI Capital Management, the investment management firm he founded in 1983. Previously, he served as president of HS Partners, Inc. He began his career at Merrill Lynch, Pierce, Fenner & Smith. Mr. Post received a BA from the University of California, Berkeley. STEVEN E. CUTCLIFFE, MANAGING DIRECTOR AND PORTFOLIO MANAGER. Steven E. Cutcliffe joined Hanson Investment Management 20 Company in 1991 as a portfolio manager. Mr. Cutcliffe is a member of the Man- agement Committee. Previously, Mr. Cutcliffe was Vice President, Corporate Fi- nance for McGinn, Smith & Company and before that was an Assistant Secretary at Manufacturers Hanover Trust Company. He received an AB from Dartmouth Col- lege and an MBA from Dartmouth's Amos Tuck School. STEVEN W. ENOS, CFA, VICE PRESIDENT, RESEARCH. Steven W. Enos joined Hanson Investment Management in 1998. Prior to joining Hanson, Mr. Enos was a Princi- pal and Vice President of Wells Capital Management. While at Wells, Mr. Enos managed $1.3 billion in equity funds and was a senior member of Wells Capi- tal's Growth Stock Team. Prior to joining Wells Fargo, he worked at Dolan Cap- ital Management where he was a research analyst. Mr. Enos began his investment career in 1985 with First Interstate Financial Advisors, where he was a port- folio manager. Mr. Enos is a Chartered Financial Analyst and a member of the Security Analysts of San Francisco. Mr. Enos received a BS from the University of California at Davis. JOHN D. SCHAEFFER, VICE PRESIDENT, RESEARCH. John D. Schaeffer joined Hanson Investment Management Company in 1997. Prior to joining the Adviser, Mr. Schaeffer was a research analyst for Barbary Coast Capital, a hedge fund. Pre- viously, Mr. Schaeffer was a senior analyst at Bridgewater Associates, a quan- titative investment management firm. Mr. Schaeffer received a BA from Duke University and an MBA from the University of California, Berkeley. JASON E. BLATTBERG, RESEARCH ASSOCIATE. Jason E. Blattberg joined Hanson In- vestment Management in 1998. Prior to joining Hanson, Mr. Blattberg was a mem- ber of the investment strategy team at Lehman Brothers. Mr. Blattberg received a BA from the University of Virginia, attended the London School of Economics, and received an MBA from the Anderson Graduate School of Management at UCLA. REYNOLD SAMORANOS, VICE PRESIDENT, TRADING AND OPERATIONS. Reynold Samoranos joined Hanson Investment Management in 1991. In addition to his responsibility as primary trader, Mr. Samoranos serves Hanson in several other areas, includ- ing accounting and general staff management. Prior to joining Hanson, Mr. Samoranos worked for Citibank North America as the regional financial control- ler. Mr. Samoranos received a BS from the University of California, Berkeley and an MBA from the University of Chicago. ADVISER'S HISTORICAL PERFORMANCE Below are certain performance data provided by the Adviser pertaining to the composite of separately managed accounts of the Adviser that are managed with substantially similar (although not necessarily identical) objectives, poli- cies and strategies as those of the Portfolio. The performance data for the managed accounts is net of all fees and expenses. The investment returns of the Portfolio may differ 21 from those of the separately managed accounts because such separately managed accounts may have fees and expenses that differ from those of the Portfolio. Further, the separately managed accounts are not subject to investment limita- tions, diversification requirements, and other restrictions imposed by the 1940 Act and the Internal Revenue Code; such conditions, if applicable, may have lowered the returns for the separately managed accounts. The results pre- sented are not intended to predict or suggest the return to be experienced by the Portfolio or the return an investor might achieve by investing in the Portfolio. 22 HANSON INVESTMENT MANAGEMENT COMPANY COMPOSITE RETURNS FOR INDIVIDUAL YEARS ENDED DECEMBER 31 (PERCENTAGE RETURNS NET OF MANAGEMENT FEES)
HANSON INVESTMENT MANAGEMENT CALENDAR YEARS COMPANY S & P 500 -------------- ----------------- ---------- 1981........................................... 11.4 % (5.3)% 1982........................................... 26.8 % 21.4 % 1983........................................... 26.9 % 22.6 % 1984........................................... 7.7 % 6.3 % 1985........................................... 33.0 % 31.7 % 1986........................................... 18.8 % 18.7 % 1987........................................... (1.0)% 5.3 % 1988........................................... 24.1 % 16.6 % 1989........................................... 28.5 % 31.7 % 1990........................................... 0.3 % (3.1)% 1991........................................... 33.8 % 30.4 % 1992........................................... 9.0 % 7.7 % 1993........................................... 1.6 % 10.1 % 1994........................................... (4.5)% 1.2 % 1995........................................... 34.0 % 37.8 % 1996........................................... 22.4 % 22.9 % 1997........................................... 35.1 % 33.4 % 3 months ended 3/31/98......................... 11.7 % 13.9 % Annualized..................................... 17.3 % 16.3 % Cumulative..................................... 1414.5 % 1197.4 % Seventeen-Year Mean (1/1/81-12/31/97).......... 18.1 % 17.0 % Value of $1 invested during (1/1/81-3/31/98)... $16.92 $14.78
Notes: 1. The ANNUALIZED RETURN is calculated from monthly data, allowing for com- pounding. Market value of the account was the sum of the account's total assets, including cash, cash equivalents, short-term investments, and se- curities valued at current market prices. 2. The CUMULATIVE RETURN means that $1 invested in the composite account on January 1, 1981 had grown to $16.92 by March 31, 1998. 3. The 17-YEAR MEAN is the arithmetic average of the annual returns for the calendar years listed. 4. The S&P 500 is an unmanaged index which assumes reinvestment of dividends and is generally considered representative of securities similar to those 23 invested in by the Adviser for purpose of the composite performance num- bers set forth above. 5. The Adviser's average annual management fee over the period shown (1/1/81- 3/31/98) was 0.40% or 40 basis points. During the period, fees on the Ad- viser's individual accounts ranged from 0.32% to 1.00% (32 basis points to 100 basis points). Net returns to investors vary depending on the manage- ment fee. ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of UAM, is re- sponsible for performing and overseeing administrative, fund accounting, divi- dend disbursing and transfer agent services provided to the Fund and its Port- folios. UAMFSI's principal office is located at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is located at 73 Tremont Street, Boston, MA 02108. Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fees are calculated from the aggregate net assets of the Portfolio:
RATE ---- Hanson Equity Portfolio................................................ 0.04%
CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined UAM Fund assets; 0.11 of 1% of the next $800 million of combined UAM Fund assets; 0.07 of 1% of combined UAM Fund assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined UAM Fund assets in excess of $3 billion. Fees are allocated among each of the Portfolios of the Fund on the basis of their relative assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum annual fee increases by $20,000. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, with its principal office located at 211 Congress Street, Boston, Massachusetts 02110, distributes the shares of the Fund. Under the Distribution Agreement (the "Agree - 24 ment"), the Distributor, as agent of the Fund, agrees to use its best efforts as sole distributor of the Fund's shares. The Distributor does not receive any fee or other compensation under the Agreement with respect to this Portfolio. The Agreement continues in effect as long as such continuance is approved at least annually by the Fund's Board of Trustees. Those approving the Agreement must include a majority of Trustees who are neither parties to the Agreement nor interested persons of any such party. The Agreement provides that the Fund will bear costs of registration of its shares with the SEC and various states and the printing of its prospectuses, its SAIs and its reports to sharehold- ers. PORTFOLIO TRANSACTIONS The Advisory Agreement authorizes the Adviser to select the brokers or deal- ers that will execute the purchase and sale of investment securities for the Portfolio. The Agreement directs the Adviser to use its best efforts to obtain the best available price and most favorable execution for all transactions of the Portfolio. If consistent with the interests of the Portfolio, the Adviser may select brokers on the basis of the research, statistical and pricing serv- ices they provide to the Portfolio in addition to required services. Such bro- kers may be paid a higher commission than that which another qualified broker would have charged for effecting the same transaction, provided that such com- missions are paid in compliance with the Securities Exchange Act of 1934, as amended, and that the Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to a Portfolio and the Adviser's other clients. Although not a typical practice, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. If a purchase or sale of securities consistent with the investment policies of the Portfolio and one or more of these other clients served by the Adviser 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 rea- sonable by the Adviser. Although there is no specified formula for allocating such transactions, such allocations are subject to periodic review by the Fund's Trustees. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized as a Delaware business trust on May 18, 1994 under the name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial inter- est, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without fur- ther action by shareholders. 25 At its discretion, the Board of Trustees may create additional Portfolios and classes of shares. The shares of each Portfolio are fully paid and nonas- sessable, and have no preference as to conversion, exchange, dividends, re- tirement or other features and no pre-emptive rights. They have noncumulative voting rights, which means that holders of more than 50% of shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. As of June 15, 1998, Charles Schwab & Co., Inc., Reinvest Account, held of record 99.8% of the outstanding shares of the Portfolio's Institutional Class for which beneficial ownership is disclaimed or presumed disclaimed. The per- sons or organizations owning 25% or more of the outstanding shares of the Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) the Portfolio. As a result, these persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter re- quiring the approval of shareholders of the Portfolio. Annual meetings will not be held except as required by the 1940 Act and other applicable laws. The Fund has undertaken that its Trustees will call a meeting of shareholders if such a meeting is requested in writing by the hold- ers of not less than 10% of the outstanding shares of the Fund. The Fund will assist shareholder communications in such matters. CUSTODIAN The Chase Manhattan Bank serves as custodian of the Fund's assets. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the independent accountant for the Fund. REPORTS Investors will receive unaudited semi-annual financial statements and annual financial statements audited by PricewaterhouseCoopers LLP. SHAREHOLDER INQUIRIES Shareholder inquiries may be made by contacting the UAM Funds Service Center at the telephone number listed on the cover page of this Prospectus. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE PORTFOLIO'S STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPEC- TUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE. 26 UAM FUNDS -- INSTITUTIONAL CLASS SHARES Acadian Emerging Markets Portfolio Acadian International Equity Portfolio BHM&S Total Return Bond Portfolio Cambiar Opportunity Portfolio Chicago Asset Management Intermediate Bond Portfolio Chicago Asset Management Value/Contrarian Portfolio C&B Balanced Portfolio C&B Equity Portfolio C&B Equity Portfolio for Taxable Investors C&B Mid Cap Equity Portfolio DSI Balanced Portfolio DSI Disciplined Value Portfolio DSI Limited Maturity Bond Portfolio DSI Money Market Portfolio FMA Small Company Portfolio FPA Crescent Portfolio Hanson Equity Portfolio Heitman Real Estate Portfolio ICM Equity Portfolio ICM Fixed Income Portfolio ICM Small Company Portfolio Jacobs International Octagon Portfolio McKee Domestic Equity Portfolio McKee International Equity Portfolio McKee Small Cap Equity Portfolio McKee U.S. Government Portfolio MJI International Equity Portfolio NWQ Balanced Portfolio NWQ Small Cap Value Portfolio NWQ Special Equity Portfolio NWQ Value Equity Portfolio Rice, Hall, James Small Cap Portfolio Rice, Hall, James Small/Mid Cap Portfolio SAMI Preferred Stock Income Portfolio Sirach Bond Portfolio Sirach Equity Portfolio Sirach Growth Portfolio Sirach Special Equity Portfolio Sirach Strategic Balanced Portfolio Sterling Partners' Balanced Portfolio Sterling Partners' Equity Portfolio Sterling Partners' Small Cap Value Portfolio TS&W Balanced Portfolio TS&W Equity Portfolio TS&W Fixed Income Portfolio TS&W International Equity Portfolio 27 UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 1-800-638-7983 Investment Adviser Hanson Investment Management Company 4000 Civic Center Drive Suite 200 San Rafael, CA 94903 Distributor UAM Fund Distributors, Inc. 211 Congress Street Boston, MA 02110 PROSPECTUS July 17, 1998 UAM Funds Prospectus July 17, 1998 Jacobs International Octagon Portfolio Institutional Class Shares [LOGO OF UAM FUNDS APPEARS HERE] TABLE OF CONTENTS
PAGE ---- Fund Expenses.............................................................. 1 Prospectus Summary......................................................... 2 Risk Factors............................................................... 3 Financial Highlights....................................................... 4 Investment Objectives...................................................... 5 Investment Policies........................................................ 5 Other Investment Policies.................................................. 8 Risks and Additional Investment Information................................ 10 Investment Limitations..................................................... 12 Purchase of Shares......................................................... 13 Redemption of Shares....................................................... 16 Shareholder Services....................................................... 19 Valuation of Shares........................................................ 20 Performance Calculations................................................... 20 Dividends, Capital Gains Distributions and Taxes........................... 21 Investment Adviser......................................................... 22 Adviser's Historical Performance........................................... 24 Administrative Services.................................................... 26 Distributor................................................................ 26 Portfolio Transactions..................................................... 27 General Information........................................................ 27 UAM Funds -- Institutional Class Shares.................................... 29
UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO INSTITUTIONAL CLASS SHARES - ------------------------------------------------------------------------------- PROSPECTUS -- JULY 17, 1998 UAM Funds Trust (the "Fund") is an open-end investment company known as a "mutual fund." The Fund consists of multiple series (known as "Portfolios"), each of which has different investment objectives and policies. Jacobs Inter- national Octagon Portfolio currently offers only one class of shares. The se- curities offered in this Prospectus are Institutional Class Shares of one di- versified, no-load Portfolio of the Fund managed by Jacobs Asset Management. JACOBS INTERNATIONAL OCTAGON PORTFOLIO. The Jacobs International Octagon Portfolio (the "Portfolio") seeks to provide long-term capital appreciation by investing in equity securities of companies in developed and emerging markets. The Portfolio may invest across the market capitalization spectrum, although it intends to emphasize smaller capitalization stocks. There can be no assurance that the Portfolio will achieve its stated objec- tive. Keep this Prospectus for future reference. It contains information that you should know before you invest. A "Statement of Additional Information" ("SAI") containing additional information about the Fund has been filed with the Secu- rities and Exchange Commission ("SEC"). The SAI is dated July 17, 1998 and has been incorporated by reference into this Prospectus. For a free copy of the SAI contact the UAM Funds Service Center at 1-800-638-7983. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FUND EXPENSES The following table illustrates expenses and fees that a shareholder of the Portfolio's Institutional Class Shares will incur. The Fund does not charge transaction fees. However, transaction fees may be charged if a broker-dealer or other financial intermediary deals with the Fund on your behalf. (See "PUR- CHASE OF SHARES.") SHAREHOLDER TRANSACTION EXPENSES Sales Load Imposed on Purchases......................................... NONE Sales Load Imposed on Reinvested Dividends.............................. NONE Deferred Sales Load..................................................... NONE Redemption Fees......................................................... NONE Exchange Fee............................................................ NONE
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) Investment Advisory Fees.............................................. 1.00% 12b-1 Fees............................................................ NONE Other Expenses........................................................ 0.49% ---- Total Operating Expenses.............................................. 1.49%* ====
- ----------- * The Total Operating Expenses includes the effect of expense offsets. If ex- pense offset were excluded, total operating expenses would not be affected. The Advisor and certain other service providers have voluntarily agreed to waive all or a portion of their fees and to assume operating expenses to keep the Portfolio's operating expenses from exceeding 1.75% of average daily net assets until further notice. The Adviser and/or service providers may change or discontinue their fee waivers and expense assumptions at any time. The table above shows various expenses and fees an investor would bear di- rectly or indirectly. The expenses and fees set forth above are based on the Portfolio's operations during the fiscal year ended April 30, 1998. EXAMPLE The following example illustrates expenses a shareholder would pay on a $1,000 investment over various time periods assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period. The Portfolio charges no redemption fees of any kind.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- Jacobs International Octagon Portfolio Institutional Shares.................... $15 $47 $81 $178
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX- PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN ABOVE. 1 PROSPECTUS SUMMARY INVESTMENT ADVISER Jacobs Asset Management is a registered investment adviser. Founded in 1995, the firm currently has over $415 million in assets under management. (See "IN- VESTMENT ADVISER.") United Asset Management Corporation is a limited partner of the Adviser and owns a controlling interest in the Adviser. PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), to investors at net asset value without a sales commission. Share purchases may be made by sending investments directly to the Fund. The minimum initial investment is $2,500. The minimum for subsequent investments is $100. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. Certain exceptions to the initial or minimum investment amounts may be permitted by the officers of the Fund. (See "PURCHASE OF SHARES.") DIVIDENDS AND DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income in quarterly dividends. Any realized net capital gains will also be distributed annually. Distributions will be reinvested in the Portfolio's shares automatically unless an investor elects to receive cash distributions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") REDEMPTIONS AND EXCHANGES Shares of the Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemp- tion request. The redemption price may be more or less than the purchase price. Shares of the Portfolios may be exchanged for shares of the same class of any other portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" and "EX- CHANGE PRIVILEGE.") ADMINISTRATIVE SERVICES UAM Fund Services, Inc., ("UAMFSI"), a wholly-owned subsidiary of United As- set Management Corporation, is responsible for performing and overseeing ad- ministration, fund accounting, dividend disbursing and transfer agency serv- ices provided to the Fund and its Portfolios by third-party service providers. (See "ADMINISTRATIVE SERVICES.") 2 RISK FACTORS The value of the Portfolio's shares will fluctuate in response to changes in market and economic conditions as well as the financial conditions and pros- pects of the issuers in which the Portfolio invests. Investors should consider the following: (1) The Portfolio will invest in securities of foreign issuers, which will be subject to additional risk factors, including foreign currency risks, not applicable to securities of U.S. issuers; (2) The Portfolio may in- vest in repurchase agreements, which entail a risk of loss should the seller default on its action; (3) The Portfolio may lend its investment securities, which entails a risk of loss should a borrower fail financially; (4) The Port- folio's performance may depend on the ability of the Adviser, a relatively new entity which has not previously served as a mutual fund adviser; however, the principals of the Adviser have substantial experience as investment advisers to mutual funds. (See "OTHER INVESTMENT POLICIES.") Contact the UAM Funds Service Center at the address or telephone number on the front cover of this prospectus for a free copy of the Portfolio's Annual Report to Shareholders. 3 FINANCIAL HIGHLIGHTS The following table provides selected per share information for a share of the Portfolio outstanding throughout the period presented of the Portfolio. This table is part of the Portfolio's Annual Financial Statements, which are included in the Portfolio's 1998 Annual Report to Shareholders. The Report is incorporated by reference into the Portfolio's SAI. The Portfolio's Annual Fi- nancial Statements have been audited by PricewaterhouseCoopers LLP whose un- qualified opinion thereon is also incorporated into the Portfolio's SAI. The following information should be read in conjunction with the Portfolio's 1998 Annual Report to Shareholders. Further information about the Portfolio's per- formance is contained in its Annual Report, which may be obtained without charge by calling the telephone number on the Prospectus cover page.
YEAR ENDED APRIL 30, JANUARY 2, 1997* 1998 TO APRIL 30, 1997 ---------- ----------------- NET ASSET VALUE, BEGINNING OF PERIOD............. $ 10.17 $ 10.00 -------- ------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income.......................... 0.10 0.06 Net Realized and Unrealized Gain on Investments.................................. 1.82 0.11++ -------- ------- Total from Investment Operations............. 1.92 0.17 -------- ------- DISTRIBUTIONS Net Investment Income.......................... (0.09) -- Net Realized Gain.............................. (0.15) -- -------- ------- TOTAL DISTRIBUTIONS.............................. (0.24) -- -------- ------- NET ASSET VALUE, END OF PERIOD................... $ 11.85 $ 10.17 ======== ======= TOTAL RETURN..................................... 19.19% 1.70%***+ ======== ======= RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (Thousands)............ $113,033 $35,833 Ratio of Expenses to Average Net Assets.......... 1.49% 1.75%** Ratio of Net Investment Income to Average Net Assets......................................... 1.23% 3.67%** Portfolio Turnover Rate.......................... 39% 7% Average Commission Rate.......................... $ 0.0014 $0.0037 Ratio of Voluntarily Waived Fees and Expenses Assumed by the Adviser to Average Net Assets .. N/A 0.40%** Ratio of Expenses to Average Net Assets Including Expense Offsets................................ 1.49% 1.75%**
- ----------- * Commencement of Operations. ** Annualized. *** Not Annualized. + Total return would have been lower had certain fees not been waived and expenses assumed by the Adviser. ++ The amount shown for a share outstanding throughout the period does not accord with the aggregate net loss on investments for that period because of the timing of sales and repurchases of the Portfolio shares in relation to fluctuating market value of the investments of the Portfolio. 4 INVESTMENT OBJECTIVES Jacobs International Octagon Portfolio seeks to provide long-term capital appreciation by investing in equity securities of companies in developed and emerging markets. The Portfolio may invest across the market capitalization spectrum, although it intends to emphasize smaller capitalization stocks. There can be no assurance that the Portfolio will achieve its stated objec- tive. INVESTMENT POLICIES In seeking its investment objective, the Portfolio will, under normal cir- cumstances, invest at least 85% of its total assets in the equity securities of developed and emerging markets in at least three countries outside the United States. The amount of total assets invested in the equity securities of emerging markets may range from a low of 10% to a high of 40%. Under normal circumstances, approximately 50% of total assets will be invested in small capitalization companies. Small capitalization companies are defined as those companies with market capitalizations of less than $1 billion at the time of purchase. Equity securities include common stock, preferred stock, convertible preferred stock, rights and warrants, and American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), and Global Depositary Re- ceipts ("GDRs"). Under unusual circumstances, when the Adviser believes that market condi- tions warrant a defensive position, up to 100% of the Portfolio's assets may be held in cash and short-term investments. See "TEMPORARY INVESTMENTS" and "REPURCHASE AGREEMENTS." When the Portfolio is in a defensive position, it may not necessarily be pursuing its stated investment objective. Emerging and developed markets in which the Portfolio initially intends to invest are listed below; however, this list is not exclusive. Investing in some emerging countries currently is not feasible, or may involve unacceptable political risks. The Portfolio will focus its investments on those emerging market countries in which it believes the economies are developing and in which the markets are becoming more sophisticated. The developed and emerging countries in which the Adviser initially intends to invest include: Argentina Greece Peru Australia Hong Kong Philippines Austria Indonesia Poland Bermuda Ireland Portugal Brazil Israel Russia Czech Republic Italy Singapore Chile Korea Spain China Japan Sweden Denmark Malaysia Switzerland Finland Mexico Thailand France Netherlands United Kingdom Germany Norway
5 An "emerging country" security is one issued by a company that, in the opin- ion of the Adviser, has one or more of the following characteristics: (i) its principal securities trading market is in an emerging country, (ii) alone or on a consolidated basis it derives 50% or more of its annual revenue from ei- ther goods produced, sales made or services performed in emerging countries, or (iii) it is organized under the laws of, and has a principal office in, an emerging country. The Adviser will base determinations as to eligibility on publicly available information and inquiries made to the companies. (See "FOR- EIGN INVESTMENTS.") There are no predetermined investment limitations with respect to any one country, but the Adviser expects to limit investments within a country in ac- cordance with the Adviser's perception of risks in that country. Generally, the Portfolio will invest in the equity securities of non-U.S. companies listed on U.S. or foreign securities exchanges, but may also invest in securi- ties traded over-the-counter. The Portfolio seeks to invest in companies that the Adviser believes will benefit from global trends, promising business or product developments and specific country opportunities resulting from chang- ing economic, social and political trends. It is expected that investments will be diversified throughout the world and within markets to minimize spe- cific country and currency risks. As markets in other countries develop, the Portfolio expects to expand and further diversify the emerging countries in which it invests. The Adviser will use a flexible, value-oriented approach to selecting the Portfolio's investments. The Adviser will focus on companies rather than on countries or markets. The goal is to identify stocks selling at the greatest discount to their intrinsic future value. In attempting to identify value across disparate economies in the international marketplace, a rigid adherence to a single model results in missed opportunities. Therefore, the Adviser as- certains value in a variety of measures, including price/cash flow, enterprise value/cash flow, and price/future earnings to identify the companies it will consider for investment. The Adviser's stock picking approach is used across a full capitalization range which takes advantage of the opportunities in smaller capitalization companies. Investments generally will be held by the Portfolio for two to five years. The Portfolio does not intend to invest in any security in a country where the currency is not freely convertible to United States dollars, unless the Portfolio has obtained the necessary governmental licensing to convert such currency or other appropriately licensed or sanctioned contractual guarantee to protect such investment against loss of that currency's external value, or the Portfolio has a reasonable expectation at the time the investment is made that such governmental licensing or other appropriately licensed or sanctioned guarantee would be obtained or that the currency in which the security is quoted would be freely convertible at the time of any proposed sale of the se- curity by the Portfolio. The Portfolio intends to purchase and hold securities for long-term capital appreciation and normally does not expect to trade for short-term gain. According- 6 ly, it is anticipated that the annual portfolio turnover rate normally will not exceed 100%, although in any particular year, market conditions could re- sult in portfolio activity at a greater or lesser rate than anticipated. The rate of portfolio turnover will not be a limiting factor when the Portfolio deems it appropriate to purchase or sell securities. DEPOSITARY RECEIPTS. The Portfolio may invest directly in securities of emerging and developed country issuers through sponsored or unsponsored ADRs, EDRs, and GDRs. 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 com- panies and evidence ownership of underlying securities issued by either a for- eign or a United States corporation. Generally, depositary receipts in regis- tered 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. INVESTMENT FUNDS. Some countries have laws and regulations that currently preclude direct foreign investment in the securities of their companies. How- ever, indirect foreign investment in the securities of companies listed and traded on the stock exchanges in these countries is permitted through invest- ment funds which have been specifically authorized. The Portfolio may invest in these investment funds subject to the provisions of the Investment Company Act of 1940 ("1940 Act") and other applicable law as discussed below under "INVESTMENT LIMITATIONS." If the Portfolio invests in such investment funds, the Portfolio's shareholders will bear not only their proportionate share of the expenses of the Portfolio (including operating expenses and the fees of the Adviser), but also will indirectly bear similar expenses of the underlying investment funds. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Portfolio may enter into forward foreign currency exchange contracts. Forward foreign currency exchange contracts provide for the purchase or sale of an amount of a specified foreign currency at a future date. The general purpose of these contracts is both to put currencies in place to settle trades and to generally protect the United States dollar value of securities held by the Portfolio against exchange rate fluctuation. While such forward contracts may limit losses to the Portfolio as a result of exchange rate fluctuation, they will also limit any gains that may otherwise have been realized. The Portfolio will enter into such contracts only to protect against the effects of fluctuating rates of currency exchange and exchange control regulations. (See "FOREIGN INVESTMENTS.") TEMPORARY INVESTMENTS. During periods in which the Adviser believes changes in economic, financial or political conditions make it advisable, the Port- 7 folio may for temporary defensive purposes reduce its holdings in equity and other securities and invest in certain short-term (less than twelve months to maturity) and medium-term (not greater than five years to maturity) debt secu- rities or may hold cash. (See "SHORT-TERM INVESTMENTS.") OTHER INVESTMENT POLICIES SHORT-TERM INVESTMENTS In order to earn a return on uninvested assets, meet anticipated redemp- tions, or for temporary defensive purposes, the Portfolio may invest a portion of its assets in domestic and foreign money market instruments including cer- tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob- ligations, U.S. Government agency securities, short-term corporate debt secu- rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Ratings Services ("S&P") or Prime-1 or Prime-2 by Moody's Investors Service ("Moody's") or if unrated, determined by the Adviser to be of comparable qual- ity. Time deposits maturing in more than seven days will not be purchased by the Portfolio, and time deposits maturing from two business days through seven calendar days will not exceed 10% of the total assets of the Portfolio. The Portfolio will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, (ii) in the case of U.S. banks, it is a member of the Fed- eral Deposit Insurance Corporation, and (iii) in the case of foreign branches of U.S. banks, the security is, in the opinion of the Adviser, of an invest- ment quality comparable with other debt securities which may be purchased by the Portfolio. The Fund has received permission from the SEC to deposit the daily uninvested cash balances of the Fund's Portfolios, as well as cash for invest- ment purposes, into one or more joint accounts and to invest the daily balance of the joint accounts in the following short-term investments: fully collater- alized repurchase agreements, interest-bearing or discounted commercial paper including dollar-denominated commercial paper of foreign issuers, and any other short-term money market instruments including variable rate demand notes and tax-exempt money instruments. By entering into these investments on a joint basis, the Portfolio may earn a higher rate of return on investments relative to what it could earn individually. The Fund has received permission from the SEC for each of its Portfolios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio. (See "INVESTMENT COMPANIES.") 8 REPURCHASE AGREEMENTS The Portfolio may invest in repurchase agreements collateralized by U.S. Government securities, certificates of deposit, and certain bankers' accept- ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repurchase agreement, the Portfolio buys a security and simultaneously commits to sell that security back at an agreed upon price plus an agreed upon market rate of interest. Under a repurchase agreement, the seller is required to maintain the value of securities subject to the agreement at not less than 100% of the repurchase price. The value of the securities purchased will be evaluated daily, and the Adviser will, if necessary, require the seller to maintain additional securities to ensure that the value is in compliance with the previous sentence. The use of repurchase agreements involves certain risks. For example, a default by the seller of the agreement may cause the Portfolio to experience a loss or delay in the liquidation of the collateral securing the repurchase agreement. The Portfolio might also incur disposition costs in liquidating the collateral. While the Fund's management acknowledges these risks, it is expected that they can be controlled through stringent counter-party selection criteria and careful monitoring procedures. The Fund has received permission from the SEC to pool daily uninvested cash balances of the Fund's Portfolios in order to invest in repurchase agreements on a joint basis. By entering into joint repurchase agreements, the Portfolio may incur lower transaction costs and earn higher rates of interest on joint repurchase agreements. The Portfolio's contribution would determine its return from a joint repurchase agreement. (See "SHORT-TERM INVESTMENTS.") LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified institutional investors as a means of earning income. The Portfolio will not loan securities to the extent that greater than one-third of its total assets at fair market value would be committed to loans. During the term of a loan, the Portfolio is subject to a gain or loss depending on any increase or decrease in the market price of the securities loaned. Lending of securities is subject to review by the Fund's Board of Trustees. All relevant facts and circumstances, including the creditworthiness of the broker, dealer or institution, will be considered by the Adviser in making decisions about securities lending. An investment company may pay reasonable negotiated fees in connection with loaned securities so long as such fees are set forth in a written contract and approved by its Board of Trustees. The Portfolio will continue to retain any voting rights with respect to loaned securities. If a material event occurs affecting an investment on loan, the loan must be called and the securities voted. PORTFOLIO TURNOVER In addition to Portfolio trading costs, higher rates of portfolio turnover may result in the realization of capital gains. (See "DIVIDENDS, CAPITAL GAINS 9 DISTRIBUTIONS AND TAXES" for more information on taxation). The Portfolio will not normally engage in short-term trading, but reserves the right to do so. The table set forth in "Financial Highlights" presents the Portfolio's histor- ical portfolio turnover rates. INVESTMENT COMPANIES The Portfolio reserves the right to invest up to 10% of its total assets, calculated at the time of investment, in the securities of other open-end or closed-end investment companies. No more than 5% of the investing Portfolio's total assets may be invested in the securities of any one investment company nor may it acquire more than 3% of the voting securities of any other invest- ment company. The Portfolio will indirectly bear its proportionate share of any management fees paid by an investment company in which it invests in addi- tion to the advisory fee paid by the Portfolio. The Fund has received permission from the SEC to allow each of its Portfo- lios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio provided that the in- vestment is consistent with the Portfolio's investment policies and restric- tions. Based upon a Portfolio's assets invested in the DSI Money Market Port- folio, the investing Portfolio's adviser will waive its investment advisory fee and any other fees earned as a result of the Portfolio's investment in the DSI Money Market Portfolio. The investing Portfolio will bear expenses of the DSI Money Market Portfolio on the same basis as all of its other shareholders. RISKS AND ADDITIONAL INVESTMENT INFORMATION FOREIGN INVESTMENTS Investment in securities of foreign issuers, including ADRs, generally in- volves more risk than investment in the securities of domestic issuers. In ad- dition, investment in small capitalization securities involves greater risk than larger, more mature issuers. Such smaller companies may have limited product lines, markets or financial resources, and their securities may trade less frequently and in more limited volume than those of larger, more mature companies. As a result, the prices of their securities may fluctuate more than those of larger issuers. There may be limited publicly available information with respect to foreign issuers, and foreign issuers are not generally subject to uniform accounting, auditing and financial standards and requirements comparable to those applica- ble to domestic companies. Therefore, disclosure of certain material informa- tion may not be made and less information may be available to investors in- vesting in emerging countries than in the United States. There may also be less government supervision and regulation of foreign securities exchanges, brokers and listed companies than in the United States. Many foreign securi- ties markets have substantially less volume than United States national secu- rities exchanges, and securities of some for- 10 eign issuers are less liquid and more volatile than securities of comparable domestic issuers and lack a secondary trading market. Brokerage commissions and other transaction costs on foreign securities exchanges are generally higher than in the United States. Dividends and interest paid by foreign is- suers may be subject to withholding and other foreign taxes which may decrease the net return on foreign investments as compared to dividends and interest paid by domestic companies. Additional risks include future political and eco- nomic developments, the possibility that a foreign jurisdiction might impose or change withholding taxes on income payable with respect to foreign securi- ties, and the possible adoption of foreign governmental restrictions such as exchange controls. Prior governmental approval for foreign investments may be required under certain circumstances in some emerging countries, and the extent of foreign investment in domestic companies may be subject to limitation in other emerg- ing countries. Foreign ownership limitations also may be imposed by the char- ters of individual companies in emerging countries to prevent, among other concerns, violation of foreign investment limitations. The Portfolio may en- counter difficulties or be unable to vote proxies, exercise shareholder rights, pursue legal remedies and obtain judgments in foreign courts. Also, some countries may withhold portions of income and dividends at the source. These considerations generally are more of a concern in developing countries, where the possibility of political instability (including the risk of war) and dependence on foreign economic assistance may be greater than in developed countries. Investments in companies domiciled in emerging countries, there- fore, may be subject to potentially higher risks than investments in developed countries. Repatriation of investment income, capital and proceeds of sales by foreign investors may require governmental registration and/or approval in some emerg- ing countries. The Portfolio could be adversely affected by delays in or a re- fusal to grant any required governmental registration or approval for such re- patriation. Any investment subject to such repatriation controls will be con- sidered illiquid if it appears reasonably likely that this process will take more than seven days. The economies of individual emerging countries may differ favorably or unfa- vorably from the United States economy in such respect as growth of gross do- mestic product, rate of inflation, currency depreciation, capital reinvest- ment, resource self-sufficiency and balance of payments position. Further, the economies of developing countries generally are heavily dependent upon inter- national trade and, accordingly, have been and may continue to be adversely affected by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been and may con- tinue to be adversely affected by economic conditions in the countries with which they trade. Investments in securities of foreign issuers are frequently denominated in foreign currencies, and since the Portfolio may temporarily hold uninvested re- 11 serves in bank deposits in foreign currencies, the value of the Portfolio's assets as measured in U.S. dollars may be affected favorably or unfavorably by changes in currency rates and in exchange controls regulations. Thus, the Portfolio may incur costs in connection with conversions between various cur- rencies. INVESTMENT LIMITATIONS The Portfolio will not: (a) with respect to 75% of its assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed as to principal and in- terest by the U.S. Government or any of its agencies or instrumental- ities); (b) with respect to 75% of its assets, purchase more than 10% of any class of the outstanding voting securities of any issuer; (c) invest more than 5% of its assets at the time of purchase in the se- curities of companies that have (with predecessors) a continuous op- erating history of less than 3 years; (d) invest more than 25% of its assets in companies within a single in- dustry; however, there are no limitations on investments made in in- struments issued or guaranteed by the U.S. Government and its agen- cies. (e) make loans except by purchasing debt securities in accordance with its investment objective and policies or entering into repurchase agreements or by lending its portfolio securities to banks, brokers, dealers and other financial institutions so long as the loans are made in compliance with the 1940 Act, as amended, or the Rules and Regulations or interpretations of the SEC; (f) (i) borrow, except from banks and as a temporary measure for extraor- dinary or emergency purposes and then, in no event, in excess of 33 1/3% of the Portfolio's gross assets valued at the lower of market or cost, and (ii) a Portfolio may not purchase additional securities when borrowings exceed 5% of total assets; or (g) pledge, mortgage or hypothecate any of its assets to an extent greater than 33 1/3% of its total assets at fair market value. The Portfolio's investment objective and investment limitations (a), (b), (d), (e) and (f)(i) listed above are fundamental policies and may be changed only with the approval of the holders of a majority of the outstanding voting securities of the Portfolio. The other investment limitations described here and those not specified as fundamental in the SAI as well as the Portfolio's investment policies are not fundamental and the Fund's Board of Trustees may change them without shareholder approval. 12 PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), without a sales commission at the net asset value per share next determined after an order is received by the Fund and payment is received by the Fund or its designated service agent. (See "VALUATION OF SHARES.") The minimum initial investment required is $2,500. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA ac- counts is $250. Certain exceptions may be permitted by the officers of the Fund. Shares of the Portfolio may be purchased by customers of broker-dealers or other financial intermediaries ("Service Agents") which have established a shareholder servicing relationship with the Fund on behalf of their customers. Service Agents may impose additional or different conditions on purchases or redemptions of Portfolio shares and may charge transaction or other account fees. Each Service Agent is responsible for transmitting to its customers a schedule of any such fees and information regarding additional or different purchase or redemption conditions. Shareholders who are customers of Service Agents should consult their Service Agent for information regarding these fees and conditions. Amounts paid to Service Agents may include transaction fees and/or service fees paid by the Fund from the Portfolio's assets attributable to the Service Agent, which would not be imposed if shares of the Portfolio were purchased directly from the Fund or the Distributor. Service Agents may provide shareholder services to their customers that are not available to a shareholder dealing directly with the Fund. A salesperson and any other person entitled to receive compensation for selling or servicing Portfolio shares may receive different compensation with respect to one particular class of shares over another in the Fund. Service Agents or, if applicable, their designees, that have entered into agreements with the Fund or its agent may enter confirmed purchase orders on behalf of clients and customers, with payment to follow no later than a Port- folio's pricing on the following business day. If payment is not received by the Fund's Sub-Transfer Agent, Chase Global Funds Services Company ("CGFSC") by such time, the Service Agent could be held liable for resulting fees or losses. A Portfolio may be deemed to have received a purchase or redemption order when a Service Agent, or, if applicable, its authorized designee, ac- cepts the order. Orders received by the Fund in proper form will be priced at the Portfolio's net asset value next computed after they are accepted by a Service Agent or its authorized designee. Service Agents are responsible to their customers and the Fund for timely transmission of all subscription and redemption requests, investment information, documentation and money. 13 INITIAL INVESTMENTS BY MAIL . Complete and sign an Application and mail it together with a check made payable to "UAM Funds " to: UAM Funds Trust UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 Payment for purchases of shares received by mail will be credited to an ac- count at the next share price calculated for the Portfolio after receipt. Pay- ment does not need to be converted into Federal Funds (monies credited to the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it for investment. The Fund will not accept third-party checks to purchase shares of the Portfolio. If you purchase shares by check, please be sure that your check is made payable to UAM Funds. BY WIRE . Telephone the UAM Funds Service Center and provide the account name, ad- dress, telephone number, social security or taxpayer identification num- ber, Portfolio selected, amount being wired and the name of the bank wiring the funds. The call must be received prior to the close of regu- lar trading on the NYSE (generally 4:00 p.m. Eastern Time) to receive that day's price. An account number will then be provided to you in ad- dition to wiring instructions. Next, .instruct your bank to wire the specified amount to the Fund's Custodian: The Chase Manhattan Bank ABA #021000021 UAM Funds DDA Acct. #9102772952 Ref: Portfolio Name _____________ Your Account Number _____________ Your Account Name _______________ Wire Control Number _____________ (assigned by the UAM Funds Service Center) . Forward a completed Application to the Fund at the address shown on the form. Federal Funds purchases will be accepted only on a day on which both the NYSE and the Custodian Bank are open for business. . To be sure that a bank wire order is received on the same day it is sent, an investors bank should wire funds as early in the day as possi- ble. The bank sending funds may charge for this service. The Fund's agent reserves the 14 right to charge investors for receipt of wired funds, but no charge is currently imposed for this service. It is necessary to obtain a new wire control number every time money is wired into an account in a Portfolio. Wire control numbers are effective for one transaction only and cannot be used more than once. Wired money that is not properly identified with a currently effective wire control number will be returned to the bank from which it was wired and will not be credited to the shareholder's account. ADDITIONAL INVESTMENTS Additional investments can be made at any time. The minimum additional in- vestment is $100. Shares can be purchased at net asset value by mailing a check to the UAM Funds Service Center (payable to "UAM Funds") or by wiring money to the Custodian Bank as outlined above. When making additional invest- ments, be sure that the account number, account name and the Portfolio to be purchased are identified on the check or wire. Prior to wiring additional in- vestments, please notify the UAM Funds Service Center by calling the number on the cover of this Prospectus. Mail orders should include, when possible, the "Invest by Mail" stub which accompanies any Fund confirmation statement. PURCHASE BY ACH If you have made this election, shares of the Portfolio may be purchased via Automated Clearing House ("ACH"). Investors purchasing via ACH should complete the bank information section on the Account Application and attach a voided check or deposit slip to the Account Application. This option must be estab- lished on your account at least 15 days prior to your initiating an ACH trans- action (see "SHAREHOLDER SERVICES--AUTOMATIC INVESTMENT PLAN"). OTHER PURCHASE INFORMATION Investments received by the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be invested at the share price calculated after the NYSE closes on that day. Investments received after the close of the NYSE will be executed at the price computed on the next day the NYSE is open. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or to reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. The Portfolio is intended to be long-term investment vehicles and is not designed to provide investors with a means of speculation on short-term market movements. A pattern of frequent purchases can be disruptive to efficient portfolio management and, consequently, can be detrimental to a Portfolio's performance and its shareholders. Accordingly, if the Fund's management deter- mines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any purchase request with respect to such investor's account. Such investor also may be barred from pur- chasing other portfolios of the UAM Funds. 15 Purchases of the Portfolio's shares will be made in full and fractional shares of the Portfolio calculated to three decimal places. Certificates for fractional shares will not be issued. Certificates for whole shares will not be issued except at the written request of the shareholder. IN-KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in ex- change for securities which are eligible for acquisition by the Portfolio, as described in this Prospectus. Securities to be exchanged which are accepted by the Fund will be valued as described under "VALUATION OF SHARES" at the next determination of net asset value after acceptance. Shares issued by the Port- folio in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the investor upon receipt from the issuer. Securities acquired through an in-kind purchase will be acquired for invest- ment and not for immediate resale. The Fund will not accept securities in exchange for shares of the Portfolio unless: . at the time of exchange, such securities are eligible to be in- cluded in the Portfolio (current market quotations must be readily available for such securities); . the investor represents and agrees that all securities offered to be exchanged are liquid securities and not subject to any restric- tions upon their sale by the Portfolio under the Securities Act of 1933, or otherwise; and . the value of any such securities (except U.S. Government securi- ties) being exchanged together with other securities of the same issuer owned by the Portfolio will not exceed 5% of the net assets of the Portfolio immediately after the transaction. Investors who are subject to federal taxation upon exchange may realize a gain or loss for federal income tax purposes depending upon the cost of secu- rities or local currency exchanged. Investors interested in such exchanges should contact the Adviser. REDEMPTION OF SHARES Shares of the Portfolio may be redeemed by mail or telephone at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request. No charge is made for redemptions. Any re- demption may be more or less than the purchase price of the shares depending on the market value of investment securities held by the Portfolio. 16 BY MAIL Address requests for redemption to the UAM Funds Service Center. Requests to redeem shares must include: . share certificates, if issued; . a letter of instruction or an assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are regis- tered; . any required signature guarantees (see "SIGNATURE GUARANTEES"); and . any other necessary legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pen- sion and profit sharing plans and other organizations. BY TELEPHONE A redemption request by telephone requires the following: . establish the telephone redemption privilege (and if desired, the wire redemption privilege) by completing appropriate sections of the Application; and . call the Fund and instruct that the redemption proceeds be mailed to you or wired to your bank. The following tasks cannot be accomplished by telephone: . changing the name of the commercial bank or the account designated to receive redemption proceeds (this can be accomplished only by a written request signed by each shareholder, with each signature guaranteed); and . redemption of certificated shares by telephone. The Fund and its Sub-Transfer Agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and they may be liable for any losses if they fail to do so. These procedures include re- quiring the investor to provide certain personal identification at the time an account is opened, as well as prior to effecting each transaction requested by telephone. All telephone transaction requests will be recorded and investors may be required to provide additional telecopied written instructions of such transaction requests. The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent do not employ the procedures described above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili- ty, cost or expense for following instructions received by telephone that it reasonably believes to be genuine. 17 SIGNATURE GUARANTEES Signature guarantees are required for the following redemptions: . redemptions where the proceeds are to be sent to someone other than the registered shareowner(s); . redemptions where the proceeds are to be sent to someplace other than the registered address; or . share transfer requests. Signature guarantees will be accepted from any eligible guarantor institu- tion which participates in a signature guarantee program. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securi- ties exchanges, registered securities associations, clearing agencies and sav- ings associations. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. OTHER REDEMPTION INFORMATION The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the UAM Funds Service Center or a redemption request in proper form. Although the Fund will redeem shares purchased by check before the check clears, payment of the redemption proceeds may be delayed for a pe- riod of up to fifteen days after their purchase, pending determination that the check has cleared. Investors should consider purchasing shares using a certified or bank check or money order if they anticipate an immediate need for redemption proceeds. The Fund may suspend the right of redemption or post- pone the date at times when both the NYSE and Custodian Bank are closed, or under any emergency circumstances determined by the SEC. If the Fund's Board of Trustees determines that it would be detrimental to the best interests of remaining shareholders of the Fund to make payment wholly or partly in cash, the Fund may pay redemption proceeds in whole or in part by a distribution in-kind of liquid securities held by the Portfolio in lieu of cash in conformity with applicable rules of the SEC. Investors may in- cur brokerage charges on the sale of portfolio securities received in payment of redemptions. The Portfolio reserves the right to liquidate any account that is below fifty percent of the required minimum initial investment amount for the Port- folio as set forth in the Prospectus, where the reduction in value has oc- curred due to a redemption or exchange out of the account. If at any time your total investment does not have a value of at least fifty percent of the re- quired minimum initial investment amount, you may be notified that the value of your account is below the Portfolio's minimum account balance requirement. You would then be allowed 60 days to make an additional investment before the account is liquidated. Retirement accounts and certain other accounts will not be subject to automatic liquidation. Reductions in value that result solely from market activity will not trigger an involuntary redemption. 18 SHAREHOLDER SERVICES EXCHANGE PRIVILEGE Institutional Class Shares of the Portfolio may be exchanged for Institu- tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo- lios of the UAM Funds at the end of this Prospectus.) Exchange requests should be made by contacting the UAM Funds Service Center. Any exchange will be based on the net asset value of the shares involved. There is no sales commission or charge of any kind for an exchange. Before making an exchange into the Portfolio, a shareholder should read its Prospec- tus and consider the investment objectives of the Portfolio to be purchased. Call the UAM Funds Service Center for a copy of the Prospectus for the Portfo- lio(s) in which you are interested. Exchanges can only be made with Portfolios that are qualified for sale in a shareholder's state of residence. Exchange requests may be made either by mail or telephone. Telephone ex- changes will be accepted only if the certificates for the shares to be ex- changed have not been issued to the shareholder and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the NYSE will be processed on the next business day. The Fund may modify or terminate the exchange program at any time upon 60 days' written notice to shareholders, and may reject any exchange request. If the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any exchange request, with respect to such investor's account. Such investors also may be barred from exchanging into other portfolios of the UAM Funds. For additional information regarding responsibility for the authentic- ity of telephoned instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE." An exchange into another UAM Funds Portfolio is a sale of shares and may result in a gain or loss for income tax purposes. AUTOMATIC INVESTMENT PLAN An Automatic Investment Plan permits shareholders of a Portfolio with a min- imum value of $2,500 or more to purchase shares automatically (minimum of $100 per transaction) at regular intervals selected by the shareholder. Provided the shareholder's bank or other financial institution allows automatic with- drawals, shares are purchased by transferring funds via the Automated Clearing House ("ACH"). Investment made through ACH will be automatically transferred from a shareholder's checking, bank money market or NOW account designated by the shareholder. Such withdrawals are made electronically, if the sharehold- er's bank or financial institution so permits, or be pre-authorized checks or drafts drawn on the shareholder's bank or other account. The bank or financial institution must be a 19 member of ACH. At the shareholder's option, the account designated will be debited in the specified amount, and shares will be purchased monthly or quar- terly. To establish an Automatic Investment Plan, a shareholder must complete the Optional Services Form available from the UAM Funds Service Center at 1-800- 638-7983 and mail it to Chase Global Funds Service Company. A shareholder may cancel his/her participation or change the amount of purchase at any time by mailing written notification to Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. Notification generally will be effective three business days following receipt. The Fund may modify or terminate this privi- lege at any time, or may charge a service fee, although no such fee currently is contemplated. VALUATION OF SHARES The net asset value of each class of a Portfolio is determined by dividing the value of the Portfolio's assets, less any liabilities, by the number of shares outstanding. The net asset value per share of the Portfolio is deter- mined as of the close of the NYSE on each day that the NYSE is open for busi- ness. Equity securities listed on a securities exchange for which market quota- tions are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed secu- rities not traded on the valuation date for which market quotations are read- ily available are valued neither exceeding the current ask prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars quoted by any major bank or by a broker. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Trustees. PERFORMANCE CALCULATIONS The Portfolio measures performance by calculating yield and total return. Both yield and total return figures are based on historical earnings and are not intended to indicate future performance. Yield and total return are calcu- lated separately for each class of a Portfolio. Yield refers to the income generated by an investment in the Portfolio over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all funds. As this differs from other accounting methods, the quoted yield may not equal the in- come actually paid to shareholders. 20 Total return is the change in value of an investment in the Portfolio over a given period, assuming reinvestment of any dividends and capital gains. A cu- mulative or aggregate total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of re- turn that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. The Portfolio's performance may be compared to data prepared by independent services which monitor the performance of investment companies, data reported in financial and industry publications, and various indices as further de- scribed in the Portfolio's SAI. This information may also be included in sales literature and advertising. The Portfolio's Annual Report to Shareholders for the most recent fiscal year end contains additional performance information that includes comparisons with appropriate indices. The Annual Report is available without charge. Con- tact the UAM Funds Service Center at the address or telephone number on the cover of this Prospectus. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income (for tax purposes) to shareholders in quarterly dividends. If any net capital gains are realized, the Portfolio will normally distribute such gains annually. All dividends and capital gains distributions will be automat- ically reinvested in shares of the Portfolio unless the Fund is notified in writing that the shareholder elects to receive the distributions in cash. FEDERAL TAXES The Portfolio intends to qualify as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, for federal in- come tax purposes and to meet all other requirements that are necessary for it (but not its shareholders) to be exempt from federal taxes on income and gains paid to shareholders in the form of dividends. To do this, the Portfolio must, among other things, distribute substantially all of its ordinary income and net capital gains on an annual basis and maintain a portfolio of investments which satisfies certain diversification criteria. Dividends paid by the Portfolio from net investment income, whether in cash or reinvested in shares, are taxable to shareholders as ordinary income. Short-term capital gains will be taxed as ordinary income. Long-term capital gains distributions are taxed as long-term capital gains. Shareholders will be notified annually of dividend income earned for tax purposes. 21 Dividends declared in October, November and December to shareholders of rec- ord in such a month and paid in January of the following year will be treated as if they had been paid by the Fund and received by the shareholders on De- cember 31. The Fund is required by federal law to withhold 31% of reportable payments paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, you must certify that your Social Security or Taxpayer Identification Number you have provided is correct and that either you are not currently subject to backup withholding or you are exempt from backup withholding. This certification must be made on the Application or on a separate form supplied by the Fund. Dividends and interest received by the Portfolio may give rise to withhold- ing and other taxes imposed by foreign countries. These taxes reduce the Port- folio's dividends but are included in the taxable income reported on your tax statement if the Portfolio qualifies for this tax treatment and elects to pass it through to you. Consult a tax adviser for more information regarding deduc- tions and credits for foreign taxes. INVESTMENT ADVISER Jacobs Asset Management (the "Adviser") is a Delaware limited partnership and is a registered investment adviser formed in July 1995. Its business of- fices are located at 200 East Broward Boulevard, Suite 1920, Fort Lauderdale, FL 33301. The Adviser provides and offers investment management and advisory services to corporations, unions, pensions and profit-sharing plans, trusts, estates and other institutions and investors. Although the Adviser is a rela- tively new entity, the principals of the Adviser, who are also the portfolio managers of the Portfolio, have substantial experience as investment advisers to mutual funds. As of the date of this Prospectus, the Adviser currently had over $415 million in assets under management. United Asset Management Corporation ("UAM") is a limited partner of the Ad- viser and owns a controlling interest in the Adviser. The Portfolio pays an annual fee in monthly installments to the Adviser for advisory services. This fee is accrued daily and paid every month as a per- centage of the average net assets in the Portfolio for that month. The per- centage fee on an annual basis is 1.00%. The Adviser and certain other service providers have voluntarily agreed to waive a portion of their advisory fees and to assume certain operating expenses to the extent necessary to keep the Portfolio's Service Class Shares' total operating expenses from exceeding 1.75% of average daily net assets, until further notice. 22 The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili- ates, may, at their own expense, compensate a Service Agent or other person for marketing, shareholder servicing, record-keeping and/or other services performed with respect to the Fund, a Portfolio or any Class of Shares. Pay- ments made for any of these purposes may be made from its revenues, its prof- its or any other source available to it. When such service arrangements are in effect, they are made generally available to all qualified service providers. The Distributor, the Adviser and certain of their other affiliates also par- ticipate, at the date of this Prospectus, in an arrangement with Smith Barney, Inc. under which Smith Barney provides certain defined contribution plan mar- keting and other shareholder services of its Consulting Group and receives .15 of 1% of the daily net asset value of Institutional Class Shares held by Smith Barney's eligible customer accounts in addition to amounts payable to all selling dealers. The Fund also compensates Smith Barney for services it pro- vides to certain defined contribution plan shareholders that are not otherwise provided by the Administrator. The investment professionals at the Adviser who comprise the Investment Com- mittee, and who are responsible for the day-to-day management of the Portfo- lio, and their qualifications are as follows: DANIEL L. JACOBS, CFA, PRESIDENT. Mr. Jacobs managed $3.4 billion in inter- national and global equity portfolios as Executive Vice President and Director of Templeton Investment Counsel from 1984 to 1995. Mr. Jacobs was Portfolio Manager of Templeton's $1.4 billion Smaller Companies Growth Fund and was a Senior Portfolio Manager of institutional separate accounts. Mr. Jacobs served as President of the Templeton Variable Annuity Fund and Portfolio Manager for the Equity and the equity portion of the Balanced Funds in the Templeton Vari- able Annuity Series. Prior to joining Templeton, he was Vice President/Portfolio Manager, Insti- tutional Investment Group and International Division of the First National Bank of Atlanta from 1976 to 1984. Mr. Jacobs received an MBA in Finance from Emory University (1976) and a BA in Economics from Miami University (1974). In addition to holding a CFA and CIC, Mr. Jacobs is a founding member of the In- ternational Society of Financial Analysts. WAI W. CHIN, MANAGING DIRECTOR, ASIAN RESEARCH AND PORTFOLIO MANAGEMENT. Ms. Chin was formerly Vice President of the Global Equity Group of Scudder, Ste- vens & Clark, where she spent over five years as a Pacific Basin analyst, spe- cializing in the developed and emerging markets of Asia. She started her re- search analyst career at Baron Capital, Inc. and was a foreign currency trader at the Bank of America and Creditanstalt Banverein. Ms. Chin holds a BA in East Asian Studies from Barnard College and received an MBA in Finance from Columbia University. 23 ROBERT J. JURGENS, MANAGING DIRECTOR, EUROPEAN RESEARCH AND PORTFOLIO MANAGEMENT. As Vice President and head of AIG Global Investors' International Equity Division from 1993 to 1995, Mr. Jurgens was responsible for investment policy and management of international and global equity portfolios. He has fourteen years of experience investing in the global stock markets, with par- ticular expertise in the European markets. Upon graduation from Pennsylvania State University with a BS in Business/French, Mr. Jurgens spent four years with Scandinavian Bank Group as a Global Portfolio Manager/Analyst, three years with Nomura Bank International in London managing global equities, and two years as an International Equity Manager at the privately held Antessa In- vestment Management Limited. ADVISER'S HISTORICAL PERFORMANCE Below are certain performance data provided by the Adviser pertaining to a registered, open-end investment company ("mutual fund") that was managed by Mr. Jacobs with substantially similar (although not necessarily identical) ob- jectives, policies, and strategies as those of the Portfolio. The investment returns of the Portfolio may differ from those of the mutual fund because fees and expenses of the mutual fund may differ from those of the Portfolio. During Mr. Jacobs' tenure as the portfolio manager of the mutual fund, he was primar- ily responsible for the day-to-day management of the mutual fund, and no other person had a significant role in achieving the mutual fund's performance. The Portfolio and the mutual fund are separate funds, and are members of different families of investment companies. The results presented are not intended to predict or suggest the return to be experienced by the Portfolio or the return an investor might achieve by investing in the Portfolio. MUTUAL FUND CUMULATIVE RETURNS ENDED JUNE 30, 1995
THREE YEARS YEAR ENDED ENDED JUNE 30, 1995 JUNE 30, 1995 ------------- ------------- Templeton International Fund................... 11.43% 14.55% Lipper International Index..................... 0.95% 7.22% Morgan Stanley Capital International ("MSCI") EAFE Index US$............................... 1.66% 12.68%
- ----------- Notes: 1. The mutual fund managed by Mr. Jacobs was the Templeton International Fund of the Templeton Variable Products Series Fund. Mr. Jacobs was the lead portfolio manager for that mutual fund from inception, May 1, 1992, to June 30, 1995. 24 JACOBS ASSET MANAGEMENT HISTORICAL PERFORMANCE Set forth below are certain performance data provided by the Adviser per- taining to the composite of separately managed accounts of the Adviser that are managed with substantially similar (although not necessarily identical) objectives, policies and strategies as those of the Portfolio. The performance data for the managed accounts is net of all fees and expenses. The investment returns of the Portfolio may differ from those of the separately managed ac- counts because such separately managed accounts may have fees and expenses that differ from those of the Portfolio. Further, the separately managed ac- counts are not subject to investment limitations, diversification requirements and other restrictions imposed by the 1940 Act and the Internal Revenue Code; such conditions, if applicable, may have lowered the returns for the sepa- rately managed accounts. The results presented are not intended to predict or suggest the return to be experienced by the Portfolio or the return an in- vestor might achieve by investing in the Portfolio. JACOBS ASSET MANAGEMENT INTERNATIONAL COMPOSITE RETURNS (PERCENTAGE RETURNS NET OF MANAGEMENT FEES)
MSCI ADVISER EAFE ------- ----- 1997............................................................. 12.53% 2.06% 1/1/98-4/30/98................................................... 13.37% 15.72% 10/1/95-4/30/98.................................................. 68.61% 30.80% Annualized Return................................................ 22.41% 10.95% Cumulative Return................................................ 68.61% 30.80%
- ----------- Notes: 1. The annualized return is calculated from monthly data, allowing for com- pounding. Market value of the account was the sum of the account's total assets, including cash, cash equivalents, short-term investments, and se- curities valued at current market prices. 2. The cumulative return means that $1 invested in the composite account on October 1, 1995 had grown to $1.37 by March 31, 1998. 3. The MSCI EAFE is an unmanaged index which assumes reinvestment of divi- dends and is generally considered representative of securities similar to those invested in by the Adviser for purpose of the composite performance numbers set forth above. 4. The Advisor's average annual management fee for the period since inception on October 1, 1995 to March 31, 1998 was 0.75%, or 75 basis points. Net returns to investors vary depending on the management fee. 25 ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of UAM, is re- sponsible for performing and overseeing administrative, fund accounting, divi- dend disbursing and transfer agent services provided to the Fund and its Port- folios. UAMFSI's principal office is located at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is located at 73 Tremont Street, Boston, MA 02108. Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fees are calculated from the aggregate net assets of the Portfolio:
RATE ---- Jacobs International Octagon Portfolio................................. 0.04%
CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined UAM Fund assets; 0.11 of 1% of the next $800 million of combined UAM Fund assets; 0.07 of 1% of combined UAM Fund assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined UAM Fund assets in excess of $3 billion. Fees are allocated among the Portfolios on the basis of their relative as- sets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum annual fee increases by $20,000. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, with its principal office located at 211 Congress Street, Boston, MA 02110, distributes shares of the Fund. Under the Distribution Agreement (the "Agreement"), the Distributor, as agent of the Fund, agrees to use its best efforts as sole dis- tributor of Fund shares. The Distributor does not receive any fee or other compensation under the Agreement with respect to the Shares offered in this Prospectus. The Agreement continues in effect as long as such continuance is approved at least annually by the Fund's Board of Trustees. Those approving the Agreement must include a majority of Trustees who are neither parties to the Agreement nor interested persons of any such party. The Agreement provides that the Fund will bear costs of registration of its shares with the SEC and various states and the printing of its prospectuses, its SAIs and its reports to shareholders. 26 PORTFOLIO TRANSACTIONS The Advisory Agreement authorizes the Adviser to select the brokers or deal- ers that will execute the purchase and sale of investment securities for the Portfolio. The Agreement directs the Adviser to use its best efforts to obtain the best available price and most favorable execution for all transactions of the Portfolio. If consistent with the interests of the Portfolio, the Adviser may select brokers on the basis of the research, statistical and pricing serv- ices they provide to the Portfolio in addition to required services. Such bro- kers may be paid a higher commission than that which another qualified broker would have charged for effecting the same transaction, provided that such com- missions are paid in compliance with the Securities Exchange Act of 1934, as amended, and that the Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to a Portfolio and the Adviser's other clients. Although not a typical practice, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. If a purchase or sale of securities consistent with the investment policies of the Portfolio and one or more of these other clients served by the Adviser 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 rea- sonable by the Adviser. Although there is no specified formula for allocating such transactions, such allocations are subject to periodic review by the Fund's Trustees. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized as a Delaware business trust on May 18, 1994 under the name "The Regis Fund II". On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial inter- est, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without fur- ther action by shareholders. At its discretion, the Board of Trustees may create additional Portfolios and classes of shares. The shares of each Portfolio are fully paid and nonas- sessable, and have no preference as to conversion, exchange, dividends, re- tirement or other features and no pre-emptive rights. They have noncumulative voting rights, which means that holders of more than 50% of shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. 27 No person or corporation owns 25% or more of the outstanding shares of the Portfolio. The persons or organizations owning 25% or more of the outstanding shares of a Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of such Portfolio. Annual meetings will not be held except as required by the 1940 Act and other applicable laws. The Fund has undertaken that its Trustees will call a meeting of shareholders if such a meeting is requested in writing by the hold- ers of not less than 10% of the outstanding shares of the Fund. The Fund will assist shareholder communications in such matters to the extent required by the undertaking. CUSTODIAN The Chase Manhattan Bank serves as custodian of the Fund's assets. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the independent accountant for the Fund. REPORTS Investors will receive unaudited semi-annual financial statements and annual financial statements audited by PricewaterhouseCoopers LLP. SHAREHOLDER INQUIRIES Shareholder inquiries may be made by contacting the UAM Funds Service Center at the telephone number listed on the cover page of this Prospectus. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF AD- DITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTI- TUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. 28 UAM FUNDS -- INSTITUTIONAL CLASS SHARES Acadian Emerging Markets Portfolio Acadian International Equity Portfolio BHM&S Total Return Bond Portfolio Cambiar Opportunity Portfolio Chicago Asset Management Intermediate Bond Portfolio Chicago Asset Management Value/Contrarian Portfolio C&B Balanced Portfolio C&B Equity Portfolio C&B Equity Portfolio for Taxable Investors C&B Mid Cap Equity Portfolio DSI Balanced Portfolio DSI Disciplined Value Portfolio DSI Limited Maturity Bond Portfolio DSI Money Market Portfolio FMA Small Company Portfolio FPA Crescent Portfolio Hanson Equity Portfolio Heitman Real Estate Portfolio ICM Equity Portfolio ICM Fixed Income Portfolio ICM Small Company Portfolio Jacobs International Octagon Portfolio McKee Domestic Equity Portfolio McKee International Equity Portfolio McKee Small Cap Equity Portfolio McKee U.S. Government Portfolio MJI International Equity Portfolio NWQ Balanced Portfolio NWQ Small Cap Value Portfolio NWQ Special Equity Portfolio NWQ Value Equity Portfolio Rice, Hall James Small Cap Portfolio Rice, Hall James Small/Mid Cap Portfolio SAMI Preferred Stock Income Portfolio Sirach Bond Portfolio Sirach Equity Portfolio Sirach Growth Portfolio Sirach Special Equity Portfolio Sirach Strategic Balanced Portfolio Sterling Partners' Balanced Portfolio Sterling Partners' Equity Portfolio Sterling Partners' Small Cap Value Portfolio TS&W Balanced Portfolio TS&W Equity Portfolio TS&W Fixed Income Portfolio TS&W International Equity Portfolio 29 UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 1-800-638-7983 Investment Adviser Jacobs Asset Management 200 East Broward Boulevard Suite 1920 Fort Lauderdale, FL 33301 Distributor UAM Fund Distributors, Inc. 211 Congress Street Boston, MA 02110 PROSPECTUS July 17, 1998 UAM Funds Prospectus July 17, 1998 MJI International Equity Portfolio Institutional Class Shares [LOGO OF UAM FUNDS APPEARS HERE] TABLE OF CONTENTS
PAGE ---- Fund Expenses.............................................................. 1 Prospectus Summary......................................................... 3 Risk Factors............................................................... 4 Financial Highlights....................................................... 4 Investment Objective....................................................... 6 Investment Policies........................................................ 6 Other Investment Policies.................................................. 8 Investment Limitations..................................................... 13 Purchase of Shares......................................................... 14 Redemption of Shares....................................................... 18 Shareholder Services....................................................... 20 Valuation of Shares........................................................ 22 Performance Calculations................................................... 23 Dividends, Capital Gains Distributions and Taxes........................... 23 Investment Adviser......................................................... 24 Administrative Services.................................................... 25 Distributor................................................................ 26 Portfolio Transactions..................................................... 26 General Information........................................................ 27 UAM Funds -- Institutional Class Shares.................................... 29
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO INSTITUTIONAL CLASS SHARES - -------------------------------------------------------------------------------- PROSPECTUS -- JULY 17, 1998 UAM Funds Trust (the "Fund") is an open-end investment company known as a "mutual fund." The Fund consists of multiple series (known as "Portfolios"), each of which has different investment objectives and policies. MJI Interna- tional Equity Portfolio currently offers two classes of shares: Institutional Class Shares and Institutional Service Class Shares ("Service Class Shares"). Shares of each class represent equal, pro rata interests in the Portfolio and accrue dividends in the same manner except that Service Class Shares bear fees payable by the class to financial institutions for services they provide to the owners of such shares. The securities offered in this Prospectus are Institu- tional Class Shares of one diversified, no-load Portfolio of the Fund managed by Murray Johnstone International Ltd. MJI INTERNATIONAL EQUITY PORTFOLIO. MJI International Equity Portfolio (the "Portfolio") seeks to maximize total return, including both capital apprecia- tion and current income, by investing primarily in the common stocks of compa- nies based outside of the United States. Under normal circumstances, at least 65% of the Portfolio's total assets will be invested in securities of issuers domiciled in at least three countries other than the United States. There can be no assurance that the Portfolio will achieve its stated objec- tive. Keep this Prospectus for future reference. It contains information that you should know before you invest. A "Statement of Additional Information" ("SAI") containing additional information about the Fund has been filed with the Secu- rities and Exchange Commission ("SEC"). The SAI is dated July 17, 1998 and has been incorporated by reference into this Prospectus. For a free copy of the SAI contact the UAM Funds Service Center at 1-800-638-7983. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FUND EXPENSES The following table illustrates expenses and fees that a shareholder of the Portfolio's Institutional Class Shares will incur. The Fund does not charge transaction fees. However, transaction fees may be charged if a broker-dealer or other financial intermediary deals with the Fund on your behalf. (See "PUR- CHASE OF SHARES.") SHAREHOLDER TRANSACTION EXPENSES Sales Load Imposed on Purchases......................................... NONE Sales Load Imposed on Reinvested Dividends.............................. NONE Deferred Sales Load..................................................... NONE Redemption Fees......................................................... NONE Exchange Fee............................................................ NONE
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) Investment Advisory Fees.............................................. 0.75% 12b-1 Fees............................................................ NONE Other Expenses (After Expenses Assumed or Waived)..................... 0.75% ---- Total Operating Expenses (After Expenses Assumed or Waived)........... 1.50%* ====
- ----------- * Absent the expenses assumed, Other Expenses and Total Operating Expenses of the Portfolio would have been 0.82% and 1.57%, respectively. The Total Oper- ating Expenses includes the effect of expense offsets. If expense offsets were excluded, total operating expenses would not be affected. The Adviser and certain other service providers have voluntarily agreed to waive all or a portion of their advisory fees and/or to assume operating expenses to keep the Portfolio's Institutional Class Shares total annual operating expenses (excluding interest, taxes and extraordinary expenses), after the effect of expense offsets, from exceeding 1.50% of average daily net assets until fur- ther notice. The Adviser and/or service providers may change or discontinue their fee waivers and expense assumptions at any time. The table above shows various fees and expenses an investor may bear di- rectly or indirectly. The expenses and fees set forth above are based on the Portfolio's Institutional Class Shares' operations during the fiscal year ended April 30, 1998. 1 EXAMPLE The following example illustrates expenses a shareholder would pay on a $1,000 investment over various time periods assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- MJI International Equity Portfolio Institutional Class Shares.............. $15 $47 $82 $179
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX- PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 2 PROSPECTUS SUMMARY INVESTMENT ADVISER Murray Johnstone International Ltd. (the "Adviser") is an international in- vestment adviser and is an affiliate of the Murray Johnstone Group ("MJ Group"), in Glasgow, Scotland. The MJ Group's origins date back to 1907, and it currently has $7 billion in assets under management. The MJ Group has a 200-member staff including 40 investment professionals. It became a subsidiary of United Asset Management Corporation in 1993. The Adviser, the SEC-regis- tered entity within the MJ Group, has $1.4 billion of assets under management and has a U.S. office in Chicago. (See "INVESTMENT ADVISER.") PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor") to investors at net asset value without a sales commission. Share purchases may be made by sending investments directly to the Fund. The minimum initial investment in the Portfolio is $2,500. The minimum initial in- vestment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. The minimum for any subsequent investment is $100. Cer- tain exceptions to the initial or minimum investment amounts may be permitted by the officers of the Fund. (See "PURCHASE OF SHARES.") DIVIDENDS AND DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income in an annual dividend. Any realized net capital gains will also be distributed annually. Distributions will be reinvested in the Portfolio's shares automatically unless an investor elects to receive cash distributions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") REDEMPTION OF SHARES Shares of the Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemp- tion request. The redemption price may be more or less than the purchase price. Shares of the Portfolio may be exchanged for shares of the same class of any other portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" and "EX- CHANGE PRIVILEGE.") ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As- set Management Corporation ("UAM"), is responsible for performing and oversee- ing administration, dividend disbursing and transfer agency services provided to the Fund and its Portfolios by third-party service providers. (See "ADMIN- ISTRATIVE SERVICES.") 3 RISK FACTORS The value of the Portfolio's shares will fluctuate in response to changes in market and economic conditions as well as the financial conditions and pros- pects of the issuers in which the Portfolio invests. Prospective investors should consider the following factors: (1) The Portfolio may invest in repur- chase agreements which entail a risk of loss should the seller default on its transaction; (2) The Portfolio may lend its investment securities which en- tails a risk of loss should a borrower fail financially; (3) The Portfolio may purchase securities on a when-issued basis which do not earn interest until issued and may decline or appreciate in market value prior to their delivery to the Portfolio; (4) The Portfolio may engage in various currency strategies to seek to hedge its investments against movements in security prices, inter- est rates, and exchange rates by the use of derivatives, including forward contracts, options and futures as well as options on futures. Such strategies are commonly referred to as "derivatives" and involve the risk of imperfect correlation in movements in the price of options and futures and movements in the price of securities, interest rates or currencies which are the subject of the hedge. To the extent these transactions involve foreign securities or cur- rencies, they are also subject to the risk factors associated with foreign in- vestments generally. There can be no assurance that a liquid secondary market for these hedging techniques will exist at any specific time. (See "OTHER IN- VESTMENT POLICIES.") FINANCIAL HIGHLIGHTS The following table provides selected per share information for a share out- standing throughout the period presented of the Portfolio's Institutional Class Shares. This table is part of the Portfolio's Annual Financial State- ments, which are included in the Portfolio's 1998 Annual Report to Sharehold- ers. The Report is incorporated by reference into the Portfolio's SAI. The Portfolio's Annual Financial Statements have been audited by PricewaterhouseCoopers LLP whose unqualified opinion thereon is also incorpo- rated into the Portfolio's SAI. The following information should be read in conjunction with the Portfolio's 1998 Annual Report to Shareholders. Further information about the Portfolio's performance is contained in its Annual Re- port, which may be obtained without charge by calling the telephone number on the Prospectus cover page. 4
YEAR YEAR YEAR SEPTEMBER 16, ENDED ENDED ENDED 1994*** APRIL 30, APRIL 30, APRIL 30, TO APRIL 30, 1998 1997 1996 1995 --------- --------- --------- ------------- NET ASSET VALUE, BEGINNING OF PERIOD......................... $ 10.65 $ 10.27 $ 9.50 $10.00 ------- ------- ------- ------ INCOME FROM INVESTMENT OPERATIONS Net Investment Income.......... 0.07 0.06 0.07 0.04 Net Realized and Unrealized Gain (Loss) on Investments... 2.02 0.42 0.75 (0.54)++ ------- ------- ------- ------ Total from Investment Operations................. 2.09 0.48 0.82 (0.50) ------- ------- ------- ------ DISTRIBUTIONS Net Investment Income.......... (0.04) (0.01) -- (a) -- In Excess of Net Investment Income....................... -- -- (0.03) -- Net Realized Gain.............. (0.41) (0.09) (0.02) -- ------- ------- ------- ------ Total Distributions.......... (0.45) (0.10) (0.05) -- ------- ------- ------- ------ NET ASSET VALUE, END OF PERIOD... $ 12.29 $ 10.65 $ 10.27 $ 9.50 ======= ======= ======= ====== TOTAL RETURN+.................... 20.39% 4.67% 8.67% (5.00)%** ======= ======= ======= ====== RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (Thousands).................. $32,296 $28,818 $ 8,592 $5,535 Ratio of Expenses to Average Net Assets+.................. 1.50% 1.50% 1.45% 1.00%* Ratio of Net Investment Income to Average Net Assets........ 0.60% 0.68% 0.88% 1.49%* Portfolio Turnover Rate........ 80% 47% 59% 81% Average Commission Rate#....... $0.0278 $0.0323 $0.0316 N/A Ratio of Voluntary Waived Fees and Expenses Assumed by the Adviser to Average Net Assets....................... 0.07% 0.53% 1.62% 5.50%* Ratio of Expenses to Average Net Assets Including Expense Offsets...................... 1.50% 1.50% 1.43% 1.00%*
- ----------- * Annualized. ** Not Annualized. *** Commencement of Operations. + Total return would have been lower had certain fees not been waived and expenses assumed by the Adviser during the periods indicated. ++ The amount shown for a share outstanding throughout the period does not accord with the aggregate net gains on investments for that period because of the timing of sales and repurchases of the Portfolio shares in relation to fluctuating market value of the investments of the Portfolio. # Beginning with fiscal year 1996, the portfolio is required to disclose the average commission rate per share it paid for portfolio trades on which commissions were charged. (a) Amount is less than $0.01 per share. 5 INVESTMENT OBJECTIVE The Portfolio seeks to maximize total return, including both capital appre- ciation and current income, by investing primarily in the common stocks of companies based outside of the United States. Under normal circumstances, at least 65% of the Portfolio's total assets will be invested in at least three different countries other than the United States. There can be no assurance that the Portfolio will achieve its stated objective. INVESTMENT POLICIES The Portfolio's investment process begins by seeking to determine the best possible allocation among international stock markets. The Portfolio's Adviser evaluates markets through a proprietary system which analyzes economic fac- tors, stock prices in each market, market performance and trends in monetary policy. Drawing on this information, the Adviser decides which markets the Portfolio should invest in and in what proportion. Once the country allocation decision has been made, the Adviser selects un- dervalued stocks in that market. The Adviser rates companies according to the quality of their management, market position, financial strength, ability to earn competitive returns on equity and assets, and growth potential. The Port- folio will invest in stocks that the Adviser determines are undervalued com- pared to industry norms within their countries. It is expected that invest- ments will be diversified throughout the world and within markets to minimize specific country and currency risks. While investments will be made primarily in securities of companies domiciled in developed countries, investments will also be made in developing countries. (See "FOREIGN INVESTMENT RISK FACTORS.") Under normal circumstances, at least 65% of the Portfolio's total assets will be invested in common stocks of companies in at least three countries outside the United States. It is expected that generally, the Portfolio will invest in common stocks of companies listed on U.S. or foreign stock ex- changes, but it may also invest in stocks traded in the over-the-counter mar- ket. Common stocks for this purpose also include securities having common stock characteristics such as rights and warrants to purchase common stocks. The Portfolio may also invest in convertible securities and preferred stocks. The Portfolio may also invest in foreign equity securities in the form of American Depositary Receipts (ADRs), European Depositary Receipts (EDRs) and other similar global instruments. ADRs (sponsored or unsponsored) are receipts typically issued by a U.S. bank or trust company evidencing ownership of the underlying foreign securities. Most ADRs are traded on a U.S. stock exchange. Issuers of unsponsored ADRs are not contractually obligated to disclose mate- rial information in the U.S. and, therefore, there may not be a correlation between such information and the market value of the unsponsored ADR. EDRs are receipts typically issued by a European bank or trust company evidencing own- ership of the underlying foreign securities. 6 FOREIGN INVESTMENT RISK FACTORS Investors should recognize that investing in foreign securities involves certain risks which are not typically associated with investing in domestic securities. Since securities issued by foreign entities may be denominated in foreign currencies, and the Portfolio may temporarily hold uninvested reserves in bank deposits in foreign currencies, the Portfolio's value may rise or fall depending on currency exchange rates. The Portfolio may also have to pay a fee to convert funds from one currency to another. Non-U.S.-based companies are not subject to the same accounting, auditing and financial reporting standards as are domestic companies. There may be less publicly-available information about non-U.S.-based companies which may make it difficult to make investment decisions. Also, stock markets outside the U.S. are typically less liquid -- that is, it is more difficult to sell large quantities of a stock without driving its price down or to buy without pushing its price up. Market regulation may be less rigorous in some markets. Finally, political factors may have an impact in the form of confiscatory taxation, ex- propriation or political instability in international markets. Although the Portfolio will seek the most favorable trading costs available in any given market, investors should recognize that foreign commissions are generally higher than those in the U.S. Custodial expenses will generally be higher than would be the case in the U.S. In addition, custodial expenses, that is, fees paid to financial institutions for holding the Portfolio's secu- rities, will generally be higher than would be the case in the U.S. Some foreign governments also levy withholding taxes against dividend and interest income. Although in some countries a portion of the taxes is recover- able, the non-recovered portion of foreign withholding taxes will reduce the income the Portfolio receives from the companies comprising its investments. Investing in the foreign securities of developing countries presents addi- tional considerations. The economies of individual developing countries may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rate of inflation, currency depreciation, capital reinvestment, resource self-sufficiency and balance of payments posi- tion. Further, the economies of developing countries generally are heavily de- pendent upon international trade and, accordingly, have been and may continue to be adversely affected by trade barriers, exchange controls, managed adjust- ments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been and may continue to be adversely affected by economic conditions in the countries with which they trade. With respect to any developing country, there is the possibility of nation- alization, expropriation or confiscatory taxation, repatriation of investment income, cap- 7 ital and the proceeds of sales by foreign investors, political changes, gov- ernmental regulation, social instability or diplomatic developments (including war) which could adversely affect the economies of such countries or the value of the Portfolio's investments in those countries. In addition, it may be dif- ficult to obtain and enforce a judgment against foreign issuers. The Portfolio may engage in various investment techniques such as futures contracts, options on futures contracts, options, and interest rate swap transactions. (See "OTHER INVESTMENT POLICIES -- HEDGING AND RELATED STRATE- GIES AND RISK CONSIDERATIONS.") OTHER INVESTMENT POLICIES The Portfolio may, under normal circumstances, invest up to 35% of its as- sets, unless restricted by additional limitations described below or in the Portfolio's SAI, in the following securities, investments or investment tech- niques. SHORT-TERM INVESTMENTS In order to earn a return on uninvested assets, meet anticipated redemp- tions, or for temporary defensive purposes, the Portfolio may invest a portion of its assets in domestic and foreign money market instruments including cer- tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob- ligations, U.S. Government agency securities, short-term corporate debt secu- rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Ratings Services or Prime-1 or Prime-2 by Moody's Investors Service or if unrated, de- termined by the Adviser to be of comparable quality. Time deposits maturing in more than seven days will not be purchased by the Portfolio, and time deposits maturing from two business days through seven calendar days will not exceed 10% of the total assets of the Portfolio. The Portfolio will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, (ii) in the case of U.S. banks, it is a member of the Fed- eral Deposit Insurance Corporation, and (iii) in the case of foreign branches of U.S. banks, the security is, in the opinion of the Adviser, of an invest- ment quality comparable with other debt securities which may be purchased by the Portfolio. The Fund has received permission from the SEC to deposit the daily uninvested cash balances of the Fund's Portfolios, as well as cash for invest- ment purposes, into one or more joint accounts and to invest the daily balance of the joint accounts in the following short-term investments: fully collater- alized repurchase agreements, interest-bearing or discounted commercial paper including dollar-denominated commercial paper of foreign issuers, and any other short-term money market instruments including variable rate demand notes and tax-exempt money 8 instruments. By entering into these investments on a joint basis, the Portfo- lio may earn a higher rate of return on investments relative to what it could earn individually. The Fund has received permission from the SEC for each of its Portfolios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio (See "INVESTMENT COMPANIES.") REPURCHASE AGREEMENTS The Portfolio may invest in repurchase agreements collateralized by U.S. Government securities, certificates of deposit, and certain bankers' accept- ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repurchase agreement, the Portfolio buys a security and simultaneously commits to sell that security back at an agreed upon price plus an agreed upon market rate of interest. Under a repurchase agreement, the seller is also required to maintain the value of securities subject to the agreement at not less than 100% of the repurchase price. The value of the securities purchased will be evaluated daily, and the Adviser will, if necessary, require the seller to maintain additional securities to ensure that the value is in compliance with the previous sentence. The use of repurchase agreements involves certain risks. For example, a default by the seller of the agreement may cause the Portfolio to experience a loss or delay in the liquidation of the collateral securing the repurchase agreement. The Portfolio might also incur disposition costs in liquidating the collateral. While the Fund's management acknowledges these risks, it is expected that they can be controlled through stringent counter-party selection criteria and careful monitoring procedures. The Fund has received permission from the SEC to pool daily uninvested cash balances of the Fund's Portfolios in order to invest in repurchase agreements on a joint basis. By entering into joint repurchase agreements, the Portfolio may incur lower transaction costs and earn higher rates of interest on joint repurchase agreements. The Portfolio's contribution would determine its return from a joint repurchase agreement. (See "SHORT TERM INVESTMENTS.") LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified institutional investors as a means of earning income. The Portfolio will not loan securities to the extent that greater than one-third of its total assets at fair market value would be committed to loans. During the term of a loan, the Portfolio is subject to a gain or loss depending on any increase or decrease in the market price of the securities loaned. Lending of securities is subject to review by the Fund's Board of Trustees. All relevant facts and circumstances, including the creditworthiness of the broker, dealer or institution, will be considered by the Adviser in making decisions about securities lending. An investment company may pay reasonable negotiated fees in connection with loaned securities so long as such fees are set forth in a written contract and 9 approved by its Board of Trustees. The Portfolio will continue to retain any voting rights with respect to loaned securities. If a material event occurs affecting an investment on loan, the loan must be called and the securities voted. WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES The Portfolio may purchase and sell securities on a "when-issued," "delayed settlement," or "forward delivery" basis. "When-issued" or "forward delivery" 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 and forward delivery transactions may be expected to occur a month or more be- fore delivery is due. Delayed settlement is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by the Portfolio until it re- ceives delivery or payment from the other party to any of the above transac- tions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. The Portfolio will maintain a separate account of cash or liquid securities at least equal to the value of purchase commitments until payment is made. Typically, no income ac- crues on securities purchased on a delayed delivery basis prior to the time delivery is made although the Portfolio may earn income on securities it has deposited in a segregated account. The Portfolio may engage in these types of purchases in order to buy securi- ties that fit with its investment objectives at attractive prices not to in- crease its investment leverage. PORTFOLIO TURNOVER In addition to Portfolio trading costs, higher rates of portfolio turnover may result in the realization of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for more information on taxation). The Portfolio will not normally engage in short-term trading, but reserves the right to do so. The table set forth in "Financial Highlights" presents the Portfolio's histor- ical portfolio turnover rates. INVESTMENT COMPANIES The Portfolio reserves the right to invest up to 10% of its total assets, calculated at the time of investment, in the securities of other open-end or closed-end investment companies. No more than 5% of the investing Portfolio's total assets may be invested in the securities of any one investment company nor may it acquire more than 3% of the voting securities of any other invest- ment company. The Portfolio will indirectly bear its proportionate share of any management fees paid by an investment company in which it invests in addi- tion to the advisory fee paid by the Portfolio. 10 The Fund has received permission from the SEC to allow each of its Portfo- lios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio provided that the in- vestment is consistent with the Portfolio's investment policies and restric- tions. Based upon the Portfolio's assets invested in the DSI Money Market Portfolio, the investing Portfolio's adviser will waive its investment advi- sory fee and any other fees it earned as a result of the Portfolio's invest- ment in the DSI Money Market Portfolio. The investing Portfolio will bear ex- penses of the DSI Money Market Portfolio on the same basis as all of its other shareholders. HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS The Portfolio may use options (both exchange-traded and over-the-counter) to attempt to enhance income. To reduce the overall risk of its investments (hedge), the Portfolio may use options, futures contracts, options on futures and forward currency contracts. These instruments are commonly referred to as derivatives. Hedging strategies may also be used in an attempt to manage the Portfolio's exposure to changing interest rates, security prices and currency exchange rates. The Portfolio may buy or sell futures contracts, write covered call options and buy put and call options on any security, index or currency including options and futures traded on foreign exchanges and options not traded on exchanges. The Portfolio's ability to use these strategies may be limited by market conditions, regulatory limits and tax considerations. The Portfolio's obligation under such hedging strategies will be covered by the maintenance of a segregated account of cash or liquid securities equal to at least 100% of the Portfolio's commitment. The SAI contains further information on all of these strategies and the risks associated with them. The Portfolio may write or purchase options in privately negotiated transac- tions ("OTC Options") as well as listed options. OTC Options can be closed out only by agreement with the other party to the transaction. Any OTC Option pur- chased by the Portfolio is considered an illiquid security. Any OTC Option written by the Portfolio will be with a qualified dealer pursuant to an agree- ment under which the Portfolio may repurchase the option at a formula price. Such options are considered illiquid to the extent that the formula price ex- ceeds the intrinsic value of the option. The Portfolio may not purchase or sell futures contracts or related options for which the aggregate initial mar- gin and premiums exceed 5% of the fair market value of the Portfolio's assets. In order to prevent leverage in connection with the purchase of futures con- tracts or call options thereon by the Portfolio, an amount of cash, cash equivalents or liquid securities equal to the market value of the obligation under the futures contracts or options (less any related market deposits) will be maintained in a segregated account with the Fund's Custodian. The Portfolio may not invest more than 15% of its net assets in illiquid securities and re- purchase agreements which have a maturity of longer than seven days. A more 11 complete discussion of the potential risks involved in transactions in options or futures contracts and related options is contained in the SAI. The Portfolio may enter into forward foreign currency exchange contracts for the purchase or sale of a specified currency at a specified future date either with respect to specific transactions or with respect to portfolio positions. For example, when the Adviser anticipates making a currency exchange transac- tion in connection with the purchase or sale of a security, the Portfolio may enter into a forward contract in order to set the exchange rate at which the transaction will be made. The Portfolio also may enter into a forward contract to sell an amount of a foreign currency approximating the value of some or all of the Portfolio's securities denominated in such currency. The Portfolio may use forward contracts in one currency or a basket of cur- rencies to hedge against fluctuations in the value of another currency when the Adviser anticipates there will be a correlation between the two and may use forward currency contracts to shift the Portfolio's exposure to foreign currency fluctuations from one country to another. The purpose of entering into these contracts is to minimize the risk to the Portfolio from adverse changes in the relationship between the U.S. dollar and foreign currencies. The Portfolio may enter into interest rate protection transactions, which consist of interest rate swaps and interest rate caps, collars and floors, for hedging purposes. These transactions are commonly known as derivatives. A swap is an agreement to exchange the return generated by one instrument for the re- turn generated by another instrument. The swaps in which the Portfolio may also engage include interest rate caps, floors and collars under which one party pays a single or periodic fixed amount (or premium), and the other party pays periodic amounts on the movement of a specified index. The Portfolio may enter into interest rate protection transactions to pre- serve a return or spread on a particular investment or portion of its portfo- lio or to protect against any increase in the price of securities it antici- pates purchasing at a later date. The Portfolio will enter into interest rate protection transactions only with banks and recognized securities dealers be- lieved by the Adviser to present minimal credit risks in accordance with guidelines established by the Fund's Board of Trustees. Interest rate swaps, caps, floors and collars will be treated as illiquid securities and will therefore, be subject to the Portfolio's investment restriction limiting in- vestment in illiquid securities to no greater than 15% of net assets. RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging strategies described above, and there can be no assurance that any strategy used will succeed. If the Adviser incorrectly forecasts interest rates, market values or other economic factors in utilizing a strategy for the Portfolio, the Portfolio would be in a better position if it had not hedged at all. In addition, the Portfolio will pay 12 commissions and other costs in connection with such hedging strategies which may increase the Portfolio's expenses and reduce its return. The use of these strategies involves certain risks, including (1) the fact that skills needed to use hedging instruments are different from those needed to select the Portfolio's securities, (2) possible imperfect correlation, or even no correlation, between price movements of hedging instruments and price movements of the investments being hedged, (3) the fact that, while hedging strategies can reduce the risk of loss, they can also reduce the opportunity for gain, or even result in losses, by offsetting favorable price movements in hedged investments and (4) the possible inability of the Portfolio to purchase or sell a portfolio security at a time that otherwise would be favorable for it to do so, or the possible need for the Portfolio to sell a portfolio secu- rity at a disadvantageous time, due to the need for it to maintain "cover" or to segregate securities in connection with hedging transactions and the possi- ble inability of the Portfolio to close out or to liquidate its hedged posi- tion. RESTRICTED AND ILLIQUID SECURITIES The Portfolio may purchase restricted securities that are not registered for sale to the general public but which are eligible for resale to qualified in- stitutional investors under Rule 144A of the Securities Act of 1933. Under the supervision of the Fund's Board of Trustees, the Adviser determines the li- quidity of such investments by considering all relevant factors. Provided that a dealer or institutional trading market in such securities exists, these re- stricted securities are not treated as illiquid securities for purposes of the Portfolio's investment limitations. The Portfolio may invest up to 15% of its net assets in securities that are illiquid. The prices realized from the sales of these securities could be less than those originally paid by the Portfolio or less than what may be considered the fair value of such securities. INVESTMENT LIMITATIONS The Portfolio will not: (a) with respect to 75% of its assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed as to principal and in- terest by the U.S. Government or any of its agencies or instrumentali- ties); (b) with respect to 75% of its assets, purchase more than 10% of any class of the outstanding voting securities of any issuer; (c) invest more than 5% of its assets at the time of purchase in the secu- rities of companies that have (with predecessors) a continuous operat- ing history of less than 3 years; 13 (d) invest more than 25% of its assets in companies within a single indus- try; however, there are no limitations on investments made in instru- ments issued or guaranteed by the U.S. Government and its agencies. (e) make loans except by purchasing debt securities in accordance with its investment objective and policies or entering into repurchase agree- ments or by lending its portfolio securities to banks, brokers, deal- ers and other financial institutions so long as the loans are made in compliance with the 1940 Act, as amended, or the Rules and Regulations or interpretations of the SEC; (f) (i) borrow, except from banks and as a temporary measure for extraor- dinary or emergency purposes and then, in no event, in excess of 33 1/3% of the Portfolio's gross assets valued at the lower of market or cost, and (ii) a Portfolio may not purchase additional securities when borrowings exceed 5% of total assets; or (g) pledge, mortgage or hypothecate any of its assets to an extent greater than 33 1/3% of its total assets at fair market value. The Portfolio's investment objective and investment limitations (a), (b), (d), (e) and (f)(i) listed above are fundamental policies and may be changed only with the approval of the holders of a majority of the outstanding voting securities of the Portfolio. The other investment limitations described here, those not specified as fundamental in the SAI, and the Portfolio's investment policies are not fundamental, and the Fund's Board of Trustees may change them without shareholder approval. PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), without a sales commission at the net asset value per share next determined after an order is received by the Fund and payment is received by the Fund or its designated service agent. (See "VALUATION OF SHARES.") The minimum initial investment required is $2,500. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA ac- counts is $250. Certain exceptions may be permitted by the officers of the Fund. Shares of the Portfolio may be purchased by customers of broker-dealers or other financial intermediaries ("Service Agents") which have established a shareholder servicing relationship with the Fund on behalf of their customers. Service Agents may impose additional or different conditions on purchases or redemptions of Portfolio shares and may charge transaction or other account fees. Each Service Agent is responsible for transmitting to its customers a schedule of any such fees and information regarding additional or different purchase or redemption conditions. Shareholders who are customers of Service Agents should consult their Serv - 14 ice Agent for information regarding these fees and conditions. Amounts paid to Service Agents may include transaction fees and/or service fees paid by the Fund from the Portfolio's assets attributable to the Service Agent, which would not be imposed if shares of the Portfolio were purchased directly from the Fund or the Distributor. Service Agents may provide shareholder services to their customers that are not available to a shareholder dealing directly with the Fund. A salesperson and any other person entitled to receive compen- sation for selling or servicing Portfolio shares may receive different compen- sation with respect to one particular class of shares over another in the Fund. Service Agents or, if applicable, their designees, that have entered into agreements with the Fund or its agent may enter confirmed purchase orders on behalf of clients and customers, with payment to follow no later than a Port- folio's pricing on the following business day. If payment is not received by the Fund's Sub-Transfer Agent, Chase Global Funds Services Company ("CGFSC") by such time, the Service Agent could be held liable for resulting fees or losses. A Portfolio may be deemed to have received a purchase or redemption order when a Service Agent, or, if applicable, its authorized designee, ac- cepts the order. Orders received by the Fund in proper form will be priced at the Portfolio's net asset value next computed after they are accepted by a Service Agent or its authorized designee. Service Agents are responsible to their customers and the Fund for timely transmission of all subscription and redemption requests, investment information, documentation and money. INITIAL INVESTMENT BY MAIL . Complete and sign an Application and mail it, along with a check payable to "UAM Funds" to: UAM Funds Trust UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 Payment for purchases of shares received by mail will be credited to an ac- count at the next share price calculated for the Portfolio after receipt. Pay- ment does not need to be converted into Federal Funds (monies credited to the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it for investment. The Fund will not accept third-party checks to purchase shares of the Portfolio. If you purchase shares by check, please be sure that your check is made payable to "UAM Funds." 15 BY WIRE . Telephone the UAM Funds Service Center and provide the account name, ad- dress, telephone number, social security or taxpayer identification num- ber, Portfolio selected, amount being wired, and the name of the bank wiring the funds. The call must be received prior to the close of regu- lar trading on the NYSE (generally 4:00 p.m. Eastern Time) to receive that days price. An account number and a wire control number will be provided to you in addition to wiring instructions. Next, . instruct your bank to wire the specified amount to the Fund's custodian: The Chase Manhattan Bank ABA #021000021 UAM Funds DDA Acct. #9102772952 Ref: Portfolio Name _________ Your Account Number __________ Your Account Name __________ Wire Control Number ___________ (assigned by UAM Funds Service Center) . Forward a completed Application to the Fund at the address shown on the form. Federal Funds purchases will be accepted only on days when the NYSE and the Custodian Bank are open for business. . To be sure that a bank wire order is received on the same day it is sent, an investor's bank should wire funds as early in the day as possi- ble. The bank sending funds may charge for this service. The Fund's agent reserves the right to charge investors for receipt of wired funds, but no charge is currently imposed for this service. It is necessary to obtain a new wire control number every time money is wired into an ac- count in a Portfolio. Wire control numbers are effective for one trans- action only and cannot be used more than once. Wired money that is not properly identified with a currently effective wire control number will be returned to the bank from which it was wired and will not be credited to the shareholder's account. ADDITIONAL INVESTMENTS Additional investments can be made at any time. The minimum additional in- vestment is $100. Shares can be purchased at net asset value by mailing a check to the UAM Service Center (payable to "UAM Funds") or by wiring money to the Custodian Bank as outlined above. When making additional investments, be sure that the account name and number is identified on the check or wire. Prior to wiring additional investments, notify the UAM Funds Service Center by calling the number on the cover of this prospectus. Mail orders should in- clude, when possible, the "Invest by Mail" stub which accompanies any Fund confirmation statement. 16 PURCHASE BY ACH If you have made this election, shares of the Portfolio may be purchased via Automated Clearing House ("ACH"). Investors purchasing via ACH should complete the bank information section on the Account Application and attach a voided check or deposit slip to the Account Application. This option must be estab- lished on your account at least 15 days prior to your initiating an ACH trans- action (see "SHAREHOLDER SERVICES--AUTOMATIC INVESTMENT PLAN"). OTHER PURCHASE INFORMATION Investments received by the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be invested at the share price calculated after the NYSE closes on that day. Investments received after the close of the NYSE will be executed at the price computed on the next day the NYSE is open. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or to reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. The Portfolio is intended to be a long-term investment vehicle and is not designed to provide investors with a means of speculation on short-term market movements. A pattern of frequent purchases can be disruptive to effi- cient portfolio management and, consequently, can be detrimental to a Portfo- lio's performance and its shareholders. Accordingly, if the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any purchase request with respect to such investor's account. Such investor also may be barred from pur- chasing other portfolios of the UAM Funds. Purchases of the Portfolio's shares will be made in full and fractional shares of the Portfolio calculated to three decimal places. Certificates for fractional shares will not be issued. Certificates for whole shares will not be issued except at the written request of the shareholder. IN-KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in ex- change for securities which are eligible for acquisition by the Portfolio, as described in this Prospectus. Securities to be exchanged which are accepted by the Fund will be valued as described under "VALUATION OF SHARES" at the next determination of net asset value after acceptance. Shares issued by the Port- folio in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the investor upon receipt from the issuer. Securities acquired through an in-kind purchase will be acquired for invest- ment and not for immediate resale. The Fund will not accept securities in exchange for shares of the Portfolio unless: 17 . at the time of exchange, such securities are eligible to be in- cluded in the Portfolio (current market quotations must be readily available for such securities); . the investor represents and agrees that all securities offered to be exchanged are liquid securities and not subject to any restric- tions upon their sale by the Portfolio under the Securities Act of 1933, or otherwise; and . the value of any such securities (except U.S. Government securi- ties) being exchanged together with other securities of the same issuer owned by the Portfolio will not exceed 5% of the net assets of the Portfolio immediately after the transaction. Investors who are subject to federal taxation upon exchange may realize a gain or loss for federal income tax purposes depending upon the cost of secu- rities or local currency exchanged. Investors interested in such exchanges should contact the Adviser. REDEMPTION OF SHARES Shares of the Portfolio may be redeemed by mail or telephone at any time, without cost at the net asset value of the Portfolio next determined after re- ceipt of the redemption request. No charge is made for redemptions. Any re- demption may be more or less than the purchase price of the shares depending on the market value of investment securities held by the Portfolio. BY MAIL Address requests for redemption to the UAM Funds Service Center. Requests to redeem shares must include: . share certificates, if issued; . a letter of instruction or an assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are regis- tered; . any required signature guarantees (see "SIGNATURE GUARANTEES"); and . any other necessary legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pen- sion and profit sharing plans and other organizations. BY TELEPHONE A redemption request by telephone requires the following: . establish the telephone redemption privilege (and if desired, the wire redemption privilege) by completing appropriate sections of the Application; and 18 . call the Fund and instruct that the redemption proceeds be mailed to you or wired to your bank. The following tasks cannot be accomplished by telephone: . changing the name of the commercial bank or the account designated to receive redemption proceeds (this can be accomplished only by a written request signed by each shareholder, with each signature guaranteed); and . redemption of certificated shares by telephone. The Fund and its Sub-Transfer Agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and they may be liable for any losses if they fail to do so. These procedures include re- quiring the investor to provide certain personal identification at the time an account is opened, as well as prior to effecting each transaction requested by telephone. All telephone transaction requests will be recorded and investors may be required to provide additional telecopied written instructions of such transaction requests. The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent does not employ the procedures described above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili- ty, cost or expense for following instructions received by telephone that it reasonably believes to be genuine. SIGNATURE GUARANTEES Signature guarantees are required for the following redemptions: . redemptions where the proceeds are to be sent to someone other than the registered shareowner(s); . redemptions where the proceeds are to be sent to someplace other than the registered address; or . share transfer requests. Signature guarantees will be accepted from any eligible guarantor institu- tion which participates in a signature guarantee program. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securi- ties exchanges, registered securities associations, clearing agencies and sav- ings associations. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. OTHER REDEMPTION INFORMATION The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the UAM Funds Service Center of a redemption request in proper form. Although the Fund will redeem shares purchased by check before the 19 check clears, payment of the redemption proceeds may be delayed for a period of up to fifteen days after their purchase, pending determination that the check has cleared. Investors should consider purchasing shares using a certi- fied or bank check or money order if they anticipate an immediate need for re- demption proceeds. The Fund may suspend the right of redemption or postpone the date at times when either the NYSE or Custodian Bank are closed, or under any emergency circumstances determined by the SEC. If the Fund's Board of Trustees determines that it would be detrimental to the best interests of remaining shareholders of the Fund to make payment wholly or partly in cash, the Fund may pay redemption proceeds in whole or in part by a distribution in-kind of liquid securities held by a Portfolio in lieu of cash in conformity with applicable rules of the SEC. Investors may in- cur brokerage charges on the sale of portfolio securities received in payment of redemptions. The Portfolio reserves the right to liquidate any account that is below fifty percent of the required minimum initial investment amount for a Portfo- lio as set forth in the Prospectus, where the reduction in value has occurred due to a redemption or exchange out of the account. If at any time your total investment does not have a value of at least fifty percent of the required minimum initial investment amount, you may be notified that the value of your account is below the Portfolio's minimum account balance requirement. You would then be allowed 60 days to make an additional investment before the ac- count is liquidated. Retirement accounts and certain other accounts will not be subject to automatic liquidation. Reductions in value that result solely from market activity will not trigger an involuntary redemption. SHAREHOLDER SERVICES EXCHANGE PRIVILEGE Institutional Class Shares of the Portfolio may be exchanged for Institu- tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo- lios of the UAM Funds at the end of this Prospectus.) Exchange requests should be made by contacting the UAM Funds Service Center. Any exchange will be based on the net asset value of the shares involved. There is no sales commission or charge of any kind for an exchange. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objectives of the Portfolio to be purchased. Call the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in which you are interested. Exchanges can only be made with Portfolios that are qualified for sale in a shareholder's state of residence. Exchange requests may be made either by mail or telephone. Telephone ex- changes will be accepted only if the certificates for the shares to be ex- changed have 20 not been issued to the shareholder and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regu- lar trading on the NYSE (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the NYSE will be processed on the next business day. The Fund may modify or terminate the exchange program at any time upon 60 days' written notice to shareholders, and may reject any exchange request. If the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any ex- change request, with respect to such investor's account. Such investors also may be barred from exchanging into other portfolios of the UAM Funds. For ad- ditional information regarding responsibility for the authenticity of tele- phoned instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE." An exchange into another UAM Funds Portfolio is a sale of shares and may result in a gain or loss for income tax purposes. AUTOMATIC INVESTMENT PLAN An Automatic Investment Plan permits shareholders of a Portfolio with a min- imum value of $2,500 or more to purchase shares automatically (minimum of $100 per transaction) at regular intervals selected by the shareholder. Provided the shareholder's bank or other financial institution allows automatic with- drawals, shares are purchased by transferring funds via the Automated Clearing House ("ACH"). Investment made through ACH will be automatically transferred from a shareholder's checking, bank money market or NOW account designated by the shareholder. Such withdrawals are made electronically, if the sharehold- er's bank or financial institution so permits, or by pre-authorized checks or drafts drawn on the shareholder's bank or other account. The bank or financial institution must be a member of ACH. At the shareholder's option, the account designated will be debited in the specified amount, and shares will be pur- chased monthly or quarterly. To establish an Automatic Investment Plan, a shareholder must complete the Optional Services Form available from the UAM Funds Service Center at 1-800- 638-7983 and mail it to Chase Global Funds Services Company. A shareholder may cancel his/her participation or change the amount of purchase at any time by mailing written notification to Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. Notification generally will be effective three business days following receipt. The Fund may modify or terminate this privi- lege at any time, or may charge a service fee, although no such fee currently is contemplated. SYSTEMATIC WITHDRAWAL PLAN Any shareholder whose account balance totals at least $10,000 may establish a Systematic Withdrawal Plan under which an amount pre-determined by the shareholder (but at least $100) is automatically redeemed from the sharehold- er's account either monthly or quarterly. A shareholder may participate in the Systematic With - 21 drawal Plan by using ACH. Redemption made through ACH will be automatically transferred to the shareholder's bank or other similar financial institution account or a properly designated third party. The bank or financial institu- tion must be a member of ACH. Redemptions ordinarily are made on the third business day of the month and payments ordinarily will be transmitted within five business days after the redemption date. Because the prices of Fund shares fluctuate, the number of shares redeemed to finance systematic with- drawal payments or a given amount will vary from payment to payment. If a shareholder owns shares in more than one Portfolio, the shareholder must des- ignate the Portfolio from which the redemptions under a Systematic Withdrawal Plan should be made. An additional sheet may be attached to the Optional Serv- ices Form if a shareholder selects more than one Portfolio. A Systematic With- drawal Plan may be terminated or suspended at any time by the Fund. A share- holder may elect at any time, in writing, to terminate participation in the Systematic Withdrawal Plan. Such written election must be sent to and received by the Fund before a termination becomes effective. There is currently no charge to the shareholder for a Systematic Withdrawal Plan. VALUATION OF SHARES The net asset value of each class of a Portfolio is determined by dividing the value of the Portfolio's assets attributable to the class, less any lia- bilities attributable to the class, by the number of shares outstanding at- tributable to the class. The net asset value per share of the Portfolio is de- termined as of the close of the NYSE on each day that the NYSE is open for business. Equity securities listed on a securities exchange for which market quota- tions are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed secu- rities not traded on the valuation date for which market quotations are read- ily available are valued neither exceeding the current ask prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars quoted by any major bank or by a broker. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost when the Board of Trustees determines that amortized cost reflects fair value. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Trustees. 22 PERFORMANCE CALCULATIONS The Portfolio measures performance by calculating yield and total return. Both yield and total return figures are based on historical earnings and are not intended to indicate future performance. Yield and total return are calcu- lated separately for each class of a portfolio. Yield refers to the income generated by an investment in the Portfolio over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all funds. As this differs from other accounting methods, the quoted yield may not equal the in- come actually paid to shareholders. Total return is the change in value of an investment in the Portfolio over a given period, assuming reinvestment of any dividends and capital gains. A cu- mulative or aggregate total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of re- turn that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Performance will be calculated separately for Institutional Class and Serv- ice Class Shares. Dividends paid by the Portfolio with respect to Institu- tional Class and Service Class Shares, to the extent any dividends are paid, will be calculated in the same manner at the same time on the same day and will be in the same amount, except that service fees, distribution charges and any incremental transfer agency costs relating to Service Class Shares will be borne exclusively by that class. The Portfolio's performance may be compared to data prepared by independent services which monitor the performance of investment companies, data reported in financial and industry publications, and various indices, all as further described in the Portfolio's SAI. This information may also be included in sales literature and advertising. The Portfolio's Annual Report to Shareholders for the most recent fiscal year end contains additional performance information that includes comparisons with appropriate indices. The Annual Report is available without charge. Contact the UAM Funds Service Center at the telephone number on the cover of this Prospectus. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS The Portfolio will normally distribute substantially all of its net invest- ment income (for tax purposes) to shareholders in the form of an annual divi- dend. If any net capital gains are realized, the Portfolio will normally dis- tribute them annually. All dividends and capital gains distributions will be automatically reinvested in 23 additional shares of the Portfolio unless the Fund is notified in writing that the shareholder elects to receive distributions in cash. FEDERAL TAXES The Portfolio intends to qualify as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, for federal in- come tax purposes and to meet all other requirements that are necessary for it (but not its shareholders) to be exempt from federal taxes on income and gains paid to shareholders in the form of dividends. To do this, the Portfolio must, among other things, distribute substantially all of its ordinary income and net capital gains on an annual basis and maintain a portfolio of investments which satisfies certain diversification criteria. Dividends paid by the Portfolio from net investment income, whether in cash or reinvested in shares, are taxable to shareholders as ordinary income. Short-term capital gains will be taxed as ordinary income. Long-term capital gains distributions are taxed as long-term capital gains. Shareholders will be notified annually of dividend income earned for tax purposes. Dividends declared in October, November and December to shareholders of rec- ord in such a month and paid in January of the following year will be treated as if they had been paid by the Fund and received by the shareholders on December 31. The Fund is required by federal law to withhold 31% of reportable payments paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, you must certify that your Social Security or Taxpayer Identification Number you have provided is correct and that either you are not currently subject to backup withholding or you are exempt from backup withholding. This certification must be made on the Application or on a separate form supplied by the Fund. Dividends and interest received by the Portfolio may give rise to withhold- ing and other taxes imposed by foreign countries. These taxes reduce the Port- folio's dividends but are included in the taxable income reported on your tax statement if the Portfolio qualifies for this tax treatment and elects to pass it through to you. Consult a tax adviser for more information regarding deduc- tions and credits for foreign taxes. INVESTMENT ADVISER The Adviser is an international investment adviser and is an affiliate of the MJ Group, in Glasgow, Scotland. The MJ Group's origins date back to 1907, and it currently has $7 billion in assets under management. The MJ Group has a 200-member staff including 40 investment professionals. It became a subsidiary of United Asset Management Corporation ("UAM") in 1993. The Adviser, the SEC- 24 registered entity within the MJ Group, has $1.4 billion of assets under man- agement and has U.S. offices in Chicago. The Portfolio pays an annual fee in monthly installments to the Adviser for advisory services. This fee is accrued daily and paid every month as a per- centage of the average net assets in the Portfolio for that month. The per- centage fee on an annual basis is 0.75%. The Adviser and certain other service providers have voluntarily agreed to waive a portion of their advisory fees and to assume certain operating expenses to the extent necessary to keep the Portfolio's Institutional Shares' total operating expenses from exceeding 1.50%. The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili- ates, may, at their own expense, compensate a Service Agent or other person for marketing, shareholder servicing, recordkeeping and/or other services per- formed with respect to the Fund, the Portfolio or any Class of Shares of the Portfolio. The person making such payments may do so out of its revenues, its profits or any other source available to it. When such services arrangements are in effect, they are made generally available to all qualified service providers. The Distributor, the Adviser and certain of their other affiliates also par- ticipate, at the date of this Prospectus, in an arrangement with Smith Barney Inc. under which Smith Barney provides certain defined contribution plan mar- keting and other shareholder services and receives from such entities .15 of 1% of the daily net asset value of Institutional Class Shares held by Smith Barney's eligible customer accounts in addition to amounts payable to all selling dealers. The Fund also compensates Smith Barney for services it pro- vides to certain defined contribution plan shareholders that are not otherwise provided by UAMFSI. The investment professional at the Adviser responsible for the day-to-day management of the Portfolio and his qualifications are as follows: RODGER SCULLION, MANAGING DIRECTOR OF THE ADVISER, has 26 years of invest- ment experience, the last 14 years based in Glasgow with the MJ Group. He is the portfolio manager of the Murray Smaller Markets Investment Trust, a closed-end investment fund registered in the United Kingdom, which invests in as many as 45 markets worldwide. Mr. Scullion is the Adviser's Chief Invest- ment Officer and the lead person on the country allocation team. During his tenure at the MJ Group, he has held portfolio management responsibilities for investments in the U.S., Europe, Japan and the Far East. ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of UAM, is re- sponsible for performing and overseeing administrative, fund accounting, divi- dend disbursing and transfer agent services provided to the Fund and its Port- folios. UAMFSI's principal office is located at 211 Congress Street, Boston, MA 02110. 25 UAMFSI has subcontracted some of these services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is located at 73 Tremont Street, Boston, MA 02108. Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fees are calculated from the aggregate net assets of the Portfolio:
RATE ---- MJI International Equity Portfolio..................................... 0.06%
CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined UAM Fund assets; 0.11 of 1% of the next $800 million of combined UAM Fund assets; 0.07 of 1% of combined UAM Fund assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined UAM Fund assets in excess of $3 billion. Fees are allocated among each of the Portfolios on the basis of their rela- tive assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum an- nual fee increases by $20,000. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin- cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis- tributes the shares of the Fund. Under the Fund's Distribution Agreement (the "Agreement"), the Distributor, as agent of the Fund, agrees to use its best efforts as sole distributor of the Fund's shares. The Distributor does not re- ceive any fee or other compensation under the Agreement with respect to the Portfolio's Institutional Class Shares that are offered in this Prospectus. The Agreement continues in effect as long as such continuance is approved at least annually by the Fund's Board of Trustees. Those approving the Agreement must include a majority of Trustees who are neither parties to the Agreement nor interested persons of any such party. The Agreement provides that the Fund will bear the costs of the registration of its shares with the SEC and various states and the printing of its prospectuses, its SAIs and its reports to shareholders. PORTFOLIO TRANSACTIONS The Advisory Agreement authorizes the Adviser to select the brokers or deal- ers that will execute the purchase and sale of investment securities for the Portfolio. 26 The Agreement directs the Adviser to use its best efforts to obtain the best available price and most favorable execution for all transactions of the Port- folio. If consistent with the interests of the Portfolio, the Adviser may se- lect brokers on the basis of the research, statistical and pricing services they provide to the Portfolio in addition to required services. Such brokers may be paid a higher commission than that which another qualified broker would have charged for effecting the same transaction, provided that such commis- sions are paid in compliance with the Securities Exchange Act of 1934, as amended, and that the Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Portfolio and the Adviser's other clients. Although not a typical practice, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. If a purchase or sale of securities consistent with the investment policies of the Portfolio and one or more of these other clients served by the Adviser 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 rea- sonable by the Adviser. Although there is no specified formula for allocating such transactions, such allocations are subject to periodic review by the Fund's Trustees. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized as a Delaware business trust on May 18, 1994 under the name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial inter- est, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without fur- ther action by shareholders. At its discretion, the Board of Trustees may create additional Portfolios and classes of shares. The shares of each Portfolio are fully paid and nonas- sessable, and have no preference as to conversion, exchange, dividends, re- tirement or other features and no pre-emptive rights. They have noncumulative voting rights, which means that holders of more than 50% of shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. As of June 15, 1998, Freya Fanning & Company held of record 49.7% of the outstanding shares of the Portfolio's Institutional Class; and Sisters of Mary Corp. held of record 30.6% of the outstanding shares of the Portfolio's Serv- ice Class. 27 Beneficial ownership of these accounts is disclaimed or presumed disclaimed. The persons or organizations owning 25% or more of the outstanding shares of a Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of such Portfolio. Both Institutional Class and Service Class Shares represent an interest in the same assets of a Portfolio. Service Class Shares bear certain expenses re- lated to shareholder servicing and the distribution of such shares. Service Class Shares have exclusive voting rights with respect to matters relating to such distribution expenditures. The Board of Trustees of the Fund has autho- rized a third class of shares, Advisor Class Shares, which is not currently being offered by this Portfolio. For information about Service Class Shares of the Portfolio, contact the UAM Funds Service Center. Annual meetings will not be held except as required by the 1940 Act and other applicable laws. The Fund has undertaken that its Trustees will call a meeting of shareholders if such a meeting is requested in writing by the hold- ers of not less than 10% of the outstanding shares of the Fund. The Fund will assist shareholder communications in such matters. CUSTODIAN The Chase Manhattan Bank serves as custodian of the Fund's assets. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the independent accountant for the Fund. REPORTS Investors will receive unaudited semi-annual financial statements and annual financial statements audited by PricewaterhouseCoopers LLP. SHAREHOLDER INQUIRIES Shareholder inquiries may be made by contacting the UAM Funds Service Center at the telephone number listed on the cover of the Prospectus. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PRO- SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OF- FERING MAY NOT BE LAWFULLY MADE. 28 UAM FUNDS -- INSTITUTIONAL CLASS SHARES Acadian Emerging Markets Portfolio Acadian International Equity Portfolio BHM&S Total Return Bond Portfolio Cambiar Opportunity Portfolio Chicago Asset Management Intermediate Bond Portfolio Chicago Asset Management Value/Contrarian Portfolio C&B Balanced Portfolio C&B Equity Portfolio C&B Equity Portfolio for Taxable Investors C&B Mid Cap Equity Portfolio DSI Balanced Portfolio DSI Disciplined Value Portfolio DSI Limited Maturity Bond Portfolio DSI Money Market Portfolio FMA Small Company Portfolio FPA Crescent Portfolio Hanson Equity Portfolio Heitman Real Estate Portfolio ICM Equity Portfolio ICM Fixed Income Portfolio ICM Small Company Portfolio Jacobs International Octagon Portfolio McKee Domestic Equity Portfolio McKee International Equity Portfolio McKee Small Cap Equity Portfolio McKee U.S. Government Portfolio MJI International Equity Portfolio NWQ Balanced Portfolio NWQ Small Cap Value Portfolio NWQ Special Equity Portfolio NWQ Value Equity Portfolio Rice, Hall James Small Cap Portfolio Rice, Hall James Small/Mid Cap Portfolio SAMI Preferred Stock Income Portfolio Sirach Bond Portfolio Sirach Equity Portfolio Sirach Growth Portfolio Sirach Special Equity Portfolio Sirach Strategic Balanced Portfolio Sterling Partners' Balanced Portfolio Sterling Partners' Equity Portfolio Sterling Partners' Small Cap Value Portfolio TS&W Balanced Portfolio TS&W Equity Portfolio TS&W Fixed Income Portfolio TS&W International Equity Portfolio 29 UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 1-800-638-7983 Investment Adviser Murray Johnstone International Ltd. Glasgow, Scotland Distributor UAM Fund Distributors, Inc. 211 Congress Street Boston, MA 02110 PROSPECTUS July 17, 1998 UAM Funds Prospectus July 17, 1998 MJI International Equity Portfolio Institutional Service Class Shares [LOGO OF UAM FUNDS APPEARS HERE] TABLE OF CONTENTS
PAGE ---- Fund Expenses.............................................................. 1 Prospectus Summary......................................................... 3 Risk Factors............................................................... 4 Financial Highlights....................................................... 5 Investment Objective....................................................... 6 Investment Policies........................................................ 6 Other Investment Policies.................................................. 8 Investment Limitations..................................................... 13 Purchase of Shares......................................................... 14 Redemption of Shares....................................................... 18 Service and Distribution Plans............................................. 20 Shareholder Services....................................................... 22 Valuation of Shares........................................................ 24 Performance Calculations................................................... 24 Dividends, Capital Gains Distributions and Taxes........................... 25 Investment Adviser......................................................... 26 Administrative Services.................................................... 27 Distributor................................................................ 27 Portfolio Transactions..................................................... 28 General Information........................................................ 28 UAM Funds -- Institutional Service Class Shares............................ 30
UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO INSTITUTIONAL SERVICE CLASS SHARES - -------------------------------------------------------------------------------- PROSPECTUS -- JULY 17, 1998 UAM Funds Trust (the "Fund"), is an open-end investment company known as a "mutual fund". The Fund consists of multiple series (known as "Portfolios"), each of which has different investment objectives and policies. MJI Interna- tional Equity Portfolio currently offers two classes of shares: Institutional Class Shares and Institutional Service Class Shares ("Service Class Shares"). Shares of each class represent equal, pro rata interests in the Portfolio and accrue dividends in the same manner except that Service Class Shares bear fees payable by the class (at the rate of .25% per annum) to financial institutions for services they provide to the owners of such shares. (See "SERVICE AND DIS- TRIBUTION PLANS.") The securities offered in this Prospectus are Service Class Shares of one diversified, no-load Portfolio of the Fund managed by Murray Johnstone International Ltd. MJI INTERNATIONAL EQUITY PORTFOLIO. MJI International Equity Portfolio (the "Portfolio") seeks to maximize total return, including both capital apprecia- tion and current income, by investing primarily in the common stocks of compa- nies based outside of the United States. Under normal circumstances, at least 65% of the Portfolio's total assets will be invested in securities of issuers domiciled in at least three countries other than the United States. There can be no assurance that the Portfolio will achieve its stated objec- tive. Keep this Prospectus for future reference. It contains information that you should know before you invest. A Statement of Additional Information ("SAI") containing additional information about the Fund has been filed with the Secu- rities and Exchange Commission ("SEC"). The SAI is dated July 17, 1998 and has been incorporated by reference into this Prospectus. For a free copy of the SAI contact the UAM Funds Service Center at 1-800-638-7983. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FUND EXPENSES The following table illustrates expenses and fees that a shareholder of the Portfolio's Service Class Shares will incur. The Fund does not charge transac- tion fees. However, transaction fees may be charged if a broker-dealer or other financial intermediary deals with the Fund on your behalf. (See "PUR- CHASE OF SHARES.") SHAREHOLDER TRANSACTION EXPENSES. Sales Load Imposed on Purchases......................................... NONE Sales Load Imposed on Reinvested Dividends.............................. NONE Deferred Sales Load..................................................... NONE Redemption Fees......................................................... NONE Exchange Fee............................................................ NONE
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) Investment Advisory Fees............................................. 0.75% 12b-1 Fees (Including Shareholder Servicing Fees)+................... 0.25% Other Expenses (After Expenses Assumed).............................. 0.75% ---- Total Operating Expenses (After Expenses Assumed).................... 1.75%+* ====
- ----------- + The Service Class Shares may bear service fees of 0.25% of average daily net assets of the Portfolio. (See "SERVICE AND DISTRIBUTION PLANS.") Long-term shareholders may pay more than the economic equivalent of the maximum front- end sales charge permitted by rules of the National Association of Securi- ties Dealers, Inc. * The Adviser and certain other service providers have voluntarily agreed to waive a portion of their advisory fees and/or to assume operating expenses to keep the Portfolio's Service Class Shares' Total Operating Expenses (ex- cluding interest, taxes and extraordinary expenses), after the effect of ex- pense offsets, from exceeding 1.75% of average daily net assets until fur- ther notice. However, if expense offsets were excluded, Total Operating Ex- penses would not be affected. Absent the expenses assumed, Other Expenses and Total Operating Expenses of the Portfolio's Service Class Shares would be 0.82% and 1.81%, respectively. The Adviser and/or service providers may change or discontinue their fee waivers and expense assumptions at any time. The table above shows various fees and expenses an investor may bear di- rectly or indirectly. The fees and expenses set forth above are based upon the Portfolio's Service Class Shares' operations during the fiscal year ended April 30, 1998. 1 EXAMPLE The following example illustrates expenses a shareholder would pay on a $1,000 investment over various time periods assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period. The Portfolios charge no redemption fees of any kind.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- MJI International Equity Portfolio Service Class Shares............................ $18 $55 $95 $206
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX- PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 2 PROSPECTUS SUMMARY INVESTMENT ADVISER Murray Johnstone International Ltd. (the "Adviser") is an international in- vestment adviser and is an affiliate of the Murray Johnstone Group ("MJ Group"), in Glasgow, Scotland. The MJ Group's origins date back to 1907, and it currently has $7 billion in assets under management. The MJ Group has a 200-member staff including 40 investment professionals. It became a subsidiary of United Asset Management Corporation in 1993. The Adviser, the SEC-regis- tered entity within the MJ Group, has $1.4 billion of assets under management and has U.S. offices in Chicago. (See "INVESTMENT ADVISER.") PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), to investors at net asset value without a sales commission. Share purchases may be made by sending investments directly to the Fund. The minimum initial investment in the Portfolio is $2,500. The minimum initial in- vestment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. The minimum for any subsequent investment is $100. Cer- tain exceptions to the initial or minimum investment amounts may be permitted by the officers of the Fund. (See "PURCHASE OF SHARES.") DIVIDENDS AND DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income in an annual dividend. Any realized net capital gains will also be distributed annually. Distributions will be reinvested in the Portfolio's shares automatically unless an investor elects to receive cash distributions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") REDEMPTIONS OF SHARES Shares of the Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemp- tion request. The redemption price may be more or less than the purchase price. Shares of the Portfolio may be exchanged for shares of the same class of any other portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" and "EX- CHANGE PRIVILEGE.") ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As- set Management Corporation, is responsible for performing and overseeing ad- ministration, dividend disbursing and transfer agency services provided to the Fund and its Portfolios by third-party service providers. (See "ADMINISTRATIVE SERVICES.") 3 RISK FACTORS The value of the Portfolio's shares will fluctuate in response to changes in market and economic conditions as well as the financial conditions and pros- pects of the issuers in which the Portfolio invests. Prospective investors should consider the following: (1) The Portfolio may invest in repurchase agreements which entail a risk of loss should the seller default on its trans- action; (2) The Portfolio may lend its investment securities which entails a risk of loss should a borrower fail financially; (3) The Portfolio may pur- chase securities on a when-issued basis which do not earn interest until is- sued and may decline or appreciate in market value prior to their delivery to the Portfolio; (4) The Portfolio may engage in various currency strategies to seek to hedge its investments against movements in security prices, interest rates, and exchange rates by the use of derivatives, including forward con- tracts, options and futures as well as options on futures. Such strategies are commonly referred to as "derivatives" and involve the risk of imperfect corre- lation in movements in the price of options and futures and movements in the price of securities, interest rates or currencies which are the subject of the hedge. To the extent these transactions involve foreign securities or curren- cies, they are also subject to the risk factors associated with foreign in- vestments generally. There can be no assurance that a liquid secondary market for these hedging techniques will exist at any specific time. (See "OTHER IN- VESTMENT POLICIES.") 4 FINANCIAL HIGHLIGHTS The following table provides selected per share information for a share out- standing throughout the period presented of the Portfolio's Institutional Service Class Shares. This table is part of the Portfolio's 1998 Annual Finan- cial Statements, which are included in the Portfolio's 1998 Annual Report to Shareholders. The Report is incorporated by reference into the Portfolio's SAI. The Portfolio's Annual Financial Statements have been audited by PricewaterhouseCoopers LLP whose unqualified opinion thereon is also incorpo- rated into the Portfolio's SAI. The following information should be read in conjunction with the Portfolio's 1998 Annual Report to Shareholders. Further information about the Portfolio's performance is contained in its Annual Re- port, which may be obtained without charge by calling the telephone number on the Prospectus cover page.
PERIOD FROM DECEMBER 31, 1996*** YEAR ENDED TO APRIL 30, 1998 APRIL 30, 1997 -------------- -------------- NET ASSET VALUE, BEGINNING OF PERIOD............. $ 10.65 $ 10.53 ------- ------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income.......................... 0.04 0.01 Net Realized and Unrealized Gain (Loss) on Investments.................................. 2.02 0.11 ------- ------- Total from Investment Operations............. 2.06 0.12 ------- ------- DISTRIBUTIONS Net Investment Income.......................... (0.04) -- In Excess of Net Investment Income............. -- -- Net Realized Gain.............................. (0.41) -- ------- ------- Total Distributions.......................... (0.45) -- ------- ------- NET ASSET VALUE, END OF PERIOD................... $ 12.26 $ 10.65 ======= ======= TOTAL RETURN+.................................... 20.11% 1.14%** ======= ======= RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (Thousands).......... $ 7,251 $ 3,920 Ratio of Expenses to Average Net Assets........ 1.75% 1.76%* Ratio of Net Investment Income to Average Net Assets....................................... 0.29% 0.59%* Portfolio Turnover Rate........................ 80% 47% Average Commission Rate#....................... $0.0278 $0.0323 Ratio of Voluntarily Waived Fees and Expenses Assumed by the Adviser to Average Net Assets....................................... 0.06% 0.47%* Ratio of Expenses to Average Net Assets Including Expense Offsets.................... 1.75% 1.75%*
- ----------- * Annualized. ** Not annualized. *** Commencement of Operations. + Total return would have been lower had certain fees not been waived and expenses assumed by the Adviser during the periods indicated. # Beginning with fiscal year 1996, the portfolio is required to disclose the average commission rate per share it paid for portfolio trades on which commissions were charged. 5 INVESTMENT OBJECTIVE The Portfolio seeks to maximize total return, including both capital appre- ciation and current income, by investing primarily in the common stocks of companies based outside of the United States. Under normal circumstances, at least 65% of the Portfolio's total assets will be invested in at least three different countries other than the United States. There can be no assurance that the Portfolio will achieve its stated objective. INVESTMENT POLICIES The Portfolio's investment process begins by seeking to determine the best possible allocation among international stock markets. The Portfolio's Adviser evaluates markets through a proprietary system which analyzes economic fac- tors, stock prices in each market, market performance and trends in monetary policy. Drawing on this information, the Adviser decides which markets the Portfolio should invest in and in what proportion. Once the country allocation decision has been made, the Adviser selects un- dervalued stocks in that market. The Adviser rates companies according to the quality of their management, market position, financial strength, ability to earn competitive returns on equity and assets, and growth potential. The Port- folio will invest in stocks that the Adviser determines are undervalued com- pared to industry norms within their countries. It is expected that invest- ments will be diversified throughout the world and within markets to minimize specific country and currency risks. While investments will be made primarily in securities of companies domiciled in developed countries, investments will also be made in developing countries. (See "FOREIGN INVESTMENT RISK FACTORS.") Under normal circumstances, at least 65% of the Portfolio's total assets will be invested in common stocks of companies in at least three countries outside the United States. It is expected that generally, the Portfolio will invest in common stocks of companies listed on U.S. or foreign stock ex- changes, but it may also invest in stocks traded in the over-the-counter mar- ket. Common stocks for this purpose also include securities having common stock characteristics such as rights and warrants to purchase common stocks. The Portfolio may also invest in convertible securities and preferred stocks. The Portfolio may also invest in foreign equity securities in the form of American Depositary Receipts (ADRs), European Depositary Receipts (EDRS) and other similar global instruments. ADRs (sponsored or unsponsored) are receipts typically issued by a U.S. bank or trust company evidencing ownership of the underlying foreign securities. Most ADRs are traded on a U.S. stock exchange. Issuers of unsponsored ADRs are not contractually obligated to disclose mate- rial information in the U.S. and, therefore, there may not be a correlation between such information and the market value of the unsponsored ADR. EDRs are receipts typically issued by a European bank or trust company evidencing own- ership of the underlying foreign securities. 6 FOREIGN INVESTMENT RISK FACTORS Investors should recognize that investing in foreign securities involves certain risks which are not typically associated with investing in domestic securities. Since securities issued by foreign entities may be denominated in foreign currencies, and the Portfolio may temporarily hold uninvested reserves in bank deposits in foreign currencies, the Portfolio's value may rise or fall depending on currency exchange rates. The Portfolio may also have to pay a fee to convert funds from one currency to another. Non-U.S.-based companies are not subject to the same accounting, auditing and financial reporting standards as are domestic companies. There may be less publicly-available information about non-U.S.-based companies which may make it difficult to make investment decisions. Also, stock markets outside the U.S. are typically less liquid -- that is, it is more difficult to sell large quantities of a stock without driving its price down or to buy without pushing its price up. Market regulation may be less rigorous in some markets. Finally, political factors may have an impact in the form of confiscatory taxation, ex- propriation or political instability in international markets. Although the Portfolio will seek the most favorable trading costs available in any given market, investors should recognize that foreign commissions are generally higher than those in the U.S. In addition, custodial expenses, that is, fees paid to financial institutions for holding the Portfolio's securi- ties, will generally be higher than would be the case in the U.S. Some foreign governments also levy withholding taxes against dividend and interest income. Although in some countries a portion of the taxes is recover- able, the non-recovered portion of foreign withholding taxes will reduce the income the Portfolio receives from the companies comprising its investments. Investing in the foreign securities of developing countries presents addi- tional considerations. The economies of individual developing countries may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rate of inflation, currency depreciation, capital reinvestment, resource self-sufficiency and balance of payments posi- tion. Further, the economies of developing countries generally are heavily de- pendent upon international trade and, accordingly, have been and may continue to be adversely affected by trade barriers, exchange controls, managed adjust- ments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been and may continue to be adversely affected by economic conditions in the countries with which they trade. With respect to any developing country, there is the possibility of nation- alization, expropriation or confiscatory taxation, repatriation of investment income, capital and the proceeds of sales by foreign investors, political changes, governmental 7 regulation, social instability or diplomatic developments (including war) which could adversely affect the economics of such countries or the value of the Portfolio's investments in those countries. In addition, it may be diffi- cult to obtain and enforce a judgment in a court against foreign issuers. The Portfolio may engage in various investment techniques such as futures contracts, options on futures contracts, options, and interest rate swap transactions. (See "OTHER INVESTMENT POLICIES--HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS.") OTHER INVESTMENT POLICIES The Portfolio may also, under normal circumstances, invest up to 35% of its assets, unless restricted by additional limitations described below or in the Portfolio's SAI, in the following securities, investments or investment tech- niques. SHORT-TERM INVESTMENTS In order to earn a return on uninvested assets, meet anticipated redemp- tions, or for temporary defensive purposes, the Portfolio may invest a portion of its assets in domestic and foreign money market instruments including cer- tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob- ligations, U.S. Government agency securities, short-term corporate debt secu- rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Ratings Service or Prime-1 or Prime-2 by Moody's Investors Service. or if unrated, de- termined by the Adviser to be of comparable quality. Time deposits maturing in more than seven days will not be purchased by the Portfolio, and time deposits maturing from two business days through seven calendar days will not exceed 10% of the total assets of a Portfolio. The Portfolio will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, (ii) in the case of U.S. banks, it is a member of the Fed- eral Deposit Insurance Corporation, and (iii) in the case of foreign branches of U.S. banks, the security is, in the opinion of the Adviser, of an invest- ment quality comparable with other debt securities which may by purchased by the Portfolio. The Fund has received permission from the SEC to deposit the daily uninvested cash balances of the Fund's Portfolios, as well as cash for investment purpos- es, into one or more joint accounts and to invest the daily balance of the joint accounts in the following short-term investments: fully collateralized repurchase agreements, interest-bearing or discounted commercial paper includ- ing dollar-denominated commercial paper of foreign issuers, and any other short-term money market instruments including variable rate demand notes and tax-exempt money instruments. By entering into these investments on a joint basis, the Portfolio may earn a higher rate of return on investments relative to what it could earn individually. 8 The Fund has received permission from the SEC for each of its Portfolios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio (See "INVESTMENT COMPANIES.") REPURCHASE AGREEMENTS The Portfolio may invest in repurchase agreements collateralized by U.S. Government securities, certificates of deposit, and certain bankers' accept- ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repurchase agreement, the Portfolio buys a security and simultaneously commits to sell that security back at an agreed upon price plus an agreed upon market rate of interest. Under a repurchase agreement, the seller is also required to maintain the value of securities subject to the agreement at not less than 100% of the repurchase price. The value of the securities purchased will be evaluated daily, and the Adviser will, if necessary, require the Seller to maintain additional securities to ensure that the value is in compliance with the previous sentence. The use of repurchase agreements involves certain risks. For example, a default by the seller of the agreement may cause the Portfolio to experience a loss or delay in the liquidation of the collateral securing the repurchase agreement. The Portfolio might also incur disposition costs in liquidating the collateral. While the Fund's management acknowledges these risks, it is expected that they can be controlled through stringent counter-party selection criteria and careful monitoring procedures. The Fund has received permission from the SEC to pool daily uninvested cash balances of the Fund's Portfolios in order to invest in repurchase agreements on a joint basis. By entering into joint repurchase agreements, the Portfolio may incur lower transaction costs and earn higher rates of interest on joint repurchase agreements. The Portfolio's contribution would determine its return from a joint repurchase agreement. (See "SHORT TERM INVESTMENTS.") LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified institutional investors as a means of earning income. The Portfolio will not loan securities to the extent that greater than one third of its total assets at fair market value would be committed to loans. During the term of a loan, the Portfolio is subject to a gain or loss depending on any increase or decrease in the market price of the securities loaned. Lending of securities is subject to review by the Fund's Board of Trustees. All relevant facts and circumstances, including the creditworthiness of the broker, dealer or institution, will be considered by the Adviser in making decisions about securities lending. An investment company may pay reasonable negotiated fees in connection with loaned securities so long as such fees are set forth in a written contract and approved by its Board of Trustees. The Portfolio will continue to retain any voting rights with respect to loaned securities. If a material event occurs affecting an investment on loan, the loan must be called and the securities voted. 9 WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES The Portfolio may purchase and sell securities on a "when-issued," "delayed settlement," or "forward delivery" basis. "When-issued" or "forward delivery" 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 and forward delivery transactions may be expected to occur a month or more be- fore delivery is due. Delayed settlement is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by the Portfolio until it re- ceives delivery or payment from the other party to any of the above transac- tions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. The Portfolio will maintain a separate account of cash or liquid securities at least equal to the value of purchase commitments until payment is made. Typically, no income ac- crues on securities purchased on a delayed delivery basis prior to the time delivery is made although the Portfolio may earn income on securities it has deposited in a segregated account. The Portfolio may engage in these types of purchases in order to buy securi- ties that fit with its investment objectives at attractive prices -- not to increase its investment leverage. PORTFOLIO TURNOVER In addition to Portfolio trading costs, higher rates of portfolio turnover may result in the realization of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for more information on taxation). The Portfolio will not normally engage in short-term trading, but reserves the right to do so. The table set forth in "Financial Highlights" presents the Portfolio's histor- ical portfolio turnover rates. INVESTMENT COMPANIES The Portfolio reserves the right to invest up to 10% of its total assets, calculated at the time of investment, in the securities of other open-end or closed-end investment companies. No more than 5% of the investing Portfolio's total assets may be invested in the securities of any one investment company, nor may it acquire more than 3% of the voting securities of any other invest- ment company. The Portfolio will indirectly bear its proportionate share of any management fees paid by an investment company in which it invests in addi- tion to the advisory fee paid by the Portfolio. The Fund has received permission from the SEC to allow each of its Portfo- lios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio provided that the in- vestment is consistent with the Portfolio's investment policies and restric- tions. Based upon the 10 Portfolio's assets invested in the DSI Money Market Portfolio, the investing Portfolio's adviser will waive its investment advisory fee and any other fees it earned as a result of the Portfolio's investment in the DSI Money Market Portfolio. The investing Portfolio will bear expenses of the DSI Money Market Portfolio on the same basis as all of its other shareholders. HEDGING AND RELATED STRATEGIES AND RISK CONSIDERATIONS The Portfolio may use options (both exchange-traded and over-the-counter) to attempt to enhance income. To reduce the overall risk of its investments (hedge), the Portfolio may use options, futures contracts, options on futures and forward currency contracts. These instruments are commonly referred to as derivatives. Hedging strategies may also be used in an attempt to manage the Portfolio's exposure to changing interest rates, security prices and currency exchange rates. The Portfolio may buy or sell futures contracts, write covered call options and buy put and call options on any security, index or currency including options and futures traded on foreign exchanges and options not traded on exchanges. The Portfolio's ability to use these strategies may be limited by market conditions, regulatory limits and tax considerations. The Portfolio's obligation under such hedging strategies will be covered by the maintenance of a segregated account of cash or liquid securities equal to at least 100% of the Portfolio's commitment. The SAI contains further information on all of these strategies and the risks associated with them. The Portfolio may write or purchase options in privately negotiated transac- tions ("OTC Options") as well as listed options. OTC Options can be closed out only by agreement with the other party to the transaction. Any OTC Option pur- chased by the Portfolio is considered an illiquid security. Any OTC Option written by the Portfolio will be with a qualified dealer pursuant to an agree- ment under which the Portfolio may repurchase the option at a formula price. Such options are considered illiquid to the extent that the formula price ex- ceeds the intrinsic value of the option. The Portfolio may not purchase or sell futures contracts or related options for which the aggregate initial mar- gin and premiums exceed 5% of the fair market value of the Portfolio's assets. In order to prevent leverage in connection with the purchase of futures con- tracts or call options thereon by the Portfolio, an amount of cash, cash equivalents or liquid securities equal to the market value of the obligation under the futures contracts or options (less any related market deposits) will be maintained in a segregated account with the Fund's Custodian. The Portfolio may not invest more than 15% of its net assets in illiquid securities and re- purchase agreements which have a maturity of longer than seven days. A more complete discussion of the potential risks involved in transactions in options or futures contracts and related options is contained in the SAI. The Portfolio may enter into forward foreign currency exchange contracts for the purchase or sale of a specified currency at a specified future date either with 11 respect to specific transactions or with respect to portfolio positions. For example, when the Adviser anticipates making a currency exchange transaction in connection with the purchase or sale of a security, the Portfolio may enter into a forward contract in order to set the exchange rate at which the trans- action will be made. The Portfolio also may enter into a forward contract to sell an amount of a foreign currency approximating the value of some or all of the Portfolio's securities denominated in such currency. The Portfolio may use forward contracts in one currency or a basket of cur- rencies to hedge against fluctuations in the value of another currency when the Adviser anticipates there will be a correlation between the two and may use forward currency contracts to shift the Portfolio's exposure to foreign currency fluctuations from one country to another. The purpose of entering into these contracts is to minimize the risk to the Portfolio from adverse changes in the relationship between the U.S. dollar and foreign currencies. The Portfolio may enter into interest rate protection transactions, which consist of interest rate swaps and interest rate caps, collars and floors, for hedging purposes. These transactions are commonly known as derivatives. A swap is an agreement to exchange the return generated by one instrument for the re- turn generated by another instrument. The swaps in which the Portfolio may also engage include interest rate caps, floors and collars under which one party pays a single or periodic fixed amount (or premium), and the other party pays periodic amounts on the movement of a specified index. The Portfolio may enter into interest rate protection transactions to pre- serve a return or spread on a particular investment or portion of its portfo- lio or to protect against any increase in the price of securities it antici- pates purchasing at a later date. The Portfolio will enter into interest rate protection transactions only with banks and recognized securities dealers be- lieved by the Adviser to present minimal credit risks in accordance with guidelines established by the Fund's Board of Trustees. Interest rate swaps, caps, floors and collars will be treated as illiquid securities and will therefore, be subject to the Portfolio's investment restriction limiting in- vestment in illiquid securities to no greater than 15% of net assets. RISK CONSIDERATIONS. The Portfolio might not employ any of the hedging strategies described above, and there can be no assurance that any strategy used will succeed. If the Adviser incorrectly forecasts interest rates, market values or other economic factors in utilizing a strategy for the Portfolio, the Portfolio would be in a better position if it had not hedged at all. In addition, the Portfolio will pay commissions and other costs in connection with such hedging strategies, which may increase the Portfolio's expenses and reduce its return. The use of these strategies involves certain risks, including (1) the fact that skills needed to use hedging instruments are different from those needed to select 12 the Portfolio's securities, (2) possible imperfect correlation, or even no correlation, between price movements of hedging instruments and price move- ments of the investments being hedged, (3) the fact that, while hedging strat- egies can reduce the risk of loss, they can also reduce the opportunity for gain, or even result in losses, by offsetting favorable price movements in hedged investments and (4) the possible inability of the Portfolio to purchase or sell a portfolio security at a time that otherwise would be favorable for it to do so, or the possible need for the Portfolio to sell a portfolio secu- rity at a disadvantageous time, due to the need for it to maintain "cover" or to segregate securities in connection with hedging transactions and the possi- ble inability of the Portfolio to close out or to liquidate its hedged posi- tion. RESTRICTED AND ILLIQUID SECURITIES The Portfolio may purchase restricted securities that are not registered for sale to the general public but which are eligible for resale to qualified in- stitutional investors under Rule 144A of the Securities Act of 1933. Under the supervision of the Fund's Board of Trustees, the Adviser determines the li- quidity of such investments by considering all relevant factors. Provided that a dealer or institutional trading market in such securities exists, these re- stricted securities are not treated as illiquid securities for purposes of the Portfolio's investment limitations. The Portfolio may invest up to 15% of its net assets in securities that are illiquid. The prices realized from the sales of these securities could be less than those originally paid by the Portfolio or less than what may be considered the fair value of such securities. INVESTMENT LIMITATIONS The Portfolio will not: (a) with respect to 75% of its assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed as to principal and in- terest by the U.S. Government or any of its agencies or instrumentali- ties); (b) with respect to 75% of its assets, purchase more than 10% of any class of the outstanding voting securities of any issuer; (c) invest more than 5% of its assets at the time of purchase in the secu- rities of companies that have (with predecessors) a continuous operat- ing history of less than 3 years; (d) invest more than 25% of its assets in companies within a single indus- try; however, there are no limitations on investments made in instru- ments issued or guaranteed by the U.S. Government and its agencies. (e) make loans except by purchasing debt securities in accordance with its investment objective and policies or entering into repurchase agree- ments 13 or by lending its portfolio securities to banks, brokers, dealers and other financial institutions so long as the loans are made in compli- ance with the 1940 Act, as amended, or the Rules and Regulations or interpretations of the SEC; (f) (i) borrow, except from banks and as a temporary measure for extraor- dinary or emergency purposes and then, in no event, in excess of 33 1/3% of the Portfolio's gross assets valued at the lower of market or cost, and (ii) the Portfolio may not purchase additional securities when borrowings exceed 5% of total assets; or (g) pledge, mortgage or hypothecate any of its assets to an extent greater than 33 1/3% of its total assets at fair market value. The Portfolio's investment objective and investment limitations (a), (b), (d), (e) and (f) (i) listed above are fundamental policies and may be changed only with the approval of the holders of a majority of the outstanding voting securities of the Portfolio. The other investment limitations described here, those not specified as fundamental in the SAI, and the Portfolio's investment policies are not fundamental, and the Fund's Board of Trustees may change them without shareholder approval. PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor"), without a sales commission at the net asset value per share next determined after an order is received by the Fund and payment is received by the Fund or its designated service agent. (See "VALUATION OF SHARES.") The minimum initial investment required is $2,500. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA ac- counts is $250. Certain exceptions may be permitted by the officers of the Fund. The Portfolio issues two classes of shares: Institutional Class and Service Class. The two classes of shares each represent interests in the same portfo- lio of investments, have the same rights and are identical in all respects, except that the Service Class Shares offered by this Prospectus bear share- holder servicing expenses and distribution plan expenses, and have exclusive voting rights with respect to the Rule 12b-1 Distribution Plan pursuant to which the distribution fee may be paid. The two classes have different ex- change privileges. (See "SHAREHOLDER SERVICES--EXCHANGE PRIVILEGE.") The net income attributable to Service Class Shares and the dividends payable on Serv- ice Class Shares will be reduced by the amount of the shareholder servicing and distribution fees; accordingly, the net asset value of the Service Class Shares will be reduced by such amounts. Some Service Agents may also impose additional or different conditions or other account fees on the purchase and redemption of Portfolio shares, which are 14 not subject to the Rule 12b-1 Service and Distribution Plans. These may in- clude transaction fees and/or service fees paid by the Fund from the Portfo- lio's assets attributable to the Service Agent and, would not be imposed if shares of the Portfolio were purchased directly from the Fund or the Distribu- tor. Service Agents may provide shareholder services to their customers that are not available to a shareholder dealing directly with the Fund. Each Serv- ice Agent is responsible for transmitting to its customers a schedule of any such fees and information regarding any additional or different conditions re- garding purchases and redemptions. Shareholders who are customers of Service Agents should consult their Service Agent for information regarding these fees and conditions. A salesperson and any other person entitled to receive compen- sation for selling or servicing Portfolio shares may receive different compen- sation with respect to one particular class of shares over another in the Fund. Service Agents or, if applicable, their designees, that have entered into agreements with the Fund or its agent may enter confirmed purchase orders on behalf of clients and customers, with payment to follow no later than a Port- folio's pricing on the following business day. If payment is not received by the Fund's Sub-Transfer Agent, Chase Global Funds Services Company ("CGFSC") by such time, the Service Agent could be held liable for resulting fees or losses. A Portfolio may be deemed to have received a purchase or redemption order when a Service Agent, or, if applicable, its authorized designee, ac- cepts the order. Orders received by the Fund in proper form will be priced at the Portfolio's net asset value next computed after they are accepted by a Service Agent or its authorized designee. Service Agents are responsible to their customers and the Fund for timely transmission of all subscription and redemption requests, investment information, documentation and money. INITIAL INVESTMENT BY MAIL . Complete and sign an Application, and mail it, together with a check payable to "UAM Funds" to: UAM Funds Trust UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 Payment for purchases of shares received by mail will be credited to an ac- count at the next share price calculated for the Portfolio after receipt. Pay- ment does not need to be converted into Federal Funds (monies credited to the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it for investment. The Fund will not accept third-party checks to purchase shares of a Portfolio. 15 If you purchase shares by check, please be sure that your check is made pay- able to "UAM Funds." BY WIRE . Telephone the UAM Funds Service Center and provide the account name, ad- dress, telephone number, social security or taxpayer identification num- ber, the Portfolio selected (Service Class Shares), the amount being wired and the name of the bank wiring the funds. The call must be re- ceived prior to the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) to receive that day's price. An account number and a wire control number will then be provided to you. Next, . instruct your bank to wire the specified amount to the Fund's Custodian: The Chase Manhattan Bank ABA #021000021 UAM Funds DDA Acct. #9102772952 Ref: Portfolio Name ___________ Your Account Number___________ Your Account Name___________ Wire Control Number___________ (assigned by the UAM Funds Service Center) . Forward a completed Application to the Fund at the address shown on the form. Federal Funds purchases will be accepted only on a day on which both the NYSE and the Custodian Bank are open for business. . To be sure that a bank wire order is received on the same day it is sent, an investor's bank should wire funds as early in the day as possi- ble. The bank sending funds may charge for this service. The Fund's agent reserves the right to charge investors for receipt of wired funds, but no charge is currently imposed for this service. It is necessary to obtain a new wire control number every time money is wired into an ac- count in a Portfolio. Wire control numbers are effective for one trans- action only and cannot be used more than once. Wired money that is not properly identified with a currently effective wire control number will be returned to the bank from which it was wired and will not be credited to the shareholder's account. ADDITIONAL INVESTMENTS Additional investments can be made at any time. The minimum additional in- vestment is $100. Shares can be purchased at net asset value by mailing a check to the UAM Funds Service Center (payable to "UAM Funds") or by wiring money to the Custodian Bank as outlined above. When making additional invest- ments, be sure that the account name and number is identified on the check or wire. Prior to wiring additional investments, notify the UAM Funds Service Center by calling the 16 number on the cover of this prospectus. Mail orders should include, when pos- sible, the "Invest by Mail" stub which accompanies any Fund confirmation statement. PURCHASE BY ACH If you have made this election, shares of the Portfolio may be purchased via Automated Clearing House ("ACH"). Investors purchasing via ACH should complete the bank information section on the Account Application and attach a voided check or deposit slip to the Account Application. This option must be estab- lished on your account at least 15 days prior to your initiating an ACH trans- action (see "SHAREHOLDER SERVICES--AUTOMATIC INVESTMENT PLAN"). OTHER PURCHASE INFORMATION Investments received by the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be invested at the share price calculated after the NYSE closes on that day. Investments received after the close of the NYSE will be executed at the price computed on the next day the NYSE is open. The Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolio or to reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. The Portfolio is intended to be a long-term investment vehicle and is not designed to provide investors with a means of speculation on short-term market movements. A pattern of frequent purchases can be disruptive to effi- cient portfolio management and, consequently, can be detrimental to a Portfo- lio's performance and its shareholders. Accordingly, if the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice, may reject in whole or part any purchase request to such investor's account. Such investor also may be barred from purchasing other portfolios of the UAM Funds. Purchases of the Portfolio's shares will be made in full and fractional shares of the Portfolio calculated to three decimal places. Certificates for fractional shares will not be issued. Certificates for whole shares will not be issued except at the written request of the shareholder. IN-KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in ex- change for securities which are eligible for acquisition by the Portfolio, as described in this Prospectus. Securities to be exchanged which are accepted by the Fund will be valued as described under "VALUATION OF SHARES" at the next determination of net asset value after acceptance. Shares issued by the Port- folio in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the 17 investor upon receipt from the issuer. Securities acquired through an in-kind purchase will be acquired for investment and not for immediate resale. The Fund will not accept securities in exchange for shares of the Portfolio unless: . at the time of exchange, such securities are eligible to be in- cluded in the Portfolio (current market quotations must be readily available for such securities); . the investor represents and agrees that all securities offered to be exchanged are liquid securities and not subject to any restric- tions upon their sale by the Portfolio under the Securities Act of 1933, or otherwise; and . the value of any such securities (except U.S. Government securi- ties) being exchanged together with other securities of the same issuer owned by the Portfolio will not exceed 5% of the net assets of the Portfolio immediately after the transaction. Investors who are subject to federal taxation upon exchange may realize a gain or loss for federal income tax purposes depending upon the cost of secu- rities or local currency exchanged. Investors interested in such exchanges should contact the Adviser. REDEMPTION OF SHARES Shares of the Portfolio may be redeemed by mail or telephone, at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request. No charge is made for redemptions. Any re- demption may be more or less than the purchase price of your shares depending on the market value of the investment securities held by the Portfolio. BY MAIL Address requests for redemption to the UAM Funds Service Center. Requests to redeem shares must include: . share certificates, if issued; . a letter of instruction or an assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are regis- tered; . any required signature guarantees (see "SIGNATURE GUARANTEES"); and . any other necessary legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pen- sion and profit sharing plans and other organizations. 18 BY TELEPHONE A redemption request by telephone requires the following: . establish the telephone redemption privilege (and if desired, the wire redemption privilege) by completing appropriate sections of the Application; and . call the Fund and instruct that the redemption proceeds be mailed to you or wired to your bank. The following tasks cannot be accomplished by telephone: . changing the name of the commercial bank or the account designated to receive redemption proceeds (this can be accomplished only by a written request signed by each shareholder, with each signature guaranteed); and . redemption of certificated shares by telephone. The Fund and its Sub-Transfer Agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and they may be liable for any losses if they fail to do so. These procedures include re- quiring the investor to provide certain personal identification at the time an account is opened, as well as prior to effecting each transaction requested by telephone. All telephone transaction requests will be recorded and investors may be required to provide additional telecopied written instructions of such transaction requests. The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent does not employ the procedures described above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili- ty, cost or expense for following instructions received by telephone that it reasonably believes to be genuine. SIGNATURE GUARANTEES Signature guarantees are required for the following redemptions: . redemptions where the proceeds are to be sent to someone other than the registered shareowner(s); . redemptions where the proceeds are to be sent to someplace other than the registered address; or . share transfer requests. Signature guarantees will be accepted from any eligible guarantor institu- tion which participates in a signature guarantee program. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securi- ties exchanges, registered securities associations, clearing agencies and sav- ings associations. Broker- dealers guaranteeing signatures must be a member of a clearing corporation or 19 maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. OTHER REDEMPTION INFORMATION The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the UAM Funds Service Center of a redemption request in proper form. Although the Fund will redeem shares purchased by check before the check clears, payment of the redemption proceeds may be delayed for a pe- riod of up to fifteen days after their purchase, pending determination that the check has cleared. Investors should consider purchasing shares using a certified or bank check or money order if they anticipate an immediate need for redemption proceeds. The Fund may suspend the right of redemption or post- pone the date at times when both the NYSE and Custodian Bank are closed, or under any emergency circumstances determined by the SEC. If the Fund's Board of Trustees determines that it would be detrimental to the best interests of remaining shareholders of the Fund to make payment wholly or partly in cash, the Fund may pay redemption proceeds in whole or in part by a distribution in-kind of liquid securities held by the Portfolio in lieu of cash in conformity with applicable rules of the SEC. Investors may in- cur brokerage charges on the sale of portfolio securities received in payment of redemptions. The Portfolio reserves the right to liquidate any account that is below fifty percent of the required minimum initial investment amount for a Portfo- lio as set forth in the Prospectus, where the reduction in value has occurred due to a redemption or exchange out of the account. If at any time your total investment does not have a value of at least fifty percent of the required minimum initial investment amount, you may be notified that the value of your account is below the Portfolio's minimum account balance requirement. You would then be allowed 60 days to make an additional investment before the ac- count is liquidated. Retirement accounts and certain other accounts will not be subject to automatic liquidation. Reductions in value that result solely from market activity will not trigger an involuntary redemption. SERVICE AND DISTRIBUTION PLANS Under the Service Plan for Service Class Shares, the Fund may enter into service agreements with Service Agents (broker-dealers or other financial in- stitutions) who receive fees with respect to the Fund's Service Class Shares owned by shareholders for whom the Service Agent is the dealer or holder of record, or for whom the Service Agent performs personal services and/or share- holder account maintenance. These fees are paid out of the assets allocable to Service Class Shares to the Distributor, to the Service Agents, directly or through the Distributor. The Fund reimburses the Distributor or the Service Agent for payments made at an annual rate of up to .25 of 1% of the average daily value of Service Class Shares. 20 Each item for which a payment may be made under the Service Plan constitutes personal service and/or shareholder account maintenance and may constitute an expense of distributing Fund shares as the SEC construes such term under Rule 12b-1. The fees payable for servicing reflect actual expenses incurred up to the limit described herein. Banks are engaged to act as Service Agents only to perform administrative and shareholder servicing functions, including transaction-related agency services for their customers. If a bank is prohibited from so acting, alterna- tive means for continuing the servicing of its shareholders would be sought and the shareholder clients of the bank would remain Fund shareholders. The Distribution Plan and Service Plan (the "Plans") provide generally that a Portfolio may incur distribution and service costs under the Plans which may not exceed in the aggregate 0.75% per annum of that Portfolio's net assets. The Board has currently limited aggregate payments under the Plans to 0.50% per annum of the Portfolio's net assets. The Service Class Shares offered by this Prospectus currently are not making payments under the Distribution Plan. Upon implementation, the Distribution Plan would permit payments to the Dis- tributor, broker-dealers, other financial institutions, sales representatives or other third parties who render promotional and distribution services, for items such as sales compensation and marketing and overhead expenses. The Plans were adopted pursuant to Rule 12b-1 under the 1940 Act. Although the Plans may be amended by the Board of Trustees, any changes in the Plans which would materially increase the amounts authorized to be paid under the Plans must be approved by shareholders of the Class involved. The Plans may be terminated by the Board of Trustees or Service Class Shareholders. The amounts and purposes of expenditures under the Plans must be reported to the Board of Trustees quarterly. The amounts allowable under the Plans for each Class of Shares of the Portfolios are also limited under certain rules of the National Association of Securities Dealers Regulation, Inc. In addition to payments by the Fund under the Plans, the Distributor, United Asset Management Corporation, the parent company of UAMFSI, and of the Adviser or any of their affiliates, may, at its own expense, compensate a Service Agent or other person for marketing, shareholder servicing, recordkeeping and/or other services performed with respect to the Fund, the Portfolio or any Class of Shares of the Portfolio. The person making such payments may do so out of its revenues, its profits or any other source available to it. Such service arrangements, when in effect, are made generally available to all qualified service providers. The Adviser may compensate its affiliated compa- nies for referring investors to the Portfolio. The Distributor, the Adviser and certain of their other affiliates also par- ticipate, at the date of this Prospectus, in an arrangement with Smith Barney Inc. under 21 which Smith Barney provides certain defined contribution plan marketing and shareholder services and receives from such entities an amount equal to up to 33.3% of the portion of the investment advisory fees attributable to the in- vested assets of Smith Barney's eligible customer accounts without regard to any expense limitation in addition to amounts payable to all selling dealers. The Fund also compensates Smith Barney for services it provides to certain de- fined contribution plan shareholders that are not otherwise provided by UAMFSI. SHAREHOLDER SERVICES EXCHANGE PRIVILEGE Service Class Shares of the Portfolio may be exchanged for Service Class Shares of any other UAM Funds Portfolio. (See the list of Portfolios of the UAM Funds at the end of this Prospectus.) Exchange requests should be made by contacting the UAM Funds Service Center. Any exchange will be based on the net asset value of the shares involved. There is no sales commission or charge of any kind for an exchange. Before making an exchange into the Portfolio, a shareholder should read its Prospec- tus and consider the investment objectives of the Portfolio to be purchased. Call the UAM Funds Service Center for a copy of the Prospectus for the Portfo- lio(s) in which you are interested. Exchanges can only be made with Portfolios that are qualified for sale in a shareholder's state of residence. Exchange requests may be made either by mail or telephone. Telephone ex- changes will be accepted only if the certificates for the shares to be ex- changed have not been issued to the shareholder and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the NYSE will be processed on the next business day. The Fund may modify or terminate the exchange program at any time upon 60 days' written notice to shareholders, and may reject any exchange request. If the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice may reject in whole or part any exchange request, with respect to such investor's account. Such investors also may be barred from exchanging into other portfolios of the UAM Funds. For additional information regarding responsibility for the authentic- ity of telephoned instructions, see "REDEMPTION OF SHARES -- BY TELEPHONE." An exchange into another UAM Funds Portfolio is a sale of shares and may result in a gain or loss for income tax purposes. AUTOMATIC INVESTMENT PLAN An Automatic Investment Plan permits shareholders of a Portfolio with a min- imum value of $2,500 or more to purchase shares automatically (minimum of 22 $100 per transaction) at regular intervals selected by the shareholder. Pro- vided the shareholder's bank or other financial institution allows automatic withdrawals, shares are purchased by transferring funds via the Automated Clearing House ("ACH"). Investment made through ACH will be automatically transferred from a shareholder's checking, bank money market or NOW account designated by the shareholder. Such withdrawals are made electronically, if the shareholder's bank or financial institution so permits, or be pre-autho- rized checks or drafts drawn on the shareholder's bank or other account. The bank or financial institution must be a member of ACH. At the shareholder's option, the account designated will be debited in the specified amount, and shares will be purchased monthly or quarterly. To establish an Automatic Investment Plan, a shareholder must complete the Optional Services Form available from the UAM Funds Service Center at 1-800- 638-7983 and mail it to Chase Global Funds Service Company. A shareholder may cancel his/her participation or change the amount of purchase at any time by mailing written notification to Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. Notification generally will be effective three business days following receipt. The Fund may modify or terminate this privi- lege at any time, or may charge a service fee, although no such fee currently is contemplated. SYSTEMATIC WITHDRAWAL PLAN Any shareholder whose account balance totals at least $10,000 may establish a Systematic Withdrawal Plan under which an amount pre-determined by the shareholder (but at least $100) is automatically redeemed from the sharehold- er's account either monthly or quarterly. A shareholder may participate in the Systematic Withdrawal Plan by using ACH. Redemption made through ACH will be automatically transferred to the shareholder's bank or other similar financial institution account or a properly designated third party. The bank or finan- cial institution must be a member of ACH. Redemptions ordinarily are made on the third business day of the month and payments ordinarily will be transmit- ted within five business days after the redemption date. Because the prices of Fund shares fluctuate, the number of shares redeemed to finance systematic withdrawal payments or a given amount will vary from payment to payment. If a shareholder owns shares in more than one Portfolio, the shareholder must des- ignate the Portfolio from which the redemptions under a Systematic Withdrawal Plan should be made. An additional sheet may be attached to the Optional Serv- ices Form if a shareholder selects more than one Portfolio. A Systematic With- drawal Plan may be terminated or suspended at any time by the Fund. A share- holder may elect at any time, in writing, to terminate participation in the Systematic Withdrawal Plan. Such written election must be sent to and received by the Fund before a termination becomes effective. There is currently no charge to the shareholder for a Systematic Withdrawal Plan. 23 VALUATION OF SHARES The net asset value of each class of a Portfolio is determined by dividing the value of the Portfolio's assets attributable to the class, less any lia- bilities attributable to the class, by the number of shares outstanding at- tributable to the class. The net asset value per share of the Portfolio is de- termined as of the close of the NYSE on each day that the NYSE is open for business. Equity securities listed on a securities exchange for which market quota- tions are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed secu- rities not traded on the valuation date for which market quotations are read- ily available are valued neither exceeding the current ask prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars quoted by any major bank or by a broker. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost when the Board of Trustees determines that amortized cost reflects fair value. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Fund's Board of Trustees. PERFORMANCE CALCULATIONS The Portfolio measures performance by calculating yield and total return. Both yield and total return figures are based on historical earnings and are not intended to indicate future performance. Yield and total return are calcu- lated separately for each class of a portfolio. Yield refers to the income generated by an investment in the Portfolio over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all funds. As this differs from other accounting methods, the quoted yield may not equal the in- come actually paid to shareholders. Total return is the change in value of an investment in the Portfolio over a given period, assuming reinvestment of any dividends and capital gains. A cu- mulative or aggregate total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of re- turn that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Performance will be calculated separately for Institutional Class and Serv- ice Class Shares. Dividends paid by the Portfolio with respect to Institu- tional Class and 24 Service Class Shares, to the extent any dividends are paid, will be calculated in the same manner at the same time on the same day and will be in the same amount, except that service fees, distribution charges and any incremental transfer agency costs relating to Service Class Shares will be borne exclu- sively by that class. The Portfolio's performance may be compared to data prepared by independent services which monitor the performance of investment companies, data reported in financial and industry publications, and various indices, all as further described in the Portfolio's SAI. This information may also be included in sales literature and advertising. The Portfolio's Annual Report to Shareholders for the most recent fiscal year end contains additional performance information that includes comparisons with appropriate indices. The Annual Report is available without charge. Con- tact the UAM Funds Service Center at the address or phone number on the cover of this Prospectus. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS The Portfolio will normally distribute substantially all of its net invest- ment income (for tax purposes) to shareholders of both of its classes annual- ly. If any net capital gains are realized, the Portfolio will normally dis- tribute them annually. All dividends and capital gains distributions will be automatically reinvested in additional shares of the Portfolio unless the Fund is notified in writing that the shareholder elects to receive distributions in cash. FEDERAL TAXES The Portfolio intends to qualify as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, for federal in- come tax purposes and to meet all other requirements that are necessary for it (but not its shareholders) to be exempt from federal taxes on income and gains paid to shareholders in the form of dividends. To do this, the Portfolio must, among other things, distribute substantially all of its ordinary income and net capital gains on an annual basis and maintain a portfolio of investments which satisfies certain diversification criteria. Dividends paid by the Portfolio from net investment income, whether distrib- uted as cash or reinvested in shares are taxable to shareholders as ordinary income. Short-term capital gains will also be taxed as ordinary income. Long- term capital gains distributions are taxed as long-term capital gains. Share- holders will be notified annually of dividend income earned for tax purposes. Dividends declared in October, November and December to shareholders of rec- ord in such a month and paid in January of the following year will be treated as if they had been paid by the Fund and received by the shareholders on De- cember 31. 25 The Fund is required by federal law to withhold 31% of reportable payments paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, you must certify that your Social Security or Taxpayer Identification Number you have provided is correct and that either you are not currently subject to backup withholding or you are exempt from backup withholding. This certification must be made on the Application or on a separate form supplied by the Fund. Dividends and interest received by the Portfolio may give rise to withhold- ing and other taxes imposed by foreign countries. These taxes reduce the Port- folio's dividends but are included in the taxable income reported on your tax statement if the Portfolio qualifies for this tax treatment and elects to pass it through to you. Consult a tax adviser for more information regarding deduc- tions and credits for foreign taxes. INVESTMENT ADVISER The Adviser is an international investment adviser and is an affiliate of the MJ Group, in Glasgow, Scotland. The MJ Group's origins date back to 1907, and it currently has $7 billion in assets under management. The MJ Group has a 200-member staff including 40 investment professionals. It became a subsidiary of United Asset Management Corporation ("UAM") in 1993. The Adviser, the SEC- registered entity within the MJ Group, has $1.4 billion of assets under man- agement and has U.S. offices in Chicago. The Portfolio pays an annual fee in monthly installments to the Adviser for advisory services. This fee is accrued daily and paid every month as a per- centage of the average net assets in the Portfolio for that month. The per- centage fee on an annual basis is 0.75%. The Adviser and certain other service providers have voluntarily agreed to waive a portion of its advisory fees and to assume certain operating expenses to the extent necessary to keep the Port- folio's Service Class Shares' total operating expenses from exceeding 1.75%. The investment professional at the Adviser responsible for the day-to-day management of the Portfolio and his qualifications are as follows: RODGER SCULLION, MANAGING DIRECTOR OF THE ADVISER, has 26 years of invest- ment experience, the last 14 years based in Glasgow with the MJ Group. He is the portfolio manager of the Murray Smaller Markets Investment Trust, a closed-end investment fund registered in the United Kingdom, which invests in as many as 45 markets worldwide. Mr. Scullion is the Adviser's Chief Invest- ment Officer and the lead person on the country allocation team. During his tenure at the MJ Group, he has held portfolio management responsibilities for investments in the U.S., Europe, Japan and the Far East. 26 ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of UAM, is re- sponsible for performing and overseeing administrative, fund accounting, divi- dend disbursing and transfer agent services provided to the Fund and its Port- folios. UAMFSI's principal office is located at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is located at 73 Tremont Street, Boston, MA 02108. Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fees are calculated from the aggregate net assets of the Portfolio: RATE ---- MJI International Equity Portfolio..................................... 0.06% CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined UAM Fund assets; 0.11 of 1% of the next $800 million of combined UAM Fund assets; 0.07 of 1% of combined UAM Fund assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined UAM Fund assets in excess of $3 billion. Fees are allocated among each of the Portfolios on the basis of their rela- tive assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum an- nual fee increases by $20,000. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin- cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis- tributes the shares of the Fund. Under the Fund's Distribution Agreement (the "Agreement"), the Distributor, as agent of the Fund, agrees to use its best efforts as sole distributor of the Fund's shares. The Distributor does not re- ceive any fee or other compensation under the Agreement with respect to this Portfolio (except as described under "Service and Distribution Agreements). The Agreement continues in effect as long as such continuance is approved at least annually by the Fund's Board of Trustees. Those approving the Agreement must include a majority of Trustees who are neither parties to the Agreement nor interested persons of any such party. The Agreement provides that the Fund will bear the costs of the registration of its shares with the SEC and various states and the printing of its prospectuses, its SAIs and its reports to shareholders. 27 PORTFOLIO TRANSACTIONS The Advisory Agreement authorizes the Adviser to select the brokers or deal- ers that will execute the purchase and sale of investment securities for the Portfolio. The Agreement directs the Adviser to use its best efforts to obtain the best available price and most favorable execution for all transactions of the Portfolio. If consistent with the interests of the Portfolio, the Adviser may select brokers on the basis of the research, statistical and pricing serv- ices they provide to the Portfolio in addition to required services. Such bro- kers may be paid a higher commission than that which another qualified broker would have charged for effecting the same transaction, provided that such com- missions are paid in compliance with the Securities Exchange Act or 1934, as amended, and that the Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Portfolio and the Adviser's other clients. Although not a typical practice, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. If a purchase or sale of securities consistent with the investment policies of the Portfolio and one or more or these other clients served by the Adviser 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 rea- sonable by the Adviser. Although there is no specified formula for allocating such transactions, such allocations are subject to periodic review by the Fund's Trustees. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized as a Delaware business trust on May 18, 1994 under the name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial inter- est, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without fur- ther action by shareholders. At its discretion, the Board of Trustees may create additional Portfolios and classes of shares. The shares of each Portfolio are fully paid and nonas- sessable, and have no preference as to conversion, exchange, dividends, re- tirement or other features and no preemptive rights. They have noncumulative voting rights, which means that holders of more than 50% of shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. 28 As of June 15, 1998, Sisters of Mercy Corp. held of record 30.6% of the out- standing shares of the Portfolio's Service Class; and Freya Fanning & Co. held of record 49.7% of the outstanding shares of the Portfolio's Institutional Class. Beneficial ownership of these accounts is disclaimed or presumed dis- claimed. The persons or organizations owning 25% or more of the outstanding shares of a Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of such Portfolio. Both Institutional Class and Service Class Shares represent an interest in the same assets of a Portfolio. Service Class Shares bear certain expenses re- lated to shareholder servicing, and the distribution of such shares. Service Class Shares have exclusive voting rights with respect to matters relating to such distribution expenditures. The Board of Trustees of the Fund has autho- rized a third class of shares, Advisor Shares, which is not currently being offered by this Portfolio. Information about the Institutional Class Shares of the Portfolio along with the fees and expenses associated with such shares is available upon request by contacting the UAM Funds Service Center. Annual meetings will not be held except as required by the 1940 Act and other applicable laws. The Fund has undertaken that its Trustees will call a meeting of shareholders if such a meeting is requested in writing by the hold- ers of not less than 10% of the outstanding shares of the Fund. The Fund will assist shareholder communications in such matters. CUSTODIAN The Chase Manhattan Bank serves as custodian of the Fund's assets. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the independent accountant for the Fund. REPORTS Investors will receive unaudited semi-annual financial statements and annual financial statements audited by PricewaterhouseCoopers LLP. SHAREHOLDER INQUIRIES Shareholder inquiries may be made by contacting the UAM Funds Service Center at the telephone number listed on the cover of the Prospectus. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PRO- SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OF- FERING MAY NOT BE LAWFULLY MADE. 29 UAM FUNDS -- INSTITUTIONAL SERVICE CLASS SHARES BHM&S Total Return Bond Portfolio DSI Disciplined Value Portfolio FMA Small Company Portfolio FPA Crescent Portfolio MJI International Equity Portfolio NWQ Balanced Portfolio NWQ Small Cap Value Portfolio NWQ Special Equity Portfolio NWQ Value Equity Portfolio Sirach Bond Portfolio Sirach Equity Portfolio Sirach Growth Portfolio Sirach Special Equity Portfolio Sirach Strategic Balanced Portfolio Sterling Partners' Balanced Portfolio Sterling Partners' Equity Portfolio Sterling Partners' Small Cap Value Portfolio TJ Core Equity Portfolio 30 UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 1-800-638-7983 Investment Adviser Murray Johnstone International Ltd. Glasgow, Scotland Distributor UAM Fund Distributors, Inc. 211 Congress Street Boston, MA 02110 PROSPECTUS July 17, 1998 UAM Funds Prospectus July 17, 1998 TJ Core Equity Portfolio Institutional Service Class Shares [LOGO OF UAM FUNDS APPEARS HERE] TABLE OF CONTENTS
PAGE ---- Fund Expenses.............................................................. 1 Prospectus Summary......................................................... 3 Risk Factors............................................................... 4 Financial Highlights....................................................... 5 Investment Objective....................................................... 6 Investment Policies........................................................ 6 Other Investment Policies.................................................. 7 Investment Limitations..................................................... 12 Purchase of Shares......................................................... 13 Redemption of Shares....................................................... 16 Service and Distribution Plans............................................. 19 Shareholder Services....................................................... 20 Valuation of Shares........................................................ 22 Performance Calculations................................................... 22 Dividends, Capital Gains Distributions and Taxes........................... 23 Investment Adviser......................................................... 24 Administrative Services.................................................... 26 Distributor................................................................ 26 Portfolio Transactions..................................................... 27 General Information........................................................ 27 UAM Funds -- Institutional Service Class Shares............................ 29
UAM FUNDS TJ CORE EQUITY PORTFOLIO INSTITUTIONAL SERVICE CLASS SHARES - -------------------------------------------------------------------------------- PROSPECTUS--JULY 17, 1998 UAM Funds Trust (the "Fund") is an open-end investment company known as a "mutual fund." The Fund consists of multiple series (known as "Portfolios") each of which has different investment objectives and policies. TJ Core Equity Portfolio currently offers only one class of shares. The securities offered in this Prospectus are Institutional Service Class Shares ("Service Class Shares") of one diversified no-load Portfolio of the Fund managed by Tom Johnson Invest- ment Management, Inc. TJ CORE EQUITY PORTFOLIO. TJ Core Equity Portfolio (the "Portfolio") seeks maximum total return consistent with reasonable risk to principal by investing in the common stock of quality companies with lower valuations in sectors of the economy exhibiting strong, or improving relative performance. There can be no assurance that the Portfolio will achieve its stated objec- tive. Keep this Prospectus for future reference. It contains information that you should know before you invest. A "Statement of Additional Information" ("SAI") containing additional information about the Fund has been filed with the Secu- rities and Exchange Commission ("SEC"). The SAI is dated July 17 1998 and has been incorporated by reference into this Prospectus. For a free copy of the SAI contact the UAM Funds Service Center at 1-800-638-7983. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FUND EXPENSES The following table illustrates expenses and fees that a shareholder of the Portfolio's Service Class Shares will incur. The Fund does not charge transac- tion fees. However, transaction fees may be charged if a broker-dealer or other financial intermediary deals with the Fund on your behalf. (See "PUR- CHASE OF SHARES.") SHAREHOLDER TRANSACTION EXPENSES Sales Load Imposed on Purchases......................................... NONE Sales Load Imposed on Reinvested Dividends.............................. NONE Deferred Sales Load..................................................... NONE Redemption Fees......................................................... NONE Exchange Fee............................................................ NONE
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) Investment Advisory Fees (After Fee Waiver).......................... 0.00% 12b-1 Fees (Including Shareholder Servicing Fees).................... 0.25% Other Expenses (After Expenses Assumed or waived)+................... 1.00% ---- Total Operating Expenses (After Fee Waiver and Expenses Assumed)..... 1.25%+* ====
- ----------- + The Service Class Shares may bear service fees of 0.25% of average daily net assets of the Portfolio. (See "SERVICE AND DISTRIBUTION PLANS.") Long-term shareholders may pay more than the economic equivalent of the maximum front- end sales charges permitted by rules of the National Association of Securi- ties Dealers, Inc. * The Adviser and certain other service providers have voluntarily agreed to waive all or a portion of their advisory fees and/or to assume operating ex- penses to keep the Portfolio's Service Class Shares' total annual operating expenses (excluding interest, taxes and extraordinary expenses), after the effect of expense offsets, from exceeding 1.25% of average daily net assets through January 1, 2000. The figures above include the effect of expense offsets. However, if expense offsets were excluded, Total Operating Expenses for the fiscal year ended April 30, 1998 would not be affected. (See "FINAN- CIAL HIGHLIGHTS.") Absent fee waivers and expense assumptions, Investment Advisory Fees, Other Expenses and the Total Operating Expenses of the Port- folio's Service Class Shares would have been 0.75%, 1.77% and 2.77%, respec- tively, of average daily net assets. The Adviser and/or service providers may change or discontinue its fee waivers and expense assumptions at any time. 1 The table above shows various fees and expenses an investor would bear di- rectly or indirectly. The expenses and fees set forth above are based on the Portfolio's Service Class Shares' operations during the fiscal year ended April 30, 1998. EXAMPLE The following example illustrates expenses a shareholder would pay on a $1,000 investment over various time periods assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period. The Portfolio charges no redemption fees of any kind.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- TJ Core Equity Portfolio..................... $13 $40 $69 $151
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX- PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 2 PROSPECTUS SUMMARY INVESTMENT ADVISER Tom Johnson Investment Management, Inc. (the "Adviser") is a registered in- vestment adviser. Founded in 1983, the Adviser currently has approximately $2.4 billion in assets under management. The Adviser is a wholly-owned subsid- iary of United Asset Management Corporation. (See "INVESTMENT ADVISER.") PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor") to investors at net asset value without a sales commission. Share purchases may be made by sending investments directly to the Fund. The minimum initial investment is $2,500. The minimum for subsequent investments is $100. The minimum initial investment for IRA accounts is $500. The minimum initial investment for spousal IRA accounts is $250. Certain exceptions to the initial or minimum investment amounts may be permitted by the officers of the Fund. (See "PURCHASE OF SHARES.") DIVIDENDS AND DISTRIBUTIONS The Portfolio will normally distribute substantially all of its net invest- ment income in quarterly dividends. The Portfolio will distribute any realized net capital gains annually. Distributions will be reinvested in Portfolio shares automatically unless an investor elects to receive cash distributions. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.") REDEMPTIONS AND EXCHANGES Shares of the Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemp- tion request. The redemption price may be more or less than the purchase price. Shares of the Portfolio may be exchanged for shares of the same class of any other portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" AND "EX- CHANGE PRIVILEGE.") ADMINISTRATIVE SERVICES UAM Funds Services Inc. ("UAMFSI"), a wholly-owned subsidiary of United As- set Management Corporation, is responsible for performing and overseeing ad- ministration, fund accounting, dividend disbursing and transfer agency serv- ices provided to the Fund and its Portfolios by third-party service providers. (See "ADMINISTRATIVE SERVICES.") 3 RISK FACTORS The value of the Portfolio's shares will fluctuate in response to changes in market and economic conditions as well as the financial conditions and pros- pects of the issuers in which a Portfolio invests. Investors should consider the following factors: (1) The Portfolio may invest in repurchase agreements which entail a risk of loss should the seller default on its transaction; (2) The Portfolio may invest a portion of its assets in derivatives including futures contracts and options; (3) The Portfolio may invest in the securities of foreign issuers which may be subject to additional risk factors, including foreign currency risks, not applicable to securities of U.S. issuers; (4) The fixed income securities held by the Portfolio will be affected by general changes in interest rates resulting in increases or decreases in the value of the securities. The value of fixed income securities can be expected to vary inversely to the changes in prevailing interest rates, i.e., as interest rates decline, the market value of fixed income securities tends to increase and vice versa; (5) The Portfolio may invest in investment-grade debt securities, but reserves the right to hold securities that have been downgraded. Adverse economic and corporate changes and changes in interest rates may have a greater impact on issuers of lower rated debt securities which the Portfolio may hold, which may lead to greater price volatility. Also, lower rated secu- rities may be more difficult to value accurately or sell in the secondary mar- ket; (6) The Portfolio may lend its investment securities which entails a risk of loss should a borrower fail financially; and (7) The Portfolio may purchase securities on a when-issued basis which do not earn interest until issued and may decline or appreciate in market value prior to their delivery to the Port- folio. (See "OTHER INVESTMENT POLICIES.") 4 FINANCIAL HIGHLIGHTS The following table provides selected per share information for a share out- standing throughout the periods presented of the Portfolio. This table is part of the Portfolio's Annual Financial Statements which are included in the Port- folio's 1998 Annual Report to Shareholders. The Report is incorporated by ref- erence into the Portfolio's SAI. The Portfolio's Annual Financial Statements have been audited for the period ended April 30, 1998 by PricewaterhouseCoopers LLP whose unqualified opinion thereon is also incorpo- rated into the Portfolio's SAI. The following information should be read in conjunction with the Portfolio's 1998 Annual Report to Shareholders. Further information about the Portfolio's performance is contained in its Annual Re- port, which may be obtained without charge by calling the telephone number on the Prospectus cover page.
SEPTEMBER 28, 1995* YEAR ENDED YEAR ENDED TO APRIL 30, 1998 APRIL 30, 1997 APRIL 30, 1996 -------------- -------------- -------------- NET ASSET VALUE, BEGINNING OF PERIOD......................... $ 13.05 $ 11.05 $ 10.00 ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income.......... 0.10 0.12 0.06 Net Realized and Unrealized Gain on Investments........... 4.55 2.08 1.05 ------- ------- ------- Total From Investment Operations.................... 4.65 2.20 1.11 ------- ------- ------- DISTRIBUTIONS Net Investment Income.......... (0.11) (0.11) (0.06) Net Realized Gain.............. (0.29) (0.09) -- ------- ------- ------- Total Distributions............ (0.40) (0.20) (0.06) ------- ------- ------- NET ASSET VALUE, END OF PERIOD.. $ 17.30 $ 13.05 $ 11.05 ======= ======= ======= TOTAL RETURN+................... 36.05 % 20.14 % 11.13 %*** ======= ======= ======= RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (Thousands)................... $11,348 $ 2,888 $ 1,023 Ratio of Expenses to Average Net Assets.................... 1.25 % 1.26 % 1.38 %** Ratio of Net Investment Income to Average Net Assets......... 0.74 % 1.07 % 1.06 %** Portfolio Turnover Rate........ 52 % 27 % 17 % Average Commission Rate........ $0.0600 $0.0600 $0.0600 Ratio of Voluntary Waived Fees and Expenses Assumed by the Adviser to Average Net Assets........................ 1.52 % 5.38 % 12.48 %** Ratio of Expenses to Average Net Assets Including Expense Offsets....................... 1.25 % 1.25 % 1.25 %**
- ----------- *Commencement of Operations. **Annualized. ***Not Annualized. + Total return would have been lower had certain fees not been waived and expenses assumed by the Adviser during the period. 5 INVESTMENT OBJECTIVE The Portfolio seeks maximum total return consistent with reasonable risk to principal by investing in the common stock of quality companies with lower valuations in sectors of the economy exhibiting strong, or improving relative performance. The Portfolio may also invest in other equity-related securities such as preferred stocks, convertible preferred stocks, convertible bonds, op- tions, futures, rights and warrants. There can be no assurance that the Port- folio will achieve its stated objective. INVESTMENT POLICIES In seeking its investment objective, the Portfolio will invest at least 65% of its total assets, under normal circumstances, in equity securities, con- sisting primarily of common stock of companies with market capitalizations greater than $200 million at the time of purchase. Furthermore, the Portfolio will invest so that 80% of the Portfolio's common stock holdings will be of issuers with market capitalizations greater than $800 million. The Portfolio may also invest in other equity-related securities such as preferred stock, convertible preferred stock, convertible bonds, options on stock indices, rights and warrants. The Portfolio may also invest up to 35% of its assets in investment grade debt securities which are generally considered to be those securities having one of the four highest grades assigned by Moody's Investors Service ("Moody's") (Aaa, Aa, A or Baa) or Standard & Poor's Ratings Service (AAA, AA, A or BBB) or, if unrated, of equivalent quality in the Adviser's judgment. Securities rated Baa or BBB may possess speculative characteristics and may be more sensitive to changes in the economy and the financial condi- tion of issuers than higher rated securities. The Adviser also reserves the right to retain securities which are downgraded by one or both of the rating agencies, if in the Adviser's judgment, the retention of securities is war- ranted. Up to 20% of the Portfolio's assets may be invested in the securities of foreign issuers. The Adviser believes that maximum total return can be achieved by investing in the common stock of quality companies with lower valuations in sectors of the economy exhibiting strong, or improving relative performance. Beginning with a thorough analysis of current and anticipated economic fundamentals, ex- amining key economic variables such as the level and direction of interest rates, forecasted growth in the GDP, anticipated gains in corporate profits, inflationary pressures, and money supply growth, as well as other variables, the Adviser is able to determine the basis for asset allocation between stocks and cash and cash equivalents. The analysis of key economic variables also helps identify industry groups or specific industries which should benefit as a result of anticipated eco- nomic fundamentals. These industry groups are then analyzed in detail begin- ning with industry screens, going onto individual company analysis, and fi- nally specific purchase recommendations. Of particular interest to the Adviser is the valuation being placed 6 upon the company as well as the forecasted growth in earnings and dividends over the next 1 to 5 years. It is anticipated that cash reserves will represent a relatively small per- centage of the Portfolio's assets. Under normal circumstances, it will be less than 20%. However, when the Adviser believes that market conditions warrant a defensive position, up to 100% of the Portfolio's assets may be held in cash and short-term investments. See "SHORT-TERM INVESTMENTS and REPURCHASE AGREE- MENTS" below for a description of the types of short-term instruments in which the Portfolio may invest for temporary defensive purposes. When the Portfolio is in a defensive position, it may not necessarily be pursuing its stated in- vestment objective. OTHER INVESTMENT POLICIES The Portfolio may also, under normal circumstances, invest up to 35% of its assets, unless restricted by additional limitations described below or in the Portfolio's SAI, in the following securities, investments or investment tech- niques: SHORT-TERM INVESTMENTS In order to earn a return on uninvested assets, meet anticipated redemp- tions, or for temporary defensive purposes, the Portfolio may invest a portion of its assets in domestic and foreign money market instruments including cer- tificates of deposit, bankers' acceptances, time deposits, U.S. Government ob- ligations, U.S. Government agency securities, short-term corporate debt secu- rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Ratings Service or Prime-1 or Prime-2 by Moody's or, if unrated, determined by the Ad- viser to be of comparable quality. Time deposits maturing in more than seven days will not be purchased by the Portfolio, and time deposits maturing from two business days through seven calendar days will not exceed 10% of the total assets of the Portfolio. The Portfolio will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, (ii) in the case of U.S. banks, it is a member of the Fed- eral Deposit Insurance Corporation, and (iii) in the case of foreign branches of U.S. banks, the security is, in the opinion of the Adviser, of an invest- ment quality comparable with other debt securities which may be purchased by the Portfolio. The Fund has received permission from the SEC to deposit the daily uninvested cash balances of the Fund's Portfolios, as well as cash for invest- ment purposes, into one or more joint accounts and to invest the daily balance of the joint accounts in the following short-term investments: fully collater- alized repurchase agreements, interest-bearing or discounted commercial paper including dollar-denominated commercial paper of foreign issuers, and any other short-term money 7 market instruments including variable rate demand notes and tax-exempt money instruments. By entering into these investments on a joint basis, the Portfo- lio may earn a higher rate of return on investments relative to what it could earn individually. The Fund has received permission from the SEC, for each of its Portfolios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio. (See "INVESTMENT COMPANIES.") REPURCHASE AGREEMENTS The Portfolio may invest in repurchase agreements collateralized by U.S. Government securities, certificates of deposit, and certain bankers' accept- ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a repurchase agreement, the Portfolio buys a security and simultaneously commits to sell that security back at an agreed upon price plus an agreed upon market rate of interest. Under a repurchase agreement, the seller is also required to maintain the value of securities subject to the agreement at not less than 100% of the repurchase price. The value of the securities purchased will be evaluated daily, and the Adviser will, if necessary, require the seller to maintain additional securities to ensure that the value is in compliance with the previous sentence. The use of repurchase agreements involves certain risks. For example, a default by the seller of the agreement may cause the Portfolio to experience a loss or delay in the liquidation of the collateral securing the repurchase agreement. The Portfolio might also incur disposition costs in liquidating the collateral. While the Fund's management acknowledges these risks, it is expected that they can be controlled through stringent counter-party selection criteria and careful monitoring procedures. The Fund has received permission from the SEC to pool daily uninvested cash balances of the Fund's Portfolios in order to invest in repurchase agreements on a joint basis. By entering into joint repurchase agreements, a Portfolio may incur lower transaction costs and earn higher rates of interest on joint repurchase agreements. Each Portfolio's contribution would determine its return from a joint repurchase agreement. (See "SHORT-TERM INVESTMENTS.") LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified institutional investors as a means of earning income. The Portfolio will not loan securities to the extent that greater than one-third of its total assets at fair market value would be committed to loans. During the term of a loan, the Portfolio is subject to a gain or loss depending on any increase or decrease in the market price of the securities loaned. Lending of securities is subject to review by the Fund's Board of Trustees. All relevant facts and circumstances, including the creditworthiness of the broker, dealer or institution, will be considered by the Adviser in making decisions about securities lending. 8 An investment company may pay reasonable negotiated fees in connection with loaned securities so long as such fees are set forth in a written contract and approved by its Board of Trustees. The Portfolio will continue to retain any voting rights with respect to loaned securities. If a material event occurs affecting an investment on a loan, the loan must be called and the securities voted. WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES The Portfolio may purchase and sell securities on a "when-issued," "delayed settlement," or "forward delivery" basis. "When-issued" or "forward delivery" 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 and forward delivery transactions may be expected to occur a month or more be- fore delivery is due. Delayed settlement is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by the Portfolio until it re- ceives delivery or payment from the other party to any of the above transac- tions. It is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. The Portfolio will maintain a separate account of cash or liquid securities at least equal to the value of purchase commitments until payment is made. Typically, no income ac- crues on securities purchased on a delayed delivery basis prior to the time delivery is made although the Portfolio may earn income on securities it has deposited in a segregated account. The Portfolio may engage in these types of purchases in order to buy securi- ties that fit with its investment objectives at attractive prices -- not to increase its investment leverage. PORTFOLIO TURNOVER In addition to Portfolio trading costs, higher rates of portfolio turnover may result in the realization of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" for more information on taxation). The Portfolio will not normally engage in short-term trading, but each reserves the right to do so. The table set forth in "Financial Highlights" presents the Portfolio's historical portfolio turnover rates. INVESTMENT COMPANIES The Portfolio reserves the right to invest up to 10% of its total assets, calculated at the time of investment, in the securities of other open-end or closed-end investment companies. No more than 5% of the investing Portfolio's total assets may be invested in the securities of any one investment company, nor may it acquire more than 3% of the voting securities of any other invest- ment company. The Portfolio will indirectly bear its proportionate share of any management fees paid by an investment company in which it invests in addi- tion to the advisory fee paid by the Portfolio. 9 The Fund has received permission from the SEC to allow each of its Portfo- lios to invest, for cash management purposes, the greater of 5% of its total assets or $2.5 million in the DSI Money Market Portfolio provided that the in- vestment is consistent with the Portfolio's investment policies and restric- tions. Based upon the Portfolio's assets invested in the DSI Money Market Portfolio, the investing Portfolio's adviser will waive its investment advi- sory fee and any other fees earned as a result of the Portfolio's investment in the DSI Money Market Portfolio. The investing Portfolio will bear expenses of the DSI Money Market Portfolio on the same basis as all of its other share- holders. FUTURES AND OPTIONS TRANSACTIONS In order to remain fully invested, and to reduce transaction costs, the Portfolio may utilize appropriate futures contracts and options to a limited extent. These instruments are commonly referred to as "derivatives." Because transaction costs associated with futures and options may be lower than the costs of investing in securities directly, it is expected that the use of in- dex futures and options to facilitate cash flows may reduce the Portfolio's overall transaction costs. The Portfolio will enter into futures contracts and options for bona fide hedging purposes only and for other purposes so long as aggregate initial margins and premiums required in connection with non-hedging positions do not exceed 5% of the Portfolio's total assets. Futures and options can be volatile and involve various degrees and types of risk. If the Portfolio judges market conditions incorrectly or employs a strategy that does not correlate well with its investments, use of futures and options contracts could result in a loss. The Portfolio could also suffer losses if it is unable to liquidate its position due to an illiquid secondary market. In the opinion of the Trustees, the risk that the Portfolio will be unable to close out a futures position or options contract will be minimized by only entering into futures contracts or options transactions traded on na- tional exchanges and for which there appears to be a liquid secondary market. For additional information regarding futures contracts and options, please see the SAI. FOREIGN INVESTMENTS The Portfolio may invest up to 20% of its assets in foreign securities which involve additional risks not typically associated with investing in domestic securities. Since the securities issued by foreign entities may be denominated in foreign currencies, and the Portfolio may temporarily hold uninvested re- serves in bank deposits in foreign currencies, the Portfolio's value may rise or fall depending on currency exchange rates. The Portfolio may also have to pay a fee to convert funds from one currency to another. Non-U.S.-based companies are not subject to the same accounting, auditing and financial reporting standards as are domestic companies and may have poli- cies 10 that are not comparable to those of domestic companies. There may be less pub- licly-available information about non-U.S.-based companies which may make it difficult to make investment decisions. Securities of some foreign companies are generally less liquid and more volatile than securities of comparable do- mestic companies. There is generally less government supervision and regula- tion of stock exchanges, brokers and listed companies than in the U.S. Politi- cal factors may have an impact in the form of confiscatory taxation, expropri- ation or political instability in international markets. Although the Portfolio will seek the most favorable trading costs available in any given market, investors should recognize that foreign commissions are generally higher than those in the U.S. In addition, custodial expenses, that is, fees paid to financial institutions for holding the Portfolio's securi- ties, will generally be higher than would be the case in the U.S. Some foreign governments also levy withholding taxes against dividend and interest income. Although in some countries a portion of the taxes is recover- able, the non-recovered portion of foreign withholding taxes will reduce the income the Portfolio receives from the companies comprising its investments. For additional information regarding foreign securities, please see the SAI. RESTRICTED AND ILLIQUID SECURITIES The Portfolio may purchase restricted securities that are not registered for sale to the general public but which are eligible for resale to qualified in- stitutional investors under Rule 144A of the Securities Act of 1933. Under the supervision of the Fund's Board of Trustees, the Adviser determines the li- quidity of such investments. Provided that a dealer or institutional trading market in such securities exists, these restricted securities are not treated as illiquid securities for purposes of the Portfolio's investment limitations. The Portfolio may invest up to 15% of its net assets in illiquid securities. The prices realized from the sales of these securities could be less than those originally paid by the Portfolio or less than what may be considered the fair value of such securities. AMERICAN DEPOSITARY RECEIPTS ADRs are depositary receipts typically used by a U.S. bank or trust company which evidence ownership of underlying securities issued by a foreign corpora- tion. Generally, ADRs in registered form are designed for use in the U.S. se- curities market and ADRs in bearer form are designed for use in securities markets outside the United States. ADRs may not necessarily be denominated in the same currency as the underlying securities into which they may be convert- ed. ADRs may be issued pursuant to sponsored or unsponsored programs. In spon- sored 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 11 easier to obtain financial information from an issuer that has participated in a sponsored program. Accordingly, there may be less information programs 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. ADRs also involve the risks of other investments in foreign securities, as discussed in the Prospectus. For purposes of the Portfolio's investment policies, the Portfolio's investment in depositary re- ceipts will be deemed to be investments in the underlying securities. INVESTMENT LIMITATIONS The Portfolio will not: (a) with respect to 75% of its assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than investments issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities); (b) with respect to 75% of its assets, purchase more than 10% of any class of the outstanding voting securities of any one issuer; (c) invest more than 5% of its assets at the time of purchase in the secu- rities of companies that have (with predecessors) a continuous operat- ing history of less than 3 years; (d) invest more than 25% of its assets in companies within a single indus- try; however, there are no limitations on investments made in instru- ments issued or guaranteed by the U.S. Government and its agencies. (e) make loans except by purchasing debt securities in accordance with its investment objective and policies or entering into repurchase agree- ments or by lending its portfolio securities to banks, brokers, deal- ers and other financial institutions so long as the loans are made in compliance with the 1940 Act, as amended, or the Rules and Regulations or interpretations of the SEC; (f) (i) borrow, except from banks and as a temporary measure for extraor- dinary or emergency purposes and then, in no event, in excess of 33 1/3% of the Portfolio's gross assets valued at the lower of market or cost, and (ii) the Portfolio may not purchase additional securities when borrowings exceed 5% of total assets; or (g) pledge, mortgage or hypothecate any of its assets to an extent greater than 33 1/3% of its total assets at fair market value. The Portfolio's investment objective and investment limitations (a), (b), (d), (e) and (f)(i) listed above are fundamental policies and may be changed only with the approval of the holders of a majority of the outstanding voting securities of the Portfolio. The other investment limitations described here, those not specified as fundamental in the SAI, and the Portfolio's investment policies are not fundamental, and the Fund's Board of Trustees may change them without shareholder approval. 12 PURCHASE OF SHARES Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the "Distributor") without a sales commission, at the net asset value per share next determined after an order is received by the Fund and payment is received by the Fund or its designated service agent. (See "VALUATION OF SHARES.") The required minimum initial investment for the Portfolio is $2,500. The initial investment minimum for IRA accounts is $500. The minimum for spousal IRA ac- counts is $250. Certain exceptions may be permitted by the officers of the Fund. The Portfolio issues Service Class Shares, which bear shareholder servicing expenses and distribution plan expenses, and have exclusive voting rights with respect to the Rule 12b-1 Distribution Plan pursuant to which the distribution fee may be paid. The net income attributable to Service Class Shares and the dividends payable on Service Class Shares will be reduced by the amount of the shareholder servicing and distribution fees; accordingly, the net asset value of the Service Class Shares will be reduced by such amounts. Some Service Agents may also impose additional or different conditions or other account fees on the purchase and redemption of Portfolio shares, which are not subject to the Rule 12b-1 Service and Distribution Plans. These may include transaction fees and/or service fees paid by the Fund from the Portfo- lio's assets attributable to the Service Agent and, would not be imposed if shares of the Portfolio were purchased directly from the Fund or the Distribu- tor. Service Agents may provide shareholder services to their customers that are not available to a shareholder dealing directly with the Fund. Each Serv- ice Agent is responsible for transmitting to its customers a schedule of any such fees and information regarding any additional or different conditions re- garding purchases and redemptions. Shareholders who are customers of Service Agents should consult their Service Agent for information regarding these fees and conditions. A salesperson and any other person entitled to receive compen- sation for selling or servicing Portfolio shares may receive different compen- sation with respect to one particular class of shares over another in the Fund. Service Agents or, if applicable, their designees, that have entered into agreements with the Fund or its agent may enter confirmed purchase orders on behalf of clients and customers, with payment to follow no later than a Port- folio's pricing on the following business day. If payment is not received by the Fund's Sub-Transfer Agent, Chase Global Funds Services Company ("CGFSC") by such time, the Service Agent could be held liable for resulting fees or losses. A Portfolio may be deemed to have received a purchase or redemption order when a Service Agent, or, if applicable, its authorized designee, ac- cepts the order. Orders received by the Fund in proper form will be priced at the Portfolio's net asset value next computed after they are accepted by Serv- ice Agent or its authorized designee. Service Agents are responsible to their customers and the Fund for timely transmission of all 13 subscription and redemption requests, investment information, documentation and money. INITIAL INVESTMENT BY MAIL . Complete and sign an Application and mail it together with a check pay- able to "UAM Funds" to: UAM Funds Trust UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 Payment for purchases of shares received by mail will be credited to an ac- count at the next share price calculated for the Portfolio after receipt. Pay- ment does not need to be converted into Federal Funds (monies credited to the Fund's Custodian Bank by a Federal Reserve Bank) before the Fund will accept it for investment. The Fund will not accept third-party checks to purchase shares of the Portfolio. If you purchase shares by check, please be sure that your check is made payable to "UAM Funds." BY WIRE . Telephone the UAM Funds Service Center and provide the account name, ad- dress, telephone number, social security or taxpayer identification num- ber, Portfolio selected, amount being wired and the name of the bank wiring the funds. The call must be received prior to the close of regu- lar trading on the NYSE (generally 4:00 p.m. Eastern Time) to receive that day's price. An account number and a wire control number will then be provided to you. Next. . Instruct the bank to wire a specified amount to the Fund's Custodian: The Chase Manhattan Bank ABA #021000021 UAM Funds DDA Acct. #9102772952 Ref: Portfolio Name ______________ Your Account Number ______________ Your Account Name _______________ Wire Control Number ______________ (assigned by the UAM Funds Service Center) . Forward a completed Application to the Fund at the address shown on the form. Federal Funds purchases will be accepted only on a day on which both the NYSE and the Custodian Bank are open for business. 14 . To be sure that a bank wire order is received on the same day it is sent, an investor's bank should wire funds as early in the day as possi- ble. The bank sending funds may charge for this service. The Fund's agent reserves the right to charge investors for receipt of wired funds, but no charge is currently imposed for this service. It is necessary to obtain a new wire control number every time money is wired into an ac- count in a Portfolio. Wire control numbers are effective for one trans- action only and cannot be used more than once. Wired money that is not properly identified with a currently effective wire control number will be returned to the bank from which it was wired and will not be credited to the shareholder's account. ADDITIONAL INVESTMENTS Additional investments can be made at any time. The minimum additional in- vestment is $100. Shares can be purchased at net asset value by mailing a check to the UAM Funds Service Center (payable to "UAM Funds") or by wiring money to the Custodian Bank as outlined above. When making additional invest- ments, be sure that the account number, account name and the Portfolio to be purchased are identified on the check or wire. Prior to wiring additional in- vestments, notify the UAM Funds Service Center by calling the number on the cover of this Prospectus. Mail orders should include, when possible, the "In- vest by Mail" stub which accompanies any Fund confirmation statement. PURCHASE BY ACH If you have made this election, shares of the Portfolio may be purchased via the Automated Clearing House ("ACH"). Investors purchasing via ACH should com- plete the bank information section on the Account Application and attach a voided check or deposit slip to the Account Application. This option must be established on your account at least 15 days prior to your initiating an ACH transaction (see "SHAREHOLDER SERVICES -- AUTOMATIC INVESTMENT PLAN"). OTHER PURCHASE INFORMATION Investments received by the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) will be invested at the share price calculated after the NYSE closes on that day. Investments received after the close of the NYSE will be executed at the price computed on the next day the NYSE is open. The Fund reserves the right, in its sole discretion, to suspend the offering of shares or reject purchase orders of the Portfolio when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. The Portfolio is intended to be a long-term investment vehicle and is not de- signed to provide investors with a means of speculation on short-term market movements. A pattern of frequent purchases can be disruptive to efficient portfolio management and, consequently, can be detrimental to a Portfolio's performance and its shareholders. Accordingly, if the Fund's management deter- mines that an investor is engaged in 15 excessive trading, the Fund, with or without prior notice, may reject in whole or part any purchase request with respect to such investor's account. Such in- vestor also may be barred from purchasing other portfolios of the UAM Funds. Purchases of shares will be made in full and fractional shares calculated to three decimal places. Certificates for whole shares will not be issued except at the written request of the shareholder. Certificates for fractional shares will not be issued. IN-KIND PURCHASES If accepted by the Fund, shares of the Portfolio may be purchased in ex- change for securities which are eligible for acquisition by the Portfolio, as described in this Prospectus. Securities to be exchanged which are accepted by the Fund will be valued as described under "VALUATION OF SHARES" at the next determination of net asset value after acceptance. Shares issued by a Portfo- lio in exchange for securities will be issued at net asset value determined as of the same time. All dividends, interest, subscription, or other rights per- taining to such securities shall become the property of the Portfolio and must be delivered to the Fund by the investor upon receipt from the issuer. Securi- ties acquired through an in-kind purchase will be acquired for investment and not for immediate resale. The Fund will not accept securities in exchange for shares of the Portfolio unless: . at the time of exchange, such securities are eligible to be in- cluded in the Portfolio (current market quotations must be readily available for such securities); . the investor represents and agrees that all securities offered to be exchanged are liquid securities and not subject to any restric- tions upon their sale by the Portfolio under the Securities Act of 1933, or otherwise; and . the value of any such securities (except U.S. Government securi- ties) being exchanged together with other securities of the same issuer owned by the Portfolio will not exceed 5% of the net assets of the Portfolio immediately after the transaction. Investors who are subject to federal taxation upon exchange may realize a gain or loss for federal income tax purposes depending upon the cost of secu- rities or local currency exchanged. Investors interested in such exchanges should contact the Adviser. REDEMPTION OF SHARES Shares of each Portfolio may be redeemed by mail or telephone at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request. No charge is made for redemptions. Any re- demption may be more or less than the purchase price of the shares depending on the market value of investment securities held by the Portfolio. 16 BY MAIL Address requests for redemption to the UAM Funds Service Center. Requests to redeem shares must include: . share certificates, if issued; . a letter of instruction or an assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are regis- tered; . any required signature guarantees (see "SIGNATURE GUARANTEES"); and . any other necessary legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pen- sion and profit sharing plans and other organizations. BY TELEPHONE A redemption request by telephone requires the following: . establish the telephone redemption privilege (and if desired, the wire redemption privilege) by completing appropriate sections of the Application; and . call the Fund and instruct that the redemption proceeds be mailed to you or wired to your bank. The following tasks cannot be accomplished by telephone: . changing the name of the commercial bank or the account designated to receive redemption proceeds (this can be accomplished only by a written request signed by each shareholder, with each signature guaranteed); and . redemption of certificated shares by telephone. The Fund and its Sub-Transfer Agent will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and they may be liable for any losses if they fail to do so. These procedures include re- quiring the investor to provide certain personal identification at the time an account is opened, as well as prior to effecting each transaction requested by telephone. All telephone transaction requests will be recorded and investors may be required to provide additional telecopied written instructions of such transaction requests. The Fund or Sub-Transfer Agent may be liable for any losses due to unauthorized or fraudulent telephone instructions if the Fund or the Sub-Transfer Agent does not employ the procedures described above. Neither the Fund nor the Sub-Transfer Agent will be responsible for any loss, liabili- ty, cost or expense for following instructions received by telephone that it reasonably believes to be genuine. 17 SIGNATURE GUARANTEES Signature guarantees are required for the following redemptions: . redemptions where the proceeds are to be sent to someone other than the registered shareholder(s); . redemptions where the proceeds are to be sent to an address which is not the registered address; or . share transfer requests. Signature guarantees will be accepted from any eligible guarantor institu- tion which participates in a signature guarantee program. Eligible signature guarantors include most banks, as well as most brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. Broker-dealers guaranteeing signa- tures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guaran- tees. A notary public can not provide a signature guarantee. OTHER REDEMPTION INFORMATION The Fund ordinarily will make payment for all shares redeemed within seven days after receipt by the UAM Funds Service Center of a redemption request in proper form. Although the Fund will redeem shares purchased by check before the check clears, payment of the redemption proceeds may be delayed for a pe- riod of up to fifteen days after their purchase, pending determination that the check has cleared. Investors should consider purchasing shares using a certified or bank check or money order if they anticipate an immediate need for redemption proceeds. The Fund may suspend the right of redemption or post- pone the date at times when both the NYSE and Custodian Bank are closed, or under any emergency circumstances determined by the SEC. If the Fund's Board of Trustees determines that it would be detrimental to the best interests of the remaining shareholders of the Fund to make payments wholly or partly in cash, the Fund may pay the redemption proceeds in whole or in part by a distribution in-kind of liquid securities held by the Portfolio instead of cash in conformity with applicable rules of the SEC. Investors may incur brokerage charges when they sell portfolio securities received in pay- ment of redemptions. The Portfolio reserves the right to liquidate any account that is below fifty percent of the required minimum initial investment amount for a Portfo- lio as set forth in the Prospectus, where the reduction in value has occurred due to a redemption or exchange out of the account. If at any time your total investment does not have a value of at least fifty percent of the required minimum initial investment amount, you may be notified that the value of your account is below the Portfolio's minimum account balance requirement. You would then be allowed 60 days to 18 make an additional investment before the account is liquidated. Retirement ac- counts and certain other accounts will not be subject to automatic liquida- tion. Reductions in value that result solely from market activity will not trigger an involuntary redemption. SERVICE AND DISTRIBUTION PLANS Under the Service Plan for Service Class Shares, the Fund may enter into service agreements with Service Agents (broker-dealers or other financial in- stitutions) who receive fees with respect to the Fund's Service Class Shares owned by shareholders for whom the Service Agent is the dealer or holder of record, or for whom the Service Agent performs personal services and/or share- holder account maintenance. These fees are paid out of the assets allocable to Service Class Shares to the Distributor, to the Service Agents directly, or through the Distributor. The Fund reimburses the Distributor or the Service Agent for payments made at an annual rate of up to .25 of 1% of the average daily value of Service Class Shares. Each item for which a payment may be made under the Service Plan constitutes personal service and/or shareholder account maintenance and may constitute an expense of distributing Fund shares as the SEC construes such term under Rule 12b-1. The fees payable for Servicing re- flect actual expenses incurred up to the limit described herein. Banks are engaged to act as Service Agents only to perform administrative and shareholder servicing functions, including transaction-related agency services for their customers. If a bank is prohibited from so acting, its shareholder clients would be permitted to remain Fund shareholders and alter- native means for continuing the servicing of such shareholders would be sought and the shareholder clients of the bank would remain Fund shareholders. The Distribution and Service Plans (the "Plans") provide generally that a Portfolio may incur distribution and service costs under the Plans which may not exceed in the aggregate 0.75% per annum of that Portfolio's net assets. The Board has currently limited aggregate payments under the Plans up to 0.50% per annum of the Portfolio's net assets. The Service Class Shares offered by this Prospectus currently are not making payments under the Distribution Plan. Upon implementation, the Distribution Plan would permit payments to the Dis- tributor, broker-dealers, other financial institutions, sales representatives or other third parties who render promotional and distribution services, for items such as sales compensation and marketing and overhead expenses. The Plans were adopted pursuant to Rule 12b-1 under the 1940 Act. Although the Plans may be amended by the Board of Trustees, any changes in the Plans which would materially increase the amounts authorized to be paid under the Plans must be approved by shareholders of the Class involved. The Plans may be terminated by the Board of Trustees or Service Class shareholders. The amounts 19 and purposes of expenditures under the Plans must be reported to the Board of Trustees quarterly. The amounts allowable under the Plans for each Class of Shares of the Portfolios are also limited under certain rules of the National Association of Securities Dealers, Inc. In addition to payments by the Fund under the Plans, the Distributor, United Asset Management Corporation, the parent company of UAMFSI and of the Adviser, the Adviser or any of their affiliates, may, at its own expense, compensate a Service Agent or other person for marketing, shareholder servicing, record- keeping and/or other services performed with respect to the Fund, the Portfo- lio or any Class of Shares of the Portfolio. The person making such payments may do so out of its revenues, its profits or any other source available to it. Such service arrangements, when in effect, are made generally available to all qualified service providers. The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Distributor, the Adviser and certain of their other affiliates also par- ticipate, at the date of this Prospectus, in an arrangement with Smith Barney Inc. under which Smith Barney provides certain defined contribution plan mar- keting and shareholder services and receives from such entities an amount equal to up to 33.3% of the portion of the investment advisory fees attribut- able to the invested assets of Smith Barney's eligible customer accounts with- out regard to any expense limitation in addition to amounts payable to all selling dealers. The Fund also compensates Smith Barney for services it pro- vides to certain defined contribution plan shareholders that are not otherwise provided by UAMFSI. SHAREHOLDER SERVICES EXCHANGE PRIVILEGE Service Class Shares of the Portfolio may be exchanged for Service Class Shares of any other UAM Funds Portfolio. (See the list of Portfolios of the UAM Funds at the end of this Prospectus.) Exchange requests should be made by contacting the UAM Funds Service Center. Any exchange will be based on the net asset value of the shares involved. There is no sales commission or charge of any kind for an exchange. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objectives of the Portfolio to be purchased. Call the UAM Funds Service Center for a copy of the Prospectus for the Portfolio(s) in which you are interested. Exchanges can only be made with Portfolios that are qualified for sale in a shareholder's state of residence. Exchange requests may be made either by mail or telephone. Telephone ex- changes will be accepted only if the certificates for the shares to be ex- changed have not been issued to the shareholder and if the registration of the two accounts will 20 be identical. Requests for exchanges received prior to the close of regular trading on the NYSE (generally 4:00 p.m., Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the NYSE will be processed on the next business day. The Fund may modify or terminate the exchange program at any time upon 60 days' written notice to shareholders, and may reject any exchange request. If the Fund's management determines that an investor is engaged in excessive trading, the Fund, with or without prior notice may reject in whole or part any ex- change request, with respect to such investor's account. Such investors also may be barred from exchanging into other portfolios of the UAM Funds. For ad- ditional information regarding responsibility for the authenticity of tele- phoned instructions, see "REDEMPTION OF SHARES BY TELEPHONE." An exchange into another UAM Funds Portfolio is a sale of shares and may result in a gain or loss for income tax purposes. AUTOMATIC INVESTMENT PLAN An Automatic Investment Plan permits shareholders of a Portfolio with a min- imum value of $2,500 or more to purchase shares automatically (minimum of $100 per transaction) at regular intervals selected by the shareholder. Provided the shareholder's bank or other financial institution allows automatic with- drawals, shares are purchased by transferring funds via the Automated Clearing House ("ACH"). Investments made through ACH will be automatically transferred from a shareholder's checking, bank money market or NOW account designated by the shareholder. Such withdrawals are made electronically, if the sharehold- er's bank or financial institution so permits, or be pre-authorized checks or drafts drawn on the shareholder's bank or other account. The bank or financial institution must be a member of ACH. At the shareholder's option, the account designated will be debited in the specified amount, and shares will be pur- chased monthly or quarterly. To establish an Automatic Investment Plan, a shareholder must complete the Optional Services Form available from the UAM Funds Service Center at 1-800- 638-7983 and mail it to Chase Global Funds Service Company. A shareholder may cancel his/her participation or change the amount of purchase at any time by mailing written notification to Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. Notification generally will be effective three business days following receipt. The Fund may modify or terminate this privi- lege at any time, or may charge a service fee, although no such fee currently is contemplated. SYSTEMATIC WITHDRAWAL PLAN Any shareholder whose account balance totals at least $10,000 may establish a Systematic Withdrawal Plan under which an amount pre-determined by the shareholder (but at least $100) is automatically redeemed from the sharehold- er's account either monthly or quarterly. A shareholder may participate in the Systematic Withdrawal Plan by using ACH. Redemptions made through ACH will be automatically transferred to the shareholder's bank or other similar financial institution account 21 or a properly designated third party. The bank or financial institution must be a member of ACH. Redemptions ordinarily are made on the third business day of the month and payments ordinarily will be transmitted within five business days after the redemption date. Because the prices of Fund shares fluctuate, the number of shares redeemed to finance systematic withdrawal payments or a given amount will vary from payment to payment. If a shareholder owns shares in more than one Portfolio, the shareholder must designate the Portfolio from which the redemptions under a Systematic Withdrawal Plan should be made. An additional sheet may be attached to the Optional Services Form if a share- holder selects more than one Portfolio. A Systematic Withdrawal Plan may be terminated or suspended at any time by the Fund. A shareholder may elect at any time, in writing, to terminate participation in the Systematic Withdrawal Plan. Such written election must be sent to and received by the Fund before a termination becomes effective. There is currently no charge to the shareholder for a Systematic Withdrawal Plan. VALUATION OF SHARES The net asset value of each class of a Portfolio is determined by dividing the value of the Portfolio's assets attributable to the class, less any lia- bilities attributable to the class, by the number of shares outstanding at- tributable to the class. The net asset value per share of the Portfolio is de- termined as of the close of the NYSE on each day that the NYSE is open for business. Equity securities listed on a securities exchange for which market quota- tions are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed secu- rities not traded on the valuation date for which market quotations are read- ily available are valued neither exceeding the current ask prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars quoted by any major bank or by a broker. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost when the Board of Trustees determines that amortized cost reflects fair value. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Fund's Board of Trustees. PERFORMANCE CALCULATIONS The Portfolio measures performance by calculating yield and total return. Both yield and total return figures are based on historical earnings and are not intended to indicate future performance. Yield and total return are calcu- lated separately for each class of a portfolio. 22 Yield refers to the income generated by an investment in the Portfolio over a given period of time, expressed as an annual percentage rate. Yields are calculated according to a standard that is required for all funds. As this differs from other accounting methods, the quoted yield may not equal the in- come actually paid to shareholders. Total return is the change in value of an investment in the Portfolio over a given period, assuming reinvestment of any dividends and capital gains. A cu- mulative or aggregate total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of re- turn that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Performance will be calculated separately for Institutional Class and Serv- ice Class Shares. Dividends paid by the Portfolio with respect to Institu- tional Class and Service Class Shares, to the extent any dividends are paid, will be calculated in the same manner at the same time on the same day and will be in the same amount, except that service fees, distribution charges and any incremental transfer agency costs relating to Service Class Shares will be borne exclusively by that class. The Portfolio's performance may be compared to data prepared by independent services which monitor the performance of investment companies, data reported in financial and industry publications, and various indices as further de- scribed in the Portfolio's SAI. This information may also be included in sales literature and advertising. The Portfolio's Annual Report to Shareholders for the most recent fiscal year end contains additional performance information that includes comparisons with appropriate indices. The Annual Report is available without charge. Con- tact the UAM Funds Service Center at the telephone number on the cover of this Prospectus. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS The Portfolio will normally distribute substantially all of its net invest- ment income (for tax purposes) to shareholders in quarterly dividends. If any net capital gains are realized, each Portfolio will normally distribute them annually. All dividends and capital gains distributions will be automatically reinvested in additional shares of the Portfolio unless the Fund is notified in writing that the shareholder elects to receive distributions in cash. FEDERAL TAXES The Portfolio intends to qualify as a "regulated investment company" under subchapter M of the Internal Revenue Code of 1986, as amended, for federal in- come tax purposes and to meet all other requirements that are necessary for it 23 (but not its shareholders) to be exempt from federal taxes on income and gains paid to shareholders in the form of dividends. To do this, the Portfolio must, among other things, distribute substantially all of its ordinary income and net capital gains on an annual basis and maintain a portfolio of investments which satisfies certain diversification criteria. Dividends paid by the Portfolio from net investment income, whether in cash or reinvested in shares, are taxable to shareholders as ordinary income. Short-term capital gains will be taxed as ordinary income. Long-term capital gains distributions are taxed as long-term capital gains. Shareholders will be notified annually of dividend income earned for tax purposes. Dividends declared in October, November and December to shareholders of rec- ord in such a month and paid in January of the following year will be treated as if they had been paid by the Fund and received by the shareholders on De- cember 31. The Fund is required by federal law to withhold 31% of reportable payments paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, you must certify that your Social Security or Taxpayer Identification Number you have provided is correct and that either you are not currently subject to backup withholding or you are exempt from backup withholding. This certification must be made on the Application or on a separate form supplied by the Fund. Dividends and interest received by the Portfolio may give rise to withhold- ing and other taxes imposed by foreign countries. These taxes reduce the Port- folio's dividends but are included in the taxable income reported on your tax statement if the Portfolio qualifies for this tax treatment and elects to pass it through to you. Consult a tax adviser for more information regarding deduc- tions and credits for foreign taxes. INVESTMENT ADVISER The Adviser is a registered investment adviser formed in 1983 with business offices located at Two Leadership Square, 211 North Robinson, Suite 450, Okla- homa City, Oklahoma. It is a wholly-owned subsidiary of United Asset Manage- ment Corporation ("UAM") and provides and offers investment management and ad- visory services to corporations, unions, pensions and profit-sharing plans, trusts, estates and other institutions and investors. The Adviser currently has approximately $2.4 billion in assets under management. The Portfolio pays an annual fee in monthly installments to the Adviser for advisory services. This fee is calculated every month as a percentage of the average net assets in the Portfolio for that month. The percentage fee on an annual basis is 0.75%. The Adviser and certain other service providers have agreed to waive all or a portion of their advisory fee and to assume certain operating expenses of the Portfolio to keep the Portfolio's total operating expenses from exceeding 1.25% of average daily net assets through January 1, 2000. 24 The Adviser may compensate its affiliated companies for referring investors to the Portfolio. The Distributor, UAM, the Adviser or any of their affiliates may, at their own expense, compensate a Service Agent or other person for mar- keting, shareholder servicing, recordkeeping and/or other services performed with respect to the Fund, the Portfolio or any Class of Shares of the Portfo- lio. The person making such payments may do so out of its revenues, its prof- its or any other source available to it. Such service arrangements, when in effect, are made generally available to all qualified service providers. The investment professionals at the Adviser who are responsible for the day- to-day management of the Portfolio and their qualifications are as follows: THOMAS E. JOHNSON, CFA, CHAIRMAN & CHIEF INVESTMENT OFFICER, SENIOR PORTFO- LIO MANAGER -- Texas Tech University, B.B.A., 1963; Texas Tech University, M.B.A., 1964; President and Senior Portfolio Manager, Tom Johnson Investment Management, Inc., 1983-Present. JERRY L. WISE, CFA, CPA, PRESIDENT AND CHIEF EXECUTIVE OFFICER, SENIOR PORT- FOLIO MANAGER -- Oklahoma University, B.B.A., 1978; Oklahoma University, M.B.A., 1984; Executive Vice President and Senior Portfolio Manager, Tom John- son Investment Management, Inc., 1986-Present. RICHARD H. PARRY, CFA, SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER -- University of Colorado, B.S., 1979; Oklahoma City University, M.B.A., 1983; Vice President and Senior Portfolio Manager, Tom Johnson Investment Manage- ment, Inc., 1989-Present; Registered Representative, UAM Fund Distributors, Inc., October 1997-Present. JAMES R. MCGLYNN, CFA, VICE PRESIDENT, PORTFOLIO MANAGER -- University of Texas at Austin, B.B.A., 1980; Portfolio Manager, Tom Johnson Investment Man- agement, Inc., 1991-Present. THOMAS A. GILES, CFA, ASSISTANT VICE PRESIDENT, PORTFOLIO MANAGER -- Univer- sity of Texas, B.B.A., 1979; University of Texas, M.B.A., 1982; Portfolio Man- ager, Tom Johnson Investment Management, Inc., 1989-Present. JOHN A. SHEPLEY, CFA, ASSISTANT VICE PRESIDENT, PORTFOLIO MANAGER -- Mid- western State University, B.B.A., 1982; Oklahoma City University, M.B.A., 1994; Portfolio Manager, Tom Johnson Investment Management, Inc., 1990- Present. EDWARD L. (NED) SCHREMS, PH.D, CFA, ASSISTANT VICE PRESIDENT, PORTFOLIO MAN- AGER -- Michigan State University, B.A., 1967; Michigan State University, M.B.A., 1968; Stanford University, M.S., 1972; Stanford University, Ph.D., 1973; Senior Portfolio Manager and Director of Equity Investments, Liberty Na- tional Bank and Trust Company and its successor, Bank One of Oklahoma City, June, 1992-March, 1998; Portfolio Manager, Tom Johnson Investment Management, Inc., March, 1998-Present. 25 DOUGLAS A. HAWS, CFA, INVESTMENT OFFICER, PORTFOLIO MANAGER --University of Oklahoma, B.B.A., 1993; Internal Auditor, Union Pacific Corporation, May, 1993-October, 1994; Portfolio Manager, Tom Johnson Investment Management, Inc., October, 1994-Present; Registered Representative, UAM Fund Distributors, Inc., October, 1997-Present. ADMINISTRATIVE SERVICES UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of UAM is re- sponsible for performing and overseeing administrative, fund accounting, divi- dend disbursing and transfer agent services provided to the Fund and its Port- folios. UAMFSI's principal office is located at 211 Congress Street, Boston, MA 02110. UAMFSI has subcontracted some of these services to Chase Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, by a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is located at 73 Tremont Street, Boston, MA 02108. Each Portfolio pays UAMFSI a two part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fees are calculated from the aggregate net assets of the Portfolio:
RATE ---- TJ Core Equity Portfolio............................................... 0.04%
CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined UAM Fund assets; 0.11 of 1% of the next $800 million of combined UAM Fund assets; 0.07 of 1% of combined UAM Fund assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined UAM Fund assets in excess of $3 billion. Fees are allocated among each of the Portfolios on the basis of their rela- tive assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum an- nual fee increases by $20,000. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM with its prin- cipal office located at 211 Congress Street, Boston, Massachusetts 02110, dis- tributes the shares of the Fund. Under the Fund's Distribution Agreement (the "Agreement"), the Distributor, as agent of the Fund, agrees to use its best efforts as sole distributor of the Fund's shares. The Distributor does not re- ceive any fee or 26 other compensation under the Agreement (except as described under "SERVICE AND DISTRIBUTION PLANS" above). The Agreement continues in effect as long as such continuance is approved at least annually by the Fund's Board of Trustees. Those approving the Agreement must include a majority of Trustees who are nei- ther parties to such Agreement, nor interested persons of any such party. The Agreement provides that the Fund will bear the costs of the registration of its shares with the SEC and various states and the printing of its prospectus- es, its SAIs and its reports to shareholders. PORTFOLIO TRANSACTIONS The Advisory Agreement authorizes the Adviser to select the brokers or deal- ers that will execute the purchase and sale of investment securities for the Portfolio. The Agreement directs the Adviser to use its best efforts to obtain the best available price and most favorable execution for all transactions of the Portfolios. If consistent with the interests of the Portfolio, the Adviser may select brokers on the basis of the research, statistical and pricing serv- ices they provide to each Portfolio in addition to required services. Such brokers may be paid a higher commission than that which another qualified bro- ker would have charged for effecting the same transaction, provided that such commissions are paid in compliance with the Securities Exchange Act of 1934, as amended, and that the Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to a Portfolio and the Adviser's other clients. Although not a typical practice, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. If a purchase or sale of securities consistent with the investment policies of a Portfolio and one or more of these other clients served by the Adviser 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 reason- able by the Adviser. Although there is no specified formula for allocating such transactions, such allocations are subject to periodic review by the Fund's Trustees. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized as a Delaware business trust on May 18, 1994 under the name "The Regis Fund II." On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial inter- est, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without fur- ther action by shareholders. 27 At its discretion, the Board of Trustees may create additional Portfolios and classes of shares. The shares of each Portfolio are fully paid and nonas- sessable, and have no preference as to conversion, exchange, dividends, re- tirement or other features and no pre-emptive rights. They have noncumulative voting rights, which means that holders of more than 50% of shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. As of June 15, 1998, Wilmington Trust Co., Trustee, FBO Allied Waste 401K Plan, held of record 34.4% of the outstanding shares of the Portfolio's Serv- ice Class for which beneficial ownership is disclaimed or presumed disclaimed. The persons or organizations owning 25% or more of the outstanding shares of a Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of such Portfolio. Annual meetings will not be held except as required by the 1940 Act and other applicable laws. The Fund has undertaken that its Trustees will call a meeting of shareholders if such a meeting is requested in writing by the hold- ers of not less than 10% of the outstanding shares of the Fund. The Fund will assist shareholder communications in such matters. CUSTODIAN The Chase Manhattan Bank serves as custodian of the Fund's assets. ACCOUNTANTS PricewaterhouseCoopers LLP serves as the independent accountant for the Fund. REPORTS Investors will receive unaudited semi-annual financial statements and annual financial statements audited by PricewaterhouseCoopers LLP. SHAREHOLDER INQUIRIES Shareholder inquiries may be made by contacting the UAM Funds Service Center at the telephone number listed on the cover page of the Prospectus. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE PORTFOLIO'S STATEMENT OF ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PRO- SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OF- FERING MAY NOT BE LAWFULLY MADE. 28 UAM FUNDS -- INSTITUTIONAL SERVICE CLASS SHARES BHM&S Total Return Bond Portfolio DSI Disciplined Value Portfolio FMA Small Company Portfolio FPA Crescent Portfolio MJI International Equity Portfolio NWQ Balanced Portfolio NWQ Small Cap Value Portfolio NWQ Special Equity Portfolio NWQ Value Equity Portfolio Sirach Bond Portfolio Sirach Equity Portfolio Sirach Growth Portfolio Sirach Special Equity Portfolio Sirach Strategic Balanced Portfolio Sterling Partners' Balanced Portfolio Sterling Partners' Equity Portfolio Sterling Partners' Small Cap Value Portfolio TJ Core Equity Portfolio 29 UAM Funds Service Center c/o Chase Global Funds Services Company P.O. Box 2798 Boston, MA 02208-2798 1-800-638-7983 Investment Adviser Tom Johnson Investment Management, Inc. Two Leadership Square, 211 North Robinson, Suite 450, Oklahoma City, OK 73102 Distributor UAM Fund Distributors, Inc. 211 Congress Street Boston, MA 02110 PROSPECTUS July 17, 1998 PART B UAM FUNDS BHM&S TOTAL RETURN BOND PORTFOLIO STATEMENT OF ADDITIONAL INFORMATION -- July 17, 1998 This Statement of Additional Information ("SAI") is not a Prospectus but should be read in conjunction with the Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the BHM&S Total Return Bond Portfolio (the "Portfolio") dated July 17, 1998 relating to the Institutional Class Shares, and the Prospectus dated July 17, 1998 relating to the Institutional Service Class Shares (the "Service Class Shares"). To obtain a Prospectus, please call the UAM Funds Service Center at 1-800-638-7983. TABLE OF CONTENTS INVESTMENT OBJECTIVE AND POLICIES....................................... 2 PURCHASE AND REDEMPTION OF SHARES....................................... 3 VALUATION OF SHARES..................................................... 4 SHAREHOLDER SERVICES.................................................... 4 INVESTMENT LIMITATIONS.................................................. 5 MANAGEMENT OF THE FUND.................................................. 6 INVESTMENT ADVISER...................................................... 9 SERVICE AND DISTRIBUTION PLANS.......................................... 10 PORTFOLIO TRANSACTIONS.................................................. 12 ADMINISTRATIVE SERVICES................................................. 13 CUSTODIAN............................................................... 14 INDEPENDENT ACCOUNTANTS................................................. 14 DISTRIBUTOR............................................................. 14 PERFORMANCE CALCULATIONS................................................ 15 GENERAL INFORMATION..................................................... 16 FINANCIAL STATEMENTS.................................................... 17 APPENDIX A -- DESCRIPTION OF SECURITIES AND RATINGS..................... A-1 APPENDIX B - COMPARISONS................................................ B-1 Investment Adviser Barrow, Hanley, Mewhinney & Strauss, Inc. (Adviser) Distributor UAM Fund Distributors, Inc. (Distributor) Administrator and Transfer Agent UAM Fund Services, Inc. (UAMFSI) INVESTMENT OBJECTIVE AND POLICIES The following discussion supplements the discussion of investment objective and policies of the Portfolio as set forth in the Portfolio's Prospectuses for the Institutional Class Shares and Service Class Shares. LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified brokers, dealers, domestic and foreign banks or other financial institutions, so long as the terms, the structure and the aggregate amount of such loans are not inconsistent with the Investment Company Act of 1940, as amended, (the "1940 Act") or the Rules and Regulations or interpretations of the Securities and Exchange Commission (the "SEC") thereunder, which currently require that (a) the borrower pledge and maintain with the Portfolio collateral consisting of cash, an irrevocable letter of credit issued by a domestic U.S. bank or securities issued or guaranteed by the United States Government having a value at all times not less than 100% of the value of the securities loaned, (b) the borrower add to such collateral whenever the price of the securities loaned rises (i.e., the borrower "marks to the market" on a daily basis), (c) the loan be made subject to termination by the Portfolio at any time, and (d) the Portfolio receives reasonable interest on the loan (which may include the Portfolio investing any cash collateral in interest bearing short-term investments). The Portfolio will not loan securities to the extent that greater than one-third of its assets (including the value of the collateral for the loans) at fair market value would be committed to loans. As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the securities loaned if the borrower of the securities fails financially. These risks are similar to the ones involved with repurchase agreements as discussed in the Prospectus. OPTIONS AND FUTURES TRANSACTIONS As indicated in the Prospectuses, to the extent consistent with its investment objectives and policies, the Portfolio may purchase and write call and put options on securities, securities indexes and on foreign currencies and enter into futures contracts and use options on futures contracts, to the extent of up to 5% of its assets. Transactions in options on securities and on indexes involve certain risks. For example, there are significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives. A decision as to whether, when and how to use options involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events. There can be no assurance that a liquid market will exist when the Portfolio seeks to close out an option position. If the Portfolio were unable to close out an option that it had purchased on a security, it would have to exercise the option in order to realize any profit or the option may expire worthless. If the Portfolio were unable to close out a covered call option that it had written on a security, it would not be able to sell the underlying security unless the option expired without exercise. As the writer of a covered call option, the Portfolio forgoes, during the option's life, the opportunity to profit from increases in the market value of the security covering the call option above the sum of the premium and the exercise price of the call. If trading were suspended in an option purchased by the Portfolio, the Portfolio would not be able to close out the option. If restrictions on exercise were imposed, the Portfolio might be unable to exercise an option it has purchased. Except to the extent that a call option on an index written by the Portfolio is covered by an option on the same index purchased by the Portfolio, movements in the index may result in a loss to the Portfolio; such losses may be mitigated or exacerbated by changes in the value of the Portfolio's securities during the period the option was outstanding. Use of futures contracts and options thereon also involves certain risks. The variable degree of correlation between price movements of futures contracts and price movements in the related portfolio positions of the Portfolio creates the possibility that losses on the hedging instrument may be greater than 2 gains in the value of the Portfolio's position. Also, futures and options markets may not be liquid in all circumstances and certain over-the-counter options may have no markets. As a result, in certain markets, the Portfolio might not be able to close out a transaction at all or without incurring losses. Although the use of options and futures transactions for hedging should minimize the risk of loss due to a decline in the value of the hedged position, at the same time it tends to limit any potential gain which might result from an increase in the value of such position. If losses were to result from the use of such transactions, they could reduce net asset value and possibly income. The Portfolio may use these techniques to hedge against changes in interest rates or securities prices or as part of its overall investment strategy. The Portfolio will maintain segregated accounts consisting of cash or liquid securities (or, as permitted by applicable regulation, enter into certain offsetting positions) to cover its obligations under options and futures contracts to avoid leveraging of the Portfolio. PORTFOLIO TURNOVER The portfolio turnover rate described in the Prospectuses is calculated by dividing the lesser of purchases or sales of portfolio securities for the year by the monthly average of the value of the portfolio securities. The calculation excludes all securities, including options, whose maturities at the time of acquisition were one year or less. Portfolio turnover may vary greatly from year to year as well as within a particular year, and may also be affected by cash requirements for redemptions of shares. See "Financial Highlights" in the Prospectuses for the historical portfolio turnover rates with respect to the Portfolios. PURCHASE AND REDEMPTION OF SHARES Both Classes of shares of the Portfolio may be purchased without a sales commission at their net asset value per share next determined after an order is received in proper form by the Fund, and payment is received by the Fund or its designated Service Agent. The minimum initial investment required for the Portfolio is $2,500, with certain exceptions as may be permitted from time to time by the officers of the Fund. Other investment minimums are: initial IRA investment, $500; initial spousal IRA investments $250; and additional investment for all accounts, $100. An order received in proper form prior to the close of regular trading on the New York Stock Exchange (the "Exchange") (generally 4:00 p.m. Eastern time) will be executed at the price computed on the date of receipt; and an order received not in proper form or after the close of the Exchange will be executed at the price computed on the next day the Exchange is open after proper receipt. The Exchange will be closed on the following days: New Year's Day, Dr. Martin Luther King, Jr.'s Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Portfolio reserves the right in its sole discretion (1) to suspend the offering of its shares, (2) to reject purchase orders when in the judgment of management such rejection is in the best interests of the Fund, and (3) to reduce or waive the minimum for initial and subsequent investment for certain fiduciary accounts such as employee benefit plans or under circumstances where certain economies can be achieved in sales of a Portfolio's shares. The Portfolio may suspend redemption privileges or postpone the date of payment (1) during any period that either the Exchange and custodian bank are closed or trading on the Exchange is restricted as determined by the SEC, (2) during any period when an emergency exists as defined by the rules of the SEC as a result of which it is not reasonably practicable for a Portfolio to dispose of securities owned by it or to fairly determine the value of its assets, and (3) for such other periods as the SEC may permit. The Fund has made an election with the SEC to pay in cash all redemptions requested by any shareholder of record limited in amount during any 90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at the beginning of such period. Such commitment is irrevocable without the prior approval of the SEC. Redemptions in excess of the above limits may be paid, in whole or in part, in investment securities or in cash as the Board of Trustees may deem advisable; however, payment will be made wholly in cash unless the Board of Trustees believe that economic or market conditions exist which would make such a practice detrimental to the best interests of the Fund. If redemptions are paid in investment securities, such securities will be valued as set forth in each Prospectus under 3 "VALUATION OF SHARES," and a redeeming shareholder would normally incur brokerage expenses if he converted those securities to cash. 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. SIGNATURE GUARANTEES To protect your account, the Fund and Chase Global Funds Services Company ("CGFSC") from fraud, signature guarantees are required for certain redemptions. The purpose of the signature guarantees is to verify the identity of the person who has authorized a redemption from your account. Signature guarantees are required for (1) all redemptions when the proceeds are to be paid to someone other than the registered owner(s) and/or the registered address, or (2) share transfer requests. Signatures must be guaranteed by an "eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. A complete definition of eligible guarantor institutions is available from the Fund's transfer agent. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. Signature guarantees will be accepted from any eligible guarantor institution which participates in a signature guarantee program. The signature guarantee must appear either: (1) on the written request for redemption; (2) on a separate instrument for assignment ("stock power") which should specify the total number of shares to be redeemed; or (3) on all stock certificates tendered for redemption and, if shares held by the Fund are also being redeemed, on the letter or stock power. VALUATION OF SHARES Equity securities listed on a securities exchange for which market quotations are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed securities not traded on the valuation dated for which market quotations are readily available are valued neither exceeding the current asked prices not less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars as quoted by any major bank or broker. Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the-counter market. Bonds and other fixed income securities may be value on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost, using methods approved by the Board of Trustees. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Fund's Board of Trustees. SHAREHOLDER SERVICES The following supplements the information set forth under "Shareholder Services" in the Prospectuses. EXCHANGE PRIVILEGE 4 Institutional Class Shares of the BHM&S Total Return Bond Portfolio may be exchanged for Institutional Class Shares of any other UAM Funds or UAM Funds, Inc. Portfolio. Likewise, Service Class Shares of the BHM&S Total Return Bond Portfolio may be exchanged for Service Class Shares of any other UAM Funds or UAM Funds, Inc. Portfolio. Exchange requests should be made by calling the Fund (1-800-638-7983) or by writing to UAM Funds, UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The exchange privilege is only available with respect to Portfolios that are qualified for sale in the shareholder's state of residence. Any such exchange will be based on the respective net asset values of the shares involved. There is no sales commission or charge of any kind. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objective of the Portfolio to be purchased. You may obtain a Prospectus for the Portfolio(s) you are interested in by calling the UAM Funds Service Center at 1-800-638-7983. Telephone exchanges will be accepted only if the certificates for the shares to be exchanged have not been issued to the shareholder, and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading of the Exchange (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the Exchange will be processed on the next business day. Neither the Fund nor CGFSC will be responsible for the authenticity of the exchange instructions received by telephone. Exchanges may also be subject to limitations as to amounts or frequency and to other restrictions established by the Board of Trustees to assure that such exchanges do not disadvantage the Fund and its shareholders. For federal income tax purposes an exchange between Portfolios is a taxable event, and, accordingly, a capital gain or loss may be realized. In a revenue ruling relating to circumstances similar to the Fund's, an exchange between series of a Fund was also deemed to be a taxable event. It is likely, therefore, that a capital gain or loss would be realized on an exchange between Portfolios; you may want to consult your tax adviser for further information in this regard. The exchange privilege may be modified or terminated at any time. TRANSFER OF SHARES Shareholders may transfer shares to another person by making a written request to the Fund. The request should clearly identify the account and number of shares to be transferred, and include the signature of all registered owners and all stock certificates, if any, which are subject to the transfer. The signature on the letter of request, the stock certificate or any stock power must be guaranteed in the same manner as described under "Purchase and Redemption of Shares." As in the case of redemptions, the written request must be received in good order before any transfer can be made. INVESTMENT LIMITATIONS The following limitations supplement those set forth in each Prospectus of the Portfolio. A Portfolio's fundamental investment limitations cannot be changed without the approval of a "majority of the outstanding shares" (as defined in the 1940 Act) of the Portfolio. Except for the numbered investment limitations noted as fundamental below, however, the limitations described below are not fundamental, and may be changed without the consent of shareholders. Whenever an investment limitation sets forth a percentage limitation on investment or utilization of assets, such limitation shall be determined immediately after and as a result of a Portfolio's acquisition of such security or other asset. Accordingly, any later increase or decrease resulting from a change in values, net assets or other circumstances will not be considered when determining whether the investment complies with a Portfolio's investment limitations. As a matter of fundamental policy, the Portfolio will not: 5 (1) invest in physical commodities or contracts on physical commodities; (2) purchase or sell real estate or real estate limited partnerships, although it may purchase and sell securities of companies which deal in real estate and may purchase and sell securities which are secured by interests in real estate; (3) make loans except (i) by purchasing debt securities in accordance with its investment objectives 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 SEC thereunder; (4) underwrite the securities of other issuers; and (5) issue senior securities, as defined in the 1940 Act, except that this restriction shall not be deemed to prohibit the Portfolio from (i) making any permitted borrowings, mortgages or pledges, or (ii) entering into repurchase transactions. As a matter of non-fundamental policy, the Portfolio will not: (1) purchase on margin or sell short except that the Portfolio may purchase futures as described in the Prospectus and this Statement of Additional Information; (2) invest more than an aggregate of 15% of the net assets of the Portfolio, determined at the time of investment, in securities subject to legal or contractual restrictions on resale or securities for which there are no readily available markets; and (3) invest for the purpose of exercising control over management of any company. MANAGEMENT OF THE FUND TRUSTEES AND OFFICERS The Officers of the Fund manage its day-to-day operations and are responsible to the Fund's Board of Trustees. The Trustees set broad policies for the Fund and elect its Officers. The following is a list of the Trustees and Officers of the Fund, their addresses and dates of birth, and a brief statement of their present positions and principal occupations during the past five years. John T. Bennett, Jr. (1/26/29), Trustee; College Road--RFD 3, Meredith, NH 03253; President of Squam Investment Management Company, Inc. and Great Island Investment Company, Inc.; President of Bennett Management Company from 1988 to 1993. Nancy J. Dunn (8/14/51), Trustee; 10 Garden Street, Cambridge, MA 02138; Vice President for Finance and Administration and Treasurer of Radcliffe College since 1991. Philip D. English (8/5/48), Trustee; 16 West Madison Street, Baltimore, MD 21201; President and Chief Executive Officer of Broventure Company, Inc.; Chairman of the Board of Chektec Corporation and Cyber Scientific, Inc. William A. Humenuk (4/21/42), Trustee; 100 King Street West, P.O. Box 2440, LCD- 1, Hamilton Ontario, Canada L8N-456; Executive Vice President and Chief Administrative Officer of Philip Services Corp.; Director, Hofler Corp.; Formerly, a Partner in the Philadelphia office of the law firm Dechert Price & Rhoads. 6 Norton H. Reamer* (3/21/35), Trustee; One International Place, Boston, MA 02110; President and Chairman of the Fund; President, Chief Executive Officer and a Director of United Asset Management Corporation; Director, Partner or Trustee of each of the Investment Companies of the Eaton Vance Group of Mutual Funds. Peter M. Whitman, Jr.* (7/1/43), Trustee; One Financial Center, Boston, MA 02111; President and Chief Investment Officer of Dewey Square Investors Corporation ("DSI") since 1988; Director and Chief Executive Officer of H. T. Investors, Inc., formerly a subsidiary of DSI. William H. Park (9/19/47), Vice President; One International Place, Boston, MA 02110; Executive Vice President and Chief Financial Officer of United Asset Management Corporation. Gary L. French (7/4/51), Treasurer; 211 Congress Street, Boston, MA 02110; President of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; formerly Vice President of Operations, Development and Control of Fidelity Investment in 1995; Treasurer of the Fidelity Group of Mutual Funds from 1991 to 1995. Michael E. DeFao (2/28/68), Secretary; 211 Congress Street, Boston, MA 02110; Vice President and General Counsel of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; Associate Attorney of Ropes & Gray (a law firm) from 1993 to 1995. Robert R. Flaherty (9/18/63), Assistant Treasurer; 211 Congress Street, Boston, MA 02110; Vice President of UAM Fund Services, Inc.; formerly Manager of Fund Administration and Compliance of Chase Global Fund Services Company from 1995 to 1996; Deloitte & Touche LLP from 1985 to 1995, Senior Manager. Michelle Azrialy (4/12/69), Assistant Secretary; 73 Tremont Street, Boston, MA 02108; Assistant Treasurer of Chase Global Funds Services Company since 1996. Senior Public Accountant with Price Waterhouse LLP from 1991 to 1994. Gordon M. Shone (7/30/56), Assistant Treasurer; 73 Tremont Street, Boston, MA 02108; Vice President of Fund Administration and Compliance of Chase Global Funds Services Company; formerly Senior Audit Manager of Coopers & Lybrand LLP (1983-1996). *Messrs. Reamer and Whitman are deemed to be "interested persons" of the Fund as that term is defined in the 1940 Act. REMUNERATION OF TRUSTEES AND OFFICERS The Fund pays each Trustee, who is not also an officer or affiliated person, a $150 quarterly retainer fee per active Portfolio which currently amounts to $1,350 per quarter. In addition, each unaffiliated Trustee receives a $2,000 meeting fee which is aggregated for all the Trustees and allocated proportionately among the Portfolios of the Fund and UAM Funds, Inc. and reimbursement for travel and other expenses incurred while attending Board meetings. Trustees who are also officers or affiliated persons receive no remuneration for their service as Trustees. The Fund's officers and employees are paid by either the Adviser, United Asset Management Corporation ("UAM"), or the Administrator and receive no compensation from the Fund. As of June 15, 1998, the Trustees and officers of the Fund owned less than 1% of the Fund's outstanding shares. 7 The following table shows aggregate compensation paid to each of the Fund's Trustees by the Fund and total compensation paid by the Funds and UAM Funds, Inc. (collectively the "Fund Complex") in the fiscal year ended April 30, 1998. 8 COMPENSATION TABLE
Pension or Retirement Estimated Total Compensation Aggregate Benefits Accrued Annual from Registrant Name of Person, Compensation From as Part of Benefits Upon and Position Registrant Fund Expenses Retirement Fund Complex -------- ---------- ------------- ---------- ------------ John T. Bennett, Jr. Trustee............. $6,149 0 0 $33,500 Philip D. English Trustee............. $6,149 0 0 $33,500 William A.Humenuk Trustee............. $6,149 0 0 $33,500 Nancy J. Dunn Trustee............. $4,668 0 0 $25,200 Peter M. Whitman, Jr. Trustee $ 0 0 0 $ 0 Norton H. Reamer Trustee............. $ 0 0 0 $ 0
PRINCIPAL HOLDERS OF SECURITIES As of June 15, 1998, the following persons or organizations held of record or beneficially 5% or more of the shares of the Portfolio: BHM&S Total Return Bond Portfolio Institutional Class Shares: Fleet National Bank, Trustee, FBO Austin Diagnostic Clinic Associates 401K Profit Sharing Plan 00050211170, P.O. Box 92800, Rochester, NY, 28.1%*; Sarah Campbell Blaffer Foundation, Texas Commerce Bank, P.O. Box 2558 10TCT 315, Houston, TX, 18.0%; Hartnat & Co., Barrow Hanley, P.O. Box 92800, Rochester, NY, 16.7%*; Wilmington Trust Co., Trustee, FBO FIGGIE Institutional Investor Retirement & Profit SA Trust, Supp. Retirement SVS. & Trust 401K Plan, CLF 436260, c/o Mutual Funds, 1100 N. Market St., Wilmington, DE, 12.5%*; Fleet National Bank, Trustee, FBO Austin Diagnostic Clinic 401K Profit Sharing Conservative Coll., P.O. Box 92800, Rochester, NY, 6.8%*; and Wilmington Trust Co., Trustee, FBO FIGGIE Institutional Investor Retirement & Profit Sharing Trust, Supp. SVS & Trust 401K Plan, MLF, c/o Mutual Funds, 1100 N. Market St., Wilmington, DE, 5.6%*. BHM&S Total Return Bond Portfolio Service Class Shares: Wilmington Trust Co., Trustee, FBO Hoag Sheltered Savings Plan, c/o Mutual Funds, 1100 North Market Street, Wilmington, DE, 24.5%*; Wilmington Trust Co., Trustee, FBO Hoag Sheltered Savings Plan, c/o Mutual Funds, 1100 North Market Street, 9 Wilmington, DE, 23.5%*; Wilmington Trust Co., Trustee, FBO Allied Waste 401K Plan, c/o Mutual Funds, 1100 North Market Street, Wilmington, DE, 18.1%*; Hartnat & Co., North Texas, P.O. Box 92800, Rochester, NY, 10.2%*; and Wilmington Trust Co., Trustee, FBO Cherokee Nation 401K Plan, c/o Mutual Funds/UAM P.O. Box 8971, Wilmington, DE, 6.9%*. The persons(s) or organization(s) listed above as owning 25% or more of the outstanding shares of the Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of such Portfolio. - ------ * Denotes shares held by a trustee or fiduciary for which beneficial ownership is disclaimed or presumed disclaimed. INVESTMENT ADVISER CONTROL OF ADVISER The Adviser is a wholly-owned subsidiary of UAM, a holding company incorporated in Delaware in December 1980 for the purpose of acquiring and owning firms engaged primarily in institutional investment management. Since its first acquisition in August 1983, UAM has acquired or organized over 45 such wholly-owned affiliated firms (the "UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to retain control over their investment advisory decisions is necessary to allow them to continue to provide investment management services that are intended to meet the particular needs of their respective clients. Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to operate under their own firm name, with their own leadership and individual investment philosophy and approach. Each UAM Affiliated Firm manages its own business independently on a day-to-day basis. Investment strategies employed and securities selected by UAM Affiliated Firms are separately chosen by each of them. Several UAM Affiliated Firms also act as investment advisers to separate series or Portfolios of the UAM Funds, Inc., a registered investment company. SERVICES PERFORMED BY ADVISER Pursuant to an Investment Advisory Agreement ("Agreement") between the Fund and the Adviser, the Adviser has agreed to manage the investment and reinvestment of the Portfolio's assets, to continuously review, supervise and administer the Portfolio's investment program, and to determine in its discretion the securities to be purchased or sold and the portion of the Portfolio's assets to be held uninvested. In the absence of (i) willful misfeasance, bad faith or gross negligence on the part of the Adviser in the performance of its obligations and duties under the Agreement, (ii) reckless disregard by the Adviser of its obligations and duties under the Agreement, or (iii) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, the Adviser shall not be subject to any liability whatsoever to the Fund, or to any shareholder of the Fund, for any error of judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services under the Agreement. Unless sooner terminated, the Agreement shall continue for periods of one year so long as such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the 10 Board of Trustees of the Fund who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called the purpose of voting on such approval, (b) by the Board of Trustees of the Fund, or (c) by vote of a majority of the outstanding voting securities of the Portfolio. The Agreement may be terminated at any time by the Portfolio, without the payment of any penalty, by vote of a majority of the entire Board of Trustees 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. The Agreement will automatically and immediately terminate in the event of its assignment. ADVISORY FEES As compensation for services rendered by the Adviser under the Investment Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly installments, calculated by applying the following annual percentage rate to the Portfolio's average daily net assets for the month: Rate BHM&S Total Return Bond Portfolio...................................0.35% From November 1, 1995 (date of commencement) to April 30, 1996, and for the fiscal years ended April 30, 1997 and April 30, 1998, the BHM&S Total Return Bond Portfolio paid no advisory fees. During these periods, the Adviser voluntarily waived advisory fees of $6,000, $40,683 and $107,452, respectively. SERVICE AND DISTRIBUTION PLANS As stated in the Portfolio's Service Class Shares Prospectus, the Distributor may enter into agreements with broker-dealers and other financial institutions ("Service Agents"), pursuant to which they will provide administrative support services to Service Class shareholders who are their customers ("Customers") in consideration of the Fund's payment of 0.25% (on an annualized basis) of the average daily net asset value of the Service Class Shares held by the Service Agent for the benefit of its Customers. Such services include: (a) acting as the sole shareholder of record and nominee for beneficial owners; (b) maintaining account records for such beneficial owners of the Fund's shares; (c) opening and closing accounts; (d) answering questions and handling correspondence from shareholders about their accounts; (e) processing shareholder orders to purchase, redeem and exchange shares; (f) handling the transmission of funds representing the purchase price or redemption proceeds; (g) issuing confirmations for transactions in the Fund's shares by shareholders; (h) distributing current copies of prospectuses, statements of additional information and shareholder reports; (i) assisting customers in completing application forms, selecting dividend and other account options and opening any necessary custody accounts; 11 (j) providing account maintenance and accounting support for all transactions; and (k) performing such additional shareholder services as may be agreed upon by the Fund and the Service Agent, provided that any such additional shareholder services must constitute a permissible non-banking activity in accordance with the then current regulations of, and interpretations thereof by, the Board of Governors of the Federal Reserve System, if applicable. Each agreement with a Service Agent is governed by a Shareholder Service Plan (the "Service Plan") that has been adopted by the Fund's Board of Trustees. Pursuant to the Service Plan, the Board of Trustees reviews, at least quarterly, a written report of the amounts expended under each agreement with Service Agents and the purposes for which the expenditures were made. In addition, arrangements with Service Agents must be approved annually by a majority of the Fund's Trustees, including a majority of the Trustees who are not "interested persons" of the Fund as defined in the 1940 Act and have no direct or indirect financial interest in such arrangements. The Board of Trustees has approved the arrangements with Service Agents based on information provided by the Fund's service contractors that there is a reasonable likelihood that the arrangements will benefit the Fund and its shareholders by affording the Fund greater flexibility in connection with the servicing of the accounts of the beneficial owners of its shares in an efficient manner. Any material amendment to the Fund's arrangements with Service Agents must be approved by a majority of the Fund's Board of Trustees (including a majority of the disinterested Trustees). So long as the arrangements with Service Agents are in effect, the selection and nomination of the members of the Fund's Board of Trustees who are not "interested persons" (as defined in the 1940 Act) of the Fund will be committed to the discretion of such non-interested Trustees. The Service Plan may be terminated at any time by vote of a majority of the Trustees of the Fund who are not "interested persons" of the Fund and who have no direct or indirect financial interest in the operation of the Service Plan or any agreements related to the Service Plan or, at the discretion of the Board of Trustees of the Fund, by vote of a majority of the outstanding voting securities of the Fund. Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a Distribution Plan for the Service Class Shares of the Fund (the "Distribution Plan"). The Distribution Plan permits the Fund to pay for certain distribution, promotional and related expenses involved in the marketing of only the Service Class Shares. The Distribution Plan permits the Service Class Shares, pursuant to the Distribution Agreement, to pay a monthly fee to the Distributor for its services and expenses in distributing and promoting sales of the Service Class Shares. These expenses include, among other things, advertising the availability of services and products; designing materials to send to customers and developing methods of making such materials accessible to customers; providing information about the product needs of customers; providing facilities to solicit Fund sales and to answer questions from prospective and existing investors about the Fund; receiving and answering correspondence from prospective investors, including requests for sales literature, prospectuses and statements of additional information; displaying and making sales literature and prospectuses available; and acting as liaison between shareholders and the Fund, including obtaining information from the Fund and providing performance information about the Fund. In addition, the Service Class Shares may make payments directly to other unaffiliated parties who either aid in the distribution of their shares or provide services to the Class. The maximum annual aggregate fee payable by the Fund under the Service and Distribution Plans (the "Plans"), is 0.75% of the Service Class Shares' average daily net assets for the year. The Fund's Board of Trustees may reduce this amount at any time. Although the maximum fee payable under the 12b-1 Plan relating to the Service Class Shares is 0.75% of average daily net assets of such class, the Board of Trustees has determined that the annual fee, payable on a monthly basis, under the Plans relating to the Service Class Shares, currently cannot exceed 0.50% of the average daily net assets represented by the Service Class. While the current fee which will be 12 payable under the Service Plan has been set at 0.25%, the Plans permit a full 0.75% on all assets to be paid at any time following appropriate Board approval. All of the distribution expenses incurred by the Distributor and others, such as broker/dealers, in excess of the amount paid by the Service Class Shares will be borne by such persons without any reimbursement from such Classes. Subject to seeking best price and execution, the Fund may, from time to time, buy or sell portfolio securities from or to firms which receive payments under the Plans. From time to time, the Distributor may pay additional amounts from its own resources to dealers for aid in distribution or for aid in providing administrative services to shareholders. The Plans, the Distribution Agreement and the form of dealer's and services agreements have all been approved by the Board of Trustees of the Fund, including a majority of the Trustees who are not "interested persons" (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the Plans or any related agreements, by vote cast in person at a meeting duly called for the purpose of voting on the Plans and such Agreements. Continuation of the Plans, the Distribution Agreement and the related agreements must be approved annually by the Board of Trustees in the same manner, as specified above. Each year the Trustees must determine whether continuation of the Plans is in the best interest of the shareholders of Service Class Shares and that there is a reasonable likelihood of the Plans providing a benefit to the Class. The Plans, the Distribution Agreement and the related agreements with any broker-dealer or others relating to the Class may be terminated at any time without penalty by a majority of those Trustees who are not "interested persons" or by a majority vote of the outstanding voting securities of the Class. Any amendment materially increasing the maximum percentage payable under the Plans must likewise be approved by a majority vote of the relevant Class' outstanding voting securities, as well as by a majority vote of those Trustees who are not "interested persons." Also, any other material amendment to the Plans must be approved by a majority vote of the Trustees including a majority of the Trustees of the Fund having no interest in the Plans. In addition, in order for the Plans to remain effective, the selection and nomination of Trustees who are not "interested persons" of the Fund must be effected by the Trustees who themselves are not "interested persons" and who have no direct or indirect financial interest in the Plans. Persons authorized to make payments under the Plans must provide written reports at least quarterly to the Board of Trustees for their review. The National Association of Securities Dealers Regulation, Inc. adopted amendments to its Conduct Rules relating to investment company sales charges. The Fund and the Distributor intend to operate in compliance with these rules. During the fiscal year ended April 30, 1998, the Portfolio's Service Class Shares paid $30,070 for services provided pursuant to the Distribution Plan. PORTFOLIO TRANSACTIONS The Investment Advisory Agreement authorizes the Adviser to select the brokers or dealers that will execute the purchases and sales of investment securities for the Portfolio and directs the Adviser to use its best efforts to obtain the best execution with respect to all transactions for the Portfolio. The Adviser may, however, consistent with the interests of the Portfolio, select brokers on the basis of the research, statistical and pricing services they provide to the 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 Adviser 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 Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Portfolio and the Adviser's other clients. It is not the Fund's practice to allocate brokerage or effect principal transactions with dealers on the basis of sales of Fund shares which may be made through broker-dealer firms. However, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. 13 Some securities considered for investment by the Portfolio may also be appropriate for other clients served by the Adviser. If purchases or sales of securities consistent with the investment policies of a Portfolio and one or more of these other clients served by the Adviser 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 Adviser. Although there is no specified formula for allocating such transactions, the various allocation methods used by the Adviser, and the results of such allocations, are subject to periodic review by the Fund's Board of Trustees. ADMINISTRATIVE SERVICES The Board of Trustees of the Fund approved a Fund Administration Agreement, effective April 15, 1996 ("Fund Administration Agreement") between UAMFSI, a wholly owned subsidiary of UAM, and the Fund. Pursuant to the terms of the Fund Administration Agreement, UAMFSI manages, administers and conducts the general business activities of the Fund other than those which have been contracted to other third parties by the Fund. Additionally, UAMFSI has agreed to provide transfer agency services to the Portfolios pursuant to the terms of the Fund Administration Agreement. UAMFSI has subcontracted some of these services to CGFSC , an affiliate of the Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement between UAMFSI and CGFSC (collectively, with the Fund Administration Agreement, the "Agreements"). Pursuant to the terms of the Agreements, the Portfolio pays UAMFSI a two-part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fee is calculated from the aggregate net assets of the Portfolio: Annual Rate BHM&S Total Return Bond Portfolio...................0.04% CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined Fund net assets; 0.11 of 1% of the next $800 million of combined Fund net assets; 0.07 of 1% of combined Fund net assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined Fund net assets in excess of $3 billion. Fees are located among each of the Portfolios on the basis of their relative assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two year. If a separate class of shares is added to a Portfolio, its minimum annual fee increases by $20,000. Prior to April 15, 1996, CGFSC or its predecessor, Mutual Funds Service Company, provided certain administrative services to the Fund under an Administration Agreement between the Fund and U.S. Trust Company of New York. The basis of the fees paid to CGFSC for the period November 1, 1995 to April 14, 1996 was as follows: the Fund paid a monthly fee for its services which on an annualized basis equaled 0.20% of the first $200 million in combined assets; plus 0.12% of the next $800 million in combined assets; plus 0.08% on assets over $1 billion but less than $3 billion; plus 0.06% on assets over $3 billion. The fees were allocated among the Portfolios on the basis of their relative assets and were subject to a designated minimum fee schedule per Portfolio, which ranged from 14 $2,000 per month upon inception of a Portfolio to $70,000 annually after two years. For the period ended April 30, 1996, and for the fiscal years ended April 30, 1997 and April 30, 1998, administrative services fees paid to CGFSC by the BHM&S Total Return Bond Portfolio totaled $22,073, $82,083 and $98,003, respectively. For the period April 15, 1996 to April 30, 1996, and for the fiscal years ended April 30, 1997 and April 30, 1998, UAMFSI earned $1,927, $838 and $12,244, respectively, from the BHM&S Total Return Bond Portfolio as Administrator. The services provided by UAMFSI and CGFSC and the fees payable to both effective April 15, 1996 are described in the Portfolio's Prospectuses. UAMFSI will bear all expenses in connection with the performance of its services under the Fund Administration Agreement. Other expenses to be incurred in the operation of the Fund will be borne by the Fund or other parties, including taxes, interest, brokerage fees and commissions, if any, salaries and fees of officers and members of the Board who are not officers, directors, shareholders or employees of UAMFSI, or the Fund's investment adviser or distributor, SEC fees and state Blue Sky fees, EDGAR filing fees, processing services and related fees, advisory and administration fees, charges and expenses of pricing and data services, independent public accountants and custodians, insurance premiums including fidelity bond premiums, outside legal expenses, costs of maintenance of corporate existence, typesetting and printing of prospectuses for regulatory purposes and for distribution to current shareholders of the Fund, printing and production costs of shareholders' reports and corporate meetings, cost and expenses of Fund stationery and forms, costs of special telephone and data lines and devices, trade association dues and expenses, and any extraordinary expenses and other customary Fund expenses. Unless sooner terminated as provided herein, the Fund Administration Agreement shall continue in effect from year to year provided such continuance is specifically approved at least annually by the Board. The Fund Administration Agreement is terminable, without penalty, by the Board or by UAMFSI, on not less than ninety (90) days' written notice. The Fund Administration Agreement shall automatically terminate upon its assignment by UAMFSI without the prior written consent of the Fund. UAMFSI will from time to time employ or associate with such person or persons as may be fit to assist them in the performance of the Fund Administration Agreement. Such person or persons may be officers and employees who are employed by both UAMFSI and the Fund. The compensation of such person or persons for such employment shall be paid by UAMFSI and no obligation will be incurred by or on behalf of the Fund in such respect. Effective February 28, 1997, the Fund entered into an Account Services Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc. (the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services Agreement, the Service Provider agrees to perform certain services for participants in a self-directed, defined contribution plan, and for whom the Service Provider provides participant recordkeeping. Pursuant to the Services Agreement, the Service Provider is entitled to receive, after the end of each month, a fee at the annual rate of 0.15% of the average aggregate daily net asset value of shares of the Portfolios in the accounts for which it provides services. During the fiscal year ended April 30, 1998, the Portfolio paid the Service Provider $40,175, in fees pursuant to the Services Agreement, all of which were voluntarily waived. CUSTODIAN The Chase Manhattan Bank, 3 Chase Metro Tech Center, Brooklyn, New York 11245, provides for the custody of the Fund's assets pursuant to the terms of a custodian agreement with the Fund. INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, serves as independent accountants for the Fund. DISTRIBUTOR 15 UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, serves as the Fund's Distributor. Shares of the Fund are offered continuously. While the Distributor will use its best efforts to sell shares of the Fund, it is not obligated to sell any particular amount of shares. The Distributor received no compensation for its services from the Portfolio during the fiscal year ended April 30, 1998. 16 PERFORMANCE CALCULATIONS PERFORMANCE The Portfolio may from time to time quote various performance figures to illustrate past performance. Performance quotations by investment companies are subject to rules adopted by the SEC, which require the use of standardized performance quotations or, alternatively, that every non-standardized performance quotation furnished by each class of a Portfolio be accompanied by certain standardized performance information computed as required by the SEC. Current yield and average annual compounded total return quotations used by a Portfolio are based on the standardized methods of computing performance mandated by the SEC. An explanation of those methods used to compute or express performance follows. YIELD Current yield reflects the income per share earned by a Portfolio's investment. The current yield of a Portfolio is determined by dividing the net investment income per share earned during a 30-day base period by the maximum offering price per share on the last day of the period and annualizing the result. Expenses accrued for the period include any fees charged to all shareholders during the base period. Since Service Class Shares of a Portfolio bear additional service and distribution expenses, the yield of the Service Class Shares of a Portfolio will generally be lower than that of the Institutional Class Shares of the same Portfolio. The yields for the Portfolio's Institutional Class Shares and Service Class Shares for the 30-day period ended on April 30, 1998 were 5.69% and 5.44%, respectively. A yield figure is obtained using the following formula: Yield = 2[(a - b + 1)/6/ - 1] ------------ cd where: a = dividends and interest earned during the period b = expenses accrued for the period (net of reimbursements) c = the average daily number of shares outstanding during the period that were entitled to receive income distributions d = the maximum offering price per share on the last day of the period. TOTAL RETURN The average annual total return of a Portfolio is determined by finding the average annual compounded rates of return over 1, 5 and 10 year periods that would equate an initial hypothetical $1,000 investment to its ending redeemable value. The calculation assumes that all dividends and distributions are reinvested when paid. The quotation assumes the amount was completely redeemed at the end of each 1, 5 and 10 year period and the deduction of all applicable Portfolio expenses on an annual basis. Since Service Class Shares of a Portfolio bear additional service and distribution expenses, the average annual total return of the Service Class Shares of a Portfolio will generally be lower than that of the Institutional Class Shares of the same Portfolio. These figures are calculated according to the following formula: P(1 + T)/n/ = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return 17 n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10 year periods (or fractional portion thereof). The average annual total returns for the Portfolio's Institutional Class Shares from inception on November 1, 1995 to April 30, 1998, and for the fiscal year ended April 30, 1998 were 6.74% and 10.16%, respectively. The average annual total returns for the Portfolio's Service Class Shares from inception on November 1, 1995 to April 30, 1998, and for the fiscal year ended April 30, 1998 were 6.44% and 9.85%, respectively. COMPARISONS To help investors better evaluate how an investment in either Portfolio of the Fund might satisfy their investment objective, advertisements regarding the Portfolio may discuss various measures of Portfolio performance as reported by various financial publications. Advertisements may also compare performance (as calculated above) to performance as reported by other investments, indices and averages. Please see Appendix B for publications, indices and averages which may be used. In assessing such comparisons of performance, an investor should keep in mind that the composition of the investments in the reported indices and averages is not identical to the composition of investments in a Portfolio, that the averages are generally unmanaged, and that the items included in the calculations of such averages may not be identical to the formula used by the Portfolio to calculate its performance. In addition, there can be no assurance that the Portfolio will continue this performance as compared to such other averages. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized under the name The Regis Fund II as a Delaware business trust on May 18, 1994. On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's principal office is located at One International Place, Boston, MA 02110; however, all investor correspondence should be addressed to the Fund at UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial interest, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without further action by shareholders. The Board of Trustees has classified an additional class of shares in the Portfolio, known as Advisor Shares. As of the date of this Statement of Additional Information, no Advisor Shares have been offered by the Portfolio. The shares of the Portfolio, when issued and paid for as provided for in its Prospectuses, will be fully paid and nonassessable, have no preference as to conversion, exchange, dividends, retirement or other features and have no preemptive rights. The shares of the Portfolio have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. Institutional Class, Service Class and Advisor Class Shares each represent an interest in the same assets of a Portfolio and are identical in all respects except that the Service Class Shares bear certain expenses related to shareholder servicing and 18 the distribution of such shares, and have exclusive voting rights with respect to matters relating to such distribution expenditures. In the event of liquidation of the Fund, the holders of the Shares of each Portfolio or any class thereof that has been established and designated shall be entitled to receive, when and as declared by the Trustees, the excess of the assets belonging to that Portfolio, or in the case of a class, belonging to that Portfolio and allocable to that class, over the liabilities belonging to that Portfolio or class. The assets so distributable to the holders of Shares of any particular Portfolio or class thereof shall be distributed to the holders in proportion to the number of Shares of that Portfolio or class thereof held by them and recorded on the books of the Fund. The liquidation of any Portfolio or class thereof may be authorized at any time by vote of a majority of the Trustees then in office. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Fund's policy is to distribute substantially all of the Portfolio's net investment income, if any, together with any net realized capital gains in the amount and at the times that will avoid both income (including capital gains) taxes incurred and the imposition of the federal excise tax on undistributed income and capital gains. The amounts of any income dividends or capital gains distributions cannot be predicted. See discussion under "Dividends, Capital Gains Distributions and Taxes" in the Prospectuses. Any dividend or distribution paid shortly after the purchase of shares of the Portfolio by an investor may have the effect of reducing the per share net asset value of the Portfolio by the per share amount of the dividend or distribution. Furthermore, such dividends or distributions, although in effect a return of capital, are subject to income taxes as set forth in the Prospectuses. As set forth in the Prospectuses, unless the shareholder elects otherwise in writing, all dividend and capital gains distributions are automatically reinvested in additional shares of the Portfolio of the Fund at net asset value (as of the business day following the record date). This will remain in effect until the Fund is notified by the shareholder in writing at least three days prior to the record date that either the Income Option (income dividends in cash and capital gains distributions in additional shares at net asset value) or the Cash Option (both income dividends and capital gains distributions in cash) has been elected. An account statement is sent to shareholders whenever an income dividend or capital gains distribution is paid. CODE OF ETHICS The Fund has adopted a Code of Ethics which restricts to a certain extent personal transactions by access persons of the Fund and imposes certain disclosure and reporting obligations. 19 FINANCIAL STATEMENTS The audited financial statements and notes thereto in the Portfolio's Annual Report to Shareholders (the "1998 Annual Report") are incorporated by reference into this Statement of Additional Information. No other parts of the 1998 Annual Report are incorporated by reference herein. The Financial Statements included in the 1998 Annual Report have been audited by the Fund's independent accountants, PricewaterhouseCoopers LLP. The reports of PricewaterhouseCoopers LLP are incorporated herein by reference. Such financial statements have been incorporated herein in reliance upon such reports given upon the authority of PricewaterhouseCoopers LLP as experts in accounting and auditing. Copies of the 1998 Annual Report may be obtained free of charge by telephoning the UAM Funds Service Center at the telephone number appearing on the front page of this Statement of Additional Information. 20 APPENDIX A -- DESCRIPTION OF SECURITIES AND RATINGS I. DESCRIPTION OF CORPORATE BOND RATINGS Moody's Investors Service Corporate Bond Ratings: Aaa -- Bonds which are Aaa are judged to be the best quality; They carry the smallest degree of investment risk and are generally referred to as "gilt- edge." Interest payments are protected by a large or by an exceptionally stable margin, and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa -- Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. A -- Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Moody's applies numerical modifiers 1, 2 and 3 in the Aa and A rating categories. The modifier 1 indicates that the security ranks at a higher end of the rating category, modifier 2 indicates a mid-range rating and the modifier 3 indicates that the issue ranks at the lower end of the rating category. Baa -- Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Standard & Poor's Corporation's Corporate Bond Ratings: AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's to a debt obligation and indicate an extremely strong capacity to pay principal and interest. AA -- Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only to a small degree. A -- Bonds rated A have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories. BBB -- Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than for debt in higher rated categories. Duff & Phelp's Corporate Bond Ratings: AAA - Debt is considered to be of the highest credit quality. The risk factors are negligible, being only slightly more than for risk-free U.S. Treasury debt. A-1 AA - Debt is considered of high credit quality. Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. A - Debt possesses protection factors which are average but adequate. However, risk factors are more variable and greater in periods of economic stress. BBB - Debt possesses below-average protection factors but such protection factors are still considered sufficient for prudent investment. Considerable variability in risk is present during economic cycles. BB - Debt that possesses one of these ratings is considered to be below investment grade. Although below investment grade, debt rated BB is deemed likely to meet obligations when due. To provide more detailed indications of credit quality, the AA, A, BBB, and BB ratings may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within these major categories. Fitch IBCA's Corporate Bond Ratings: AAA - Bonds considered to be investment grade and of the highest credit quality. These ratings denote the lowest expectation of investment risk and are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. This capacity is very unlikely to be adversely affected by foreseeable events. AA - Bonds considered to be investment grade and of very high credit quality. These ratings denote a very low expectation of investment risk and indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. A - Bonds considered to be investment grade and of high credit quality. These ratings denote a low expectation of investment risk and indicate strong capacity for timely payment of financial commitments. This capacity may, nevertheless, be more vulnerable to adverse changes in circumstances or in economic conditions than bonds with higher ratings. BBB - Bonds considered to be investment grade and of good credit quality. These ratings denote that there is currently a low expectation of investment risk. The capacity for timely payment of financial commitments is adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this category. BB - Bonds considered to be speculative. These ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic changes over time; however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment grade. To provide more detailed indications of credit quality, the Fitch IBCA ratings from and including AA to BB may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within these major rating categories. A-2 II. DESCRIPTION OF MUNICIPAL NOTE RATINGS Moody's Investors Service Municipal Notes Ratings: MIG1 -- Municipal Notes which are rated MIG1 are considered best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broad-based access to the market for refinancing. MIG2 -- Municipal Notes which are rated MIG2 are considered high quality. Margins of protection are ample although not so large as in the preceding group. MIG3 -- Municipal Notes which are rated MIG3 are considered favorable quality. All security elements are accounted for but there is lacking the undeniable strength of the preceding grades. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established. Standard & Poor's Corporation's Municipal Notes Ratings: SP-1 -- Municipal Notes which are rated SP-1 are considered to possess a strong capacity to pay principal and interest. Issues determined to possess very strong characteristics are given a plus (+) designation. SP-2 -- Municipal Notes which are rated SP-2 are considered to possess a satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes. Duff & Phelp's Municipal Notes Ratings: D-1+ - Debt possesses the highest certainty of timely payment. Short-term liquidity, including internal operating factors and/or access to alternative sources of funds, is outstanding, and safety is just below risk-free U.S. Treasury short-term obligations. D-1 - Debt possesses very high certainty of timely payment. Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. D-1- - Debt possesses high certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. D-2 - Debt possesses good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. D-3 - Debt possesses satisfactory liquidity and other protection factors qualify issues as investment grade. Risk factors are larger and subject to more variation. Nevertheless, timely payment is expected. D-4 - Debt possesses speculative investment characteristics. Liquidity is not sufficient to insure against disruption in debt service. Operating factors and market access may be subject to a high degree of variation. Fitch IBCA's Municipal Notes Ratings: F1 - Securities possess the highest credit quality. This designation indicates the strongest capacity for timely payment of financial commitments and may have an added "+" to denote any exceptionally strong credit feature. A-3 F2 - Securities possess good credit quality. This designation indicates a satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of securities rated "F1." F3 - Securities possess fair credit quality. This designation indicates that the capacity for timely payment of financial commitments is adequate; however, near-term adverse changes could result in a reduction to non-investment grade. B - Securities possess speculative credit quality. this designation indicates minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse changes in financial and economic conditions. III. DESCRIPTION OF U.S. GOVERNMENT SECURITIES The term "U.S. Government Securities" refers to a variety of securities which are issued or guaranteed by the United States Government, and by various instrumentalities which have been established or sponsored by the United States Government. U.S. Treasury securities are backed by the "full faith and credit" of the United States. Securities issued or guaranteed by federal agencies and U.S. Government sponsored instrumentalities may or may not be backed by the full faith and credit of the United States. In the case of securities not backed by the full faith and credit of the United States, the investor must look principally to the agency or instrumentality issuing or guaranteeing the obligation for ultimate repayment, and may not be able to assess a claim against the United States itself in the event the agency or instrumentality does not meet its commitment. Agencies which are backed by the full faith and credit of the United States include the Export- Import Bank, Farmers Home Administration, Federal Financing Bank, and others. Certain agencies and instrumentalities, such as the GNMA are, in effect, backed by the full faith and credit of the United States through provisions in their charters that they may make "indefinite and unlimited" drawings on the U.S. Treasury, if needed to service its debt. Debt from certain other agencies and instrumentalities, including the Federal Home Loan Bank and FNMA, is not guaranteed by the United States, but those institutions are protected by the discretionary authority of the U.S. Treasury to purchase certain amounts of their securities to assist the institution in meeting its debt obligations. Finally, other agencies and instrumentalities, such as the Farm Credit System and the FHLMC, are federally chartered institutions under Government supervision, but their debt securities are backed only by the 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. A-4 IV. DESCRIPTION OF COMMERCIAL PAPER The Portfolio may invest in commercial paper (including variable amount master demand notes) rated A-1 or better by Standard & Poor's Corporation ("S&P") or Prime-1 by Moody's Investors Service ("Moody's") or by S&P. Commercial paper refers to short-term, unsecured promissory notes issued by corporations to finance short-term credit needs. Commercial paper is usually sold on a discount basis and has a maturity at the time of issuance not exceeding nine months. Variable amount master demand notes are demand obligations that permit the investment of fluctuating amounts at varying market rates of interest pursuant to arrangement between the issuer and a commercial bank acting as agent for the payees of such notes whereby both parties have the right to vary the amount of the outstanding indebtedness on the notes. As variable amount master demand notes are direct lending arrangements between a lender and a borrower, it is not generally contemplated that such instruments will be traded, and there is no secondary market for these notes, although they are redeemable (and thus immediately repayable by the borrower) at face value, plus accrued interest, at any time. In connection with the Portfolio's investment in variable amount master demand notes, the Adviser's investment management staff will monitor, on an ongoing basis, the earning power, cash flow and other liquidity ratios of the issuer and the borrower's ability to pay principal and interest on demand. Commercial paper rated A-1 by S&P has the following characteristics: (1) liquidity ratios are adequate to meet cash requirements; (2) long-term senior debt is rated "A" or better; (3) the issuer has access to at least two additional channels of borrowing; (4) basic earnings and cash flow have an upward trend with allowance made for unusual circumstances; (5) typically, the issuer's industry is well established, and the issuer has a strong position within the industry; and (6) the reliability and quality of management are unquestioned. Relative strength or weakness of the above factors determine whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1 is the highest commercial paper rating assigned by Moody's. Among the factors considered by Moody's in assigning ratings are the following: (1) evaluation of the management of the issuer; (2) economic evaluation of the issuer's industry or industries and the appraisal of speculative-type risks which may be inherent in certain areas; (3) evaluation of the issuer's products in relation to completion and customer acceptance; (4) liquidity; (5) amount and quality of long term debt; (6) trend of earnings over a period of ten years; (7) financial strength of a parent company and the relationships which exist with the issuer; and (8) recognition by the management of issuer of obligations which may be present or may arise as a result of public interest questions and preparations to meet such obligations. Relative strength or weakness of the above factors determine whether the issuer's commercial paper is Prime-1 or Prime-2. V. DESCRIPTION OF BANK OBLIGATIONS Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated interest rate. Certificates of deposit are negotiable short-term obligations of commercial banks. Variable rate certificates of deposit are certificates of deposit on which the interest rate is periodically adjusted prior to their stated maturity based upon a specified market rate. As a result of these adjustments, the interest rate on these obligations may increase or decrease periodically. Frequently, dealers selling variable rate certificates of deposit to the Portfolio will agree to repurchase such instruments, at the Portfolio's option, at par on or near the coupon dates. The dealers' obligations to repurchase these instruments are subject to conditions imposed by various dealers. Such conditions typically are the continued credit standing of the issuer and the existence of reasonably orderly market conditions. The Portfolio is also able to sell variable rate certificates of deposit in the secondary market. Variable rate certificates of deposit normally carry a higher interest rate than comparable fixed rate certificates of deposit. A banker's acceptance is a time draft drawn on a commercial bank by a borrower usually in connection with an international commercial transaction to finance the import, export, transfer or storage of goods. The borrower is liable for payment as well as the bank which unconditionally guarantees to pay the draft at its face amount on the maturity date. Most acceptances have maturities of six months or less and are traded in the secondary markets prior to maturity. A-5 APPENDIX B - COMPARISONS (a) Dow Jones Composite Average or its component averages -- an unmanaged index composed of 30 blue-chip industrial corporation stocks (Dow Jones Industrial Average), 15 utilities company stocks and 20 transportation stocks. (b) Standard & Poor's 500 Stock Index or its component indices -- an unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40 utilities stocks and 20 transportation stocks. (c) Standard & Poor's 400 Mid Cap Index - consists of 400 domestic stocks chosen for market size, liquidity, and industry group representation. It is also a market-value weighted index and was the first benchmark of mid cap stock price movement. (d) The New York Stock Exchange composite or component indices -- unmanaged indices of all industrial, utilities, transportation and finance stocks listed on the New York Stock Exchange. (e) Wilshire 5000 Equity Index or its component indices -- represents the return on the market value of all common equity securities for which daily pricing is available. (f) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income Fund Performance Analysis -- measure total return and average current yield for the mutual fund industry. Rank individual mutual fund performance over specified time periods, assuming reinvestment of all distributions, exclusive of any applicable sales charges. (g) Lipper Capital Appreciation Funds Index - a fund that aims at maximum capital appreciation, frequently by means of 100% or more portfolio turnover, leveraging, purchasing unregistered securities, purchasing options, etc. The fund may take large cash positions. (h) Lipper Small Cap Funds Index- a fund that by prospectus or portfolio practice invests primarily in companies with market capitalizations of less than $1 billion at the time of purchase. (i) Morgan Stanley Capital International EAFE Index and World Index -- respectively, arithmetic, market value-weighted averages of the performance of over 900 securities listed on the stock exchanges of countries in Europe, Australia and the Far East, and over 1,400 securities listed on the stock exchanges of these continents, including North America. (j) Goldman Sachs 100 Convertible Bond Index -- currently includes 67 bonds and 33 preferred. The original list of names was generated by screening for convertible issues of 100 million or greater in market capitalization. The index is priced monthly. (k) Salomon Brothers GNMA Index -- includes pools of mortgages originated by private lenders and guaranteed by the mortgage pools of the Government National Mortgage Association. (l) Salomon Brothers High Grade Corporate Bond Index -- consists of publicly issued, non-convertible corporate bonds rated AA or AAA. It is a value- weighted, total return index, including approximately 800 issues with maturities of 12 years or greater. (m) Salomon Brothers Broad Investment Grade Bond Index -- is a market-weighted index that contains approximately 4,700 individually priced investment grade corporate bonds rated BBB or better, U.S. Treasury/agency issues and mortgage pass through securities. B-1 (n) Lehman Brothers Long-Term Treasury Bond Index -- is composed of all bonds covered by the Lehman Brothers Treasury Bond Index with maturities of 10 years or greater. (o) Lehman Brothers Government/Corporate Index -- is a combination of the Government and Corporate Bond Indices. The Government Index includes public obligations of the U.S. Treasury, issues of Government agencies, and corporate debt backed by the U.S. Government. The Corporate Bond Index includes fixed-rate nonconvertible corporate debt. Also included are Yankee Bonds and nonconvertible debt issued by or guaranteed by foreign or international governments and agencies. All issues are investment grade (BBB) or higher, with maturities of at least one year and an outstanding par value of at least $100 million for U.S. Government issues and $25 million for others. Any security downgraded during the month is held in the index until month-end and then removed. All returns are market value weighted inclusive of accrued income. (p) Lehman Brothers Aggregate Bond Index --- is a fixed income market value- weighted index that combines the Lehman Brothers Government Corporate Bond Index and the Lehman Brothers Mortgage-Backed Securities Index. It includes fixed rate issues of investment grade (BBB) or higher, with maturities of at least one year and outstanding per values of at least $100 million for U.S. Government issues and $25 million for others. (q) NASDAQ Industrial Index -- is composed of more than 3,000 industrial issues. It is a value-weighted index calculated on price change only and does not include income. (r) Value Line -- composed of over 1,600 stocks in the Value Line Investment Survey. (s) Russell 2000 Index -- composed of the 2,000 smallest stocks in the Russell 3000, a market value-weighted index of the 3,000 largest U.S. publicly- traded companies. (t) Salomon Brothers 3 Month T-Bill Average - the average return for all Treasury bills for the previous three month period. (u) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70% Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35% Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade Bond Index; all stocks on the NASDAQ system exclusive of those traded on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Salomon Brothers High Grade Bond Index. (v) CDA Mutual Fund Report published by CDA Investment Technologies, Inc. -- analyzes price, current yield, risk, total return and average rate of return (average compounded growth rate) over specified time periods for the mutual fund industry. (w) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes price, yield, risk and total return for equity funds. (x) Financial publications: Business Week, Changing Times, Financial World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial Times, Global Investor, Wall Street Journal and Weisenberger Investment Companies Service -- publications that rate fund performance over specified time periods. (y) Consumer Price Index (or Cost of Living Index), published by the U.S. Bureau of Labor Statistics -- a statistical measure of change over time in the price of goods and services in major expenditure groups. B-2 (z) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates -- historical measure of yield, price and total return for common and small company stock, long-term government bonds, U.S. Treasury bills and inflation. (aa) Savings and Loan Historical Interest Rates -- as published by the U.S. Savings & Loan League Fact Book. (bb) Historical data supplied by the research departments of First Boston Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg L.P. B-3 PART B UAM FUNDS CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO STATEMENT OF ADDITIONAL INFORMATION -- July 17, 1998 This Statement of Additional Information ("SAI") is not a Prospectus but should be read in conjunction with the Prospectuses of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the Chicago Asset Management Value/Contrarian Portfolio Institutional Class Shares and Chicago Asset Management Intermediate Bond Portfolio Institutional Class Shares (the "Portfolios") dated July 17, 1998. To obtain the Prospectuses, please call the UAM Funds Service Center at 1- 800-638-7983. TABLE OF CONTENTS
INVESTMENT OBJECTIVE AND POLICIES................................... 2 PURCHASE AND REDEMPTION OF SHARES................................... 9 VALUATION OF SHARES................................................. 10 SHAREHOLDER SERVICES................................................ 10 INVESTMENT LIMITATIONS.............................................. 11 MANAGEMENT OF THE FUND.............................................. 12 INVESTMENT ADVISER.................................................. 15 PORTFOLIO TRANSACTIONS.............................................. 16 ADMINISTRATIVE SERVICES............................................. 17 CUSTODIAN........................................................... 19 INDEPENDENT ACCOUNTANTS............................................. 19 DISTRIBUTOR......................................................... 19 PERFORMANCE CALCULATIONS............................................ 19 GENERAL INFORMATION................................................. 21 FINANCIAL STATEMENTS................................................ 22 APPENDIX A -- DESCRIPTION OF SECURITIES AND CORPORATE BOND RATINGS.. A-1 APPENDIX B - COMPARISONS............................................ B-1
Investment Adviser Chicago Asset Management Company (Adviser) Distributor UAM Fund Distributor, Inc. (Distributor) Administrator and Transfer Agent UAM Fund Services, Inc. (UAMFSI) INVESTMENT OBJECTIVE AND POLICIES The following discussion supplements the discussion of investment objectives and policies of the Portfolios as set forth in the Portfolios' Prospectuses. LENDING OF SECURITIES 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, as amended, (the "1940 Act") or the Rules and Regulations or interpretations of the Securities and Exchange Commission (the "SEC") thereunder, which currently require that (a) the borrower pledge and maintain with the Portfolio collateral consisting of cash, an irrevocable letter of credit issued by a domestic U.S. bank or securities issued or guaranteed by the United States Government having a value at all times not less than 100% of the value of the securities loaned, (b) the borrower add to such collateral whenever the price of the securities loaned rises (i.e., the borrower "marks to the market" on a daily basis), (c) the loan be made subject to termination by the Portfolio at any time, and (d) the Portfolio receives reasonable interest on the loan (which may include the Portfolio investing any cash collateral in interest bearing short-term investments). Each Portfolio will not loan securities to the extent that greater than one-third of its assets (including the value of the collateral for the loans) at fair market value would be committed to loans. As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the securities loaned if the borrower of the securities fails financially. These risks are similar to the ones involved with repurchase agreements as discussed in the Prospectuses. HEDGING STRATEGIES Each Portfolio may engage in various portfolio strategies to hedge against adverse movements in the equity, debt and currency markets. Each Portfolio may buy or sell futures contracts, write (i.e., sell) covered call options on its portfolio securities, purchase put and call options on securities and engage in transactions in stock index options and stock index futures, and related options on such futures. Each Portfolio may also enter into foreign currency contracts to hedge against its foreign currency movements. Each of these portfolio strategies is described below. Although certain risks are involved in options and futures transactions, the Adviser believes that, because the Portfolios will engage in options and futures transactions only for hedging purposes, the options and futures portfolio strategies of a Portfolio will not subject it to the risks frequently associated with the speculative use of options and futures transactions. While each Portfolio's use of hedging strategies is intended to reduce the volatility of the net asset value of the Portfolio shares, the Portfolios' net asset value will fluctuate. There can be no assurance that a Portfolio's hedging transactions will be effective. Also, a Portfolio may not necessarily be engaging in hedging activities when movements in any particular equity, debt or currency market occur. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS The U.S. dollar value of the assets of the Portfolios may be affected favorably or unfavorably by changes in foreign currency exchange rates and exchange control regulations, and the Portfolios may incur costs in connection with conversions between various currencies. The Portfolios will conduct their foreign currency exchange transactions either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency exchange market, or through entering into forward contracts to purchase or sell foreign currencies. 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 are traded in the interbank market and are 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 such trades. The Portfolios may enter into forward foreign currency exchange contracts in several circumstances. When a Portfolio enters into a contract for the purchase or sale of a security denominated in a foreign currency, or when a 2 Portfolio anticipates the receipt in a foreign currency of dividends or interest payments on a security which it holds, the Portfolio may desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent of such dividend or interest payment, as the case may be. By entering into a forward contract for a fixed amount of dollars, for the purchase or sale of the amount of foreign currency involved in the underlying transactions, the Portfolio will be able to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the subject foreign currency during the period between the date on which the security is purchased or sold, or on which the dividend or interest payment is declared, and the date on which such payments are made or received. Additionally, when either of the Portfolios anticipates that the currency of a particular foreign country may suffer a substantial decline against the U.S. dollar, it may enter into a forward contract for a fixed amount of dollars to sell the amount of foreign currency approximating the value of some or all of such Portfolio's securities denominated in such foreign currency. The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible since the future value of securities in foreign currencies will change as a consequence of market movements in the value of these securities between the date on which the forward contract is entered into and the date it matures. The projection of short-term currency market movement is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain. Neither Portfolio intends to enter into such forward contracts to protect the value of portfolio securities on a regular or continuous basis. The Portfolios will not enter into such forward contracts or maintain a net exposure to such contracts where the consummation of the contracts would obligate such Portfolio to deliver an amount of foreign currency in excess of the value of such Portfolio's securities or other assets denominated in that currency. Under normal circumstances, consideration of the prospect for currency parities will be incorporated into the long-term investment decisions made with regard to overall diversification strategies. However, the management of the Fund believes that it is important to have the flexibility to enter into such forward contracts when it determines that the best interests of the performance of each Portfolio will thereby be served. The Fund's Custodian will place cash or liquid securities into a segregated account in an amount equal to the value of such Portfolio's total assets committed to the consummation of forward foreign currency exchange contracts. If the value of the securities placed in the segregated account declines, additional cash or securities will be placed in the account on a daily basis so that the value of the account will be equal to the amount of such Portfolio's commitments with respect to such contracts. The Portfolios generally will not enter into a forward contract with a term of greater than one year. At the maturity of a forward contract, a Portfolio may either sell the portfolio security and make delivery of the foreign currency, or it may retain the security and terminate its contractual obligation to deliver the foreign currency by purchasing an "offsetting" contract with the same currency trader obligating it to purchase, on the same maturity date, the same amount of the foreign currency. It is impossible to forecast with absolute precision the market value of a particular portfolio security at the expiration of the contract. Accordingly, it may be necessary for a Portfolio to purchase additional foreign currency on the spot market (and bear the expense of such purchase) if the market value of the security is less than the amount of foreign currency that such Portfolio is obligated to deliver and if a decision is made to sell the security and make delivery of the foreign currency. If a Portfolio retains the portfolio security and engages in an offsetting transaction, such Portfolio will incur a gain or loss (as described below) to the extent that there has been movement in forward contract prices. Should forward prices decline during the period between a Portfolio entering into a forward contract for the sale of a foreign currency and the date it enters into an offsetting contract for the purchase of the foreign currency, such Portfolio will realize a gain to the extent that the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to purchase. Should forward prices increase, such Portfolio would suffer a loss to the extent that the price of the currency it has agreed to purchase exceeds the price of the currency it has agreed to sell. Each of the Portfolios' dealings in forward foreign currency exchange contracts will be limited to the transactions described above. Of course, the Portfolios are not required to enter into such transactions with regard to 3 their foreign currency-denominated securities. It also should be realized that this method of protecting the value of portfolio 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 which one can achieve 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. FUTURES CONTRACTS Each Portfolio may enter into futures contracts for the purposes of hedging, remaining fully invested and reducing transactions costs. 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"), a U.S. Government agency. 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 acceptable 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. Generally, margin deposits are structured as percentages (e.g., 5%) of the market value of the contracts being traded. After a futures contract position is opened, the value of the contract is marked to market daily. If the futures contract price changes to the extent that the margin on deposit does not satisfy margin requirements, payment of additional "variation" margin will be required. Conversely, changes 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 Portfolios expect to earn interest income on their 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 a fluctuation in interest rates. The Portfolios intend to use futures contracts only for hedging purposes. Regulations of the CFTC applicable to the Fund require that all of its futures transactions constitute bona fide hedging positions or that the Fund's commodity futures and option positions be for other purposes, only to the extent that the aggregate initial margins and premiums required to establish such non-hedging positions do not exceed five percent of the liquidation value of a Portfolio. A 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. As evidence of this hedging interest, each Portfolio expects that approximately 75% of its futures contracts purchases will be "completed," that is, equivalent amounts of related securities will have been purchased or will be purchased by the Portfolio on the settlement date of the futures contracts. Although techniques other than the sale and purchase of futures contracts could be used to control the Portfolio's exposure to market fluctuations, the use of futures contracts may be a more effective means of hedging 4 this exposure. While the Portfolio will incur commission expenses in both opening and closing out futures positions, these costs are lower than transaction costs incurred in the purchase and sale of the underlying securities. RESTRICTIONS ON THE USE OF FUTURES CONTRACTS A Portfolio will not enter into futures contract transactions to the extent that, immediately thereafter, the sum of its initial margin deposits on open contracts exceeds 5% of the market value of its total assets. In addition, a Portfolio will not enter into futures contracts to the extent that its outstanding obligations to purchase securities under these contracts would exceed 20% of its total assets. RISK FACTORS IN FUTURES TRANSACTIONS A Portfolio will minimize the risk that it will be unable to close out a futures position by only entering into futures which are traded on national futures exchanges and for which there appears to be a liquid secondary market. 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, a 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, a Portfolio may be required to make delivery of the instruments underlying futures contracts it holds. The inability to close futures positions also could have an adverse impact on a Portfolio's ability to effectively hedge. 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 costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit 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. However, because the futures strategies of the Portfolios are engaged in only for hedging purposes, the Adviser does not believe that the Portfolios are subject to the risks of loss frequently associated with futures transactions. A Portfolio would presumably have sustained comparable losses if, instead of the futures contract, it had invested in the underlying financial instrument and sold it after the decline. Utilization of futures transactions by the Portfolios does involve the risk of imperfect or no correlation where the securities underlying the futures contracts have different maturities than the portfolio securities being hedged. It is also possible that the Portfolio could lose money on futures contracts and also experience a decline in value of portfolio securities. There is also the risk of loss by the 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. 5 OPTIONS The Portfolios may purchase and sell put and call options on securities and futures contracts for hedging purposes. 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 on which it is based or 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. For example, there are significant differences between the securities, futures and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objective. A decision as to whether, when, and how to use options involves the exercise of skill and judgment by the Adviser, and even a well-conceived transaction may be unsuccessful because of market behavior or unexpected events. WRITING COVERED CALL OPTIONS The principal reason for writing call options is to attempt to realize, through the receipt of premiums, a greater return than would be realized on securities alone. By writing covered call options, each Portfolio gives up the opportunity, while the option is in effect, to profit from any price increase in the underlying security above the option exercise price. In addition, each Portfolio's ability to sell the underlying security will be limited while the option is in effect unless the Portfolio effects a closing purchase transaction. A closing purchase transaction cancels out the Portfolio's position as the writer of an option by means of an offsetting purchase of an identical option prior to the expiration of the option it has written. Covered call options serve as a partial hedge against the price of the underlying security declining. Each Portfolio writes only covered options, which means that so long as a Portfolio is obligated as the writer of the option it will, in a segregated account with its custodian, maintain cash or liquid securities denominated in U.S. dollars with a value equal to or greater than the exercise price of the underlying securities. PURCHASING OPTIONS The amount of any appreciation in the value of the underlying security subject to a put will be partially offset by the amount of the premium paid for the put option and any related transaction costs. Prior to its expiration, a put option may be sold in a closing sale transaction and profit or loss from a sale will depend on whether the amount received is more or less than the premium paid for the put option plus the related transaction costs. A closing sale transaction cancels out a Portfolio's position as purchaser of an option by means of an offsetting sale of an identical option prior to the expiration of the option it has purchased. In certain circumstances, a Portfolio may purchase call options on securities held in its investment portfolio on which it has written call options or on securities which it intends to purchase. OPTIONS ON FOREIGN CURRENCIES The Portfolios may purchase and write options on foreign currencies for hedging purposes in a manner similar to that in which futures contracts on foreign currencies, or forward contracts, will be utilized. For example, a decline in the dollar value of a foreign currency in which portfolio securities are denominated will reduce the dollar value of such securities, even if their value in the foreign currency remains constant. In order to protect against such diminutions in the value of portfolio securities, the Portfolios may purchase put options on the foreign currency. If the value of the currency does decline, the Portfolio will have the right to sell such currency for a fixed amount in dollars and will thereby offset, in whole or in part, the adverse effect on its portfolio which otherwise would have resulted. Conversely, where a rise in the dollar value of a currency in which securities to be acquired are denominated is projected, thereby increasing the cost of such securities, the Portfolios may purchase call options thereon. The purchase of such options could offset, at least partially, the effects of the adverse movements in 6 exchange rates. As in the case of other types of options, however, the benefit to the Portfolios deriving from purchases of foreign currency options will be reduced by the amount of the premium and related transaction costs. In addition, where currency exchange rates do not move in the direction or to the extent anticipated, a Portfolio could sustain losses on transactions in foreign currency options which would require it to forego a portion or all of the benefits of advantageous changes in such rates. Each Portfolio may write options on foreign currencies for the same types of hedging purposes. For example, where a Portfolio anticipates a decline in the dollar value of foreign currency denominated securities due to adverse fluctuations in exchange rates it could, instead of purchasing a put option, write a call option on the relevant currency. If the anticipated decline occurs, the option will most likely not be exercised, and the diminution in value of portfolio securities will be offset by the amount of the premium received. Similarly, instead of purchasing a call option to hedge against an anticipated increase in the dollar cost of securities to be acquired, a Portfolio could write a put option on the relevant currency which, if rates move in the manner projected, will expire unexercised and allow the Portfolio to hedge such increased cost up to the amount of the premium. As in the case of other types of options, however, the writing of a foreign currency option will constitute only a partial hedge up to the amount of the premium, and only if rates move in the expected direction. If this does not occur, the option may be exercised and a Portfolio would be required to purchase or sell the underlying currency at a loss which may not be offset by the amount of the premium. Through the writing of options on foreign currencies, a Portfolio also may be required to forego all or a portion of the benefits which might otherwise have been obtained from favorable movements in exchange rates. Each Portfolio intends to write covered call options on foreign currencies. A call option written on a foreign currency by a Portfolio is "covered" if the Portfolio owns the underlying foreign currency covered by the call or has an absolute and immediate right to acquire that foreign currency without additional cash consideration (or for additional cash consideration held in a segregated account by the Custodian) upon conversion or exchange of other foreign currency held in its portfolio. A call option is also covered if a Portfolio has a call on the same foreign currency and in the same principal amount as the call written where the exercise price of the call held (a) is equal to or less than the exercise price of the call written or (b) is greater than the exercise price of the call written if the difference is maintained by the Portfolio in cash or liquid securities in a segregated account with the Custodian. Each Portfolio also intends to write call options on foreign currencies that are not covered for cross-hedging purposes. A call option on a foreign currency is for cross-hedging purposes if it is not covered but is designed to provide a hedge against a decline in the U.S. dollar value of a security which the Portfolio owns or has the right to acquire and which is denominated in the currency underlying the option due to an adverse change in the exchange rate. In such circumstances, the Portfolio will collateralize the option by maintaining in a segregated account with the Custodian, cash or liquid securities in an amount not less than the value of the underlying foreign currency in U.S. dollars marked to market daily. RISKS OF OPTIONS ON FUTURES CONTRACTS, FORWARD CONTRACTS AND OPTIONS ON FOREIGN CURRENCIES Options on foreign currencies and forward contracts are not traded on contract markets regulated by the CFTC or (with the exception of certain foreign currency options) by the SEC. To the contrary, such instruments are traded through financial institutions acting as market-makers, although foreign currency options are also traded on certain national securities exchanges, such as the Philadelphia Stock Exchange and the Chicago Board Options Exchange, subject to the regulation of the SEC. Similarly, options on currencies may be traded over- the-counter. In an over-the-counter trading environment, many of the protections afforded to exchange participants will not be available. For example, there are no daily price fluctuation limits, and adverse market movements could therefore continue to an unlimited extent over a period of time. Although the purchaser of an option cannot lose more than the amount of the premium plus related transaction costs, this entire amount could be lost. Moreover, the option writer and a trader of forward contracts could lose amounts substantially in excess of their initial investments, due to the margin and collateral requirements associated with such positions. 7 Options on foreign currencies traded on national securities exchanges are within the jurisdiction of the SEC, as are other securities traded on such exchanges. As a result, many of the protections provided to traders on organized exchanges will be available with respect to such transactions. In particular, all foreign currency option positions entered into on a national securities exchange are cleared and guaranteed by the Options Clearing Corporation ("OCC"), thereby reducing the risk of counterparty default. Furthermore, a liquid secondary market in options traded on a national securities exchange may be more readily available than in the over-the-counter market, potentially permitting the Portfolios to liquidate open positions at a profit prior to exercise or expiration, or to limit losses in the event of adverse market movements. The purchase and sale of exchange-traded foreign currency options, however, is subject to the risks of the availability of a liquid secondary market described above, as well as the risks regarding adverse market movements, margining of options written, the nature of the foreign currency market, possible intervention by governmental authorities and the effect of other political and economic events. In addition, exchange-traded options of foreign currencies involve certain risks not presented by the over-the-counter market. For example, exercise and settlement of such options must be made exclusively through the OCC, which has established banking relationships in applicable foreign countries for this purpose. As a result, the OCC may, if it determines that foreign governmental restrictions or taxes would prevent the orderly settlement of foreign currency option exercises, or would result in undue burdens on the OCC or its clearing member, impose special procedures on exercise and settlement, such as technical changes in the mechanics of delivery of currency, the fixing of dollar settlement prices or prohibitions, on exercise. In addition, futures contracts, options on futures contracts, forward contracts and options on foreign currencies may be traded on foreign exchanges. Such transactions are subject to the risk of governmental actions affecting trading in, or the prices of, foreign currencies or securities. The value of such positions also could be adversely affected by (i) other complex foreign political and economic factors, (ii) lesser availability than in the United States of data on which to make a trading decision, (iii) delays in a Portfolio's ability to act upon economic events occurring in foreign markets during non-business hours in the United States, (iv) the imposition of different exercise and settlement terms and procedures and margin requirements than in the United States, and (v) lesser trading volume. INTEREST RATE SWAP TRANSACTIONS Each Portfolio may enter into swap contracts. A swap is an agreement to exchange the return generated by one instrument for the return generated by another instrument. The payment streams are calculated by reference to a specific index and agreed upon notional amount. The term "specified index" includes fixed interest rates, total return on interest rate indices and fixed income indices, (as well as amounts derived from arithmetic operations on these indices). For example, a Portfolio may agree to swap the return generated by a fixed-income index for the return generated by a second fixed-income index. The Portfolios 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 a Portfolio receiving or paying, as the case may be, only the net amount of the two payments. A Portfolio's obligations under a swap agreement will be accrued daily (offsetting against any amounts owing to the Portfolio) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the maintenance of a segregated account consisting of cash or liquid securities, to avoid any potential leveraging of the Portfolio. Since swaps will be entered into for good faith hedging purposes, the Adviser and the Fund 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. Interest rate swaps do not involve the delivery of securities, other underlying assets, or principal. Accordingly, the risk of loss with respect to interest rate swaps is limited to the net amount of interest payments that a Portfolio is contractually obligated to make. If the other party to the interest rate swap defaults, a Portfolio's risk of loss consists of the net amount of interest payments that a Portfolio is contractually entitled to receive. If there is a default by the counterparty, the Portfolio may have contractual remedies pursuant to the agreements related to the 8 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. PORTFOLIO TURNOVER The portfolio turnover rate described in the Prospectuses is calculated by dividing the lesser of purchases or sales of portfolio securities for the year by the monthly average of the value of the portfolio securities. The calculation excludes all securities, including options, whose maturities at the time of acquisition were one year or less. Portfolio turnover may vary greatly from year to year as well as within a particular year, and may also be affected by cash requirements for redemptions of shares. See "Financial Highlights" in the Prospectuses for the historical portfolio turnover rates with respect to the Portfolios. PURCHASE AND REDEMPTION OF SHARES Shares of the Portfolios may be purchased without a sales commission at the net asset value per share next determined after an order is received in proper form by the Fund, and payment is received by the Fund or its designated Service Agent. The minimum initial investment required for the Portfolios is $2,000, with certain exceptions as may be permitted from time to time by the officers of the Fund. Other investment minimums are: initial IRA investment, $500; initial spousal IRA investment, $250; and additional investment for all accounts, $100. An order received in proper form prior to the close of regular trading on the New York Stock Exchange ("Exchange") (generally 4:00 p.m. Eastern Time) will be executed at the price computed on the date of receipt; and an order received not in proper form or after the close of the Exchange will be executed at the price computed on the next day the Exchange is open after proper receipt. The exchange will be closed on the following days: New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,Thanksgiving Day and Christmas Day. Each Portfolio reserves the right in its sole discretion (1) to suspend the offering of its shares, (2) to reject purchase orders when in the judgment of management such rejection is in the best interests of the Fund, and (3) to reduce or waive the minimum for initial and subsequent investment for certain fiduciary accounts such as employee benefit plans or under circumstances where certain economies can be achieved in sales of a Portfolio's shares. Each Portfolio may suspend redemption privileges or postpone the date of payment (1) during any period that either the Exchange and custodian bank are closed or trading on the Exchange is restricted as determined by the SEC, (2) during any period when an emergency exists as defined by the rules of the SEC as a result of which it is not reasonably practicable for a Portfolio to dispose of securities owned by it or to fairly determine the value of its assets, and (3) for such other periods as the SEC may permit. The Fund has made an election with the SEC to pay in cash all redemptions requested by any shareholder of record limited in amount during any 90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at the beginning of such period. Such commitment is irrevocable without the prior approval of the SEC. Redemptions in excess of the above limits may be paid, in whole or in part, in investment securities or in cash as the Board of Trustees may deem advisable; however, payment will be made wholly in cash unless the Board of Trustees believe that economic or market conditions exist which would make such a practice detrimental to the best interests of the Fund. If redemptions are paid in investment securities, such securities will be valued as set forth in the Prospectus under "VALUATION OF SHARES," and a redeeming shareholder would normally incur brokerage expenses if those securities were converted to cash. 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. SIGNATURE GUARANTEES 9 To protect your account, the Fund and Chase Global Funds Services Company ("CGFSC") from fraud, signature guarantees are required for certain redemptions. The purpose of signature guarantees is to verify the identity of the person who has authorized a redemption from your account. Signature guarantees are required for (1) all redemptions when the proceeds are to be paid to someone other than the registered owner(s) and/or registered address, or (2) share transfer requests. Signatures must be guaranteed by an "eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. A complete definition of eligible guarantor institutions is available from the Fund's transfer agent. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. Signature guarantees will be accepted from any eligible guarantor institution which participates in a signature guarantee program. The signature guarantee must appear either: (1) on the written request for redemption; (2) on a separate instrument for assignment ("stock power") which should specify the total number of shares to be redeemed; or (3) on all stock certificates tendered for redemption and, if shares held by the Fund are also being redeemed, on the letter or stock power. VALUATION OF SHARES Equity securities listed on a securities exchange for which market quotations are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed securities not traded on the valuation date for which market quotations are readily available are valued neither exceeding the current asked prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars as quoted by any major bank or broker. Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the-counter market. Bonds and other fixed income securities may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost, using methods approved by the Board of Trustees. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods approved by the Fund's Board of Trustees. SHAREHOLDER SERVICES The following supplements the information set forth under "Shareholder Services" in the Prospectus. 10 EXCHANGE PRIVILEGE Institutional Class Shares of each Portfolio may be exchanged for Institutional Class Shares of any other UAM Funds or UAM Funds, Inc. Portfolio. Exchange requests should be made by calling the Fund (1-800-638-7983) or by writing to UAM Funds, UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The exchange privilege is only available with respect to Portfolios that are qualified for sale in the shareholder's state of residence. Any such exchange will be based on the respective net asset values of the shares involved. There is no sales commission or charge of any kind. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objective of the Portfolio to be purchased. You may obtain a Prospectus for the Portfolio(s) you are interested in by calling the UAM Funds Service Center at 1-800-638-7983. Telephone exchanges will be accepted only if the certificates for the shares to be exchanged have not been issued to the shareholder, and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading of the Exchange (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the Exchange will be processed on the next business day. Neither the Fund nor CGFSC will be responsible for the authenticity of the exchange instructions received by telephone. Exchanges may also be subject to limitations as to amounts or frequency and to other restrictions established by the Board of Trustees to assure that such exchanges do not disadvantage the Fund and its shareholders. For federal income tax purposes an exchange between Portfolios is a taxable event, and, accordingly, a capital gain or loss may be realized. In a revenue ruling relating to circumstances similar to the Fund's, an exchange between series of a Fund was also deemed to be a taxable event. It is likely, therefore, that a capital gain or loss would be realized on an exchange between Portfolios; you may want to consult your tax adviser for further information in this regard. The exchange privilege may be modified or terminated at any time. TRANSFER OF SHARES Shareholders may transfer shares to another person by making a written request to the Fund. The request should clearly identify the account and number of shares to be transferred, and include the signature of all registered owners and all stock certificates, if any, which are subject to the transfer. The signature on the letter of request, the stock certificate or any stock power must be guaranteed in the same manner as described under "Purchase and Redemption of Shares." As in the case of redemptions, the written request must be received in good order before any transfer can be made. INVESTMENT LIMITATIONS The following limitations supplement those set forth in the Prospectuses of the Portfolios. A Portfolio's fundamental investment limitations cannot be changed without the approval of a "majority of the outstanding shares" (as defined in the 1940 Act) of the Portfolio. Except for the numbered investment limitations noted as fundamental below, however, the limitations described below are not fundamental, and may be changed without the consent of shareholders. Whenever an investment limitation sets forth a percentage limitation on investment or utilization of assets, such limitation shall be determined immediately after and as a result of a Portfolio's acquisition of such security or other asset. Accordingly, any later increase or decrease resulting from a change in values, net assets or other circumstances will not be considered when determining whether the investment complies with a Portfolio's investment limitations. As a matter of fundamental policy, each Portfolio will not: 11 (1) invest in physical commodities or contracts on physical commodities; (2) purchase or sell real estate or real estate limited partnerships, although it may purchase and sell securities of companies which deal in real estate and may purchase and sell securities which are secured by interests in real estate; (3) make loans except (i) by purchasing debt securities in accordance with its investment objectives 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 SEC thereunder; (4) underwrite the securities of other issuers; and (5) issue senior securities, as defined in the 1940 Act, except that this restriction shall not be deemed to prohibit a Portfolio from (i) making any permitted borrowings, mortgages or pledges, or (ii) entering into options, futures or repurchase transactions. As a matter of non-fundamental policy, each Portfolio will not: (6) invest in stock, bond or interest rate futures and/or options on futures unless (i) not more than 5% of the Portfolio's assets are required as deposit to secure obligations under such futures and/or options on futures contracts provided, however, that in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in computing such 5% and (ii) not more than 20% of the Portfolio's assets are invested in stock or bond futures and options; (7) purchase on margin or sell short except as specified in (5) above; (8) invest more than an aggregate of 15% of the net assets of the Portfolio, determined at the time of investment, in securities subject to legal or contractual restrictions on resale or securities for which there are no readily available markets; and (9) invest for the purpose of exercising control over management of any company. MANAGEMENT OF THE FUND TRUSTEES AND OFFICERS The Officers of the Fund manage its day-to-day operations and are responsible to the Fund's Board of Trustees. The Trustees set broad policies for the Fund and elect its Officers. The following is a list of the Trustees and Officers of the Fund, their addresses and dates of birth, and a brief statement of their present positions and principal occupations during the past five years. John T. Bennett, Jr. (1/26/29), Trustee; College Road--RFD 3, Meredith, NH 03253; President of Squam Investment Management Company, Inc. and Great Island Investment Company, Inc.; President of Bennett Management Company from 1988 to 1993. 12 Nancy J. Dunn (8/14/51), Trustee; 10 Garden Street, Cambridge, MA 02138; Vice President for Finance and Administration and Treasurer of Radcliffe College since 1991. Philip D. English (8/5/48), Trustee; 16 West Madison Street, Baltimore, MD 21201; President and Chief Executive Officer of Broventure Company, Inc.; Chairman of the Board of Chektec Corporation and Cyber Scientific, Inc. William A. Humenuk (4/21/42), Trustee; 100 King Street West, P.O. Box 2440, LCD- 1, Hamilton Ontario, Canada L8N-456; Executive Vice President and Chief Administrative Officer of Philip Services Corp.; Director, Hofler Corp.; Formerly, a Partner in the Philadelphia office of the law firm Dechert Price & Rhoads. Norton H. Reamer* (3/21/35), Trustee; One International Place, Boston, MA 02110; President and Chairman of the Fund; President, Chief Executive Officer and a Director of United Asset Management Corporation; Director, Partner or Trustee of each of the Investment Companies of the Eaton Vance Group of Mutual Funds. Peter M. Whitman, Jr.* (7/1/43), Trustee; One Financial Center, Boston, MA 02111; President and Chief Investment Officer of Dewey Square Investors Corporation ("DSI") since 1988; Director and Chief Executive Officer of H. T. Investors, Inc., formerly a subsidiary of DSI. William H. Park (9/19/47), Vice President; One International Place, Boston, MA 02110; Executive Vice President and Chief Financial Officer of United Asset Management Corporation. Gary L. French (7/4/51), Treasurer; 211 Congress Street, Boston, MA 02110; President of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; formerly Vice President of Operations, Development and Control of Fidelity Investment in 1995; Treasurer of the Fidelity Group of Mutual Funds from 1991 to 1995. Michael E. DeFao (2/28/68), Secretary; 211 Congress Street, Boston, MA 02110; Vice President and General Counsel of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; Associate Attorney of Ropes & Gray (a law firm) from 1993 to 1995. Robert R. Flaherty (9/18/63), Assistant Treasurer; 211 Congress Street, Boston, MA 02110; Vice President of UAM Fund Services, Inc.; formerly Manager of Fund Administration and Compliance of Chase Global Fund Services Company from 1995 to 1996; Deloitte & Touche LLP from 1985 to 1995, Senior Manager. Michelle Azrialy (4/12/69), Assistant Secretary; 73 Tremont Street, Boston, MA 02108; Assistant Treasurer of Chase Global Funds Services Company since 1996. Senior Public Accountant with Price Waterhouse LLP from 1991 to 1994. Gordon M. Shone (7/30/56), Assistant Treasurer; 73 Tremont Street, Boston, MA 02108; Vice President of Fund Administration and Compliance of Chase Global Funds Services Company; formerly Senior Audit Manager of Coopers & Lybrand LLP (1983-1996). *Messrs. Reamer and Whitman are deemed to be "interested persons" of the Fund as that term is defined in the 1940 Act. REMUNERATION OF TRUSTEES AND OFFICERS The Fund pays each Trustee, who is not also an officer or affiliated person, a $150 quarterly retainer fee per active Portfolio which currently amounts to $1,350 per quarter. In addition, each unaffiliated Trustee receives a $2,000 meeting fee which is aggregated for all the Trustees and allocated proportionately among the 13 Portfolios of the Fund and UAM Funds, Inc. and reimbursement for travel and other expenses incurred while attending Board meetings. Trustees who are also officers or affiliated persons receive no remuneration for their service as Trustees. The Fund's officers and employees are paid by either the Adviser, United Asset Management Corporation ("UAM"), or the Administrator and receive no compensation from the Fund. As of June 15, 1998, the Trustees and officers of the Fund owned less than 1% of the Fund's outstanding shares. The following table shows aggregate compensation paid to each of the Fund's Trustees by the Fund and total compensation paid by the Funds and UAM Funds, Inc. (collectively the "Fund Complex") in the fiscal year ended April 30, 1998. 14 COMPENSATION TABLE
Pension or Retirement Estimated Total Compensation Aggregate Benefits Accrued Annual from Registrant Name of Person, Compensation From as Part of Benefits Upon and Position Registrant Fund Expenses Retirement Fund Complex -------- ---------- ------------- ---------- ------------ John T. Bennett, Jr. Trustee.............. $6,149 0 0 $33,500 Philip D. English Trustee.............. $6,149 0 0 $33,500 William A. Humenuk Trustee.............. $6,149 0 0 $33,500 Nancy J. Dunn Trustee.............. $4,668 0 0 $25,200 Peter M. Whitman, Jr. Trustee $ 0 0 0 $ 0 Norton H. Reamer Trustee.............. $ 0 0 0 $ 0
PRINCIPAL HOLDERS OF SECURITIES As of June 15, 1998, the following persons or organizations held of record or beneficially 5% or more of the shares of a Portfolio: Chicago Asset Management Value/Contrarian Portfolio Institutional Class Shares: UMBSC & Co, FBO Interstate Brands Conserv. Growth, P.O. Box 419260, Kansas City, MO, 47.8%*; UMBSC & Co., FBO Interstate Brands Moderate Growth, P.O. Box 419260, Kansas City, MO, 28.0%*; UMBSC & Co., FBO Interstate Brands Aggressive Growth, P.O. Box 419260, Kansas City, MO, 11.5%*; and United Asset Management Corp., Profit Sharing and 401K Plan Trustees, P.O. Box 1443, Chicago, IL, 5.6%*. Chicago Asset Management Intermediate Bond Portfolio Institutional Class Shares: John D. Curran and Francis McCartin Trustees FBO Pipe Fitters Pension Fund Local 597, c/o Chicago Asset Management Company, 70 W. Madison, 56th Floor, Chicago, IL, 89.4%*; and Wilmington Trust Co., Trustee, FBO American Eurocoper 401K Plan, c/o Mutual Funds, 1100 North Market Street, Wilmington, DE, 6.1%*. 15 - ------------ * Denotes shares held by a trustee or other fiduciary for which beneficial ownership is disclaimed or presumed disclaimed. The person(s) or organization(s) listed above as owning 25% or more of the outstanding shares of the Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of such Portfolio. INVESTMENT ADVISER CONTROL OF ADVISER The Adviser is a wholly-owned subsidiary of UAM, a holding company incorporated in Delaware in December 1980 for the purpose of acquiring and owning firms engaged primarily in institutional investment management. Since its first acquisition in August 1983, UAM has acquired or organized over 45 such wholly-owned affiliated firms (the "UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to retain control over their investment advisory decisions is necessary to allow them to continue to provide investment management services that are intended to meet the particular needs of their respective clients. Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to operate under their own firm name, with their own leadership and individual investment philosophy and approach. Each UAM Affiliated Firm manages its own business independently on a day-to-day basis. Investment strategies employed and securities selected by UAM Affiliated Firms are separately chosen by each of them. Several UAM Affiliated Firms also act as investment advisers to separate series or Portfolios of UAM Funds, Inc., a registered investment company. SERVICES PERFORMED BY ADVISER Pursuant to the Investment Advisory Agreements between each Portfolio of the Fund and the Adviser (collectively, the "Agreement"), the Adviser has agreed to manage the investment and reinvestment of the Portfolios' assets, to continuously review, supervise and administer the Portfolios' investment program, and to determine in its discretion the securities to be purchased or sold and the portion of the Portfolio's assets to be held uninvested. In the absence of (i) willful misfeasance, bad faith or gross negligence on the part of the Adviser in the performance of its obligations and duties under the Agreement, (ii) reckless disregard by the Adviser of its obligations and duties under the Agreement, or (iii) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, the Adviser shall not be subject to any liability whatsoever to the Fund, or to any shareholder of the Fund, for any error of judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services under the Agreement. Unless sooner terminated, the Agreement shall continue for periods of one year so long as such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Trustees of the Fund who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, (b) by the Board of Trustees of the Fund, or (c) by vote of a majority of the outstanding voting securities of the Portfolio. The Agreement may be terminated at any time by the Portfolio, without the payment of any penalty, by vote of a majority of the entire Board of Trustees 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. The Agreement may be terminated by the Adviser at any time, without the payment of any penalty, upon 90 days written notice to the Fund. The Agreement will automatically and immediately terminate in the event of its assignment. PHILOSOPHY AND STYLE 16 Chicago Asset Management Value/Contrarian Portfolio. The Adviser views itself as an equity manager who, by combining value judgment and contrarian opinion, strives to outperform the market and other money managers not by market timing, but by focusing on the selection of individual securities. Categorized as a large cap, bottom-up, value/contrarian, the Adviser's philosophy and strategy are qualitative and have remained the same since the inception of the firm. Chicago Asset Management Intermediate Bond Portfolio. The Adviser's approach is predicated on a controlled risk strategy that avoids dependence on interest rate anticipation while emphasizing value added through sector rotation and yield curve analysis. The firm seeks to add value by improving the odds in a risk/reward equation. The Adviser focuses on the more traditional aspects of active portfolio management by scrutinizing sectors, coupons, call features, and the shape of the yield curve. The Portfolio is constructed for income and safety. ADVISORY FEES As compensation for services rendered by the Adviser under the Investment Advisory Agreements, the Portfolio pays the Adviser an annual fee in monthly installments, calculated by applying the following annual percentage rates to each Portfolio's average daily net assets for the month:
Rate Chicago Asset Management Value/Contrarian Portfolio...................... 0.625% Chicago Asset Management Intermediate Bond Portfolio..................... 0.48%
For the fiscal years ended April 30, 1996, 1997, and 1998, the Chicago Asset Management Value/Contrarian Portfolio paid no advisory fees . During these periods, the Adviser voluntarily waived advisory fees of $5,000, $13,652, and $120,386, respectively. Until further notice, the Adviser has voluntarily agreed to waive its advisory fee and to assume as the Adviser's own expense certain operating expenses payable by the Portfolio (excluding interest, taxes and extraordinary expenses), if necessary, in order to keep the Portfolio's total annual operating expenses from exceeding 0.95%. For the fiscal years ended April 30, 1996, 1997, and 1998, the Chicago Asset Management Intermediate Bond Portfolio paid no advisory fees. During these periods, the Adviser voluntarily waived advisory fees of $31,000, $41,438, and $52,374, respectively. Until further notice, the Adviser has voluntarily agreed to waive its advisory fee and to assume as the Adviser's own expense certain operating expenses payable by the Portfolio, if necessary, in order to keep the Portfolio's total annual operating expenses from exceeding 0.80%. PORTFOLIO TRANSACTIONS The Investment Advisory Agreements authorize the Adviser to select the brokers or dealers that will execute the purchases and sales of investment securities for the Portfolios and directs the Adviser to use its best efforts to obtain the best execution with respect to all transactions for the Portfolios. The Adviser may, however, consistent with the interests of the Portfolios, select brokers on the basis of the research, statistical and pricing services they provide to the Portfolios. 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 Adviser 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 17 Act of 1934, as amended, and that the Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Portfolios and the Adviser's other clients. It is not the Fund's practice to allocate brokerage or effect principal transactions with dealers on the basis of sales of Fund shares which may be made through broker-dealer firms. However, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. During the fiscal years ended April 30, 1996, 1997, and 1998, Chicago Asset Management Value/Contrarian Portfolio paid aggregate brokerage commissions of $892, $20,946, and $33,412, respectively. The difference in brokerage commissions paid between fiscal years April 30, 1997 and 1998, was the result of growth in the Chicago Asset Management Value/Contrarian Portfolio's assets. Some securities considered for investment by the Portfolios may also be appropriate for other clients served by the Adviser. If purchases or sales of securities consistent with the investment policies of a Portfolio and one or more of these other clients served by the Adviser 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 Adviser. Although there is no specified formula for allocating such transactions, the various allocation methods used by the Adviser, and the results of such allocations, are subject to periodic review by the Fund's Board of Trustees. ADMINISTRATIVE SERVICES The Board of Trustees of the Fund has approved a Fund Administration Agreement ("Fund Administration Agreement"), effective April 15, 1996, between UAMFSI, a wholly owned subsidiary of UAM, and the Fund. Pursuant to the terms of the Fund Administration Agreement, UAMFSI manages, administers and conducts the general business activities of the Fund other than those which have been contracted to other third parties by the Fund. Additionally, UAMFSI has agreed to provide transfer agency services to the Portfolio pursuant to the terms of the Fund Administration Agreement. UAMFSI has subcontracted some of these services to CGFSC, an affiliate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement between UAMFSI and CGFSC (collectively, with the Fund Administration Agreement, the "Agreements"). Pursuant to the terms of the Agreements, each Portfolio pays UAMFSI a two-part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub- administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio- specific fees are calculated from the aggregate net assets of each Portfolio: Annual Rate Chicago Asset Management Value/Contrarian Portfolio 0.06% Chicago Asset Management Intermediate Bond Portfolio 0.04% CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined Fund net assets; 0.11 of 1% of the next $800 million of combined Fund net assets; 0.07 of 1% of combined Fund net assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined Fund net assets in excess of $3 billion. 18 Fees are allocated among each of the Portfolios on the basis of their relative assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum annual fee increases by $20,000. Prior to April 15, 1996, CGFSC or its predecessor, Mutual Funds Service Company, provided certain administrative services to the Fund under an Administration Agreement between the Fund and U.S. Trust Company of New York. The following table shows administrative fees paid by each Portfolio to UAMFSI and CGFSC during the last three fiscal years: 19 UAMFSI
Fiscal Fiscal Period ended Year Ended Year Ended 4/30/96 4/30/97 4/30/98 ------- ------- ------- Chicago Asset Management $2,523 $1,287 $11,576 Value/Contrarian Portfolio Chicago Asset Management $2,640 $3,427 $ 4,364 Intermediate Bond Portfolio CGFSC Fiscal Fiscal Period Ended Year Ended Year Ended 4/30/96 4/30/97 4/30/98 ------- ------- ------- Chicago Asset Management $49,477 $74,076 $73,676 Value/Contrarian Portfolio Chicago Asset Management $48,360 $76,798 $78,912 Intermediate Bond Portfolio
UAMFSI will bear all expenses in connection with the performance of its services under the Fund Administration Agreement. Other expenses to be incurred in the operation of the Fund will be borne by the Fund or other parties, including taxes, interest, brokerage fees and commissions, if any, salaries and fees of officers and members of the Board who are not officers, directors, shareholders or employees of UAMFSI, or the Fund's investment adviser or distributor, SEC fees and state Blue Sky fees, EDGAR filing fees, processing services and related fees, advisory and administration fees, charges and expenses of pricing and data services, independent public accountants and custodians, insurance premiums including fidelity bond premiums, outside legal expenses, costs of maintenance of corporate existence, typesetting and printing of prospectuses for regulatory purposes and for distribution to current shareholders of the Fund, printing and production costs of shareholders' reports and corporate meetings, cost and expenses of Fund stationery and forms, costs of special telephone and data lines and devices, trade association dues and expenses, and any extraordinary expenses and other customary Fund expenses. Unless sooner terminated as provided herein, the Fund Administration Agreement shall continue in effect from year to year provided such continuance is specifically approved at least annually by the Board. The Fund Administration Agreement is terminable, without penalty, by the Board or by UAMFSI, on not less than ninety (90) days' written notice. The Fund Administration Agreement shall automatically terminate upon its assignment by UAMFSI without the prior written consent of the Fund. UAMFSI will from time to time employ or associate with such person or persons as may be fit to assist them in the performance of the Fund Administration Agreement. Such person or persons may be 20 officers and employees who are employed by both UAMFSI and the Fund. The compensation of such person or persons for such employment shall be paid by UAMFSI and no obligation will be incurred by or on behalf of the Fund in such respect. Effective February 28, 1997, the Fund entered into an Account Services Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc. (the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services Agreement, the Service Provider agrees to perform certain services for participants in a self-directed, defined contribution plan, and for whom the Service Provider provides participant recordkeeping. Pursuant to the Services Agreement, the Service Provider is entitled to receive, after the end of each month, a fee at the annual rate of 0.15% of the average aggregate daily net asset value of shares of the Portfolios in the accounts for which it provides services. During the fiscal year ended April 30, 1998, the Chicago Asset Management Value/Contrarian Portfolio and the Chicago Asset Management Intermediate Bond Portfolio paid the Service Provider $656 and $1,520, respectively, in fees pursuant to the Services Agreement, all of which were voluntarily waived. CUSTODIAN The Chase Manhattan Bank, 3 Chase Metro Tech Center, Brooklyn, New York 11245, provides for the custody of the Fund's assets pursuant to the terms of a custodian agreement with the Fund. INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, serves as independent accountants for the Fund. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, serves as the Fund's Distributor. Shares of the Fund are offered continuously. While the Distributor will use its best efforts to sell shares of the Fund, it is not obligated to sell any particular amount of shares. The Distributor received no compensation for its services from the Portfolio during the fiscal year ended April 30, 1998. PERFORMANCE CALCULATIONS PERFORMANCE The Portfolios may from time to time quote various performance figures to illustrate past performance. Performance quotations by investment companies are subject to rules adopted by the SEC, which require the use of standardized performance quotations or, alternatively, that every non-standardized performance quotation furnished by the Portfolio be accompanied by certain standardized performance information computed as required by the SEC. Current yield and average annual compounded total return quotations used by the Portfolio are based on the standardized methods of computing performance mandated by the SEC. An explanation of those methods used to compute or express performance follows. YIELD Current yield reflects the income per share earned by a Portfolio's investment. The current yield of a Portfolio is determined by dividing the net investment income per share earned during a 30-day base period by the maximum offering price per share on the last day of the period and annualizing the result. Expenses accrued for the period include any fees charged to all shareholders during the base period. The yield for the Chicago Asset Management Intermediate Bond Portfolio for the 30-day period ended April 30, 1998 was 5.20%. A yield figure is obtained using the following formula: 21 Yield = 2[(a - b + 1)/6/ - 1] ----- cd 22 where: a = dividends and interest earned during the period b = expenses accrued for the period (net of reimbursements) c = the average daily number of shares outstanding during the period that were entitled to receive income distributions d = the maximum offering price per share on the last day of the period. TOTAL RETURN The average annual total return of a Portfolio is determined by finding the average annual compounded rates of return over 1, 5 and 10 year periods that would equate an initial hypothetical $1,000 investment to its ending redeemable value. The calculation assumes that all dividends and distributions are reinvested when paid. The quotation assumes the amount was completely redeemed at the end of each 1, 5 and 10 year period and the deduction of all applicable Portfolio expenses on an annual basis. The average annual total return for the Chicago Asset Management Intermediate Bond Portfolio and Chicago Asset Management Value/Contrarian Portfolio from inception and for the one year period ended on the date of the Financial Statements included herein are as follows:
Average Annual Since One Year Ended Inception Through Year April 30, 1998 Ended April 30, 1998 Inception Date -------------- ----------------------- -------------- Intermediate Bond Portfolio........... 8.08% 7.85% 1/24/95 Value/Contrarian Portfolio............ 31.71% 21.97% 12/16/94
These figures are calculated according to the following formula: P(1 + T)n = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10 year periods (or fractional portion thereof). COMPARISONS To help investors better evaluate how an investment in either Portfolio of the Fund might satisfy their investment objective, advertisements regarding the Portfolios may discuss various measures of Portfolio performance as reported by various financial publications. Advertisements may also compare performance (as calculated above) to performance as reported by other investments, indices and averages. Please see Appendix B for publications, indices and averages which may be used. In assessing such comparisons of performance, an investor should keep in mind that the composition of the investments in the reported indices and averages is not identical to the composition of investments in a Portfolio, that the averages are generally unmanaged, and that the items included in the calculations of such averages may not be identical to the formula used by the Portfolio to calculate its performance. In addition, there can be no assurance that the Portfolio will continue this performance as compared to such other averages. 23 GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized under the name The Regis Fund II as a Delaware business trust on May 18, 1994. On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust". The Fund's principal executive office is located at One International Place, 44th Floor, Boston, MA 02110; however, all investor correspondence should be addressed to the Fund at UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial interest, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without further action by shareholders. The Board of Trustees has classified two additional classes of shares in each of the Portfolios, known as Institutional Service Shares and Advisor Shares. As of the date of this Statement of Additional Information, no Institutional Service Shares or Advisor Shares have been offered by these Portfolios. The shares of the Portfolios, when issued and paid for as provided for in their Prospectuses, will be fully paid and nonassessable, have no preference as to conversion, exchange, dividends, retirement or other features and have no preemptive rights. The shares of the Portfolios have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. Institutional Class, Service Class and Advisor Class Shares represent an interest in the same assets of a Portfolio and are identical in all respects except that the Service Class Shares bear certain expenses related to shareholder servicing and the distribution of such shares, and have exclusive voting rights with respect to matters relating to such distribution expenditures. In the event of liquidation of the Fund, the holders of the shares of each Portfolio or any class thereof that has been established and designated shall be entitled to receive, when and as declared by the Trustees, the excess of the assets belonging to that Portfolio, or in the case of a class, belonging to that Portfolio and allocable to that class, over the liabilities belonging to that Portfolio or class. The assets so distributable to the holders of shares of any particular Portfolio or class thereof shall be distributed to the holders in proportion to the number of shares of that Portfolio or class thereof held by them and recorded on the books of the Fund. The liquidation of any Portfolio or class thereof may be authorized at any time by vote of a majority of the Trustees then in office. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Fund's policy is to distribute substantially all of each Portfolio's net investment income, if any, together with any net realized capital gains annually in the amount and at the times that will avoid both income (including capital gains) taxes incurred and the imposition of the federal excise tax on undistributed income and capital gains. The amounts of any income dividends or capital gains distributions cannot be predicted. See discussion under "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" in the Prospectuses. 24 Any dividend or distribution paid shortly after the purchase of shares of a Portfolio by an investor may have the effect of reducing the per share net asset value of the portfolio by the per share amount of the dividend or distribution. Furthermore, such dividends or distributions, although in effect a return of capital, are subject to income taxes as set forth in the Prospectuses. As set forth in the Prospectuses, unless the shareholder elects otherwise in writing, all dividend and capital gains distributions are automatically reinvested in additional shares of the respective Portfolio of the Fund at net asset value (as of the business day following the record date). This will remain in effect until the Fund is notified by the shareholder in writing at least three days prior to the record date that either the Income Option (income dividends in cash and capital gains distributions in additional shares at net asset value) or the Cash Option (both income dividends and capital gains distributions in cash) has been elected. An account statement is sent to shareholders whenever an income dividend or capital gains distribution is paid. CODE OF ETHICS The Fund has adopted a Code of Ethics which restricts to a certain extent personal transactions by access persons of the fund and imposes certain disclosure and reporting obligations. 25 FINANCIAL STATEMENTS The audited financial statements and notes thereto in the Portfolio's Annual Report to Shareholders (the "1998 Annual Report") are incorporated by reference into this Statement of Additional Information. No other parts of the 1998 Annual Report are incorporated by reference herein. The Financial Statements included in the 1998 Annual Report have been audited by the Fund's independent accountants, PricewaterhouseCoopers LLP. The reports of PricewaterhouseCoopers LLP are incorporated herein by reference. Such financial statements have been incorporated herein in reliance upon such reports given upon the authority of PricewaterhouseCoopers LLP as experts in accounting and auditing. Copies of the 1998 Annual Report may be obtained free of charge by telephoning the UAM Funds Service Center at the telephone number appearing on the front page of this Statement of Additional Information. 26 APPENDIX A -- DESCRIPTION OF SECURITIES AND CORPORATE BOND RATINGS I. DESCRIPTION OF CORPORATE BOND RATINGS Moody's Investors Service Corporate Bond Ratings: Aaa -- Bonds which are rated Aaa are judged to be the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt-edge." Interest payments are protected by a large or by an exceptionally stable margin, and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa -- Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. Moody's Investors Service ("Moody's") applies numerical modifiers 1, 2 and 3 in the Aa and A rating categories. The modifier 1 indicates that the security ranks at a higher end of the rating category, modifier 2 indicates a mid-range rating and the modifier 3 indicates that the issue ranks at the lower end of the rating category. A -- Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa -- Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Ba -- Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B -- Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca -- Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C -- Bonds which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Standard & Poor's Corporation's Corporate Bond Ratings: AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's to a debt obligation and indicate an extremely strong capacity to pay principal and interest. A-1 AA -- Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only to a small degree. A -- Bonds rated A have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories. BBB -- Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than for debt in higher rated categories. BB, B, CCC, CC -- Debt rated BB, B, CCC and CC is regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. BB indicates the lowest degree of speculation and CC the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. C -- The rating C is reserved for income bonds on which no interest is being paid. D -- Debt rated D is in default, and payment of interest and/or repayment of principal is in arrears. II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES The term "U.S. Government Securities" refers to a variety of securities which are issued or guaranteed by the United States Government, and by various instrumentalities which have been established or sponsored by the United States Government. U.S. Treasury securities are backed by the "full faith and credit" of the United States. Securities issued or guaranteed by federal agencies and U.S. Government sponsored instrumentalities may or may not be backed by the full faith and credit of the United States. In the case of securities not backed by the full faith and credit of the United States, the investor must look principally to the agency or instrumentality issuing or guaranteeing the obligation for ultimate repayment, and may not be able to assess a claim against the United States itself in the event the agency or instrumentality does not meet its commitment. Agencies which are backed by the full faith and credit of the United States include the Export- Import Bank, Farmers Home Administration, federal Financing Bank, and others. Certain agencies and instrumentalities, such as the GNMA are, in effect, backed by the full faith and credit of the United States through provisions in their charters that they may make "indefinite and unlimited" drawings on the U.S. Treasury, if needed to service its debt. Debt from certain other agencies and instrumentalities, including the Federal Home Loan Bank and FNMA, is not guaranteed by the United States, but those institutions are protected by the discretionary authority of the U.S. Treasury to purchase certain amounts of their securities to assist the institution in meeting its debt obligations. Finally, other agencies and instrumentalities, such as the Farm Credit System and the FHLMC, are federally chartered institutions under government supervision, but their debt securities are backed only by the 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. A-2 III. DESCRIPTION OF COMMERCIAL PAPER The Portfolios may invest in commercial paper (including variable amount master demand notes) rated A-1 or better by Standard & Poor's Corporation ("S&P") or Prime-1 by Moody's or by S&P. Commercial paper refers to short-term, unsecured promissory notes issued by corporations to finance short-term credit needs. Commercial paper is usually sold on a discount basis and has a maturity at the time of issuance not exceeding nine months. Variable amount master demand notes are demand obligations that permit the investment of fluctuating amounts at varying market rates of interest pursuant to arrangement between the issuer and a commercial bank acting as agent for the payees of such notes whereby both parties have the right to vary the amount of the outstanding indebtedness on the notes. As variable amount master demand notes are direct lending arrangements between a lender and a borrower, it is not generally contemplated that such instruments will be traded, and there is no secondary market for these notes, although they are redeemable (and thus immediately repayable by the borrower) at face value, plus accrued interest, at any time. In connection with the Portfolio's investment in variable amount master demand notes, the Adviser's investment management staff will monitor, on an ongoing basis, the earning power, cash flow and other liquidity ratios of the issuer and the borrower's ability to pay principal and interest on demand. Commercial paper rated A-1 by S&P has the following characteristics: (1) liquidity ratios are adequate to meet cash requirements; (2) long-term senior debt is rated "A" or better; (3) the issuer has access to at least two additional channels of borrowing; (4) basic earnings and cash flow have an upward trend with allowance made for unusual circumstances; (5) typically, the issuer's industry is well established, and the issuer has a strong position within the industry; and (6) the reliability and quality of management are unquestioned. Relative strength or weakness of the above factors determine whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1 is the highest commercial paper rating assigned by Moody's. Among the factors considered by Moody's in assigning ratings are the following: (1) evaluation of the management of the issuer; (2) economic evaluation of the issuer's industry or industries and the appraisal of speculative-type risks which may be inherent in certain areas; (3) evaluation of the issuer's products in relation to completion and customer acceptance; (4) liquidity; (5) amount and quality of long term debt; (6) trend of earnings over a period of ten years; (7) financial strength of a parent company and the relationships which exist with the issuer; and (8) recognition by the management of issuer of obligations which may be present or may arise as a result of public interest questions and preparations to meet such obligations. IV. DESCRIPTION OF BANK OBLIGATIONS Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated interest rate. Certificates of deposit are negotiable short-term obligations of commercial banks. Variable rate certificates of deposit are certificates of deposit on which the interest rate is periodically adjusted prior to their stated maturity based upon a specified market rate. As a result of these adjustments, the interest rate on these obligations may increase or decrease periodically. Frequently, dealers selling variable rate certificates of deposit to the Portfolios will agree to repurchase such instruments, at a Portfolio's option, at par on or near the coupon dates. The dealers' obligations to repurchase these instruments are subject to conditions imposed by various dealers. Such conditions typically are the continued credit standing of the issuer and the existence of reasonably orderly market conditions. The Portfolios are also able to sell variable rate certificates of deposit in the secondary market. Variable rate certificates of deposit normally carry a higher interest rate than comparable fixed rate certificates of deposit. A banker's acceptance is a time draft drawn on a commercial bank by a borrower usually in connection with an international commercial transaction to finance the import, export, transfer or storage of goods. The borrower is liable for payment as well as the bank which unconditionally guarantees to pay the draft at its face amount on the maturity date. Most acceptances have maturities of six months or less and are traded in the secondary markets prior to maturity. A-3 APPENDIX B - COMPARISONS (a) Dow Jones Composite Average or its component averages -- an unmanaged index composed of 30 blue-chip industrial corporation stocks (Dow Jones Industrial Average), 15 utilities company stocks and 20 transportation stocks. (b) Standard & Poor's 500 Stock Index or its component indices -- an unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40 utilities stocks and 20 transportation stocks. (c) Standard & Poor's 400 Mid Cap Index - consists of 400 domestic stocks chosen for market size, liquidity, and industry group representation. It is also a market-value weighted index and was the first benchmark of mid cap stock price movement. (d) The New York Stock Exchange composite or component indices -- unmanaged indices of all industrial, utilities, transportation and finance stocks listed on the New York Stock Exchange. (e) Wilshire 5000 Equity Index or its component indices -- represents the return on the market value of all common equity securities for which daily pricing is available. (f) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income Fund Performance Analysis -- measure total return and average current yield for the mutual fund industry. Rank individual mutual fund performance over specified time periods, assuming reinvestment of all distributions, exclusive of any applicable sales charges. (g) Lipper Capital Appreciation Funds Index - a fund that aims at maximum capital appreciation, frequently by means of 100% or more portfolio turnover, leveraging, purchasing unregistered securities, purchasing options, etc. The fund may take large cash positions. (h) Lipper Small Cap Funds Index- a fund that by prospectus or portfolio practice invests primarily in companies with market capitalizations of less than $1 billion at the time of purchase. (i) Morgan Stanley Capital International EAFE Index and World Index -- respectively, arithmetic, market value-weighted averages of the performance of over 900 securities listed on the stock exchanges of countries in Europe, Australia and the Far East, and over 1,400 securities listed on the stock exchanges of these continents, including North America. (j) Goldman Sachs 100 Convertible Bond Index -- currently includes 67 bonds and 33 preferred. The original list of names was generated by screening for convertible issues of 100 million or greater in market capitalization. The index is priced monthly. (k) Salomon Brothers GNMA Index -- includes pools of mortgages originated by private lenders and guaranteed by the mortgage pools of the Government National Mortgage Association. (l) Salomon Brothers High Grade Corporate Bond Index -- consists of publicly issued, non-convertible corporate bonds rated AA or AAA. It is a value-weighted, total return index, including approximately 800 issues with maturities of 12 years or greater. (m) Salomon Brothers Broad Investment Grade Bond Index -- is a market- weighted index that contains approximately 4,700 individually priced investment grade corporate bonds rated BBB or better, U.S. Treasury/agency issues and mortgage pass through securities. B-1 (n) Lehman Brothers Long-Term Treasury Bond Index -- is composed of all bonds covered by the Lehman Brothers Treasury Bond Index with maturities of 10 years or greater. (o) Lehman Brothers Government/Corporate Index -- is a combination of the Government and Corporate Bond Indices. The Government Index includes public obligations of the U.S. Treasury, issues of Government agencies, and corporate debt backed by the U.S. Government. The Corporate Bond Index includes fixed-rate nonconvertible corporate debt. Also included are Yankee Bonds and nonconvertible debt issued by or guaranteed by foreign or international governments and agencies. All issues are investment grade (BBB) or higher, with maturities of at least one year and an outstanding par value of at least $100 million for U.S. Government issues and $25 million for others. Any security downgraded during the month is held in the index until month-end and then removed. All returns are market value weighted inclusive of accrued income. (p) NASDAQ Industrial Index -- is composed of more than 3,000 industrial issues. It is a value-weighted index calculated on price change only and does not include income. (q) Value Line -- composed of over 1,600 stocks in the Value Line Investment Survey. (r) Russell 2000 Index -- composed of the 2,000 smallest stocks in the Russell 3000, a market value-weighted index of the 3,000 largest U.S. publicly-traded companies. (s) Salomon Brothers 3 Month T-Bill Average - the average return for all Treasury bills for the previous three month period. (t) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70% Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35% Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade Bond Index; all stocks on the NASDAQ system exclusive of those traded on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Salomon Brothers High Grade Bond Index. (u) CDA Mutual Fund Report published by CDA Investment Technologies, Inc. -- analyzes price, current yield, risk, total return and average rate of return (average compounded growth rate) over specified time periods for the mutual fund industry. (v) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes price, yield, risk and total return for equity funds. (w) Financial publications: Business Week, Changing Times, Financial World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial Times, Global Investor, Wall Street Journal and Weisenberger Investment Companies Service -- publications that rate fund performance over specified time periods. (x) Consumer Price Index (or Cost of Living Index), published by the U.S. Bureau of Labor Statistics -- a statistical measure of change over time in the price of goods and services in major expenditure groups. (y) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates - - historical measure of yield, price and total return for common and small company stock, long-term government bonds, U.S. Treasury bills and inflation. (z) Savings and Loan Historical Interest Rates -- as published by the U.S. Savings & Loan League Fact Book. B-2 (aa) Historical data supplied by the research departments of First Boston Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg L.P. B-3 PART B UAM FUNDS FPA CRESCENT PORTFOLIO STATEMENT OF ADDITIONAL INFORMATION -- July 17, 1998 This Statement of Additional Information ("SAI") is not a Prospectus but should be read in conjunction with the Prospectuses of the UAM Funds Trust for the FPA Crescent Portfolio dated July 17, 1998 (the "Portfolio") relating to the Portfolio's Institutional Class Shares and Institutional Service Class Shares ("Service Class Shares"). To obtain the Prospectuses, please call the UAM Funds Service Center at 1-800-638-7983. TABLE OF CONTENTS INVESTMENT OBJECTIVE AND POLICIES....................................... 2 PURCHASE AND REDEMPTION OF SHARES....................................... 8 VALUATION OF SHARES..................................................... 9 SHAREHOLDER SERVICES.................................................... 9 MANAGEMENT OF THE FUND.................................................. 10 INVESTMENT ADVISER...................................................... 12 SERVICE AND DISTRIBUTION PLANS.......................................... 14 PORTFOLIO TRANSACTIONS.................................................. 16 ADMINISTRATIVE SERVICES................................................. 16 CUSTODIAN............................................................... 18 INDEPENDENT ACCOUNTANTS................................................. 18 DISTRIBUTOR............................................................. 18 PERFORMANCE CALCULATIONS................................................ 18 GENERAL INFORMATION..................................................... 19 FINANCIAL STATEMENTS.................................................... 20 APPENDIX A -- DESCRIPTION OF SECURITIES AND RATINGS..................... A-1 APPENDIX B - COMPARISONS................................................ B-1
Investment Adviser First Pacific Advisors, Inc. (Adviser) Distributor UAM Fund Distributors, Inc. (Distributor) Administrator and Transfer Agent UAM Fund Services, Inc. (UAMFSI) INVESTMENT OBJECTIVE AND POLICIES The following discussion supplements the discussion of the Portfolio's investment objective and policies as set forth in the Portfolio's Prospectuses for the Institutional Class Shares and Service Class Shares. LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified brokers, dealers, domestic and foreign banks or other financial institutions, so long as the terms, the structure and the aggregate amount of such loans are not inconsistent with the Investment Company Act of 1940, as amended, (the "1940 Act") or the Rules and Regulations or interpretations of the Securities and Exchange Commission (the "SEC") thereunder, which currently require that (a) the borrower pledge and maintain with the Portfolio collateral consisting of cash, an irrevocable letter of credit issued by a domestic U.S. bank or securities issued or guaranteed by the United States Government having a value at all times not less than 100% of the value of the securities loaned, (b) the borrower add to such collateral whenever the price of the securities loaned rises (i.e., the borrower "marks to the market" on a daily basis), (c) the loan be made subject to termination by the Portfolio at any time, and (d) the Portfolio receives reasonable interest on the loan (which may include the Portfolio investing any cash collateral in interest-bearing short-term investments). The Portfolio will not loan securities to the extent that greater than one third of its assets (including the value of the collateral for the loans) at fair market value would be committed to loans. As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the securities loaned if the borrower of the securities fails financially. These risks are similar to the ones involved with repurchase agreements as discussed below and in the Prospectuses. REPURCHASE AGREEMENTS The Portfolio may enter into repurchase agreements as discussed in the Prospectuses. Under such agreements, the seller of the security agrees to repurchase it at a mutually agreed upon time and price. The repurchase price may be higher than the purchase price, the difference being income to the Portfolio, or the purchase and repurchase prices may be the same, with interest at a stated rate due to the Portfolio together with the repurchase price at the time of repurchase. In either case, the income to the Portfolio is unrelated to the interest rate on the security itself. The Portfolio will generally enter into repurchase agreements of short durations, from overnight to one week, although the underlying securities generally have longer maturities. The Portfolio may not enter into a repurchase agreement with more than seven days to maturity if, as a result, more than 15% of the value of the Portfolio's total assets would be invested in illiquid securities including such repurchase agreements. For purposes of the 1940 Act, a repurchase agreement is deemed to be a loan from the Portfolio to the seller of the U.S. Government security subject to the repurchase agreement. It is not clear whether a court would consider the U.S. Government security acquired by the Portfolio subject to a repurchase agreement as being owned by the Portfolio or as being collateral for a loan by the Portfolio to the seller. In the event of the commencement of bankruptcy or insolvency proceedings with respect to the seller of the U.S. Government security before its repurchase under a repurchase agreement, the Portfolio may encounter delays and incur costs before being able to sell the security. Delays may involve loss of interest or a decline in price of the U.S. Government security. If a court characterizes the transaction as a loan and the Portfolio has not perfected a security interest in the U.S. Government security, the Portfolio may be required to return the security to the seller's estate and be treated as an unsecured creditor of the seller. As an unsecured creditor, the Portfolio would be at the risk of losing some or all of the principal and income involved in the transaction. As with any unsecured debt instrument purchased for the Portfolio, the investment manager seeks to minimize the risk of loss through repurchase agreements by analyzing the creditworthiness of the obligor, in this case the seller of the security. Apart from the risk of bankruptcy or insolvency proceedings, there is also the risk that the seller may fail to repurchase the security. However, the Portfolio will always receive as collateral for any repurchase agreement securities acceptable to it, the market value of which is equal to at least 100% of the amount invested by the 2 Portfolio plus accrued interest, and the Portfolio will make payment against such securities only upon physical delivery or evidence of book entry transfer to the account of its Custodian. If the market value of the U.S. Government security subject to the repurchase agreement becomes less than the repurchase price (including interest), the Portfolio will direct the seller of the U.S. Government security to deliver additional securities so that the market value of all securities subject to the repurchase agreement will equal or exceed the repurchase price. It is possible that the Portfolio will be unsuccessful in seeking to impose on the seller a contractual obligation to deliver additional securities. WHEN-ISSUED SECURITIES The Portfolio may from time to time purchase securities on a "when- issued" basis. The price of such securities, which may be expressed in yield terms, is fixed at the time the commitment to purchase is made, but delivery and payment for the when-issued securities take place at a later date. Normally, the settlement date occurs within one month of the purchase; during the period between purchase and settlement, no payment is made by the Portfolio to the issuer and no interest accrues to the Portfolio. To the extent that assets of the Portfolio are held in cash pending the settlement of a purchase of securities, the Portfolio would earn no income; however, it is the Portfolio's intention to be fully invested to the extent practicable and subject to the policies stated above. While when-issued securities may be sold prior to the settlement date, the Portfolio intends to purchase such securities with the purpose of actually acquiring them unless a sale appears desirable for investment reasons. At the time the Portfolio makes the commitment to purchase a security on a when-issued basis, it will record the transaction and reflect the value of the security in determining its net asset value. The market value of the when-issued securities may be more or less than the purchase price. The Portfolio does not believe that its net asset value or income will be adversely affected by its purchase of securities on a when-issued basis. The Portfolio will establish a segregated account with its Custodian in which it will maintain cash or liquid securities equal in value to commitments for when-issued securities. Such segregated securities either will mature or, if necessary, be sold on or before the settlement date. FOREIGN SECURITIES Among the means through which the Portfolio may invest in foreign securities is the purchase of American Depository Receipts ("ADRs") or European Depository Receipts ("EDRs"). Generally, ADRs, in registered form, are denominated in U.S. dollars and are designed for use in the U.S. securities markets, while EDRs, in bearer form, may be denominated in other currencies and are designed for use in European securities markets. ADRs are receipts typically issued by a U.S. bank or trust company evidencing ownership of the underlying securities. EDRs are European receipts evidencing a similar arrangement. For purposes of the Portfolio's investment policies, ADRs and EDRs are deemed to have the same classification as the underlying securities they represent. Thus an ADR or EDR representing ownership of common stock will be treated as common stock. DEBT SECURITIES AND RATINGS Ratings of debt securities represent the rating agencies' opinions regarding their quality, are not a guarantee of quality and may be reduced after the Portfolio has acquired the security. The Advisor will consider whether the Portfolio should continue to hold the security but is not required to dispose of it. Credit ratings attempt to evaluate the safety of principal and interest payments and do not evaluate the risks of fluctuations in market value. Also, rating agencies may fail to make timely changes in credit ratings in response to subsequent events, so that an issuer's current financial conditions may be better or worse than the rating indicates. The Portfolio reserves the right to invest up to 30% of its total assets in securities rated lower than BBB by S & P or lower than Baa by Moody's Investors Service. Lower rated securities generally offer a higher current yield than that available for higher grade issues. However, lower rated securities involve higher risks, in that they are especially subject to adverse changes in general economic conditions and in the industries in which the issuers are engaged, to changes in the financial condition of the issuers and to price fluctuations in response to changes in interest rates. During periods of economic downturn or rising interest rates, highly leveraged issuers may experience financial stress which could adversely affect their ability to make payments of interest and principal and increase the possibility of default. In addition, the market for lower rated debt securities has expanded rapidly in recent years, 3 and its growth paralleled a long economic expansion. At times in recent years, the prices of many lower rated debt securities have declined substantially, reflecting an expectation that many issuers of such securities might experience financial difficulties. As a result, the yields on lower rated debt securities rose dramatically, but such higher yields did not reflect the value of the income stream that holders of such securities expected, but rather, the risk that holders of such securities could lose a substantial portion of their value as a result of the issuers' financial restructuring or default. There can be no assurance that such declines will not recur. The market for lower-rated debt issues generally is thinner and less active than that for higher quality securities, which may limit the Portfolio's ability to sell such securities at fair value in response to changes in the economy or financial markets. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may also decrease the values and liquidity of lower rated securities, especially in a thinly traded market. SHORT SALES The Portfolio may seek to hedge investments or realize additional gains through short sales. The Portfolio may make short sales, which are transactions in which the Portfolio sells a security it does not own, in anticipation of a decline in the market value of that security. To complete such a transaction, the Portfolio must borrow the security to make delivery to the buyer. The Portfolio then is obligated to replace the security borrowed by purchasing it at the market price at or prior to the time of replacement. The price at such time may be more or less than the price at which the security was sold by the Portfolio. Until the security is replaced, the Portfolio is required to repay the lender any dividends or interest that accrue during the period of the loan. To borrow the security, the Portfolio also may be required to pay a premium, which would increase the cost of the security sold. The net proceeds of the short sale will be retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out. The Portfolio also will incur transaction costs in effecting short sales. The Portfolio will incur a loss as a result of the short sale if the price of the security increases between the date of the short sale and the date on which the Portfolio replaces the borrowed security. The Portfolio will realize a gain if the security declines in price between those dates. The amount of any gain will be decreased, and the amount of any loss increased by the amount of the premium, dividends, interest, or expenses the Portfolio may be required to pay in connection with a short sale. No securities will be sold short if, after effect is given to any such short sale, the total market value of all securities sold short would exceed 25% of the value of the Portfolio's net equity. The Portfolio similarly will limit its short sales of the securities of any single issuer if the market value of the securities that have been sold short by the Portfolio would exceed the two percent (2%) of the value of the Portfolio's net equity or if such securities would constitute more than two percent (2%) of any class of the issuer's securities. Whenever the Portfolio engages in short sales, its custodian segregates an amount of cash or liquid securities equal to the difference between (a) the market value of the securities sold short at the time they were sold short and (b) any cash or U.S. Government securities required to be deposited with the broker in connection with the short sale (not including the proceeds from the short sale). The segregated assets are marked to market daily, provided that at no time will the amount deposited in the segregated account plus the amount deposited with the broker be less than the market value of the securities at the time they were sold short. In addition, the Portfolio may make short sales "against the box," i.e. when a security identical to one owned by the Portfolio is borrowed and sold short. If the Portfolio enters into a short sale against the box, it is required to segregate securities equivalent in kind and amount to the securities sold short (or securities convertible or exchangeable into such securities) and is required to hold such securities while the short sale is outstanding. The Portfolio will incur transaction costs, in connection with opening, maintaining, and closing short sales against the box. 4 OPTIONS AND FUTURES TRANSACTIONS As indicated in the Prospectuses, to the extent consistent with its investment objectives and policies, the Portfolio may purchase and write call and put options on securities, securities indexes and on foreign currencies and enter into futures contracts and use options on futures contracts, to the extent of up to 5% of its assets. Transactions in options on securities and on indexes involve certain risks. For example, there are significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives. A decision as to whether, when and how to use options involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events. There can be no assurance that a liquid market will exist when the Portfolio seeks to close out an option position. If the Portfolio were unable to close out an option that it had purchased on a security, it would have to exercise the option in order to realize any profit or the option may expire worthless. If the Portfolio were unable to close out a covered call option that it had written on a security, it would not be able to sell the underlying security unless the option expired without exercise. As the writer of a covered call option, the Portfolio forgoes, during the option's life, the opportunity to profit from increases in the market value of the security covering the call option above the sum of the premium and the exercise price of the call. If trading were suspended in an option purchased by the Portfolio, the Portfolio would not be able to close out the option. If restrictions on exercise were imposed, the Portfolio might be unable to exercise an option it has purchased. Except to the extent that a call option on an index written by the Portfolio is covered by an option on the same index purchased by the Portfolio, movements in the index may result in a loss to the Portfolio; such losses may be mitigated or exacerbated by changes in the value of the Portfolio's securities during the period the option was outstanding. Use of futures contracts and options thereon also involves certain risks. The variable degree of correlation between price movements of futures contracts and price movements in the related portfolio positions of the Portfolio creates the possibility that losses on the hedging instrument may be greater than gains in the value of the Portfolio's position. Also, futures and options markets may not be liquid in all circumstances and certain over-the- counter options may have no markets. As a result, in certain markets, the Portfolio might not be able to close out a transaction at all or without incurring losses. Although the use of options and futures transactions for hedging should minimize the risk of loss due to a decline in the value of the hedged position, at the same time it tends to limit any potential gain which might result from an increase in the value of such position. If losses were to result from the use of such transactions, they could reduce net asset value and possibly income. The Portfolio may use these techniques to hedge against changes in interest rates or securities prices or as part of its overall investment strategy. The Portfolio will maintain segregated accounts consisting of cash or liquid securities (or, as permitted by applicable regulation, enter into certain offsetting positions) to cover its obligations under options and futures contracts to avoid leveraging of the Portfolio. INFLATION-INDEXED BONDS Inflation-indexed bonds issued by the U.S. Treasury pay interest on a semi-annual basis, equal to a fixed percentage of the inflation-adjusted principal amount. For example, if a fund purchased an inflation-indexed bond with a par value of $1,000 and a 3% real rate of return coupon (payable 1.5% semi-annually), and inflation over the first six months was 1%, the mid-year par value of the bond would be $1,010 and the first semi-annual interest payment would be $15.15 ($1,010 times 1.5%). If inflation continued during the second half of the year and reached 3% by year end, the end-of-year par value of the bond would be $1,030 and the second semi-annual interest payment would be $15.45 ($1,030 times 1.5%). 5 The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates in turn are tied to the relationship between nominal interest rates and the rate of inflation. Therefore, if inflation were to rise faster than nominal interest rates, real interest rates might decline, leading to an increase in the value of inflation- indexed bonds. In contrast, if nominal interest rates increased at a faster rate than inflation, real interest might rise, leading to a decrease in the value of inflation-indexed bonds. While these securities are expected to be protected from long-term inflationary trends, short-term increases in inflation may lead to a decline in value. If interest rates rise due to reasons other than inflation (for example, due to changes in currency exchange rates), investors in these securities may not be protected to the extent that the increase is not reflected in the bond's inflation measure. The periodic adjustment of the U.S. inflation-indexed bonds is tied to the Consumer Price Index for Urban Consumers ("CPI-U"), which is calculated monthly by the U.S. Bureau of Labor Statistics. The CPI-U is a measurement of changes in the cost of living, made up of components such as housing, food, transportation and energy. There can be no assurance that the CPI-U will accurately measure the real rate of inflation in the prices of goods and services. INVESTMENT RESTRICTIONS The following limitations supplement those set forth in the Prospectuses of the Portfolio. The Portfolio's fundamental investment limitations cannot be changed without the approval of a "majority of the outstanding shares" (as defined in the 1940 Act) of the Portfolio. Except for the numbered investment limitations noted as fundamental below however, the limitations described below are not fundamental, and may be changed without the consent of shareholders. Whenever an investment limitation sets forth a percentage limitation on investment or utilization of assets, such limitation shall be determined immediately after and as a result of the Portfolio's acquisition of such security or other asset. Accordingly, any later increase or decrease resulting from a change in values, net assets or other circumstances will not be considered when determining whether the investment complies with the Portfolio's investment limitations. As a matter of fundamental policy, the Portfolio will not: 6 (1) make loans to others, except (i) through the purchase of debt securities in accordance with its investment objective and policies, and (ii) to the extent the entry into a repurchase agreement is deemed to be a loan; (2) (i) borrow money, except as stated in the Prospectuses and this SAI. Any such borrowing will be made only if immediately thereafter there is an asset coverage of at least 300% of all borrowings; (ii) mortgage, pledge or hypothecate any of its assets except in connection with any such borrowings; (3) purchase securities on margin, participate on a joint or joint and several basis in any securities trading account, or underwrite securities (does not preclude the Portfolio from obtaining such short- term credit as may be necessary for the clearance of purchases and sales of its portfolio securities); (4) purchase or sell commodities or commodity contracts (other than futures transactions for the purposes and under the conditions described in the Prospectuses and in this SAI); (5) invest more than 25% of the market value of its assets in the securities of companies engaged in any one industry (does not apply to investment in the securities of the U.S. Government, its agencies or instrumentalities); (6) issue senior securities, as defined in the 1940 Act, except that this restriction shall not be deemed to prohibit the Portfolio from (i) making any permitted borrowings, mortgages or pledges, or (ii) entering into options, futures or repurchase transactions; (7) purchase the securities of any issuer, if as a result more than 5% of the total assets of the Portfolio would be invested in the securities of that issuer, other than obligations of the U.S. Government, its agencies or instrumentalities, provided that up to 25% of the value of the Portfolio's assets may be invested without regard to this limitation; (8) purchase or sell real estate; however, the Portfolio may invest in debt securities secured by real estate or interests therein or issued by companies which invest in real estate or interests therein, including real estate investment trusts; (9) with respect to 75% of its assets, own more than 5% of the securities of any single issuer (other than investments issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities); and (10) with respect to 75% of its assets, own more than 10% of the outstanding voting securities of any one issuer. For the purposes of (2) above, the Portfolio may not borrow except from banks for temporary or emergency purposes and in connection with short sales of securities. In these situations, the Portfolio will limit borrowings to no more than 331/3% of the Portfolio's assets, and the Portfolio may not purchase additional securities when borrowings exceed 5% of its total assets. Investment restriction (6) above shall not be deemed to prohibit the Portfolio from engaging in short sales of securities as described in the Prospectuses under "Additional Investment Policies" and in this SAI under "Investment Objective and Policies." As a matter of non-fundamental policy, the Portfolio will not: 7 (11) purchase any security if as a result the Portfolio would then hold more than 10% of any class of securities of an issuer (taking all common stock issues of an issuer as a single class, all preferred stock issues as a single class, and all debt issues as a single class) or more than 10% of the outstanding voting securities of an issuer; (12) invest in any issuer for purposes of exercising control or management; (13) invest in securities of other investment companies which would result in the Portfolio owning more than 3% of the outstanding voting securities of any one such investment company, the Portfolio owning securities of another investment company having an aggregate value in excess of 5% of the value of the Portfolio's total assets, or the Portfolio owning securities of investment companies in the aggregate which would exceed 10% of the value of the Portfolio's total assets; and (14) invest, in the aggregate, more than 15% of its net assets in securities which are not readily marketable or are illiquid. PORTFOLIO TURNOVER The portfolio turnover rate described in the Prospectuses is calculated by dividing the lesser of purchases or sales of portfolio securities for the year by the monthly average of the value of the portfolio securities. The calculation excludes all securities, including options, whose maturities at the time of acquisition were one year or less. Portfolio turnover may vary greatly from year to year as well as within a particular year, and may also be affected by cash requirements for redemptions of shares. See "Financial Highlights" in the Prospectuses for the historical portfolio turnover rates with respect to the Portfolio. PURCHASE AND REDEMPTION OF SHARES Shares of the Portfolio may be purchased without a sales commission at the net asset value per share next determined after an order is received in proper form by the Fund and payment is received by the Fund or its designated Service Agent. The minimum initial investment required for the Portfolio is $2,500, with certain exceptions as may be permitted from time to time by the officers of the Fund. Other investment minimums are: initial IRA investment, $500; initial spousal IRA investment, $250; and additional investment for all accounts, $100. An order received in proper form prior to the close of regular trading on the New York Stock Exchange (the "Exchange") (generally 4:00 p.m. Eastern Time) will be executed at the price computed on the date of receipt; and an order received not in proper form or after the close of the Exchange will be executed at the price computed on the next day the Exchange is open after proper receipt. The Exchange will be closed on the following days: New Year's Day, Dr. Martin Luther King, Jr.'s Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Portfolio reserves the right in its sole discretion (1) to suspend the offering of its shares, (2) to reject purchase orders when in the judgment of management such rejection is in the best interests of the Fund, and (3) to reduce or waive the minimum for initial and subsequent investment for certain fiduciary accounts such as employee benefit plans or under circumstances where certain economies can be achieved in sales of a Portfolio's shares. The Portfolio may suspend redemption privileges or postpone the date of payment (1) during any period that both the Exchange and custodian bank are closed or trading on the Exchange is restricted as 8 determined by the SEC, (2) during any period when an emergency exists as defined by the rules of the SEC as a result of which it is not reasonably practicable for the Portfolio to dispose of securities owned by it or to fairly determine the value of its assets, and (3) for such other periods as the SEC may permit. The Fund has made an election with the SEC to pay in cash all redemptions requested by any shareholder of record limited in amount during any 90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at the beginning of such period. Such commitment is irrevocable without the prior approval of the SEC. Redemptions in excess of the above limits may be paid, in whole or in part, in investment securities or in cash as the Directors may deem advisable; however, payment will be made wholly in cash unless the Directors believe that economic or market conditions exist which would make such a practice detrimental to the best interests of the Fund. If redemptions are paid in investment securities, such securities will be valued as set forth in the Prospectuses under "VALUATION OF SHARES," and a redeeming shareholder would normally incur brokerage expenses if these securities were converted to cash. No charge is made by the Portfolio for redemptions. Any redemption may be more or less than the shareholder's initial cost depending on the market value of the securities held by the Portfolio. SIGNATURE GUARANTEES To protect your account, the Fund and Chase Global Funds Services Company ("CGFSC") from fraud, signature guarantees are required for certain redemptions. The purpose of signature guarantees is to verify the identity of the person who has authorized a redemption from your account. Signature guarantees are required for (1) all redemptions when the proceeds are to be paid to someone other than the registered owner(s) and/or registered address, or (2) share transfer requests. Signatures must be guaranteed by an "eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. A complete definition of eligible guarantor institutions is available from the transfer agent. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. Signature guarantees will be accepted from any eligible guarantor institution which participates in a signature guarantee program. The signature guarantee must appear either: (1) on the written request for redemption; (2) on a separate instrument for assignment ("stock power") which should specify the total number of shares to be redeemed; or (3) on all stock certificates tendered for redemption and, if shares held by the Fund are also being redeemed, on the letter or stock power. VALUATION OF SHARES Equity securities listed on a securities exchange for which market quotations are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities not traded on the valuation date for which market quotations are readily available are valued neither exceeding the current asked prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars as quoted by any major bank or broker. Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the- counter market. Bonds and other fixed income securities may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost, which approximates market value. 9 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 Fund's Board of Trustees. SHAREHOLDER SERVICES The following supplements the information set forth under "Shareholder Services" in the Prospectuses. EXCHANGE PRIVILEGE Institutional Class Shares of the Portfolio may be exchanged for any other Institutional Class Shares of any other UAM Funds or UAM Funds, Inc. Portfolio. Similarly, Service Class Shares of the Portfolio may be exchanged for shares of other UAM Funds or UAM Funds, Inc. Portfolios' Service Class Shares. Exchange requests should be made by calling the Fund (1-800-638-7983) or by writing to UAM Funds, UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The exchange privilege is only available with respect to Portfolios that are qualified for sale in the shareholder's state of residence. Any such exchange will be based on the respective net asset values of the shares involved. There is no sales commission or charge of any kind. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objectives of the Portfolio to be purchased. You may obtain a Prospectus for the Portfolio(s) you are interested in by calling the UAM Funds Service Center at 1-800-638-7983. Telephone exchanges will be accepted only if the certificates for the shares to be exchanged have not been issued to the shareholder, and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading of the Exchange (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the Exchange will be processed on the next business day. Neither the Fund nor CGFSC will be responsible for the authenticity of the exchange instructions received by telephone. Exchanges may also be subject to limitations as to amounts or frequency and to other restrictions established by the Board of Trustees to assure that such exchanges do not disadvantage the Fund and its shareholders. For federal income tax purposes an exchange between Portfolios is a taxable event, and, accordingly, a capital gain or loss may be realized. In a revenue ruling relating to circumstances similar to the Fund's, an exchange between series of a Fund was also deemed to be a taxable event. It is likely, therefore, that a capital gain or loss would be realized on an exchange between Portfolios; you may want to consult your tax adviser for further information in this regard. The exchange privilege may be modified or terminated at any time. MANAGEMENT OF THE FUND TRUSTEES AND OFFICERS The Officers of the Fund manage its day-to-day operations and are responsible to the Fund's Board of Trustees. The Trustees set broad policies for the Fund and elect its Officers. The following is a list of the Trustees and Officers of the Fund, their dates of birth, addresses, and a brief statement of their present positions and principal occupations during the past five years. John T. Bennett, Jr. (1/26/29), Trustee; College Road--RFD 3, Meredith, NH 03253; President of Squam Investment Management Company, Inc. and Great Island Investment Company, Inc.; President of Bennett Management Company from 1988 to 1993. Nancy J. Dunn (8/14/51), Trustee; 10 Garden Street, Cambridge, MA 02138; Vice President for Finance and Administration and Treasurer of Radcliffe College since 1991. 10 Philip D. English (8/5/48), Trustee; 16 West Madison Street, Baltimore, MD 21201; President and Chief Executive Officer of Broventure Company, Inc.; Chairman of the Board of Chektec Corporation and Cyber Scientific, Inc. William A. Humenuk (4/21/42), Trustee; 100 King Street West, P.O. Box 2440, LCD- 1, Hamilton Ontario, Canada L8N-456; Executive Vice President and Chief Administrative Officer of Philip Services Corp.; Director, Hofler Corp.; Formerly, a Partner in the Philadelphia office of the law firm Dechert Price & Rhoads. Norton H. Reamer* (3/21/35), Trustee; One International Place, Boston, MA 02110; President and Chairman of the Fund; President, Chief Executive Officer and a Director of United Asset Management Corporation; Director, Partner or Trustee of each of the Investment Companies of the Eaton Vance Group of Mutual Funds. Peter M. Whitman, Jr.* (7/1/43), Trustee; One Financial Center, Boston, MA 02111; President and Chief Investment Officer of Dewey Square Investors Corporation ("DSI") since 1988; Director and Chief Executive Officer of H. T. Investors, Inc., formerly a subsidiary of DSI. William H. Park (9/19/47), Vice President; One International Place, Boston, MA 02110; Executive Vice President and Chief Financial Officer of United Asset Management Corporation. Gary L. French (7/4/51), Treasurer; 211 Congress Street, Boston, MA 02110; President of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; formerly Vice President of Operations, Development and Control of Fidelity Investment in 1995; Treasurer of the Fidelity Group of Mutual Funds from 1991 to 1995. Michael E. DeFao (2/28/68), Secretary; 211 Congress Street, Boston, MA 02110; Vice President and General Counsel of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; Associate Attorney of Ropes & Gray (a law firm) from 1993 to 1995. Robert R. Flaherty (9/18/63), Assistant Treasurer; 211 Congress Street, Boston, MA 02110; Vice President of UAM Fund Services, Inc.; formerly Manager of Fund Administration and Compliance of Chase Global Fund Services Company from 1995 to 1996; Deloitte & Touche LLP from 1985 to 1995, Senior Manager. Michelle Azrialy (4/12/69), Assistant Secretary; 73 Tremont Street, Boston, MA 02108; Assistant Treasurer of Chase Global Funds Services Company since 1996. Senior Public Accountant with Price Waterhouse LLP from 1991 to 1994. Gordon M. Shone (7/30/56), Assistant Treasurer; 73 Tremont Street, Boston, MA 02108; Vice President of Fund Administration and Compliance of Chase Global Funds Services Company; formerly Senior Audit Manager of Coopers & Lybrand LLP (1983-1996). *Messrs. Reamer and Whitman are deemed to be "interested persons" of the Fund as that term is defined in the 1940 Act. REMUNERATION OF TRUSTEES AND OFFICERS The Fund pays each Trustee, who is not also an officer or affiliated person, a $150 quarterly retainer fee per active Portfolio which currently amounts to $1,350 per quarter. In addition, each unaffiliated Trustee receives a $2,000 meeting fee which is aggregated for all the Trustees and allocated proportionately among the Portfolios of the Fund and UAM Funds, Inc. and reimbursement for travel and other expenses incurred while attending Board meetings. Trustees who are also officers or affiliated persons receive no remuneration for their service as Trustees. The Fund's officers and employees are paid by either the Adviser, United Asset Management 11 Corporation ("UAM"), or the Administrator and receive no compensation from the Fund. As of June 15, 1998, the Trustees and officers of the Fund owned less than 1% of the Fund's outstanding shares. The following table shows aggregate compensation paid to each of the Fund's Trustees by the Fund and total compensation paid by the Funds and UAM Funds, Inc. (collectively the "Fund Complex") in the fiscal year ended March 31, 1998. COMPENSATION TABLE
Pension or Retirement Estimated Total Compensation Aggregate Benefits Accrued Annual from Registrant Name of Person, Compensation as Part of Benefits Upon and Position From Registrant Fund Expenses Retirement Fund Complex -------- --------------- ------------- ---------- ------------ John T. Bennett, Jr. Trustee............. $6,149 0 0 $33,500 Philip D. English Trustee............. $6,149 0 0 $33,500 William A. Humenuk Trustee............. $6,149 0 0 $33,500 Nancy J. Dunn Trustee............. $4,668 0 0 $25,200
12 Peter M. Whitman, Jr. Trustee $ 0 0 0 $ 0 Norton H. Reamer Trustee............. $ 0 0 0 $ 0
13 PRINCIPAL HOLDERS OF SECURITIES As of June 15, 1998, the following persons or organizations held of record or beneficially 5% or more of the shares of the Portfolio: FPA Crescent Portfolio Institutional Class Shares: Charles Schwab & Co., Inc., Reinvest Account, 101 Montgomery St., San Francisco, CA, 48.8%*. FPA Crescent Portfolio Institutional Service Class Shares: Wilmington Trust Co., Trustee, FBO FIGGIE Institutional Investor Retirement & Profit Sharing Trust SV & PR 401K Plan, AC 421712, c/o Mutual Funds, 1100 N. Market St., Wilmington, DE, 41.5%*; Wilmington Trust Co., Trustee, FBO Loews Theaters Salaried Employees Profit Sharing & 401K Plan, c/o Mutual Funds, 1100 N. Market St., Wilmington, DE, 13.2%*; Wilmington Trust Co., Trustee, FBO FIGGIE Institutional Investor Retirement & Profit Sharing Trust Supp. Retirement SVS & Trust 401K Plan, MLF AC 436270, c/o Mutual Funds, 1100 N. Market St., Wilmington, DE, 12.5%*; Fleet National Bank, FBO Continental Homes 401K Retirement Plan, P.O. Box 92800, Rochester, NY, 12.2%*; and Wilmington Trust Co., Trustee, FBO FIGGIE Institutional Investor Retirement & Profit Sharing Trust 401K Plan, CLF AC 436260, c/o Mutual Funds, 1100 N. Market St., Wilmington, DE, 9.7%*. The persons or organizations listed above as owning 25% or more of the outstanding shares of a Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of such Portfolio. - -------- * Denotes shares held by a trustee or other fiduciary for which beneficial ownership is disclaimed or presumed disclaimed. INVESTMENT ADVISER PHILOSOPHY AND STYLE Equity Securities: The Adviser utilizes a contrarian investment style, which often leads to investing in "what other people do not wish to own." The Adviser searches for common stocks, preferred stocks, warrants and convertible securities that reflect low price/earnings ratios (P/Es) and trade at discounts to private market value. The Adviser deems the following to be important in its stock selection process: high return on capital; solid balance sheet; meaningful cash flow; active share repurchase program; insider buying; strong management, seeking to add shareholder value; and projected earnings growth exceeding the stock market average. In the Adviser's view, the stock market prices securities efficiently in the long term, rewarding companies which successfully grow their own earnings and penalizing those which do not. The investment philosophy is based on the conviction that the market valuation of securities is often inefficient in the short-term. The Adviser feels that hasty short-term decisions could cause a particular security, industry group or the entire market to become underpriced or overpriced in the short- term, thereby creating an excellent opportunity to either buy or sell. The Adviser's intensive research process includes looking for ideas by reviewing stock price or industry group under performance, insider purchasers, management changes and corporate spin-offs. Fundamental analysis is the foundation of the Adviser's investment approach. Fixed Income Obligations: Through fixed income investments, the Adviser seeks a reliable and recurring stream of income for the Portfolio, while preserving its capital. The Adviser attempts to identify the current interest rate trends and invests funds accordingly. Usually, a defensive strategy is employed, with investments made at 14 different points along the yield curve in an attempt to keep the average maturity of fixed income investments less than or equal to ten years. The Adviser considers yield spread relationships and their underlying factors such as credit quality, investor perception and liquidity on a continuous basis to determine which sector offers the best investment value. When combined with equity securities, the ownership of fixed income securities not only broadens the universe of opportunities, but offers additional diversification and can help lower portfolio volatility. REPRESENTATIVE INSTITUTIONAL CLIENTS As of the date of this Statement of Additional Information, the Adviser's representative institutional clients included: General Electric Investment Corporation; Eastman Kodak Company; Federated Department Stores, Inc.; Fox Inc.; Xerox Corporation; Southern Farm Bureau Life Insurance Company; Commonwealth of Pennsylvania Public School Employees Retirement System; and The Lannan Foundation. In compiling this client list, the Adviser used objective criteria such as account size, geographic location and client classification. The Adviser did not use any performance-based criteria. It is not known whether these clients approve or disapprove of the Adviser or the advisory services provided. SERVICES PERFORMED BY ADVISER Pursuant to an Investment Advisory Agreement ("Agreement") between the Fund and the Adviser, the Adviser has agreed to manage the investment and reinvestment of the Portfolio's assets, to continuously review, supervise and administer the Portfolio's investment program, and to determine in its discretion the securities to be purchased or sold and the portion of the Portfolio's assets to be held in cash or cash equivalents. In the absence of (i) willful misfeasance, bad faith or gross negligence on the part of the Adviser in the performance of its obligations and duties under the Agreement, (ii) reckless disregard by the Adviser of its obligations and duties under the Agreement, or (iii) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, the Adviser shall not be subject to any liability whatsoever to the Fund, or to any shareholder of the Fund, for any error of judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services under the Agreement. Unless sooner terminated, the Agreement shall continue for periods of one year so long as such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Trustees of the Fund who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, (b) by the Board of Trustees of the Fund, or (c) by vote of a majority of the outstanding voting securities of the Portfolio. The Agreement may be terminated at any time by the Portfolio, without the payment of any penalty, by vote of a majority of the entire Board of Trustees 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. The Agreement may be terminated by the Adviser at any time, without the payment of any penalty, upon 90 days written notice to the Fund. The Agreement will automatically and immediately terminate in the event of its assignment. CONTROL OF ADVISER The Adviser is an indirect wholly-owned subsidiary of UAM, a holding company incorporated in Delaware in December 1980 for the purpose of acquiring and owning firms engaged primarily in institutional investment management. Since its first acquisition in August 1983, UAM has acquired or organized over 45 such wholly-owned affiliated firms (the "UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to retain control over their investment advisory decisions is necessary to allow them to continue to provide investment management services that are intended to meet the particular needs of their respective clients. 15 Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to operate under their own firm name, with their own leadership and individual investment philosophy and approach. Each UAM Affiliated Firm manages its own business independently on a day-to-day basis. Investment strategies employed and securities selected by UAM Affiliated Firms are separately chosen by each of them. Several UAM Affiliated Firms also act as investment advisers to separate series or Portfolios of UAM Funds, Inc., a registered investment company. ADVISORY FEES As compensation for services rendered by the Adviser under the Investment Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly installments, calculated by applying the following annual percentage rate to the Portfolio's average daily net assets for the month: 1.00%. For the fiscal years ended March 31, 1996, 1997 and 1998, the Portfolio paid advisory fees of $189,156, $302,772 and $1,489,678, respectively. SERVICE AND DISTRIBUTION PLANS As stated in the Portfolio's Service Class Shares Prospectus, the Distributor may enter into agreements with broker-dealers and other financial institutions ("Service Agents"), pursuant to which they will provide administrative support services to Service Class shareholders who are their customers ("Customers") in consideration of the Fund's payment of 0.25% (on an annualized basis) of the average daily net asset value of the Service Class Shares held by the Service Agent for the benefit of its Customers. Such services include: (a) acting as the sole shareholder of record and nominee for beneficial owners; (b) maintaining account records for such beneficial owners of the Fund's shares; (c) opening and closing accounts; (d) answering questions and handling correspondence from shareholders about their accounts; (e) processing shareholder orders to purchase, redeem and exchange shares; (f) handling the transmission of funds representing the purchase price or redemption proceeds; (g) issuing confirmations for transactions in the Fund's shares by shareholders; (h) distributing current copies of prospectuses, statements of additional information and shareholder reports; (i) assisting customers in completing application forms, selecting dividend and other account options and opening any necessary custody accounts; (j) providing account maintenance and accounting support for all transactions; and (k) performing such additional shareholder services as may be agreed upon by the Fund and the Service Agent, provided that any such additional shareholder service must constitute a permissible non-banking activity in accordance with the then current regulations of, and interpretations thereof by, the Board of Governors of the Federal Reserve System, if applicable. Each agreement with a Service Agent is governed by a Shareholder Service Plan (the "Service Plan") that has been adopted by the Fund's Board of Trustees. Pursuant to the Service Plan, the Board of Trustees reviews, at least quarterly, a written report of the amounts expended under each agreement with Service Agents and the purposes for which the expenditures were made. In addition, arrangements with Service Agents must be approved 16 annually by a majority of the Fund's Trustees, including a majority of the Trustees who are not "interested persons" of the company as defined in the 1940 Act and have no direct or indirect financial interest in such arrangements. The Board of Trustees has approved the arrangements with Service Agents based on information provided by the Fund's service contractors that there is a reasonable likelihood that the arrangements will benefit the Fund and its shareholders by affording the Fund greater flexibility in connection with the servicing of the accounts of the beneficial owners of its shares in an efficient manner. Any material amendment to the Fund's arrangements with Service Agents must be approved by a majority of the Fund's Board of Trustees (including a majority of the disinterested Trustees). So long as the arrangements with Service Agents are in effect, the selection and nomination of the members of the Fund's Board of Trustees who are not "interested persons" (as defined in the 1940 Act) of the Fund will be committed to the discretion of such non-interested Trustees. The Service Plan may be terminated at any time by vote of a majority of the Trustees of the Fund who are not "interested persons" of the Fund and who have no direct or indirect financial interest in the operation of the Service Plan or any agreements related to the Service Plan or, at the discretion of the Board of Trustees of the Fund, by vote of a majority of the outstanding voting securities of the Fund. Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a Distribution Plan for the Service Class Shares of the Fund (the "Distribution Plan"). The Distribution Plan permits the Fund to pay for certain distribution, promotional and related expenses involved in the marketing of only the Service Class Shares. The Distribution Plan permits the Service Class Shares, pursuant to the Distribution Agreement, to pay a monthly fee to the Distributor for its services and expenses in distributing and promoting sales of the Service Class Shares. These expenses include, among other things, advertising the availability of services and products; designing materials to send to customers and developing methods of making such materials accessible to customers; providing information about the product needs of customers; providing facilities to solicit Fund sales and to answer questions from prospective and existing investors about the Fund; receiving and answering correspondence from prospective investors, including requests for sales literature, prospectuses and statements of additional information; displaying and making sales literature and prospectuses available; and acting as liaison between shareholders and the Fund, including obtaining information from the Fund and providing performance information about the Fund. In addition, the Service Class Shares may make payments directly to other unaffiliated parties, who either aid in the distribution of their shares or provide services to the Class. The maximum annual aggregate fee payable by the Fund under the Service and Distribution Plans (the "Plans"), is 0.75% of the Service Class Shares' average daily net assets for the year. The Fund's Board of Trustees may reduce this amount at any time. Although the maximum fee payable under the 12b-1 Plan relating to the Service Class Shares is 0.75% of average daily net assets of such class, the Board of Trustees has determined that the annual fee, payable on a monthly basis, under the Plans relating to the Service Class Shares, currently cannot exceed 0.50% of the average daily net assets represented by the Service Class. While the current fee which will be payable under the Service Plan and Distribution Plan has been set at 0.25%, the Plans permit a full 0.75% on all assets to be paid at any time following appropriate Board approval. All of the distribution expenses incurred by the Distributor and others, such as broker/dealers, in excess of the amount paid by the Service Class Shares will be borne by such persons without any reimbursement from such Classes. Subject to seeking best price and execution, the Fund may, from time to time, buy or sell portfolio securities from or to firms which receive payments under the Plans. From time to time, the Distributor may pay additional amounts from its own resources to dealers for aid in distribution or for aid in providing administrative services to shareholders. The Plans, the Distribution Agreement and the form of dealer's and services agreements have all been approved by the Board of Trustees of the Fund, including a majority of the Trustees who are not "interested persons" (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the Plans or 17 any related agreements, by vote cast in person at a meeting duly called for the purpose of voting on the Plan and such Agreements. Continuation of the Plans, the Distribution Agreement and the related agreements must be approved annually by the Board of Trustees in the same manner, as specified above. Each year the Trustees must determine whether continuation of the Plans is in the best interest of the shareholders of Service Class Shares and that there is a reasonable likelihood of the Plans providing a benefit to the Class. The Plans, the Distribution Agreement and the related agreements with any broker-dealer or others relating to the Class may be terminated at any time without penalty by a majority of those Trustees who are not "interested persons" or by a majority vote of the outstanding voting securities of the Class. Any amendment materially increasing the maximum percentage payable under the Plans must likewise be approved by a majority vote of the relevant Class' outstanding voting securities, as well as by a majority vote of those Trustees who are not "interested persons." Also, any other material amendment to the Plans must be approved by a majority vote of the Trustees including a majority of the Trustees of the Fund having no interest in the Plans. In addition, in order for the Plans to remain effective, the selection and nomination of Trustees who are not "interested persons" of the Fund must be effected by the Trustees who themselves are not "interested persons" and who have no direct or indirect financial interest in the Plans. Persons authorized to make payments under the Plans must provide written reports at least quarterly to the Board of Trustees for their review. The National Association of Securities Dealers Regulation, Inc. has adopted amendments to its Conduct Rules relating to investment company sales charges. The Fund and the Distributor intend to operate in compliance with these rules. During the fiscal year ended March 31, 1998, the Portfolio's Service Class Shares paid $28,629 for services provided pursuant to the Distribution Plan. PORTFOLIO TRANSACTIONS The Investment Advisory Agreement authorizes the Adviser to select the brokers or dealers that will execute the purchases and sales of investment securities for the Portfolio and directs the Adviser to use its best efforts to obtain the best execution with respect to all transactions for the Portfolio. In doing so, a Portfolio may pay higher commission rates than the lowest rate available when the Adviser believes it is reasonable to do so in light of the value of the research, statistical, and pricing services provided by the broker effecting the transaction. It is not the Fund's practice to allocate brokerage or effect principal transactions with dealers on the basis of sales of Fund shares which may be made through broker-dealer firms. However, the Adviser may place portfolio orders with qualified broker-dealers who recommend the Fund's Portfolios or who act as agents in the purchase of shares of the Portfolios for their clients. During the fiscal years ended March 31, 1996, 1997, and 1998, brokerage commissions paid by the Portfolio totaled $63,938, $50,128 and $213,179, respectively. The difference in brokerage commissions paid between fiscal years April 30, 1997 and 1998, was the result of growth in the portfolio's assets. Some securities considered for investment by the Portfolio may also be appropriate for other clients served by the Adviser. If purchases or sales of securities consistent with the investment policies of a Portfolio and one or more of these other clients served by the Adviser 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 Adviser. Although there is no specified formula for allocating such transactions, the various allocation methods used by the Adviser, and the results of such allocations, are subject to periodic review by the Fund's Trustees. ADMINISTRATIVE SERVICES The Board of Trustees of the Fund approved a Fund Administration Agreement, effective April 15, 1996 ("Fund Administration Agreement") between UAMFSI, a wholly owned subsidiary of UAM, and the Fund. Pursuant to the terms of the Fund Administration Agreement, 18 UAMFSI manages, administers and conducts the general business activities of the Fund other than those which have been contracted to the third parties by the Fund. Additionally, UAMFSI has agreed to provide transfer agency services to the Portfolio pursuant to the terms of the Agreement. UAMFSI has subcontracted some of these services to CGFSC, an affiliate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement between UAMFSI and CGFSC (collectively, with the Fund Administration Agreement, the "Agreements"). Pursuant to the terms of the Agreements, the Portfolio pays UAMFSI a two- part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fee is calculated from the aggregate net assets of the Portfolio: Annual Rate ----------- FPA Crescent Portfolio.................0.06% CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19% of 1% of the first $200 million of combined Fund net assets; 0.11 of 1% of the next $800 million of combined Fund net assets; 0.07 of 1% of combined Fund net assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined Fund net assets in excess of $3 billion. Fees are allocated among each of the Portfolios on the basis of their relative assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum annual fee increases by $20,000. Prior to April 15, 1996, CGFSC or its predecessor, Mutual Funds Service Company, provided certain administrative services to the Fund under an Administration Agreement between the Fund and U.S. Trust Company of New York. The Services provided by UAMFSI and CGFSC and the basis of the current fees payable are described in the Portfolio's Prospectuses. During the fiscal year ended March 31, 1996, the Portfolio paid administrative fees of $78,576 to its prior administrator, Investment Company Administration Corporation ("ICAC"). During the fiscal year ended March 31, 1997, the Portfolio paid total administrative fees of $14,196 to ICAC, $20,251 to CGFSC, and $30,359 to UAMFSI. During the fiscal year ended March 31, 1998, the Portfolio paid total administrative fees of $151,953 to CGFSC, and $89,427 to UAMFSI. UAMFSI will bear all expenses in connection with the performance of its services under the Fund Administration Agreement. Other expenses to be incurred in the operation of the Fund will be borne by the Fund or other parties, including taxes, interest, brokerage fees and commissions, if any, salaries and fees of officers and members of the Board who are not officers, directors, shareholders or employees of UAMFSI, or the Fund's investment adviser or distributor, SEC fees and state Blue Sky fees, EDGAR filing fees, processing services and related fees, advisory and administration fees, charges and expenses of pricing and data services, independent public accountants and custodians, insurance premiums including fidelity bond premiums, outside legal expenses, costs of maintenance of corporate existence, typesetting and printing of prospectuses for regulatory purposes and for distribution to current shareholders of the Fund, printing and production costs of shareholders' reports and corporate meetings, cost and expenses of Fund stationery and forms, costs of special telephone and data lines and devices, trade association dues and expenses, and any extraordinary expenses and other customary Fund expenses. 19 Unless sooner terminated as provided herein, the Fund Administration Agreement shall continue in effect from year to year provided such continuance is specifically approved at least annually by the Board. The Fund Administration Agreement is terminable, without penalty, by the Board or by UAMFSI, on not less than ninety (90) days' written notice. The Fund Administration Agreement shall automatically terminate upon its assignment by UAMFSI without the prior written consent of the Fund. UAMFSI will from time to time employ or associate with such person or persons as may be fit to assist them in the performance of the Fund Administration Agreement. Such person or persons may be officers and employees who are employed by both UAMFSI and the Fund. The compensation of such person or persons for such employment shall be paid by UAMFSI and no obligation will be incurred by or on behalf of the Fund in such respect. Effective February 28, 1997, the Fund entered into an Account Services Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc. (the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services Agreement, the Service Provider agrees to perform certain services for participants in a self-directed, defined contribution plan, and for whom the Service Provider provides participant recordkeeping. Pursuant to the Services Agreement, the Service Provider is entitled to receive, after the end of each month, a fee at the annual rate of 0.15% of the average aggregate daily net asset value of shares of the Portfolios in the accounts for which it provides services. During the fiscal year ended March 31, 1998, the Portfolio paid $19,064, in fees pursuant to the Services Agreement. CUSTODIAN The Chase Manhattan Bank, 3 Chase Metro Tech Center, Brooklyn, New York 11245, provides for the custody of the Fund's assets pursuant to the terms of a custodian agreement with the Fund. INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, serves as independent accountants for the Fund. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, serves as the Fund's Distributor. Shares of the Fund are offered continuously. While the Distributor will use its best efforts to sell shares of the Fund, it is not obligated to sell any particular amount of shares. The Distributor received no compensation for its services from the Portfolio during the fiscal year ended March 31, 1998. PERFORMANCE CALCULATIONS PERFORMANCE The Portfolio may from time to time quote various performance figures to illustrate past performance. Performance quotations by investment companies are subject to rules adopted by the SEC, which require the use of standardized performance quotations or, alternatively, that every non-standardized performance quotation furnished by the Portfolio be accompanied by certain standardized performance information computed as required by the SEC. An explanation of the method used to compute or express performance follows. TOTAL RETURN The average annual total return of the Portfolio is determined by finding the average annual compounded rates of return over 1, 5 and 10 year periods that would equate an initial hypothetical $1,000 investment to its ending redeemable value. The calculation assumes that all dividends and distributions are reinvested when paid. The quotation assumes the amount was completely redeemed at the end of each 1, 5 and 10 year period and the 20 deduction of all applicable Portfolio expenses on an annual basis. Since Service Class Shares of the Portfolio bear additional service and distribution expenses, the average annual total return of the Service Class Shares of the Portfolio will generally be lower than that of the Institutional Class Shares. The average annual total returns for the Portfolio's Institutional Class Shares for the period from inception on June 2, 1993 to March 31, 1998, and for the fiscal year ended March 31, 1998 were 18.87% and 25.96%, respectively. The average annual total returns for the Portfolio's Service Class Shares for the period from inception on January 24, 1997 to March 31, 1998, and for the fiscal year ended March 31, 1998 were 23.62% and 25.55%, respectively. These figures will be calculated according to the following formula: P(1 + T)/n/ = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10 year periods (or fractional portion thereof). COMPARISONS To help investors better evaluate how an investment in the Portfolio of the Fund might satisfy their investment objective, advertisements regarding the Portfolio may discuss various measures of Portfolio performance as reported by various financial publications. Advertisements may also compare performance (as calculated above) to performance as reported by other investments, indices and averages. Please see Appendix B for publications, indices and averages which may be used. In assessing such comparisons of performance, an investor should keep in mind that the composition of the investments in the reported indices and averages is not identical to the composition of investments in the Portfolio, that the averages are generally unmanaged, and that the items included in the calculations of such averages may not be identical to the formula used by the Portfolio to calculate its performance. In addition, there can be no assurance that the Portfolio will continue this performance as compared to such other averages. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized under the name "The Regis Fund II," as a Delaware business trust on May 18, 1994. On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's principal executive office is located at One International Place, 44th Floor, Boston, MA 02110; however, all investor correspondence should be addressed to the Fund at UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial interest, without par value. The Trustees have the power to designate one or more series ("Portfolios") of shares of beneficial interest without further action by shareholders. The Board of Trustees has classified an additional class of shares in the Portfolio, known as Advisor Shares. As of the date of this Statement of Additional Information, no Advisor Shares have been offered by the Portfolio. 21 The shares of the Portfolio, when issued and paid for as provided for in its Prospectuses, will be fully paid and nonassessable, have no preference as to conversion, exchange, dividends, retirement or other features and have no preemptive rights. The shares of the Portfolio have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. Institutional Class, Service Class and Advisor Class Shares each represent an interest in the same assets of a Portfolo and are identical in all respects except that the Service Class Shares bear certain expenses related to shareholder servicing and the distribution of such shares, and have exclusive voting rights with respect to matters relating to such distribution expenditures. In the event of liquidation of the Fund, the holders of the Shares of each Portfolio or any class thereof that has been established and designated shall be entitled to receive, when and as declared by the Trustees, the excess of the assets belonging to that Portfolio, or in the case of a class, belonging to that Portfolio and allocable to that class, over the liabilities belonging to that Portfolio or class. The assets so distributable to the holders of Shares of any particular Portfolio or class thereof shall be distributed to the holders in proportion to the number of Shares of that Portfolio or class thereof held by them and recorded on the books of the Fund. The liquidation of any Portfolio or class thereof may be authorized at any time by vote of a majority of the Trustees then in office. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Fund's policy is to distribute substantially all of the Portfolio's net investment income, if any, together with any net realized capital gains 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 capital gains. (See discussion under "Dividends, Capital Gains Distributions and Taxes" in the Prospectuses.) The amounts of any income dividends or capital gains distributions cannot be predicted. Any dividend or distribution paid shortly after the purchase of shares of the Portfolio by an investor may have the effect of reducing the per share net asset value of the Portfolio by the per share amount of the dividend or distribution. Furthermore, such dividends or distributions, although in effect a return of capital, are subject to income taxes as set forth in the Prospectuses. As set forth in the Prospectuses, unless the shareholder elects otherwise in writing, all dividend and capital gains distributions are automatically reinvested in additional shares of the Portfolio at net asset value (as of the business day following the record date). This will remain in effect until the Fund is notified by the shareholder in writing at least three days prior to the record date that either the Income Option (income dividends in cash and capital gains distributions in additional shares at net asset value) or the Cash Option (both income dividends and capital gains distributions in cash) has been elected. An account statement is sent to shareholders whenever an income dividend or capital gains distribution is paid. 22 CODE OF ETHICS The Fund has adopted a Code of Ethics which restricts to a certain extent personal transactions by access persons of the Fund and imposes certain disclosure and reporting obligations. FINANCIAL STATEMENTS The audited financial statements and notes thereto in the Portfolio's Annual Report to Shareholders (the "1998 Annual Report") are incorporated by reference into this Statement of Additional Information. No other parts of the 1998 Annual Report are incorporated by reference herein. The Financial Statements included in the 1998 Annual Report have been audited by the Fund's independent accountants, PricewaterhouseCoopers LLP. The report of PricewaterhouseCoopers LLP is incorporated herein by reference. Such financial statements have been incorporated herein in reliance upon such report given upon the authority of PricewaterhouseCoopers LLP as experts in accounting and auditing. Copies of the 1998 Annual Report may be obtained free of charge by telephoning the UAM Funds Service Center at the telephone number appearing on the front page of this Statement of Additional Information. 23 APPENDIX A -- DESCRIPTION OF SECURITIES AND RATINGS I. DESCRIPTION OF CORPORATE BOND RATINGS Moody's Investors Service Corporate Bond Ratings: Aaa -- Bonds which are rated Aaa are judged to be the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt-edge." Interest payments are protected by a large or by an exceptionally stable margin, and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa -- Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. Moody's Investors Service applies numerical modifiers 1, 2 and 3 in the Aa and A rating categories. The modifier 1 indicates that the security ranks at a higher end of the rating category, modifier 2 indicates a mid-range rating and the modifier 3 indicates that the issue ranks at the lower end of the rating category. A -- Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa -- Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Ba -- Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B -- Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca -- Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C -- Bonds which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. A-1 Standard & Poor's Corporation Corporate Bond Ratings: AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's to a debt obligation and indicate an extremely strong capacity to pay principal and interest. AA -- Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only to a small degree. A -- Bonds rated A have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories. BBB -- Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than for debt in higher rated categories. BB, B, CCC, CC -- Debt rated BB, B, CCC and CC is regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. BB indicates the lowest degree of speculation and CC the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. C -- The rating C is reserved for income bonds on which no interest is being paid. D -- Debt rated D is in default, and payment of interest and/or repayment of principal is in arrears. * Ratings are generally given to securities at the time of issuance. While the rating agencies may from time to time revise such ratings, they undertake no obligation to do so. II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES The term "U.S. Government Securities" refers to a variety of securities which are issued or guaranteed by the United States Government, and by various instrumentalities which have been established or sponsored by the United States Government. U.S. Treasury securities are backed by the "full faith and credit" of the United States. Securities issued or guaranteed by federal agencies and U.S. Government sponsored instrumentalities may or may not be backed by the full faith and credit of the United States. In the case of securities not backed by the full faith and credit of the United States, the investor must look principally to the agency or instrumentality issuing or guaranteeing the obligation for ultimate repayment and may not be able to assert a claim against the United States itself in the event the agency or instrumentality does not meet its commitment. Agencies which are backed by the full faith and credit of the United States include the Export- Import Bank, Farmers Home Administration, Federal Financing Bank, and others. Certain agencies and instrumentalities, such as the 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 U.S. Treasury, if needed to service its debt. Debt from certain other agencies and instrumentalities, including the Federal Home Loan Bank and Federal National Mortgage Association, is not guaranteed by the United States, but those institutions are protected by the discretionary authority of the U.S. Treasury to purchase certain amounts of their securities to assist the institution in meeting its debt obligations. Finally, other agencies and instrumentalities, such as the Farm Credit System and the Federal Home Loan Mortgage Corporation, are federally A-2 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. A-3 APPENDIX B - COMPARISONS (a) Dow Jones Composite Average or its component averages -- an unmanaged index composed of 30 blue-chip industrial corporation stocks (Dow Jones Industrial Average), 15 utilities company stocks and 20 transportation stocks. (b) Standard & Poor's 500 Stock Index or its component indices -- an unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40 utilities stocks and 20 transportation stocks. (c) Standard & Poor's 400 Mid Cap Index - consists of 400 domestic stocks chosen for market size, liquidity, and industry group representation. It is also a market-value weighted index and was the first benchmark of mid cap stock price movement. (d) The New York Stock Exchange composite or component indices -- unmanaged indices of all industrial, utilities, transportation and finance stocks listed on the New York Stock Exchange. (e) Wilshire 5000 Equity Index or its component indices -- represents the return on the market value of all common equity securities for which daily pricing is available. (f) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income Fund Performance Analysis -- measure total return and average current yield for the mutual fund industry. Rank individual mutual fund performance over specified time periods, assuming reinvestment of all distributions, exclusive of any applicable sales charges. (g) Lipper Capital Appreciation Funds Index - a fund that aims at maximum capital appreciation, frequently by means of 100% or more portfolio turnover, leveraging, purchasing unregistered securities, purchasing options, etc. The fund may take large cash positions. (h) Lipper Small Cap Funds Index- a fund that by prospectus or portfolio practice invests primarily in companies with market capitalizations of less than $1 billion at the time of purchase. (i) Morgan Stanley Capital International EAFE Index and World Index -- respectively, arithmetic, market value-weighted averages of the performance of over 900 securities listed on the stock exchanges of countries in Europe, Australia and the Far East, and over 1,400 securities listed on the stock exchanges of these continents, including North America. (j) Goldman Sachs 100 Convertible Bond Index -- currently includes 67 bonds and 33 preferred. The original list of names was generated by screening for convertible issues of 100 million or greater in market capitalization. The index is priced monthly. (k) Salomon Brothers GNMA Index -- includes pools of mortgages originated by private lenders and guaranteed by the mortgage pools of the Government National Mortgage Association. (l) Salomon Brothers High Grade Corporate Bond Index -- consists of publicly issued, non-convertible corporate bonds rated AA or AAA. It is a value-weighted, total return index, including approximately 800 issues with maturities of 12 years or greater. (m) Salomon Brothers Broad Investment Grade Bond Index -- is a market- weighted index that contains approximately 4,700 individually priced investment grade corporate bonds rated BBB or better, U.S. Treasury/agency issues and mortgage pass through securities. B-1 (n) Lehman Brothers Long-Term Treasury Bond Index -- is composed of all bonds covered by the Lehman Brothers Treasury Bond Index with maturities of 10 years or greater. (o) Lehman Brothers Government/Corporate Index -- is a combination of the Government and Corporate Bond Indices. The Government Index includes public obligations of the U.S. Treasury, issues of Government agencies, and corporate debt backed by the U.S. Government. The Corporate Bond Index includes fixed-rate nonconvertible corporate debt. Also included are Yankee Bonds and nonconvertible debt issued by or guaranteed by foreign or international governments and agencies. All issues are investment grade (BBB) or higher, with maturities of at least one year and an outstanding par value of at least $100 million for U.S. Government issues and $25 million for others. Any security downgraded during the month is held in the index until month-end and then removed. All returns are market value weighted inclusive of accrued income. (p) NASDAQ Industrial Index -- is composed of more than 3,000 industrial issues. It is a value-weighted index calculated on price change only and does not include income. (q) Value Line -- composed of over 1,600 stocks in the Value Line Investment Survey. (r) Russell 2000 Index -- composed of the 2,000 smallest stocks in the Russell 3000, a market value-weighted index of the 3,000 largest U.S. publicly-traded companies. (s) Salomon Brothers 3 Month T-Bill Average - the average return for all Treasury bills for the previous three month period. (t) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman Brothers long-term Treasury Bond and 10% U.S. Treasury Bills; 70% Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35% Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade Bond Index; all stocks on the NASDAQ system exclusive of those traded on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Salomon Brothers High Grade Bond Index. (u) CDA Mutual Fund Report published by CDA Investment Technologies, Inc. -- analyzes price, current yield, risk, total return and average rate of return (average compounded growth rate) over specified time periods for the mutual fund industry. (v) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes price, yield, risk and total return for equity funds. (w) Financial publications: Business Week, Changing Times, Financial World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial Times, Global Investor, Wall Street Journal and Weisenberger Investment Companies Service -- publications that rate fund performance over specified time periods. (x) Consumer Price Index (or Cost of Living Index), published by the U.S. Bureau of Labor Statistics -- a statistical measure of change over time in the price of goods and services in major expenditure groups. (y) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates - - historical measure of yield, price and total return for common and small company stock, long-term government bonds, U.S. Treasury bills and inflation. (z) Savings and Loan Historical Interest Rates -- as published by the U.S. Savings & Loan League Fact Book. B-2 (aa) Historical data supplied by the research departments of First Boston Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg L.P. B-3 PART B UAM FUNDS HANSON EQUITY PORTFOLIO Institutional Class Shares STATEMENT OF ADDITIONAL INFORMATION -- July 17, 1998 This Statement of Additional Information ("SAI") is not a Prospectus but should be read in conjunction with the Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the Hanson Equity Portfolio (the "Portfolio") dated July 17, 1998. To obtain the Prospectus, please call the UAM Funds Service Center at 1-800-638-7983. INVESTMENT OBJECTIVE AND POLICIES......................................... 2 PURCHASE AND REDEMPTION OF SHARES......................................... 3 VALUATION OF SHARES....................................................... 4 SHAREHOLDER SERVICES...................................................... 4 INVESTMENT LIMITATIONS.................................................... 5 MANAGEMENT OF THE FUND.................................................... 6 INVESTMENT ADVISER........................................................ 9 PORTFOLIO TRANSACTIONS.................................................... 10 ADMINISTRATIVE SERVICES................................................... 11 CUSTODIAN................................................................. 12 INDEPENDENT ACCOUNTANTS................................................... 12 DISTRIBUTOR............................................................... 12 PERFORMANCE CALCULATIONS.................................................. 13 GENERAL INFORMATION....................................................... 14 FINANCIAL STATEMENTS...................................................... 15 APPENDIX A -- DESCRIPTION OF SECURITIES AND RATINGS....................... A-1 APPENDIX B COMPARISONS................................................... B-1
Investment Adviser Hanson Investment Management Company (Adviser) Distributor UAM Fund Distributors, Inc. (Distributor) Administrator and Transfer Agent UAM Fund Services, Inc. (UAMFSI) INVESTMENT OBJECTIVE AND POLICIES The following discussion supplements the discussion of investment objective and policies of the Portfolio as set forth in the Portfolio's Prospectus: LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified brokers, dealers, domestic and foreign banks or other financial institutions so long as the terms, the structure and the aggregate amount of such loans are not inconsistent with the Investment Company Act of 1940, as amended, (the "1940 Act") or the Rules and Regulations or interpretations of the Securities and Exchange Commission (the "SEC") thereunder, which currently require that (a) the borrower pledge and maintain with the Portfolio collateral consisting of cash, an irrevocable letter of credit issued by a domestic U.S. bank or securities issued or guaranteed by the United States Government having a value at all times not less than 100% of the value of the securities loaned, (b) the borrower add to such collateral whenever the price of the securities loaned rises (i.e., the borrower "marks to the market" on a daily basis), (c) the loan be made subject to termination by the Portfolio at any time, and (d) the Portfolio receives reasonable interest on the loan (which may include the Portfolio investing any cash collateral in interest bearing short-term investments). The Portfolio will not loan securities to the extent that greater than one-third of its assets (including the value of the collateral for the loans) at fair market value would be committed to loans. As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the securities loaned if the borrower of the securities fails financially. These risks are similar to the ones involved with repurchase agreements as discussed in the Prospectus. FOREIGN SECURITIES Investors in the Portfolio should recognize that investing in foreign companies through the purchase of American Depositary Receipts ("ADRs") involves certain special considerations which are not typically associated with investing in U.S. companies. Since the securities of foreign companies are frequently denominated in foreign currencies, investments may be affected favorably or unfavorably by changes in currency rates and in exchange control regulations, and may incur costs in connection with conversions between various currencies. As foreign companies are not generally subject to uniform accounting, auditing and financial reporting standards and they may have policies that are not comparable to those of domestic companies, there may be less information available about certain foreign companies than about domestic companies. Securities of some foreign companies are generally less liquid and more volatile than securities of comparable domestic companies. There is generally less government supervision and regulation of stock exchanges, brokers and listed companies than in the U.S. In addition, with respect to certain foreign countries, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments which could affect U.S. investments in those countries. Certain foreign governments levy withholding taxes on dividend and interest income. Although in some countries a portion of these taxes are recoverable, the non-recoverable portion of foreign withholding taxes will reduce the income received from the companies comprising the Portfolio's investments. However, these foreign withholding taxes are not expected to have a significant impact. PORTFOLIO TURNOVER The portfolio turnover rate described in the Prospectus is calculated by dividing the lesser of purchases or sales of portfolio securities for the year by the monthly average of the value of the portfolio securities. The calculation excludes all securities, including options, whose maturities at the time of 2 acquisition were one year or less. Portfolio turnover may vary greatly from year to year as well as within a particular year, and may also be affected by cash requirements for redemptions of shares. See "Financial Highlights" in the Prospectus for the historical portfolio turnover rates with respect to the Portfolio. PURCHASE AND REDEMPTION OF SHARES Shares of the Portfolio may be purchased without a sales commission at the net asset value per share next determined after an order is received in proper form by the Fund, and payment is received by the Fund or its designated Service Agent. The minimum initial investment required for the Portfolio is $2,500, with certain exceptions as may be permitted from time to time by the officers of the Fund. Other investment minimums are: initial IRA investment, $500; initial spousal IRA investment, $250; and additional investment for all accounts, $100. An order received in proper form prior to the close of regular trading on the New York Stock Exchange (the "Exchange") (generally 4:00 p.m. Eastern Time) will be executed at the price computed on the date of receipt; and an order received not in proper form or after the close of the Exchange will be executed at the price computed on the next day the Exchange is open after proper receipt. The Exchange will be closed on the following days: New Year's Day, Dr. Martin Luther King, Jr.'s Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Portfolio reserves the right in its sole discretion (1) to suspend the offering of its shares, (2) to reject purchase orders when in the judgment of management such rejection is in the best interests of the Fund, and (3) to reduce or waive the minimum for initial and subsequent investment for certain fiduciary accounts such as employee benefit plans or under circumstances where certain economies can be achieved in sales of the Portfolio's shares. The Portfolio may suspend redemption privileges or postpone the date of payment (1) during any period that either the Exchange or custodian bank are closed or trading on the Exchange is restricted as determined by the SEC, (2) during any period when an emergency exists as defined by the rules of the SEC as a result of which it is not reasonably practicable for the Portfolio to dispose of securities owned by it or to fairly determine the value of its assets, and (3) for such other periods as the SEC may permit. The Fund has made an election with the SEC to pay in cash all redemptions requested by any shareholder of record limited in amount during any 90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at the beginning of such period. Such commitment is irrevocable without the prior approval of the SEC. Redemptions in excess of the above limits may be paid, in whole or in part, in investment securities or in cash as the Board of Trustees may deem advisable; however, payment will be made wholly in cash unless the Board of Trustees believe that economic or market conditions exist which would make such a practice detrimental to the best interests of the Fund. If redemptions are paid in investment securities, such securities will be valued as set forth in the Prospectus under "VALUATION OF SHARES," and a redeeming shareholder would normally incur brokerage expenses if those securities were converted to cash. No charge is made by the Portfolio for redemptions. Any redemption may be more or less than the shareholder's initial cost depending on the market value of the securities held by the Portfolio. SIGNATURE GUARANTEES To protect your account, the Fund and Chase Global Funds Services Company ("CGFSC") from fraud, signature guarantees are required for certain redemptions. the purpose of signature guarantees is to verify the identity of the person who has authorized a redemption from your account. Signature guarantees are required for (1) all redemptions when the proceeds are to be paid to someone other than the registered owner(s) and/or registered address, or (2) share transfer requests. 3 Signatures must be guaranteed by an "eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. A complete definition of eligible guarantor institutions is available from the transfer agent. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. Signature guarantees will be accepted from any eligible guarantor institution which participates in a signature guarantee program. The signature guarantee must appear either: (1) on the written request for redemption; (2) on a separate instrument for assignment ("stock power") which should specify the total number of shares to be redeemed; or (3) on all stock certificates tendered for redemption and, if shares held by the Fund are also being redeemed, on the letter or stock power. VALUATION OF SHARES Equity securities listed on a securities exchange for which market quotations are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed securities not traded on the valuation date for which market quotations are readily available are valued neither exceeding the current asked prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars as quoted by any major bank or broker. Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the- counter market. Bonds and other fixed income securities may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost using methods approved by the Board of Trustees. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Fund's Board of Trustees. SHAREHOLDER SERVICES The following supplements the information set forth under "Shareholder Services" in the Prospectus. EXCHANGE PRIVILEGE Institutional Class Shares of the Portfolio may be exchanged for Institutional Class Shares of any other UAM Funds or UAM Funds, Inc. Portfolio. Exchange requests should be made by calling the Fund (1-800-638-7983) or by writing to UAM Funds Trust, UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The exchange privilege is only available with respect to Portfolios that are qualified for sale in the shareholder's state of residence. Any such exchange will be based on the respective net asset values of the shares involved. There is no sales commission or charge of any kind. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objectives of the Portfolio to be purchased. You may obtain a Prospectus for the Portfolio(s) you are interested in by calling the UAM Funds Service Center at 1-800-638-7983. 4 Telephone exchanges will be accepted only if the certificates for the shares to be exchanged have not been issued to the shareholder, and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading of the Exchange (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the Exchange will be processed on the next business day. Neither the Fund nor CGFSC will be responsible for the authenticity of the exchange instructions received by telephone. Exchanges may also be subject to limitations as to amounts or frequency and to other restrictions established by the Fund's Board of Trustees to assure that such exchanges do not disadvantage the Fund and its shareholders. For federal income tax purposes an exchange between Funds is a taxable event, and, accordingly, a capital gain or loss may be realized. In a revenue ruling relating to circumstances similar to the Fund's, an exchange between series of a Fund was also deemed to be a taxable event. It is likely, therefore, that a capital gain or loss would be realized on an exchange between Portfolios. You may want to consult your tax adviser for further information in this regard. The exchange privilege may be modified or terminated at any time. TRANSFER OF SHARES Shareholders may transfer shares of the Portfolio to another person by making a written request to the Fund. The request should clearly identify the account and number of shares to be transferred, and include the signature of all registered owners and all stock certificates, if any, which are subject to the transfer. The signature on the letter of request, the stock certificate or any stock power must be guaranteed in the same manner as described under "Redemption of Shares." As in the case of redemptions, the written request must be received in good order before any transfer can be made. INVESTMENT LIMITATIONS The following limitations supplement those set forth in the Prospectus of the Portfolio. A Portfolio's fundamental investment limitations cannot be changed without the approval of a "majority of the outstanding shares" (as defined in the 1940 Act) of the Portfolio. Except for the numbered investment limitations noted as fundamental below, however, the limitations described below are not fundamental, and may be changed without the consent of shareholders. Whenever an investment limitation sets forth a percentage limitation on investment or utilization of assets, such limitation shall be determined immediately after and as a result of the Portfolio's acquisition of such security or other asset. Accordingly, any later increase or decrease resulting from a change in values, net assets or other circumstances will not be considered when determining whether the investment complies with the Portfolio's investment limitations. As a matter of fundamental policy, the Portfolio will not: (1) invest in physical commodities or contracts on physical commodities; (2) purchase or sell real estate or real estate limited partnerships, although it may purchase and sell securities of companies which deal in real estate and may purchase and sell securities which are secured by interests in real estate; (3) make loans except (i) by purchasing debt securities in accordance with its investment objectives and (ii) by lending its portfolio securities to banks, brokers, dealers and other 5 financial institutions so long as such loans are not inconsistent with the 1940 Act, or the rules and regulations or interpretations of the SEC thereunder; (4) underwrite the securities of other issuers; and (5) issue senior securities, as defined in the 1940 Act, except that this restriction shall not be deemed to prohibit the Portfolio from (i) making any permitted borrowings, mortgages or pledges, or (ii) entering into repurchase transactions. As a matter of non-fundamental policy, the Portfolio will not: (1) purchase on margin or sell short; (2) invest more than an aggregate of 15% of the net assets of the Portfolio, determined at the time of investment, in securities subject to legal or contractual restrictions on resale or securities for which there are no readily available markets; and (3) invest for the purpose of exercising control over management of any company. MANAGEMENT OF THE FUND TRUSTEES AND OFFICERS The Officers of the Fund manage its day-to-day operations and are responsible to the Fund's Board of Trustees. The Trustees set broad policies for the Fund and elect its Officers. The following is a list of the Trustees and Officers of the Fund, their addresses and dates of birth, and a brief statement of their present positions and principal occupations during the past five years. John T. Bennett, Jr. (1/26/29), Trustee; College Road--RFD 3, Meredith, NH 03253; President of Squam Investment Management Company, Inc. and Great Island Investment Company, Inc.; President of Bennett Management Company from 1988 to 1993. Nancy J. Dunn (8/14/51), Trustee; 10 Garden Street, Cambridge, MA 02138; Vice President for Finance and Administration and Treasurer of Radcliffe College since 1991. Philip D. English (8/5/48), Trustee; 16 West Madison Street, Baltimore, MD 21201; President and Chief Executive Officer of Broventure Company, Inc.; Chairman of the Board of Chektec Corporation and Cyber Scientific, Inc. William A. Humenuk (4/21/42), Trustee; 100 King Street West, P.O. Box 2440, LCD- 1, Hamilton Ontario, Canada L8N-456; Executive Vice President and Chief Administrative Officer of Philip Services Corp.; Director, Hofler Corp.; Formerly, a Partner in the Philadelphia office of the law firm Dechert Price & Rhoads. Norton H. Reamer* (3/21/35), Trustee; One International Place, Boston, MA 02110; President and Chairman of the Fund; President, Chief Executive Officer and a Director of United Asset Management Corporation; Director, Partner or Trustee of each of the Investment Companies of the Eaton Vance Group of Mutual Funds. 6 Peter M. Whitman, Jr.* (7/1/43), Trustee; One Financial Center, Boston, MA 02111; President and Chief Investment Officer of Dewey Square Investors Corporation ("DSI") since 1988; Director and Chief Executive Officer of H. T. Investors, Inc., formerly a subsidiary of DSI. William H. Park (9/19/47), Vice President; One International Place, Boston, MA 02110; Executive Vice President and Chief Financial Officer of United Asset Management Corporation. Gary L. French (7/4/51), Treasurer; 211 Congress Street, Boston, MA 02110; President of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; formerly Vice President of Operations, Development and Control of Fidelity Investment in 1995; Treasurer of the Fidelity Group of Mutual Funds from 1991 to 1995. Michael E. DeFao (2/28/68), Secretary; 211 Congress Street, Boston, MA 02110; Vice President and General Counsel of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; Associate Attorney of Ropes & Gray (a law firm) from 1993 to 1995. Robert R. Flaherty (9/18/63), Assistant Treasurer; 211 Congress Street, Boston, MA 02110; Vice President of UAM Fund Services, Inc.; formerly Manager of Fund Administration and Compliance of Chase Global Fund Services Company from 1995 to 1996; Deloitte & Touche LLP from 1985 to 1995, Senior Manager. Michelle Azrialy (4/12/69), Assistant Secretary; 73 Tremont Street, Boston, MA 02108; Assistant Treasurer of Chase Global Funds Services Company since 1996. Senior Public Accountant with Price Waterhouse LLP from 1991 to 1994. Gordon M. Shone (7/30/56), Assistant Treasurer; 73 Tremont Street, Boston, MA 02108; Vice President of Fund Administration and Compliance of Chase Global Funds Services Company; formerly Senior Audit Manager of Coopers & Lybrand LLP (1983-1996). *Messrs. Reamer and Whitman are deemed to be "interested persons" of the Fund as that term is defined in the 1940 Act. REMUNERATION OF TRUSTEES AND OFFICERS The Fund pays each Trustee, who is not also an officer or affiliated person, a $150 quarterly retainer fee per active Portfolio which currently amounts to $1,350 per quarter. In addition, each unaffiliated Trustee receives a $2,000 meeting fee which is aggregated for all the Trustees and allocated proportionately among the Portfolios of the Fund and UAM Funds, Inc. and reimbursement for travel and other expenses incurred while attending Board meetings. Trustees who are also officers or affiliated persons receive no remuneration for their service as Trustees. The Fund's officers and employees are paid by either the Adviser, United Asset Management Corporation ("UAM"), or the Administrator and receive no compensation from the Fund. As of June 15, 1998, the Trustees and officers of the Fund owned less than 1% of the Fund's outstanding shares. 7 The following table shows aggregate compensation paid to each of the Fund's Trustees by the Fund and total compensation paid by the Funds and UAM Funds, Inc. (collectively the "Fund Complex") in the fiscal year ended April 30, 1998. COMPENSATION TABLE
Pension or Retirement Estimated Total Compensation Aggregate Benefits Accrued Annual from Registrant Name of Person, Compensation From as Part of Benefits Upon and Position Registrant Fund Expenses Retirement Fund Complex -------- ---------- ------------- ---------- ------------ John T. Bennett, Jr. Trustee............. $6,149 0 0 $33,500 Philip D. English Trustee............. $6,149 0 0 $33,500 William A. Humenuk Trustee............. $6,149 0 0 $33,500 Nancy J. Dunn Trustee............. $4,668 0 0 $25,200 Peter M. Whitman, Jr. Trustee $ 0 0 0 $ 0 Norton H. Reamer Trustee............. $ 0 0 0 $ 0
PRINCIPAL HOLDERS OF SECURITIES As of June 15, 1998, the following persons or organizations held of record or beneficially 5% or more of the shares of the Portfolio: Hanson Equity Portfolio Institutional Class Shares: Charles Schwab & Co., Inc., Reinvest Account, Attn: Mutual Funds, 101 Montgomery St., San Francisco, CA, 99.8%*. The person(s) or organization(s) listed above as owning 25% or more of the outstanding shares of the Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of such Portfolio. - ------- 8 * Denotes shares held by a trustee or other fiduciary for which beneficial ownership is disclaimed or presumed disclaimed. 9 INVESTMENT ADVISER CONTROL OF ADVISER The Adviser is a wholly-owned subsidiary of UAM, a holding company incorporated in Delaware in December 1980 for the purpose of acquiring and owning firms engaged primarily in institutional investment management. Since its first acquisition in August 1983, UAM has acquired or organized over 45 such wholly-owned affiliated firms (the "UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to retain control over their investment advisory decisions is necessary to allow them to continue to provide investment management services that are intended to meet the particular needs of their respective clients. Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to operate under their own firm name, with their own leadership and individual investment philosophy and approach. Each UAM Affiliated Firm manages its own business independently on a day-to-day basis. Investment strategies employed and securities selected by UAM Affiliated Firms are separately chosen by each of them. Several UAM Affiliated Firms also act as investment advisers to separate series or Portfolios of UAM Funds, Inc., a registered investment company. SERVICES PERFORMED BY ADVISER Pursuant to an Investment Advisory Agreement ("Agreement") between the Fund and the Adviser, the Adviser has agreed to manage the investment and reinvestment of the Portfolio's assets, to continuously review, supervise and administer the Portfolio's investment program, and to determine in its discretion the securities to be purchased or sold and the portion of the Portfolio's assets to be held uninvested. In the absence of (i) willful misfeasance, bad faith or gross negligence on the part of the Adviser in the performance of its obligations and duties under the Agreement, (ii) reckless disregard by the Adviser of its obligations and duties under the Agreement, or (iii) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, the Adviser shall not be subject to any liability whatsoever to the Fund, or to any shareholder of the Fund, for any error of judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services under the Agreement. Unless sooner terminated, the Agreement shall continue for periods of one year so long as such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Trustees of the Fund who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, (b) by the Board of Trustees of the Fund, or (c) by a vote of a majority of the outstanding voting securities of the Portfolio. The Agreement may be terminated at any time by the Portfolio, without the payment of any penalty, by vote of a majority of the entire Board of Trustees 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. The Agreement may be terminated by the Adviser at any time, without the payment of any penalty, upon 90 days written notice to the Fund. The Agreement will automatically and immediately terminate in the event of its assignment. ADVISORY FEES As compensation for services rendered by the Adviser under the Investment Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly installments, calculated by applying the following annual percentage rates to the Portfolio's average daily net assets for the month: 10 Rate ---- Hanson Equity Portfolio................................. 0.70% For the period from October 3, 1997 (commencement of operations) to April 30, 1998, the Portfolio paid advisory fees of $83,786. PORTFOLIO TRANSACTIONS The Investment Advisory Agreement authorizes the Adviser to select the brokers or dealers that will execute the purchases and sales of investment securities for the Portfolio and directs the Adviser to use its best efforts to obtain the best execution with respect to all transactions for the Portfolio. The Adviser may, however, consistent with the interests of the Portfolio, select brokers on the basis of the research, statistical and pricing services they provide to the 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 Adviser under the Investment 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 Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Portfolio and the Adviser's other clients. It is not the Fund's practice to allocate brokerage or effect principal transactions with dealers on the basis of sales of Fund shares which may be made through broker-dealer firms. However, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. For the period from October 3, 1997 (commencement of operations) to April 30, 1998, the Portfolio paid aggregate brokerage commissions of $33,367. Some securities considered for investment by the Portfolio may also be appropriate for other clients served by the Adviser. If purchases or sales of securities consistent with the investment policies of the Portfolio and one or more of these other clients served by the Adviser 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 Adviser. Although there is no specified formula for allocating such transactions, the various allocation methods used by the Adviser, and the results of such allocations, are subject to periodic review by the Fund's Board of Trustees. 11 ADMINISTRATIVE SERVICES The Board of Trustees of the Fund approved a Fund Administration Agreement, effective April 15, 1996 ("Fund Administration Agreement") between UAMFSI, a wholly owned subsidiary of UAM, and the Fund. Pursuant to the terms of the Fund Administration Agreement, UAMFSI manages, administers and conducts the general business activities of the Fund other than those which have been contracted to other third parties by the Fund. Additionally, UAMFSI has agreed to provide transfer agency services to the Portfolios pursuant to the terms of the Fund Administration Agreement. UAMFSI has subcontracted some of these services to CGFSC , an affiliate of the Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement between UAMFSI and CFFSC (collectively, with the Fund Administration Agreement, the "Agreements"). Pursuant to the terms of the Agreements, the Portfolio pays UAMFSI a two- part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fee is calculated from the aggregate net assets of the Portfolio: Annual Rate ----------- Hanson Equity Portfolio............... 0.04% CGFSC's monthly fee for itsservices is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined Fund net assets; 0.11 of 1% of the next $800 million of combined Fund net assets; 0.07 of 1% of combined Fund net assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined Fund net assets in excess of $3 billion. Fees are located among each of the Portfolios on the basis of their relative assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two year. If a separate class of shares is added to a Portfolio, its minimum annual fee increases by $20,000. Prior to April 15, 1996, CGFSC or its predecessor, Mutual Funds Service Company, provided certain administrative services to the Fund under an Administration Agreement between the Fund and U.S. Trust Company of New York. For the period from October 3, 1997 (commencement of operations) to April 30, 1998, administrative services fees paid by the Portfolio totaled $22,082. Of the fees paid during this period, $17,295 were paid to CGFSC and $4,787 were paid to UAMFSI. UAMFSI will bear all expenses in connection with the performance of its services under the Fund Administration Agreement. Other expenses to be incurred in the operation of the Fund will be borne by the 12 Fund or other parties, including taxes, interest, brokerage fees and commissions, if any, salaries and fees of officers and members of the Board who are not officers, directors, shareholders or employees of UAMFSI, or the Fund's investment adviser or distributor, SEC fees and state Blue Sky fees, EDGAR filing fees, processing services and related fees, advisory and administration fees, charges and expenses of pricing and data services, independent public accountants and custodians, insurance premiums including fidelity bond premiums, outside legal expenses, costs of maintenance of corporate existence, typesetting and printing of prospectuses for regulatory purposes and for distribution to current shareholders of the Fund, printing and production costs of shareholders' reports and corporate meetings, cost and expenses of Fund stationery and forms, costs of special telephone and data lines and devices, trade association dues and expenses, and any extraordinary expenses and other customary Fund expenses. Unless sooner terminated as provided herein, the Fund Administration Agreement shall continue in effect from year to year provided such continuance is specifically approved at least annually by the Board. The Fund Administration Agreement is terminable, without penalty, by the Board or by UAMFSI, on not less than ninety (90) days' written notice. The Fund Administration Agreement shall automatically terminate upon its assignment by UAMFSI without the prior written consent of the Fund. UAMFSI will from time to time employ or associate with such person or persons as may be fit to assist them in the performance of the Fund Administration Agreement. Such person or persons may be officers and employees who are employed by both UAMFSI and the Fund. The compensation of such person or persons for such employment shall be paid by UAMFSI and no obligation will be incurred by or on behalf of the Fund in such respect. Effective February 28, 1997, the Fund entered into an Account Services Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc. (the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services Agreement, the Service Provider agrees to perform certain services for participants in a self-directed, defined contribution plan, and for whom the Service Provider provides participant recordkeeping. Pursuant to the Services Agreement, the Service Provider is entitled to receive, after the end of each month, a fee at the annual rate of 0.15% of the average aggregate daily net asset value of shares of the Portfolios in the accounts for which it provides services. During the fiscal year ended April 30, 1998, the Portfolio paid no fees to the Service Provider. CUSTODIAN The Chase Manhattan Bank, 3 Chase Metro Tech Center, Brooklyn, New York 11245, provides for the custody of the Fund's assets pursuant to the terms of a custodian agreement with the Fund. INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, serves as independent accountants for the Fund. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, serves as the Fund's Distributor. Shares of the Fund are offered continuously. While the Distributor will use its best efforts to sell shares of the Fund, it is not obligated to sell any particular amount of shares. The Distributor received no compensation for its services from the Portfolio during the fiscal year ended April 30, 1998. 13 PERFORMANCE CALCULATIONS PERFORMANCE The Portfolio may from time to time quote various performance figures to illustrate past performance. Performance quotations by investment companies are subject to rules adopted by the SEC, which require the use of standardized performance quotations or, alternatively, that every non-standardized performance quotation furnished by a Portfolio be accompanied by certain standardized performance information computed as required by the SEC. Average annual compounded total return quotations used by a Portfolio are based on the standardized methods of computing performance mandated by the SEC. An explanation of the method used to compute or express performance follows. TOTAL RETURN The average annual total return of the Portfolio is determined by finding the average annual compounded rates of return over 1, 5 and 10 year periods that would equate an initial hypothetical $1,000 investment to its ending redeemable value. The calculation assumes that all dividends and distributions are reinvested when paid. The quotation assumes the amount was completely redeemed at the end of each 1, 5 and 10 year period and the deduction of all applicable Portfolio expenses on an annual basis. These figures are calculated according to the following formula: P(1 + T)/n/ = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10 year periods (or fractional portion thereof). The cumulative total return for the Portfolio's Institutional Class Shares for the period from October 3, 1997 (commencement of operations) to April 30, 1998, was 13.80%. Cumulative total return represents the Portfolio's performance over a specified period of time. The Portfolio's cumulative total return is representative of approximately seven months of performance. COMPARISONS To help investors better evaluate how an investment in the Portfolio might satisfy their investment objective, advertisements regarding the Portfolio may discuss various measures of Portfolio performance as reported by various financial publications. Advertisements may also compare performance (as calculated above) to performance as reported by other investments, indices and averages. Please see Appendix B for publications, indices and averages which may be used. In assessing such comparisons of performance, an investor should keep in mind that the composition of the investments in the reported indices and averages is not identical to the composition of investments in the Portfolio, that the averages are generally unmanaged, and that the items included in the calculations of such averages may not 14 be identical to the formula used by the Portfolio to calculate its performance. In addition, there can be no assurance that the Portfolio will continue this performance as compared to such other averages. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized under the name The Regis Fund II as a Delaware business trust on May 18, 1994. On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's principal executive office is located at One International Place, 44th Floor, Boston, MA 02110; however, all investor correspondence should be addressed to the Fund at UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial interest, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without further action by shareholders. The Board of Trustees has classified an two additional classes of shares in the Portfolio, known as Institutional Service Shares and Advisor Shares. As of the date of this Statement of Additional Information, no Institutional Service Shares or Advisor Shares have been offered by the Portfolio. The shares of the Portfolio, when issued and paid for as provided for in its Prospectus, will be fully paid and nonassessable, have no preference as to conversion, exchange, dividends, retirement or other features and have no preemptive rights. The shares of the Portfolio have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. Institutional Class, Service Class and Advisor Class Shares each represent an interest in the same assets of a Portfolo and are identical in all respects except that the Service Class Shares bear certain expenses related to shareholder servicing and the distribution of such shares, and have exclusive voting rights with respect to matters relating to such distribution expenditures. In the event of liquidation of the Fund, the holders of the shares of each Portfolio or any class thereof that has been established and designated shall be entitled to receive, when and as declared by the Trustees, the excess of the assets belonging to that Portfolio, or in the case of a class, belonging to that Portfolio and allocable to that class, over the liabilities belonging to that Portfolio or class. The assets so distributable to the holders of shares of any particular Portfolio or class thereof shall be distributed to the holders in proportion to the number of shares of that Portfolio or class thereof held by them and recorded on the books of the Fund. The liquidation of any Portfolio or class thereof may be authorized at any time by vote of a majority of the Trustees then in office. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS 15 The Fund's policy is to distribute substantially all of the Portfolio's net investment income, if any, together with any net realized capital gains annually in the amount and at the times that will avoid both income (including capital gains) taxes incurred and the imposition of the federal excise tax on undistributed income and capital gains. The amounts of any income dividends or capital gains distributions cannot be predicted. See discussion under "Dividends, Capital Gains Distributions and Taxes" in the Prospectus. Any dividend or distribution paid shortly after the purchase of shares of the Portfolio by an investor may have the effect of reducing the per share net asset value of the Portfolio by the per share amount of the dividend or distribution. Furthermore, such dividends or distributions, although in effect a return of capital, are subject to income taxes as set forth in the Prospectus. As set forth in the Prospectus, unless the shareholder elects otherwise in writing, all dividend and capital gains distributions are automatically reinvested in additional shares of the respective Portfolio of the Fund at net asset value (as of the business day following the record date). This will remain in effect until the Fund is notified by the shareholder in writing at least three days prior to the record date that either the Income Option (income dividends in cash and capital gains distributions in additional shares at net asset value) or the Cash Option (both income dividends and capital gains distributions in cash) has been elected. An account statement is sent to shareholders whenever an income dividend or capital gains distribution is paid. CODE OF ETHICS The Fund has adopted a Code of Ethics which restricts, to a certain extent, personal transactions by access persons of the Fund and imposes certain disclosure and reporting obligations. FINANCIAL STATEMENTS The audited financial statements and notes thereto in the Portfolio's Annual Report to Shareholders (the "1998 Annual Report") are incorporated by reference into this Statement of Additional Information. No other parts of the 1998 Annual Report are incorporated by reference herein. The Financial Statements 16 included in the 1998 Annual Report have been audited by the Fund's independent accountants, PricewaterhouseCoopers LLP. The reports of PricewaterhouseCoopers LLP are incorporated herein by reference. Such financial statements have been incorporated herein in reliance upon such reports given upon the authority of PricewaterhouseCoopers LLP as experts in accounting and auditing. Copies of the 1998 Annual Report may be obtained free of charge by telephoning the UAM Funds Service Center at the telephone number appearing on the front page of this Statement of Additional Information. 17 APPENDIX A -- DESCRIPTION OF SECURITIES AND RATINGS I. DESCRIPTION OF CORPORATE BOND RATINGS Moody's Investors Service Corporate Bond Ratings: Aaa -- Bonds which are Aaa are judged to be the best quality; They carry the smallest degree of investment risk and are generally referred to as "gilt- edge." Interest payments are protected by a large or by an exceptionally stable margin, and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa -- Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. A -- Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Moody's applies numerical modifiers 1, 2 and 3 in the Aa and A rating categories. The modifier 1 indicates that the security ranks at a higher end of the rating category, modifier 2 indicates a mid-range rating and the modifier 3 indicates that the issue ranks at the lower end of the rating category. Baa -- Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Standard & Poor's Corporation's Corporate Bond Ratings: AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's to a debt obligation and indicate an extremely strong capacity to pay principal and interest. AA -- Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only to a small degree. A -- Bonds rated A have a strong capacity to pay interest and repay principal although they are A-1 somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories. BBB -- Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than for debt in higher rated categories. A-2 II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES The term "U.S. Government Securities" refers to a variety of securities which are issued or guaranteed by the United States Government, and by various instrumentalities which have been established or sponsored by the United States Government. U.S. Treasury securities are backed by the "full faith and credit" of the United States. Securities issued or guaranteed by Federal agencies and U.S. Government sponsored instrumentalities may or may not be backed by the full faith and credit of the United States. In the case of securities not backed by the full faith and credit of the United States, the investor must look principally to the agency or instrumentality issuing or guaranteeing the obligation for ultimate repayment, and may not be able to assess a claim against the United States itself in the event the agency or instrumentality does not meet its commitment. Agencies which are backed by the full faith and credit of the United States include the Export- Import Bank, Farmers Home Administration, Federal Financing Bank, and others. Certain agencies and instrumentalities, such as the GNMA are, in effect, backed by the full faith and credit of the United States through provisions in their charters that they may make "indefinite and unlimited" drawings on the U.S. Treasury, if needed to service its debt. Debt from certain other agencies and instrumentalities, including the Federal Home Loan Bank and FNMA, is not guaranteed by the United States, but those institutions are protected by the discretionary authority of the U.S. Treasury to purchase certain amounts of their securities to assist the institution in meeting its debt obligations. Finally, other agencies and instrumentalities, such as the Farm Credit System and the FHLMC, are federally chartered institutions under Government supervision, but their debt securities are backed only by the 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. III. DESCRIPTION OF COMMERCIAL PAPER The Portfolio may invest in commercial paper (including variable amount master demand notes) rated A-1 or better by S&P or Prime-1 by Moody's or by S&P. Commercial paper refers to short-term, unsecured promissory notes issued by corporations to finance short-term credit needs. Commercial paper is usually sold on a discount basis and has a maturity at the time of issuance not exceeding nine months. Variable amount master demand notes are demand obligations that permit the investment of fluctuating amounts at varying market rates of interest pursuant to arrangement between the issuer and a commercial bank acting as agent for the payees of such notes whereby both parties have the right to vary the amount of the outstanding indebtedness on the notes. As variable amount master demand notes are direct lending arrangements between a lender and a borrower, it is not generally contemplated that such instruments will be traded, and there is no secondary market for these notes, although they are redeemable (and thus immediately repayable by the borrower) at face value, plus accrued interest, at any time. In connection with the Portfolio's investment in variable amount master demand notes, the Adviser's investment management staff will monitor, on an ongoing basis, the earning power, cash flow and other liquidity ratios of the issuer and the borrower's ability to pay principal and interest on demand. Commercial paper rated A-1 by S&P has the following characteristics: (1) liquidity ratios are adequate to meet cash requirements; (2) long-term senior debt is rated "A" or better; (3) the issuer has access to at least two additional channels of borrowing; (4) basic earnings and cash flow have an upward trend with allowance made for A-3 unusual circumstances; (5) typically, the issuer's industry is well established, and the issuer has a strong position within the industry; and (6) the reliability and quality of management are unquestioned. Relative strength or weakness of the above factors determine whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1 is the highest commercial paper rating assigned by Moody's. Among the factors considered by Moody's in assigning ratings are the following: (1) evaluation of the management of the issuer; (2) economic evaluation of the issuer's industry or industries and the appraisal of speculative-type risks which may be inherent in certain areas; (3) evaluation of the issuer's products in relation to completion and customer acceptance; (4) liquidity; (5) amount and quality of long term debt; (6) trend of earnings over a period of ten years; (7) financial strength of a parent company and the relationships which exist with the issuer; and (8) recognition by the management of issuer of obligations which may be present or may arise as a result of public interest questions and preparations to meet such obligations. IV. DESCRIPTION OF BANK OBLIGATIONS Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated interest rate. Certificates of deposit are negotiable short-term obligations of commercial banks. Variable rate certificates of deposit are certificates of deposit on which the interest rate is periodically adjusted prior to their stated maturity based upon a specified market rate. As a result of these adjustments, the interest rate on these obligations may increase or decrease periodically. Frequently, dealers selling variable rate certificates of deposit to the Portfolio will agree to repurchase such instruments, at the Portfolio's option, at par on or near the coupon dates. The dealers' obligations to repurchase these instruments are subject to conditions imposed by various dealers. Such conditions typically are the continued credit standing of the issuer and the existence of reasonably orderly market conditions. The Portfolio is also able to sell variable rate certificates of deposit in the secondary market. Variable rate certificates of deposit normally carry a higher interest rate than comparable fixed rate certificates of deposit. A banker's acceptance is a time draft drawn on a commercial bank by a borrower usually in connection with an international commercial transaction to finance the import, export, transfer or storage of goods. The borrower is liable for payment as well as the bank which unconditionally guarantees to pay the draft at its face amount on the maturity date. Most acceptances have maturities of six months or less and are traded in the secondary markets prior to maturity. V. DESCRIPTION OF FOREIGN INVESTMENTS Investors should recognize that investing in foreign companies involves certain special considerations which are not typically associated with investing in U.S. companies. Since the securities of foreign companies are frequently denominated in foreign currencies, a Portfolio may be affected favorably or unfavorably by changes in currency rates and in exchange control regulations, and may incur costs in connection with conversions between various currencies. As foreign companies are not generally subject to uniform accounting, auditing and financial reporting standards and they may have policies that are not comparable to those of domestic companies, there may be less information available about certain foreign companies than about domestic companies. Securities of some foreign companies are generally less liquid and more volatile than securities of comparable domestic companies. There is generally less government supervision and regulation of stock exchanges, brokers and listed companies than in the U.S. In addition, with respect to certain foreign countries, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments which could affect U.S. investments in those countries. A-4 Although the Fund will endeavor to achieve the most favorable execution costs in its portfolio transactions, fixed commissions on many foreign stock exchanges are generally higher than negotiated commissions on U.S. exchanges. Certain foreign governments levy withholding taxes on dividend and interest income. Although in some countries a portion of these taxes are recoverable, the non-recoverable portion of foreign withholding taxes will reduce the income received from the companies comprising the Fund's Portfolios. However, these foreign withholding taxes are not expected to have a significant impact. A-5 APPENDIX B - COMPARISONS (a) Dow Jones Composite Average or its component averages -- an unmanaged index composed of 30 blue-chip industrial corporation stocks (Dow Jones Industrial Average), 15 utilities company stocks and 20 transportation stocks. (b) Standard & Poor's 500 Stock Index or its component indices -- an unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40 utilities stocks and 20 transportation stocks. (c) Standard & Poor's 400 Mid Cap Index - consists of 400 domestic stocks chosen for market size, liquidity, and industry group representation. It is also a market-value weighted index and was the first benchmark of mid cap stock price movement. (d) The New York Stock Exchange composite or component indices -- unmanaged indices of all industrial, utilities, transportation and finance stocks listed on the New York Stock Exchange. (e) Wilshire 5000 Equity Index or its component indices -- represents the return on the market value of all common equity securities for which daily pricing is available. (f) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income Fund Performance Analysis -- measure total return and average current yield for the mutual fund industry. Rank individual mutual fund performance over specified time periods, assuming reinvestment of all distributions, exclusive of any applicable sales charges. (g) Lipper Capital Appreciation Funds Index - a fund that aims at maximum capital appreciation, frequently by means of 100% or more portfolio turnover, leveraging, purchasing unregistered securities, purchasing options, etc. The fund may take large cash positions. (h) Lipper Small Cap Funds Index- a fund that by prospectus or portfolio practice invests primarily in companies with market capitalizations of less than $1 billion at the time of purchase. (i) Morgan Stanley Capital International EAFE Index and World Index -- respectively, arithmetic, market value-weighted averages of the performance of over 900 securities listed on the stock exchanges of countries in Europe, Australia and the Far East, and over 1,400 securities listed on the stock exchanges of these continents, including North America. (j) Goldman Sachs 100 Convertible Bond Index -- currently includes 67 bonds and 33 preferred. The original list of names was generated by screening for convertible issues of 100 million or greater in market capitalization. The index is priced monthly. (k) Salomon Brothers GNMA Index -- includes pools of mortgages originated by private lenders and guaranteed by the mortgage pools of the Government National Mortgage Association. (l) Salomon Brothers High Grade Corporate Bond Index -- consists of publicly issued, non-convertible corporate bonds rated AA or AAA. It is a value-weighted, total return index, including approximately 800 issues with maturities of 12 years or greater. B-1 (m) Salomon Brothers Broad Investment Grade Bond Index -- is a market- weighted index that contains approximately 4,700 individually priced investment grade corporate bonds rated BBB or better, U.S. Treasury/agency issues and mortgage pass through securities. (n) Lehman Brothers Long-Term Treasury Bond Index -- is composed of all bonds covered by the Lehman Brothers Treasury Bond Index with maturities of 10 years or greater. (o) Lehman Brothers Government/Corporate Index -- is a combination of the Government and Corporate Bond Indices. The Government Index includes public obligations of the U.S. Treasury, issues of Government agencies, and corporate debt backed by the U.S. Government. The Corporate Bond Index includes fixed-rate nonconvertible corporate debt. Also included are Yankee Bonds and nonconvertible debt issued by or guaranteed by foreign or international governments and agencies. All issues are investment grade (BBB) or higher, with maturities of at least one year and an outstanding par value of at least $100 million for U.S. Government issues and $25 million for others. Any security downgraded during the month is held in the index until month-end and then removed. All returns are market value weighted inclusive of accrued income. (p) NASDAQ Industrial Index -- is composed of more than 3,000 industrial issues. It is a value-weighted index calculated on price change only and does not include income. (q) Value Line -- composed of over 1,600 stocks in the Value Line Investment Survey. (r) Russell 2000 Index -- composed of the 2,000 smallest stocks in the Russell 3000, a market value-weighted index of the 3,000 largest U.S. publicly-traded companies. (s) Salomon Brothers 3 Month T-Bill Average - the average return for all Treasury bills for the previous three month period. (t) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70% Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35% Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade Bond Index; all stocks on the NASDAQ system exclusive of those traded on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Salomon Brothers High Grade Bond Index. (u) CDA Mutual Fund Report published by CDA Investment Technologies, Inc. -- analyzes price, current yield, risk, total return and average rate of return (average compounded growth rate) over specified time periods for the mutual fund industry. (v) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes price, yield, risk and total return for equity funds. (w) Financial publications: Business Week, Changing Times, Financial World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial Times, Global Investor, Wall Street Journal and Weisenberger Investment Companies Service -- publications that rate fund performance over specified time periods. B-2 (x) Consumer Price Index (or Cost of Living Index), published by the U.S. Bureau of Labor Statistics -- a statistical measure of change over time in the price of goods and services in major expenditure groups. (y) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates - - historical measure of yield, price and total return for common and small company stock, long-term government bonds, U.S. Treasury bills and inflation. (z) Savings and Loan Historical Interest Rates -- as published by the U.S. Savings & Loan League Fact Book. (aa) Historical data supplied by the research departments of First Boston Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg L.P. B-3 PART B UAM FUNDS JACOBS INTERNATIONAL OCTAGON PORTFOLIO STATEMENT OF ADDITIONAL INFORMATION - July 17, 1998 This Statement of Additional Information ("SAI") is not a Prospectus but should be read in conjunction with the Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the Jacobs International Octagon Portfolio Institutional Class Shares (the "Portfolio") dated July 17, 1998. To obtain the Prospectus, please call the UAM Funds Service Center at 1-800-638-7983. TABLE OF CONTENTS INVESTMENT OBJECTIVE AND POLICIES.......................................... 2 PURCHASE AND REDEMPTION OF SHARES.......................................... 4 VALUATION OF SHARES........................................................ 5 SHAREHOLDER SERVICES....................................................... 5 INVESTMENT LIMITATIONS..................................................... 6 MANAGEMENT OF THE FUND..................................................... 7 INVESTMENT ADVISER......................................................... 9 PORTFOLIO TRANSACTIONS..................................................... 11 ADMINISTRATIVE SERVICES.................................................... 11 CUSTODIAN.................................................................. 13 INDEPENDENT ACCOUNTANTS.................................................... 13 DISTRIBUTOR................................................................ 13 PERFORMANCE CALCULATIONS................................................... 13 GENERAL INFORMATION........................................................ 15 FINANCIAL STATEMENTS....................................................... 16 APPENDIX A - COMPARISONS................................................... A-1 APPENDIX B DESCRIPTION OF SECURITIES AND RATINGS........................... B-1 Investment Adviser Jacobs Asset Management (Adviser) Distributor UAM Funds Distributors, Inc. (Distributor) Administrator and Transfer Agent UAM Funds Services, Inc. (UAMFSI) INVESTMENT OBJECTIVE AND POLICIES The following discussion supplements the discussion of investment objective and policies of the Portfolio as set forth in the Portfolio's Prospectus. LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified brokers, dealers, domestic and foreign banks or other financial institutions, so long as the terms, the structure and the aggregate amount of such loans are not inconsistent with the Investment Company Act of 1940, as amended, (the "1940 Act") or the Rules and Regulations or interpretations of the Securities and Exchange Commission (the "SEC") thereunder, which currently require that (a) the borrower pledge and maintain with the Portfolio collateral consisting of cash, an irrevocable letter of credit issued by a domestic U.S. bank or securities issued or guaranteed by the United States Government having a value at all times not less than 100% of the value of the securities loaned, (b) the borrower add to such collateral whenever the price of the securities loaned rises (i.e., the borrower "marks to the market" on a daily basis), (c) the loan be made subject to termination by the Portfolio at any time, and (d) the Portfolio receives reasonable interest on the loan (which may include the Portfolio investing any cash collateral in interest bearing short-term investments). The Portfolio will not loan securities to the extent that greater than one-third of its assets (including the value of the collateral for the loans) at fair market value would be committed to loans. As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the securities loaned if the borrower of the securities fails financially. These risks are similar to the ones involved with repurchase agreements as in the Prospectus. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS The U.S. dollar value of the assets of the Portfolio may be affected favorably or unfavorably by changes in foreign currency exchange rates and exchange control regulations, and the Portfolio may incur costs in connection with conversions between various currencies. The Portfolio will conduct its foreign currency exchange transactions either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency exchange market, or through entering into forward contracts to purchase or sell foreign currencies. 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 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 such trades. The Portfolio may enter into forward currency exchange contracts in several circumstances. When the Portfolio enters into a contract for the purchase or sale of a security denominated in a foreign currency, or when the Portfolio anticipates the receipt in a foreign currency of dividends or interest payments on a security which it holds, the Portfolio may desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent of such dividend or interest payment, as the case may be. By entering into a forward contract for a fixed amount of dollars for the purchase or sale of the amount of foreign currency involved in the underlying transactions, the Portfolio will be able to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the subject foreign currency during the period between the date on which the security is purchased or sold, or on which the dividend or interest payment is declared, and the date on which such payments are made or received. Additionally, when the Portfolio anticipates that the currency of a particular foreign country may suffer a substantial decline against the U.S. dollar, it may enter into a forward contract for a fixed amount of dollars, to sell the amount of foreign currency approximating the value of some or all of the Portfolio's securities denominated in such foreign currency. The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible since the future value of securities in foreign currencies will change as a consequence of market movements in the value of these securities between the date on which the forward contract is entered into and the date it matures. The projection of short-term currency market movement is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain. From time to time, the Portfolio 2 may enter into forward contracts to protect the value of portfolio securities and enhance Portfolio performance. The Portfolio will not enter into such forward contracts or maintain a net exposure to such contracts where the consummation of the contracts would obligate the Portfolio to deliver an amount of foreign currency in excess of the value of the Portfolio securities or other assets denominated in that currency. Under normal circumstances, consideration of the prospect for currency parities will be incorporated into the long-term investment decisions made with regard to overall diversification strategies. However, the Adviser believes that it is important to have the flexibility to enter into such forward contracts when it determines that the best interests of the performance of the Portfolio will thereby be served. Except when the Portfolio enters into a forward contract for the purchase or sale of a security denominated in a foreign currency, which requires no segregation, a forward contract which obligates the Portfolio to buy or sell currency will generally require the Fund's Custodian to hold an amount of that currency or liquid securities denominated in that currency equal to the Portfolio's obligations, or to segregate liquid assets equal to the amount of the Portfolio's obligation. If the value of the segregated assets declines, additional liquid assets will be segregated on a daily basis so that the value of the segregated assets will be equal to the amount of the Portfolio's commitments with respect to such contracts. If the Portfolio retains the portfolio security and engages in an offsetting transaction, the Portfolio will incur a gain or loss (as described below) to the extent that there has been movement in forward contract prices. Should forward prices decline during the period between the Portfolio entering into a forward contract for the sale of a foreign currency and the date it enters into an offsetting contract for the purchase of the foreign currency, the Portfolio will realize a gain to the extent that the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to purchase. Should forward prices increase, the Portfolio would suffer a loss to the extent that the price of the currency it has agreed to purchase exceeds the price of the currency it has agreed to sell. The Portfolio's dealings in forward foreign currency exchange contracts will be limited to the transactions described above. Of course, the Portfolio is not required to enter into such transactions with regard to their foreign currency-denominated securities. It also should be realized that this method of protecting the value of portfolio 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 which one can achieve 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. RISKS OF FORWARD CONTRACTS Forward contracts are not traded on contract markets regulated by the CFTC or by the SEC. To the contrary, such instruments are traded through financial institutions acting as market-makers. Moreover, a trader of forward contracts could lose amounts substantially in excess of their initial investments, due to the margin and collateral requirements associated with such positions. In addition, forward contracts may be traded on foreign exchanges. Such transactions are subject to the risk of governmental actions affecting trading in or the prices of foreign currencies or securities. The value of such positions also could be adversely affected by (i) other complex foreign political and economic factors, (ii) lesser availability than in the United States of data on which to make trading decisions, (iii) delays in a Portfolio's ability to act upon economic events occurring in foreign markets during nonbusiness hours in the United States, (iv) the imposition of different exercise and settlement terms and procedures and margin requirements than in the United States, and (v) lesser trading volume. 3 DEPOSITARY RECEIPTS ADRs are depositary receipts typically used 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 investments in foreign securities, as discussed in the Prospectus. For purposes of the Portfolio's investment policies, the Portfolio's investments in depositary receipts will be deemed to be investments in the underlying securities. PORTFOLIO TURNOVER The portfolio turnover rate described in the Prospectus is calculated by dividing the lesser of purchases or sales of portfolio securities for the year by the monthly average of the value of the portfolio securities. The calculation excludes all securities, including options, whose maturities at the time of acquisition were one year or less. Portfolio turnover may vary greatly from year to year as well as within a particular year, and may also be affected by cash requirements for redemptions of shares. See "Financial Highlights" in the Prospectus for the historical portfolio turnover rates with respect to the Portfolio. PURCHASE AND REDEMPTION OF SHARES Shares of the Portfolio may be purchased without a sales commission at the net asset value per share next determined after an order is received in proper form by the Fund, and payment is received by the Fund or its designated Service Agent. The minimum initial investment required for the Portfolio is $2,500, with certain exceptions as may be permitted from time to time by the officers of the Fund. Other investment minimums are: initial IRA investment, $500; initial spousal IRA investment, $250; and additional investment for all accounts, $100. An order received in proper form prior to the close of regular trading on the New York Stock Exchange ("Exchange") (generally 4:00 p.m. Eastern Time) will be executed at the price computed on the date of receipt; and an order received not in proper form or after the close of the Exchange will be executed at the price computed on the next day the Exchange is open after proper receipt. The exchange will be closed on the following days: New Year's Day, Dr. Martin Luther King, Jr. Day, 4 Presidents' Day; Good Friday; Memorial Day; Independence Day; Labor Day; Thanksgiving Day and Christmas Day. The Portfolio reserves the right in its sole discretion (1) to suspend the offering of its shares, (2) to reject purchase orders when in the judgment of management such rejection is in the best interests of the Fund, and (3) to reduce or waive the minimum for initial and subsequent investment for certain fiduciary accounts such as employee benefit plans or under circumstances where certain economics can be achieved in sales of the Portfolio's shares. The Portfolio may suspend redemption privileges or postpone the date of payment (1) during any period that both the Exchange and custodian bank are closed or trading on the Exchange is restricted as determined by the SEC, (2) during any period when an emergency exists as defined by the rules of the SEC as a result of which it is not reasonably practicable for the Portfolio to dispose of securities owned by it or to fairly determine the value of its assets, and (3) for such other periods as the SEC may permit. The Fund has made an election with the SEC to pay in cash all redemptions requested by any shareholder of record limited in amount during any 90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at the beginning of such period. Such commitment is irrevocable without the prior approval of the SEC. Redemptions in excess of the above limits may be paid, in whole or in part, in investment securities or in cash as the Board of Trustees may deem advisable; however, payment will be made wholly in cash unless the Board of Trustees believes that economic or market conditions exist which would make such a practice detrimental to the best interests of the Fund. If redemptions are paid in investment securities, such securities will be valued as set forth in the Prospectus under "VALUATION OF SHARES," and a redeeming shareholder would normally incur brokerage expenses if those securities were converted to cash. No charge is made by the Portfolio for redemptions. Any redemption may be more or less than the shareholder's initial cost depending on the market value of the securities held by the Portfolio. SIGNATURE GUARANTEES To protect your account, the Fund and Chase Global Funds Services Company ("CGFSC") from fraud, signature guarantees are required for certain redemptions. The purpose of signature guarantees is to verify the identity of the person who has authorized a redemption from your account. Signature guarantees are required for (1) all redemptions when the proceeds are to be sent to someone other than the registered owner(s) and/or registered address, or (2) share transfer requests. Signatures must be guaranteed by an "eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. A complete definition of eligible guarantor institutions is available from the Fund's transfer agent. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. Signature guarantees will be accepted from any eligible guarantor institution which participates in a signature guarantee program. The signature guarantee must appear either: (1) on the written request for redemption; (2) on a separate instrument for assignment ("stock power") which should specify the total number of shares to be redeemed; or (3) on all stock certificates tendered for redemption and, if shares held by the Fund are also being redeemed, on the letter or stock power. VALUATION OF SHARES 5 Equity securities listed on a securities exchange for which market quotations are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed securities not traded on the valuation date for which market quotations are readily available are valued neither exceeding the current asked prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars as quoted by any major bank or broker. Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the- counter market. Bonds and other fixed income securities may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost, using methods approved by the Board of Trustees. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods approved by the Fund's Board of Trustees. SHAREHOLDER SERVICES The following supplements the information set forth under "Shareholder Services" in the Prospectus. 6 EXCHANGE PRIVILEGE Institutional Class Shares of the Portfolio may be exchanged for Institutional Class Shares of any UAM Funds or UAM Funds, Inc. Portfolio. Exchange requests should be made by calling the Fund (1-800-638-7983) or by writing to UAM Funds, UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The exchange privilege is only available with respect to Portfolios that are qualified for sale in the shareholder's state of residence. Any such exchange will be based on the respective net asset values of the shares involved. There is no sales commission or charge of any kind. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objective of the Portfolio to be purchased. You may obtain a Prospectus for the Portfolio(s) you are interested in by calling the UAM Funds Service Center at 1-800-638-7983. Telephone exchanges will be accepted only if the certificates for the shares to be exchanged have not been issued to the shareholder, and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading of the Exchange (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the Exchange will be processed on the next business day. Neither the Fund nor the Sub- Administrator will be responsible for the authenticity of the exchange instructions received by telephone. Exchanges may also be subject to limitations as to amounts or frequency, and to other restrictions established by the Board of Trustees to assure that such exchanges do not disadvantage the Fund and its shareholders. For federal income tax purposes an exchange between Funds is a taxable event, and, accordingly, a capital gain or loss may be realized. In a revenue ruling relating to circumstances similar to the Fund's, an exchange between series of a Fund was also deemed to be a taxable event. It is likely, therefore, that a capital gain or loss would be realized on an exchange between Portfolios; you may want to consult your tax adviser for further information in this regard. The exchange privilege may be modified or terminated at any time. TRANSFER OF SHARES Shareholders may transfer shares of the Portfolio to another person by making a written request to the Fund. The request should clearly identify the account and number of shares to be transferred, and include the signature of all registered owners and all stock certificates, if any, which are subject to the transfer. The signature on the letter of request, the stock certificate or any stock power must be guaranteed in the same manner as described under "PURCHASE AND REDEMPTION OF SHARES." As in the case of redemptions, the written request must be received in good order before any transfer can be made. INVESTMENT LIMITATIONS The following limitations supplement those set forth in the Prospectus of the Portfolio. A Portfolio's fundamental investment limitations cannot be changed without the approval of a "majority of the outstanding shares" (as defined in the 1940 Act) of the Portfolio. Except for the numbered investment limitations noted as fundamental below, however, the limitations described below are not fundamental, and may be changed without the consent of shareholders. Whenever an investment limitation sets forth a percentage limitation on investment or utilization of assets, such limitation shall be determined immediately after and as a result of the Portfolio's acquisition of such security or other asset. Accordingly, any later increase or decrease resulting from a change in values, net assets or other circumstances will not be considered when determining whether the investment complies with the Portfolio's investment limitations. As a matter of fundamental policy, the Portfolio will not: (1) invest in physical commodities or contracts on physical commodities; 7 (2) purchase or sell real estate limited partnerships, although it may purchase and sell securities of companies which deal in real estate and may purchase and sell securities which are secured by interests in real estate; (3) make loans except (i) by purchasing debt securities in accordance with its investment objectives and (ii) by lending its portfolio securities in 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 SEC thereunder; and (4) underwrite the securities of other issuers. As a matter of non-fundamental policy, the Portfolio will not: (1) invest in futures and/or options on futures; (2) purchase on margin or sell short; (3) invest more than an aggregate of 15% of the net assets of the Portfolio, determined at the time of investment, in securities subject to legal or contractual restrictions on resale or securities for which there are no readily available markets; (4) invest for the purpose of exercising control over management of any company; and (5) issue senior securities, as defined in the 1940 Act, except that this restriction shall not be deemed to prohibit the Portfolio from (i) making any permitted borrowings, mortgages or pledges, or (ii) entering into repurchase transactions. MANAGEMENT OF THE FUND TRUSTEES AND OFFICERS The Officers of the Fund manage its day-to-day operations and are responsible to the Fund's Board of Trustees. The Trustees set broad policies for the Fund and elect its Officers. The following is a list of the Trustees and Officers of the Fund, their addresses and dates of birth, and a brief statement of their present positions and principal occupations during the past five years. John T. Bennett, Jr. (1/26/29), Trustee; College Road--RFD 3, Meredith, NH 03253; President of Squam Investment Management Company, Inc. and Great Island Investment Company, Inc.; President of Bennett Management Company from 1988 to 1993. Nancy J. Dunn (8/14/51), Trustee; 10 Garden Street, Cambridge, MA 02138; Vice President for Finance and Administration and Treasurer of Radcliffe College since 1991. 8 Philip D. English (8/5/48), Trustee; 16 West Madison Street, Baltimore, MD 21201; President and Chief Executive Officer of Broventure Company, Inc.; Chairman of the Board of Chektec Corporation and Cyber Scientific, Inc. William A. Humenuk (4/21/42), Trustee; 100 King Street West, P.O. Box 2440, LCD- 1, Hamilton Ontario, Canada L8N-456; Executive Vice President and Chief Administrative Officer of Philip Services Corp.; Director, Hofler Corp.; Formerly, a Partner in the Philadelphia office of the law firm Dechert Price & Rhoads. Norton H. Reamer* (3/21/35), Trustee; One International Place, Boston, MA 02110; President and Chairman of the Fund; President, Chief Executive Officer and a Director of United Asset Management Corporation; Director, Partner or Trustee of each of the Investment Companies of the Eaton Vance Group of Mutual Funds. Peter M. Whitman, Jr.* (7/1/43), Trustee; One Financial Center, Boston, MA 02111; President and Chief Investment Officer of Dewey Square Investors Corporation ("DSI") since 1988; Director and Chief Executive Officer of H. T. Investors, Inc., formerly a subsidiary of DSI. William H. Park (9/19/47), Vice President; One International Place, Boston, MA 02110; Executive Vice President and Chief Financial Officer of United Asset Management Corporation. Gary L. French (7/4/51), Treasurer; 211 Congress Street, Boston, MA 02110; President of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; formerly Vice President of Operations, Development and Control of Fidelity Investment in 1995; Treasurer of the Fidelity Group of Mutual Funds from 1991 to 1995. Michael E. DeFao (2/28/68), Secretary; 211 Congress Street, Boston, MA 02110; Vice President and General Counsel of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; Associate Attorney of Ropes & Gray (a law firm) from 1993 to 1995. Robert R. Flaherty (9/18/63), Assistant Treasurer; 211 Congress Street, Boston, MA 02110; Vice President of UAM Fund Services, Inc.; formerly Manager of Fund Administration and Compliance of Chase Global Fund Services Company from 1995 to 1996; Deloitte & Touche LLP from 1985 to 1995, Senior Manager. Michelle Azrialy (4/12/69), Assistant Secretary; 73 Tremont Street, Boston, MA 02108; Assistant Treasurer of Chase Global Funds Services Company since 1996. Senior Public Accountant with Price Waterhouse LLP from 1991 to 1994. Gordon M. Shone (7/30/56), Assistant Treasurer; 73 Tremont Street, Boston, MA 02108; Vice President of Fund Administration and Compliance of Chase Global Funds Services Company; formerly Senior Audit Manager of Coopers & Lybrand LLP (1983-1996). *Messrs. Reamer and Whitman are deemed to be "interested persons" of the Fund as that term is defined in the 1940 Act. REMUNERATION OF TRUSTEES AND OFFICERS The Fund pays each Trustee, who is not also an officer or affiliated person, a $150 quarterly retainer fee per active Portfolio which currently amounts to $1,350 per quarter. In addition, each unaffiliated Trustee receives a $2,000 meeting fee which is aggregated for all the Trustees and allocated proportionately among the Portfolios of the Fund and UAM Funds, Inc. and reimbursement for travel and other expenses incurred while attending Board meetings. Trustees who are also officers or affiliated persons receive no remuneration for their service as Trustees. The Fund's officers and employees are paid by either the Adviser, United Asset Management 9 Corporation ("UAM"), or the Administrator and receive no compensation from the Fund. As of June 15, 1998, the Trustees and officers of the Fund owned less than 1% of the Fund's outstanding shares. 10 The following table shows aggregate compensation paid to each of the Fund's Trustees by the Fund and total compensation paid by the Funds and UAM Funds, Inc. (collectively the "Fund Complex") in the fiscal year ended April 30, 1998. COMPENSATION TABLE
Pension or Retirement Estimated Benefits Accrued Annual Total Compensation Name of Person, Aggregate Compensation as Part of Benefits Upon from Registrant and Position From Registrant Fund Expenses Retirement Fund Complex -------- --------------- ------------- ---------- ------------ John T. Bennett, Jr. Trustee........... $6,149 0 0 $33,500 Philip D. English Trustee........... $6,149 0 0 $33,500 William A. Humenuk Trustee........... $6,149 0 0 $33,500 Nancy J. Dunn Trustee........... $4,668 0 0 $25,200 Peter M. Whitman, Jr. $ 0 0 0 $ 0 Trustee Norton H. Reamer Trustee $ 0 0 0 $ 0
PRINCIPAL HOLDERS OF SECURITIES As of June 15, 1998, the following persons or organizations held of record or beneficially 5% or more of the shares of the Portfolio: Jacobs International Octagon Portfolio Institutional Class Shares: Michigan State University Foundation, 4700 S. Hagadom Rd., Suite 220, E. Lansing, MI, 16.2%*; Charles Schwab & Co., Inc., Reinvest Account, Attn: Mutual Funds, 101 Montgomery St., San Francisco, CA, 12.7%*; and Chembaco, FBO H.H. & Grace A. Dow Foundation, c/o Chemical Bank & Trust, 333 E. Bank St., Midland, MI, 7.3%*. The person(s) or organization(s) listed above as owning 25% or more of the outstanding shares of the Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of such Portfolio. - ------- 11 * Denotes shares held by a trustee or other fiduciary for which beneficial ownership is disclaimed or presumed disclaimed. INVESTMENT ADVISER CONTROL OF ADVISER The Adviser is a Florida limited partnership organized in July 1995. UAM is a limited partner of the Adviser and owns a controlling interest in the Adviser. UAM is a holding company incorporated in Delaware in December 1980 for the purpose of acquiring and owning firms engaged primarily in institutional investment management. Since its first acquisition in August 1983, UAM has acquired or organized over 45 wholly-owned affiliated firms (the "UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to retain control over their investment advisory decisions is necessary to allow them to continue to provide investment management services that are intended to meet the particular needs of their respective clients. Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to operate under their own firm name, with their own leadership and individual investment philosophy and approach. Each UAM Affiliated Firm manages its own business independently on a day-to-day basis. Investment strategies employed and securities selected by UAM Affiliated Firms are separately chosen by each of them. Several UAM Affiliated Firms also act as investment advisers to separate series or Portfolios of UAM Funds, Inc. a registered investment company. SERVICES PERFORMED BY ADVISER Pursuant to an Investment Advisory Agreement ("Agreement") between the Fund and the Adviser, the Adviser has agreed to manage the investment and reinvestment of the Portfolio's assets, to continuously review, supervise and administer the Portfolio's investment program, and to determine in its discretion the securities to be purchased or sold and the portion of the Portfolio's assets to be held uninvested. In the absence of (i) willful misfeasance, bad faith or gross negligence on the part of the Adviser in the performance of its obligations and duties under the Agreement, (ii) reckless disregard by the Adviser of its obligations and duties under the Agreement, or (iii) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, the Adviser shall not be subject to any liability whatsoever to the Fund, or to any shareholder of the Fund, for any error of judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services under the Agreement. Unless sooner terminated, the Agreement shall continue for periods of one year so long as such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Trustees of the Fund who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, (b) by the Board of Trustees of the Fund, or (c) by vote of a majority of the outstanding voting securities of the Portfolio. The Agreement may be terminated at any time by the Portfolio, without the payment of any penalty, by vote of a majority of the entire Board of Trustees 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. The Agreement may be terminated by the Adviser at any time, without the payment of any penalty, upon 90 days written notice to the Fund. The Agreement will automatically and immediately terminate in the event of its assignment. ADVISORY FEES As compensation for services rendered by the Adviser under the Investment Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly installments, calculated by applying the following annual percentage rates to the Portfolio's average daily net assets for the month: Rate Jacobs International Octagon Portfolio........1.00% 12 For the period from January 2, 1997 (commencement of operations) to April 30, 1997, Jacobs International Octagon Portfolio paid advisory fees of $35,743. During this period, the Adviser voluntarily waived advisory fees of $23,838. For the fiscal year ended April 30, 1998, Jacobs International Octagon Portfolio paid advisory fees of $730,085, of which $0 were voluntarily waived. Until further notice, the Adviser has agreed voluntarily to waive all or a portion of its advisory fees and to assume operating expenses otherwise payable by the Portfolio, if necessary, to keep the Portfolio's total annual operating expenses from exceeding 1.75% of average daily net assets. PORTFOLIO TRANSACTIONS The Investment Advisory Agreement authorizes the Adviser to select the brokers or dealers that will execute the purchases and sales of investment securities for the Portfolio and directs the Adviser to use its best efforts to obtain the best execution with respect to all transactions for the Portfolio. The Adviser may, however, consistent with the interests of the Portfolio, select brokers on the basis of the research, statistical and pricing services they provide to the 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 Adviser under the Investment 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 Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Portfolio and the Adviser's other clients. It is not the Fund's practice to allocate brokerage or effect principal transactions with dealers on the basis of sales of shares which may be made through broker-dealer firms. However, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. During the period from January 2, 1997 (date of commencement) to April 30, 1997, and for the fiscal year ended April 30, 1998, Jacobs International Octagon Portfolio paid aggregate brokerage commissions of $74,683 and $344,507, respectively. The difference in brokerage commissions paid between April 30, 1997 and 1998, was the result of growth in the portfolio's assets. Some securities considered for investment by the Portfolio may also be appropriate for other clients served by the Adviser. If purchases or sales of securities consistent with the investment policies of the Portfolio and one or more of these other clients served by the Adviser 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 Adviser. Although there is no specified formula for allocating such transactions, the various allocation methods used by the Adviser, and the results of such allocations, are subject to periodic review by the Fund's Board of Trustees. ADMINISTRATIVE SERVICES The Board of Trustees of the Fund approved a Fund Administration Agreement ("Fund Administration Agreement"), effective April 15, 1996, between UAMFSI, a wholly owned subsidiary of UAM, and the Fund. Pursuant to the terms of the Fund Administration Agreement, UAMFSI manages, administers and conducts the general business activities of the Fund other than those which have been contracted to other third parties by the Fund. Additionally, UAMFSI has agreed to provide transfer agency services to the Portfolio pursuant to the terms of the Fund Administration Agreement. UAMFSI has subcontracted some of these services to CGFSC, an affiliate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement between UAMFSI and CGFSC (collectively, with the Fund Administration Agreement, the "Agreements"). Pursuant to the terms of the Agreements, the Portfolio pays UAMFSI a two- part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fee is calculated from the aggregate net assets of the Portfolio: 13 Annual Rate ----------- Jacobs International Octagon Portfolio.........0.04% CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined Fund net assets; 0.11 of 1% of the next $800 million of combined Fund net assets; 0.07 of 1% of combined Fund net assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined Fund net assets in excess of $3 billion. Fees are allocated among each of the Portfolios on the basis of their relative assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum annual fee increases by $20,000. Prior to April 15, 1996, CGFSC or its predecessor, Mutual Funds Service Company, provided certain administrative services to the Fund under an Administration Agreement between the Fund and U.S. Trust Company of New York. For the period January 2, 1997 (date of commencement) to April 30, 1997, and for the fiscal year ended April 30, 1998, administrative service fees paid to CGFSC by the Jacobs International Octagon Portfolio totaled $11,212 and $78,772, respectively. For these same periods, UAMFSI earned $2,339 and $29,248, respectively, from the Jacobs International Octagon Portfolio as Administrator. The services provided by UAMFSI and CGFSC and the basis of the current fees payable are described in the Portfolio's Prospectus. UAMFSI will bear all expenses in connection with the performance of its services under the Fund Administration Agreement. Other expenses to be incurred in the operation of the Fund will be borne by the Fund or other parties, including taxes, interest, brokerage fees and commissions, if any, salaries and fees of officers and members of the Board who are not officers, directors, shareholders or employees of UAMFSI, or the Fund's investment adviser or distributor, SEC fees and state Blue Sky fees, EDGAR filing fees, processing services and related fees, advisory and administration fees, charges and expenses of pricing and data services, independent public accountants and custodians, insurance premiums including fidelity bond premiums, outside legal expenses, costs of maintenance of corporate existence, typesetting and printing of prospectuses for regulatory purposes and for distribution to current shareholders of the Fund, printing and production costs of shareholders' reports and corporate meetings, cost and expenses of Fund stationery and forms, costs of special telephone and data lines and devices, trade association dues and expenses, and any extraordinary expenses and other customary Fund expenses. Unless sooner terminated as provided herein, the Fund Administration Agreement shall continue in effect from year to year provided such continuance is specifically approved at least annually by the Board. The Fund Administration Agreement is terminable, without penalty, by the Board or by UAMFSI, on not less than ninety (90) days' written notice. The Fund Administration Agreement shall automatically terminate upon its assignment by UAMFSI without the prior written consent of the Fund. UAMFSI will from time to time employ or associate with such person or persons as may be fit to assist them in the performance of the Fund Administration Agreement. Such person or persons may be officers and employees who are employed by both UAMFSI and the Fund. The compensation of such person or persons for such employment shall be paid by UAMFSI and no obligation will be incurred by or on behalf of the Fund in such respect. 14 Effective February 28, 1997, the Fund entered into an Account Services Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc. (the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services Agreement, the Service Provider agrees to perform certain services for participants in a self-directed, defined contribution plan, and for whom the Service Provider provides participant recordkeeping. Pursuant to the Services Agreement, the Service Provider is entitled to receive, after the end of each month, a fee at the annual rate of 0.15% of the average aggregate daily net asset value of shares of the Portfolios in the accounts for which it provides services. During the fiscal year ended April 30, 1998, the Portfolio paid the Service Provider $1,789 in fees pursuant to the Services Agreement. CUSTODIAN The Chase Manhattan Bank, 3 Chase Metro Tech Center, Brooklyn, New York 11245, provides for the custody of the Fund's assets pursuant to the terms of a custodian agreement with the Fund. INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, serves as independent accountants for the Fund. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, serves as the Fund's Distributor. Shares of the Fund are offered continuously. While the Distributor will use its best efforts to sell shares of the Fund, it is not obligated to sell any particular amount of shares. The Distributor received no compensation for its services from the Portfolio during the fiscal year ended April 30, 1998. PERFORMANCE CALCULATIONS PERFORMANCE The Portfolio may from time to time quote various performance figures to illustrate past performance. Performance quotations by investment companies are subject to rules adopted by the SEC, which require the use of standardized performance quotations or, alternatively, that every non-standardized performance quotation furnished by the Portfolio be accompanied by certain standardized performance information computed as required by the SEC. Average annual compounded total return quotations used by the Portfolio are based on the standardized methods of computing performance mandated by the SEC. An explanation of the method used to compute or express performance follows. YIELD Current yield reflects the income per share earned by a Portfolio's investment. The current yield of a Portfolio is determined by dividing the net investment income per share earned during a 30-day base period by the maximum offering price per share on the last day of the period and annualizing the result. Expenses accrued for the period include any fees charged to all shareholders during the base period. Since Service Class Shares of a Portfolio bear additional service and distribution expenses, the yield of the Service Class Shares of a Portfolio will generally be lower than that of the Institutional Class Shares of the same Portfolio. 15 A yield figure is obtained using the following formula: Yield = 2[(a - b + 1)/6/ - 1] ----- cd where: a = dividends and interest earned during the period b = expenses accrued for the period (net of reimbursements) c = the average daily number of shares outstanding during the period that were entitled to receive income distributions d = the maximum offering price per share on the last day of the period. TOTAL RETURN The average annual total return of the Portfolio is determined by finding the average annual compounded rates of return over 1, 5 and 10 year periods that would equate an initial hypothetical $1,000 investment to its ending redeemable value. The calculation assumes that all dividends and distributions are reinvested when paid. The quotation assumes the amount was completely redeemed at the end of each 1, 5 and 10 year period and the deduction of all applicable Portfolio expenses on an annual basis. The average annual total returns for the Portfolio's Institutional Class Shares from inception on January 2, 1997 to April 30, 1997, and for the fiscal year ended April 30, 1998 were 15.62% and 19.19%, respectively. These figures are calculated according to the following formula: P(1 + T)/n/ = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10 year periods (or fractional portion thereof). COMPARISONS To help investors better evaluate how an investment in the Portfolio might satisfy their investment objective, advertisements regarding the Portfolio may discuss various measures of Portfolio performance as reported by various financial publications. Advertisements may also compare performance (as calculated above) to performance as reported by other investments, indices and averages. Please see Appendix A for publications, indices and averages which may be used. In assessing such comparisons of performance, an investor should keep in mind that the composition of the investments in the reported indices and averages is not identical to the composition of investments in the Portfolio, that the averages are generally unmanaged, and that the items included in the calculations of such averages may not be identical to the formula used by the Portfolio to calculate its performance. In addition, there can be no assurance that the Portfolio will continue this performance as compared to such other averages. 16 GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized under the name "The Regis Fund II" as a Delaware business trust on May 18, 1994. On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's principal executive office is located at One International Place, 44th Floor, Boston, MA 02110; however all investor correspondence should be directed to the Fund at UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial interest, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without further action by shareholders. The Board of Trustees has classified an two additional classes of shares in the Portfolio, known as Institutional Service Shares and Advisor Shares. As of the date of this Statement of Additional Information, no Institutional Service Shares or Advisor Shares have been offered by the Portfolio. The shares of the Portfolio, when issued and paid for as provided for in its Prospectus, will be fully paid and nonassessable, have no preference as to conversion, exchange, dividends, retirement or other features and have no preemptive rights. The shares of the Portfolio have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. Institutional Class, Service Class and Advisor Class Shares each represent an interest in the same assets of a Portfolo and are identical in all respects except that the Service Class Shares bear certain expenses related to shareholder servicing and the distribution of such shares, and have exclusive voting rights with respect to matters relating to such distribution expenditures. In the event of liquidation of the Fund, the holders of the shares of each Portfolio or any class thereof that has been established and designated shall be entitled to receive, when and as declared by the Trustees, the excess of the assets belonging to that Portfolio, or in the case of a class, belonging to that Portfolio and allocable to that class, over the liabilities belonging to that Portfolio or class. The assets so distributable to the holders of shares of any particular Portfolio or class thereof shall be distributed to the holders in proportion to the number of shares of that Portfolio or class thereof held by them and recorded on the books of the Fund. The liquidation of any Portfolio or class thereof may be authorized at any time by vote of a majority of the Trustees then in office. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Fund's policy is to distribute substantially all of the Portfolio's net investment income, if any, together with any net realized capital gains annually in the amount and at the times that will avoid both income (including capital gains) taxes incurred and the imposition of the federal excise tax on undistributed income and capital gains. The amounts of any income dividends or capital gains distributions cannot be predicted. See discussion under "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES" in the Prospectus. Any dividend or distribution paid shortly after the purchase of shares of the Portfolio by an investor may have the effect of reducing the per share net asset value of the Portfolio by the per share amount of the dividend or 17 distribution. Furthermore, such dividends or distributions, although in effect a return of capital, are subject to income taxes as set forth in the Prospectus. As set forth in the Prospectus, unless the shareholder elects otherwise in writing, all dividend and capital gains distributions are automatically reinvested in additional shares of the respective Portfolio of the Fund at net asset value (as of the business day following the record date). This will remain in effect until the Fund is notified by the shareholder in writing at least three days prior to the record date that either the Income Option (income dividends in cash and capital gains distributions in additional shares at net asset value) or the Cash Option (both income dividends and capital gains distributions in cash) has been elected. An account statement is sent to shareholders whenever an income dividend or capital gains distribution is paid. CODE OF ETHICS The Fund has adopted a Code of Ethics which restricts to a certain extent personal transactions by access persons of the Fund and imposes certain disclosure and reporting obligations. FINANCIAL STATEMENTS The audited financial statements and notes thereto in the Portfolio's Annual Report to Shareholders (the "1998 Annual Report") are incorporated by reference into this Statement of Additional Information. No other parts of the 1998 Annual Report are incorporated by reference herein. The Financial Statements included in the 1998 Annual Report have been audited by the Fund's independent accountants, PricewaterhouseCoopers LLP. The reports of PricewaterhouseCoopers LLP are incorporated herein by reference. Such financial statements have been incorporated herein in reliance upon such reports given upon the authority of PricewaterhouseCoopers LLP as experts in accounting and auditing. Copies of the 1998 Annual Report may be obtained free of charge by telephoning the UAM Funds Service Center at the telephone number appearing on the front page of this Statement of Additional Information. 18 APPENDIX A - COMPARISONS (a) Dow Jones Composite Average or its component averages -- an unmanaged index composed of 30 blue-chip industrial corporation stocks (Dow ]ones Industrial Average), 15 utilities company stocks and 20 transportation stocks. (b) Standard & Poor's 500 Stock Index or its component indices -- an unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40 utilities stocks and 20 transportation stocks. (c) Standard & Poor's 400 Mid Cap Index -- consists of 400 domestic stocks chosen for market size, liquidity, and industry group representation. It is also a market-value weighted index and was the first benchmark of mid cap stock price movement. (d) The New York Stock Exchange composite or component indices -- unmanaged indices of all industrial, utilities, transportation and finance stocks listed on the New York Stock Exchange. (e) Wilshire 5000 Equity Index or its component indices -- represents the return on the market value of all common equity securities for which daily pricing is available. (f) Lipper-Mutual Fund Performance Analysis and Lipper-Fixed Income Fund Performance Analysis -- measure total return and average current yield for the mutual fund industry. Rank individual mutual fund performance over specified time periods, assuming reinvestment of all distributions, exclusive of any applicable sales charges. (g) Lipper Capital Appreciation Funds Index -- a fund that aims at maximum capital appreciation, frequently by means of 100% or more portfolio turnover, leveraging, purchasing unregistered securities, purchasing options, etc. The fund may take large cash positions. (h) Lipper Small Cap Funds Index -- a fund that by prospectus or portfolio practice invests primarily in companies with market capitalizations of less than $1 billion at the time of purchase. (i) Morgan Stanley Capital International EAFE Index and World Index -- respectively, arithmetic, market value-weighted averages of the performance of over 900 securities listed on the stock exchanges of countries in Europe, Australia and the Far East, and over 1,400 securities listed on the stock exchanges of these commitments, including North America. (j) Goldman Sachs 100 Convertible Bond Index -- currently includes 67 bonds and 33 preferred. The original list of names was generated by screening for convertible issues of 100 million or greater in market capitalization. The index is priced monthly. (k) Salomon Brothers GNMA Index -- includes pools of mortgages originated by private lenders and guaranteed by the mortgage pools of the Government National Mortgage Association. (l) Salomon Brothers High Grade Corporate Bond Index -- consists of publicly issued, non-convertible corporate bonds rated AA or AAA. It is a value-weighted, total return index, including approximately 800 issues with maturities of 12 years or greater. (m) Salomon Brothers Broad Investment Grade Bond Index -- is a market- weighted index that contains approximately 4,700 individually priced investment grade corporate bonds rated BBB or better, U.S. Treasury/agency issues and mortgage pass through securities.
A-1 (n) Lehman Brothers Long-Term Treasury Bond Index -- is composed of all bonds covered by the Lehman Brothers Treasury Bond Index with maturities of 10 years or greater. (o) Lehman Brothers Government/Corporate Index -- is a combination of the Government and Corporate Bond Indices. The Government Index includes public obligations of the U.S. Treasury, issues of Government agencies, and corporate debt backed by the U.S. Government. The Corporate Bond Index includes fixed-rate nonconvertible corporate debt. Also included are Yankee Bonds and nonconvertible debt issued by or guaranteed by foreign or international governments and agencies. All issues are investment grade (BBB) or higher, with maturities of at least one year and an outstanding par value of at least $100 million for U.S. Government issues and $25 million for others. Any security downgraded during the month is held in the index until month-end and then removed. All returns are market value weighted inclusive of accrued income. (p) NASDAQ Industrial Index -- is composed of more than 3,000 industrial issues. It is a value-weighted index calculated on price change only and does not include income. (q) Value Line -- composed of over 1,600 stocks in the Value Line Investment Survey. (r) Russell 2000 Index -- composed of the 2,000 smallest stocks in the Russell 3000, a market value-weighted index of the 3,000 largest U.S. publicly-traded companies. (s) Salomon Brothers 3 Month T-Bill Average -- the average return for all Treasury bills for the previous three month period. (t) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70% Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35% Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade Bond Index; all stocks on the NASDAQ system exclusive of those traded on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Salomon Brothers High Grade Bond Index. (u) CDA Mutual Fund Report published by CDA Investment Technologies, Inc. -- analyzes price, current yield, risk, total return and average rate of return (average compounded growth rate) over specified time periods for the mutual fund industry. (v) Mutual Fund Source Book published by Morningstar, Inc. - analyzes price, yield, risk and total return for equity funds. (w) Financial publications: Business Week, Changing Times, Financial World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial Times, Global Investor, Wall Street Journal and Weisenberger Investment Companies Service -- publications that rate fund performance over specified time periods. (x) Consumer Price Index (or Cost of Living Index), published by the U.S. Bureau of Labor Statistics -- a statistical measure of change over time in the price of goods and services in major expenditure groups. (y) Stocks, Bonds, Bills and Inflation, published by lbbotson Associates - - historical measure of yield, price and total return for common and small company stock, long-term government bonds, U.S. Treasury bills and inflation. (z) Savings and Loan Historical Interest Rates -- as published by the U.S. Savings & Loan League Fact Book.
A-2 (aa) Historical data supplied by the research departments of First Boston Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg L.P. A-3 APPENDIX B - DESCRIPTION OF SECURITIES AND RATINGS I. DESCRIPTION OF COMMERCIAL PAPER RATINGS Moody's Investors Service Commercial Paper Ratings: Prime-1 - Issuers (or supporting institutions) have a superior ability for repayment of senior short-term debt obligations. Prime-1 repayment ability will often be evidenced by many of the following characteristics: leading market positions in well-established industries; high rates of return on funds employed; conservative capitalization structure with moderate reliance on debt and ample asset protection; broad margins in earnings coverage of fixed financial charges and high internal cash generation; and well-established access to a range of financial markets and assured sources of alternate liquidity. Prime-2 - Issuers (or supporting institutions) have a strong ability for repayment of senior short-term debt obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Standard & Poor's Ratings Services Commercial Paper Ratings: A-1 - Obligations are rated in the highest category indicating that the obligor's capacity to meet its financial commitment is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong. A-2 - Obligations are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations rated "A-1". However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory. B-1 PART B UAM FUNDS MJI INTERNATIONAL EQUITY PORTFOLIO STATEMENT OF ADDITIONAL INFORMATION -- July 17, 1998 This Statement of Additional Information ("SAI") is not a Prospectus but should be read in conjunction with the Prospectuses of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the MJI International Equity Portfolio (the "Portfolio") dated July 17 , 1998 relating to the Institutional Class Shares and the Institutional Service Class Shares (the "Service Class Shares"). To obtain a Prospectus, please call UAM Funds Service Center at 1-800-638-7983. TABLE OF CONTENTS INVESTMENT OBJECTIVE AND POLICIES........................................ 2 PURCHASE AND REDEMPTION OF SHARES........................................ 9 VALUATION OF SHARES...................................................... 10 SHAREHOLDER SERVICES..................................................... 10 INVESTMENT LIMITATIONS................................................... 11 MANAGEMENT OF THE FUND................................................... 12 INVESTMENT ADVISER....................................................... 14 SERVICE AND DISTRIBUTION PLANS........................................... 16 PORTFOLIO TRANSACTIONS................................................... 18 ADMINISTRATIVE SERVICES.................................................. 18 CUSTODIAN................................................................ 20 INDEPENDENT ACCOUNTANTS.................................................. 20 DISTRIBUTOR.............................................................. 20 PERFORMANCE CALCULATIONS................................................. 20 GENERAL INFORMATION...................................................... 21 FINANCIAL STATEMENTS..................................................... 22 APPENDIX A -- DESCRIPTION OF SECURITIES AND RATINGS...................... A-1 APPENDIX B - COMPARISONS................................................. B-1 Investment Adviser Murray Johnstone International Ltd. (Adviser) Distributor UAM Fund Distributors, Inc. (Distributor) Administrator and Transfer Agent UAM Fund Services, Inc. (UAMFSI) INVESTMENT OBJECTIVE AND POLICIES The following discussion supplements the discussion of investment objective and policies of the Portfolio as set forth in the Portfolio's Prospectuses for the Institutional Class Shares and Service Class Shares. LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified brokers, dealers, domestic and foreign banks or other financial institutions, so long as the terms, the structure and the aggregate amount of such loans are not inconsistent with the Investment Company Act of 1940, as amended, (the "1940 Act") or the Rules and Regulations or interpretations of the Securities and Exchange Commission (the "SEC") thereunder, which currently require that (a) the borrower pledge and maintain with the Portfolio collateral consisting of cash, an irrevocable letter of credit issued by a domestic U.S. bank or securities issued or guaranteed by the United States Government having a value at all times not less than 100% of the value of the securities loaned, (b) the borrower add to such collateral whenever the price of the securities loaned rises (i.e., the borrower "marks to the market" on a daily basis), (c) the loan be made subject to termination by the Portfolio at any time, and (d) the Portfolio receives reasonable interest on the loan (which may include the Portfolio investing any cash collateral in interest bearing short-term investments). The Portfolio will not loan securities to the extent that greater than one-third of its assets (including the value of the collateral for the loans) at fair market value would be committed to loans. As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the securities loaned if the borrower of the securities fails financially. These risks are similar to the ones involved with repurchase agreements as discussed in the Prospectuses. HEDGING STRATEGIES The Portfolio may engage in various portfolio strategies to hedge against adverse movements in the equity, debt and currency markets. The Portfolio may buy or sell futures contracts, write (i.e., sell) covered call options on its portfolio securities, purchase put and call options on securities and engage in transactions in stock index options and stock index futures, and related options on such futures. The Portfolio may also enter into forward foreign currency exchange contracts to hedge against its foreign currency movements. These portfolio strategies are commonly referred to as derivative investments. Each of these portfolio strategies is described below. Although certain risks are involved in options and futures transactions, the Adviser believes that, because the Portfolio will engage in options and futures transactions only for hedging purposes, the options and futures portfolio strategies of the Portfolio will not subject it to the risks frequently associated with the speculative use of options and futures transactions. While the Portfolio's use of hedging strategies is intended to reduce the volatility of the net asset value of the Portfolio shares, the Portfolio's net asset value will fluctuate. There can be no assurance that the Portfolio's hedging transactions will be effective. Also, the Portfolio may not necessarily be engaging in hedging activities when movements in any particular equity, debt or currency market occur. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS The U.S. dollar value of the assets of the Portfolio may be affected favorably or unfavorably by changes in foreign currency exchange rates and exchange control regulations, and the Portfolio may incur costs in connection with conversions between various currencies. The Portfolio will conduct its foreign currency exchange transactions either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency exchange market, or through entering into forward contracts to purchase or sell foreign currencies. 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 are traded in the interbank market and are 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 such trades. The Portfolio may enter into forward foreign currency exchange contracts in several circumstances. When the Portfolio enters into a contract for the purchase or sale of a security denominated in a foreign currency, or when 2 the Portfolio anticipates the receipt in a foreign currency of dividends or interest payments on a security which it holds, the Portfolio may desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent of such dividend or interest payment, as the case may be. By entering into a forward contract for a fixed amount of dollars, for the purchase or sale of the amount of foreign currency involved in the underlying transactions, the Portfolio will be able to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the subject foreign currency during the period between the date on which the security is purchased or sold, or on which the dividend or interest payment is declared, and the date on which such payments are made or received. Additionally, when the Portfolio anticipates that the currency of a particular foreign country may suffer a substantial decline against the U.S. dollar, it may enter into a forward contract for a fixed amount of dollars to sell the amount of foreign currency approximating the value of some or all of the Portfolio's securities denominated in such foreign currency. The precise matching of the forward contract amounts and the value of the securities involved generally will not be possible since the future value of securities in foreign currencies will change as a consequence of market movements in the value of these securities between the date on which the forward contract is entered into and the date it matures. The projection of short-term currency market movement is extremely difficult and the successful execution of a short-term hedging strategy is highly uncertain. The Portfolio does not intend to enter into such forward contracts to protect the value of portfolio securities on a regular or continuous basis. The Portfolio will not enter into such forward contracts or maintain a net exposure to such contracts where the consummation of the contracts would obligate the Portfolio to deliver an amount of foreign currency in excess of the value of the Portfolio's securities or other assets denominated in that currency. Under normal circumstances, consideration of the prospect for currency parities will be incorporated into the long-term investment decisions made with regard to overall diversification strategies. However, the management of the Fund believes that it is important to have the flexibility to enter into such forward contracts when it determines that the best interests of the performance of the Portfolio will thereby be served. The Fund's Custodian will place cash or liquid securities into a segregated account in an amount equal to the value of the Portfolio's total assets committed to the consummation of forward foreign currency exchange contracts. If the value of the securities placed in the segregated account declines, additional cash or securities will be placed in the account on a daily basis so that the value of the account will be equal to the amount of the Portfolio's commitments with respect to such contracts. The Portfolio generally will not enter into a forward contract with a term of greater than one year. At the maturity of a forward contract, the Portfolio may either sell the portfolio security and make delivery of the foreign currency, or it may retain the security and terminate its contractual obligation to deliver the foreign currency by purchasing an "offsetting" contract with the same currency trader obligating it to purchase, on the same maturity date, the same amount of the foreign currency. It is impossible to forecast with absolute precision the market value of a particular portfolio security at the expiration of the contract. Accordingly, it may be necessary for the Portfolio to purchase additional foreign currency on the spot market (and bear the expense of such purchase) if the market value of the security is less than the amount of foreign currency that the Portfolio is obligated to deliver and if a decision is made to sell the security and make delivery of the foreign currency. If the Portfolio retains the portfolio security and engages in an offsetting transaction, the Portfolio will incur a gain or loss (as described below) to the extent that there has been movement in forward contract prices. Should forward prices decline during the period between the Portfolio entering into a forward contract for the sale of a foreign currency and the date it enters into an offsetting contract for the purchase of the foreign currency, the Portfolio will realize a gain to the extent that the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to purchase. Should forward prices increase, the Portfolio would suffer a loss to the extent that the price of the currency it has agreed to purchase exceeds the price of the currency it has agreed to sell. The Portfolio's dealings in forward foreign currency exchange contracts will be limited to the transactions described above. Of course, the Portfolio is not required to enter into such transactions with regard to their foreign currency-denominated securities. It also should be realized that this method of protecting the value of portfolio 3 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 which one can achieve 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. FUTURES CONTRACTS The Portfolio may enter into futures contracts for the purposes of hedging, remaining fully invested and reducing transactions costs. 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"), a U.S. Government agency. 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 contracts on securities indices or other indices do not require the physical delivery of securities, but merely provide for profits and losses resulting from changes in the market value of a contract to be credited or debited at the close of each trading day to the respective accounts of the parties to the contract. On the contract's expiration date a final cash settlement occurs and the futures position is simply closed out. Changes in the market value of a particular futures contract reflect changes in the level of the index on which the futures contract is based. Futures traders are required to make a good faith margin deposit in cash or acceptable 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. Generally, margin deposits are structured as percentages (e.g., 5%) of the market value of the contracts being traded. After a futures contract position is opened, the value of the contract is marked to market daily. If the futures contract price changes to the extent that the margin on deposit does not satisfy margin requirements, payment of additional "variation" margin will be required. Conversely, changes 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 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 a fluctuation in interest rates. The Portfolio intends to use futures contracts only for hedging purposes. Regulations of the CFTC applicable to the Fund require that all of its futures transactions constitute bona fide hedging transactions or that the Fund's commodity futures and option positions be for other purposes, to the extent that the aggregate initial margins and premiums required to establish such non-hedging positions do not exceed five percent of the liquidation value of the Portfolio. The 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. As evidence of this hedging interest, the Portfolio expects that approximately 75% of its futures contracts purchases will be "completed," that is, equivalent amounts of related securities will have been purchased or will be purchased by the Portfolio on the settlement date of the futures contracts. 4 Although techniques other than the sale and purchase of futures contracts could be used to control the Portfolio's exposure to market fluctuations, the use of futures contracts may be a more effective means of hedging this exposure. While the Portfolio will incur commission expenses in both opening and closing out futures positions, these costs are lower than transaction costs incurred in the purchase and sale of the underlying securities. RESTRICTIONS ON THE USE OF FUTURES CONTRACTS The Portfolio will not enter into futures contract transactions to the extent that, immediately thereafter, the sum of its initial margin deposits on open contracts exceeds 5% of the market value of its total assets. In addition, the Portfolio will not enter into futures contracts to the extent that its outstanding obligations to purchase securities under these contracts would exceed 20% of its total assets. RISK FACTORS IN FUTURES TRANSACTIONS The Portfolio will minimize the risk that it will be unable to close out a futures position by only entering into futures which are traded on national futures exchanges and for which there appears to be a liquid secondary market. 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 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 Portfolio may be required to make delivery of the instruments underlying futures contracts it holds. The inability to close futures positions also could have an adverse impact on the Portfolio's ability to effectively hedge. 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 costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit 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. However, because the futures strategies of the Portfolio are engaged in only for hedging purposes, the Adviser does not believe that the Portfolio is subject to the risks of loss frequently associated with futures transactions. The Portfolio would presumably have sustained comparable losses if, instead of the futures contract, it had invested in the underlying financial instrument and sold it after the decline. Utilization of futures transactions by the Portfolio does involve the risk of imperfect or no correlation where the securities underlying the futures contracts have different maturities than the portfolio securities being hedged. It is also possible that the Portfolio could lose money on futures contracts and also experience a decline in value of portfolio securities. There is also the risk of loss by the 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. 5 OPTIONS The Portfolio may purchase and sell put and call options on securities and futures contracts for hedging purposes. 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 on which it is based or 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. For example, there are significant differences between the securities, futures and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objective. A decision as to whether, when, and how to use options involves the exercise of skill and judgment by the Adviser, and even a well-conceived transaction may be unsuccessful because of market behavior or unexpected events. WRITING COVERED CALL OPTIONS The principal reason for writing call options is to attempt to realize, through the receipt of premiums, a greater return than would be realized on securities alone. By writing covered call options, the Portfolio gives up the opportunity, while the option is in effect, to profit from any price increase in the underlying security above the option exercise price. In addition, the Portfolio's ability to sell the underlying security will be limited while the option is in effect unless the Portfolio effects a closing purchase transaction. A closing purchase transaction cancels out the Portfolio's position as the writer of an option by means of an offsetting purchase of an identical option prior to the expiration of the option it has written. Covered call options serve as a partial hedge against the price of the underlying security declining. The Portfolio writes only covered options, which means that so long as the Portfolio is obligated as the writer of the option it will, in a segregated account with its custodian, maintain cash or liquid securities denominated in U.S. dollars with a value equal to or greater than the exercise price of the underlying securities. PURCHASING OPTIONS The amount of any appreciation in the value of the underlying security subject to a put will be partially offset by the amount of the premium paid for the put option and any related transaction costs. Prior to its expiration, a put option may be sold in a closing sale transaction and profit or loss from a sale will depend on whether the amount received is more or less than the premium paid for the put option plus the related transaction costs. A closing sale transaction cancels out the Portfolio's position as purchaser of an option by means of an offsetting sale of an identical option prior to the expiration of the option it has purchased. In certain circumstances, the Portfolio may purchase call options on securities held in its investment portfolio on which it has written call options or on securities which it intends to purchase. OPTIONS ON FOREIGN CURRENCIES The Portfolio may purchase and write options on foreign currencies for hedging purposes in a manner similar to that in which futures contracts on foreign currencies, or forward contracts, will be utilized. For example, a decline in the dollar value of a foreign currency in which portfolio securities are denominated will reduce the dollar value of such securities, even if their value in the foreign currency remains constant. In order to protect against such diminutions in the value of portfolio securities, the Portfolio may purchase put options on the foreign currency. If the value of the currency does decline, the Portfolio will have the right to sell such currency for a fixed amount in dollars and will thereby offset, in whole or in part, the adverse effect on its portfolio which otherwise would have resulted. Conversely, where a rise in the dollar value of a currency in which securities to be acquired are denominated is projected, thereby increasing the cost of such securities, the Portfolio may purchase call options thereon. The purchase of such options could offset, at least partially, the effects of the adverse movements in exchange rates. As in the case of other types of options, however, the benefit to the Portfolio deriving from 6 purchases of foreign currency options will be reduced by the amount of the premium and related transaction costs. In addition, where currency exchange rates do not move in the direction or to the extent anticipated, the Portfolio could sustain losses on transactions in foreign currency options which would require it to forego a portion or all of the benefits of advantageous changes in such rates. The Portfolio may write options on foreign currencies for the same types of hedging purposes. For example, where the Portfolio anticipates a decline in the dollar value of foreign currency denominated securities due to adverse fluctuations in exchange rates it could, instead of purchasing a put option, write a call option on the relevant currency. If the anticipated decline occurs, the option will most likely not be exercised, and the diminution in value of portfolio securities will be offset by the amount of the premium received. Similarly, instead of purchasing a call option to hedge against an anticipated increase in the dollar cost of securities to be acquired, the Portfolio could write a put option on the relevant currency which, if rates move in the manner projected, will expire unexercised and allow the Portfolio to hedge such increased cost up to the amount of the premium. As in the case of other types of options, however, the writing of a foreign currency option will constitute only a partial hedge up to the amount of the premium, and only if rates move in the expected direction. If this does not occur, the option may be exercised and the Portfolio would be required to purchase or sell the underlying currency at a loss which may not be offset by the amount of the premium. Through the writing of options on foreign currencies, the Portfolio also may be required to forego all or a portion of the benefits which might otherwise have been obtained from favorable movements in exchange rates. The Portfolio intends to write covered call options on foreign currencies. A call option written on a foreign currency by the Portfolio is "covered" if the Portfolio owns the underlying foreign currency covered by the call or has an absolute and immediate right to acquire that foreign currency without additional cash consideration (or for additional cash consideration held in a segregated account by the Custodian) upon conversion or exchange of other foreign currency held in its portfolio. A call option is also covered if the Portfolio has a call on the same foreign currency and in the same principal amount as the call written where the exercise price of the call held (a) is equal to or less than the exercise price of the call written or (b) is greater than the exercise price of the call written if the difference is maintained by the Portfolio in cash or liquid securities in a segregated account with the Custodian. The Portfolio also intends to write call options on foreign currencies that are not covered for cross-hedging purposes. A call option on a foreign currency is for cross-hedging purposes if it is not covered but is designed to provide a hedge against a decline in the U.S. dollar value of a security which the Portfolio owns or has the right to acquire and which is denominated in the currency underlying the option due to an adverse change in the exchange rate. In such circumstances, the Portfolio will collateralize the option by maintaining in a segregated account with the Custodian, cash or U.S. government securities or other high grade liquid debt or equity securities in an amount not less than the value of the underlying foreign currency in U.S. dollars marked to market daily. RISKS OF OPTIONS ON FUTURES CONTRACTS, FORWARD CONTRACTS AND OPTIONS ON FOREIGN CURRENCIES Options on foreign currencies and forward contracts are not traded on contract markets regulated by the CFTC or (with the exception of certain foreign currency options) by the SEC. To the contrary, such instruments are traded through financial institutions acting as market-makers, although foreign currency options are also traded on certain national securities exchanges, such as the Philadelphia Stock Exchange and the Chicago Board Options Exchange, subject to the regulation of the Commission. Similarly, options on currencies may be traded over-the-counter. In an over-the-counter trading environment, many of the protections afforded to exchange participants will not be available. For example, there are no daily price fluctuation limits, and adverse market movements could therefore continue to an unlimited extent over a period of time. Although the purchaser of an option cannot lose more than the amount of the premium plus related transaction costs, this entire amount could be lost. Moreover, the option writer and a trader of forward contracts could lose amounts substantially in excess of their initial investments, due to the margin and collateral requirements associated with such positions. Options on foreign currencies traded on national securities exchanges are within the jurisdiction of the Commission, as are other securities traded on such exchanges. As a result, many of the protections provided to 7 traders on organized exchanges will be available with respect to such transactions. In particular, all foreign currency option positions entered into on a national securities exchange are cleared and guaranteed by the Options Clearing Corporation ("OCC"), thereby reducing the risk of counterparty default. Furthermore, a liquid secondary market in options traded on a national securities exchange may be more readily available than in the over-the-counter market, potentially permitting the Portfolio to liquidate open positions at a profit prior to exercise or expiration, or to limit losses in the event of adverse market movements. The purchase and sale of exchange-traded foreign currency options, however, is subject to the risks of the availability of a liquid secondary market described above, as well as the risks regarding adverse market movements, margining of options written, the nature of the foreign currency market, possible intervention by governmental authorities and the effect of other political and economic events. In addition, exchange-traded options of foreign currencies involve certain risks not presented by the over-the-counter market. For example, exercise and settlement of such options must be made exclusively through the OCC, which has established banking relationships in applicable foreign countries for this purpose. As a result, the OCC may, if it determines that foreign governmental restrictions or taxes would prevent the orderly settlement of foreign currency option exercises, or would result in undue burdens on the OCC or its clearing member, impose special procedures on exercise and settlement, such as technical changes in the mechanics of delivery of currency, the fixing of dollar settlement prices or prohibitions, on exercise. In addition, futures contracts, options on futures contracts, forward contracts and options on foreign currencies may be traded on foreign exchanges. Such transactions are subject to the risk of governmental actions affecting trading in, or the prices of, foreign currencies or securities. The value of such positions also could be adversely affected by (i) other complex foreign political and economic factors, (ii) lesser availability than in the United States of data on which to make a trading decision, (iii) delays in the Portfolio's ability to act upon economic events occurring in foreign markets during non-business hours in the United States, (iv) the imposition of different exercise and settlement terms and procedures and margin requirements than in the United States, and (v) lesser trading volume. INTEREST RATE SWAP TRANSACTIONS The Portfolio may enter into swap contracts which are also commonly referred to as derivative investments. A swap is an agreement to exchange the return generated by one instrument for the return generated by another instrument. The payment streams are calculated by reference to a specific index and agreed upon notional amount. The term "specified index" includes fixed interest rates, total return on interest rate indices and fixed income indices, (as well as amounts derived from arithmetic operations on these indices). For example, the Portfolio may agree to swap the return generated by a fixed-income index for the return generated by a second fixed-income index. 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. The Portfolio's obligations under a swap agreement will be accrued daily (offsetting against any amounts owing to the Portfolio) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the maintenance of a segregated account consisting of cash or liquid securities, to avoid any potential leveraging of the Portfolio. Since swaps will be entered into for good faith hedging purposes, the Adviser and the Fund 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. Interest rate swaps do not involve the delivery of securities, other underlying assets, or principal. Accordingly, the risk of loss with respect to interest rate swaps is limited to the net amount of interest payments that the Portfolio is contractually obligated to make. If the other party to the interest rate swap defaults, the Portfolio's risk of loss consists of the net amount of interest payments that the Portfolio is contractually entitled to receive. If there is a default by the counterparty, the Portfolio 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 increasingly liquid. 8 PORTFOLIO TURNOVER The portfolio turnover rate described in the Prospectuses is calculated by dividing the lesser of purchases or sales of portfolio securities for the year by the monthly average of the value of the portfolio securities. The calculation excludes all securities, including options, whose maturities at the time of acquisition were one year or less. Portfolio turnover may vary greatly from year to year as well as within a particular year, and may also be affected by cash requirements for redemptions of shares. See "Financial Highlights" in the Prospectuses for the historical portfolio turnover rates with respect to the Portfolio. PURCHASE AND REDEMPTION OF SHARES Both classes of shares of the Portfolio may be purchased without a sales commission at the net asset value per share next determined after an order is received in proper form by the Fund, and payment is received by the Fund or its designated Service Agent. The minimum initial investment required for the Portfolio is $2,500, with certain exceptions as may be permitted from time to time by the officers of the Fund. Other investment minimums are: initial IRA investment, $500; initial spousal IRA investment, $250; and additional investment for all accounts, $100. An order received in proper form prior to the close of regular trading on the New York Stock Exchange (the "Exchange") (generally 4:00 p.m. Eastern Time) will be executed at the price computed on the date of receipt; and an order received not in proper form or after the close of the Exchange will be executed at the price computed on the next day the Exchange is open after proper receipt. The Exchange will be closed on the following days: New Year's Day, Dr. Martin Luther King, Jr.'s Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Portfolio reserves the right in its sole discretion (1) to suspend the offering of its shares, (2) to reject purchase orders when in the judgment of management such rejection is in the best interests of the Fund, and (3) to reduce or waive the minimum for initial and subsequent investment for certain fiduciary accounts such as employee benefit plans or under circumstances where certain economies can be achieved in sales of the Portfolio's shares. The Adviser may compensate affiliated broker-dealer subsidiaries of United Asset Management Corporation, out of its profits, for referring investors to the Portfolio and, in certain instances, furnishing information liaison services with respect to such investors. Such compensation would be based upon the advisory fees payable (without regard to any expense limitation in effect at the time) in respect of assets attributable to the referral. If liaison services are included, the rate would be up to 25% in the first year and up to 15% each year thereafter; otherwise, the rate would be up to 30% in the first year, 20% for the second year and 10% for each remaining year up to a total of 5 years. The Portfolio may suspend redemption privileges or postpone the date of payment (1) during any period that either the Exchange and custodian bank are closed or trading on the Exchange is restricted as determined by the SEC, (2) during any period when an emergency exists as defined by the rules of the SEC as a result of which it is not reasonably practicable for a Portfolio to dispose of securities owned by it or to fairly determine the value of its assets, and (3) for such other periods as the SEC may permit. The Fund has made an election with the SEC to pay in cash all redemptions requested by any shareholder of record limited in amount during any 90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at the beginning of such period. Such commitment is irrevocable without the prior approval of the SEC. Redemptions in excess of the above limits may be paid, in whole or in part, in investment securities or in cash as the Board of Trustees may deem advisable; however, payment will be made wholly in cash unless the Trustees believe that economic or market conditions exist which would make such a practice detrimental to the best interests of the Fund. If redemptions are paid in investment securities, such securities will be valued as set forth in the Prospectus under "VALUATION OF SHARES," and a redeeming shareholder would normally incur brokerage expenses if those securities were converted to cash. No charge is made by the Portfolio for redemptions. Any redemption may be more or less than the shareholder's initial cost depending on the market value of the securities held by the Portfolio. 9 SIGNATURE GUARANTEES To protect your account, the Fund and Chase Global Funds Services Company ("CGFSC") from fraud, signature guarantees are required for certain redemptions. The purpose of signature guarantees is to verify the identity of the person who has authorized a redemption from your account. Signature guarantees are required for (1) all redemptions when the proceeds are to be paid to someone other than the registered owner(s) and/or registered address, or (2) share transfer requests. Signatures must be guaranteed by an "eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. A complete definition of eligible guarantor institutions is available from the transfer agent. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signatures guarantees. Signature guarantees will be accepted from any eligible guarantor institution which participates in a signature guarantee program. The signature guarantee must appear either: (1) on the written request for redemption; (2) on a separate instrument for assignment ("stock power") which should specify the total number of shares to be redeemed; or (3) on all stock certificates tendered for redemption and, if shares held by the Fund are also being redeemed, on the letter or stock power. VALUATION OF SHARES Equity securities listed on a securities exchange for which market quotations are readily available are value at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed securities not traded on the valuation date for which market quotations are readily available are valued neither exceeding the current asked prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars as quoted by any major bank or broker. Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the- counter market. Bonds and other fixed income securities may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost, using methods approved by the Board of Trustees. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Fund's Board of Trustees. SHAREHOLDER SERVICES The following supplements the information set forth under "Shareholder Services" in the Portfolio's Prospectuses. EXCHANGE PRIVILEGE Institutional Class Shares of the Portfolio may be exchanged for Institutional Class Shares of any other UAM Funds or UAM Funds, Inc. Portfolio and Service Class Shares of the Portfolio may be exchanged for Service Class Shares of any other UAM Funds or UAM Funds, Inc. Portfolio. Exchange requests should be made by calling the Fund (1-800-638-7983) or by writing to UAM Funds Trust, UAM Funds Service Center, c/o Chase Global 10 Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The exchange privilege is only available with respect to Portfolios that are qualified for sale in the shareholder's state of residence. Any such exchange will be based on the respective net asset values of the shares involved. There is no sales commission or charge of any kind. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objective of the Portfolio to be purchased. You may obtain a Prospectus for the Portfolio(s) you are interested in by calling the UAM Funds Service Center at 1-800-638-7983. Telephone exchanges will be accepted only if the certificates for the shares to be exchanged have not been issued to the shareholder and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading of the Exchange (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the Exchange will be processed on the next business day. Neither the Fund nor CGFSC will be responsible for the authenticity of the exchange instructions received by telephone. Exchanges may also be subject to limitations as to amounts or frequency and to other restrictions established by the Fund's Board of Trustees to assure that such exchanges do not disadvantage the Fund and its shareholders. For federal income tax purposes an exchange between Funds is a taxable event, and, accordingly, a capital gain or loss may be realized. In a revenue ruling relating to circumstances similar to the Fund's, an exchange between series of a Fund was also deemed to be a taxable event. It is likely, therefore, that a capital gain or loss would be realized on an exchange between Portfolios. You may want to consult your tax adviser for further information in this regard. The exchange privilege may be modified or terminated at any time. TRANSFER OF SHARES Shareholders may transfer shares of the Portfolio to another person by making a written request to the Fund. The request should clearly identify the account and number of shares to be transferred, and include the signature of all registered owners and all stock certificates, if any, which are subject to the transfer. The signature on the letter of request, the stock certificate or any stock power must be guaranteed in the same manner as described under "PURCHASE AND REDEMPTION OF SHARES." As in the case of redemptions, the written request must be received in good order before any transfer can be made. INVESTMENT LIMITATIONS The following limitations supplement those set forth in each Prospectus of the Portfolio. A Portfolio's fundamental investment limitations cannot be changed without approval by a "majority of the outstanding shares" (as defined in the 1940 Act) of the Portfolio. Except for the numbered investment limitations noted as fundamental below, however, the limitations described below are not fundamental, and may be changed without the consent of shareholders. Whenever an investment limitation sets forth a percentage limitation on investment or utilization of assets, such limitation shall be determined immediately after and as a result of the Portfolio's acquisition of such security or other asset. Accordingly, any later increase or decrease resulting from a change in values, net assets or other circumstances will not be considered when determining whether the investment complies with the Portfolio's investment limitations. As a matter of fundamental policy, the Portfolio will not: (1) invest in physical commodities or contracts on physical commodities; (2) purchase or sell real estate or real estate limited partnerships, although it may purchase and sell securities of companies which deal in real estate and may purchase and sell securities which are secured by interests in real estate; 11 (3) make loans except (i) by purchasing debt securities in accordance with its investment objectives 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 SEC thereunder; (4) underwrite the securities of other issuers; and (5) issue senior securities, as defined in the 1940 Act, except that this restriction shall not be deemed to prohibit the Portfolio from (i) making any permitted borrowings, mortgages or pledges, or (ii) entering into options, futures or repurchase transactions. As a matter of non-fundamental policy, the Portfolio will not: (1) invest in stock or bond futures and/or options on futures unless (i) not more than 5% of the Portfolio's assets are required as deposit to secure obligations under such futures and/or options on futures contracts provided, however, that in the case of an option that is in- the-money at the time of purchase, the in-the-money amount may be excluded in computing such 5% and (ii) not more than 20% of the Portfolio's assets are invested in stock or bond futures and options; (2) purchase on margin or sell short except as specified in (5) above; (3) invest more than an aggregate of 15% of the net assets of the Portfolio, determined at the time of investment, in securities subject to legal or contractual restrictions on resale or securities for which there are no readily available markets; and (4) invest for the purpose of exercising control over management of any company. MANAGEMENT OF THE FUND TRUSTEES AND OFFICERS The Officers of the Fund manage its day-to-day operations and are responsible to the Fund's Board of Trustees. The Trustees set broad policies for the Fund and elect its Officers. The following is a list of the Trustees and Officers of the Fund, their addresses and dates of birth, and a brief statement of their present positions and principal occupations during the past five years. John T. Bennett, Jr. (1/26/29), Trustee; College Road--RFD 3, Meredith, NH 03253; President of Squam Investment Management Company, Inc. and Great Island Investment Company, Inc.; President of Bennett Management Company from 1988 to 1993. Nancy J. Dunn (8/14/51), Trustee; 10 Garden Street, Cambridge, MA 02138; Vice President for Finance and Administration and Treasurer of Radcliffe College since 1991. Philip D. English (8/5/48), Trustee; 16 West Madison Street, Baltimore, MD 21201; President and Chief Executive Officer of Broventure Company, Inc.; Chairman of the Board of Chektec Corporation and Cyber Scientific, Inc. 12 William A. Humenuk (4/21/42), Trustee; 100 King Street West, P.O. Box 2440, LCD- 1, Hamilton Ontario, Canada L8N-456; Executive Vice President and Chief Administrative Officer of Philip Services Corp.; Director, Hofler Corp.; Formerly, a Partner in the Philadelphia office of the law firm Dechert Price & Rhoads. Norton H. Reamer* (3/21/35), Trustee; One International Place, Boston, MA 02110; President and Chairman of the Fund; President, Chief Executive Officer and a Director of United Asset Management Corporation; Director, Partner or Trustee of each of the Investment Companies of the Eaton Vance Group of Mutual Funds. Peter M. Whitman, Jr.* (7/1/43), Trustee; One Financial Center, Boston, MA 02111; President and Chief Investment Officer of Dewey Square Investors Corporation ("DSI") since 1988; Director and Chief Executive Officer of H. T. Investors, Inc., formerly a subsidiary of DSI. William H. Park (9/19/47), Vice President; One International Place, Boston, MA 02110; Executive Vice President and Chief Financial Officer of United Asset Management Corporation. Gary L. French (7/4/51), Treasurer; 211 Congress Street, Boston, MA 02110; President of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; formerly Vice President of Operations, Development and Control of Fidelity Investment in 1995; Treasurer of the Fidelity Group of Mutual Funds from 1991 to 1995. Michael E. DeFao (2/28/68), Secretary; 211 Congress Street, Boston, MA 02110; Vice President and General Counsel of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; Associate Attorney of Ropes & Gray (a law firm) from 1993 to 1995. Robert R. Flaherty (9/18/63), Assistant Treasurer; 211 Congress Street, Boston, MA 02110; Vice President of UAM Fund Services, Inc.; formerly Manager of Fund Administration and Compliance of Chase Global Fund Services Company from 1995 to 1996; Deloitte & Touche LLP from 1985 to 1995, Senior Manager. Michelle Azrialy (4/12/69), Assistant Secretary; 73 Tremont Street, Boston, MA 02108; Assistant Treasurer of Chase Global Funds Services Company since 1996. Senior Public Accountant with Price Waterhouse LLP from 1991 to 1994. Gordon M. Shone (7/30/56), Assistant Treasurer; 73 Tremont Street, Boston, MA 02108; Vice President of Fund Administration and Compliance of Chase Global Funds Services Company; formerly Senior Audit Manager of Coopers & Lybrand LLP (1983-1996). *Messrs. Reamer and Whitman are deemed to be "interested persons" of the Fund as that term is defined in the 1940 Act. REMUNERATION OF TRUSTEES AND OFFICERS The Fund pays each Trustee, who is not also an officer or affiliated person, a $150 quarterly retainer fee per active Portfolio which currently amounts to $1,350 per quarter. In addition, each unaffiliated Trustee receives a $2,000 meeting fee which is aggregated for all the Trustees and allocated proportionately among the Portfolios of the Fund and UAM Funds, Inc. and reimbursement for travel and other expenses incurred while attending Board meetings. Trustees who are also officers or affiliated persons receive no remuneration for their service as Trustees. The Fund's officers and employees are paid by either the Adviser, United Asset Management Corporation ("UAM"), or the Administrator and receive no compensation from the Fund. As of June 15, 1998, the Trustees and officers of the Fund owned less than 1% of the Fund's outstanding shares. 13 The following table shows aggregate compensation paid to each of the Fund's Trustees by the Fund and total compensation paid by the Funds and UAM Funds, Inc. (collectively the "Fund Complex") in the fiscal year ended April 30, 1998. 14 COMPENSATION TABLE
Pension or Retirement Estimated Total Compensation Aggregate Benefits Accrued Annual from Registrant Name of Person, Compensation From as Part of Benefits Upon and Position Registrant Fund Expenses Retirement Fund Complex -------- ---------- ------------- ---------- ------------ John T. Bennett, Jr. Trustee............. $6,149 0 0 $33,500 Philip D. English Trustee............. $6,149 0 0 $33,500 William A. Humenuk Trustee............. $6,149 0 0 $33,500 Nancy J. Dunn Trustee............. $4,668 0 0 $25,200 Peter M. Whitman, Jr. Trustee $ 0 0 0 $ 0 Norton H. Reamer Trustee............. $ 0 0 0 $ 0
PRINCIPAL HOLDER OF SECURITIES As of June 15, 1998, the following persons or organizations held of record or beneficially 5% or more of the shares of the Portfolio: MJI International Equity Portfolio Institutional Class Shares: Freya Fanning & Company, 400 Essex St., Box 5600, Beverly Farms, MA, 49.7%*; UMBSC & Co., FBO Interstate Brands Aggressive Growth., P.O. Box 419260, Kansas City, MO, 19.2%*; and UMBSC & Co., FBO Interstate Brands Moderate Growth., P.O. Box 419260, Kansas City, MO, 11.2%*. MJI International Equity Portfolio Institutional Service Class Shares: Sisters of Mercy Corp., 2300 Adeline Drive, Burlingame, CA, 30.6%*; Wilmington Trust Co., Trustee, FBO Hoag Hospital Aggressive Lifestyle, c/o Mutual Funds/UAM, P.O. Box 8971, Wilmington, DE, 16.9%*; Hartnat & Co. and Siliconix MJI International Equity, P.O. Box 92800, Rochester, NY, 14.9%*; Wilmington Trust Co. ,Trustee, FBO Davies Medical Pension Plan, c/o Mutual Funds, 1100 North Market Street, Wilmington, DE, 11.9%*; and Wilmington Trust Co., Trustee, FBO Hoag Hospital Aggressive Lifestyle, c/o Mutual Funds UAM, P.O. Box 8971, Wilmington, DE, 9.6%*. 15 The persons(s) or organization(s) listed above as owning 25% or more of the outstanding shares of the Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of such Portfolio. - ------ * Denotes shares held by a trustee or fiduciary for which beneficial ownership is disclaimed or presumed disclaimed. INVESTMENT ADVISER INVESTMENT PHILOSOPHY A value orientation for country, currency and stock selection is key to Murray Johnstone's investment philosophy. Murray Johnstone's management structure centers around regional research teams which are specialized by geography. The individuals within each team are responsible for conducting research within each region as well as identifying particular stocks for possible inclusion within portfolios. On-site, fundamental research is a primary component of the evaluation process. CONTROL OF ADVISER The Adviser, through its parent, UAM UK Holdings, is a wholly-owned subsidiary of UAM, a holding company incorporated in Delaware in December 1980 for the purpose of acquiring and owning firms engaged primarily in institutional investment management. Since its first acquisition in August 1983, UAM has acquired or organized over 45 such wholly-owned affiliated firms (the "UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to retain control over their investment advisory decisions is necessary to allow them to continue to provide investment management services that are intended to meet the particular needs of their respective clients. Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to operate under their own firm name, with their own leadership and individual investment philosophy and approach. Each UAM Affiliated Firm manages its own business independently on a day-to-day basis. Investment strategies employed and securities selected by UAM Affiliated Firms are separately chosen by each of them. Several UAM Affiliated Firms also act as investment advisers to separate series or Portfolios of UAM Funds, Inc., a registered investment company. REPRESENTATIVE INSTITUTIONAL CLIENTS As of the date of this SAI, the Adviser's representative institutional clients included: Ace Hardware, American Cancer Society, Royal Caribbean Cruises, Siemens, Levitz, Franciscan Sisters, Rhode Island School of Design, Government of Guam, City of Albany and Arkansas Police & Fire Retirement Systems. In compiling this client list, the Adviser used objective criteria such as account size, geographic location and client classification. The Adviser did not use any performance based criteria. It is not known whether these clients approve or disapprove of the Adviser or the advisory services provided. SERVICES PERFORMED BY ADVISER Pursuant to an Investment Advisory Agreement ("Agreement") between the Fund and the Adviser, the Adviser has agreed to manage the investment and reinvestment of the Portfolio's assets, to continuously 16 review, supervise and administer the Portfolio's investment program, and to determine in its discretion the securities to be purchased or sold and the portion of the Portfolio's assets to be held uninvested. In the absence of (i) willful misfeasance, bad faith or gross negligence on the part of the Adviser in the performance of its obligations and duties under the Agreement, (ii) reckless disregard by the Adviser of its obligations and duties under the Agreement, or (iii) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, the Adviser shall not be subject to any liability whatsoever to the Fund, or to any shareholder of the Fund, for any error of judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services under the Agreement. Unless sooner terminated, the Agreement shall continue for periods of one year so long as such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Trustees of the Fund who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, (b) by the Board of Trustees of the Fund, or (c) by a vote of a majority of the outstanding voting securities of the Portfolio. The Agreement may be terminated at any time by the Portfolio, without the payment of any penalty, by vote of a majority of the entire Board of Trustees 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. The Agreement may be terminated by the Adviser at any time, without the payment of any penalty, upon 90 days written notice to the Fund. The Agreement will automatically and immediately terminate in the event of its assignment. 17 ADVISORY FEES As compensation for services rendered by the Adviser under the Investment Advisory Agreement, the Portfolio pays the Adviser an annual fee in monthly installments, calculated by applying the following annual percentage rates to the Portfolio's average daily net assets for the month: Rate MJI International Equity Portfolio..............................0.75% For the fiscal years ended April 30, 1996, April 30, 1997 and April 30, 1998, the MJI International Equity Portfolio paid advisory fees of $0, $41,961 and $284,464 respectively. The Adviser voluntarily waived advisory fees of $54,000, $99,017 and $0, for the fiscal years ended April 30, 1996, April 30, 1997 and April 30, 1998, respectively. Until further notice, the Adviser has voluntarily agreed to waive its advisory fees and to assume as the Adviser's own expense certain operating expenses payable by the Portfolio, if necessary, in order to keep the Portfolio's total annual operating expenses from exceeding 1.50%. SERVICE AND DISTRIBUTION PLANS As stated in the Portfolio's Service Class Shares Prospectus, the "Distributor" may enter into agreements with broker-dealers and other financial institutions ("Service Agents"), pursuant to which they will provide administrative support services to Service Class shareholders who are their customers ("Customers") in consideration of the Fund's payment of 0.25% (on an annualized basis) of the average daily net asset value of the Service Class Shares held by the Service Agent for the benefit of its Customers. Such services include: (a) acting as the sole shareholder of record and nominee for beneficial owners; (b) maintaining account records for such beneficial owners of the Fund's shares; (c) opening and closing accounts; (d) answering questions and handling correspondence from shareholders about their accounts; (e) processing shareholder orders to purchase, redeem and exchange shares; (f) handling the transmission of funds representing the purchase price or redemption proceeds; (g) issuing confirmations for transactions in the Fund's shares by shareholders; (h) distributing current copies of prospectuses, statements of additional information and shareholder reports; (i) assisting customers in completing application forms, selecting dividend and other account options and opening any necessary custody accounts; (j) providing account maintenance and accounting support for all transactions; and (k) performing such additional shareholder services as may be agreed upon by the Fund and the Service Agent, provided that any such additional shareholder services must constitute a permissible non- banking activity in accordance with the then current regulations of, and interpretations thereof by, the Board of Governors of the Federal Reserve System, if applicable. 18 Each agreement with a Service Agent is governed by a Shareholder Service Plan (the "Service Plan") that has been adopted by the Fund's Board of Trustees. Pursuant to the Service Plan, the Board of Trustees reviews, at least quarterly, a written report of the amounts expended under each agreement with Service Agents and the purposes for which the expenditures were made. In addition, arrangements with Service Agents must be approved annually by a majority of the Fund's Trustees, including a majority of the Trustees who are not "interested persons" of the company as defined in the 1940 Act and have no direct or indirect financial interest in such arrangements. The Board of Trustees has approved the arrangements with Service Agents based on information provided by the Fund's service contractors that there is a reasonable likelihood that the arrangements will benefit the Fund and its shareholders by affording the Fund greater flexibility in connection with the servicing of the accounts of the beneficial owners of its shares in an efficient manner. Any material amendment to the Fund's arrangements with Service Agents must be approved by a majority of the Fund's Board of Trustees (including a majority of the disinterested Trustees). So long as the arrangements with Service Agents are in effect, the selection and nomination of the members of the Fund's Board of Trustees who are not "interested persons" (as defined in the 1940 Act) of the Company will be committed to the discretion of such non- interested Trustees. The Service Plan may be terminated at any time by vote of a majority of the Trustees of the Fund who are not "interested persons" of the Fund and who have no direct or indirect financial interest in the operation of the Service Plan or any agreements related to the Service Plan or, at the discretion of the Board of Trustees of the Fund, by vote of a majority of the outstanding voting securities of the Fund. Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a Distribution Plan for the Service Class Shares of the Fund (the "Distribution Plan"). The Distribution Plan permits the Fund to pay for certain distribution, promotional and related expenses involved in the marketing of only the Service Class Shares. The Distribution Plan permits the Service Class Shares, pursuant to the Distribution Agreement, to pay a monthly fee to the Distributor for its services and expenses in distributing and promoting sales of the Service Class Shares. These expenses include, among other things, advertising the availability of services and products; designing materials to send to customers and developing methods of making such materials accessible to customers; providing information about the product needs of customers; providing facilities to solicit Fund sales and to answer questions from prospective and existing investors about the Fund; receiving and answering correspondence from prospective investors, including requests for sales literature, prospectuses and statements of additional information; displaying and making sales literature and prospectuses available; and acting as liaison between shareholders and the Fund, including obtaining information from the Fund and providing performance information about the Fund. In addition, the Service Class Shares may make payments directly to other unaffiliated parties, who either aid in the distribution of their shares or provide services to the Class. The maximum annual aggregate fee payable by the Fund under the Service and Distribution Plans (the "Plans"), is 0.75% of the Service Class Shares' average daily net assets for the year. The Fund's Board of Trustees may reduce this amount at any time. Although the maximum fee payable under the 12b-1 Plan relating to the Service Class Shares is 0.75% of average daily net assets of such class, the Board of Trustees has determined that the annual fee, payable on a monthly basis, under the Plans relating to the Service Class Shares, currently cannot exceed .50% of the average daily net assets represented by the Service Class. While the current fee which will be payable under the Service Plan and Distribution Plan has been set at .25%, the Plans permit a full 0.75% on all assets to be paid at any time following appropriate Board approval. All of the distribution expenses incurred by the Distributor and others, such as broker/dealers, in excess of the amount paid by the Service Class Shares will be borne by such persons without any reimbursement from such Classes. Subject to seeking best price and execution, the Fund may, from time to time, buy or sell portfolio securities from or to firms which receive payments under the Plans. From time to time, the Distributor may pay additional 19 amounts from its own resources to dealers for aid in distribution or for aid in providing administrative services to shareholders. The Plans, the Distribution Agreement and the form of dealer's and services agreements have all been approved by the Board of Trustees of the Fund, including a majority of the Trustees who are not "interested persons" (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the Plans or any related agreements, by vote cast in person at a meeting duly called for the purpose of voting on the Plan and such Agreements. Continuation of the Plans, the Distribution Agreement and the related agreements must be approved annually by the Board of Trustees in the same manner, as specified above. Each year the Trustees must determine whether continuation of the Plans is in the best interest of the shareholders of Service Class Shares and that there is a reasonable likelihood of the Plans providing a benefit to the Class. The Plans, the Distribution Agreement and the related agreements with any broker- dealer or others relating to the Class may be terminated at any time without penalty by a majority of those trustees who are not "interested persons" or by a majority vote of the outstanding voting securities of the Class. Any amendment materially increasing the maximum percentage payable under the Plans must likewise be approved by a majority vote of the relevant Class' outstanding voting securities, as well as by a majority vote of those Trustees who are not "interested persons." Also, any other material amendment to the Plans must be approved by a majority vote of the Trustees including a majority of the Trustees of the Fund having no interest in the Plans. In addition, in order for the Plans to remain effective, the selection and nomination of Trustees who are not "interested persons" of the Fund must be effected by the Trustees who themselves are not "interested persons" and who have no direct or indirect financial interest in the Plans. Persons authorized to make payments under the Plans must provide written reports at least quarterly to the Board of Trustees for their review. The National Association of Securities Dealers Regulation, Inc. has adopted amendments to its Conduct Rules relating to investment company sales charges. The Fund and the Distributor intend to operate in compliance with these rules. During the fiscal year ended April 30, 1998, the Portfolio's Service Class Shares paid $15,037 for services provided pursuant to the Distribution Plan. PORTFOLIO TRANSACTIONS The Investment Advisory Agreements authorize the Adviser to select the brokers or dealers that will execute the purchases and sales of investment securities for the Portfolio and directs the Adviser to use its best efforts to obtain the best execution with respect to all transactions for the Portfolio. The Adviser may, however, consistent with the interests of the Portfolio, select brokers on the basis of the research, statistical and pricing services they provide to the 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 Adviser 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 Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Portfolio and the Adviser's other clients. It is not the Fund's practice to allocate brokerage or effect principal transactions with dealers on the basis of sales of Fund shares which may be made through broker-dealer firms. However, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. During the fiscal years ended April 30, 1996, April 30, 1997 and April 30, 1998, the MJI International Equity Portfolio paid aggregate brokerage commissions of $44,004, $102,419 and $173,063, respectively. The difference in brokerage commissions paid between fiscal years April 30, 1997 and 1998, was the result of growth in the portfolio's assets. Some securities considered for investment by the Portfolio may also be appropriate for other clients served by the Adviser. If purchases or sales of securities consistent with the investment policies of a Portfolio and one or more of these other clients served by the Adviser 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 Adviser. 20 Although there is no specified formula for allocating such transactions, the various allocation methods used by the Adviser, and the results of such allocations, are subject to periodic review by the Fund's Board of Trustees. ADMINISTRATIVE SERVICES The Board of Trustees of the Fund approved a Fund Administration Agreement ("Fund Administration Agreement"), effective April 15, 1996, between UAMFSI, a wholly owned subsidiary of UAM, and the Fund. Pursuant to the terms of the Fund Administration Agreement. UAMFSI manages, administers and conducts the general business activities of the Fund other than those which have been contracted to other third parties by the Fund. Additionally, UAMFSI has agreed to provide transfer agency services to the Portfolio pursuant to the terms of the Fund Administration Agreement. UAMFSI has subcontracted some of these services to CGFSC, an affiliate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement between UAMFSI and CGFSC (collectively, with the Fund Administration Agreement, the "Agreements"). Pursuant to the terms of the Agreements, the Portfolio pays UAMFSI a two- part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fee is calculated from the aggregate net assets of the Portfolio: Annual Rate MJI International Equity Portfolio..............................0.06% CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined Fund net assets; 0.11 of 1% of the next $800 million of combined Fund net assets; 0.07 of 1% of combined Fund net assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined Fund net assets in excess of $3 billion. Fees are allocated among each of the Portfolios on the basis of their relative assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,00 annually after two years. If a separate class of shares is added to a Portfolio, its minimum annual fee increases by $20,000. Prior to April 15, 1996, CGFSC or its predecessor, Mutual Funds Services Company, provided certain administrative services to the Fund under an Administration Agreement between the Fund and U.S. Trust Company of New York. For the fiscal years ended April 30, 1996, April 30, 1997 and April 30, 1998, administrative services fees paid to CGFSC by the MJI International Equity Portfolio totaled 21 $69,866, $96,855 and $105,743, respectively. For the period April 15, 1996 to April 30, 1996, and for the fiscal years ended April 30, 1997 and April 30, 1998, UAMFSI earned $3,134, $11,239 and $22,754, respectively, from the MJI International Equity Portfolio as Administrator. The services provided by UAMFSI and CGFSC and the basis of the current fees payable are described in the Portfolio's Prospectuses. UAMFSI will bear all expenses in connection with the performance of its services under the Fund Administration Agreement. Other expenses to be incurred in the operation of the Fund will be borne by the Fund or other parties, including taxes, interest, brokerage fees and commissions, if any, salaries and fees of officers and members of the Board who are not officers, directors, shareholders or employees of UAMFSI, or the Fund's investment adviser or distributor, SEC fees and state Blue Sky fees, EDGAR filing fees, processing services and related fees, advisory and administration fees, charges and expenses of pricing and data services, independent public accountants and custodians, insurance premiums including fidelity bond premiums, outside legal expenses, costs of maintenance of corporate existence, typesetting and printing of prospectuses for regulatory purposes and for distribution to current shareholders of the Fund, printing and production costs of shareholders' reports and corporate meetings, cost and expenses of Fund stationery and forms, costs of special telephone and data lines and devices, trade association dues and expenses, and any extraordinary expenses and other customary Fund expenses. Unless sooner terminated as provided herein, the Fund Administration Agreement shall continue in effect from year to year provided such continuance is specifically approved at least annually by the Board. The Fund Administration Agreement is terminable, without penalty, by the Board or by UAMFSI, on not less than ninety (90) days' written notice. The Fund Administration Agreement shall automatically terminate upon its assignment by UAMFSI without the prior written consent of the Fund. UAMFSI will from time to time employ or associate with such person or persons as may be fit to assist them in the performance of the Fund Administration Agreement. Such person or persons may be officers and employees who are employed by both UAMFSI and the Fund. The compensation of such person or persons for such employment shall be paid by UAMFSI and no obligation will be incurred by or on behalf of the Fund in such respect. Effective February 28, 1997, the Fund entered into an Account Services Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc. (the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services Agreement, the Service Provider agrees to perform certain services for participants in a self-directed, defined contribution plan, and for whom the Service Provider provides participant recordkeeping. Pursuant to the Services Agreement, the Service Provider is entitled to receive, after the end of each month, a fee at the annual rate of 0.15% of the average aggregate daily net asset value of shares of the Portfolios in the accounts for which it provides services. During the fiscal year ended April 30, 1998, the Portfolio paid $30,161 in fees pursuant to the Services Agreement, of which $27,286 were voluntarily waived. CUSTODIAN The Chase Manhattan Bank, 3 Chase Metro Tech Center, Brooklyn, New York 11245, provides for the custody of the Fund's assets pursuant to the terms of a custodian agreement with the Fund. INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, serves as independent accountants for the Fund. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, serves as the Fund's Distributor. Shares of the Fund are offered continuously. While the Distributor will use its best efforts to sell shares of the 22 Fund, it is not obligated to sell any particular amount of shares. The Distributor received no compensation for its services from the Portfolio during the fiscal year ended April 30, 1998. PERFORMANCE CALCULATIONS PERFORMANCE The Portfolio may from time to time quote various performance figures to illustrate the past performance of each class of the Portfolio. Performance quotations by investment companies are subject to rules adopted by the SEC, which require the use of standardized performance quotations or, alternatively, that every non-standardized performance quotation furnished by the Portfolio be accompanied by certain standardized performance information computed as required by the SEC. Current yield and average annual compounded total return quotations used by the Fund are based on the standardized methods of computing performance mandated by the SEC. An explanation of the method used to compute or express performance follows. TOTAL RETURN The average annual total return of a Portfolio is determined by finding the average annual compounded rates of return over 1, 5 and 10 year periods that would equate an initial hypothetical $1,000 investment to its ending redeemable value. The calculation assumes that all dividends and distributions are reinvested when paid. The quotation assumes the amount was completely redeemed at the end of each 1, 5 and 10 year period and the deduction of all applicable Fund expenses on an annual basis. Since Service Class Shares of the Portfolio bear additional service and distribution expenses, the average annual total return of the Service Class Shares of the Portfolio will generally be lower than that of the Institutional Class Shares. The average annual total return for the MJI International Equity Portfolio Institutional Class and Institutional Service Class Shares from inception to April 30, 1998, and for the one year period ended on the date of the Financial Statements incorporated hereby by reference are as follows:
Since Inception One Year Through Year Ended Ended April 30, April 30 Inception 1998 1998 Date ---------- ---------------- --------- MJI International Equity Portfolio 20.39% 7.53% 9/16/94 Institutional Class Shares......................... MJI International Equity Portfolio 20.11% 15.73% 12/31/96 Institutional Service Class Shares.................
These figures are calculated according to the following formula: P (1 + T)/n/ = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10 year periods (or fractional portion thereof). COMPARISONS 23 To help investors better evaluate how an investment in a Portfolio of the Fund might satisfy their investment objective, advertisements regarding the Portfolio may discuss various measures of Portfolio performance as reported by various financial publications. Advertisements may also compare performance (as calculated above) to performance as reported by other investments, indices and averages. Please see Appendix B for publications, indices and averages which may be used. In assessing such comparisons of performance, an investor should keep in mind that the composition of the investments in the reported indices and averages is not identical to the composition of investments in the Portfolio, that the averages are generally unmanaged, and that the items included in the calculations of such averages may not be identical to the formula used by the Portfolio to calculate its performance. In addition, there can be no assurance that the Portfolio will continue this performance as compared to such other averages. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized under the name "The Regis Fund II," as a Delaware business trust on May 18, 1994. On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's principal executive office is located at One International Place, 44th Floor, Boston, MA 02110; however, all investor correspondence should be addressed to the Fund at UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial interest, without par value. The Trustees have the power to designate one or more series ("Portfolios") of shares of beneficial interest without further action by shareholders. The Board of Trustees has classified an additional class of shares in the Portfolio, known as Advisor Shares. As of the date of this Statement of Additional Information, no Advisor Shares have been offered by the Portfolio. The shares of the Portfolio, when issued and paid for as provided for in its Prospectus, will be fully paid and nonassessable, have no preference as to conversion, exchange, dividends, retirement or other features and have no preemptive rights. The shares of the Portfolio have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. Institutional Class, Service Class and Advisor Class Shares each represent an interest in the same assets of a Portfolio and are identical in all respects except that the Service Class Shares bear certain expenses related to shareholder servicing and the distribution of such shares, and have exclusive voting rights with respect to matters relating to such distribution expenditures. In the event of liquidation of the Fund, the holders of the shares of each Portfolio or any class thereof that has been established and designated shall be entitled to receive, when and as declared by the Trustees, the excess of the assets belonging to that Portfolio, or in the case of a class, belonging to that Portfolio and allocable to that class, over the liabilities belonging to that Portfolio or class. The assets so distributable to the holders of shares of any particular Portfolio or class thereof shall be distributed to the holders in proportion to the number of shares of that Portfolio or class thereof held by them and recorded on the books of the Fund. The liquidation of any Portfolio or class thereof may be authorized at any time by vote of a majority of the Trustees then in office. 24 DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Fund's policy is to distribute substantially all of each Portfolio's net investment income, if any, together with any net realized capital gains annually in the amount and at the times that will avoid both income (including capital gains) taxes incurred on it and the imposition of the federal excise tax on undistributed income and capital gains. The amounts of any income dividends or capital gains distributions cannot be predicted. See the discussion under "Dividends, Capital Gains Distributions and Taxes" in the Prospectuses. Any dividend or distribution paid shortly after the purchase of shares of a Portfolio by an investor may have the effect of reducing the per share net asset value of the Portfolio by the per share amount of the dividend or distribution. Furthermore, such dividends or distributions, although in effect a return of capital, are subject to income taxes as set forth in the Prospectuses. As set forth in the Prospectuses, unless the shareholder elects otherwise in writing, all dividend and capital gains distributions are automatically reinvested in additional shares of the respective Portfolio of the Fund at net asset value (as of the business day following the record date). This will remain in effect until the Fund is notified by the shareholder in writing at least three days prior to the record date that either the Income Option (income dividends in cash and capital gains distributions in additional shares at net asset value) or the Cash Option (both income dividends and capital gains distributions in cash) has been elected. An account statement is sent to shareholders whenever an income dividend or capital gains distribution is paid. CODE OF ETHICS The Fund has adopted a Code of Ethics which restricts to a certain extent personal transactions by access persons of the Fund and imposes certain disclosure and reporting obligations. 25 FINANCIAL STATEMENTS The audited financial statements and notes thereto in the Portfolio's Annual Report to Shareholders (the "1998 Annual Report") are incorporated by reference into this Statement of Additional Information. No other parts of the 1998 Annual Report are incorporated by reference herein. The Financial Statements included in the 1998 Annual Report have been audited by the Fund's independent accountants, PricewaterhouseCoopers LLP. The reports of PricewaterhouseCoopers LLP are incorporated herein by reference. Such financial statements have been incorporated herein in reliance upon such reports given upon the authority of PricewaterhouseCoopers LLP as experts in accounting and auditing. Copies of the 1998 Annual Report may be obtained free of charge by telephoning the UAM Funds Service Center at the telephone number appearing on the front page of this Statement of Additional Information. 26 APPENDIX A -- DESCRIPTION OF SECURITIES AND RATINGS I. DESCRIPTION OF CORPORATE BOND RATINGS MOODY'S INVESTORS SERVICE CORPORATE BOND RATINGS Aaa -- Bonds which are Aaa are judged to be the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt- edge." Interest payments are protected by a large or by an exceptionally stable margin, and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa -- Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group, they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. A -- Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Moody's Investors Service ("Moody's") applies numerical modifiers 1, 2 and 3 in the Aa and A rating categories. The modifier 1 indicates that the security ranks at a higher end of the rating category, modifier 2 indicates a mid-range rating and modifier 3 indicates that the issue ranks at the lower end of the rating category. Baa -- Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's to a debt obligation and indicate an extremely strong capacity to pay principal and interest. AA -- Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only to a small degree. A -- Bonds rated A have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories. BBB -- Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than for debt in higher rated categories. II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES The term "U.S. Government Securities" refers to a variety of securities which are issued or guaranteed by the United States Government, and by various instrumentalities which have been established or sponsored by the United States Government. A-1 U.S. Treasury securities are backed by the "full faith and credit" of the United States. Securities issued or guaranteed by federal agencies and U.S. Government sponsored instrumentalities may or may not be backed by the full faith and credit of the United States. In the case of securities not backed by the full faith and credit of the United States, the investor must look principally to the agency or instrumentality issuing or guaranteeing the obligation for ultimate repayment, and may not be able to assess a claim against the United States itself in the event the agency or instrumentality does not meet its commitment. Agencies which are backed by the full faith and credit of the United States include the Export- Import Bank, Farmers Home Administration, Federal Financing Bank, and others. Certain agencies and instrumentalities, such as the GNMA are, in effect, backed by the full faith and credit of the United States through provisions in their charters that they may make "indefinite and unlimited" drawings on the U.S. Treasury, if needed to service its debt. Debt from certain other agencies and instrumentalities, including the Federal Home Loan Bank and FNMA, is not guaranteed by the United States, but those institutions are protected by the discretionary authority of the U.S. Treasury to purchase certain amounts of their securities to assist the institution in meeting its debt obligations. Finally, other agencies and instrumentalities, such as the Farm Credit System and the FHLMC, are federally chartered institutions under Government supervision, but their debt securities are backed only by the 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. III. DESCRIPTION OF COMMERCIAL PAPER The Portfolios may invest in commercial paper (including variable amount master demand notes) rated A-1 or better by Standard & Poor's ("S&P") or Prime-1 by Moody's or by S&P. Commercial paper refers to short-term, unsecured promissory notes issued by corporations to finance short-term credit needs. Commercial paper is usually sold on a discount basis and has a maturity at the time of issuance not exceeding nine months. Variable amount master demand notes are demand obligations that permit the investment of fluctuating amounts at varying market rates of interest pursuant to arrangement between the issuer and a commercial bank acting as agent for the payees of such notes whereby both parties have the right to vary the amount of the outstanding indebtedness on the notes. As variable amount master demand notes are direct lending arrangements between a lender and a borrower, it is not generally contemplated that such instruments will be traded, and there is no secondary market for these notes, although they are redeemable (and thus immediately repayable by the borrower) at face value, plus accrued interest, at any time. In connection with the Portfolio's investment in variable amount master demand notes, the Adviser's investment management staff will monitor, on an ongoing basis, the earning power, cash flow and other liquidity ratios of the issuer and the borrower's ability to pay principal and interest on demand. Commercial paper rated A-1 by S&P has the following characteristics: (1) liquidity ratios are adequate to meet cash requirements; (2) long-term senior debt is rated "A" or better; (3) the issuer has access to at least two additional channels of borrowing; (4) basic earnings and cash flow have an upward trend with allowance made for unusual circumstances; (5) typically, the issuer's industry is well established, and the issuer has a strong position within the industry; and (6) the reliability and quality of management are unquestioned. Relative strength or weakness of the above factors determine whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1 is the highest commercial paper rating assigned by Moody's. Among the factors considered by Moody's in assigning ratings are the following: (1) evaluation of the management of the issuer; (2) economic evaluation of the issuer's industry or industries and the appraisal of speculative-type risks which may be inherent in certain areas; (3) evaluation of the issuer's products in relation to completion and customer acceptance; (4) liquidity; (5) amount and quality of long term debt; (6) trend of earnings over a period of ten years; (7) financial strength of a parent company and the relationships which exist with the issuer; and (8) recognition by the management of issuer of obligations which may be present or may arise as a result of public interest questions and preparations to meet such obligations. A-2 IV. DESCRIPTION OF BANK OBLIGATIONS Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated interest rate. Certificates of deposit are negotiable short-term obligations of commercial banks. Variable rate certificates of deposit are certificates of deposit on which the interest rate is periodically adjusted prior to their stated maturity based upon a specified market rate. As a result of these adjustments, the interest rate on these obligations may increase or decrease periodically. Frequently, dealers selling variable rate certificates of deposit to the Portfolio will agree to repurchase such instruments, at the Portfolio's option, at par on or near the coupon dates. The dealers' obligations to repurchase these instruments are subject to conditions imposed by various dealers. Such conditions typically are the continued credit standing of the issuer and the existence of reasonably orderly market conditions. The Portfolio is also able to sell variable rate certificates of deposit in the secondary market. Variable rate certificates of deposit normally carry a higher interest rate than comparable fixed rate certificates of deposit. A banker's acceptance is a time draft drawn on a commercial bank by a borrower usually in connection with an international commercial transaction to finance the import, export, transfer or storage of goods. The borrower is liable for payment as well as the bank which unconditionally guarantees to pay the draft at its face amount on the maturity date. Most acceptances have maturities of six months or less and are traded in the secondary markets prior to maturity. V. DESCRIPTION OF FOREIGN INVESTMENTS Investors should recognize that investing in foreign companies involves certain special considerations which are not typically associated with investing in U.S. companies. Since the securities of foreign companies are frequently denominated in foreign currencies, a Portfolio may be affected favorably or unfavorably by changes in currency rates and in exchange control regulations, and may incur costs in connection with conversions between various currencies. As foreign companies are not generally subject to uniform accounting, auditing and financial reporting standards and they may have policies that are not comparable to those of domestic companies, there may be less information available about certain foreign companies than about domestic companies. Securities of some foreign companies are generally less liquid and more volatile than securities of comparable domestic companies. There is generally less government supervision and regulation of stock exchanges, brokers and listed companies than in the U.S. In addition, with respect to certain foreign countries, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments which could affect U.S. investments in those countries. Although the Fund will endeavor to achieve the most favorable execution costs in its portfolio transactions, fixed commissions on many foreign stock exchanges are generally higher than negotiated commissions on U.S. exchanges. Certain foreign governments levy withholding taxes on dividend and interest income. Although in some countries a portion of these taxes are recoverable, the non-recoverable portion of foreign withholding taxes will reduce the income received from the companies comprising the Fund's Portfolios. However, these foreign withholding taxes are not expected to have a significant impact. A-3 APPENDIX B - COMPARISONS (a) Dow Jones Composite Average or its component averages -- an unmanaged index composed of 30 blue-chip industrial corporation stocks (Dow Jones Industrial Average), 15 utilities company stocks and 20 transportation stocks. (b) Standard & Poor's 500 Stock Index or its component indices -- an unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40 utilities stocks and 20 transportation stocks. (c) Standard & Poor's 400 Mid Cap Index - consists of 400 domestic stocks chosen for market size, liquidity, and industry group representation. It is also a market-value weighted index and was the first benchmark of mid cap stock price movement. (d) The New York Stock Exchange composite or component indices -- unmanaged indices of all industrial, utilities, transportation and finance stocks listed on the New York Stock Exchange. (e) Wilshire 5000 Equity Index or its component indices -- represents the return on the market value of all common equity securities for which daily pricing is available. (f) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income Fund Performance Analysis -- measure total return and average current yield for the mutual fund industry. Rank individual mutual fund performance over specified time periods, assuming reinvestment of all distributions, exclusive of any applicable sales charges. (g) Lipper Capital Appreciation Funds Index - a fund that aims at maximum capital appreciation, frequently by means of 100% or more portfolio turnover, leveraging, purchasing unregistered securities, purchasing options, etc. The fund may take large cash positions. (h) Lipper Small Cap Funds Index- a fund that by prospectus or portfolio practice invests primarily in companies with market capitalizations of less than $1 billion at the time of purchase. (i) Morgan Stanley Capital International EAFE Index and World Index - - respectively, arithmetic, market value-weighted averages of the performance of over 900 securities listed on the stock exchanges of countries in Europe, Australia and the Far East, and over 1,400 securities listed on the stock exchanges of these continents, including North America. (j) Goldman Sachs 100 Convertible Bond Index -- currently includes 67 bonds and 33 preferred. The original list of names was generated by screening for convertible issues of 100 million or greater in market capitalization. The index is priced monthly. (k) Salomon Brothers GNMA Index -- includes pools of mortgages originated by private lenders and guaranteed by the mortgage pools of the Government National Mortgage Association. B-1 (l) Salomon Brothers High Grade Corporate Bond Index -- consists of publicly issued, non-convertible corporate bonds rated AA or AAA. It is a value-weighted, total return index, including approximately 800 issues with maturities of 12 years or greater. (m) Salomon Brothers Broad Investment Grade Bond Index -- is a market-weighted index that contains approximately 4,700 individually priced investment grade corporate bonds rated BBB or better, U.S. Treasury/agency issues and mortgage pass through securities. (n) Lehman Brothers Long-Term Treasury Bond Index -- is composed of all bonds covered by the Lehman Brothers Treasury Bond Index with maturities of 10 years or greater. (o) Lehman Brothers Government/Corporate Index -- is a combination of the Government and Corporate Bond Indices. The Government Index includes public obligations of the U.S. Treasury, issues of Government agencies, and corporate debt backed by the U.S. Government. The Corporate Bond Index includes fixed-rate nonconvertible corporate debt. Also included are Yankee Bonds and nonconvertible debt issued by or guaranteed by foreign or international governments and agencies. All issues are investment grade (BBB) or higher, with maturities of at least one year and an outstanding par value of at least $100 million for U.S. Government issues and $25 million for others. Any security downgraded during the month is held in the index until month-end and then removed. All returns are market value weighted inclusive of accrued income. (p) NASDAQ Industrial Index -- is composed of more than 3,000 industrial issues. It is a value-weighted index calculated on price change only and does not include income. (q) Value Line -- composed of over 1,600 stocks in the Value Line Investment Survey. (r) Russell 2000 Index -- composed of the 2,000 smallest stocks in the Russell 3000, a market value-weighted index of the 3,000 largest U.S. publicly-traded companies. (s) Salomon Brothers 3 Month T-Bill Average - the average return for all Treasury bills for the previous three month period. (t) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70% Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35% Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade Bond Index; all stocks on the NASDAQ system exclusive of those traded on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Salomon Brothers High Grade Bond Index. (u) CDA Mutual Fund Report published by CDA Investment Technologies, Inc. -- analyzes price, current yield, risk, total return and average rate of return (average compounded growth rate) over specified time periods for the mutual fund industry. (v) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes price, yield, risk and total return for equity funds. (w) Financial publications: Business Week, Changing Times, Financial World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial Times, Global Investor, Wall Street Journal and Weisenberger Investment Companies Service -- publications that rate fund performance over specified time periods. B-2 (x) Consumer Price Index (or Cost of Living Index), published by the U.S. Bureau of Labor Statistics -- a statistical measure of change over time in the price of goods and services in major expenditure groups. (y) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates -- historical measure of yield, price and total return for common and small company stock, long-term government bonds, U.S. Treasury bills and inflation. (z) Savings and Loan Historical Interest Rates -- as published by the U.S. Savings & Loan League Fact Book. (aa) Historical data supplied by the research departments of First Boston Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg L.P. B-3 PART B UAM FUNDS TJ CORE EQUITY PORTFOLIO Institutional Service Class Shares STATEMENT OF ADDITIONAL INFORMATION -- July 17, 1998 This Statement of Additional Information ("SAI") is not a Prospectus but should be read in conjunction with the Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the TJ Core Equity Portfolio (the "Portfolio") Institutional Service Class Shares (the "Service Class Shares") dated July 17, 1998. To obtain the Prospectus, please call the UAM Funds Service Center at 1- 800-638-7983. TABLE OF CONTENTS
INVESTMENT OBJECTIVE AND POLICIES........................................ 2 PURCHASE AND REDEMPTION OF SHARES........................................ 5 VALUATION OF SHARES...................................................... 7 SHAREHOLDER SERVICES..................................................... 7 INVESTMENT LIMITATIONS................................................... 8 MANAGEMENT OF THE FUND................................................... 9 INVESTMENT ADVISER....................................................... 11 SERVICE AND DISTRIBUTION PLANS........................................... 12 PORTFOLIO TRANSACTIONS................................................... 15 ADMINISTRATIVE SERVICES.................................................. 15 CUSTODIAN................................................................ 17 INDEPENDENT ACCOUNTANTS.................................................. 17 DISTRIBUTOR.............................................................. 17 PERFORMANCE CALCULATIONS................................................. 17 GENERAL INFORMATION...................................................... 18 FINANCIAL STATEMENTS..................................................... 19 APPENDIX A - DESCRIPTION OF SECURITIES AND RATINGS....................... A-1 APPENDIX B - COMPARISONS................................................. B-1
Investment Adviser Tom Johnson Investment Management, Inc. (Adviser) Distributor UAM Fund Distributors, Inc. (Distributor) Administrator and Transfer Agent UAM Fund Services, Inc. (UAMFSI) INVESTMENT OBJECTIVE AND POLICIES The following discussion supplements the discussion of investment objective and policies of the Portfolio as set forth in the Portfolio's Prospectus. FOREIGN SECURITIES Investors should recognize that investing in foreign companies directly or through the purchase of American Depositary Receipts ("ADRs") involves certain special considerations which are not typically associated with investing in U.S. companies. Since the securities of foreign companies are frequently denominated in foreign currencies, investments may be affected favorably or unfavorably by changes in currency rates and in exchange control regulations, and may incur costs in connection with conversions between various currencies. As foreign companies are not generally subject to uniform accounting, auditing and financial reporting standards and they may have policies that are not comparable to those of domestic companies, there may be less information available about certain foreign companies than about domestic companies. Securities of some foreign companies are generally less liquid and more volatile than securities of comparable domestic companies. There is generally less government supervision and regulation of stock exchanges, brokers and listed companies than in the U.S. In addition, with respect to certain foreign countries, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments which could affect U.S. investments in those countries. Certain foreign governments levy withholding taxes on dividend and interest income. Although in some countries a portion of these taxes are recoverable, the non-recoverable portion of foreign withholding taxes will reduce the income received from the companies comprising the Portfolio's investments. However, these foreign withholding taxes are not expected to have a significant impact. LENDING OF SECURITIES The Portfolio may lend its investment securities to qualified brokers, dealers, domestic and foreign banks or other financial institutions, so long as the terms, the structure and the aggregate amount of such loans are not inconsistent with the Investment Company Act of 1940, as amended, (the "1940 Act") or the Rules and Regulations or interpretations of the Securities and Exchange Commission (the "SEC") thereunder, which currently require that (a) the borrower pledge and maintain with the Portfolio collateral consisting of cash, an irrevocable letter of credit issued by a domestic U.S. bank or securities issued or guaranteed by the United States Government having a value at all times of not less than 100% of the value of the securities loaned, (b) the borrower add to such collateral whenever the price of the securities loaned rises (i.e., the borrower "marks to the market" on a daily basis), (c) the loan be made subject to termination by the Portfolio at any time, and (d) the Portfolio receives reasonable interest on the loan (which may include the Portfolio investing any cash collateral in interest bearing short-term investments). The Portfolio will not loan securities to the extent that greater than one-third of its assets (including the value of the collateral for the loans) at fair market value would be committed to loans. As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the securities loaned if the borrower of the securities fails financially. These risks are similar to the ones involved with repurchase agreements as discussed in the Prospectus. HEDGING STRATEGIES The Portfolio may engage in various portfolio strategies to hedge against adverse movements in the equity, debt and currency markets. The Portfolio may buy or sell futures contracts, write (i.e., sell) covered call options on its portfolio securities, purchase put and call options on securities and engage in transactions in stock index options and stock index futures, and related options on such futures. Each of these portfolio strategies is described below. Although certain risks are involved in options and futures transactions, the Adviser believes that, because the 2 Portfolio will engage in options and futures transactions only for hedging purposes, the options and futures portfolio strategies of the Portfolio will not subject it to the risks frequently associated with the speculative use of options and futures transactions. While the Portfolio's use of hedging strategies is intended to reduce the volatility of the net asset value of the Portfolio shares, the Portfolio's net asset value will fluctuate. There can be no assurance that the Portfolio's hedging transactions will be effective. Also, the Portfolio may not necessarily be engaging in hedging activities when movements in any particular equity, debt or currency market occur. FUTURES CONTRACTS The Portfolio may enter into futures contracts for the purposes of hedging, remaining fully invested and reducing transaction costs. 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"), a U.S. Government agency. 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 contracts on securities indices or other indices do not require the physical delivery of securities, but merely provide for profits and losses resulting from changes in the market value of a contract to be credited or debited at the close of each trading day to the respective accounts of the parties to the contract. On the contract's expiration date a final cash settlement occurs and the futures position is simply closed out. Changes in the market value of a particular futures contract reflect changes in the level of the index on which the futures contract is based. Futures traders are required to make a good faith margin deposit in cash or acceptable 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. Generally margin deposits are structured as percentages (e.g., 5%) of the market value of the contracts being traded. After a futures contract position is opened, the value of the contract is marked to market daily. If the futures contract price changes to the extent that the margin on deposit does not satisfy margin requirements, payment of additional "variation" margin will be required. Conversely, changes 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 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 a fluctuation in interest rates. The Portfolio intends to use futures contracts only for hedging purposes. Regulations of the CFTC applicable to the Fund require that all of its futures transactions constitute bona fide hedging transactions or that the Fund's commodity futures and option positions be for other purposes, only to the extent that the aggregate initial margins and premiums required to establish such non-hedging positions do not exceed five percent of the liquidation value of the Portfolio. The 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. As evidence of this hedging interest, the Portfolio expects that approximately 75% of its futures contracts purchases will be "completed," that is, equivalent amounts 3 of related securities will have been purchased or will be purchased by the Portfolio on the settlement date of the futures contracts. Although techniques other than the sale and purchase of futures contracts could be used to control the Portfolio's exposure to market fluctuations, the use of futures contracts may be a more effective means of hedging this exposure. While the Portfolio will incur commission expenses in both opening and closing out futures positions, these costs are lower than transaction costs incurred in the purchase and sale of the underlying securities. RESTRICTIONS ON THE USE OF FUTURES CONTRACTS The Portfolio will not enter into futures contract transactions to the extent that, immediately thereafter, the sum of its initial margin deposits on open contracts exceeds 5% of the market value of its total assets. In addition, the Portfolio will not enter into futures contracts to the extent that its outstanding obligations to purchase securities under these contracts would exceed 20% of its total assets. 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. The Portfolio will minimize the risk that it will be unable to close out a futures position by only entering into futures which are traded on national futures exchanges and for which there appears to be a liquid secondary market. 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 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 Portfolio may be required to make delivery of the instruments underlying futures contracts it holds. The inability to close futures positions also could have an adverse impact on the Portfolio's ability to effectively hedge. 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 costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit 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. However, because the futures strategies of the Portfolio are engaged in only for hedging purposes, the Adviser does not believe that the Portfolio is subject to the risks of loss frequently associated with futures transactions. The Portfolio would presumably have sustained comparable losses if, instead of the futures contract, it had invested in the underlying financial instrument and sold it after the decline. Utilization of futures transactions by the Portfolio does involve the risk of imperfect or no correlation where the securities underlying the futures contracts have different maturities than the Portfolio securities being hedged. It is also possible that the Portfolio could both lose money on futures contracts and also experience a decline in value of portfolio securities. There is also the risk of loss by the 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 4 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. OPTIONS The Portfolio may purchase and sell put and call options on securities and futures contracts for hedging purposes. 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 on which it is based or 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. For example, there are significant differences between the securities, futures and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objective. A decision as to whether, when, and how to use options involves the exercise of skill and judgment by the Adviser, and even a well-conceived transaction may be unsuccessful because of market behavior or unexpected events. WRITING COVERED CALL OPTIONS The principal reason for writing call options is to attempt to realize, through the receipt of premiums, a greater return than would be realized on securities alone. By writing covered call options, the Portfolio gives up the opportunity, while the option is in effect, to profit from any price increase in the underlying security above the option exercise price. In addition, the Portfolio's ability to sell the underlying security will be limited while the option is in effect unless the Portfolio effects a closing purchase transaction. A closing purchase transaction cancels out the Portfolio's position as the writer of an option by means of offsetting purchase of an identical option prior to the expiration of the option it has written. Covered call options serve as a partial hedge against the price of the underlying security declining. The Portfolio writes only covered options, which means that so long as the Portfolio is obligated as the writer of the option it will, through its custodian, have deposited and maintained cash or liquid securities denominated in U.S. dollars with a value equal to or greater than the exercise price of the underlying securities. PURCHASING OPTIONS The amount of any appreciation in the value of the underlying security subject to a put will be partially offset by the amount of the premium paid for the put option and any related transaction costs. Prior to its expiration, a put option may be sold in a closing sale transaction and profit or loss from a sale will depend on whether the amount received is more or less than the premium paid for the put option plus the related transaction costs. A closing sale transaction cancels out the Portfolio's position as purchaser of an option by means of an offsetting sale of an identical option prior to the expiration of the option it has purchased. In certain circumstances, the Portfolio may purchase call options on securities held in its investment portfolio on which it has written call options or on securities which it intends to purchase. PORTFOLIO TURNOVER The portfolio turnover rate described in the Prospectus is calculated by dividing the lesser of purchases or sales of portfolio securities for the year by the monthly average of the value of the portfolio securities. The calculation excludes all securities, including options, whose maturities at the time of acquisition were one year or less. Portfolio turnover may vary greatly from year to year as well as within a particular year, and may also be affected by cash requirements for redemptions of shares. See "Financial Highlights" in the Prospectus for the historical portfolio turnover rates with respect to the Portfolio. 5 PURCHASE AND REDEMPTION OF SHARES Shares of the Portfolio may be purchased without a sales commission at the net asset value per share next determined after an order is received in proper form by the Fund, and payment is received by the Fund or its designated Service Agent. The minimum initial investment required for the Portfolio is $2,500, with certain exceptions as may be permitted from time to time by the officers of the Fund. Other investment minimums are: initial IRA investment, $500; initial spousal IRA investment, $250; and additional investment for all accounts, $100. An order received in proper form prior to the close of regular trading on the New York Stock Exchange ("Exchange") (generally 4:00 p.m. Eastern Time) will be executed at the price computed on the date of receipt; and an order received not in proper form or after the close of the Exchange will be executed at the price computed on the next day the Exchange is open after proper receipt. The exchange will be closed on the following days: New Year's Day, Dr. Martin Luther King, Jr. Day; Presidents' Day; Good Friday; Memorial Day; Independence Day; Labor Day; Thanksgiving Day and Christmas Day. The Portfolio reserves the right in its sole discretion (1) to suspend the offering of its shares, (2) to reject purchase orders when in the judgment of management such rejection is in the best interests of the Fund, and (3) to reduce or waive the minimum for initial and subsequent investment for certain fiduciary accounts such as employee benefit plans or under circumstances where certain economies can be achieved in sales of the Portfolio's shares. The Portfolio may suspend redemption privileges or postpone the date of payment (1) during any period that either the Exchange and custodian bank are closed or trading on the Exchange is restricted as determined by the SEC, (2) during any period when an emergency exists as defined by the rules of the SEC as a result of which it is not reasonably practicable for the Portfolio to dispose of securities owned by it or to fairly determine the value of its assets, and (3) for such other periods as the SEC may permit. The Fund has made an election with the SEC to pay in cash all redemptions requested by any shareholder of record limited in amount during any 90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at the beginning of such period. Such commitment is irrevocable without the prior approval of the SEC. Redemptions in excess of the above limits may be paid, in whole or in part, in investment securities or in cash as the Board of Trustees may deem advisable; however, payment will be made wholly in cash unless the Trustees believe that economic or market conditions exist which would make such a practice detrimental to the best interests of the Portfolio. If redemptions are paid in investment securities, such securities will be valued as set forth in the prospectus under "VALUATION OF SHARES," and a redeeming shareholder would normally incur brokerage expenses if he converted those securities to cash. No charge is made by the Portfolio for redemptions. Any redemption may be more or less than the shareholder's initial cost depending on the market value of the securities held by the Portfolio. SIGNATURE GUARANTEES To protect your account, the Fund and Chase Global Funds Services Company ("CGFSC") from fraud, signature guarantees are required for certain redemptions. The purpose of signature guarantees is to verify the identity of the person who has authorized a redemption from your account. Signature guarantees are required for (1) all redemptions when the proceeds are to be paid to someone other than the registered owner(s) and/or registered address, or (2) share transfer requests. Signatures must be guaranteed by an "eligible guarantor institution" as defined in Rule 17ad-15 under the Securities Exchange Act of 1934. Eligible guarantor institutions include banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. A complete definition of eligible guarantor institutions is available from the fund's transfer agent. Broker-dealers guaranteeing signatures must be a member of a clearing corporation or maintain net capital of at least $100,000. Credit unions must be authorized to issue signature guarantees. Signature guarantees will be accepted from any eligible guarantor institution which participates in a signature guarantee program. 6 The signature guarantee must appear either: (1) on the written request for redemption; (2) on a separate instrument for assignment ("stock power") which should specify the total number of shares to be redeemed; or (3) on all stock certificates tendered for redemption and, if shares held by the Fund are also being redeemed, on the letter or stock power. VALUATION OF SHARES Equity securities listed on a securities exchange for which market quotations are readily available are valued at the last quoted sale price of the day. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed securities not traded on the valuation date for which market quotations are readily available are valued neither exceeding the current asked prices nor less than the current bid prices. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents. The converted value is based upon the bid price of the foreign currency against U.S. dollars as quoted by any major bank or broker. Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the- counter market. Bonds and other fixed income securities may be valued on the basis of prices provided by a pricing service when such prices are believed to reflect the fair market value of such securities. Securities purchased with remaining maturities of 60 days or less are valued at amortized cost, using methods approved by the Board of Trustees. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods approved by the Fund's Board of Trustees. SHAREHOLDER SERVICES The following supplements the information set forth under "Shareholder Services" in the Prospectus. EXCHANGE PRIVILEGE Service Class Shares of the Portfolio may be exchanged for Service Class Shares of any other UAM Funds or UAM Funds, Inc. Portfolio. Exchange requests should be made by calling the Fund (1-800-638-7983) or by writing to UAM Funds, UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The exchange privilege is only available with respect to Portfolios that are qualified for sale in the shareholder's state of residence. Any such exchange will be based on the respective net asset values of the shares involved. There is no sales commission or charge of any kind. Before making an exchange into a Portfolio, a shareholder should read its Prospectus and consider the investment objective of the Portfolio to be purchased. You may obtain a Prospectus for the Portfolio(s) you are interested in by calling the UAM Funds Service Center at 1-800-638-7983. Telephone exchanges will be accepted only if the certificates for the shares to be exchanged have not been issued to the shareholder, and if the registration of the two accounts will be identical. Requests for exchanges received prior to the close of regular trading of the Exchange (generally 4:00 p.m. Eastern Time) will be processed as of the close of business on the same day. Requests received after the close of regular trading on the Exchange will be processed on the next business day. Neither the Fund nor CGFSC will be responsible for the authenticity of the exchange instructions received by telephone. Exchanges may also be subject 7 to limitations as to amounts or frequency and to other restrictions established by the Board of Trustees to assure that such exchanges do not disadvantage the Fund and its shareholders. For federal income tax purposes an exchange between Portfolios is a taxable event, and, accordingly, a capital gain or loss may be realized. In a revenue ruling relating to circumstances similar to the Fund's, an exchange between series of a Fund was also deemed to be a taxable event. It is likely, therefore, that a capital gain or loss would be realized on an exchange between Portfolios; you may want to consult your tax adviser for further information in this regard. The exchange privilege may be modified or terminated at any time. TRANSFER OF SHARES Shareholders may transfer shares of the Portfolio to another person by making a written request to the Fund. The request should clearly identify the account and number of shares to be transferred, and include the signature of all registered owners and all stock certificates, if any, which are subject to the transfer. The signature on the letter of request, the stock certificate or any stock power must be guaranteed in the same manner as described under "Purchase and Redemption of Shares." As in the case of redemptions, the written request must be received in good order before any transfer can be made. INVESTMENT LIMITATIONS The following limitations supplement those set forth in the Prospectus of the Portfolio. A Portfolio's fundamental investment limitations cannot be changed without approval by a "majority of the outstanding shares" (as defined in the 1940 Act) of the Portfolio. Except for the numbered investment limitations noted as fundamental below, however, the limitations described below are not fundamental, and may be changed without the consent of shareholders. Whenever an investment limitation sets forth a percentage limitation on investment or utilization of assets, such limitation shall be determined immediately after and as a result of the Portfolio's acquisition of such security or other asset. Accordingly, any later increase or decrease resulting from a change in values, net assets or other circumstances will not be considered when determining whether the investment complies with the Portfolio's investment limitations. As a matter of fundamental policy, the Portfolio will not: (1) invest in physical commodities or contracts on physical commodities; (2) purchase or sell real estate or real estate limited partnerships, although it may purchase and sell securities of companies which deal in real estate and may purchase and sell securities which are secured by interests in real estate; (3) make loans except (i) by purchasing debt securities in accordance with its investment objectives 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 SEC thereunder; (4) underwrite the securities of other issuers; and (5) issue senior securities, as defined in the 1940 Act, except that this restriction shall not be deemed to prohibit the Portfolio from (i) making any permitted borrowings, mortgages or pledges, or (ii) entering into options, futures or repurchase transactions; As a matter of non-fundamental policy, the Portfolio will not: 8 (a) invest in stock, bond or interest rate futures and/or options on futures unless (i) not more than 5% of the Portfolio's assets are required as deposit to secure obligations under such futures and/or options on futures contracts provided, however, that in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in computing such 5% and (ii) not more than 20% of the Portfolio's assets are invested in futures and options (b) purchase on margin or sell short except as specified in (5) above; (c) invest more than an aggregate of 15% of the net assets of the Portfolio, determined at the time of investment, in securities subject to legal or contractual restrictions on resale or securities for which there are no readily available markets; and (d) invest for the purpose of exercising control over management of any company. MANAGEMENT OF THE FUND TRUSTEES AND OFFICERS The Officers of the Fund manage its day-to-day operations and are responsible to the Fund's Board of Trustees. The Trustees set broad policies for the Fund and elect its Officers. The following is a list of the Trustees and Officers of the Fund, their addresses and dates of birth, and a brief statement of their present positions and principal occupations during the past five years. John T. Bennett, Jr. (1/26/29), Trustee; College Road--RFD 3, Meredith, NH 03253; President of Squam Investment Management Company, Inc. and Great Island Investment Company, Inc.; President of Bennett Management Company from 1988 to 1993. Nancy J. Dunn (8/14/51), Trustee; 10 Garden Street, Cambridge, MA 02138; Vice President for Finance and Administration and Treasurer of Radcliffe College since 1991. Philip D. English (8/5/48), Trustee; 16 West Madison Street, Baltimore, MD 21201; President and Chief Executive Officer of Broventure Company, Inc.; Chairman of the Board of Chektec Corporation and Cyber Scientific, Inc. William A. Humenuk (4/21/42), Trustee; 100 King Street West, P.O. Box 2440, LCD- 1, Hamilton Ontario, Canada L8N-456; Executive Vice President and Chief Administrative Officer of Philip Services Corp.; Director, Hofler Corp.; Formerly, a Partner in the Philadelphia office of the law firm Dechert Price & Rhoads. Norton H. Reamer* (3/21/35), Trustee; One International Place, Boston, MA 02110; President and Chairman of the Fund; President, Chief Executive Officer and a Director of United Asset Management Corporation; Director, Partner or Trustee of each of the Investment Companies of the Eaton Vance Group of Mutual Funds. 9 Peter M. Whitman, Jr.* (7/1/43), Trustee; One Financial Center, Boston, MA 02111; President and Chief Investment Officer of Dewey Square Investors Corporation ("DSI") since 1988; Director and Chief Executive Officer of H. T. Investors, Inc., formerly a subsidiary of DSI. William H. Park (9/19/47), Vice President; One International Place, Boston, MA 02110; Executive Vice President and Chief Financial Officer of United Asset Management Corporation. Gary L. French (7/4/51), Treasurer; 211 Congress Street, Boston, MA 02110; President of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; formerly Vice President of Operations, Development and Control of Fidelity Investment in 1995; Treasurer of the Fidelity Group of Mutual Funds from 1991 to 1995. Michael E. DeFao (2/28/68), Secretary; 211 Congress Street, Boston, MA 02110; Vice President and General Counsel of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; Associate Attorney of Ropes & Gray (a law firm) from 1993 to 1995. Robert R. Flaherty (9/18/63), Assistant Treasurer; 211 Congress Street, Boston, MA 02110; Vice President of UAM Fund Services, Inc.; formerly Manager of Fund Administration and Compliance of Chase Global Fund Services Company from 1995 to 1996; Deloitte & Touche LLP from 1985 to 1995, Senior Manager. Michelle Azrialy (4/12/69), Assistant Secretary; 73 Tremont Street, Boston, MA 02108; Assistant Treasurer of Chase Global Funds Services Company since 1996. Senior Public Accountant with Price Waterhouse LLP from 1991 to 1994. Gordon M. Shone (7/30/56), Assistant Treasurer; 73 Tremont Street, Boston, MA 02108; Vice President of Fund Administration and Compliance of Chase Global Funds Services Company; formerly Senior Audit Manager of Coopers & Lybrand LLP (1983-1996). *Messrs. Reamer and Whitman are deemed to be "interested persons" of the Fund as that term is defined in the 1940 Act. REMUNERATION OF TRUSTEES AND OFFICERS The Fund pays each Trustee, who is not also an officer or affiliated person, a $150 quarterly retainer fee per active Portfolio which currently amounts to $1,350 per quarter. In addition, each unaffiliated Trustee receives a $2,000 meeting fee which is aggregated for all the Trustees and allocated proportionately among the Portfolios of the Fund and UAM Funds, Inc. and reimbursement for travel and other expenses incurred while attending Board meetings. Trustees who are also officers or affiliated persons receive no remuneration for their service as Trustees. The Fund's officers and employees are paid by either the Adviser, United Asset Management Corporation ("UAM"), or the Administrator and receive no compensation from the Fund. As of June 15, 1998, the Trustees and officers of the Fund owned less than 1% of the Fund's outstanding shares. The following table shows aggregate compensation paid to each of the Fund's Trustees by the Fund and total compensation paid by the Funds and UAM Funds, Inc. (collectively the "Fund Complex") in the fiscal year ended April 30, 1998. COMPENSATION TABLE
Pension or Retirement Estimated Total Compensation Benefits Annual from Registrant Aggregate Accrued as Benefits Upon and Name of Person, Compensation Part of Retirement Fund Complex Position From Registrant Fund Expenses --------------- ------------------ - ------------------------------ --------------- ---------------
10 John T. Bennett, Jr. Trustee..................... $6,149 0 0 $33,500 Philip D. English Trustee..................... $6,149 0 0 $33,500 William A.Humenuk Trustee..................... $6,149 0 0 $33,500 Nancy J. Dunn Trustee..................... $4,668 0 0 $25,200 Peter M. Whitman, Jr. Trustee..................... $ 0 0 0 $ 0 Norton H. Reamer Trustee..................... $ 0 0 0 $ 0
PRINCIPAL HOLDERS OF SECURITIES As of June 15, 1998, the following persons or organizations held of record or beneficially 5% or more of the shares of the Portfolio: T.J. Core Equity Portfolio Institutional Class Shares: Wilmington Trust Co., Trustee, FBO Allied Waste 401K Plan, c/o Mutual Funds UAM, 1100 North Market Street, Wilmington, DE, 34.4%; UMBSC & Co., FBO Lillick & Charles TJ Core, c/o Trust Department, P.O. Box 419260, Kansas City, MO, 15.0%; Fleet National Bank, Trustee, FBO Austin Diagnostic Clinic 401K PS, P.O. Box 92800, Rochester, NY, 13.2%*; Hartnat & Co., FBO Catholic Healthcare West Sisters of Mercy, P.O. Box 92800, Rochester, NY, 9.3%*; and Wilmington Trust Co., Trustee, FBO Catholic Healthcare West Medical Foundation Money Purchase Pension Plan, c/o Mutual Funds, 1100 North Market Street, Wilmington, DE, 5.5%*. The person(s) or organization(s) listed above as owning 25% or more of the outstanding shares of the Portfolio may be presumed to "control" (as that term is defined in the 1940 Act) such Portfolio. As a result, those persons or organizations could have the ability to vote a majority of the shares of the Portfolio on any matter requiring the approval of shareholders of such Portfolio. _______ * Denotes shares held by a trustee or other fiduciary for which beneficial ownership is disclaimed or presumed disclaimed. 11 INVESTMENT ADVISER INVESTMENT PHILOSOPHY Tom Johnson's investment philosophy is a conservative one which stresses adequate diversification, risk reduction, and consistency of returns. The firm maintains strong disciplines and emphasizes long-term results. The firm's initial goal is preservation of capital; thus, high quality issues are emphasized. Secondary goals include income and capital appreciation. Thorough fundamental economic, industry, and company analyses provide the framework within which all investment alternatives are evaluated. REPRESENTATIVE INSTITUTIONAL CLIENTS As of the date of this Statement of Additional Information, the Adviser's representative institutional clients included: LL Bean, Oklahoma Teachers' Retirement System, Presbyterian Health Foundation, Service Corporation International and University of Texas Ex-Students' Association. In compiling this client list, the Adviser used objective criteria such as account size, geographic location and client classification. The Adviser did not use any performance-based criteria. It is not known whether these clients approve or disapprove of the Adviser or the advisory services provided. CONTROL OF ADVISER The Adviser is a wholly-owned subsidiary of UAM, a holding company incorporated in Delaware in December 1980 for the purpose of acquiring and owning firms engaged primarily in institutional investment management. Since its first acquisition in August 1983, UAM has acquired or organized over 45 such wholly-owned affiliated firms (the "UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to retain control over their investment advisory decisions is necessary to allow them to continue to provide investment management services that are intended to meet the particular needs of their respective clients. Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to operate under their own firm name, with their own leadership and individual investment philosophy and approach. Each UAM Affiliated Firm manages its own business independently on a day-to-day basis. Investment strategies employed and securities selected by UAM Affiliated Firms are separately chosen by each of them. Several UAM Affiliated Firms also act as investment advisers to separate series or Portfolios of UAM Funds, Inc., a registered investment company. SERVICES PERFORMED BY ADVISER Pursuant to an Investment Advisory Agreement ("Agreement") between the Fund and the Adviser, the Adviser has agreed to manage the investment and reinvestment of the Portfolio's assets, to continuously review, supervise and administer the Portfolio's investment program, and to determine in its discretion the securities to be purchased or sold and the portion of the Portfolio's assets to be held uninvested. In the absence of (i) willful misfeasance, bad faith or gross negligence on the part of the Adviser in the performance of its obligations and duties under the Agreement, (ii) reckless disregard by the Adviser of its obligations and duties under the Agreement, or (iii) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, the Adviser shall not be subject to any liability whatsoever to the Fund, or to any shareholder of the Fund, for any error of judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services under the Agreement. Unless sooner terminated, the Agreement shall continue for periods of one year so long as such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Trustees of the Fund who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, (b) by the Board of Trustees of the Fund, or (c) by vote of a majority of the outstanding voting securities of the Portfolio. The Agreement 12 may be terminated at any time by the Portfolio, without the payment of any penalty, by vote of a majority of the entire Board of Trustees 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. The Agreement may be terminated by the Adviser at any time, without the payment of any penalty, upon 90 days written notice to the Fund. The Agreement will automatically and immediately terminate in the event of its assignment. ADVISORY FEES As compensation for services rendered by the Adviser under the Agreement, the Portfolio pays the Adviser an annual fee, in monthly installments, calculated by applying the following annual percentage rates to the Portfolio's average daily net assets for the month: Rate ----- TJ Core Equity Portfolio................ 0.75% From September 28, 1995 (date of commencement) to April 30, 1996, and for the fiscal years ended April 30, 1997 and April 30, 1998, the TJ Core Equity Portfolio paid no advisory fees. During these periods, the Adviser voluntarily waived advisory fees of $4,000, $14,372 and $63,097, respectively. Until January 1, 2000, the Adviser has voluntarily agreed to waive all or a portion of its advisory fees and to assume operating expenses otherwise payable by the Portfolio, if necessary, in order to keep the Portfolio's total annual operating expenses from exceeding 1.25% of average daily net assets. SERVICE AND DISTRIBUTION PLANS As stated in the Prospectus, the "Distributor" may enter into agreements with broker-dealers and other financial institutions ("Service Agents"), pursuant to which they will provide administrative support services to Service Class shareholders who are their customers ("Customers") in consideration of the Fund's payment of 0.25% (on an annualized basis) of the average daily net asset value ("NAV") of the Service Class Shares held by the Service Agent for the benefit of its Customers. Such services include: (a) acting as the sole shareholder of record and nominee for beneficial owners; (b) maintaining account records for such beneficial owners of the Fund's shares; (c) opening and closing accounts; (d) answering questions and handling correspondence from shareholders about their accounts; (e) processing shareholder orders to purchase, redeem and exchange shares; (f) handling the transmission of funds representing the purchase price or redemption proceeds; (g) issuing confirmations for transactions in the Fund's shares by shareholders; (h) distributing current copies of prospectuses, statements of additional information and shareholder reports; (i) assisting customers in completing application forms, selecting dividend and other account options and opening any necessary custody accounts; (j) providing account maintenance and accounting support for all transactions; and 13 (k) performing such additional shareholder services as may be agreed upon by the Fund and the Service Agent, provided that any such additional shareholder services must constitute a permissible non- banking activity in accordance with the then current regulations of, and interpretations thereof by, the Board of Governors of the Federal Reserve System, if applicable. Each agreement with a Service Agent is governed by a Shareholder Service Plan (the "Service Plan") that has been adopted by the Fund's Board of Trustees. Pursuant to the Service Plan, the Board of Trustees reviews, at least quarterly, a written report of the amounts expended under each agreement with Service Agents and the purposes for which the expenditures were made. In addition, arrangements with Service Agents must be approved annually by a majority of the Fund's Trustees, including a majority of the Trustees who are not "interested persons" of the Fund as defined in the 1940 Act and have no direct or indirect financial interest in such arrangements. The Board of Trustees has approved the arrangements with Service Agents based on information provided by the Fund's service contractors that there is a reasonable likelihood that the arrangements will benefit the Fund and its shareholders by affording the Fund greater flexibility in connection with the servicing of the accounts of the beneficial owners of its shares in an efficient manner. Any material amendment to the Fund's arrangements with Service Agents must be approved by a majority of the Fund's Board of Trustees (including a majority of the disinterested Trustees). So long as the arrangements with Service Agents are in effect, the selection and nomination of the members of the Fund's Board of Trustees who are not "interested persons" (as defined in the 1940 Act) of the Fund will be committed to the discretion of such non-interested Trustees. The Service Plan may be terminated at any time by vote of a majority of the Trustees of the Fund who are not "interested persons" of the Fund and who have no direct or indirect financial interest in the operation of the Service Plan or any agreements related to the Service Plan or, at the discretion of the Board of Trustees of the Fund, by vote of a majority of the outstanding voting securities of the Fund. Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a Distribution Plan for the Service Class Shares of the Fund (the "Distribution Plan"). The Distribution Plan permits the Fund to pay for certain distribution, promotional and related expenses involved in the marketing of only the Service Class Shares. The Distribution Plan permits the Service Class Shares, pursuant to the Distribution Agreement, to pay a monthly fee to the Distributor for its services and expenses in distributing and promoting sales of the Service Class Shares. These expenses include, among other things, advertising the availability of services and products; designing materials to send to customers and developing methods of making such materials accessible to customers; providing information about the product needs of customers; providing facilities to solicit Fund sales and to answer questions from prospective and existing investors about the Fund; receiving and answering correspondence from prospective investors, including requests for sales literature, prospectuses and statements of additional information; displaying and making sales literature and prospectuses available; and acting as liaison between shareholders and the Fund, including obtaining information from the Fund and providing performance information about the Fund. In addition, the Service Class Shares may make payments directly to other unaffiliated parties who either aid in the distribution of their shares or provide services to the Class. The maximum annual aggregate fee payable by the Fund under the Service and Distribution Plans (the "Plans"), is 0.75% of the Service Class Shares' average daily net assets for the year. The Fund's Board of Trustees may reduce this amount at any time. Although the maximum fee payable under the 12b-1 Plan relating to the Service Class Shares is 0.75% of average daily net assets of such class, the Board of Trustees has determined that the annual fee, payable on a monthly basis, under the Plans relating to the Service Class Shares, currently cannot exceed 0.50% of the average daily net assets represented by the Service Class. While the current fee which will be payable under the Service Plan has been set at 0.25%, the Plans permit a full 0.75% on all assets to be paid at any time following appropriate Board approval. 14 All of the distribution expenses incurred by the Distributor and others, such as broker/dealers, in excess of the amount paid by the Service Class Shares will be borne by such persons without any reimbursement from such Classes. Subject to seeking best price and execution, the Fund may, from time to time, buy or sell portfolio securities from or to firms which receive payments under the Plans. From time to time, the Distributor may pay additional amounts from its own resources to dealers for aid in distribution or for aid in providing administrative services to shareholders. The Plans, the Distribution Agreement and the form of dealer's and services agreements have all been approved by the Board of Trustees of the Fund, including a majority of the Trustees who are not "interested persons" (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the Plans or any related agreements, by vote cast in person at a meeting duly called for the purpose of voting on the Plans and such Agreements. Continuation of the Plans, the Distribution Agreement and the related agreements must be approved annually by the Board of Trustees in the same manner, as specified above. Each year the Trustees must determine whether continuation of the Plans is in the best interest of the shareholders of Service Class Shares and that there is a reasonable likelihood of the Plans providing a benefit to the Class. The Plans, the Distribution Agreement and the related agreements with any broker-dealer or others relating to the Class may be terminated at any time without penalty by a majority of those Trustees who are not "interested persons" or by a majority vote of the outstanding voting securities of the Class. Any amendment materially increasing the maximum percentage payable under the Plans must likewise be approved by a majority vote of the relevant Class' outstanding voting securities, as well as by a majority vote of those Trustees who are not "interested persons." Also, any other material amendment to the Plans must be approved by a majority vote of the Trustees including a majority of the Trustees of the Fund having no interest in the Plans. In addition, in order for the Plans to remain effective, the selection and nomination of Trustees who are not "interested persons" of the Fund must be effected by the Trustees who themselves are not "interested persons" and who have no direct or indirect financial interest in the Plans. Persons authorized to make payments under the Plans must provide written reports at least quarterly to the Board of Trustees for their review. The National Association of Securities Dealers Regulation, Inc. has adopted amendments to its Conduct Rules relating to investment company sales charges. The Fund and the Distributor intend to operate in compliance with these rules. During the fiscal year ended April 30, 1998, the Portfolio's Service Class Shares paid $18,198 for services provided pursuant to the Distribution Plan. PORTFOLIO TRANSACTIONS The Investment Advisory Agreement authorizes the Adviser to select the brokers or dealers that will execute the purchases and sales of investment securities for the Portfolio and directs the Adviser to use its best efforts to obtain the best execution with respect to all transactions for the Portfolio. The Adviser may, however, consistent with the interests of the Portfolio, select brokers on the basis of the research, statistical and pricing services they provide to the 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 Adviser under the Investment 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 Adviser determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Portfolio and the Adviser's other clients. It is not the Fund's practice to allocate brokerage or effect principal transactions with dealers on the basis of sales of Fund shares which may be made through broker-dealer firms. However, the Adviser may place portfolio orders with qualified broker-dealers who refer clients to the Adviser. During the period from September 28, 1995 to April 30, 1996, and for the fiscal years ended April 30, 1997 and April 30, 1998, the Portfolio paid aggregate brokerage commissions of $1,572, $3,696 and $18,284, respectively. The difference in brokerage 15 commissions paid between fiscal years April 30, 1997 and 1998, was the result of growth in the portfolio's assets. Some securities considered for investment by the Portfolio may also be appropriate for other clients served by the Adviser. If purchases or sales of securities consistent with the investment policies of the Portfolio and one or more of these other clients served by the Adviser 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 Adviser. Although there is no specified formula for allocating such transactions, the various allocation methods used by the Adviser, and the results of such allocations, are subject to periodic review by the Fund's Board of Trustees. ADMINISTRATIVE SERVICES The Board of Trustees of the Fund approved a Fund Administration Agreement ("Fund Administration Agreement"), effective April 15, 1996, between UAMFSI, a wholly owned subsidiary of UAM, and the Fund. Pursuant to the terms of the Fund Administration Agreement, UAMFSI manages, administers and conducts the general business activities of the Fund other than those which have been contracted to other third parties by the Fund. Additionally, UAMFSI has agreed to provide transfer agency services to the Portfolio pursuant to the terms of the Fund Administration Agreement. UAMFSI has subcontracted some of these services to CGFSC, an affiliate of The Chase Manhattan Bank, pursuant to a Mutual Funds Service Agreement between UAMFSI and CGFSC (collectively, with the Fund Administration Agreement, the "Agreements"). Pursuant to the terms of the Agreements, the Portfolio pays UAMFSI a two-part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn pays to CGFSC. The following Portfolio-specific fee is calculated from the aggregate net assets of the Portfolio: Annual Rate ----------- TJ Core Equity Portfolio......................0.04% CGFSC's monthly fee for its services is calculated on an annualized basis as follows: 0.19 of 1% of the first $200 million of combined Fund net assets; 0.11 of 1% of the next $800 million of combined Fund net assets; 0.07 of 1% of combined Fund net assets in excess of $1 billion but less than $3 billion; 0.05 of 1% of combined Fund net assets in excess of $3 billion. Fees are allocated among each of the Portfolios on the basis of their relative assets and are subject to a graduated minimum fee schedule per Portfolio, which starts at $2,000 per month and increases to $70,000 annually after two years. If a separate class of shares is added to a Portfolio, its minimum annual fee increases by $20,000. Prior to April 15, 1996, CGFSC or its predecessor, Mutual Funds Service Company, provided certain administrative services to the Fund under an Administration Agreement between the Fund and U.S. Trust Company of New York. 16 The basis of the fees paid to CGFSC for the period September 28, 1995 to April 14, 1996 was as follows: the Fund paid a monthly fee for CGFSC's services which on an annualized basis equaled 0.20% of the first $200 million in combined assets; plus 0.12% of the next $800 million in combined assets; plus 0.08% on assets over $1 billion but less than $3 billion; plus 0.06% on assets over $3 billion. The fees were allocated among the Portfolios on the basis of their relative assets and were subject to a designated minimum fee schedule per Portfolio, which ranged from $2,000 per month upon inception of a Portfolio to $70,000 annually after two years. For the period ended April 30, 1996, administrative services fees paid to CGFSC by the TJ Core Equity Portfolio totaled $15,232. For the period April 15, 1996 to April 30, 1996, UAMFSI earned $1,768 from the TJ Core Equity Portfolio as Administrator. For the fiscal years ended April 30, 1997 and April 30, 1998, administrative fees paid by the Portfolio to UAMFSI totaled $763 and $3,366, respectively, and to CGFSC totaled $59,928 and $72,990, respectively. The services provided by UAMFSI and CGFSC and the basis of the current fees payable are described in the Portfolio's Prospectus. UAMFSI will bear all expenses in connection with the performance of its services under the Fund Administration Agreement. Other expenses to be incurred in the operation of the Fund will be borne by the Fund or other parties, including taxes, interest, brokerage fees and commissions, if any, salaries and fees of officers and members of the Board who are not officers, directors, shareholders or employees of UAMFSI, or the Fund's investment adviser or distributor, SEC fees and state Blue Sky fees, EDGAR filing fees, processing services and related fees, advisory and administration fees, charges and expenses of pricing and data services, independent public accountants and custodians, insurance premiums including fidelity bond premiums, outside legal expenses, costs of maintenance of corporate existence, typesetting and printing of prospectuses for regulatory purposes and for distribution to current shareholders of the Fund, printing and production costs of shareholders' reports and corporate meetings, cost and expenses of Fund stationery and forms, costs of special telephone and data lines and devices, trade association dues and expenses, and any extraordinary expenses and other customary Fund expenses. Unless sooner terminated as provided herein, the Fund Administration Agreement shall continue in effect from year to year provided such continuance is specifically approved at least annually by the Board. The Fund Administration Agreement is terminable, without penalty, by the Board or by UAMFSI, on not less than ninety (90) days' written notice. The Fund Administration Agreement shall automatically terminate upon its assignment by UAMFSI without the prior written consent of the Fund. UAMFSI will from time to time employ or associate with such person or persons as may be fit to assist them in the performance of the Fund Administration Agreement. Such person or persons may be officers and employees who are employed by both UAMFSI and the Fund. The compensation of such person or persons for such employment shall be paid by UAMFSI and no obligation will be incurred by or on behalf of the Fund in such respect. Effective February 28, 1997, the Fund entered into an Account Services Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc. (the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services Agreement, the Service Provider agrees to perform certain services for participants in a self-directed, defined contribution plan, and for whom the Service Provider provides participant recordkeeping. Pursuant to the Services Agreement, the Service Provider is entitled to receive, after the end of each month, a fee at the annual rate of 0.15% of the average aggregate daily net asset value of shares of the Portfolios in the accounts for which it provides services. During the fiscal year ended April 30, 1998, the Portfolio paid the Service Provider $10,898, in fees pursuant to the Services Agreement, all of which were voluntarily waived. CUSTODIAN The Chase Manhattan Bank, 3 Chase Metro Tech Center, Brooklyn, New York 11245, provides for the custody of the Fund's assets pursuant to the terms of a custodian agreement with the Fund. INDEPENDENT ACCOUNTANTS 17 PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, serves as independent accountants for the Fund. DISTRIBUTOR UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, serves as the Fund's Distributor. Shares of the Fund are offered continuously. While the Distributor will use its best efforts to sell shares of the Fund, it is not obligated to sell any particular amount of shares.The Distributor received no compensation for its services from the Portfolio during the fiscal year ended April 30, 1998. PERFORMANCE CALCULATIONS PERFORMANCE The Portfolio may from time to time quote various performance figures to illustrate past performance. Performance quotations by investment companies are subject to rules adopted by the SEC which require the use of standardized performance quotations or, alternatively, that every non-standardized performance quotation furnished by the Portfolio be accompanied by certain standardized performance information computed as required by the SEC. Average annual compounded total return quotations used by the Portfolio are based on the standardized methods of computing performance mandated by the SEC. An explanation of the method used to compute or express performance follows. TOTAL RETURN The average annual total return of the Portfolio is determined by finding the average annual compounded rates of return over 1, 5 and 10 year periods that would equate an initial hypothetical $1,000 investment to its ending redeemable value. The calculation assumes that all dividends and distributions are reinvested when paid. The quotation assumes the amount was completely redeemed at the end of each 1, 5 and 10 year period and the deduction of all applicable Portfolio expenses on an annual basis. 18 These figures are calculated according to the following formula: P(1 + T)n = ERV where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10 year periods (or fractional portion thereof). The average annual total returns for the Portfolio's Service Class Shares from inception on September 28, 1995 to April 30, 1998, and for the fiscal year ended April 30, 1998 were 25.90% and 36.05%, respectively. COMPARISONS To help investors better evaluate how an investment in the Portfolios of the Fund might satisfy their investment objective, advertisements regarding the Portfolio may discuss various measures of Portfolio performance as reported by various financial publications. Advertisements may also compare performance (as calculated above) to performance as reported by other investments, indices and averages. Please see Appendix B for publications, indices and averages which may be used. In assessing such comparisons of performance, an investor should keep in mind that the composition of the investments in the reported indices and averages is not identical to the composition of investments in the Portfolio, that the averages are generally unmanaged, and that the items included in the calculations of such averages may not be identical to the formula used by the Portfolio to calculate its performance. In addition, there can be no assurance that the Portfolio will continue this performance as compared to such other averages. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS The Fund was organized under the name The Regis Fund II as a Delaware business trust on May 18, 1994. On October 31, 1995, the name of the Fund was changed to "UAM Funds Trust." The Fund's principal executive office is located at One International Place, 44th floor, Boston, MA 02110; however, all investor correspondence should be addressed to the Fund at UAM Funds Service Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited number of shares of beneficial interest, without par value. The Trustees have the power to designate one or more series ("Portfolios") or classes of shares of beneficial interest without further action by shareholders. The Board of Trustees has classified two additional classes of shares in the Portfolio, known as Institutional Shares and Advisor Shares. As of the date of this Statement of Additional Information, no Advisor Shares have been offered by the Portfolio. The shares of the Portfolio, when issued and paid for as provided for in its Prospectus, will be fully paid and nonassessable, have no preference as to conversion, exchange, dividends, retirement or other features and have no preemptive rights. The shares of the Portfolio have noncumulative voting rights, which 19 means that the holders of more than 50% of the shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the Fund. Institutional Class, Service Class and Advisor Class Shares each represent an interest in the same assets of a Portfolo and are identical in all respects except that the Service Class Shares bear certain expenses related to shareholder servicing and the distribution of such shares, and have exclusive voting rights with respect to matters relating to such distribution expenditures. In the event of liquidation of the Fund, the holders of the shares of each Portfolio or any class thereof that has been established and designated shall be entitled to receive, when and as declared by the Trustees, the excess of the assets belonging to that Portfolio, or in the case of a class, belonging to that Portfolio and allocable to that class, over the liabilities belonging to that Portfolio or class. The assets so distributable to the holders of shares of any particular Portfolio or class thereof shall be distributed to the holders in proportion to the number of shares of that Portfolio or class thereof held by them and recorded on the books of the Fund. The liquidation of any Portfolio or class thereof may be authorized at any time by vote of a majority of the Trustees then in office. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Fund's policy is to distribute substantially all of the Portfolio's net investment income, if any, together with any net realized capital gains in the amount and at the times that will avoid both income (including capital gains) taxes incurred on it and the imposition of the federal excise tax on undistributed income and capital gains. The amounts of any income dividends or capital gains distributions cannot be predicted. See the discussion under "Dividends, Capital Gains Distributions and Taxes" in the Prospectus. Any dividend or distribution paid shortly after the purchase of shares of the Portfolio by an investor may have the effect of reducing the per share net asset value of the Portfolio by the per share amount of the dividend or distribution. Furthermore, such dividends or distributions, although in effect a return of capital, are subject to income taxes as set forth in the Prospectus. As set forth in the Prospectus, unless the shareholder elects otherwise in writing, all dividend and capital gains distributions are automatically reinvested in additional shares of the respective Portfolio of the Fund at net asset value (as of the business day following the record date). This will remain in effect until the Fund is notified by the shareholder in writing at least three days prior to the record date that either the Income Option (income dividends in cash and capital gains distributions in additional shares at net asset value) or the Cash Option (both income dividends and capital gains distributions in cash) has been elected. An account statement is sent to shareholders whenever an income dividend or capital gains distribution is paid. CODE OF ETHICS The Fund has adopted a Code of Ethics which restricts to a certain extent personal transactions by access persons of the Fund and imposes certain disclosure and reporting obligations. 20 FINANCIAL STATEMENTS The audited financial statements and notes thereto in the Portfolio's Annual Report to Shareholders (the "1998 Annual Report") are incorporated by reference into this Statement of Additional Information. No other parts of the 1998 Annual Report are incorporated by reference herein. The Financial Statements included in the 1998 Annual Report have been audited by the Fund's independent accountants, PricewaterhouseCoopers LLP. The reports of PricewaterhouseCoopers LLP are incorporated herein by reference. Such financial statements have been incorporated herein in reliance upon such reports given upon the authority of PricewaterhouseCoopers LLP as experts in accounting and auditing. Copies of the 1998 Annual Report may be obtained free of charge by telephoning the UAM Funds Service Center at the telephone number appearing on the front page of this Statement of Additional Information. 21 APPENDIX A - DESCRIPTION OF SECURITIES AND RATINGS I. DESCRIPTION OF CORPORATE BOND RATINGS Moody's Investors Service Corporate Bond Ratings: Aaa -- Bonds which are Aaa are judged to be the best quality; They carry the smallest degree of investment risk and are generally referred to as "gilt- edge." Interest payments are protected by a large or by an exceptionally stable margin, and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa -- Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. A -- Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa -- Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Moody's Investors Service ("Moody's") applies numerical modifiers 1, 2 and 3 in the Aa and A rating categories. The modifier 1 indicates that the security ranks at a higher end of the rating category, modifier 2 indicates a mid-range rating and the modifier 3 indicates that the issue ranks at the lower end of the rating category. Standard & Poor's Ratings Services Corporate Bond Ratings: AAA -- Bonds rated AAA have the highest rating assigned by Standard & Poor's to a debt obligation and indicate an extremely strong capacity to pay principal and interest. AA -- Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only to a small degree. A -- Bonds rated A have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories. BBB -- Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than for debt in higher rated categories. S&P's letter ratings may be modified by the addition of a plus or minus sign, which is used to show relative standing within the major rating categories except in the AAA category. A-1 II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES The term "U.S. Government Securities" refers to a variety of securities which are issued or guaranteed by the United States Government, and by various instrumentalities which have been established or sponsored by the United States Government. U.S. Treasury securities are backed by the "full faith and credit" of the United States. Securities issued or guaranteed by federal agencies and U.S. Government sponsored instrumentalities may or may not be backed by the full faith and credit of the United States. In the case of securities not backed by the full faith and credit of the United States, the investor must look principally to the agency or instrumentality issuing or guaranteeing the obligation for ultimate repayment, and may not be able to assess a claim against the United States itself in the event the agency or instrumentality does not meet its commitment. Agencies which are backed by the full faith and credit of the United States include the Export- Import Bank, Farmers Home Administration, Federal Financing Bank, and others. Certain agencies and instrumentalities, such as the GNMA are, in effect, backed by the full faith and credit of the United States through provisions in their charters that they may make "indefinite and unlimited" drawings on the U.S. Treasury, if needed to service its debt. Debt from certain other agencies and instrumentalities, including the Federal Home Loan Bank and FNMA, is not guaranteed by the United States, but those institutions are protected by the discretionary authority of the U.S. Treasury to purchase certain amounts of their securities to assist the institution in meeting its debt obligations. Finally, other agencies and instrumentalities, such as the Farm Credit System and the FHLMC, are federally chartered institutions under Government supervision, but their debt securities are backed only by the 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. III. DESCRIPTION OF COMMERCIAL PAPER The Portfolio may invest in commercial paper (including variable amount master demand notes) rated A-1 or better by Standard & Poor's ("S&P") or Prime-1 by Moody's or by S&P. Commercial paper refers to short-term, unsecured promissory notes issued by corporations to finance short-term credit needs. Commercial paper is usually sold on a discount basis and has a maturity at the time of issuance not exceeding nine months. Variable amount master demand notes are demand obligations that permit the investment of fluctuating amounts at varying market rates of interest pursuant to arrangement between the issuer and a commercial bank acting as agent for the payees of such notes whereby both parties have the right to vary the amount of the outstanding indebtedness on the notes. As variable amount master demand notes are direct lending arrangements between a lender and a borrower, it is not generally contemplated that such instruments will be traded, and there is no secondary market for these notes, although they are redeemable (and thus immediately repayable by the borrower) at face value, plus accrued interest, at any time. In connection with the Portfolio's investment in variable amount master demand notes, the Adviser's investment management staff will monitor, on an ongoing basis, the earning power, cash flow and other liquidity ratios of the issuer and the borrower's ability to pay principal and interest on demand. Commercial paper rated A-1 by S&P has the following characteristics: (1) liquidity ratios are adequate to meet cash requirements; (2) long-term senior debt is rated "A" or better; (3) the issuer has access to at least two additional channels of borrowing; (4) basic earnings and cash flow have an upward trend with allowance made for unusual circumstances; (5) typically, the issuer's industry is well established, and the issuer has a strong position within the industry; and (6) the reliability and quality of management are unquestioned. Relative strength or weakness of the above factors determine whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1 is the highest commercial paper rating assigned by Moody's. Among the factors considered by Moody's in assigning ratings are the following: (1) evaluation of the management of the issuer; (2) economic evaluation of the issuer's industry or industries and the appraisal of speculative-type risks which may be inherent in A-2 certain areas; (3) evaluation of the issuer's products in relation to completion and customer acceptance; (4) liquidity; (5) amount and quality of long term debt; (6) trend of earnings over a period of ten years; (7) financial strength of a parent company and the relationships which exist with the issuer; and (8) recognition by the management of issuer of obligations which may be present or may arise as a result of public interest questions and preparations to meet such obligations. IV. DESCRIPTION OF BANK OBLIGATIONS Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated interest rate. Certificates of deposit are negotiable short-term obligations of commercial banks. Variable rate certificates of deposit are certificates of deposit on which the interest rate is periodically adjusted prior to their stated maturity based upon a specified market rate. As a result of these adjustments, the interest rate on these obligations may increase or decrease periodically. Frequently, dealers selling variable rate certificates of deposit to the Portfolio will agree to repurchase such instruments, at the Portfolio's option, at par on or near the coupon dates. The dealers' obligations to repurchase these instruments are subject to conditions imposed by various dealers. Such conditions typically are the continued credit standing of the issuer and the existence of reasonably orderly market conditions. The Portfolio is also able to sell variable rate certificates of deposit in the secondary market. Variable rate certificates of deposit normally carry a higher interest rate than comparable fixed rate certificates of deposit. A banker's acceptance is a time draft drawn on a commercial bank by a borrower usually in connection with an international commercial transaction to finance the import, export, transfer or storage of goods. The borrower is liable for payment as well as the bank which unconditionally guarantees to pay the draft at its face amount on the maturity date. Most acceptances have maturities of six months or less and are traded in the secondary markets prior to maturity. V. DESCRIPTION OF FOREIGN INVESTMENTS Investors should recognize that investing in foreign companies involves certain special considerations which are not typically associated with investing in U.S. companies. Since the securities of foreign companies are frequently denominated in foreign currencies, a Portfolio may be affected favorably or unfavorably by changes in currency rates and in exchange control regulations, and may incur costs in connection with conversions between various currencies. As foreign companies are not generally subject to uniform accounting, auditing and financial reporting standards and they may have policies that are not comparable to those of domestic companies, there may be less information available about certain foreign companies than about domestic companies. Securities of some foreign companies are generally less liquid and more volatile than securities of comparable domestic companies. There is generally less government supervision and regulation of stock exchanges, brokers and listed companies than in the U.S. In addition, with respect to certain foreign countries, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments which could affect U.S. investments in those countries. Although the Fund will endeavor to achieve the most favorable execution costs in its portfolio transactions, fixed commissions on many foreign stock exchanges are generally higher than negotiated commissions on U.S. exchanges. Certain foreign governments levy withholding taxes on dividend and interest income. Although in some countries a portion of these taxes are recoverable, the non-recoverable portion of foreign withholding taxes will reduce the income received from the companies comprising the Fund's Portfolios. However, these foreign withholding taxes are not expected to have a significant impact. A-3 APPENDIX B - COMPARISONS (a) Dow Jones Composite Average or its component averages -- an unmanaged index composed of 30 blue-chip industrial corporation stocks (Dow Jones Industrial Average), 15 utilities company stocks and 20 transportation stocks. (b) Standard & Poor's 500 Stock Index or its component indices -- an unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40 utilities stocks and 20 transportation stocks. (c) Standard & Poor's 400 Mid Cap Index - consists of 400 domestic stocks chosen for market size, liquidity, and industry group representation. It is also a market-value weighted index and was the first benchwork of mid cap stock price movement. (d) The New York Stock Exchange composite or component indices -- unmanaged indices of all industrial, utilities, transportation and finance stocks listed on the New York Stock Exchange. (e) Wilshire 5000 Equity Index or its component indices -- represents the return on the market value of all common equity securities for which daily pricing is available. (f) Lipper -- Mutual Fund Performance Analysis and Lipper -- Fixed Income Fund Performance Analysis -- measure total return and average current yield for the mutual fund industry. Rank individual mutual fund performance over specified time periods, assuming reinvestment of all distributions, exclusive of any applicable sales charges. (g) Lipper Capital Appreciation Funds Index - a fund that aims at maximum capital appreciation, frequently by means of 100% or more portfolio turnover, leveraging, purchasing unregistered securities, purchasing options, etc. The fund may take large cash positions. (h) Lipper Equity Income Funds Index - is comprised of the 30 largest funds, in terms of total net assets, which seek relatively high current income and growth of income through investing 60% or more of their portfolios in equities. (i) Lipper Small Cap Funds Index- a fund that by prospectus or portfolio practice invests primarily in companies with market capitalizations of less than $1 billion at the time of purchase. (j) Morgan Stanley Capital International EAFE Index and World Index - - respectively, arithmetic, market value-weighted averages of the performance of over 900 securities listed on the stock exchanges of countries in Europe, Australia and the Far East, and over 1,400 securities listed on the stock exchanges of these continents, including North America. (k) Goldman Sachs 100 Convertible Bond Index -- currently includes 67 bonds and 33 preferred. The original list of names was generated by screening for convertible issues of 100 million or greater in market capitalization. The index is priced monthly. B-1 (l) Salomon Brothers GNMA Index -- includes pools of mortgages originated by private lenders and guaranteed by the mortgage pools of the Government National Mortgage Association. (m) Salomon Brothers High Grade Corporate Bond Index -- consists of publicly issued, non-convertible corporate bonds rated AA or AAA. It is a value-weighted, total return index, including approximately 800 issues with maturities of 12 years or greater. (n) Salomon Brothers Broad Investment Grade Bond Index -- is a market-weighted index that contains approximately 4,700 individually priced investment grade corporate bonds rated BBB or better, U.S. Treasury/agency issues and mortgage pass through securities. (o) Lehman Brothers Long-Term Treasury Bond -- is composed of all bonds covered by the Lehman Brothers Treasury Bond Index with maturities of 10 years or greater. (p) Lehman Brothers Government/Corporate Index -- is a combination of the Government and Corporate Bond Indices. The Government Index includes public obligations of the U.S. Treasury, issues of Government agencies, and corporate debt backed by the U.S. Government. The Corporate Bond Index includes fixed-rate nonconvertible corporate debt. Also included are Yankee Bonds and nonconvertible debt issued by or guaranteed by foreign or international governments and agencies. All issues are investment grade (BBB) or higher, with maturities of at least one year and an outstanding par value of at least $100 million for U.S. Government issues and $25 million for others. Any security downgraded during the month is held in the index until month-end and then removed. All returns are market value weighted inclusive of accrued income. (q) NASDAQ Industrial Index -- is composed of more than 3,000 industrial issues. It is a value-weighted index calculated on price change only and does not include income. (r) Value Line -- composed of over 1,600 stocks in the Value Line Investment Survey. (s) Russell 2000 Index -- composed of the 2,000 smallest stocks in the Russell 3000, a market value-weighted index of the 3,000 largest U.S. publicly-traded companies. (t) The Salomon Brothers 3-Month T-Bill Average - the average return for all treasury bills for the previous three month period. (u) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70% Standard & Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35% Standard & Poor's 500 Stock Index and 65% Salomon Brothers High Grade Bond Index; all stocks on the NASDAQ system exclusive of those traded on an exchange, and 65% Standard & Poor's 500 Stock Index and 35% Salomon Brothers High Grade Bond Index. (v) CDA Mutual Fund Report published by CDA Investment Technologies, Inc. -- analyzes price, current yield, risk, total return and average rate of return (average compounded growth rate) over specified time periods for the mutual fund industry. (w) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes price, yield, risk and total return for equity funds. (x) Financial publications: Business Week, Changing Times, Financial World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial Times, Global Investor, Wall B-2 Street Journal and Weisenberger Investment Companies Service -- publications that rate fund performance over specified time periods. (y) Consumer Price Index (or Cost of Living Index), published by the U.S. Bureau of Labor Statistics -- a statistical measure of change over time in the price of goods and services in major expenditure groups. (z) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates -- historical measure of yield, price and total return for common and small company stock, long-term government bonds, U.S. Treasury bills and inflation. (aa) Savings and Loan Historical Interest Rates -- as published by the U.S. Savings & Loan League Fact Book. (bb) Historical data supplied by the research departments of First Boston Corporation; the J.P. Morgan Companies; Salomon Brothers; Merrill Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg L.P. B-3 PART C UAM FUNDS TRUST OTHER INFORMATION ITEM 23. EXHIBITS Exhibits previously filed by the Fund are incorporated by reference to such filings. The following table describes the location of all exhibits. In the table, the following references are used: PEA 23 = Post Effective Amendment No. 23 filed on July 2, 1998; PEA 22 = Post Effective Amendment No. 22 filed on June 24, 1998; PEA 21 = Post Effective Amendment No. 21 filed on June 19, 1998; PEA 20 = Post-Effective Amendment No. 20 filed on March 26, 1998, PEA 19 = Post- Effective Amendment No. 19 filed on February 3, 1998; PEA 18 = Post-Effective Amendment No. 18 filed on January 23, 1998, PEA17 = Post-Effective Amendment No. 17 filed on December 15, 1997, PEA16 = Post-Effective Amendment No. 16 filed on July 10, 1997, PEA14 = Post-Effective Amendment No. 14 filed on September 17, 1996, PEA13 = Post-Effective Amendment No. 13 filed on August 28, 1996, PEA12 = Post-Effective Amendment No. 12 filed on July 17, 1996, PEA8 = Post-Effective Amendment No. 8 filed on March 13, 1996, PEA4 = Post-Effective Amendment No. 4 filed on February 9, 1995, PEA3 = Post-Effective Amendment No. 3 filed on December 14, 1994, PEA2 = Post-Effective Amendment No. 2 filed on November 25, 1994, PEA1 = Post-Effective Amendment No. 1 filed on November 15, 1994, and RS = Original Registration Statement on Form N-1A filed on June 3, 1994.
Exhibit Incorporated by - ---------- Reference to (Location): ------------------------ A. 1. Agreement and Declaration of Trust Filed herewith 2. Certificate of Trust Filed herewith 3. Certificate of Amendment to Certificate of Trust Filed herewith B. By-Laws Filed herewith C. 1. Form of Specimen Share Certificates Filed herewith 2. Article 9 of Bylaws Filed herewith 3. Excerpts from Agreement and Declaration of Trust Filed herewith D. Investment Advisory Agreements RS, PEA1, PEA2, PEA3, PEA4, PEA12, PEA14, PEA17, PEA18, PEA 21; PEA 22, PEA 23 E. 1. Distribution Agreement (UAM Funds Distributors, Inc.) Filed herewith 2. Distribution Agreement (ACG Capital Corporation) PEA17, PEA19 F. Trustees' and Officers' Contracts and Programs Not applicable G. 1. Global Custody Agreement PEA16 H. 1. Fund Administration Agreement PEA13 2. Mutual Funds Service Agreement PEA16 I. (1) and (2) Opinions and Consents of Counsel Filed herewith J. Consent of Independent Auditors Filed herewith K. Other Financial Statements Not applicable L. Purchase Agreement Filed herewith M. 1. Distribution Plan Filed herewith 2. Selling Dealer Agreements Filed herewith 3. Shareholder Services Plan Filed herewith 4. Service Agreement Filed herewith
N. Financial Data Schedule Filed herewith O. Amended and Restated Rule 18f-3 Multiple Class Plan Filed herewith P. Powers of Attorney Filed herewith
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND Not applicable. ITEM 25. INDEMNIFICATION Reference is made to Article VI of Registrant's Declaration of Trust, which is incorporated herein by reference. Registrant hereby also makes the undertaking consistent with Rule 484 under the Securities Act of 1933, as amended. 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 that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a trustee, 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 its counsel the matter has been settled by controlling precedent, submit to a 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. Provisions for indemnification of UAM Fund Services, Inc. are contained in Section 6 of its Fund Administration Agreement with the Registrant. Provisions for indemnification of the Registrant's investment advisers are contained in Section 7 of their respective Investment Advisory Agreements with the Registrant. Provisions for indemnification of Registrant's principal underwriter, UAM Fund Distributors, Inc., are contained in its Distribution Agreement with the Registrant. Provisions for indemnification of Registrant's custodian, The Chase Manhattan Bank, are contained in Section 12 of its Fund Global Custody Agreement with the Registrant. ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER Reference is made to the caption "Investment Adviser" in the Prospectuses constituting Part A of this Registration Statement and "Investment Adviser" in Part B of this Registration Statement. Except for information with respect to Pell Rudman Trust Company, N.A., the information required by this Item 26 with respect to each director, officer, or partner of each other investment adviser of the Registrant is incorporated by reference to the Forms ADV filed by the investment advisers listed below with the Securities and Exchange Commission pursuant to the Investment Advisers Act of 1940, as amended, under the file numbers indicated:
Investment Adviser File No. - ------------------ -------- Barrow, Hanley, Mewhinney & Strauss, Inc. 801-31237 Cambiar Investors, Inc. 801-09538 Chicago Asset Management Company 801-20197 Dwight Asset Management Company 801-45304
First Pacific Advisors, Inc. 801-39512 Hanson Investment Management Company 801-14817 Heitman/PRA Securities Advisors, Inc. 801-48252 Jacobs Asset Management, L.P. 801-49790 Murray Johnstone International Ltd. 801-34926 Pacific Financial Research, Inc. 801-54352 Tom Johnson Investment Management, Inc. 801-42549
Name and Principal Business Address Positions and Offices with Pell Rudman Positions and Offices with Pell - ----------------------------------- -------------------------------------- ------------------------------- Trust Company, N.A. Rudman & Co., Inc ------------------- ----------------- Jeffrey S. Thomas Director Chief Financial Officer of 100 Federal Street Pell, Rudman & Co., Inc. Boston, Massachusetts Edward I. Rudman Director Chairman and President of Pell, 100 Federal Street Rudman & Co., Inc. Boston, Massachusetts James S. McDonald Director Executive Vice President of 100 Federal Street Pell, Rudman & Co., Inc. Boston, Massachusetts Susan W. Hunnewell Director Senior Vice President of Pell, 100 Federal Street Rudman & Co., Inc. Boston, Massachusetts
Barrow, Hanley, Mewhinney & Strauss, Inc., Cambiar Investors, Inc., Chicago Asset Management Company, Dwight Asset Management Company, First Pacific Advisors, Inc., Hanson Investment Management Company, Heitman/PRA Securities Advisors, Inc., Jacobs Asset Management, L.P., Murray Johnstone International Ltd., Pacific Financial Research, Inc., Pell Rudman Trust Company, N.A., and Tom Johnson Investment Management, Inc., are affiliates of United Asset Management Corporation ("UAM"), a Delaware corporation owning firms engaged primarily in institutional investment management. ITEM 27. PRINCIPAL UNDERWRITERS (a) Except for Heitman Real Estate Portfolio Advisor Class Shares, UAM Fund Distributors, Inc. ("UAMFDI"), the firm which acts as sole distributor of the Registrant's shares, also acts as sole distributor for UAM Funds, Inc., Analytic Optioned Equity Fund, Inc. and The Analytic Series Fund. ACG Capital Corporation ("ACG") acts as sole distributor of the Heitman Real Estate Portfolio Advisor Class Shares. (b) The information required with respect to each Director and officer of UAMFSI is incorporated by reference to Schedule A of Form BD filed pursuant to the Securities and Exchange Act of 1934 (SEC File No. 8-41126). The information required with respect to each Director and officer of ACG is incorporated by reference to Schedule A of Form BD filed pursuant to the Securities and Exchange Act of 1934 (SEC File No. 8-47813). (c) Not applicable. ITEM 28. LOCATION OF ACCOUNTS AND RECORDS The books, accounts and other documents required by Section 31(a) under the Investment Company Act of 1940, as amended, and the rules promulgated thereunder will be maintained in the physical possession of the Registrant, the Registrant's Advisers, the Registrant's Sub-Transfer and Sub-Administrative Agent (Chase Global Funds Services Company, 73 Tremont Street, Boston, Massachusetts 02108) and the Registrant's Custodian Bank (The Chase Manhattan Bank 4 Chase MetroTech Center, Brooklyn, New York, 11245). ITEM 29. MANAGEMENT SERVICES Not Applicable. ITEM 30. UNDERTAKINGS Not Applicable. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements of effectiveness of the Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933, and has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston and Commonwealth of Massachusetts on the 17th day of July, 1998. UAM FUNDS TRUST /s/ Michael E. DeFao -------------------- Michael E. DeFao Secretary Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the 17th day of July, 1998: * ______________________________ Norton H. Reamer, Chairman and President * ______________________________ John T. Bennett, Jr., Trustee * _____________________________ Nancy J. Dunn, Trustee * _____________________________ Philip D. English, Trustee * _____________________________ William A. Humenuk, Trustee * _____________________________ Peter M. Whitman, Jr., Trustee /s/ Gary L. French - ------------------ Gary L. French, Treasurer /s/ Michael E. DeFao - -------------------- * Michael E. DeFao (Attorney-in-Fact) UAM FUNDS TRUST FILE NOS. 811-8544/33-79858 POST-EFFECTIVE AMENDMENT NO. 24 EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- A. 1. Agreement and Declaration of Trust A. 2. Certificate of Trust A. 3. Certificate of Amendment to Certificate of Trust B. By-Laws C. 1. Form of Specimen Share Certificates C. 2. Article 9 of Bylaws C. 3. Excerpts from Agreement and Declaration of Trust E. 1. Distribution Agreement I. (1) and (2) Opinions and Consents of Counsel J. Consent of Independent Auditors L. Purchase Agreement M. 1. Distribution Plan M. 2. Selling Dealer Agreement M. 3. Shareholder Services Plan M. 4. Service Agreements N. Financial Data Schedules O. Amended and Restated Rule 18f-3 Multiple Class Plan P. Powers of Attorney
EX-99.A.1 2 DECLARATION OF TRUST EXHIBIT A.1. THE REGIS FUND II AGREEMENT AND DECLARATION OF TRUST APRIL 26, 1994 AGREEMENT AND DECLARATION OF TRUST
ARTICLE I. NAME AND DEFINITIONS....................................................... 1 Section 1.1 Name and Principal Office.................................................. 1 Section 1.2 Definitions................................................................ 1 (a) "Act"........................................................ 1 (b) "By-laws".................................................... 1 (c) "class"...................................................... 1 (d) "Commission"................................................. 1 (e) "Declaration of Trust"....................................... 1 (f) "Majority of the Outstanding Voting Shares".................. 1 (g) "1940 Act"................................................... 1 (h) "person"..................................................... 2 (i) "Shareholder"................................................ 2 (j) "Shares"..................................................... 2 (k) "Sub-Trust" or "Series"...................................... 2 (l) "Trust"...................................................... 2 (m) "Trustees"................................................... 2 ARTICLE II. PURPOSE OF TRUST........................................................... 2 ARTICLE III. THE TRUSTEES............................................................... 2 Section 3.1 Number, Designation, Election, Term, etc................................... 2 (a) Initial Trustees............................................. 2 (b) Number....................................................... 2 (c) Election and Term............................................ 2 (d) Resignation and Retirement................................... 3 (e) Removal...................................................... 3 (f) Vacancies.................................................... 3 (g) Effect of Death, Resignation, etc............................ 3 (h) No Accounting................................................ 3 Section 3.2 Powers of Trustees......................................................... 3 (a) Investments.................................................. 4 (b) Disposition of Assets........................................ 4 (c) Ownership Powers............................................. 4 (d) Subscription................................................. 4 (e) Form of Holding.............................................. 4 (f) Reorganization, etc.......................................... 4 (g) Voting Trusts, etc........................................... 4 (h) Compromise................................................... 5 (i) Partnerships, etc............................................ 5 (j) Borrowing and Security....................................... 5 (k) Guarantees, etc.............................................. 5 (l) Insurance.................................................... 5 (m) Pensions, etc................................................ 5 (n) Distribution Plans........................................... 5 Section 3.3 Certain Contracts.......................................................... 5 (a) Advisory..................................................... 5 (b) Administration............................................... 5
(c) Distribution................................................. 6 (d) Custodian and Depository..................................... 6 (e) Transfer and Dividend Disbursing Agency...................... 6 (f) Shareholder Servicing........................................ 6 (g) Accounting................................................... 6 Section 3.4 Payment of Trust Expenses and Compensation of Trustees..................... 6 Section 3.5 Ownership of Assets of the Trust........................................... 7 Section 3.6 Action by Trustees......................................................... 7 ARTICLE IV. SHARES..................................................................... 7 Section 4.1 Description of Shares...................................................... 7 Section 4.2 Establishment and Designation of Sub-Trusts and Classes.................... 9 (a) Assets Belonging to Sub-Trusts............................... 9 (b) Liabilities Belonging to Sub-Trusts.......................... 9 (c) Dividends.................................................... 9 (d) Liquidation.................................................. 10 (e) Voting....................................................... 10 (f) Redemption by Shareholder.................................... 10 (g) Redemption of Trust.......................................... 11 (h) Net Asset Value.............................................. 11 (i) Transfer..................................................... 11 (j) Equality..................................................... 11 (k) Fractions.................................................... 11 (l) Conversion Rights............................................ 11 (m) Class Differences............................................ 12 Section 4.3 Ownership of Shares........................................................ 12 Section 4.4 Investments in the Trust................................................... 12 Section 4.5 No Pre-emptive Rights...................................................... 12 Section 4.6 Status of Shares and Limitation of Personal Liability...................... 12 Section 4.7 No Appraisal Rights........................................................ 12 ARTICLE V. SHAREHOLDERS' VOTING POWERS AND MEETINGS................................... 12 Section 5.1 Voting Powers.............................................................. 12 Section 5.2 Meetings................................................................... 13 Section 5.3 Record Dates............................................................... 13 Section 5.4 Quorum and Required Vote................................................... 13 Section 5.5 Action by Written Consent.................................................. 13 Section 5.6 Inspection of Records...................................................... 14
Section 5.7 Additional Provisions...................................................... 14 ARTICLE VI. LIMITATION OF LIABILITY; INDEMNIFICATION................................... 14 Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice................. 14 Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or Surety ............. 14 Section 6.3 Indemnification of Shareholders............................................ 15 Section 6.4 Indemnification of Trustees, Officers, etc................................. 15 Section 6.5 Compromise Payment......................................................... 15 Section 6.6 Indemnification Not Exclusive, etc......................................... 16 Section 6.7 Liability of Third Persons Dealing with Trustees........................... 16 Section 6.8 Discretion................................................................. 16 ARTICLE VII. MISCELLANEOUS.............................................................. 16 Section 7.1 Duration and Termination of Trust.......................................... 16 Section 7.2 Reorganization............................................................. 16 Section 7.3 Amendments................................................................. 17 Section 7.4 Filing of Copies; References; Headings..................................... 17 Section 7.5 Applicable Law............................................................. 17 Section 7.6 Registered Agent........................................................... 18 Section 7.7 Integration................................................................ 18
AGREEMENT AND DECLARATION OF TRUST AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts this 26th day of April, 1994, by the Trustee or Trustees hereunder, and by the holders of shares of beneficial interest to be issued hereunder as hereinafter provided. WITNESSETH WHEREAS this Trust has been formed to carry on the business of an investment company; and WHEREAS this Trust is authorized to issue its shares of beneficial interest in separate series, each separate series to be a Sub-Trust hereunder, and to issue classes of Shares of any Sub-Trust or divide Shares of any Sub-Trust into two or more classes, all in accordance with the provisions hereinafter set forth; and WHEREAS the Trustees have agreed to manage all property coming into their hands as trustees of a Delaware business trust in accordance with the provisions of the Delaware Business Trust Act (12 Del. C. (S) 3801, et seq.), as from time to time amended and including any successor statute of similar import (the "Act"), and the provisions hereinafter set forth. NOW, THEREFORE, the Trustees hereby declare that they will hold all cash, securities, and other assets which they may from time to time acquire in any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the following terms and conditions for the benefit of the holders from time to time of shares of beneficial interest in this Trust and the Sub-Trusts created hereunder as hereinafter set forth. ARTICLE I NAME AND DEFINITIONS Section 1.1 NAME AND PRINCIPAL OFFICE. This Trust shall be known as THE REGIS FUND II and the Trustees shall conduct the business of the Trust under that name or any other name or names as they may from time to time determine. The principal office of the Trust shall be located at such location as the Trustees may from time to time determine. Section 1.2 DEFINITIONS. Whenever used herein, unless otherwise required by the context or specifically provided: (a) "Act" shall have the meaning given to it in the recitals of this Declaration of Trust. (b) "By-Laws" shall mean the By-Laws of the Trust as amended from time to time; (c) "class" refers to any class of Shares of any Series or Sub-Trust established and designated under or in accordance with the provisions of Article IV; (d) "Commission" shall have the meaning given it in the 1940 Act; (e) "Declaration of Trust" shall mean this Agreement and Declaration of Trust as amended or restated from time to time; (f) "Majority of the Outstanding Voting Shares" of the Trust or Sub- Trust shall mean the vote, at the annual or a special meeting of Shareholders duly called, (A) of 67 per centum or more of the Shares of the Trust or Sub- Trust present at such meeting, if holders of more than 50 per centum of the outstanding Shares of the Trust or Sub-Trust are present or represented by proxy; or (B) of more than 50 per centum of the outstanding voting Shares of the Trust or Sub-Trust, whichever is the less. 2 (g) "1940 Act" refers to the Investment Company Act of 1940 and the Rules and Regulations hereunder, all as amended from time to time; (h) "person" means a natural person, corporation, limited liability company, trust, association, partnership (whether general, limited, or otherwise), joint venture, or any other entity; (i) "Shareholder" means a beneficial owner of record of Shares; (j) "Shares" refers to the transferable units of interest into which the beneficial interest in the Trust and each Sub-Trust of the Trust and/or any class of any Sub-Trust (as the context may require) shall be divided from time to time; (k) "Sub-Trust" or "Series" refers to a series of Shares established and designated under or in accordance with the provisions of Article IV; (l) "Trust" refers to the Delaware business trust established by this Declaration of Trust, inclusive of each and every Sub-Trust established hereunder; and (m) "Trustees" refers to the trustees of the Trust and of each Sub-Trust hereunder named herein or elected in accordance with Article III. ARTICLE II PURPOSE OF TRUST The purposes of the Trust are (i) to operate as an investment company and to offer Shareholders of the Trust and each Sub-Trust of the Trust one or more investment programs primarily in securities and debt instruments, and (ii) to engage in such activities that are necessary, suitable, incidental, or convenient to the accomplishment of the foregoing. ARTICLE III THE TRUSTEES Section 3.1 NUMBER,DESIGNATION, ELECTION, TERM, ETC. (a) TRUSTEES. The initial Trustees hereof shall be seven (7). (b) NUMBER. The Trustees serving as such, whether named above or hereafter becoming Trustees, may increase or decrease the number of Trustees to a number other than the number theretofore determined. No decrease in the number of Trustees shall have the effect of removing any Trustee from office prior to the expiration of his term, but the number of Trustees may be decreased in conjunction with the removal of a Trustee pursuant to subsection (e) of this Section 3.1. (c) ELECTION AND TERM. The Trustees shall be elected by the Shareholders of the Trust at a meeting of the Shareholders held prior to the effective date of the Registration Statement of the Trust under the 1940 Act, and the term of office of any Trustees in office before such election shall terminate at the time of such election. Each Trustee shall be a natural person and may, but need not be a Shareholder. Each Trustee, whether named above or hereafter becoming a Trustee, shall serve as a Trustee of the Trust and of each Sub-Trust hereunder during the lifetime of this Trust and until its termination as hereinafter provided except as such Trustee sooner dies, resigns, retires, or is removed or, if sooner, until the next meeting of Shareholders called for the purpose of electing Trustees and until the election and qualification of his successor. The Shareholders 3 may fix the number of Trustees and elect Trustees at any meeting of Shareholders called by the Trustees for that purpose and to the extent required by applicable law, including paragraph (a) and (b) of Section 16 of the 1940 Act. Subject to Section 16(a) of the 1940 Act, the Trustees may elect successors and may, pursuant to Section 3.1(f) hereof, appoint Trustees to fill vacancies. (d) RESIGNATION AND RETIREMENT. Any Trustee may resign his trust or retire as a trustee of the Trust, by written instrument signed by him and delivered to the other Trustees or to any officer of the Trust, and such resignation or retirement shall take effect upon such delivery or upon such later date as is specified in such instrument and shall be effective as to the Trust and each Sub-Trust hereunder. (e) REMOVAL. Any Trustee may be removed with or without cause at any time by written instrument, signed by at least two-thirds of the number of Trustees in office immediately prior to such removal, specifying the date upon which such removal shall become effective. Any such removal shall be effective as to the Trust and each Sub-Trust hereunder. (f) VACANCIES. Any vacancy or anticipated vacancy resulting from any reason, including without limitation the death, resignation, retirement, removal or incapacity of any of the Trustees, or resulting from an increase in the number of Trustees by the other Trustees may (but so long as there are at least two remaining Trustees, need not unless required by the 1940 Act) be filled by a majority of the remaining Trustees, subject to the provisions of Section 16(a) of the 1940 Act, through the appointment of such other person as such remaining Trustees in their discretion shall determine. Such appointment shall be evidenced by a written instrument signed by a majority of the Trustees then in office, or by a recording in the records of the Trust, and shall be effective upon such signing or recording and the acceptance of the person named therein to serve as a trustee of the Trust and agreement by such person to be bound by the provisions of this Declaration of Trust. Any such appointment in anticipation of a vacancy to occur by reason of retirement, resignation or increase in number of Trustees to be effective at a later date shall be deemed effective upon the effective date of said retirement, resignation or increase in number of Trustees. (g) EFFECT OF DEATH, RESIGNATION, ETC. The death, resignation, retirement, removal or incapacity of the Trustees, or any one of them, shall cause a Trustee to cease to be a trustee of the Trust but shall not operate to annul or terminate the Trust or any Sub-Trust hereunder or to revoke or terminate any existing agency or contract created or entered into pursuant to the terms of this Declaration of Trust. (h) NO ACCOUNTING. Except to the extent required by the 1940 Act or under circumstances which would justify his removal for cause, no person ceasing to be a trustee of the Trust as a result of his death, resignation, retirement, removal or incapacity (nor the estate of any such person) shall be required to make an accounting to the Shareholders or remaining Trustees upon such cessation. Section 3.2 POWERS OF TRUSTEES. Subject to the provisions of this Declaration of Trust, the business of the Trust shall be managed by the Trustees, and they shall have all powers necessary or convenient to carry out that responsibility and the purpose of the Trust. The Trustees in all instances shall act as principals, and are and shall be free from the control of the Shareholders. The Trustees shall have full power and authority to do any and all acts and to make and execute any and all contracts and instruments that they may consider necessary or appropriate in connection with the management of the Trust. The Trustees shall not be bound or limited by present or future laws or customs with regard to investment by trustees or fiduciaries, but shall have full authority and absolute power and control over the assets of the Trust and the business of the Trust to the same extent as if the Trustees were the sole owners of the assets of the Trust and the business in their own right, including such authority, power and control to do all acts and things as they, in their sole discretion, shall deem proper to accomplish the purposes of this Trust. Without limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration of Trust providing for the conduct of the business and affairs of the Trust and may amend and repeal them to the extent that such By- Laws do not reserve that right to the Shareholders; they may from time to time in accordance with the provisions of Section 4.1 hereof establish Sub-Trusts, each such Sub-Trust to operate as a separate and distinct investment medium and with separately defined investment objectives and policies and distinct investment purposes; they may 4 from time to time in accordance with the provisions of Section 4.1 hereof establish Series or establish classes of Shares of any Series or Sub-Trust or divide the Shares of any Series or Sub-Trust into classes; they may as they consider appropriate designate employees and agents who may be denominated as officers with titles, including, but not limited to, "president", "vice- president", "treasurer", "secretary", "assistant treasurer", "assistant secretary", "managing director", "chairman of the board" and "vice chairman of the board" and who in such capacity may act for and on behalf of the Trust, as and to the extent authorized by the Trustees, and appoint and terminate agents and consultants and hire and terminate employees, any one or more of the foregoing of whom may be a Trustee, and may provide for the compensation of all of the foregoing; they may appoint from their own number, and terminate, any one or more committees consisting of two or more Trustees, including without implied limitation an executive committee, which may, when the Trustees are not in session and subject to the 1940 Act, exercise some or all of the power and authority of the Trustees as the Trustees may determine; in accordance with Section 3.3 they may employ one or more advisers, administrators, depositories and custodians and may authorize any depository or custodian to employ subcustodians or agents and to deposit all or any part of such assets in a system or systems for the central handling of securities and debt instruments, retain transfer, dividend, accounting or Shareholder servicing agents or any of the foregoing, provide for the distribution of Shares by the Trust through one or more distributors, principal underwriters, or otherwise, and subject to Section 5.3 set record dates or times for the determination of Shareholders or various of them with respect to various matters; they may compensate or provide for the compensation of the Trustees, officers, advisers, administrators, custodians, other agents, consultants and employees of the Trust or the Trustees on such terms as they deem appropriate; and in general they may delegate to any officer of the Trust, to any committee of the Trustees and to any employee, adviser, administrator, distributor, depository, custodian, transfer and dividend disbursing agent, or any other agent or consultant of the Trust such authority, powers, functions and duties as they consider desirable or appropriate for the conduct of the business and affairs of the Trust, including without implied limitation the power and authority to act in the name of the Trust and any Sub-Trust and of the Trustees, to sign documents and to act as attorney-in-fact for the Trustees. Without limiting the foregoing and to the extent not inconsistent with the 1940 Act or other applicable law, the Trustees shall have power and authority for and on behalf of the Trust and each separate Sub-Trust established hereunder: (a) INVESTMENTS. To invest and reinvest cash and other property, and to hold cash or other property uninvested without in any event being bound or limited by any present or future law or custom in regard to investments by trustees; (b) DISPOSITION OF ASSETS. To sell, exchange, lend, pledge, mortgage, hypothecate, write options on and lease any or all of the assets of the Trust; (c) OWNERSHIP POWERS. To vote or give assent, or exercise any rights of ownership, with respect to stock or other securities, debt instruments or property; and to execute and deliver proxies or powers of attorney to such person or persons as the Trustees shall deem proper, granting to such person or persons such power and discretion with relation to securities, debt instruments or property as the Trustees shall deem proper; (d) SUBSCRIPTION. To exercise powers and rights of subscription or otherwise which in any manner arise out of ownership of securities or debt instruments; (e) FORM OF HOLDING. To hold any security, debt instrument or property in a form not indicating any trust, whether in bearer, unregistered or other negotiable form, or in the name of the Trustees or of the Trust or of any Sub- Trust or in the name of a custodian, subcustodian or other depository or a nominee or nominees or otherwise; (f) REORGANIZATION, ETC. To consent to or participate in any plan for the reorganization, consolidation, or merger of any corporation or issuer, any security or debt instrument of which is or was held 5 in the Trust; to consent to any contract, lease, mortgage, purchase, or sale of property by such corporation or issuer, and to pay calls or subscriptions with respect to any security or debt instrument held in the Trust; (g) VOTING TRUSTS, ETC. To join with other holders of any securities or debt instruments in acting through a committee, depositary, voting trustee, or otherwise, and in that connection to deposit any security or debt instrument with, or transfer any security or debt instrument to, any such committee, depositary, or trustee, and to delegate to them such power and authority with relation to any security or debt instrument (whether or not so deposited or transferred) as the Trustees shall deem proper, and to agree to pay, and to pay, such portion of the expenses and compensation of such committee, depositary or trustee as the Trustees shall deem proper; (h) COMPROMISE. To compromise, arbitrate or otherwise adjust claims in favor of or against the Trust or any Sub-Trust or any matter in controversy, including but not limited to claims for taxes; (i) PARTNERSHIPS, ETC. To enter into joint ventures, general or limited partnerships, limited liability companies, and any other combinations or associations ; (j) BORROWING AND SECURITY. To borrow funds and to mortgage and pledge the assets of the Trust or any part thereof to secure obligations arising in connection with such borrowing; (k) GUARANTEES, etc. To endorse or guarantee the payment of any notes or other obligations of any person; to make contracts of guaranty or suretyship, or otherwise assume liability for payment thereof; and to mortgage and pledge the Trust property or any part thereof to secure any of or all such obligations; (l) INSURANCE. To purchase and pay for entirely out of Trust property such insurance as they may deem necessary or appropriate for the conduct of the business, including, without limitation, insurance policies insuring the assets of the Trust and payment of distributions and principal on its portfolio investments, and insurance policies insuring the Shareholders, Trustees, officers, employees, agents, consultants, investment advisers, managers, administrators, distributors, principal underwriters, or independent contractors, or any thereof (or any person connected therewith), of the Trust individually against all claims and liabilities of every nature arising by reason of holding, being or having held any such office or position, or by reason of any action alleged to have been taken or omitted by any such person in any such capacity, including any action taken or omitted that may be determined to constitute negligence, whether or not the Trust would have the power to indemnify such person against such liability; (m) PENSIONS, ETC. To pay pensions for faithful service, as deemed appropriate by the Trustees, and to adopt, establish and carry out pension, profit-sharing, share bonus, share purchase, savings, thrift and other retirement, incentive and benefit plans, trusts and provisions, including the purchasing of life insurance and annuity contracts as a means of providing such retirement and other benefits, for any or all of the Trustees, officers, employees, and agents of the Trust; and (n) DISTRIBUTION PLANS. To adopt on behalf of the Trust or any Sub- Trust, including with respect to any class thereof, a plan of distribution and related agreements thereto pursuant to the terms of Rule 12b-1 of the 1940 Act and to make payments from the assets of the Trust or the relevant Sub-Trust or Sub-Trusts pursuant to said Rule 12b-1 Plan. Section 3.3 CERTAIN CONTRACTS. Subject to compliance with the provisions of the 1940 Act, but notwithstanding any limitations of present and future law or custom in regard to delegation of powers by trustees generally, the Trustees may, at any time and from time to time and without limiting the generality of their powers and authority otherwise set forth herein, enter into one or more contracts with any one or more corporations, trusts, associations, partnerships, limited partnerships, limited liability companies, other type of organizations, or individuals (a "Contracting Party"), to provide for the performance and assumption of some or all of the following services, duties, and responsibilities to, for, or on behalf of the Trust and/or any Sub- 6 Trust, and/or the Trustees, and to provide for the performance and assumption of such other services, duties, and responsibilities in addition to those set forth below as the Trustees may determine appropriate: (a) ADVISORY. Subject to the general supervision of the Trustees and in conformity with the stated policy of the Trustees with respect to the investments of the Trust or of the assets belonging to any Sub-Trust of the Trust (as that phrase is defined in subsection (a) of Section 4.2), to manage such investments and assets, make investment decisions with respect thereto, and to place purchase and sale orders for portfolio transactions relating to such investments and assets; (b) ADMINISTRATION. Subject to the general supervision of the Trustees and in conformity with any policies of the Trustees with respect to the operations of the Trust and each Sub-Trust (including each class thereof), to supervise all or any part of the operations of the Trust and each Sub-Trust, and to provide all or any part of the administrative and clerical personnel, office space, and office equipment and services appropriate for the efficient administration and operations of the Trust and each Sub-Trust; (c) DISTRIBUTION. To distribute the Shares of the Trust and each Sub- Trust (including any classes thereof), to be principal underwriter of such Shares, and/or to act as agent of the Trust and each Sub-Trust in the sale of Shares and the acceptance or rejection of orders for the purchase of Shares; (d) CUSTODIAN AND DEPOSITORY. To act as depository for and to maintain custody of the property of the Trust and each Sub-Trust and accounting records in connection therewith; (e) TRANSFER AND DIVIDEND DISBURSING AGENCY. To maintain record of the ownership of outstanding Shares, the issuance and redemption and the transfer thereof, and to disburse any dividends declared by the Trustees and in accordance with the policies of the Trustees and/or the instructions of any particular Shareholder to reinvest any such dividends; (f) SHAREHOLDER SERVICING. To provide service with respect to the relationship of the Trust and its Shareholders, records with respect to Shareholders and their Shares, and similar matters; and (g) ACCOUNTING. To handle all or any part of the accounting responsibilities, whether with respect to the Trust's properties, Shareholders or otherwise. The same person may be the Contracting Party for some or all of the service, duties, and responsibilities to, for and of the Trust and/or the Trustees, and the contracts with respect thereto may contain such terms interpretive of or in addition to the delineation of the services, duties, and responsibilities provided for, including provisions that are not inconsistent with the 1940 Act relating to the standard of duty of and the rights to indemnification of the Contracting Party and others, as the Trustees may determine. Nothing herein shall preclude, prevent, or limit the Trust or a Contracting Party from entering into sub-contractual arrangements relating to any of the matters referred to in Sections 3.3(a) through (g) hereof. The fact that: (i) any of the Shareholders, Trustees or officers of the Trust is a shareholder, director, officer, partner, trustee, employee, manager, adviser, principal underwriter or distributor, or agent of or for any Contracting Party, or of or for any parent or affiliate of any Contracting Party or that the Contracting Party or any parent or affiliate thereof is a Shareholder or has an interest in the Trust or any Sub-Trust, or that (ii) any Contracting Party may have a contract providing for the rendering of any similar services to one or more other corporations, trusts, associations, partnerships, limited partnerships, limited liability companies, or other organizations, or have other business or interests, 7 shall not affect the validity of any contract for the performance and assumption of services, duties, and responsibilities to, for or of the Trust or any Sub- Trust and/or the Trustees or disqualify any Shareholder, Trustee or officer of the Trust from voting upon or executing the same or create any liability or accountability to the Trust, any Sub-Trust, or its Shareholders, provided that in the case of any relationship or interest referred to in the preceding clause (i) on the part of any Trustee or officer of the Trust either (x) the material facts as to such relationship or interest have been disclosed to or are known by the Trustees not having any such relationship or interest and the contract involved is approved in good faith by a majority of such Trustees not having any such relationship or interest (even though such unrelated or disinterested Trustees are less than a quorum of all of the Trustees), (y) the material facts as to such relationship or interest and as to the contract have been disclosed to or are known by the Shareholders entitled to vote thereon and the contract involved is specifically approved in good faith by vote of the Shareholders, or (z) the specific contract involved is fair to the Trust as of the time it is authorized, approved, or ratified by the Trustees or by the Shareholders. Section 3.4 PAYMENT OF TRUST EXPENSES AND COMPENSATION OF TRUSTEES. The Trustees are authorized to pay or to cause to be paid out of the principal or income of the Trust or any Sub-Trust, or partly out of principal and partly out of income, and to charge or allocate the same to, between, or among such one or more of the Sub-Trusts and/or one or more classes of Shares thereof that may be established and designated pursuant to Article IV, as the Trustees deem fair, all expenses, fees, charges, taxes, and liabilities incurred or arising in connection with the Trust, any Sub-Trust and/or any class of Shares thereof, or in connection with the management thereof, including, but not limited to, the Trustees' compensation and such expenses and charges for the services of the Trust's officers, employees, investment adviser, administrator, distributor, principal underwriter, auditor, counsel, depository, custodian, transfer agent, dividend disbursing agent, accounting agent, Shareholder servicing agent, and such other agents, consultants, and independent contractors and such other expenses and charges as the Trustees may deem necessary or proper to incur. Without limiting the generality of any other provision hereof, the Trustees shall be entitled to reasonable compensation from the Trust for their services as trustees of the Trust and may fix the amount of such compensation. Nothing herein shall in any way prevent the employment of any Trustee for special services, including legal, accounting, advisory, management or other services and payment for the same by the Trust. Except to the extent expressly provided in a written agreement with the Trust, no Trustee resigning and no Trustee removed shall have any right to any compensation for any period following his resignation or removal, or any right to damages on account of such removal. The Trustees shall have the power, as frequently as they may determine, to cause each Shareholder, or each Shareholder of any particular Sub-Trust, to pay directly, in advance or arrears, for charges of the Trust"s custodian or transfer, Shareholder servicing or similar agent, an amount fixed from time to time by the Trustees, by setting off such charges due from such Shareholder from declared but unpaid dividends owed such Shareholder and/or by reducing the number of Shares in the account of such Shareholder by that number of full and/or fractional Shares which represents the outstanding amount of such charges due from such Shareholder. Section 3.5 OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the assets of the Trust and of each Sub-Trust shall at all times be considered as vested in the Trustees as joint tenants. The right, title and interest of the Trustees in such assets shall vest automatically in each person who may hereafter become a Trustee, and upon any Trustees' death, resignation or removal, such Trustee shall automatically cease to have any right, title or interest in such assets. Vesting and cessation of title as set forth in this Section 3.5 shall be effective notwithstanding the absence of execution and delivery of any conveyancing documents. Section 3.6 ACTION BY TRUSTEES. Except as otherwise provided by the 1940 Act or other applicable law, this Declaration of Trust or the By-Laws, any action to be taken by the Trustees on behalf of or with respect to the Trust or any Sub-Trust or class thereof may be taken by a majority of the Trustees present at a meeting of Trustees (a quorum, consisting of at least a majority of the Trustees then in office, being present), within or without Delaware, including any meeting held by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other at 8 the same time, and participation by such means shall constitute presence in person at a meeting, or by written consents of a majority of the Trustees then in office (or such larger or different number as may be required by the 1940 Act or other applicable law). ARTICLE IV SHARES Section 4.1 DESCRIPTION OF SHARES. The beneficial interest in the Trust shall be divided into Shares, all without par value, but the Trustees shall have the authority from time to time to issue Shares in one or more Series (each of which Series of Shares shall represent the beneficial interest in a separate and distinct Sub-Trust of the Trust, including without limitation each Sub-Trust specifically established and designated in Section 4.2), as they deem necessary or desirable. For all purposes under this Declaration of Trust or otherwise, including, without implied limitation, (i) with respect to the rights of creditors and (ii) for purposes of interpreting the relevant rights of each Sub-Trust and the Shareholders of each Sub-Trust, each Sub-Trust established hereunder shall be deemed to be a separate trust. Notice of the limitation of liabilities of a Sub-Trust shall be set forth in the certificate of trust of the Trust, and debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Sub-Trust shall be enforceable against the assets of such Sub-Trust only, and not against the assets of the Trust generally. Notwithstanding any other provisions of this Declaration of Trust and without limiting the power of the Trustees to amend the Declaration of Trust as provided elsewhere herein, the Trustees shall have the power to amend this Declaration of Trust, at any time and from time to time, in such manner as the Trustees may determine in their sole discretion, without the need for Shareholder action, so as to add to, delete, replace or otherwise modify any provisions relating to the Shares contained in this Declaration of Trust for the purpose of responding to or complying with any regulations, orders, rulings or interpretations of any governmental agency or any laws, now or hereafter applicable to the Trust. The Trustees shall have exclusive power without the requirement of Shareholder approval to establish and designate such separate and distinct Sub-Trusts, and to fix and determine the relative rights and preferences as between the shares of the separate Sub-Trusts as to right of redemption and the price, terms and manner of redemption, special and relative rights as to dividends and other distributions and on liquidation, sinking or purchase fund provisions, conversion rights, and conditions under which the several Sub-Trusts shall have separate voting rights or no voting rights. In addition, the Trustees shall have exclusive power, without the requirement of Shareholder approval, to issue classes of Shares of any Sub-Trust or divide the Shares of any Sub-Trust into classes, each class having such different dividend, liquidation, voting and other rights as the Trustees may determine in their sole discretion, and may establish and designate the specific classes of Shares of each Sub-Trust. The fact that a Sub-Trust shall have initially been established and designated without any specific establishment or designation of classes (i.e., that all Shares of such Sub-Trust are initially of a single class), or that a Sub-Trust shall have more than one established and designated class, shall not limit the authority of the Trustees to establish and designate separate classes, or one or more further classes, of said Sub-Trust without approval of the holders of the initial class thereof, or previously established and designated class or classes thereof, provided that the establishment and designation of such further separate classes would not adversely affect the rights of the holders of the initial or previously established and designated class or classes. The number of authorized Shares and the number of Shares of each Sub-Trust or class thereof that may be issued is unlimited, and the Trustees may issue Shares of any Sub-Trust or class thereof for such consideration and on such terms as they may determine (or for no consideration if pursuant to a Share dividend or split-up), all without action or approval of the Shareholders. All Shares when so issued on the terms determined by the Trustees shall be fully paid and non-assessable (but may be subject to mandatory contribution back to the Trust as provided in subsection (h) of Section 4.2). The Trustees may classify or reclassify any unissued Shares or any Shares previously issued and reacquired of any Sub-Trusts or class thereof into one or more Sub-Trust or classes thereof that may be established and designated from time to time. 9 The Trustees may hold as treasury Shares, reissue for such consideration and on such terms as they may determine, or cancel, at their discretion from time to time, any Shares of any Sub-Trust or class thereof reacquired by the Trust. The Trustees may from time to time close the transfer books or establish record dates and times for the purposes of determining the holders of Shares entitled to be treated as such, to the extent provided or referred to in Section 5.3. The establishment and designation of any Sub-Trust or of any class of Shares of any Sub-Trust in addition to those established and designated in Section 4.2 shall be effective (i) upon the execution by a majority of the then Trustees of an instrument setting forth such establishment and designation of the relative rights and preferences of the Shares of such Sub-Trust or class, (ii) upon the execution of an instrument in writing by an officer of the Trust pursuant to the vote of a majority of the Trustees, or (iii) as otherwise provided in either such instrument. At any time that there are no Shares outstanding of any particular Sub-Trust or class previously established and designated, the Trustees may by an instrument executed by a majority of their number (or by an instrument executed by an officer of the Trust pursuant to the vote of a majority of the Trustees) abolish that Sub-Trust or class and the establishment and designation thereof. Each instrument establishing and designating any Sub-Trust shall have the status of an amendment to this Declaration of Trust. Any Trustee, officer or other agent of the Trust, and any organization in which any such person is interested may acquire, own, hold and dispose of Shares of any Sub-Trust (including any classes thereof) of the Trust to the same extent as if such person were not a Trustee, officer or other agent of the Trust; and the Trust may issue and sell or cause to be issued and sold and may purchase Shares of any Sub-Trust (including any classes thereof) from any such person or any such organization subject only to the general limitations, restrictions or other provisions applicable to the sale or purchase of Shares of such Sub-Trust (including any classes thereof) generally. Section 4.2 ESTABLISHMENT AND DESIGNATION OF SUB-TRUSTS AND CLASSES. Without limiting the authority of the Trustees set forth in Section 4.1 to establish and designate any further Sub-Trusts, the Trustees hereby establish and designate four Sub-Trusts: "MJI International, MJI Global Bond, Chicago Asset Management Value Contrarian and Chicago Asset Management Intermediate-Term Bond" which shall consist of a single class of Shares. The Shares of such Sub- Trust and any Shares of any further Sub-Trust or class thereof that may from time to time be established and designated by the Trustees shall (unless the Trustees otherwise determine with respect to some further Sub-Trust at the time of establishing and designating the same) have the following relative rights and preferences: (a) ASSETS BELONGING TO SUB-TRUSTS. All consideration received by the Trust for the issue or sale of Shares of a particular Sub-Trust or any classes thereof, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall be held by the Trustees in trust for the benefit of the holders of Shares of that Sub-Trust or class thereof and shall irrevocably belong to that Sub-Trust (and be allocable to any classes thereof) for all purposes, and shall be so recorded upon the books of account of the Trust. Separate and distinct records shall be maintained for each Sub-Trust and the assets associated with a Sub-Trust shall be held and accounted for separately from the other assets of the Trust, or any other Sub-Trust. Such consideration, assets, income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds, in whatever form the same may be, together with any General Items (as hereinafter defined) allocated to that Sub-Trust as provided in the following sentence, are herein referred to as "assets belonging to" that Sub-Trust (and allocable to any classes thereof). In the event that there are any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular Sub-Trust (collectively "General Items"), the Trustees shall allocate such General Items to and among any one or more of the Sub-Trusts established and designated from time to time in such manner and on such basis as they, in their sole discretion, deem fair and equitable; and any General Items so 10 allocated to a particular Sub-Trust shall belong to that Sub-Trust (and be allocable to any classes thereof). Each such allocation by the Trustees shall be conclusive and binding upon the holders of all Shares of all Sub-Trusts (including any classes thereof) for all purposes. (b) LIABILITIES BELONGING TO SUB-TRUSTS. The assets belonging to each particular Sub-Trust shall be charged with the liabilities in respect of that Sub-Trust and all expenses, costs, charges, and reserves belonging to that Sub- Trust, and any general liabilities, expenses, costs, charges, or reserves of the Trust which are not readily identifiable as belonging to any particular Sub- Trust shall be allocated and charged by the Trustees to and among any one or more of the Sub-Trusts established and designated from time to time in such manner and on such basis as the Trustees in their sole discretion shall determine. In addition, the liabilities in respect of a particular class of Shares of a particular Sub-Trust and all expenses, costs, charges, and reserves belonging to that class of Shares, and any general liabilities, expenses, costs, charges or reserves of that particular Sub-Trust which are not readily identifiable as belonging to any particular class of Shares of that Sub-Trust shall be allocated and charged by the Trustees to and among any one or more of the classes of Shares of that Sub-Trust established and designated from time to time in such manner and on such basis as the Trustees in their sole discretion shall determine. The liabilities, expenses, costs, charges, and reserves allocated and so charged to a Sub-Trust or class thereof are herein referred to as "liabilities belonging to" that Sub-Trust or class thereof. Each allocation of liabilities, expenses, costs, charges, and reserves by the Trustees shall be conclusive and binding upon the Shareholders, creditors and any other persons dealing with the Trust or any Sub-Trust (including any classes thereof) for all purposes. Any creditor of any Sub-Trust may look only to the assets of that Sub-Trust to satisfy such creditor's debt. The Trustees shall have full discretion, to the extent not inconsistent with the 1940 Act, to determine which items shall be treated as income and which items as capital; and each such determination and allocation shall be conclusive and binding upon the shareholders. (c) DIVIDENDS. Dividends and distributions on Shares of a particular Sub-Trust or any class thereof may be paid with such frequency as the Trustees may determine, which may be daily or otherwise pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, to the holders of Shares of that Sub-Trust or class, from such of the income and capital gains, accrued or realized, from the assets belonging to that Sub-Trust, or in the case of a class, belonging to that Sub-Trust and allocable to that class, as the Trustees may determine, after providing for actual and accrued liabilities belonging to that Sub-Trust or class. All dividends and distributions on Shares of a particular Sub-Trust or class thereof shall be distributed pro rata to the holders of Shares of that Sub-Trust or class in proportion to the number of Shares of that Sub-Trust or class held by such holders at the date and time of record established for the payment of such dividends or distributions, except that in connection with any dividend or distribution program or procedure the Trustees may determine that no dividend or distribution shall be payable on Shares as to which the Shareholder's purchase order and/or payment have not been received by the time or times established by the Trustees under such program or procedure. Such dividends and distributions may be made in cash or Shares of that Sub-Trust or class or a combination thereof as determined by the Trustees or pursuant to any program that the Trustees may have in effect at the time for the election by each Shareholder of the mode of the making of such dividend or distribution to that Shareholder. Any such dividend or distribution paid in Shares will be paid at the net asset value thereof as determined in accordance with subsection (h) of this Section 4.2. The Trustees shall have full discretion to determine which items shall be treated as income and which items as capital; and each such determination and allocation shall be conclusive and binding upon the Shareholders. (d) LIQUIDATION. In the event of the liquidation or dissolution of the Trust, subject to Section 7.1 hereof, the holders of Shares of each Sub- Trust or any class thereof that has been established and designated shall be entitled to receive, when and as declared by the Trustees, the excess of the assets belonging to that Sub-Trust, or in the case of a class, belonging to that Sub-Trust and allocable to that class, over the liabilities belonging to that Sub-Trust or class. The assets so distributable to the holders of Shares of any particular Sub- 11 Trust or class thereof shall be distributed among such holders in proportion to the number of Shares of that Sub-Trust or class thereof held by them and recorded on the books of the Trust. The liquidation of any particular Sub-Trust or class thereof may be authorized at any time by vote of a majority of the Trustees then in office. (e) VOTING. On each matter submitted to a vote of the Shareholders, each holder of a Share shall be entitled to one vote for each whole Share standing in his name on the books of the Trust irrespective of the Series thereof or class thereof and all Shares of all Series and classes thereof shall vote together as a single class; provided, however, that as to any matter (i) with respect to which a separate vote of one or more Series or classes thereof is required by the 1940 Act or the provisions of the writing establishing and designating the Sub-Trust or class, such requirements as to a separate vote by such Series or class thereof shall apply in lieu of all Shares of all Series and classes thereof voting together; and (ii) as to any matter which affects the interests of one or more particular Series or classes thereof, only the holders of Shares of the one or more affected Series or classes shall be entitled to vote, and each such Series or class shall vote as a separate class. (f) REDEMPTION BY SHAREHOLDER. Each holder of Shares of a particular Sub- Trust or any class thereof shall have the right at such times as may be permitted by the Trust to require the Trust to redeem all or any part a of his Shares of that Sub-Trust or class thereof at a redemption price equal to the net asset value per Share of that Sub-Trust or class thereof next determined in accordance with subsection (h) of this Section 4.2 after the Shares are properly tendered for redemption, subject to any contingent deferred sales charge or redemption charge in effect at the time of redemption. Payment of the redemption price shall be in cash; provided, however, that if the Trustees determine, which determination shall be conclusive, that conditions exist which make payment wholly in cash unwise or undesirable, the Trust may, subject to the requirements of the 1940 Act, make payment wholly or partly in securities or other assets belonging to the Sub-Trust of which the Shares being redeemed are part at the value of such securities or assets used in such determination of net asset value. Notwithstanding the foregoing, the Trust may postpone payment of the redemption price and may suspend the right of the holders of Shares of any Sub- Trust or class thereof to require the Trust to redeem Shares of that Sub-Trust during any period or at any time when and to the extent permissible under the 1940 Act. (g) REDEMPTION BY TRUST. Each Share of each Sub-Trust or class thereof that has been established and designated is subject to redemption by the Trust at the redemption price which would be applicable if such Share was then being redeemed by the Shareholder pursuant to subsection (f) of this Section 4.2: (i) at any time, in the sole discretion of the Trustees, or (ii) upon such other conditions as may from time to time be determined by the Trustees and set forth in the then current Prospectus or Statement of Additional Information of the Trust. Upon such redemption the holders of the Shares so redeemed shall have no further right with respect thereto other than to receive payment of such redemption price. (h) NET ASSET VALUE. The net asset value per Share of any Sub-Trust shall be (i) in the case of a Sub-Trust whose Shares are not divided into classes, the quotient obtained by dividing the value of the net assets of that Sub-Trust (being the value of the assets belonging to that Sub-Trust less the liabilities belonging to that Sub-Trust) by the total number of Shares of that Sub-Trust outstanding, and (ii) in the case of a class of Shares of a Sub-Trust whose Shares are divided into classes, the quotient obtained by dividing the value of the net assets of that Sub-Trust allocable to such class (being the value of the assets belonging to that Sub-Trust allocable to such class less the liabilities belonging to such class) by the total number of Shares of such class outstanding; all determined in accordance with the methods and procedures, including without limitation those with respect to rounding, established by the Trustees from time to time. The Trustees may determine to maintain the net asset value per Share of any Sub-Trust at a designated constant dollar amount and in connection therewith may adopt procedures not inconsistent with the 1940 act for the continuing declarations of income attributable to that Sub-Trust as dividend payable in additional shares 12 of the Sub-Trust at the designated constant dollar amount and for the handling of any losses attributable to that Sub-Trust. Such procedures may provide that in the event of any loss each Shareholder shall be deemed to have contributed to the capital of the Trust attributable to that Sub-Trust his pro rata portion of the total number of Shares required to be canceled in order to permit the net asset value per Share of that Sub-Trust to be maintained, after reflecting such loss, at the designated constant dollar amount. Each Shareholder of the Trust shall be deemed to have agreed, by his investment in any Sub-Trust with respect to which the Trustees shall have adopted any such procedure, to make the contribution referred to in the preceding sentence in the event of any such loss. (i) TRANSFER. All Shares of each particular Sub-Trust or class thereof shall be transferable, but transfers of Shares of a particular Sub-Trust or class thereof will be recorded on the Share transfer records of the Trust applicable to that Sub-Trust or class only at such times as Shareholders shall have the right to require the Trust to redeem Shares of that Sub-Trust or class and at such other times as may be permitted by the Trustees. (j) EQUALITY. Except as provided herein or in the instrument designating and establishing any class of Shares or any Sub-Trust, all Shares of each particular Sub-Trust or class thereof shall represent an equal proportionate interest in the assets belonging to that Sub-Trust, or in the case of a class, belonging to that Sub-Trust and allocable to that class, subject to the liabilities belonging to that Sub-Trust or class and each share of any particular Sub-Trust or class shall be equal to each other Share of that Sub- Trust or class; but the provisions of this sentence shall not restrict any distinctions permissible under subsection (c) of this Section 4.2 that may exist with respect to dividends and distributions on Shares of the same Sub-Trust or class. The Trustees may from time to time divide or combine the Shares of any particular Sub-Trust or class into a greater or lesser number of Shares of that Sub-Trust or class without thereby changing the proportionate beneficial interest in the assets belonging to that Sub-Trust or class or in any way affecting the rights of Shares of any other Sub-Trust or class. (k) FRACTIONS. Any fractional Share of any Sub-Trust or class, if any such fractional Share is outstanding, shall carry proportionately all the rights and obligations of a whole Share of that Sub-Trust or class, including rights and obligations with respect to voting, receipt of dividends and distributions, redemption of Shares, and liquidation of the Trust. (l) CONVERSION OR EXCHANGE RIGHTS. Subject to compliance with the requirements of the 1940 Act, the Trustees shall have the authority to provide that holders of Shares of any Sub-Trust or class thereof shall have the right to convert or exchange said Shares into Shares of one or more other Sub-Trust or class thereof in accordance with such requirements and procedures as may be established by the Trustees. (m) CLASS DIFFERENCES. Subject to Section 4.1, the relative rights and preferences of the classes of any Sub-Trust may differ in such other respects as the Trustees may determine to be appropriate in their sole discretion, provided that such differences are set forth in the instrument establishing and designating such classes and executed by a majority of the Trustees (or by an instrument executed by an officer of the Trust pursuant to a vote of a majority of the Trustees). Section 4.3 OWNERSHIP OF SHARES. The ownership of Shares shall be recorded on the books of the Trust or of a transfer or similar agent for the Trust, which books shall be maintained separately for the Shares of each Sub- Trust and each class thereof that has been established and designated. No certificates certifying the ownership of Shares need be issued except as the Trustees may otherwise determine from time to time. The trustees may make such rules as they consider appropriate for the issuance of Share certificates, the use of facsimile signature, the transfer of Shares and similar matters. The record books of the Trust as kept by the Trust or any transfer or similar agent, as the case may be, shall be conclusive as to who are the Shareholders and as to the number of Shares of each Sub-Trust and class thereof held from time to time by each such Shareholder. 13 Section 4.4 INVESTMENTS IN THE TRUST. The Trustees may accept investments in the Trust and each Sub-Trust from such persons and on such terms and for such consideration, not inconsistent with the provisions of the 1940 Act, as they from time to time authorize. The Trustees may authorize any distributor, principal underwriter, custodian, transfer agent or other person to accept orders for the purchase of Shares that conform to such authorized terms and to reject any purchase orders for Shares whether or not conforming to such authorized terms. Section 4.5 NO PRE-EMPTIVE RIGHTS. Shareholders shall have no pre- emptive or other rights to subscribe to any additional Shares or other securities issued by the Trust or any Sub-Trust, except as the Trustees in their sole discretion shall have determined by resolution. Section 4.6 STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. Shares shall be deemed to be personal property giving only the rights provided in this Declaration of Trust. Every Shareholder by virtue of acquiring Shares shall be held to have expressly assented and agreed to the terms hereof and to have become a party hereto. The death, incapacity, dissolution, termination, or bankruptcy of a Shareholder during the continuance of the Trust shall not operate to dissolve or terminate the Trust or any Sub-Trust thereof nor entitle the representative of such Shareholder to an accounting or to take any action in court or elsewhere against the Trust or the Trustees, but only to the rights of such Shareholder under this Trust. Ownership of Shares shall not entitle the Shareholder to any title in or to the whole or any part of the Trust property or right to call for a partition or division of the same or for an accounting, nor shall the ownership of Shares constitute the Shareholders partners. Neither the Trust nor the Trustees nor any officer, employee or agent of the Trust shall have any power to bind personally any Shareholder, nor except as specifically provided herein to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time personally agree to pay. Section 4.7 NO APPRAISAL RIGHTS. Shareholders shall have no right to demand payment for their shares or to any other rights of dissenting shareholders in the event the Trust participates in any transaction which would give rise to appraisal or dissenters' rights by a shareholder of a corporation organized under the General Corporation Law of the State of Delaware, or otherwise. ARTICLE V SHAREHOLDERS' VOTING POWERS AND MEETINGS Section 5.1 VOTING POWERS. The Shareholders shall have power to vote only (i) for the election of Trustees as provided in Section 3.1, (ii) with respect to any contract with a Contracting Party as provided in Section 3.3 as to which Shareholder approval is required by the 1940 Act, (iii) with respect to any termination or reorganization of the Trust to the extent and as provided in Sections 7.1 and 7.2, (iv) with respect to any amendment of this Declaration of Trust to the extent and as provided in Section 7.3, and (v) with respect to such additional matters relating to the Trust as may be required by the 1940 act, this Declaration of Trust, the By-Laws or any registration of the Trust with the Commission (or any successor agency) or any state, or as the Trustees may consider necessary or desirable. There shall be no cumulative voting in the election of Trustees. Shares may be voted in person or by proxy. Proxies may be given orally or in writing or pursuant to any computerized or mechanical data gathering process specifically approved by the Trustees. A proxy with respect to Shares held in the name of two or more persons shall be valid if executed by any one of them unless at or prior to exercise of the proxy the Trust receives a specific written notice to the contrary from any one of them. A proxy purporting to be executed by or on behalf of a Shareholder shall be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity shall rest on the challenger. At any time when no Shares of a Series are outstanding, the Trustees may exercise all rights of Shareholders of that Series with respect to matters affecting that Series and may take any action required by law, this Declaration of Trust, or the By-Laws to be taken by Shareholders. Section 5.2 MEETINGS. No annual or regular meeting of Shareholders is required. Special meetings of Shareholders may be called by the Trustees from time to time for the purpose of electing Trustees 14 as herein provided and for such other purposes as may be prescribed by law, this Declaration of Trust or the By-Laws, or for taking action upon any other matter deemed by the Trustees to be necessary or desirable. Written notice of any meeting of Shareholders shall be given or caused to be given by the Trustees by mailing such notice at least seven days before such meeting, postage prepaid, stating the time, place, and purpose of the meeting, to each Shareholder at the Shareholder's address as it appears on the record of the Trust. Whenever notice of a meeting is required to be given to a Shareholder under the Declaration of Trust or the By-Laws, a written waiver thereof, executed before or after the meeting by such Shareholder or his attorney thereunto authorized and filed with the records of the meeting, shall be deemed equivalent to such notice. Section 5.3 RECORD DATES. For the purpose of determining the Shareholders who are entitled to vote or act at any meeting or any adjournment thereof, or who are entitled to participate in any dividend or distribution, or for the purpose of any other action, the Trustees may from time to time close the transfer books for such period, not exceeding 30 days (except at or in connection with the termination of the Trust), as the Trustees may determine; or without closing the transfer books the Trustees may fix a date and time not more than 90 days prior to the date of any meeting of Shareholders or other action as the date and time of record for the determination of Shareholders entitled to vote at such meeting or any adjournment thereof or to be treated as Shareholders of record for purposes of such other action, and any Shareholder who was a Shareholder at the date and time so fixed shall be entitled to vote at such meeting or any adjournment thereof or to be treated as a Shareholder of record for purposes of such other action, even though he has since that date and time disposed of his Shares, and no Shareholder becoming such after that date and time shall be so entitled to vote at such meeting or any adjournment thereof or to be treated as a Shareholder of record for purposes of such other action. Nothing in this section shall be construed as precluding the Trustees from setting different record dates for different Sub-Trusts. Section 5.4 QUORUM AND REQUIRED VOTE. Except as otherwise provided by the 1940 Act or other applicable law, thirty percent of the Shares entitled to vote shall be a quorum for the transaction of business at a Shareholders' meeting. Any meeting of shareholders, whether or not a quorum is present, may be adjourned from time to time by the majority of the Shares represented at the meeting, either in person or by proxy. Any adjourned session or sessions may be held, within a reasonable time after the date set for the original meeting without the necessity of notice of the adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which the adjournment is taken, unless the Trustees fix a new record date for the adjourned meeting. A majority of the Shares voted, at a meeting of which a quorum is present, shall decide any questions and a plurality shall elect a Trustee, except when a different vote is required or permitted by any provision of the 1940 Act or other applicable law or by this Declaration of Trust or the By-Laws. Section 5.5 ACTION BY WRITTEN CONSENT. Subject to the provisions of the 1940 Act and other applicable law, any action taken by Shareholders may be taken without a meeting if a majority of Shareholders entitled to vote on the matter (or such larger proportion thereof as shall be required by the 1940 Act or by any express provision of this Declaration of Trust or the By-Laws) consent to the action in writing and such written consents are filed with the record of the meetings of Shareholders. Such consent shall be treated for all purposes as a vote taken at a meeting of Shareholders. Section 5.6 INSPECTION OF RECORDS. The records of the Trust shall be open to inspection by Shareholders to the same extent as is permitted stockholders of a Delaware corporation under the Delaware General Law. Section 5.7 ADDITIONAL PROVISIONS. The By-Laws may include further provisions for Shareholders' votes and meetings and related matters not inconsistent with the provisions hereof. ARTICLE VI LIMITATION OF LIABILITY; INDEMNIFICATION 15 Section 6.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE. All persons extending credit to, contracting with or having any claim against the Trust shall look only to the assets of the Sub-Trust with which such person dealt for payment under such credit, contract or claim; and neither the Shareholders of any Sub-Trust nor the Trustees, nor any of the Trust's officers, employees or agents, whether past, present or future, nor any other Sub-Trust nor the Trustees, nor any of the Trust's officers, employees or agents, whether past, present or future, nor any other Sub-Trust shall be personally liable therefor. Every note, bond, contract, instrument, certificate, or undertaking and every act or thing whatsoever executed or done by or on behalf of the Trust, any Sub-Trust or the Trustees or any of them in connection with the Trust shall be conclusively deemed to have been executed or done only by or for the Trust (or the Sub-Trust) or the Trustees and not personally. The Trustees and the Trust's officers, employees and agents shall not be liable to the Trust or the Shareholders; provided however, that nothing in this Declaration of Trust shall protect any Trustee or officer, employee or agent against any liability to the Trust or the Shareholders to which such Trustee or officer, employee or agent would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee or of such officer, employee or agent. Every note, bond, contract, instrument, certificate, or undertaking made or issued by the Trustees or by any officers or officer shall give notice that the same was executed or made by or on behalf of the Trust or by them as Trustees or Trustee or as officers or officer and not individually and that the obligations of such instrument are not binding upon any of them or the Shareholders individually but are binding only upon the assets and property of the Trust, or the particular Sub-Trust in question, as the case may be, but the omission thereof shall not operate to bind any Trustees or Trustee or officers or officer or Shareholders or Shareholder individually or otherwise invalidate any such note, bond, contract, instrument, certificate, or undertaking. Section 6.2 TRUSTEE'S GOOD FAITH ACTION; EXPERT ADVICE; NO BOND OR SURETY. The exercise by the Trustees of their powers and discretion hereunder shall be binding upon everyone interested. A Trustee shall be liable to the Trust and the Shareholders for his own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee, and for nothing else, and shall not be liable for errors of judgment or mistakes of fact or law. Subject to the foregoing, (a) the Trustees shall not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, consultant, adviser, administrator, distributor or principal underwriter, custodian or transfer, dividend disbursing, Shareholder servicing or accounting agent of the Trust, nor shall any Trustee be responsible for the act or omission of any other Trustee; (b) the Trustees may take advice of counsel or other experts with respect to the meaning and operation of this Declaration of Trust and their duties as Trustees, and shall be under no liability for any act or omission in accordance with such advice or for failing to follow such advice; and (c) in discharging their duties, the Trustees, when acting in good faith, shall be entitled to rely upon the books of account of the Trust and upon written reports made to the Trustees by any officer appointed by them, any independent public accountant, and (with respect to the subject matter of the contract involved) any officer, partner, or responsible employee of a Contracting Party appointed by the Trustees pursuant to Section 3.3. The Trustees as such shall not be required to give any bond or surety or any other security for the performance of their duties. To the extent that, at law or in equity, a Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to a shareholder any such Trustee acting under this Declaration of Trust shall not be liable to the Trust or to any such Shareholder for the Trustee's good faith reliance on the provisions of this Declaration of Trust. The provisions of this Declaration of Trust, to the extent that they restrict the duties and liabilities of a Trustee otherwise existing at law or in equity, are agreed by the Shareholders to replace such other duties and liabilities of such Trustee. Section 6.3 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder (or former Shareholder) of any Sub-Trust of the Trust shall be charged or held to be personally liable for any obligation or liability of the Trust solely by reason of being or having been a Shareholder and not because of such Shareholder's acts or omissions or for some other reason, the Trust on behalf of said Sub-Trust (upon proper and timely request by the Shareholder) shall assume the defense against such charge and satisfy any judgment thereon, and, to the 16 fullest extent permitted by law, the Shareholder or former Shareholder (or his heirs, executors, administrators, or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the assets of said Sub-Trust estate to be held harmless from and indemnified against all loss and expense arising from such liability. Section 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. To the fullest extent permitted by law, the Trust shall indemnify (from the assets of the Sub- Trust or Sub-Trusts in question) each of its Trustees and officers (including persons who serve at the Trust's request as directors, officers, or trustees of another organization in which the Trust has any interest as a shareholder, creditor or otherwise) (hereinafter referred to as a "Covered Person") against all liabilities including but not limited to amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and expenses, including reasonable accountants' and counsel fees, incurred by any Covered Person in connection with the defense or disposition of any action, suit, or other proceeding, whether civil or criminal, before any court or administrative or legislative body, in which such Covered Person may be or may have been involved as a party or otherwise or with which such person may be or may have been threatened, while in office or thereafter by reason of any alleged act or omission as a Trustee or officer or, by reason of being or having been such a Trustee or officer, director or trustee, except with respect to any matter as to which it has been determined that such Covered Person had acted with willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such Covered Person's office (such conduct referred to hereafter as "Disabling Conduct"). A determination that the Covered Person is entitled to indemnification may be made by (i) a final decision on the merits by a court or other body before whom the proceeding was brought that the person to be indemnified was not liable by reason of Disabling Conduct, (ii) dismissal of a court action or an administrative proceeding against a Covered Person for insufficiency of evidence of Disabling Conduct, or (iii) a reasonable determination, based upon a review of the facts, that the Covered Person was not liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of Trustees who are neither "interested persons" of the Trust as defined in section 2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an independent legal counsel in a written opinion. Expenses, including accountants' and counsel fees so incurred by any such Covered Person (but excluding amounts paid in satisfaction of judgments, in compromise, or as fines or penalties), may be paid from time to time from funds attributable to the Sub-Trust in question in advance of the final disposition of any such action, suit, or proceeding, provided that the Covered Person shall have undertaken to repay the amounts so paid to the Sub-Trust in question if it is ultimately determined that indemnification of such expenses is not authorized under this Article VI and (i) the Covered Person shall have provided security for such undertaking, (ii) the Trust shall be insured against losses arising by person of any lawful advances, or (iii) a majority of a quorum of the disinterested Trustees who are not a party to the proceeding, or an independent legal counsel in a written opinion, shall have determined, based on a review of readily available facts (as opposed to a full trial-type inquiry), that there is reason to believe that the Covered Person ultimately will be found entitled to indemnification. Section 6.5 COMPROMISE PAYMENT. As to any matter disposed of by a compromise payment by any such Covered Person referred to in Section 6.4, pursuant to a consent decree or otherwise, no such indemnification either for said payment or for any other expenses shall be provided unless such indemnification shall be approved (a) by a majority of the disinterested Trustees who are not parties to the proceeding or (b) by an independent legal counsel in a written opinion. Approval by the Trustees pursuant to clause (a) or by independent legal counsel pursuant to clause (b) shall not prevent the recovery from any Covered Person of any amount paid to such Covered Person in accordance with any of such clauses as indemnification if such Covered Person is subsequently adjudicated by a court of competent jurisdiction to have been liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of such Covered Person's office. Section 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of indemnification provided by this Article VI shall not be exclusive of or affect any other rights to which any such Covered Person may be entitled. As used in this Article VI, "Covered Person" shall include such person's heirs, executors, and administrators; an "interested Covered Person" is one against whom the action, suits, or other proceeding in 17 question or another action, suit, or other proceeding on the same or similar grounds is then or has been pending or threatened; and a "disinterested" person is a person against whom none of such actions, suits or other proceedings or another action, suit or other proceeding on the same or similar grounds is then or has been pending or threatened. Nothing contained in this Article shall affect any rights to indemnification to which personnel of the Trust, other than Trustees and officers, and other persons may be entitled by contract or otherwise under law, nor the power of the Trust to purchase and maintain liability insurance on behalf of any such person. Section 6.7 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person dealing with the Trustees shall be bound to make any inquiry concerning the validity of any transaction made or to be made by the Trustees or to see to the application of any payments made or property transferred to the Trust or upon its order. Section 6.8 DISCRETION. Whenever in this Declaration of Trust the Trustees are permitted or required to make a decision (a) in their "sole discretion," "sole and absolute discretion," "full discretion," or "discretion," or under a similar grant of authority or latitude, the Trustees shall be entitled to consider only such interests and factors as they desire, whether reasonable or unreasonable, and may consider their own interests, and shall have no duty or obligation to give any consideration to any interests of or factors affecting the Trust or the Shareholders, or (b) in their "good faith" or under another express standard, the Trustees shall act under such express standard and shall not be subject to any other or different standards imposed by this Declaration of Trust or by law or any other agreement contemplated herein. Each Shareholder and Trustee hereby agrees that any standard of care or duty imposed in this Declaration of Trust or any other agreement contemplated herein or under the Act or any other applicable law, rule or regulation shall be modified, waived, or limited in each case as required to permit the Trustees to act under this Declaration of Trust or any other agreement contemplated herein and to make any decision pursuant to the authority prescribed in this Declaration of Trust. ARTICLE VII MISCELLANEOUS Section 7.1 DURATION AND TERMINATION OF TRUST. Unless terminated as provided herein, the Trust shall continue without limitation of time and, without limiting the generality of the foregoing, no change, alteration or modification with respect to any Sub-Trust or class thereof shall operate to terminate the Trust. The Trust may be terminated at any time by a Majority of the Outstanding Voting Shares of the Trust or by the Trustees by written notice to the Shareholders. Upon termination, after paying or otherwise providing for all charges, taxes, expenses and liabilities, whether due to accrued or anticipated as may be determined by the Trustees, the Trust shall in accordance with such procedures as the Trustees consider appropriate reduce the remaining assets to distributable form in cash, securities or other property, or any combination thereof, and distribute the proceeds to the Shareholders, in conformity with the provisions of subsection (d) of Section 4.2. Section 7.2 REORGANIZATION. The Trustees may sell, convey, merge, and transfer the assets of the Trust, or the assets belonging to any one or more Sub-Trusts, to another trust, partnership, association, or corporation organized under the laws of any state of the United States, or to the Trust to be held as assets belonging to another Sub-Trust of the Trust in exchange for cash, shares or other securities (including, in the case of a transfer to another Sub-Trust of the Trust, Shares of such other Sub-Trust or any class thereof) with such transfer either (1) being made subject to, or with the assumption by the transferee of, the liabilities belonging to each Sub-Trust the assets of which are so transferred, or (2) not being made subject to, or not with the assumption of, such liabilities; provided, however, that no assets belonging to any particular Sub-Trust shall be so transferred unless the terms of such transfer shall have first been approved at a meeting called for the purpose by the affirmative vote of the holders of a Majority of the Outstanding Voting Shares of that Sub- 18 Trust. Following such transfer, the Trustees shall distribute such cash, shares, or other securities among the Shareholders of the Sub-Trust (taking into account the differences among the classes of Shares thereof, if any) the assets belonging to which have been so transferred; and if all of the assets of the Trust have been so transferred, the Trust shall be terminated. The Trust, or any one or more Sub-Trusts, may either as the successor, survivor, or non-survivor, (1) consolidate with one or more other trusts, partnerships, limited liability companies, associations, or corporations organized under the laws of the State of Delaware or any other state of the United States, to form a new consolidated trust, partnership, association or, corporation under the laws of which any one of the constituent entities is organized, or (2) merge into or transfer a substantial portion of its assets to one or more other trusts, partnerships, associations, or corporations organized under the laws of the State of Delaware or any other state of the United States, or have one or more such trusts, partnerships, associations, or corporations merged into or transfer a substantial portion of its assets to it, any such consolidation as are specified in an agreement and plan of reorganization entered into by the Trust, or one or more Sub-Trusts as the case may be, in connection therewith. Any such consolidation, merger or transfer shall require the affirmative vote of the holders of a Majority of the Outstanding Voting Shares of the Trust (or each Sub-Trust affected thereby, as the case may be), except that such affirmative vote of the holders of Shares shall not be required if the Trust (or Sub-Trust affected thereby, as the case may be) shall be the survivor of such consolidation or merger or transferee of such assets. Section 7.3 AMENDMENTS. All rights granted to the Shareholders under this Declaration of Trust are granted subject to the reservation of the right to amend this Declaration of Trust as herein provided, except that no amendment shall repeal the limitations on personal liability of any Shareholder or Trustee or repeal the prohibition of assessment upon the Shareholders without the express consent of each Shareholder or Trustee involved. Subject to the foregoing, the provisions of this Declaration of Trust (whether or not related to the rights of Shareholders) may be amended at any time, so long as such amendment does not adversely affect the rights of any Shareholder with respect to which such amendment is or purports to be applicable and so long as such amendment is not in contravention of applicable law, including the 1940 Act, by an instrument in writing signed by a majority of the then Trustees (or by an officer of the Trust pursuant to the vote of a majority of such Trustees). Any amendment to this Declaration of Trust that adversely affects the rights of Shareholders may be adopted at any time by an instrument in writing signed by a majority of the then Trustees (or by an officer of the Trust pursuant to a vote of a majority of such Trustees) when authorized to do so by the vote in accordance with subsection (e) of Section 4.2 of Shareholders holding a majority of the Shares entitled to vote. Without limiting the generality of the foregoing, amendments having the purposes of changing the name of the Trust or any Sub-Trust or of supplying any omission, curing or curing, correcting or supplementing any defective or inconsistent provision contained herein shall not require authorization by Shareholder vote. Subject to the provisions of this Section 7.3, any amendment shall be effective as provided in the instrument containing the terms of such amendment or, if there is no provision therein with respect to effectiveness, upon the execution of such instrument and of a certificate (which may be a part of such instrument) executed by a Trustee or officer of the Trust to the effect that such amendment has been duly adopted. Section 7.4 FILING OF COPIES; REFERENCES; HEADINGS. The original or a copy of this instrument and of each amendment hereto shall be kept at the office of the Trust where it may be inspected by any Shareholder. Anyone dealing with the Trust may rely on a certificate by an officer of the Trust as to whether or not any such amendments have been made, as to the identities of the Trustees and officers, and as to any matters in connection with the Trust hereunder; and, with the same effect as if it were the original, may rely on a copy certified by an officer of the Trust to be a copy of this instrument or of any such amendments. In this instrument and in any such amendment, references to this instrument, and all expressions like "herein", "hereof", and "hereunder" shall be deemed to refer to this instrument as a whole as the same may be amended or affected by any such amendments. The masculine gender shall include the feminine and neuter genders. Headings are placed herein for convenience of reference only and shall not be taken as a part hereof or control or affect the meaning, construction, or effect of this instrument. This instrument may be executed in any number of counterparts each of which shall be deemed an original. 19 Section 7.5 APPLICABLE LAW. This Declaration of Trust is created under and is to be governed by the State of Delaware. The Trust shall be of the type referred to in Section 3801 of the Delaware Business Trust Act and of the type commonly called a business trust, and without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily exercised by such a trust. Section 7.6 REGISTERED AGENT. Corporation Service Company is hereby designated as the initial registered agent for service of process on the Trust in Delaware. The address of the registered office of the Trust in the State of Delaware is 1013 Centre Road, in the City of Wilmington, County of New Castle 19805. Section 7.7 INTEGRATION. This Declaration of Trust constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto. IN WITNESS WHEREOF, the undersigned hereunto set their hand and seal in Boston, Massachusetts for themselves and their assigns, as of the day and year first above written. /s/ Norton H. Reamer -------------------- Norton H. Reamer /s/ John T. Bennett, Jr. ------------------------ John T. Bennett, Jr. /s/ J. Edward Day ----------------- J. Edward Day /s/ Philip D. English --------------------- Philip D. English /s/ William A. Humenuk ---------------------- William A. Humenuk /s/ Robert B. Russell, II ------------------------- Robert B. Russell, II /s/ Peter M .Whitman -------------------- Peter M. Whitman 20 The foregoing instrument was acknowledged before me this 26th day of April, 1994 by _______________of Boston, Massachusetts and _____________ of Boston, Massachusetts. Notary Public [Notarial Seal] My commission expires: 21 EX-99.A.2 3 CERTIFICATE OF TRUST Exhibit A.2. STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 05/18/1994 944088394 2403833 CERTIFICATE OF TRUST OF THE REGIS FUND II This Certificate of Trust of The Regis Fund II (the "Trust"), dated April 26, 1994, is filed in accordance with the provisions of the Delaware Business Trust Act (12 Del. C. Section 3801 et seq.) and sets forth the following: FIRST: The name of the business trust formed hereby is The Regis Fund II. SECOND: The business address of the registered office of the Trust in the State of Delaware is 1013 Centre Road, in the City of Wilmington, County of New Castle, 19805. The name of the Trust's registered agent at that address is Corporation Service Company. THIRD: This Certificate of Trust shall be effective upon the date and time of filing. FOURTH: Series Trust. Notice is hereby given that pursuant to Section 3804 of the Delaware Business Trust Act, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series of the Trust shall be enforceable against the assets of such series only and not against the assets of the Trust generally. The Trust will be a registered investment company under the Investment Company Act of 1940, as amended. IN WITNESS WHEREOF, the undersigned, being the Chairman of the Board of Trustees of the Trust, has executed this Certificate of Trust in Boston, Massachusetts as of the date first written above. /s/ Norton H. Reamer ---------------------------------- Norton H. Reamer -2- EX-99.A.3 4 CERTIFICATE OF AMENDMENT TO CERT. OF TRUST Exhibit A.3. CERTIFICATE OF AMENDMENT TO CERTIFICATE OF TRUST OF THE REGIS FUND II Pursuant to Sections 3810(b)(1) and 3811(a)(2) of the Delaware Business Trust Act, as amended, the undersigned hereby certifies that: 1. The name of the business trust is THE REGIS FUND II (the "Trust"). 2. Article FIRST of the Certificate of Trust of the Trust shall be amended to provide as follows: FIRST: The name of the business trust is "UAM FUNDS TRUST." 3. The effective date of this Certificate of Amendment is October 31, 1995. IN WITNESS WHEREOF, the undersigned, being a trustee of the Trust, has duly executed this Certificate of Amendment this 26th day of October, 1995. THE REGIS FUND II /s/ Norton H. Reamer Norton H. Reamer, Trustee STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 10/31/1995 950251251 - 2403833 -3- EX-99.B 5 BY-LAWS EXHIBIT B. BY-LAWS OF THE REGIS FUND II ARTICLE 1 --------- Agreement and Declaration of Trust and Principal Office 1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject to the Agreement and Declaration of Trust, as from time to time in effect ("Declaration of Trust"), of The Regis Fund II, the Delaware business trust established by the Declaration of Trust (the "Trust"). 1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust shall be located at One International Place, Boston, Massachusetts 02110. ARTICLE 2 --------- MEETING OF TRUSTEES 2.1 REGULAR MEETINGS. Regular meetings of the Trustees may be held without call or notice at such places either within or without the State of Delaware and at such times as the Trustees may from time to time determine, provided that notice of the first regular meeting following any such determination shall be given to absent Trustees. 2.2 SPECIAL MEETINGS. Special meetings of the Trustees may be held at any time and at any place designated in the call of the meeting when called by the Chairman of the Board, the President or the Treasurer or by two or more Trustees, sufficient notice thereof being given to each Trustee by the Secretary or an Assistant Secretary or by the officer or the Trustees calling the meeting. 2.3 NOTICE. It shall be sufficient notice to a Trustee of a special meeting to send notice by mail at least forty-eight hours or by telegram at least twenty- four hours before the meeting addressed to the Trustee at his or her usual or last known business or residence address or to give notice to him or her in person or by telephone at least twenty-four hours before the meeting. Notice of a meeting need not be given to any Trustee if a written waiver of notice, executed by him or her before or after the meeting, is filed with the records of the meeting, or to any Trustee who attends the meeting without protesting prior thereto or at its commencement the lack of notice to him or her. Neither notice of a meeting nor a waiver of a notice need specify the purposes of the meeting. 2.4 QUORUM; ADJOURNMENT: VOTE REQUIRED FOR ACTION. At any meeting of the Trustees a majority of the Trustees then in office shall constitute a quorum. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of Trustees, if any action taken is approved by a majority of the required quorum for such meeting. Any meeting may be adjourned from time to time by a majority of the votes cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice. At the adjourned meeting, the Trustees may transact any business which might have been transacted at the original meeting. Except in cases where 1 the Declaration of Trust or these By-Laws otherwise provide, the vote of a majority of the Trustees present at a meeting at which a quorum is present shall be the act of the Trustees. 2.5 ACTION BY WRITING. Except as required by law, any action required or permitted to be taken at any meeting of the Trustees may be taken without a meeting if a majority of the Trustees (or such larger proportion thereof as shall be required by any express provision of the Declaration of Trust or these By-Laws) consent to the action in writing and such written consents are filed with the records of the meeting of Trustees. Such consent shall be treated for all purposes as a vote taken at a meeting of Trustees. 2.6 PARTICIPATION BY COMMUNICATIONS EQUIPMENT. One or more of the Trustees or of any committee of the Trustees may participate in a meeting thereof by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting. ARTICLE 3 --------- Officers 3.1 ENUMERATION; QUALIFICATION. The officers of the Trust shall be a Chairman of the Board, a President, a Treasurer, a Secretary and such other officers, including Vice Presidents, if any, as the Trustees from time to time may in their discretion elect. The Trust may also have such agents as the Trustees from time to time may in their discretion appoint. The Chairman of the Board shall be a Trustee and may, but need not be, a beneficial owner of the Trust (a "Shareholder'); and any other officer may be but none need be a Trustee or Shareholder. Any two or more offices may be held by the same person. 3.2 ELECTION; TENURE. The Chairman of the Board, the President, the Treasurer, the Secretary and such other officers as the Trustees may in their discretion from time to time elect shall hold office until their respective successors are chosen and qualified, or in each case until he or she sooner dies, resigns, is removed or becomes disqualified. Each officer shall hold office and each agent shall retain authority at the pleasure of the Trustees. 3.3 POWERS. Subject to the other provisions of these By-Laws, each officer shall have, in addition to the duties and powers herein and in the Declaration of Trust set forth, such duties and powers as are commonly incident to the office occupied by him or her as if the Trust were organized as a Delaware business corporation and such other duties and powers as the Trustees may from time to time designate. 3.4 CHAIRMAN. Unless the Trustees otherwise provide, the Chairman of the Board, shall preside at all meetings of Trustees and exercise and perform such other powers and duties as may be from time to time assigned to him or her by the Trustees. 3.5 PRESIDENT. Unless otherwise provided by the Trustees, the President shall be the Chief Executive Officer of the Trust and shall, subject to the control of the Board of Trustees, have general supervision, direction and control of the business of the Trust. The President shall preside at all meetings of Shareholders and in the absence of the Chairman of the Board at all meetings of the Board of Trustees. 3.6 VICE PRESIDENT. The Vice President, or if there be more than one Vice President, the Vice Presidents in the order determined by the Trustees (or if there be no such determination, then in the order of their election) shall in the absence of the President or in the event of his or her inability or refusal to act, perform the duties of the President, and when so acting, shall have all the powers of and be subject to 2 all the restrictions upon the President. The Vice Presidents shall perform such other duties and have such other powers as the Trustees may from time to time prescribe. 3.7 TREASURER. The Treasurer shall be the chief financial and accounting officer of the Trust, and shall, subject to the provisions of the Declaration of Trust and to any arrangement made by the Trustees with a custodian, investment adviser or manager, or transfer, shareholder servicing or similar agent, be in charge of the valuable papers, books of account and accounting records of the Trust, and shall have such other duties and powers as may be designated from time to time by the Trustees or by the President. 3.8 ASSISTANT TREASURER. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Trustees (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Trustees may from time to time prescribe. 3.9 SECRETARY. The Secretary shall record all proceedings of the Shareholders and the Trustees in books to be kept therefor, which books or a copy thereof shall be kept at the principal office of the Trust. In the absence of the Secretary from any meeting of the Shareholders or Trustees, an assistant secretary, or if there be none or if he or she is absent, a temporary secretary chosen at such meeting shall record the proceedings thereof in the aforesaid books. The Secretary shall have such other duties and powers as the Trustees may from time to time prescribe. 3.10 ASSISTANT SECRETARY. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Trustees (or if there be no determination, then in the order of their election), shall, in the absence of the Secretary or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Trustees may from time to time prescribe. 3.11 RESIGNATIONS AND REMOVALS. Any Trustee or officer may resign at any time by written instrument signed by him or her and delivered to the Chairman, the Vice Chairman, the President or the Secretary or to a meeting of the Trustees. Such resignation shall be effective upon receipt unless specified to be effective at some other time. The Trustees may remove any officer elected by them with or without cause. Except to the extent expressly provided in a written agreement with the Trust, no Trustee or officer resigning and no officer removed shall have any right to any compensation for any period following his or her resignation or removal, or any right to damages on account of such removal. ARTICLE 4 --------- Committees 4.1 GENERAL. The Trustees, by vote of a majority of the Trustees then in office, may elect from their number an Executive Committee, Compensation Committee, Audit Committee and Nomination Committee each of which shall consist of two or more of the Trustee of the Trust which committee shall have and may exercise some or all of the powers and authority of the Board with respect to all matters except those which by law, by the Declaration of Trust, or by these By-Laws may not be delegated. 4.2 OTHER COMMITTEES OF THE BOARD. The Board of Trustees may from time to time, by resolution adopted by a majority of the whole Board, designate one or more other committees of the Board, each such committee to consist of two or more Trustees and to have such powers and duties as the Board of Trustees may, by resolution, prescribe. 3 4.3 LIMITATION OF COMMITTEE POWERS. No committee of the Board shall have power or authority to: (a) recommend to shareholders any action requiring authorization of shareholders pursuant to statute or the Agreement and Declaration of Trust; (b) approve or terminate any contract with an investment adviser or principal underwriter, as such terms are defined in the 1940 Act, or take any other action required to be taken by the Board of Trustees by the 1940 Act; (c) amend or repeal these By-laws or adopt new By-laws; (d) declare dividends or other distributions or issue capital stock of the Trust; and (e) approve any merger or share exchange which does not require shareholder approval. 4.4 GENERAL. One-third, but not less than two members, of the members of any committee shall be present in person at any meeting of such committee in order to constitute a quorum for the transaction of business at such meeting, and the act of a majority present shall be the act of such committee. The Board may designate a chairman of any committee and such chairman or any two members of any committee may fix the time and place of its meetings unless the Board shall otherwise provide. In the absence or disqualification of any member or any committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may unanimously appoint another member of the Board of Trustees to act at the meeting in the place of any such absent or disqualified member. The Board shall have the power at any time to change the membership of any committee, to fill all vacancies, to designate alternate members, to replace any absent or disqualified member, or to dissolve any such committee. All committees shall keep written minutes of their proceedings and shall report such minutes to the Board. All such proceedings shall be subject to revision or alteration by the Board; provided, however, that third parties shall not be prejudiced by such revision or alteration. ARTICLE 5 --------- Reports 5.1 GENERAL. The Trustees and officers shall render reports at the time and in the manner required by the Declaration of Trust or any applicable law. Officers and Committees shall render such additional reports as they may deem desirable or as may from time to time be required by the Trustees. ARTICLE 6 --------- Fiscal Year 6.1 GENERAL. The fiscal year of the Trust shall be fixed by resolution of the Trustees. 4 ARTICLE 7 --------- Seal 7.1 GENERAL. The seal of the Trust shall consist of a flat-faced die with the word "Delaware", together with the name of the Trust and the year of its organization cut or engraved thereon, but, unless otherwise required by the Trustees, the seal shall not be necessary to be placed on, and its absence shall not impair the validity of, any document, instrument or other paper executed and delivered by or on behalf of the Trust. ARTICLE 8 --------- Execution of Papers 8.1 GENERAL. Except as the Trustees may generally or in particular cases authorize the execution thereof in some other manner, all deeds, leases, contracts, notes and other obligations made by the Trustees shall be signed by the President, any Vice President or by the Treasurer or such other officers or agents as shall be designated for that purpose by a vote of the Trustees. ARTICLE 9 --------- Issuance of Shares Certificates 9.1 SHARE CERTIFICATES. In lieu of issuing certificates for shares of the Trust, the Trustees or the transfer agent may either issue receipts therefor or may keep accounts upon the books of the Trust for the record holders of such shares, who shall in either case be deemed, for all purposes hereunder, to be the holders of certificates for such shares as if they had accepted such certificates and shall be held to have expressly assented and agreed to the terms hereof . The Trustees may at any time authorize the issuance of share certificates either in limited cases or to all Shareholders. In that event, a Shareholder may receive a certificate stating the number of shares owned by him or her, in such form as shall be prescribed from time to time by the Trustees. Such certificate shall be signed by the president or a vice president and by the treasurer or assistant treasurer. Such signatures may be facsimiles if the certificate is signed by a transfer agent, or by a registrar, other than a Trustee, officer or employee of the Trust. In case any officer who has signed or whose facsimile signature has been placed on such certificate shall cease to be such officer before such certificate is issued, it may be issued by the Trust with the same effect as if he or she were such officer at the time of its issue. 9.2 LOSS OF CERTIFICATES. In case of the alleged loss or destruction or the mutilation of a share certificate, a duplicate certificate may be issued in place thereof, upon such terms as the Trustees shall prescribe. The Trust may require the owner of the lost, destroyed or mutilated share certificate, or his or her legal representative, to give the Trust a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, destruction or mutilation of any such certificate or the issuance of such new certificate. 9.3 ISSUANCE OF NEW CERTIFICATE TO PLEDGEE. A pledgee of shares transferred as collateral security shall be entitled to a new certificate if the instrument of transfer substantially describes the debt or duty that is intended to be secured thereby. Such new certificate shall express on its face that it is held 5 as collateral security, and the name of the pledgor shall be stated thereon, who alone shall be liable as a Shareholder, and entitled to vote thereon. 9.4 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any time discontinue the issuance of share certificates and may, by written notice to each Shareholder, require the surrender of share certificates to the Trust for cancellation. Such surrender and cancellation shall not affect the ownership of shares in the Trust. ARTICLE 10 ---------- Dealings with Trustees and Officers 10.1 GENERAL. Any Trustee, officer or other agent of the Trust may acquire, own and dispose of shares of the Trust to the same extent as if he or she were not a Trustee, officer or agent; and the Trustees may accept subscriptions to shares or repurchase shares from any firm or company in which any Trustee, officer or other agent of the Trust may have an interest. ARTICLE 11 ---------- Amendments to the By-Laws 11.1 GENERAL. These By-Laws may be amended or repealed, by a majority of the Trustees then in office at any meeting of the Trustees, or by one or more writings signed by such a majority. 6 EX-99.C 6 FORM OF SPECIMEN SHARE CERTIFICATE EXHIBIT C.1. NUMBER SHARES [ ] [ ] UAM FUNDS TRUST [NAME OF PORTFOLIO] INSTITUTIONAL CLASS SHARES SHARES OF BENEFICIAL INTEREST, WITHOUT PAR VALUE CUSIP #: THIS CERTIFIES THAT SPECIMEN ORGANIZED UNDER THE LAWS OF THE STATE OF DELAWARE IS THE OWNER OF TRANSFERABLE ONLY ON THE BOOKS OF THE ABOVE TRUST BY THE HOLDER HEREOF IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED. THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE ISSUED AND SHALL BE HELD SUBJECT TO ALL OF THE PROVISIONS OF THE AGREEMENT AND DECLARATION OF TRUST OF UAM FUNDS TRUST TO ALL OF WHICH THE HOLDER BY ACCEPTANCE HEREOF ASSENTS. THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE TRANSFER AGENT. WITNESS, THE FACSIMILE SEAL OF UAM FUNDS TRUST AND THE SIGNATURES OF ITS DULY AUTHORIZED OFFICERS. DATED: COUNTERSIGNED AND REGISTERED: [___________ _________________________________________________________________] TRANSFER AGENT AND REGISTRAR SPECIMEN PRESIDENT TREASURER BY AUTHORIZED SIGNATURE 1 UAM FUNDS TRUST THE TRUST WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER UPON REQUEST A FULL STATEMENT OF THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS, QUALIFICATIONS, AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH CLASS WHICH THE PORTFOLIO IS AUTHORIZED TO ISSUE. SUCH REQUEST MAY BE MADE TO THE TRANSFER AGENT OF THE COMPANY AT ITS OFFICE IN BOSTON, MASSACHUSETTS. THE FOLLOWING ABBREVIATIONS, WHEN USED IN THE INSCRIPTION ON THE FACE OF THIS CERTIFICATE, SHALL BE CONSTRUED AS THOUGH THEY WERE WRITTEN OUT IN FULL ACCORDING TO APPLICABLE LAWS OR REGULATIONS. TEN COM - as tenants in common UNIF GIFT MIN ACT __________ Custodian _________ (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minor Act JT TEN - as joint tenants with right of survivorship and not as tenants in common ______________ (State) Additional abbreviations may also be used though not in the above list. FOR VALUE RECEIVED ____________ HEREBY SELL ASSIGN AND TRANSFER UNTO PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ------------------------------- - -------------------------------------------------------------------------------- - --------------------- - -------------------------------------------------------------------------------- - --------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE - -------------------------------------------------------------------------------- - --------------------- - -------------------------------------------------------------------------------- - --------------------- - -------------------------------------------------------------------------------- - --------------------- 2 SHARES REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT - -------------------------------------------------------------------------------- - --------------------- ATTORNEY TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN NAMED PORTFOLIO WITH FULL POWER OF SUBSTITUTION IN THE PREMISES. DATED ________________ 19___ SIGNATURE GUARANTEED ________________________________ ________________________________________________ (SIGNATURE OF SELLER MUST BE GUARANTEED) 3 NUMBER SHARES [ ] [ ] UAM FUNDS TRUST [NAME OF PORTFOLIO] INSTITUTIONAL SERVICE CLASS SHARES SHARES OF BENEFICIAL INTEREST, WITHOUT PAR VALUE CUSIP #: THIS CERTIFIES THAT SPECIMEN ORGANIZED UNDER THE LAWS OF THE STATE OF DELAWARE IS THE OWNER OF TRANSFERABLE ONLY ON THE BOOKS OF THE ABOVE TRUST BY THE HOLDER HEREOF IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED. THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE ISSUED AND SHALL BE HELD SUBJECT TO ALL OF THE PROVISIONS OF THE AGREEMENT AND DECLARATION OF TRUST OF UAM FUNDS TRUST TO ALL OF WHICH THE HOLDER BY ACCEPTANCE HEREOF ASSENTS. THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE TRANSFER AGENT. WITNESS, THE FACSIMILE SEAL OF UAM FUNDS TRUST AND THE SIGNATURES OF ITS DULY AUTHORIZED OFFICERS. DATED: COUNTERSIGNED AND REGISTERED: [______________ _________________________________________________________________] TRANSFER AGENT AND REGISTRAR SPECIMEN PRESIDENT TREASURER BY AUTHORIZED SIGNATURE 4 UAM FUNDS TRUST THE TRUST WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER UPON REQUEST A FULL STATEMENT OF THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS, QUALIFICATIONS, AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH CLASS WHICH THE PORTFOLIO IS AUTHORIZED TO ISSUE. SUCH REQUEST MAY BE MADE TO THE TRANSFER AGENT OF THE COMPANY AT ITS OFFICE IN BOSTON, MASSACHUSETTS. THE FOLLOWING ABBREVIATIONS, WHEN USED IN THE INSCRIPTION ON THE FACE OF THIS CERTIFICATE, SHALL BE CONSTRUED AS THOUGH THEY WERE WRITTEN OUT IN FULL ACCORDING TO APPLICABLE LAWS OR REGULATIONS. TEN COM - as tenants in common UNIF GIFT MIN ACT __________ Custodian __________ (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minor Act JT TEN - as joint tenants with right of survivorship and not as tenants in common ______________ (State) Additional abbreviations may also be used though not in the above list. FOR VALUE RECEIVED ____________ HEREBY SELL ASSIGN AND TRANSFER UNTO PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ------------------------------ - -------------------------------------------------------------------------------- __________________ - -------------------------------------------------------------------------------- - ------------------ PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE - -------------------------------------------------------------------------------- - ------------------ - -------------------------------------------------------------------------------- - ------------------ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - ------------------ 5 SHARES REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT - -------------------------------------------------------------------------------- - ------------------ ATTORNEY TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN NAMED PORTFOLIO WITH FULL POWER OF SUBSTITUTION IN THE PREMISES. DATED ________________ 19___ SIGNATURE GUARANTEED _________________________________ ________________________________________________ (SIGNATURE OF SELLER MUST BE GUARANTEED) 6 EX-99.C.2 7 BYLAWS OF THE REGIS FUND II Exhibit C.2. BYLAWS OF THE REGIS FUND II ARTICLE 9 --------- Issuance of Shares Certificates 9.1 SHARE CERTIFICATES. In lieu of issuing certificates for shares of the Trust, the Trustees or the transfer agent may either issue receipts therefor or may keep accounts upon the books of the Trust for the record holders of such shares, who shall in either case be deemed, for all purposes hereunder, to be the holders of certificates for such shares as if they had accepted such certificates and shall be held to have expressly assented and agreed to the terms hereof. The Trustees may at any time authorize the issuance of share certificates either in limited cases or to all Shareholders. In that event, a Shareholder may receive a certificate stating the number of shares owned by him or her, in such form as shall be prescribed from time to time by the Trustees. Such certificate shall be signed by the president or a vice president and by the treasurer or assistant treasurer. Such signatures may be facsimiles if the certificate is signed by a transfer agent, or by a registrar, other than a Trustee, officer or employee of the Trust. In case any officer who has signed or whose facsimile signature has been placed on such certificate shall cease to be such officer before such certificate is issued, it may be issued by the Trust with the same effect as if he or she were such officer at the time of its issue. 9.2 LOSS OF CERTIFICATES. In case of the alleged loss or destruction or the mutilation of a share certificate, a duplicate certificate may be issued in place thereof, upon such terms as the Trustees shall prescribe. The Trust may require the owner of the lost, destroyed or mutilated share certificate, or his or her legal representative, to give the Trust a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, destruction or mutilation of any such certificate or the issuance of such new certificate. 9.3 ISSUANCE OF NEW CERTIFICATE TO PLEDGEE. A pledgee of shares transferred as collateral security shall be entitled to a new certificate if the instrument of transfer substantially describes the debt or duty that is intended to be secured thereby. Such new certificate shall express on its face that it is held as collateral security, and the name of the pledgor shall be stated thereon, who alone shall be liable as a Shareholder, and entitled to vote thereon. 9.4 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any time discontinue the issuance of share certificates and may, by written notice to each Shareholder, require the surrender of share certificates to the Trust for cancellation. Such surrender and cancellation shall not affect the ownership of shares in the Trust. -2- EX-99.C.3 8 AGREEMENT AND DECLARATION OF TRUST Exhibit C.3. THE REGIS FUND II AGREEMENT AND DECLARATION OF TRUST April 26, 1994 AGREEMENT AND DECLARATION OF TRUST ARTICLE II PURPOSE OF TRUST The purposes of the Trust are (i) to operate as an investment company and to offer Shareholders of the Trust and each Sub-Trust of the Trust one or more investment programs primarily in securities and debt instruments, and (ii) to engage in such activities that are necessary, suitable, incidental, or convenient to the accomplishment of the foregoing. ARTICLE III THE TRUSTEES (c) ELECTION AND TERM. The Trustees shall be elected by the Shareholders of the Trust at a meeting of the Shareholders held prior to the effective date of the Registration Statement of the Trust under the 1940 Act, and the term of office of any Trustees in office before such election shall terminate at the time of such election. Each Trustee shall be a natural person and may, but need not be a Shareholder. Each Trustee, whether named above or hereafter becoming a Trustee, shall serve as a Trustee of the Trust and of each Sub-Trust hereunder during the lifetime of this Trust and until its termination as hereinafter provided except as such Trustee sooner dies, resigns, retires, or is removed or, if sooner, until the next meeting of Shareholders called for the purpose of electing Trustees and until the election and qualification of his successor. The Shareholders may fix the number of Trustees and elect Trustees at any meeting of Shareholders called by the Trustees for that purpose and to the extent required by applicable law, including paragraph (a) and (b) of Section 16 of the 1940 Act. Subject to Section 16(a) of the 1940 Act, the Trustees may elect successors and may, pursuant to Section 3.1(f) hereof, appoint Trustees to fill vacancies. ARTICLE IV SHARES (c) DIVIDENDS. Dividends and distributions on Shares of a particular Sub- Trust or any class thereof may be paid with such frequency as the Trustees may determine, which may be daily or otherwise pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, to the holders of Shares of that Sub-Trust or class, from such of the income and capital gains, accrued or realized, from the assets belonging to that Sub-Trust, or in the case of a class, belonging to that Sub-Trust and allocable to that class, as the Trustees may determine, after providing for actual and accrued liabilities belonging to that Sub-Trust or class. All dividends and distributions on Shares of a particular Sub-Trust or class thereof shall be distributed pro rata to the holders of Shares of that Sub-Trust or class in proportion to the number of Shares of that Sub-Trust or class held by such holders at the date and time of record established for the payment of such dividends or distributions, except that in connection with any dividend or distribution program or procedure the Trustees may determine that no dividend or distribution shall be payable on Shares as to which the Shareholder's purchase order and/or payment have not been received by the time or times established by the Trustees under such program or procedure. Such dividends and distributions may be made in cash or Shares of that Sub-Trust or class of a combination thereof as determined by the Trustees or pursuant to any program that the Trustees may have in effect at the time for the election by each Shareholder of the mode of the making of such dividend or distribution to that Shareholder. Any such dividend or distribution paid in Shares will be paid at the net asset value thereof as determined in accordance with subsection (h) of this Section 4.2. The Trustees shall have full discretion to determine which items shall be treated as income and which items as capital; and each such determination and allocation shall e conclusive and binding upon the Shareholders. (d) LIQUIDATION. In the event of the liquidation or dissolution of the Trust, subject to Section 7.1 hereof, the holders of Shares of each Sub-Trust or any class thereof that has been established and designated shall be entitled to receive, when and as declared by the Trustees, the excess of the assets belonging to that Sub-Trust, or in the case of a class, belonging to that Sub- Trust and allocable to that class, over the liabilities belonging to that Sub- Trust or class. The assets so distributable to the holders of Shares of any particular Sub-Trust or class thereof shall be distributed among such holders in proportion to the number of Shares of that Sub-Trust or class thereof held by them and recorded on the books of the Trust. The liquidation of any particular Sub-Trust or class thereof may be authorized at any time by vote of a majority of the Trustees then in office. (e) VOTING. On each matter submitted to a vote of the Shareholders, each holder of a Share shall be entitled to one vote for each whole Share standing in his name on the books of the Trust irrespective of the Series thereof or class thereof and all Shares of all Series and classes thereof shall vote together as a single class; provided, however, that as to any matter (i) with respect to which a separate vote of one or more Series or classes thereof is required by the 1940 Act or the provisions of the writing establishing and designating the Sub-Trust or class, such requirements as to a separate vote by such Series or class thereof shall apply in lieu of all Shares of all Series and classes thereof voting together; and (ii) as to any matter which affects the interests of one or more particular Series or classes thereof, only the holders of Shares of the one or more affected Series or classes shall be entitled to vote, and each such Series or class shall vote as a separate class. (f) REDEMPTION BY SHAREHOLDER. Each holder of Shares of a particular Sub- Trust or any class thereof shall have the right at such times as may be permitted by the Trust to require the Trust to redeem all or any part of his Shares of that Sub-Trust or class thereof at a redemption price equal to the net asset value per Share of that Sub-Trust or class thereof next determined in accordance with subsection (h) of this Section 4.2 after the Shares are properly tendered for redemption, subject to any contingent deferred sales charge or redemption charge in effect at the time of redemption. Payment of the redemption price shall be in cash; provided, however, that if the Trustees determine, which determination shall be conclusive, that conditions -2- exist which make payment wholly in cash unwise or undesirable, the Trust may, subject to the requirements of the 1940 Act, make payment wholly or partly in securities or other assets belonging to the Sub-Trust of which the Shares being redeemed are part at the value of such securities or assets used in such determination of net asset value. Notwithstanding the foregoing, the Trust may postpone payment of the redemption price and may suspend the right of the holders of Shares of any Sub- Trust or class thereof to require the Trust to redeem Shares of that Sub-Trust during any period or at any time when and to the extent permissible under the 1940 Act. (g) REDEMPTION BY TRUST. Each Share of each Sub-Trust or class thereof that has been established and designated is subject to redemption by the Trust at the redemption price which would be applicable if such Share was then being redeemed by the Shareholder pursuant to subsection (f) of this Section 4.2: (i) at any time, in the sole discretion of the Trustees, or (ii) upon such other conditions as may from time to time be determined by the Trustees and set forth in the then current Prospectus or Statement of Additional Information of the Trust. Upon such redemption the holders the Shares so redeemed shall have no further right with respect thereto other than to receive payment of such redemption price. (h) NET ASSET VALUE. The net asset value per Share of any Sub-Trust shall be (i) in the case of a Sub-Trust whose Shares are not divided into classes, the quotient obtained by dividing the value of the net assets of that Sub-Trust (being the value of the assets belonging to that Sub-Trust less the liabilities belonging to that Sub-Trust) by the total number of Shares of that Sub-Trust outstanding, and (ii) in the case of a class of Shares of a Sub-Trust whose Shares are divided into classes, the quotient obtained by dividing the value of the net assets of that Sub-Trust allocable to such class (being the value of the assets belonging to that Sub-Trust allocable to such class less the liabilities belonging to such class) by the total number of Shares of such class outstanding; all determined in accordance with the methods and procedures, including without limitation those with respect to rounding, established by the Trustees from time to time. The Trustees may determine to maintain the net asset value per Share of any Sub-Trust at a designated constant dollar amount and in connection therewith may adopt procedures not inconsistent with the 1940 Act for the continuing declarations of income attributable to that Sub-Trust as dividend payable in additional shares of the Sub-Trust at the designated constant dollar amount and for the handling of any losses attributable to that Sub-Trust. Such procedures may provide that in the event of any loss each Shareholder shall be deemed to have contributed to the capital of the Trust attributable to that Sub-Trust his pro rata portion of the total number of Shares required to be canceled in order to permit the net asset value per Share of that Sub-Trust to be maintained, after reflecting such loss, at the designated constant dollar amount. Each Shareholder of the Trust shall be deemed to have agreed, by his investment in any Sub-Trust with respect to which the Trustees shall have adopted any such procedure, to make the contribution referred to in the preceding sentence in the event of any such loss. (i) TRANSFER. All Shares of each particular Sub-Trust or class thereof shall be transferable, but transfers of Shares of a particular Sub-Trust or class thereof will be recorded on the Share transfer records of the Trust applicable to that Sub-Trust or class only at such times as -3- Shareholders shall have the right to require the Trust to redeem Shares of that Sub-Trust or class and at such other times as may be permitted by the Trustees. (j) EQUALITY. Except as provided herein or in the instrument designating and establishing any class of Shares or any Sub-Trust, all Shares of each particular Sub-Trust or class thereof shall represent an equal proportionate interest in the assets belonging to that Sub-Trust, or in the case of a class, belonging to that Sub-Trust and allocable to that class, subject to the liabilities belonging to that Sub-Trust or class and each share of any particular Sub-Trust or class shall be equal to each other Share of that Sub- Trust or class; but the provisions of this sentence shall not restrict any distinctions permissible under subsection (C) of this Section 4.2 that may exist with respect to dividends and distributions on Shares of the same Sub-Trust or class. The Trustees may from time to time divide or combine the Shares of any particular Sub-Trust or class into a greater or lesser number of Shares of that Sub-Trust or class without thereby changing the proportionate beneficial interest in the assets belonging to that Sub-Trust or class or in any way affecting the rights of Shares of any other Sub-Trust or class. (k) FRACTIONS. Any fractional Share of any Sub-Trust or class, if any such fractional Share is outstanding, shall carry proportionately all the rights and obligations of a whole Share of that Sub-Trust or class, including rights and obligations with respect to voting, receipt of dividends and distributions, redemption of Shares, and liquidation of the Trust. (m) CLASS DIFFERENCES. Subject to Section 4.1, the relative rights and preferences of the classes of any Sub-Trust may differ in such other respects as the Trustees may determine to be appropriate in their sole discretion, provided that such differences are set forth in the instrument establishing and designating such classes and executed by a majority of the Trustees (or by an instrument executed by an officer of the Trust pursuant to a vote of a majority of the Trustees). Section 4.3 OWNERSHIP OF SHARES. The ownership of Shares shall be recorded on the books of the Trust or of a transfer or similar agent for the Trust, which books shall be maintained separately for the Shares of each Sub- Trust and each class thereof that has been established and designated. No certificates certifying the ownership of Shares need be issued except as the Trustees may otherwise determine from time to time. The trustees may make such rules as they consider appropriate for the issuance of Share certificates, the use of facsimile signature, the transfer of Shares and similar matters. The record books of the Trust as kept by the Trust or any transfer or similar agent, as the case may be, shall be conclusive as to who are the Shareholders and as to the number of Shares of each Sub-Trust and class thereof held from time to time by each such Shareholder. Section 4.5 NO PRE-EMPTIVE RIGHTS. Shareholders shall have no pre-emptive or other rights to subscribe to any additional Shares or other securities issued by the Trust or any Sub-Trust, except as the Trustees in their sole discretion shall have determined by resolution. Section 4.6 STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. Shares shall be deemed to be personal property giving only the rights provided in this Declaration of Trust. Every Shareholder by virtue of acquiring Shares shall be held to have expressly assented -4- and agreed to the terms hereof and to have become a party hereto. The death, incapacity, dissolution, termination, or bankruptcy of a Shareholder during the continuance of the Trust shall not operate to dissolve or terminate the Trust or any Sub-Trust thereof nor entitle the representative of such Shareholder to an accounting or to take any action in court or elsewhere against the Trust or the Trustees, but only to the rights of such Shareholder under this Trust. Ownership of Shares shall not entitle the Shareholder to any title in or to the whole or any part of the Trust property or right to call for a partition or division of the same or for an accounting, nor shall the ownership of Shares constitute the Shareholders partners. Neither the Trust nor the Trustees nor any officer, employee or agent of the Trust shall have any power to bind personally any Shareholder, nor except as specifically provided herein to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time personally agree to pay. Section 4.7 NO APPRAISAL RIGHTS. Shareholders shall have no right to demand payment for their shares or to any other rights of dissenting shareholders in the event the Trust participates in any transaction which would give rise to appraisal or dissenters' rights by a shareholder of a corporation organized under the General Corporation Law of the State of Delaware, or otherwise. ARTICLE V SHAREHOLDERS' VOTING POWERS AND MEETINGS Section 5.1 VOTING POWERS. The Shareholders shall have power to vote only (i) for the election of Trustees as provided in Section 3.1, (ii) with respect to any contract with a Contracting Party as provided in Section 3.3 as to which Shareholder approval is required by the 1940 Act, (iii) with respect to any termination or reorganization of the Trust to the extent and as provided in Sections 7.1 and 7.2, (iv) with respect to any amendment of this Declaration of Trust to the extent and as provided in Section 7.3, and (v) with respect to such additional matters relating to the Trust as may be required by the 1940 Act, this Declaration of Trust, the By-Laws or any registration of the Trust with the Commission (or any successor agency) or any state, or as the Trustees may consider necessary or desirable. There shall be no cumulative voting in the election of Trustees. Shares may be voted in person or by proxy. Proxies may be given orally or in writing or pursuant to any computerized or mechanical data gathering process specifically approved by the Trustees. A proxy with respect to Shares held in the name of two or more persons shall be valid if executed by any one of them unless at or prior to exercise of the proxy the Trust receives a specific written notice to the contrary from any one of them. A proxy purporting to be executed by or on behalf of a Shareholder shall be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity shall rest on the challenger. At any time when no Shares of a Series are outstanding, the Trustees may exercise all rights of Shareholders of that Series with respect to matters affecting that Series and may take any actions required by law, this Declaration of Trust, or the By-Laws to be taken by Shareholders. -5- Section 5.2 MEETINGS. No annual or regular meeting of Shareholders is required. Special meetings of Shareholders may be called by the Trustees from time to time for the purpose of electing Trustees as herein provided and for such other purposes as may be prescribed by law, this Declaration of Trust or the By-Laws, or for taking action upon any other matter deemed by the Trustees to be necessary or desirable. Written notice of any meeting of Shareholders shall be given or caused to be given by the Trustees by mailing such notice at least seven days before such meeting, postage prepaid, stating the time, place, and purpose of the meeting, to each Shareholder at the Shareholder's address as it appears on the record of the Trust. Whenever notice of a meeting is required to be given to a Shareholder under the Declaration of Trustee or the By-Laws, a written waiver thereof, executed before or after the meeting by such Shareholder or his attorney thereunto authorized and filed with the records of the meeting, shall be deemed equivalent to such notice. Section 5.3 RECORD DATES. For the purpose of determining the Shareholders who are entitled to vote or act at any meeting or any adjournment thereof, or who are entitled to participate in any dividend or distribution, or for the purpose of any other action, the Trustees may from time to time close the transfer books for such period, not exceeding 30 days (except at or in connection with the termination of the Trust), as the Trustees may determine; or without closing the transfer books the Trustees may fix a date and time not more than 90 days prior to the date of any meeting of Shareholders or other action as the date and time of record for the determination of Shareholders entitled to vote at such meeting or any adjournment thereof or to be treated as a Shareholder of record for purposes of such other action, even though he has since that date and time disposed of his Shares, and no Shareholder becoming such after that date and time shall be so entitled to vote at such meeting or any adjournment thereof or to be treated as a Shareholder of record for purposes of such other action. Nothing in this section shall be construed as precluding the Trustees from setting different record dates for different Sub-Trusts. Section 5.4 QUORUM AND REQUIRED VOTE. Except as otherwise provided by the 1940 Act or other applicable law, thirty percent of the Shares entitled to vote shall be a quorum for the transaction of business at a Shareholders' meeting. Any meeting of shareholders, whether or not a quorum is present, may be adjourned from time to time by the majority of the Shares represented at the meeting, either in person or by proxy. Any adjourned session or sessions may be held, within a reasonable time after the date set for the original meeting without the necessity of notice of the adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which the adjournment is taken, unless the Trustees fix a new record date for the adjourned meeting. A majority of the Shares voted, at a meeting of which a quorum is present, shall decide any questions and a plurality shall elect a Trustee, except when a different vote is required or permitted by any provision of the 1940 Act or other applicable law or by this Declaration of Trust or the By-Laws. Section 5.5 ACTION BY WRITTEN CONSENT. Subject to the provisions of the 1940 Act and other applicable law, any action taken by Shareholders may be taken without a meeting if a majority of Shareholders entitled to vote on the matter (or such larger proportion thereof as shall be required by the 1940 Act or by any express provision of this Declaration of Trust or the By-Laws) consent to the action in writing and such written consents are filed with the record of the -6- meetings of Shareholders. Such consent shall be treated for all purposes as a vote taken at a meeting of Shareholders. Section 5.6 INSPECTION OF RECORDS. The records of the Trust shall be open to inspection by Shareholders to the same extent as is permitted stockholders of a Delaware corporation under the Delaware General Law. Section 5.7 ADDITIONAL PROVISIONS. The By-Laws may include further provisions for Shareholders' votes and meetings and related matters not inconsistent with the provisions hereof. ARTICLE VI LIMITATION OF LIABILITY; INDEMNIFICATION Section 6.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE. All persons extending credit to, contracting with or having any claim against the Trust shall look only to the assets of the Sub-Trust with which such person dealt for payment under such credit, contract or claim; and neither the Shareholders of any Sub-Trust nor the Trustees, nor any of the Trust's officers, employees or agents, whether past, present or future, nor any other Sub-Trust nor the Trustees, nor any of the Trust's officers, employees or agents, whether past, present or future, nor any other Sub-Trust shall be personally liable therefor. Every note, bond, contract, instrument, certificate, or undertaking and every act or thing whatsoever executed or done by or on behalf of the Trust, any Sub-Trust or the Trustees or any of them in connection with the Trust shall be conclusively deemed to have been executed or done only by or for the Trust (or the Sub-Trust) or the Trustees and not personally. The Trustees and the Trust's officers, employees and agents shall not be liable to the Trust or the Shareholders; provided however, that nothing in this Declaration of Trust shall protect any Trustee or officer, employee or agent against any liability to the Trust or the Shareholders to which such Trustee or officer, employee or agent would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee or of such officer, employee or agent. Every note, bond, contract, instrument, certificate, or undertaking made or issued by the Trustees or by any officers or officer shall give notice that the same was executed or made by or on behalf of the Trust or by them as Trustees or Trustee or as officers or officer and not individually and that the obligations of such instrument are not binding upon any of them or the Shareholders individually but are binding only upon the assets and property of the Trust, or the particular Sub-Trust in question, as the case may be, but the omission thereof shall not operate to bind any Trustees or Trustee or officers officer or Shareholders or Shareholder individually or otherwise invalidate any such note, bond, contract, instrument, certificate, or undertaking. Section 6.2 TRUSTEE'S GOOD FAITH ACTION; EXPERT ADVICE; NO BOND OR SURETY. The exercise by the Trustees of their powers and discretion hereunder shall be binding upon everyone interested. A Trustee shall be liable to the Trust and the Shareholders for his own -7- willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee, and for nothing else, and shall not be liable for errors of judgment or mistakes of fact or law. Subject to the foregoing, (a) the Trustees shall not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, consultant, adviser, administrator, distributor or principal underwriter, custodian or transfer, dividend disbursing, Shareholder servicing or accounting agent of the Trust, nor shall any Trustee be responsible for the act or omission of any other Trustee; (b) the Trustees may take advice of counsel or other experts with respect to the meaning and operation of this Declaration of Trust and their duties as Trustees, and shall be under no liability for any act or omission in accordance with such advice or for failing to follow such advice; and (c) in discharging their duties, the Trustees, when acting in good faith, shall be entitled to rely upon the books of account of the Trust and upon written reports made to the Trustees by any officer appointed by them, any independent public accountant, and (with respect to the subject matter of the contract involved) any officer partner, or responsible employee of a Contracting Party appointed by the Trustees pursuant to Section 3.3. The Trustees as such shall not be required to give any bond or surety or any other security for the performance of their duties. To the extent that, at law or in equity, a Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to a shareholder any such Trustee acting under this Declaration of Trust shall not be liable to the Trust or to any such Shareholder for the Trustee's good faith reliance on the provisions of this Declaration of Trust. The provisions of this Declaration of Trust, to the extent that they restrict the duties and liabilities of a Trustee otherwise existing at law or in equity, are agreed by the Shareholders to replace such other duties and liabilities of such Trustee. Section 6.3 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder (or former Shareholder) of any Sub-Trust or the Trust shall be charged or held to be personally liable for any obligation or liability of the Trust solely by reason of being or having been a Shareholder and not because of such Shareholder's acts or omissions or for some other reason, the Trust on behalf of said Sub-trust (upon proper and timely request by the Shareholder) shall assume the defense against such charge and satisfy any judgment thereon, and, to the fullest extent permitted by law, the Shareholder or former Shareholder (or his heirs, executors, administrators, or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the assets of said Sub-Trust estate to be held harmless from and indemnified against all loss and expense arising from such liability. ARTICLE VII MISCELLANEOUS Section 7.1 DURATION AND TERMINATION OF TRUST. Unless terminated as provided herein, the Trust shall continue without limitation of time and, without limiting the generality of the foregoing, no change, alteration or modification with respect to any Sub-Trust or class thereof shall operate to terminate the Trust. The Trust may be terminated at any time by a Majority of the Outstanding Voting Shares of the Trust or by the Trustees by written notice to the Shareholders. -8- Upon termination, after paying or otherwise providing for all charges, taxes, expenses and liabilities, whether due to accrued or anticipated as may be determined by the Trustees, the Trust shall in accordance with such procedures as the Trustees consider appropriate reduce the remaining assets to distributable form in cash, securities or other property, or any combination thereof, and distribute the proceeds to the Shareholders, in conformity with the provisions of subsection (d) of Section 42. Section 7.2 REORGANIZATION. The Trustees may sell, convey, merge, and transfer the assets of the Trust, or the assets belonging to any one or more Sub-Trusts, to another trust, partnership, association, or corporation organized under the laws of any state of the United States, or to the Trust to be held as assets belonging to another Sub-Trust of the Trust in exchange for cash, shares or other securities (including, in the case of a transfer to another Sub-Trust of the Trust, Shares of such other Sub-Trust or any class thereof) with such transfer either (1) being made subject to, or with the assumption by the transferee of, the liabilities belonging to each Sub-Trust the assets of which are so transferred, or (2) not being made subject to, or not with the assumption of, such liabilities; provided, however, that no assets belonging to any particular Sub-Trust shall be so transferred unless the terms of such transfer shall have first been approved at a meeting called for the purpose by the affirmative vote of the holders of a Majority of the Outstanding Voting Shares of that Sub-Trust. Following such transfer, the Trustees shall distribute such cash, shares, or other securities among the Shareholders of the Sub-Trust (taking into account the differences among the classes of Shares thereof, if any) the assets belonging to which have been so transferred; and if all of the assets of the Trust have been so transferred, the Trust shall be terminated. The Trust, or any one or more Sub-Trusts, may either as the successor, survivor, or non-survivor, (1) consolidate with one or more other trusts, partnerships, limited liability companies, associations, or corporations organized under the laws of the State of Delaware or any other state of the United States, to form a new consolidated trust, partnership, association or, corporation under the laws of which any one of the constituent entities is organized, or (2) merge into or transfer a substantial portion of its assets to one or more other trusts, partnerships, associations, or corporations organized under the laws of the State of Delaware or any other state of the United States, or have one or more such trusts, partnerships, associations, or corporations merged into or transfer a substantial portion of its assets to it, any such consolidation as are specified in an agreement and plan of reorganization entered into by the Trust, or one or more Sub-Trusts as the case may be, in connection therewith. Any such consolidation, merger or transfer shall require the affirmative vote of the holders of a Majority of the Outstanding Voting Shares of the Trust (or each Sub-Trust affected thereby, as the case may be), except that such affirmative vote of the holders of Shares shall not be required if the Trust (or Sub-Trust affected thereby, as the case may be) shall be the survivor of such consolidation or merger or transferee of such assets. Section 7.3 AMENDMENTS. All rights granted to the Shareholders under this Declaration of Trust are granted subject to the reservation of the right to amend this Declaration of Trust as herein provided, except that no amendment shall repeal the limitations on personal liability of any Shareholder or Trustee or repeal the prohibition of assessment upon the Shareholders without the express consent of each Shareholder or Trustee involved. Subject to the -9- foregoing, the provisions of this Declaration of Trust (whether or not related to the rights of Shareholders) may be amended at any time, so long as such amendment does not adversely affect the rights of any Shareholder with respect to which such amendment is or purports to be applicable and so long as such amendment is not in contravention of applicable law, including the 1940 Act, by an instrument in writing signed by a majority of the then Trustees (or by an officer of the Trust pursuant to the vote of a majority of such Trustees). Any amendment to this Declaration of Trust that adversely affects the rights of Shareholders may be adopted at any time by an instrument in writing signed by a majority of the then Trustees (or by an officer of the Trust pursuant to a vote of a majority of such Trustees) when authorized to do so by the vote in accordance with subsection (e) of Section 4.2 of Shareholders holding a majority of the Shares entitled to vote. Without limiting the generality of the foregoing, amendments having the purposes of changing the name of the Trust or any Sub-Trust or of supplying any omission, curing or curing, correcting or supplementing any defective or inconsistent provision contained herein shall not require authorization by Shareholder vote. Subject to the provisions of this Section 7.3, any amendment shall be effective as provided in the instrument containing the terms of such amendment or, if there is no provision therein with respect to effectiveness, upon the execution of such instrument and of a certificate (which may be a part of such instrument) executed by a Trustee or officer of the Trust to the effect that such amendment has been duly adopted. Section 7.4 FILING OF COPIES; REFERENCES; HEADINGS. The original or a copy of this instrument and of each amendment hereto shall be kept at the office of the Trust where it may be inspected by any Shareholder. Anyone dealing with the Trust may rely on a certificate by an officer of the Trust as to whether or not any such amendments have been made, as to the identities of the Trustees and officers, and as to any matters in connection with the Trust hereunder; and, with the same effect as if it were the original, may rely on a copy certified by an officer of the Trust to be a copy of this instrument or of any such amendments. In this instrument and in any such amendment, references to this instrument, and all expressions like "herein," "hereof," and "hereunder" shall be deemed to refer to this instrument as a whole as the same may be amended or affected by any such amendments. The masculine gender shall include the feminine and neuter genders. Headings are placed herein for convenience of reference only and shall not be taken as a part hereof or control or affect the meaning, construction, or effect of his instrument. This instrument may be executed in any number of counterparts each of which shall be deemed an original. -10- EX-99.E.1 9 DISTRIBUTION AGREEMENT EXHIBIT E.1. DISTRIBUTION AGREEMENT BETWEEN UAM FUND DISTRIBUTORS, INC. AND UAM FUNDS TRUST THIS AGREEMENT entered into the 20th day of June, 1996, by and between UAM FUNDS TRUST, a Delaware business trust, with an office located at 73 Tremont Street, Boston, Massachusetts 02108 (the "Fund"), and UAM FUND DISTRIBUTORS, INC., a Massachusetts corporation with its principal office located at 211 Congress Street, Boston, Massachusetts 02110 (the "Distributor"). W I T N E S S E T H: -------------------- In consideration of the mutual covenants and agreements of the parties hereto, the parties intending to be bound, mutually covenant and agree with each other as follows: 1. The Fund hereby appoints the distributor as agent of the Fund to effect the sale and public distribution of shares of the capital stock of the Fund. 2. The Fund shall compensate the distributor for its services rendered pursuant to the Fund's Rule 12b-1 Distribution Plan as adopted by various portfolios or classes of the portfolios of the Fund pursuant to Investment Company Act Rule 12b-1, a copy of which, as presently in force, is attached hereto. 3. The Distributor shall be the agent for the Fund for the sale of its shares either through dealers or otherwise and the Fund agrees that it will not sell any shares to any person except to fill orders for the shares received through the distributor; provided, however, that the foregoing shall not apply: (a) to shares issued or sold in connection with the merger or consolidation of any other investment company with the Fund or the acquisition by purchase or otherwise of all or substantially all of the assets of any investment company or substantially all of the outstanding shares of any such company by the Fund; (b) to shares which may be offered by the Fund to its stockholders for reinvestment of cash distributed from capital gains or net investment income of the Fund; (c) to shares which may be issued to shareholders of a series of the Fund who exercise any exchange privilege set forth in a Prospectus of the Fund; (d) to shares issued to existing stockholders as the result of a stock split; (e) to shares which the Fund otherwise may issue directly to registered stockholders pursuant to authority of its Board of Trustees; or (f) shares sold in any jurisdiction in which the Distributor is not registered as a broker-dealer. 4. The Fund hereby authorizes the Distributor to sell its shares in accordance with the following schedule of prices: 1 The applicable price will be the respective public offering price applicable to each portfolio of the Fund or class of a Portfolio of the Fund next effective after receipt and acceptance by the Fund of a proper offer to purchase, determined in accordance with the Agreement and Declaration of Trust, By-Laws, Registration Statement and Prospectus for the portfolios and classes of portfolios of the Fund. 5. Orders for the purchase of shares placed by the Distributor shall be subject to the provisions of Rule 2830 of the Conduct Rules of the NASD, the provisions of which are hereby incorporated by reference. 6. The Fund agrees to prepare and file registration statements with the Securities and Exchange Commission and the Securities Departments of various states and other jurisdictions in which the shares may be offered, at its own expense, and do such other things and to take such other actions as may be mutually agreed upon by and between the parties as shall be reasonably necessary in order to effect the registration and the sale of the Fund's shares. The Distributor shall cooperate with the Fund in the preparation and filing of applications for registration and qualification of the shares under applicable law. 7. With respect to the apportionment of costs between the Fund and the Distributor of activities with which both are concerned, the following will apply: (a) At its own expense, the Fund shall pay all costs incurred in the preparation and mailing of the Fund's current Prospectuses, Statements of Additional Information and reports to stockholders. (b) The Distributor will pay the costs incurred in printing and mailing copies of Prospectuses to prospective investors. (c) The Distributor will pay advertising and promotional expenses, including the costs of literature sent to prospective investors. (d) The Distributor will pay the costs of any additional copies of Fund financial and other reports and other Fund literature supplied to the Distributor by the Fund for sales promotion purposes. 8. Normally, the Fund shall not exercise any direction or control over the time and place of solicitation, the persons to be solicited, or the manner of solicitation; but the Distributor agrees that solicitations shall be in a form acceptable to the Fund and shall be subject to such terms and conditions as may be prescribed from time to time by the Fund, the Registration Statement, the Prospectuses, the Agreement and Declaration of Trust, and By-Laws of the Fund, and shall not violate any provision of the laws of the United States or any other jurisdiction to which solicitations are subject, or violate any rule or regulation promulgated by any lawfully constituted authority to which the Fund or Distributor may be subject. 9. (a) The Fund appoints and designates the Distributor as agent of the Fund and the Distributor accepts such appointment as such agent, to repurchase shares of the Fund in accordance with the provisions of the Agreement and Declaration of Trust and By-Laws of the Fund. 2 (b) In connection with such redemptions or repurchases the Fund authorizes and designates the Distributor to take any action, to make any adjustments in net asset value, and to make any arrangements for the payment of the redemption or repurchase price authorized or permitted to be taken or made in accordance with the Investment Company Act of 1940 and as set forth in the By-Laws and then current Prospectuses of the Fund. (c) The authority of the Distributor under this paragraph 9 may, with the consent of the Fund, be redelegated in whole or in part to another person or firm. (d) The authority granted in this paragraph 9 may be suspended by the Fund at any time or from time to time pursuant to the provisions of its Agreement and Declaration of Trust until further notice to the Distributor. The President or any Vice President of the Fund shall have the power granted by said provisions. After any such suspension the authority granted to the Distributor by this paragraph 9 shall be reinstated only by a written instrument executed by the Fund's President or any Vice President. 10. The Distributor shall keep and maintain adequate records in respect of its activities which further the sale of shares. The Distributor is authorized to direct the disposition of monies payable by the Fund pursuant to the Fund's Rule 12b-1 Plan and, consequently, the Distributor shall provide to the Fund's Board of Trustees, and the Trustees shall review, at least quarterly, a written report of the amounts so expended and the purposes for which such expenditures were made. 11. The Distributor agrees that it will not place orders for more shares than are required to fill the requests received by it as agent of the Fund and that it will expeditiously transmit all such orders to the Fund. 12. (a) This Agreement shall become effective June 20, 1996 and shall continue in effect for a period of more than one year from its effective date only as long as such continuance is approved, at least annually, by a vote of the Board of Trustees of the Fund, and of the Trustees who are not "Interested persons" of the Fund and have no direct or indirect financial interest in the operation of the Fund's Rule 12b-1 Distribution Plan or in any agreements related to the Fund's Rule 12b-1 Distribution Plan, cast in person at a meeting called for the purpose of voting on such Agreement. (b) This Agreement may be terminated at any time, without the payment of any penalty, by vote of a majority of the members of the Board of Trustees of the Fund who are not interested persons of the Fund and have no direct or indirect financial interest in the operation of the Fund's Rule 12b-1 Distribution Plan or in any agreements related to the Fund's Rule 12b-1 Distribution Plan or by vote of a majority of the outstanding voting securities of the Fund on not more than sixty days' written notice to the Distributor. This Agreement shall automatically terminate in the event of its assignment by the Distributor unless the United States Securities and Exchange Commission has issued an order exempting the Fund and the Distributor from the provisions of the Investment Company Act of 1940, as amended, which would otherwise have effected the termination of this Agreement. 13. No amendment to this Agreement shall be executed or become effective unless its terms have been approved in the manner described in paragraph 12(a) above for approval of this Agreement. 3 14. The Fund and the Distributor hereby each agree that all literature and publicity issued by either of them referring directly or indirectly to the Fund or to the Distributor shall be submitted to and receive the approval of the Fund and the Distributor before the same may be used by either party. 15. The Distributor agrees to use its best efforts in effecting the sale and public distribution of the shares of the Fund and to perform its duties in redeeming the shares of the Fund, but nothing contained in this Agreement shall make the Distributor or any of its officers and trustees or shareholders liable for any loss sustained by the Fund or the Fund's officers, trustees or shareholders, or by any other person on account of any act done or omitted to be done by the Distributor under this Agreement; provided, that nothing herein contained shall protect the Distributor against any liability to the Fund or to any of its shareholders to which the Distributor would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties as Distributor or by reason of its reckless disregard of its obligations or duties as Distributor under this Agreement. Nothing in this Agreement shall protect the Distributor from any liabilities which it may have under the Securities Act of 1933 or the Investment Company Act of 1940. 16. As used in this Agreement the terms "interested persons," "assignment," and "majority of the outstanding voting securities" shall have the respective meanings specified in the Investment Company Act of 1940 as now in effect. 17. This Agreement shall be construed in accordance with the laws of the Commonwealth of Massachusetts, except to the extent such laws are preempted by the Investment Company Act of 1940. 18. Any notice required to be given hereunder shall be sent via first class mail to the address of the party as set forth above. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers on the day and year above written. Attest: UAM FUNDS TRUST /s/ Michael E. DeFao /s/ Norton H. Reamer - ------------------------------------- ------------------------------- Michael E. DeFao, Secretary Norton H. Reamer, President Attest: UAM FUND DISTRIBUTORS, INC. /s/ Michael E. DeFao /s/ Gary French - ------------------------------------- ------------------------------- Michael E. DeFao, Secretary Gary French, President 4 EX-99.I.1 10 OPINIONS AND CONSENTS OF COUNSEL EXHIBIT I.(1) Stradley Ronan Stevens & Young Attorneys At Law 2600 One Commerce Square Philadelphia, PA 19103-7098 (215) 564-8000 Fax215) 564-8120 Direct Dial: (215) 564-8101 August 18, 1994 The Regis Fund II c/o Mutual Funds Service Company P.O. Box 2798 Boston, MA 02208-2798 Gentlemen: You have requested our opinion with respect to the shares of beneficial interest to be offered upon effectiveness of your registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933 and the Investment Company Act of 1940. Based upon our review of such records, documents, and representations as we have deemed relevant, it is our opinion that the shares of beneficial interest to be sold and issued by The Regis Fund II, upon issuance, sale and payment in accordance with the terms of sale contained in the Prospectus, will be legally issued, fully paid and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the registration statement covering the registration of the said shares under the Securities Act of 1933 and the Investment Company Act of 1940, and amendments thereto, and registration statements filed in accordance with the securities laws of the various states in which shares of The Regis Fund II will be offered, and we further consent to the fact this opinion concerning the legality of the issue 1 The Regis Fund II Page 2 has been rendered by us. Very truly yours, STRADLEY, RONAN, STEVENS & YOUNG By:/S/ Audrey C. Talley Audrey C. Talley, a Partner 2 EX-99.I.2 11 SHARES OF BENEFICIAL INTEREST Exhibit I.(2) DRINKER BIDDLE & REATH LLP 1345 Chestnut Street Philadelphia, PA 19107-3496 (215) 988-2700 July 10, 1998 UAM Funds Trust c/o Chase Global Funds Service Center P.O. Box 2798 Boston, MA 02208-2795 Re: UAM Funds Trust - Shares of Beneficial Interest ----------------------------------------------- Gentlemen: We have acted as counsel for UAM Funds Trust, a Delaware business trust, ("UAM") in connection with the registration by UAM of its shares of beneficial interest, without par value. The Declaration and Agreement of Trust of UAM authorize the issuance of an unlimited number of shares of beneficial interest, which are divided into multiple series and classes (each a "Class" and collectively "Classes"). The shares of beneficial interest designated into each such series are referred to herein as the "Shares." You have asked for our opinion on certain matters relating to the Shares. We have reviewed UAM's Agreement and Declaration of Trust and By-laws, resolutions of UAM's Board of Trustees ("Board"), certificates of public officials and of UAM's officers and such other legal and factual matters as we have deemed appropriate. We have also reviewed UAM's Registration Statement on Form N-1A under the Securities Act of 1933 (the "Registration Statement"), as amended through Post-Effective Amendment No. 24 thereto. This opinion is based exclusively on the Delaware Business Trust Act and the federal law of the United States of America. We have assumed the following for purposes of this opinion: 1. The shares of beneficial interest have been issued in accordance with the Agreement and Declaration of Trust and By-laws of UAM and resolutions of UAM's Board relating to the creation, authorization and issuance of the Shares. 2. Prior to the issuance of any future Shares, the Board (a) will duly authorize the issuance of such future Shares, (b) will determine with respect to each class of such future Shares the preferences, limitations and relative rights applicable thereto and (c) if such future Shares are classified into separate series, will duly take the action necessary to create such UAM Funds Trust July 10, 1998 Page 2 series and to determine the number of shares of such series and the relative designations, preferences, limitations and relative rights thereof. 3. With respect to the future Shares, there will be compliance with the terms, conditions and restrictions applicable to the issuance of such shares that are set forth in (i) UAM's Agreement and Declaration of Trust and By-laws, each as amended as of the date of such issuance, and (ii) the applicable future series designations. 4. The Board will not change the preferences, limitations or relative rights of any class or series of Shares after any shares of such class or series have been issued. Based upon the foregoing, we are of the opinion that: 1. UAM is authorized to issue an unlimited number of Shares. 2. UAM's Board is authorized (i) to create from time to time one or more additional series or classes of Shares and (ii) to determine, at the time of creation of any such series or class the designations, preferences, limitations and relative rights thereof. 3. The Shares will be, when issued in accordance with, and sold for the consideration described in the Registration Statement, validly issued, fully paid and non-assessable by UAM, and that the holders of the Shares will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the general corporation law of the State of Delaware (except that we express no opinion as to such holders who are also trustees of UAM). We consent to the filing of this opinion with Post-Effective Amendment No. 24 to the Registration Statement to be filed by UAM with the Securities and Exchange Commission. Very truly yours, /s/ DRINKER BIDDLE AND REATH LLP -------------------------------- DRINKER BIDDLE AND REATH LLP -2- EX-99.J 12 CONSENT OF INDEPENDENT AUDITORS Exhibit J. CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectuses and Statements of Additional Information constituting parts of this Post-Effective Amendment No. 24 to the registration statement on Form N-1A (the "Registration Statement") of our reports dated June 3, 1998, relating to the financial statements and financial highlights appearing in the April 30, 1998 Annual Reports to the Shareholders of The TJ Core Equity Portfolio, Jacobs International Octagon Portfolio, BHM&S Total Return Bond Portfolio, MJI International Equity Portfolio, Hanson Equity Portfolio, Chicago Asset Management Value/Contrarian Portfolio and Chicago Asset Management Intermediate Bond Portfolio, which are also incorporated by reference into the Registration Statement. We hereby consent to the incorporation by reference in the Prospectuses and Statement of Additional Information constituting parts of this Post-Effective Amendment No. 24 to the registration statement on Form N-1A (the "Registration Statement") of our report dated April 29, 1998, relating to the financial statements and financial highlights appearing in the March 31, 1998 Annual Report to the Shareholders of the FPA Crescent Portfolio, which are also incorporated by reference into the Registration Statement. We also consent to the references to us under the headings "Financial Statements" and "Independent Accountants" in the Statements of Additional Information and to the references to us under the headings "Financial Highlights", "Accountants" and "Reports" in the Prospectuses. PricewaterhouseCoopers LLP Boston, Massachusetts July 7, 1998 EX-99.L 13 PURCHASE AGREEMENT EXHIBIT L. PURCHASE AGREEMENT The Regis Fund II (the "Trust"), a Delaware business trust, and United Asset Management Corporation, a Delaware Corporation, hereby agree as follows: 1. The Trust hereby offers and United Asset Management Corporation hereby purchases 2,500 shares of beneficial interest representing an interest in the Chicago Asset Management Value/Contrarian Portfolio, 2,500 shares of beneficial interest representing an interest in the Chicago Asset Management Intermediate Bond Portfolio, 2,500 shares of beneficial interest representing an interest in MJI Global Bond Portfolio, and 2,500 shares of beneficial interest in MJI International Equity Portfolio of the Fund (the "Shares") at a price of $10 per share. United Asset Management Corporation hereby acknowledges purchase of the Shares and the Trust hereby acknowledges receipt from United Asset Management Corporation of funds in the amount of $100,000 in full payment of the Shares. It is further agreed that no certificate for the Shares will be issued by the Trust. 2. United Asset Management Corporation represents and warrants to the Trust that the Shares are being acquired for investment purposes and not with a view to the distribution thereof. 3. The names "The Regis Fund II" and "Trustees of The Regis Fund II" refer, respectively, to the Trust created and the Trustees as Trustees but not individually or personally, acting from time to time under an Agreement and Declaration of Trust dated May 18, 1994, to which reference is hereby made, and to any and all amendments thereto. The obligations of The Regis Fund II entered into in the name or on behalf thereof by any of the Trustees, representatives or agents are not made individually, but only in such capacities, and are not binding upon any of the Trustees, Shareholders or representatives of the trust personally, but bind only the assets of the Trust, and all persons dealing with any series of Shares of the Trust must look solely to the assets of the Trust belonging to such series for the enforcement of any claims against the Trust. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the 18th day of August, 1994. Attest: THE REGIS FUND II /s/ Kathleen M. O'Neill By: /s/ Karl O. Hartmann - ------------------------ --------------------------- Karl O. Hartmann, Secretary Attest: UNITED ASSET MANAGEMENT CORPORATION /s/ Kathleen M. O'Neill By: /s/ Richard S. Robie, III - ------------------------ ------------------------------------- Richard S. Robie, III, Vice President 1 EX-99.M.1 14 DISTRIBUTION PLAN EXHIBIT M.1. UAM FUNDS TRUST DISTRIBUTION PLAN INTRODUCTION - ------------ This Distribution Plan (the "Plan") has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by UAM Funds Trust (the "Fund"), for the portfolios and classes of the Fund's portfolios. The Plan has been approved by the Board of Trustees, including a majority of the Trustees and trustees who are not interested persons of the Fund and who have no direct or indirect financial interest in the operation of the Plan or in any agreements related thereto, cast in person at a meeting called for the purpose of voting on such Plan. Such approval by the trustees included a determination that in the exercise of reasonable business judgment and in light of their fiduciary duties, there is a reasonable likelihood that the Plan will benefit the portfolios and classes of its portfolios and its shareholders. The Plan has been approved, or will be approved, by a vote of the holders of a majority of the outstanding voting securities, as defined in the Act of each portfolio or class of shares of a portfolio distributed pursuant to the Plan, prior to the implementation of the Plan with respect to such portfolio or such class of shares of a portfolio, if adopted after any public offering of the portfolio's voting securities or the sale of shares of a portfolio to persons who are not affiliated persons of the portfolio, affiliated persons of such persons, promoters of the Fund, or affiliated persons of such promoters. Each portfolio of the Fund is managed by an investment adviser which is registered as such with the Securities and Exchange Commission under the Investment Advisers Act of 1940 and which is a wholly-owned subsidiary or affiliate of United Asset Management Corporation. The investment adviser serves as manager of the portfolios pursuant to an investment advisory agreement approved by the Board of Trustees and shareholders of the Fund. The Fund is authorized to issue different series of securities and is an open-end management investment company registered under the Act. UAM Fund Distributors, Inc. (the "Distributor") is the principal underwriter and national distributor for the Fund's shares pursuant to a Distribution Agreement approved by the Board. The Distributor may enter into agreements with other registered broker-dealers, consultants, recordkeepers, accounting agents and other Service Providers in the implementation of this Plan and of the Distribution Agreement between it and the Fund. The Fund may, in addition, enter into arrangements with other than broker-dealers and Service Providers which are not "affiliated persons" or "interested persons" of the Fund or the Distributor to provide to the Fund services in the Fund's marketing of its shares (the "Service Providers"). 1 * * * The Plan provides that: 1. The Fund may pay a monthly fee not to exceed 0.75% per annum of the Fund's daily average net assets (the "Maximum Amount") to reimburse the Distributor, other broker-dealers or Service Providers for amounts expended by them under the terms of this Plan. 2. (a) The Distributor shall be reimbursed pursuant to paragraph 1 above for monies expended to furnish, or cause or encourage others to furnish, services and incentives in connection with the promotion, offering and sale of the Fund's shares and, where suitable and appropriate, the retention of the Fund's shares by shareholders. (b) To the extent that Service Providers are paid directly by the Fund, such Service Providers, shall use the monies paid respectively to them to reimburse themselves for the actual costs they have incurred in providing distribution-related services including but not limited to: advertising the availability of services and products; designing material to send to customers and developing methods of making such materials accessible to customers; providing information about the product needs of customers; providing facilities to solicit Fund sales and to answer questions from prospective and existing investors about the Fund; receiving and answering correspondence from prospective investors, including requests for sales literature, prospectuses and statements of additional information; displaying and making sales literature and prospectuses available; acting as liaison between shareholders and the Fund, including obtaining information from the Fund and providing performance and other information about the Fund. 3. The Distributor shall report to the Fund at least monthly on the amount and the use of the monies paid to it under the Plan. To the extent paid directly by the Fund, the Service Providers shall inform the Fund monthly and in writing of the amounts each claims under the Service Agreement and the Plan; both the Distributor and the Service Providers shall furnish the Board of Trustees of the Fund with such other information as the Board may reasonably request in connection with the payments made under the Plan and the use thereof by the Distributor and the Service Providers, respectively, in order to enable the Board to make an informed determination of the amount of the Fund's payments and whether the Plan should be continued. 4. The officers of the Fund shall furnish to the Board of Trustees of the Fund, for their review, on a quarterly basis, a written report of the amounts expended under the Plan and the purposes for which such expenditures were made. 5. This Plan shall remain in effect as to a portfolio or class of shares of a portfolio of the Fund only if it is approved by the vote of a majority of the respective portfolio's or class's outstanding voting securities as defined in the Act when such approval is required by the Act; thereafter, it shall continue in effect for a period of more than one year from the date of its execution or adoption only so long as such continuance is specifically approved at least annually by a vote of the Board of Trustees of the Fund, and of the trustees who are not interested persons of the Fund and have no direct or indirect financial interest in 2 the operation of the Plan or in any agreements related to the Plan ("non- interested trustees"), cast in person at a meeting called for the purpose of voting on such Plan. 6. (a) The Plan may be terminated at any time by vote of a majority of the non-interested trustees or by vote of a majority of the respective portfolio's or class's outstanding voting securities. (b) The Plan may not be amended to increase materially the amount to be spent for distribution pursuant to paragraph 1 thereof without approval by the respective portfolio's or class's shareholders. 7. The Distribution Agreement between the Fund and the Distributor, and the Service Agreements between the Fund and the Service Providers, shall specifically have a copy of this Plan attached to, and its terms and provisions incorporated respectively by reference in, such agreements. 8. All material amendments to this Plan shall be approved by the non-interested trustees in the manner described in paragraph 5 above. 9. So long as the Plan is in effect, the selection and nomination of the Fund's non-interested trustees shall be committed to the discretion of such non- interested trustees. 10. The definitions contained in Sections 2(a)(3), 2(a)(4), 2(a)(19) and 2(a)(42) of the Act shall govern the meaning of "affiliated person," "assignment," "interested person(s)" and "vote of a majority of the outstanding voting securities," respectively, for purposes of this Plan. This Plan shall take effect on the date of the public offering of the respective portfolio or class of shares of a portfolio, unless a different date has been designated as the Plan's effective date by the Board of the Fund. Approved June 18, 1998 3 EX-99.M.2 15 SELLING DEALER AGREEMENT EXHIBIT M.2. UAM FUND DISTRIBUTORS, INC. 211 CONGRESS STREET BOSTON, MASSACHUSETTS 02110 -------------------------------- SELLING DEALER AGREEMENT UAM FUNDS, INC. AND UAM FUNDS TRUST (Institutional Class Shares) -------------------------------- Dealer: ________________________ Gentlemen: We invite you, as a selected dealer, to participate as principal in the distribution of the Institutional Class Shares (the "Shares") of the Portfolios of UAM Funds, Inc. and of UAM Funds Trust (each Portfolio is referred to herein as the "Fund") with respect to which we have been retained to act as exclusive national distributor and which are offered for sale pursuant to currently effective federal Prospectuses describing such Shares. OFFERING PRICE TO PUBLIC: - ------------------------- Orders for Shares received from you and accepted by the Fund, will be at the public offering price applicable to each order as set forth in that Fund's Prospectus relating to such Shares. The manner of computing the net asset value of Shares, the public offering price and the effective time of orders received from you are described in the Prospectuses for the Shares. We reserve the right, at any time and without notice, to suspend the sale of Fund Shares. SALES, ORDERS AND CONFIRMATIONS: - -------------------------------- In offering Fund Shares to the public or otherwise, you shall act as dealer for your own account, and in no transaction shall you have any authority to act as agent for the Fund, for any other selected dealer or for us. No person is authorized to make any representation concerning the Shares or any Fund except those contained in the relevant and current Prospectus and in written information issued by the Fund or by us as a supplement to such Prospectus. In purchasing Fund Shares, you shall rely solely on such representations contained in the Prospectus and in such written supplemental information. All sales are made subject to confirmation and orders are subject to acceptance or rejection by the Fund in its sole discretion. Your orders must be wired, telephoned or written to the Fund as provided in the relevant and current Prospectus. You agree to place orders for the same number of Shares sold by you at the price at which such Shares are sold. You agree that you will not purchase Shares except for investment or for the purpose of covering purchase orders already received and that you will not, as principal, sell Fund Shares unless purchased by you from the Fund under the terms hereof. You also agree that you will not withhold placing with us orders received from your customers so as to profit yourself from such withholding. Each of your orders shall be confirmed by you in writing on the same day. PAYMENT AND ISSUANCE OF CERTIFICATES: - ------------------------------------- The Shares purchased by you hereunder shall be paid for in full at the public offering price, by check payable to the Fund, at its office, within three business days after our acceptance of your order. If not so paid, we reserve the right to cancel the sale and to hold you responsible for any loss sustained by us or the Fund (including lost profit) in consequence. Certificates representing the Shares will not be issued unless a specific request is received from the purchaser. Certificates, if requested, will be issued in the names indicated by registration instructions accompanying your payment. REDEMPTIONS: - ------------ The relevant Prospectus describes the provisions whereby a Fund, under all ordinary circumstances, will redeem Shares held by shareholders on demand. You agree that you will not make any representations to shareholders relating to the redemption of their Shares other than the statements contained in the relevant and current Prospectus, and the underlying organizational documents of the Fund, to which it refers, and that you will quote as the redemption price only the price determined by the Fund. You shall not repurchase any Shares from your customers at a price below that next quoted by the Fund for redemption. You may hold such repurchased Shares for investment purposes or submit such Shares to the Fund for redemption. DISTRIBUTION AND/OR SERVICE FEES: - --------------------------------- We expect you to provide distribution and marketing services (the "Services") in the promotion of the sale of the Shares of such Fund and the retention of assets by such Fund and/or services and assistance to your customers who own Fund Shares, including but not limited to, answering routine inquiries regarding the Shares or a Fund or the status of a customer's account and providing information to customers relating to maintaining their investment in the Fund. Certain of the managers (the "Managers") of the Funds may, from time to time, determine to provide support for the distribution and marketing of, and/or the provision of services to the holders of, the Shares in the form of payments or additional payments to selected broker-dealers who enter into Selling Dealer Agreements with us. Accordingly, for your Services in respect of Shares of any Fund the Manager of which has determined to provide such support and has adopted a Supplemental Plan (a "Supplemental Plan"), you will receive a supplemental fee (the "Supplemental Fees"), as established by each particular Manager from time to time, subject to the further provisions of this Agreement, the terms of the then current and applicable Prospectus relating to such Shares and the instructions received by us from such Manager. The Supplemental Fees, if any, in respect of Shares of a particular Fund may be based on such factors as initial and/or current purchase prices or net asset values of such Shares acquired by or held in 2 the accounts of your customers or certain customers and the periods for which such shares have been held and may be subject to such other minimums as may be established by the Managers or by us from time to time. Such Supplemental Fees may consist of a conversion fee component, if any, and/or a new contribution fee component, if any, the rates of which shall be as provided in the schedule of fees set forth in Appendix A attached hereto, as the same may be amended by us at any time and from time to time by notice thereof to you; provided, however, that in no event shall the rate of any such component be in excess of the current rates set forth in any form of subsequent notice furnished to you by us or on our behalf, or by the Manager or the Fund. We reserve the right, at any time, without notice, to modify, suspend or terminate payments hereunder, or any component of such payments, either with respect to one or more Funds or classes of Shares or generally with respect to the Funds and the Shares; and the payment of Supplemental Fees hereunder shall be automatically suspended or terminated if and to the extent that payments from the relevant Manager are suspended or terminated, or automatically reduced if and to the extent that the corresponding rates of payments to be made from the relevant Manager are reduced. Any such action may be for any reason whatsoever or no reason at all; and you agree that you shall not be entitled to any payments for any period after the effective date of any such suspension or termination, nor shall you be entitled to any payments after the effective date of any such modification or reduction except as may be calculated pursuant to a modified or reduced schedule of fees substituted for the previously effective schedule. You understand and agree that we merely administer and forward payments pursuant to the Supplemental Plans of the Managers and that we shall have no liability to you for such payments. Accordingly, you agree that anything to the contrary herein notwithstanding (i) we shall have no liability to you, and you shall have no recourse whatsoever against us or our assets, for any payment for which provision is made in this Agreement, and (ii) your sole recourse, if any, in respect of any such payment for which provision is made in this Agreement shall be against the respective Manager. LEGAL COMPLIANCE: - ----------------- This Agreement and any transaction with, or payments to, you pursuant to the terms hereof is conditioned on each party's representation to the other party that, as of the date of this Agreement it is, and at all times during the effectiveness of this Agreement it will be, a registered broker-dealer under the Securities Exchange Act of 1934, as amended, and qualified under applicable state securities laws in each jurisdiction in which the actions contemplated to be taken by it under this Agreement require it to be qualified to act as a broker-dealer in securities, and a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"). Each party agrees to notify the other promptly in writing and immediately suspend sales of Shares if this representation ceases to be true. Each party also agrees that it will comply with the rules of the NASD including, in particular, Sections 2, 21(c) and 26 of Article III of its Rules of Fair Practice, as amended, and that each party will maintain adequate records with respect to its transactions with the other and the Funds. BLUE SKY MATTERS: - ----------------- 3 We shall have no obligation or responsibility with respect to your right to sell Shares in any state or jurisdiction. We may furnish you with information identifying the states and jurisdictions where the Shares of a Fund are qualified for sale; and you will not transact orders for Shares except in such states and jurisdictions as identified by us. LITERATURE: - ----------- We will furnish you with copies of each Fund's relevant Prospectus and sales literature (if any) and other information made publicly available by us or the Fund which relate to the Fund or the Shares of such Fund, in reasonable quantities upon your request. You agree to deliver a copy of the current and relevant Prospectus in accordance with the provisions of the Securities Act of 1933 to each purchaser of Shares. We shall file Fund sales literature and promotional material with the NASD as required. You may not publish or use any sales literature or promotional materials with respect to the Shares, the Funds or any Fund without our prior review and written approval. NOTICES AND COMMUNICATIONS: - --------------------------- All communications from you (other than purchase and sale orders) should be addressed to us at 211 Congress Street, Boston, Massachusetts 02110, Attention: Compliance Officer. Any notice from us to you shall be deemed to have been duly given if mailed or telegraphed to you at the address set forth below. Each of us may change the address to which notices shall be sent by notice to the other in accordance with the terms hereof. TERMINATION: - ------------ This Agreement may be terminated by either party at any time by written notice to that effect and will terminate without notice upon the appointment of a trustee for you under the Securities Investor Protection Act, or any other act of insolvency by you. Notwithstanding the termination of this Agreement, you shall remain liable for any amounts otherwise owing to us or the Funds and for your portion of any transfer tax or other liability which may be asserted or assessed against the Fund, or us. AMENDMENT: - ---------- This Agreement may be amended or revised to modify, suspend or terminate payments hereunder as provided in the section above entitled "DISTRIBUTION AND/OR SERVICE FEES" or to amend Appendix A as provided in said section. This Agreement may be otherwise amended or revised at any time by us upon notice to you and you will be deemed to have accepted any such other amendment or revision upon placing any subsequent order for Shares. GENERAL: - -------- Your acceptance hereof will constitute an obligation on your part to observe all the terms and conditions hereof. In the event that you breach any of the terms and conditions of this 4 Agreement, you will indemnify us, the Funds, and our affiliates for any damages, losses, costs and expenses (including reasonable attorneys' fees and expenses) arising out of or relating to such breach. In the event that we breach any of the terms and conditions of this Agreement, we will indemnify you and your affiliates for any damages, losses, costs and expenses (including reasonable attorneys' fees and expenses) arising out of or relating to such breach. Nothing contained herein shall constitute you, us and any dealers an association or partnership. All references in this Agreement to the "Prospectus" refer to the then current and relevant version of the Prospectus of the particular Fund or Funds concerned and include the Statement of Additional Information incorporated by reference therein and any stickers or supplements thereto. This Agreement is to be construed in accordance with the laws of The Commonwealth of Massachusetts. Please confirm this Agreement by dating and executing, by your duly authorized representative, one copy of this Agreement below and return it to us. Keep the enclosed duplicate copy for your records. UAM FUND DISTRIBUTORS, INC. BY:__________________________________ (Name of Officer and Title) 5 SELECTED DEALER AGREEMENT ACCEPTANCE ------------------------------------ UAM FUND DISTRIBUTORS, INC. The undersigned hereby confirms its acceptance of, and agreement to the terms of, the foregoing Selected Dealer Agreement and acknowledges that any purchase of Fund Shares made during the effectiveness of this Agreement is subject to all the applicable terms and conditions set forth in this Agreement, and agrees to pay for the shares at the price and upon the terms and conditions stated in the Agreement. The undersigned hereby acknowledges receipt of Prospectuses relating to the Fund Shares and confirms that, in executing this Selected Dealer Agreement, it has relied on such Prospectuses and not on any other statement whatsoever, written or oral. PLEASE SIGN HERE AND COMPLETE BELOW ___________________________________________ (Full Corporate Name of Broker-Dealer) By:________________________________________ (Name of Officer and Title) ___________________________________________ (Broker-Dealer's Tax Identification No,) ___________________________________________ (Notice Address -- Please include name of compliance contact) Date:______________________________________ 6 APPENDIX A SCHEDULE OF FEES SUPPLEMENTAL FEES (FOR CERTAIN DEFINED CONTRIBUTION PLANS ONLY) Supplemental fees for each broker-dealer will be determined quarterly as of the end of each calendar quarter. Each quarterly fee shall consist of CONVERSION COMPONENTS, if any, and NEW CONTRIBUTION COMPONENTS, if any. There shall be a CONVERSION COMPONENT with respect to each new shareholder account established through the purchase of Shares of the Funds subject to the further terms and conditions stated in this paragraph. The aggregate purchase price of Shares of the Funds initially acquired by the account must have been at least $1,000,000 and the account must have been in existence for at least one full calendar quarter. The portion of the CONVERSION COMPONENT attributable to the Shares of each Fund initially acquired by such account shall be calculated by applying the quarterly rate of the CONVERSION COMPONENT for that Fund, as specified below, to the aggregate purchase price of the Shares of that Fund initially acquired. The amount so calculated shall be included in the fee with respect to such account for each of the four (4) full calendar quarters following the establishment of the account; provided, however, that such CONVERSION COMPONENT shall not be payable with respect to, or included in the fee for, any such quarter if, as of the last business day of such quarter, the number of Shares of the Funds (adjusted, if necessary, to give effect to exchanges) held in the account has been reduced to less than ninety (90) percent of the number of Shares initially acquired by such account, nor shall a CONVERSION COMPONENT be payable for any quarter subsequent thereto. There shall be a NEW CONTRIBUTION COMPONENT for each shareholder account which existed at the beginning of a calendar quarter subject to the further terms and conditions stated in this paragraph. The account must have made a QUALIFYING PURCHASE of Shares of a Fund or Funds during the quarter concerned. A QUALIFYING PURCHASE means an aggregate investment of at least $100,000 in the Shares of the Funds. The portion of the NEW CONTRIBUTION COMPONENT attributable to the Shares of each Fund acquired by such account as part of a QUALIFYING PURCHASE shall be calculated by applying the single payment rate of the NEW CONTRIBUTION COMPONENT for that Fund, as specified below, to the portion of the QUALIFYING PURCHASE made in Shares of that Fund and aggregating the amounts for all such Funds the Shares of which were included in such QUALIFYING PURCHASE. The aggregate amount of the NEW CONTRIBUTION COMPONENT so determined shall be included in the supplemental fees for the single quarter concerned. 7
NEW CONVERSION CONTRIBUTION NAME OF FUND COMPONENT COMPONENT - ------------ ---------- ------------ Acadian Emerging Markets Portfolio (I) * 0.25% Acadian International Equity Portfolio (I) * 0.25% BHM&S Total Return Bond Portfolio (I) * 0.25% C&B Balanced Portfolio (I) * 0.25% C&B Equity Portfolio (I) * 0.25% C&B Equity Portfolio for Taxable Investors(I) * 0.25% C&B Mid Cap Equity Portfolio (I) * 0.25% Chicago Asset Management Intermediate Bond Portfolio (I) * 0.25% Chicago Asset Management Value/Contrarian Portfolio (I) * 0.25% DSI Balanced Portfolio (I) * 0.25% DSI Disciplined Value Portfolio (I) * 0.25% DSI Limited Maturity Bond Portfolio (I) * 0.25% FMA Small Company Portfolio (I) * 0.25% ICM Equity Portfolio (I) * 0.25% ICM Fixed Income Portfolio (I) * 0.25% Jacobs International Octagon Portfolio (I) * 0.25% McKee Domestic Equity Portfolio (I) * 0.25% McKee International Equity Portfolio (I) * 0.25% McKee Small Cap Equity Portfolio (I) * 0.25% McKee U.S. Government Portfolio (I) * 0.25% MJI International Equity Portfolio (I) * 0.25% NWQ Balanced Portfolio (I) * 0.25% NWQ Small Cap Value Portfolio (I) * 0.25% NWQ Special Equity Portfolio (I) * 0.25% NWQ Value Equity Portfolio (I) * 0.25% Rice, Hall, James Small Cap Portfolio (I) * 0.25% Rice, Hall, James Small/Mid Cap Portfolio (I) * 0.25% SAMI Preferred Stock Income Portfolio (I) * 0.25% Sirach Bond Portfolio (I) * 0.25%
8 Sirach Equity Portfolio (I) * 0.25% Sirach Growth Portfolio (I) * 0.25% Sirach Special Equity Portfolio (I) * 0.25% Sirach Strategic Balanced Portfolio (I) * 0.25% Sterling Partners' Balanced Portfolio (I) * 0.25% Sterling Partners' Equity Portfolio (I) * 0.25% Sterling Small Cap Value Portfolio (I) * 0.25% TS&W Balanced Portfolio (I) * 0.25% TS&W Equity Portfolio (I) * 0.25% TS&W Fixed Income Portfolio (I) * 0.25% TS&W International Equity Portfolio (I) * 0.25%
_____________________ * At the quarterly rate of 0.125% on the first $3,000,000 of initial assets and 0.0625% on the excess of such assets over $3,000,000. 9 UAM FUND DISTRIBUTORS, INC. --------------------------- UAM Fund Distributors, Inc., the distributor of the UAM Funds, Inc. and UAM Funds Trust (collectively, the "Funds"), is a member of the National Securities Clearing Corporation ("NSCC") Fund/Serv. Accordingly, transactions in shares of portfolios of the Funds may be processed through Fund/Serv. If you are interested in utilizing Fund/Serv, please provide the information requested below. Firm Name: ____________________________________ Address: ____________________________________ ____________________________________ ____________________________________ NSCC Dealer #: ________________________ NSCC Dealer Alpha Code: ________________________ NSCC Clearing #: ________________________ Phone Number: ________________________ Fax Number: ________________________ Mutual Fund Contact: ________________________ UAM Fund Distributors, Inc. has also executed and filed with the NSCC the Investment Company Institute's ("ICI") Standard Networking Agreement. Provided your firm has also executed and filed such agreement, Networking may be utilized. If your firm wishes to utilize Networking, please complete the below acknowledgment. By completing this acknowledgment, you agree that your firm will participate in Networking under the terms of the ICI Standard Agreement. ACKNOWLEDGMENT Firm: ____________________________ By: _____________________________ Name: Title: Date: 10 UAM FUND DISTRIBUTORS, INC. 211 CONGRESS STREET BOSTON, MASSACHUSETTS 02110 ________________________ SELLING DEALER AGREEMENT UAM FUNDS, INC. AND UAM FUNDS TRUST (Institutional Service Class Shares) ________________________ Dealer: ___________________. Gentlemen: We invite you, as a selected dealer, to participate as principal in the distribution of the Institutional Service Class Shares (the "Shares") of the Portfolios of UAM Funds, Inc. and of UAM Funds Trust (each Portfolio is referred to herein as the "Fund") with respect to which we have been retained to act as exclusive national distributor and which are offered for sale pursuant to currently effective federal Prospectuses describing such Shares. OFFERING PRICE TO PUBLIC: - ------------------------- Orders for Shares received from you and accepted by the Fund, will be at the public offering price applicable to each order as set forth in that Fund's Prospectus relating to such Shares. The manner of computing the net asset value of Shares, the public offering price and the effective time of orders received from you are described in the Prospectuses for the Shares. We reserve the right, at any time and without notice, to suspend the sale of Fund Shares. SALES, ORDERS AND CONFIRMATIONS: - -------------------------------- In offering Fund Shares to the public or otherwise, you shall act as dealer for your own account, and in no transaction shall you have any authority to act as agent for the Fund, for any other selected dealer or for us. No person is authorized to make any representation concerning the Shares or any Fund except those contained in the relevant and current Prospectus and in written information issued by the Fund or by us as a supplement to such Prospectus. In purchasing Fund Shares, you shall rely solely on such representations contained in the Prospectus and in such written supplemental information. All sales are made subject to confirmation and orders are subject to acceptance or rejection by the Fund in its sole discretion. Your orders must be wired, telephoned or written to the Fund as provided in the relevant and current Prospectus. You agree to place orders for the same number of Shares sold by you at the price at which such Shares are sold. You agree that you will not purchase Shares except for investment or for the purpose of covering purchase orders already received and that you will not, as principal, sell Fund Shares unless purchased by 11 you from the Fund under the terms hereof. You also agree that you will not withhold placing with us orders received from your customers so as to profit yourself from such withholding. Each of your orders shall be confirmed by you in writing on the same day. PAYMENT AND ISSUANCE OF CERTIFICATES: - ------------------------------------- The Shares purchased by you hereunder shall be paid for in full at the public offering price, by check payable to the Fund, at its office, within three business days after our acceptance of your order. If not so paid, we reserve the right to cancel the sale and to hold you responsible for any loss sustained by us or the Fund (including lost profit) in consequence. Certificates representing the Shares will not be issued unless a specific request is received from the purchaser. Certificates, if requested, will be issued in the names indicated by registration instructions accompanying your payment. REDEMPTIONS: - ------------ The relevant Prospectus describes the provisions whereby a Fund, under all ordinary circumstances, will redeem Shares held by shareholders on demand. You agree that you will not make any representations to shareholders relating to the redemption of their Shares other than the statements contained in the relevant and current Prospectus, and the underlying organizational documents of the Fund, to which it refers, and that you will quote as the redemption price only the price determined by the Fund. You shall not repurchase any Shares from your customers at a price below that next quoted by the Fund for redemption. You may hold such repurchased Shares for investment purposes or submit such Shares to the Fund for redemption. DISTRIBUTION AND/OR SERVICE FEES: - --------------------------------- We expect you to provide distribution and marketing services (the "Services") in the promotion of the sale of the Shares of such Fund and the retention of assets by such Fund and/or services and assistance to your customers who own Fund Shares, including but not limited to, answering routine inquiries regarding the Shares or a Fund or the status of a customer's account and providing information to customers relating to maintaining their investment in the Fund. 12B-1 PLANS: ------------ For your Services in respect of Shares of any Fund that has a Distribution Plan under Rule 12b-1 (a "12b-1 Plan") of the Investment Company Act of 1940 (the "1940 Act"), you will receive a fee (the "12b-1 Fee"), as established by us and the Fund from time to time, pursuant to the provisions of the 12b-1 Plan of such Fund relating to such Shares, subject to the further provisions of this Agreement, the terms of the then current and applicable Prospectus relating to such Shares and the provisions of the relevant 12b-1 Plan. The 12b-1 Fee in respect of Shares of a particular Fund shall be based on the net asset value of such Shares held in the accounts of your customers, provided that such Shares so held have an aggregate net asset value of at least the minimum amount established by us from time to time. Such 12b-1 Fee shall consist of a distribution fee component, if any, and/or a service fee component, if any, the rates of which shall be as provided in the schedule of fees set forth in Appendix A attached hereto, as the same may 12 be amended by a Fund or by us at any time and from time to time by notice thereof to you; provided, however, that in no event shall the rate of any such component be in excess of the current rates set forth in the then current and applicable Prospectus relating to such Shares and the provisions of the relevant 12b-1 Plan. SUPPLEMENTAL PLANS (FOR CERTAIN DEFINED CONTRIBUTION PLANS): ------------------------------------------------------------ Certain of the managers (the "Managers") of the Funds may, from time to time, determine to provide additional support, under certain circumstances, for the distribution and marketing of, and/or the provision of services to the holders of, the Shares in the form of payments or additional payments to selected broker-dealers who enter into Selling Dealer Agreements with us. Such additional payments will be made only when the Shares are used as part of a defined contribution product, and you provide, or cause to be provided, additional support to the defined contribution plan, its sponsors, or its participants with respect to such things as investment selection, investment style, and other characteristics such as performance of the Funds. Accordingly, for providing such additional services in respect of Shares of any Fund the Manager of which has determined to provide such additional support and has adopted a Supplemental Plan (a "Supplemental Plan"), you may receive a supplemental fee (the "Supplemental Fees"), as established by each particular Manager from time to time, subject to the further provisions of this Agreement, the terms of the then current and applicable Prospectus relating to such Shares and the instructions received by us from such Manager. The Supplemental Fees, if any, in respect of Shares of a particular Fund may be based on such factors as initial and/or current purchase prices or net asset values of such Shares acquired by or held in the accounts of your customers or certain customers and the periods for which such shares have been held and may be subject to such other minimums as may be established by the Managers or by us from time to time. Such Supplemental Fees may consist of a conversion fee component, if any, and/or a new contribution fee component, if any, the rates of which shall be as provided in the schedule of fees set forth in Appendix A attached hereto, as the same may be amended by us at any time and from time to time by notice thereof to you; provided, however, that in no event shall the rate of any such component be in excess of the current rates set forth in any form of subsequent notice furnished to you by us or on our behalf, or by the Manager or the Fund. We reserve the right, at any time, without notice, to modify, suspend or terminate payments hereunder, or any component of such payments, either with respect to one or more Funds or classes of Shares or generally with respect to the Funds and the Shares; and (i) the payment of 12b-1 Fees hereunder shall be automatically suspended or terminated if and to the extent that payments under the relevant 12b-1 Plan are suspended or terminated, or automatically reduced if and to the extent that the corresponding rates of payments to be made under the relevant 12b-1 Plan are reduced; and (ii) the payment of Supplemental Fees hereunder shall be automatically suspended or terminated if and to the extent that payments from the relevant Manager are suspended or terminated, or automatically reduced if and to the extent that the corresponding rates of payments to be made from the relevant Manager are reduced. Any such action may be for any reason whatsoever or no reason at all; and you agree that you shall not be entitled to any payments for any period after the effective date of any such suspension or 13 termination, nor shall you be entitled to any payments after the effective date of any such modification or reduction except as may be calculated pursuant to a modified or reduced schedule of fees substituted for the previously effective schedule. You understand and agree that we merely administer and forward payments pursuant to the 12b-1 Plans of the Funds and/or the Supplemental Plans of the Managers and that we shall have no liability to you for such payments. Accordingly, you agree that anything to the contrary herein notwithstanding (i) we shall have no liability to you, and you shall have no recourse whatsoever against us or our assets, for any payment for which provision is made in this Agreement, and (ii) your sole recourse, if any, in respect of any such payment for which provision is made in this Agreement shall be against the respective Fund or Manager, as the case may be. LEGAL COMPLIANCE: - ---------------- This Agreement and any transaction with, or payments to, you pursuant to the terms hereof is conditioned on each party's representation to the other party that, as of the date of this Agreement it is, and at all times during the effectiveness of this Agreement it will be, a registered broker-dealer under the Securities Exchange Act of 1934, as amended, and qualified under applicable state securities laws in each jurisdiction in which the actions contemplated to be taken by it under this Agreement require it to be qualified to act as a broker-dealer in securities, and a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"). Each party agrees to notify the other promptly in writing and immediately suspend sales of Shares if this representation ceases to be true. Each party also agrees that it will comply with the rules of the NASD including, in particular, Sections 2, 21(c) and 26 of Article III of its Rules of Fair Practice, as amended, and that each party will maintain adequate records with respect to its transactions with the other and the Funds. BLUE SKY MATTERS: - ----------------- We shall have no obligation or responsibility with respect to your right to sell Shares in any state or jurisdiction. We may furnish you with information identifying the states and jurisdictions where the Shares of a Fund are qualified for sale; and you will not transact orders for Shares except in such states and jurisdictions as identified by us. LITERATURE: - ----------- We will furnish you with copies of each Fund's relevant Prospectus and sales literature (if any) and other information made publicly available by us or the Fund which relate to the Fund or the Shares of such Fund, in reasonable quantities upon your request. You agree to deliver a copy of the current and relevant Prospectus in accordance with the provisions of the Securities Act of 1933 to each purchaser of Shares. We shall file Fund sales literature and promotional material with the NASD as required. You may not publish or use any sales literature or promotional materials with respect to the Shares, the Funds or any Fund without our prior review and written approval. NOTICES AND COMMUNICATIONS: - --------------------------- 14 All communications from you (other than purchase and sale orders) should be addressed to us at 211 Congress Street, Boston, Massachusetts 02110, Attention: Compliance Officer. Any notice from us to you shall be deemed to have been duly given if mailed or telegraphed to you at the address set forth below. Each of us may change the address to which notices shall be sent by notice to the other in accordance with the terms hereof. TERMINATION: - ------------ This Agreement may be terminated by either party at any time by written notice to that effect and will terminate without notice upon the appointment of a trustee for you under the Securities Investor Protection Act, or any other act of insolvency by you. Notwithstanding the termination of this Agreement, you shall remain liable for any amounts otherwise owing to us or the Funds and for your portion of any transfer tax or other liability which may be asserted or assessed against the Fund, or us. AMENDMENT: - ---------- This Agreement may be amended or revised to modify, suspend or terminate payments hereunder as provided in the section above entitled "DISTRIBUTION AND/OR SERVICE FEES" or to amend Appendix A as provided in said section. This Agreement may be otherwise amended or revised at any time by us upon notice to you and you will be deemed to have accepted any such other amendment or revision upon placing any subsequent order for Shares. GENERAL: - -------- Your acceptance hereof will constitute an obligation on your part to observe all the terms and conditions hereof. In the event that you breach any of the terms and conditions of this Agreement, you will indemnify us, the Funds, and our affiliates for any damages, losses, costs and expenses (including reasonable attorneys' fees and expenses) arising out of or relating to such breach. In the event that we breach any of the terms and conditions of this Agreement, we will indemnify you and your affiliates for any damages, losses, costs and expenses (including reasonable attorneys' fees and expenses) arising out of or relating to such breach. Nothing contained herein shall constitute you, us and any dealers an association or partnership. All references in this Agreement to the "Prospectus" refer to the then current and relevant version of the Prospectus of the particular Fund or Funds concerned and include the Statement of Additional Information incorporated by reference therein and any stickers or supplements thereto. This Agreement is to be construed in accordance with the laws of The Commonwealth of Massachusetts. Please confirm this Agreement by dating and executing, by your duly authorized representative, one copy of this Agreement below and return it to us. Keep the enclosed duplicate copy for your records. 15 UAM FUND DISTRIBUTORS, INC. BY:_____________________________________ (Name of Officer and Title) 16 SELECTED DEALER AGREEMENT ACCEPTANCE - ------------------------------------ UAM FUND DISTRIBUTORS, INC. The undersigned hereby confirms its acceptance of, and agreement to the terms of, the foregoing Selected Dealer Agreement and acknowledges that any purchase of Fund Shares made during the effectiveness of this Agreement is subject to all the applicable terms and conditions set forth in this Agreement, and agrees to pay for the shares at the price and upon the terms and conditions stated in the Agreement. The undersigned hereby acknowledges receipt of Prospectuses relating to the Fund Shares and confirms that, in executing this Selected Dealer Agreement, it has relied on such Prospectuses and not on any other statement whatsoever, written or oral. INVESTMENT DEALER PLEASE SIGN HERE AND COMPLETE BELOW ________________________________________ (Full Corporate Name of Broker-Dealer) By:_____________________________________ (Name of Officer and Title) ________________________________________ (Broker-Dealer's Tax Identification No,) ________________________________________ (Notice Address -- Please include name of compliance contact) Date:___________________________________ APPENDIX A SCHEDULE OF FEES 12B-1 FEES A separate fee for each Fund will be determined quarterly based on the annual rates set forth below.
DISTRIBUTION SERVICE NAME OF FUND COMPONENT COMPONENT - ------------ ------------ --------- BHM&S Total Return Bond Portfolio (IS) 0.00% 0.25% DSI Disciplined Value Portfolio (IS) 0.00% 0.25% FMA Small Company Portfolio (IS) 0.15% 0.25% FPA Crescent Portfolio (IS) 0.00% 0.25%
17 MJI International Equity Portfolio (IS) 0.00% 0.25% NWQ Balanced Portfolio (IS) 0.15% 0.25% NWQ Value Equity Portfolio (IS) 0.15% 0.25% Sirach Equity Portfolio (IS) 0.00% 0.25% Sirach Growth Portfolio (IS) 0.00% 0.25% Sirach Special Equity Portfolio (IS) 0.00% 0.25% Sirach Strategic Balanced Portfolio (IS) 0.00% 0.25% Sterling Partners' Balanced Portfolio (IS) 0.00% 0.25% Sterling Partners' Equity Portfolio (IS) 0.00% 0.25% TJ Core Equity Portfolio (IS) 0.00% 0.25%
18 SUPPLEMENTAL FEES (FOR CERTAIN DEFINED CONTRIBUTION PLANS ONLY) Supplemental fees for each broker-dealer will be determined quarterly as of the end of each calendar quarter. Each quarterly fee shall consist of CONVERSION COMPONENTS, if any, and NEW CONTRIBUTION COMPONENTS, if any. There shall be a CONVERSION COMPONENT with respect to each new shareholder account established through the purchase of Shares of the Funds subject to the further terms and conditions stated in this paragraph. The aggregate purchase price of Shares of the Funds initially acquired by the account must have been at least $1,000,000 and the account must have been in existence for at least one full calendar quarter. The portion of the CONVERSION COMPONENT attributable to the Shares of each Fund initially acquired by such account shall be calculated by applying the quarterly rate of the CONVERSION COMPONENT for that Fund, as specified below, to the aggregate purchase price of the Shares of that Fund initially acquired. The amount so calculated shall be included in the fee with respect to such account for each of the four (4) full calendar quarters following the establishment of the account; provided, however, that such CONVERSION COMPONENT shall not be payable with respect to, or included in the fee for, any such quarter if, as of the last business day of such quarter, the number of Shares of the Funds (adjusted, if necessary, to give effect to exchanges) held in the account has been reduced to less than ninety (90) percent of the number of Shares initially acquired by such account, nor shall a CONVERSION COMPONENT be payable for any quarter subsequent thereto. There shall be a NEW CONTRIBUTION COMPONENT for each shareholder account which existed at the beginning of a calendar quarter subject to the further terms and conditions stated in this paragraph. The account must have made a QUALIFYING PURCHASE of Shares of a Fund or Funds during the quarter concerned. A QUALIFYING PURCHASE means an aggregate investment of at least $100,000 in the Shares of the Funds. The portion of the NEW CONTRIBUTION COMPONENT attributable to the Shares of each Fund acquired by such account as part of a QUALIFYING PURCHASE shall be calculated by applying the single payment rate of the NEW CONTRIBUTION COMPONENT for that Fund, as specified below, to the portion of the QUALIFYING PURCHASE made in Shares of that Fund and aggregating the amounts for all such Funds the Shares of which were included in such QUALIFYING PURCHASE. The aggregate amount of the NEW CONTRIBUTION COMPONENT so determined shall be included in the supplemental fees for the single quarter concerned.
NEW CONVERSION CONTRIBUTION NAME OF FUND COMPONENT COMPONENT - ------------ ---------- ------------ BHM&S Total Return Bond Portfolio (IS) * 0.25% DSI Disciplined Value Portfolio (IS) * 0.25% FMA Small Company Portfolio (IS) * 0.25% MJI International Equity Portfolio (IS) * 0.25%
19 NWQ Small Cap Value Portfolio (IS) * 0.25% NWQ Special Equity Portfolio (IS) * 0.25% NWQ Balanced Portfolio (IS) * 0.25% NWQ Value Equity Portfolio (IS) * 0.25% Sirach Equity Portfolio (IS) * 0.25% Sirach Growth Portfolio (IS) * 0.25% Sirach Special Equity Portfolio (IS) * 0.25% Sirach Strategic Balanced Portfolio (IS) * 0.25% Sterling Partners' Balanced Portfolio (IS) * 0.25% Sterling Partners' Equity Portfolio (IS) * 0.25% Sterling Partners' Small Cap Value Portfolio (IS) * 0.25% TJ Core Equity Portfolio (IS) * 0.25%
_____________________ * At the quarterly rate of 0.125% on the first $3,000,000 of initial assets and 0.0625% on the excess of such assets over $3,000,000. 20 EX-99.M.3 16 SHAREHOLDER SERVICES PLAN EXHIBIT M.3. UAM FUNDS TRUST I SHAREHOLDER SERVICES PLAN ------------------------- 1. Services. Under this Shareholder Services Plan (the "Plan"), -------- _______________ (the "Shareholder Servicing Agent"), shall provide personal service and/or services for the maintenance of shareholder accounts for the shareholders of UAM Funds Trust (the "Fund") including: (a) acting as the sole shareholder of record and nominee for beneficial owners; (b) maintaining account records for such beneficial owners of the Fund's shares; (c) opening and closing accounts; (d) answering questions and handling correspondence from shareholders about their accounts; (e) processing shareholder orders to purchase, redeem and exchange shares; (f) handling the transmission of funds representing the purchase price or redemption proceeds; (g) issuing confirmation for transactions in the Fund's shares by shareholders; (h) distributing current copies of prospectuses, statements of additional information and shareholder reports; (i) assisting customers in completing application forms, selecting dividend and other account options and opening custody accounts with the Shareholder Servicing Agent; (j) providing account maintenance and accounting support for all transactions. (k) performing such additional shareholder services as may be agreed upon by the Fund and the Shareholder Servicing Agent, provided that any such additional shareholder service must constitute a permissible non- banking activity in accordance with the then current regulations of, and interpretations thereof by, the Board of Governors of the Federal Reserve System. 2. Shareholder Servicing Fee. In consideration for the foregoing ------------------------- services, the Fund shall reimburse the Shareholder Servicing Agent for the actual expenses incurred by the Shareholder Servicing Agent in providing the foregoing services up to a maximum annual rate equal to 0.25% of the average daily net assets of the Fund serviced by the Shareholder Servicing Agent, accrued daily and payable monthly. 3. Reimbursement. All shareholder services expenses shall be submitted ------------- for reimbursement promptly and must be submitted for reimbursement in the same fiscal year of the Fund in which such expenses were incurred or, in the case of expenses incurred close to the end of the Fund's fiscal year, in the next fiscal quarter of the Fund after such expenses have been incurred. 4. Term. This Plan, which was approved initially by the Board of ---- Trustees of the Fund on June 18, 1998, shall continue in effect indefinitely thereafter so long as its continuance, together with the continuance of any and all agreements now or in the future related to the Plan, are approved at least annually by a majority of the Board of Trustees of the Fund including a majority of the Trustees who are not "interested persons," as defined in the 1940 Act, of the Fund and who have no direct or indirect financial interest in the operation of the Plan, or any agreements related to the Plan, cast in person at a meeting called for the purpose of voting on the Plan and any related agreements. 5. Quarterly Report. The Trustees of the Fund shall review on a ---------------- quarterly basis a written report of the amount of monies reimbursed or reimbursable by the Fund pursuant to the Plan and any related agreements and the purposes for which such reimbursements and the related expenditures were made. Such quarterly report shall be 1 prepared by such persons as are authorized to direct the distribution of monies reimbursed or reimbursable by the Fund pursuant to the Plan and any related agreements. 6. Termination. This Plan may be terminated at any time by vote of the ----------- majority of the Trustees of the Fund who are not "interested persons," as defined in the 1940 Act, of the Fund and who have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan or, at the discretion of the Board of Trustees of the Fund, by vote of a majority of the outstanding voting securities of the Fund. 7. Trustees' Review. The Trustees of the Fund have a duty to request and ---------------- evaluate, and the Shareholder Servicing Agent agrees to provide upon request by the Fund, such information as may be reasonably necessary to make an informed determination of whether the Plan should be implemented or continued. In fulfilling their duties under this Section 7, the Trustees should consider and give appropriate weight to all factors pertinent to the continued use of the Fund's assets for the Plan. Minutes describing the factors considered and the basis for the Trustees' decision to use the Fund's assets for the Plan must be made and preserved. 8. Amendments. The Plan may not be amended in any material respect ---------- except with the approval of a majority of the Board of Trustees of the Fund including a majority of the Trustees who are not "interested Persons," as defined in the 1940 Act, of the Fund cast in person at a meeting called for the purpose of voting on such amendment to the Plan. 2 EX-99.M.4 17 SERVICE AGREEMENT EXHIBIT M.4. OMNIBUS ACCOUNT SERVICES AGREEMENT UAM FUNDS, INC. UAM FUNDS TRUST AGREEMENT entered into as of _________________, by and between UAM Funds, Inc. and UAM Funds Trust (collectively, the "Funds"), various investment advisers to such Funds (the "Adviser"), and _______________________ ("Service Provider"). As used in this Agreement, the following terms shall have the following meanings, unless a different meaning is clearly required by the context: Client-shareholders shall mean those clients of Service Provider who maintain an - ------------------- interest in an omnibus account with the Funds registered in the name of "____________" and who receive services from Service Provider under this Agreement. Funds - See attached list. - ----- In consideration of the mutual covenants herein contained, the parties agree as follows: 1. Service Provider agrees to perform certain services for the Client- shareholders as more particularly set forth below. Service Provider represents and warrants that it has, and will continue at all times to have, the necessary facilities, equipment and personnel to perform its services hereunder in a businesslike and competent manner; systems to comply with any applicable laws, rules and regulations related to the services to be provided under this Agreement, including the maintenance and preservation of all records and registrations required by any applicable laws, rules and regulations. 2. Service Provider represents and warrants that all Client-shareholders are aware that they are transacting business with Service Provider and not the Funds, and that they will look only to Service Provider and not the Funds for resolution of problems or discrepancies in their accounts. Service Provider represents and warrants that it is registered or not required to be registered as either a broker-dealer pursuant to Section 15 of the Securities Exchange Act of 1934 (the "Exchange Act") or a transfer agent pursuant to Section 17A of the Exchange Act. Service Provider further represents and warrants that neither it nor any of its affiliates is, or during the term of this Agreement will become, a "fiduciary" as that term is defined in Section 4975 of the Internal Revenue Code of 1986, as amended, or in Section 3(21)(A) of the Employee Retirement Income Security Act of 1974, as amended, with respect to any investment in the Funds which may be subject to such Sections, or if we are a fiduciary, our receipt of compensation pursuant to this Agreement will not violate federal law. 3. Service Provider agrees that it will establish with the Funds one or more omnibus accounts registered in Service Provider's name for Client- shareholders in the Funds, and will perform various services for Client- shareholders in those accounts, including without limitation: establishing and maintaining records of Client-shareholders' accounts; processing purchase and redemption transactions; confirming Client-shareholder transactions; delivering prospectuses to new shareholders upon confirmation of purchase order; delivery of shareholder reports and proxies to shareholders; answering routine client inquiries regarding the Funds; assisting clients in changing dividend options, account -1- designations and addresses; withholding taxes on non-resident alien accounts; disbursing income dividends and capital gains distributions; reinvesting dividends and distributions; preparing and delivering to Client-shareholders and state and federal authorities, including the United States Internal Revenue Service, such information respecting dividends and distributions paid by the Funds as may be required by law, rule or regulation; withholding on dividends and distributions as may be required by state or federal authorities from time to time; and such other services as the Funds may reasonably request. Service Provider will transmit to each Fund each business day by 4:00 p.m. EST purchase or redemption orders reflecting purchase, redemption and exchange orders received by it that business day for Client-shareholders. 4. Service Provider may maintain all historical Client-shareholder records consistent with requirements of all applicable laws, rules and regulations. Upon the request of the Funds, Service Provider shall provide copies of written communications regarding the Funds to or from such Client- shareholders, and other materials. Service Provider shall make available (if requested) to the Funds, records or communications necessary to determine the number of Client-shareholders in each Service Provider's omnibus account, states of residence for each shareholder, and the number of shares held by each. If, at any time, the Funds determine that Service Provider's practices, procedures or controls are inadequate, written notice of such inadequacy shall be given to Service Provider, and Service Provider shall have 15 days plus any additional time which the Funds may provide to correct its practices, procedures or controls. In the event such practices, procedures or controls are not adequately corrected by Service Provider, the Funds shall have the right to immediately terminate this Agreement. Nothing in this Agreement shall impose upon the Funds the obligation to review Service Provider's practices, procedures and controls. 5. The official records of transactions of Service Provider's omnibus account and the number of shares in such omnibus accounts shall be as determined by the Funds. Service Provider shall be solely responsible for any discrepancies between its omnibus accounts and the Client-shareholder accounts and for the maintenance of all records regarding the Client- shareholders, the Client-shareholders' transactions and the Client- shareholders' interests in the omnibus accounts. 6. Service Provider is solely responsible for the reconciliation of customer accounts with its omnibus account at the Funds. If any such reconciliation indicates any unexplained reconciling item or items, the Funds agree to assist Service Provider in resolving any discrepancies. 7. The Funds will have the sole authority and responsibility under this Agreement for countersigning securities of the Funds, monitoring the issuance of securities of the Funds with a view to preventing unauthorized issuance, registering the transfer of securities of the Funds, exchanging or converting securities of the Funds or transferring record ownership of securities of the Funds by bookkeeping entry without physical issuance of securities certificates of the Funds. While Service Provider will provide the services to its Client-shareholders as described in this Agreement, Service Provider will not engage in countersigning securities of the Funds, monitoring the issuance of securities of the Funds with a view to preventing unauthorized issuance, registering the transfer of securities of the Funds, exchanging or converting securities of the Funds, or transferring record ownership of securities of the Funds by bookkeeping entry without physical issuance of securities certificates of the Funds. -2- 8. The Funds represent and warrant that they will not use any information relating to Client-shareholders received pursuant to this Agreement to solicit or otherwise attempt to sell products to Client-shareholders. 9. For the services and facilities described in this Agreement, the Funds and Adviser(s) will pay a fee to Service Provider after the end of each month at the annual rate applicable to the average aggregate daily net asset value of shares of the Funds in the accounts for which Service Provider provides services. The initial terms, conditions and amounts of such payments are set forth in Schedule A attached hereto. In computing Service Provider's fee, one-twelfth of the applicable fee rate set forth in Schedule A shall be applied to the average aggregate daily net asset value of shares of the applicable Funds in accounts for which Service Provider provides services for the month in question. Each month's fee shall be determined independently of every other month's fee. For the month in which this Agreement becomes effective or terminates, there shall be an appropriate proration on the basis of the number of days that the Agreement is in effect during the month. Except as otherwise agreed in writing with the Funds with respect to specific expenditures by Service Provider, Service Provider shall be solely responsible for all costs and expenses of providing services under this Agreement. The parties to this Agreement recognize and agree that all payments made under this Agreement represent compensation for the administrative services contained herein only and do not constitute payment in any manner for investment advisory services or for costs of distribution of the Fund's shares. 10. With regard to all the services provided to its Client-shareholders by Service Provider, Service Provider is an independent contractor, is solely responsible for its actions or inactions, and is not and does not have authority to act as agent of the Funds. Service Provider is solely responsible to its Client-shareholders and agrees that at all times, including after termination of this Agreement, it will be responsible for all complaints and inquiries from its Client-shareholders relating to Service Provider's actions or inactions under this Agreement or relating to the Client-shareholders' accounts during the period in which this Agreement was in effect. 11. The Funds will be responsible for any loss, claim, demand or liability arising from a material error or omission contained in the Funds' prospectuses provided that the error or omission was not a result of information provided by Service Provider. Service Provider shall indemnify and hold each officer, employee and agent of each Fund harmless from and against any and all losses arising out of any action taken or omitted to be taken by Service Provider pursuant to this Agreement and resulting from Service Provider's breach of this Agreement, willful misconduct or negligence. This paragraph shall survive the termination of the Agreement. 12. Service Provider shall provide such security as is necessary to prevent unauthorized use of any on-line computer facilities (if applicable). 13. Service Provider acknowledges that the Funds may enter into similar agreements with others without the consent of Service Provider. -3- 14. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder shall not be affected thereby. 15. This Agreement supersedes all prior services agreements between the parties relating to the Funds. 16. This Agreement shall become effective as of the date it is accepted by Service Provider, and will continue in effect until terminated in writing upon sixty (60) days prior notice by either party to the other; provided, that Service Provider shall be entitled to receive all fees it has earned up to and including the effective date of the termination. 17. This Agreement shall be governed by, and construed in accordance with, the laws of The Commonwealth of Massachusetts. 18. Whenever notice is required under this Agreement, it shall be given in writing by registered mail to the Funds c/o UAM Fund Services, Inc., 211 Congress Street, Boston, MA 02110; and to Service Provider at ___________. 19. The duties and obligations of the parties herein may not be assigned by a party without the prior written consent of the other party. 20. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which together shall be deemed one and the same document. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and their respective corporate seals to be affixed as of the date first above written by their respective officers hereunto duly authorized. ATTEST: UAM FUNDS, INC. UAM FUNDS TRUST By:____________________________ By:_____________________________ Name:__________________________ Name:___________________________ Date:__________________________ Date:___________________________ ATTEST: ___________________[ADVISER] By:____________________________ By:______________________________ Name:__________________________ Name:____________________________ Date:__________________________ Date:____________________________ ATTEST: ___________________[SERVICE PROVIDER] By:____________________________ By:______________________________ Name:__________________________ Name:____________________________ Date:__________________________ Date:____________________________ -4- OMNIBUS ACCOUNT SERVICES AGREEMENT LIST OF PARTICIPATING FUNDS: - --------------------------- -5- OMNIBUS ACCOUNT SERVICES AGREEMENT SCHEDULE A Fee payable to Service Provider is based upon the average aggregate daily net asset value of shares of the Funds included in this Agreement and shall be in the following amount: $__________. -6- OMNIBUS ACCOUNT SERVICES AGREEMENT UAM FUNDS, INC. UAM FUNDS TRUST AGREEMENT entered into as of _________________, by and between UAM Funds, Inc. and UAM Funds Trust (collectively, the "Funds") and _______________________ ("Service Provider"). As used in this Agreement, the following terms shall have the following meanings, unless a different meaning is clearly required by the context: Client-shareholders shall mean those clients of Service Provider who maintain an - ------------------- interest in an omnibus account with the Funds registered in the name of "____________" and who receive services from Service Provider under this Agreement. Funds - See attached list. - ----- In consideration of the mutual covenants herein contained, the parties agree as follows: 1. Service Provider agrees to perform certain services for the Client- shareholders as more particularly set forth below. Service Provider represents and warrants that it has, and will continue at all times to have, the necessary facilities, equipment and personnel to perform its services hereunder in a businesslike and competent manner; systems to comply with any applicable laws, rules and regulations related to the services to be provided under this Agreement, including the maintenance and preservation of all records and registrations required by any applicable laws, rules and regulations. 2. Service Provider represents and warrants that all Client-shareholders are aware that they are transacting business with Service Provider and not the Funds, and that they will look only to Service Provider and not the Funds for resolution of problems or discrepancies in their accounts. Service Provider represents and warrants that it is registered or not required to be registered as either a broker-dealer pursuant to Section 15 of the Securities Exchange Act of 1934 (the "Exchange Act") or a transfer agent pursuant to Section 17A of the Exchange Act. Service Provider further represents and warrants that neither it nor any of its affiliates is, or during the term of this Agreement will become, a "fiduciary" as that term is defined in Section 4975 of the Internal Revenue Code of 1986, as amended, or in Section 3(21)(A) of the Employee Retirement Income Security Act of 1974, as amended, with respect to any investment in the Funds which may be subject to such Sections. 3. Service Provider agrees that it will establish with the Funds one or more omnibus accounts registered in Service Provider's name for Client- shareholders in the Funds, and will perform various services for Client- shareholders in those accounts, including without limitation: establishing and maintaining records of Client-shareholders' accounts; processing purchase and redemption transactions; confirming Client-shareholder transactions; delivering prospectuses to new shareholders upon confirmation of purchase order; delivery of shareholder reports and proxies to shareholders; answering routine client inquiries regarding the Funds; assisting clients in changing dividend options, account designations and addresses; withholding taxes on non-resident alien accounts; disbursing income dividends and capital gains distributions; reinvesting dividends and distributions; preparing and delivering to Client-shareholders and state and federal authorities, including the United States Internal -7- Revenue Service, such information respecting dividends and distributions paid by the Funds as may be required by law, rule or regulation; withholding on dividends and distributions as may be required by state or federal authorities from time to time; and such other services as the Funds may reasonably request. Service Provider will transmit to each Fund each business day by 4:00 p.m. EST purchase or redemption orders reflecting purchase, redemption and exchange orders received by it that business day for Client-shareholders. 4. Service Provider may maintain all historical Client-shareholder records consistent with requirements of all applicable laws, rules and regulations. Upon the request of the Funds, Service Provider shall provide copies of written communications regarding the Funds to or from such Client- shareholders, and other materials. Service Provider shall make available (if requested) to the Funds, records or communications necessary to determine the number of Client-shareholders in each Service Provider's omnibus account, states of residence for each shareholder, and the number of shares held by each. If, at any time, the Funds determine that Service Provider's practices, procedures or controls are inadequate, written notice of such inadequacy shall be given to Service Provider, and Service Provider shall have 15 days plus any additional time which the Funds may provide to correct its practices, procedures or controls. In the event such practices, procedures or controls are not adequately corrected by Service Provider, the Funds shall have the right to immediately terminate this Agreement. Nothing in this Agreement shall impose upon the Funds the obligation to review Service Provider's practices, procedures and controls. 5. The official records of transactions of Service Provider's omnibus account and the number of shares in such omnibus accounts shall be as determined by the Funds. Service Provider shall be solely responsible for any discrepancies between its omnibus accounts and the Client-shareholder accounts and for the maintenance of all records regarding the Client- shareholders, the Client-shareholders' transactions and the Client- shareholders' interests in the omnibus accounts. 6. Service Provider is solely responsible for the reconciliation of customer accounts with its omnibus account at the Funds. If any such reconciliation indicates any unexplained reconciling item or items, the Funds agree to assist Service Provider in resolving any discrepancies. 7. The Funds will have the sole authority and responsibility under this Agreement for countersigning securities of the Funds, monitoring the issuance of securities of the Funds with a view to preventing unauthorized issuance, registering the transfer of securities of the Funds, exchanging or converting securities of the Funds or transferring record ownership of securities of the Funds by bookkeeping entry without physical issuance of securities certificates of the Funds. While Service Provider will provide the services to its Client-shareholders as described in this Agreement, Service Provider will not engage in countersigning securities of the Funds, monitoring the issuance of securities of the Funds with a view to preventing unauthorized issuance, registering the transfer of securities of the Funds, exchanging or converting securities of the Funds, or transferring record ownership of securities of the Funds by bookkeeping entry without physical issuance of securities certificates of the Funds. 8. The Funds represent and warrant that they will not use any information relating to Client-shareholders received pursuant to this Agreement to solicit or otherwise attempt to sell products to Client-shareholders. -8- 9. For the services and facilities described in this Agreement, the Funds will pay a fee to Service Provider after the end of each month at the annual rate applicable to the average aggregate daily net asset value of shares of the Funds in the accounts for which Service Provider provides services. The initial terms, conditions and amounts of such payments are set forth in Schedule A attached hereto. In computing Service Provider's fee, one-twelfth of the applicable fee rate set forth in Schedule A shall be applied to the average aggregate daily net asset value of shares of the applicable Funds in accounts for which Service Provider provides services for the month in question. Each month's fee shall be determined independently of every other month's fee. For the month in which this Agreement becomes effective or terminates, there shall be an appropriate proration on the basis of the number of days that the Agreement is in effect during the month. Except as otherwise agreed in writing with the Funds with respect to specific expenditures by Service Provider, Service Provider shall be solely responsible for all costs and expenses of providing services under this Agreement. The parties to this Agreement recognize and agree that all payments made under this Agreement represent compensation for the administrative services contained herein only and do not constitute payment in any manner for investment advisory services or for costs of distribution of the Fund's shares. 10. With regard to all the services provided to its Client-shareholders by Service Provider, Service Provider is an independent contractor, is solely responsible for its actions or inactions, and is not and does not have authority to act as agent of the Funds. Service Provider is solely responsible to its Client-shareholders and agrees that at all times, including after termination of this Agreement, it will be responsible for all complaints and inquiries from its Client-shareholders relating to Service Provider's actions or inactions under this Agreement or relating to the Client-shareholders' accounts during the period in which this Agreement was in effect. 11. The Funds will be responsible for any loss, claim, demand or liability arising from a material error or omission contained in the Funds' prospectuses provided that the error or omission was not a result of information provided by Service Provider. Service Provider shall indemnify and hold each officer, employee and agent of each Fund harmless from and against any and all losses arising out of any action taken or omitted to be taken by Service Provider pursuant to this Agreement and resulting from Service Provider's breach of this Agreement, willful misconduct or negligence. This paragraph shall survive the termination of the Agreement. 12. Service Provider shall provide such security as is necessary to prevent unauthorized use of any on-line computer facilities (if applicable). 13. Service Provider acknowledges that the Funds may enter into similar agreements with others without the consent of Service Provider. 14. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder shall not be affected thereby. 15. This Agreement supersedes all prior services agreements between the parties relating to the Funds. -9- 16. This Agreement shall become effective as of the date it is accepted by Service Provider, and will continue in effect until terminated in writing upon sixty (60) days prior notice by either party to the other; provided, that Service Provider shall be entitled to receive all fees it has earned up to and including the effective date of the termination. 17. This Agreement shall be governed by, and construed in accordance with, the laws of The Commonwealth of Massachusetts. 18. Whenever notice is required under this Agreement, it shall be given in writing by registered mail to the Funds c/o UAM Fund Services, Inc., 211 Congress Street, Boston, MA 02110; and to Service Provider at ___________. 19. The duties and obligations of the parties herein may not be assigned by a party without the prior written consent of the other party. 20. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which together shall be deemed one and the same document. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and their respective corporate seals to be affixed as of the date first above written by their respective officers hereunto duly authorized. ATTEST: UAM FUNDS, INC. UAM FUNDS TRUST By:____________________________ By:_____________________________ Name:__________________________ Name:___________________________ Date:__________________________ Date:___________________________ ATTEST: ___________________[SERVICE PROVIDER] By:____________________________ By:______________________________ Name:__________________________ Name:____________________________ Date:__________________________ Date:____________________________ -10- OMNIBUS ACCOUNT SERVICES AGREEMENT LIST OF PARTICIPATING FUNDS: - --------------------------- -11- OMNIBUS ACCOUNT SERVICES AGREEMENT SCHEDULE A Fee payable to Service Provider is based upon the average aggregate daily net asset value of shares of the Funds included in this Agreement and shall be in the following amount: $__________. -12- EX-99.27.N.1 18 FINANCIAL DATA SCHEDULE-BHM & S, INST'L SERV. [ARTICLE] 6 [CIK] 0000924727 [NAME] UAM FUNDS TRUST [SERIES] [NUMBER] 602 [NAME] BHM & S TOTAL RETURN BOND PORTFOLIO, INSTITUTIONAL SERVICE CLASS [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] APR-30-1998 [PERIOD-START] MAY-01-1997 [PERIOD-END] APR-30-1998 [INVESTMENTS-AT-COST] 34,985,825 [INVESTMENTS-AT-VALUE] 35,252,010 [RECEIVABLES] 523,214 [ASSETS-OTHER] 227 [OTHER-ITEMS-ASSETS] 128 [TOTAL-ASSETS] 35,775,579 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 117,462 [TOTAL-LIABILITIES] 117,462 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 34,625,865 [SHARES-COMMON-STOCK] 1,521,319 [SHARES-COMMON-PRIOR] 406,663 [ACCUMULATED-NII-CURRENT] 230,556 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 535,511 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 266,185 [NET-ASSETS] 35,658,117 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 1,948,958 [OTHER-INCOME] 0 [EXPENSES-NET] (240,459) [NET-INVESTMENT-INCOME] 1,708,499 [REALIZED-GAINS-CURRENT] 719,181 [APPREC-INCREASE-CURRENT] 340,239 [NET-CHANGE-FROM-OPS] 2,767,919 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (671,335) [DISTRIBUTIONS-OF-GAINS] (58,332) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 1,470,225 [NUMBER-OF-SHARES-REDEEMED] (426,221) [SHARES-REINVESTED] 70,652 [NET-CHANGE-IN-ASSETS] 18,551,157 [ACCUMULATED-NII-PRIOR] 117,102 [ACCUMULATED-GAINS-PRIOR] (43,821) [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 107,452 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 392,973 [AVERAGE-NET-ASSETS] 30,611,394 [PER-SHARE-NAV-BEGIN] 9.95 [PER-SHARE-NII] 0.56 [PER-SHARE-GAIN-APPREC] 0.40 [PER-SHARE-DIVIDEND] (0.53) [PER-SHARE-DISTRIBUTIONS] (0.04) [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 10.34 [EXPENSE-RATIO] 0.94 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.27.N.2 19 FINANCIAL DATA SCHEDULE-BHM & S, INST'L CLASS [ARTICLE] 6 [CIK] 0000924727 [NAME] UAM FUNDS TRUST [SERIES] [NUMBER] 601 [NAME] BHM & S TOTAL RETURN BOND PORTFOLIO, INSTITUTIONAL CLASS [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] APR-30-1998 [PERIOD-START] MAY-01-1997 [PERIOD-END] APR-30-1998 [INVESTMENTS-AT-COST] 34,985,825 [INVESTMENTS-AT-VALUE] 35,252,010 [RECEIVABLES] 523,214 [ASSETS-OTHER] 227 [OTHER-ITEMS-ASSETS] 128 [TOTAL-ASSETS] 35,775,579 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 117,462 [TOTAL-LIABILITIES] 117,462 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 34,625,865 [SHARES-COMMON-STOCK] 1,923,231 [SHARES-COMMON-PRIOR] 1,311,135 [ACCUMULATED-NII-CURRENT] 230,556 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 535,511 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 266,185 [NET-ASSETS] 35,658,117 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 1,948,958 [OTHER-INCOME] 0 [EXPENSES-NET] (240,459) [NET-INVESTMENT-INCOME] 1,708,499 [REALIZED-GAINS-CURRENT] 719,181 [APPREC-INCREASE-CURRENT] 340,239 [NET-CHANGE-FROM-OPS] 2,767,919 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (928,980) [DISTRIBUTIONS-OF-GAINS] (76,247) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 1,644,535 [NUMBER-OF-SHARES-REDEEMED] (1,130,795) [SHARES-REINVESTED] 98,356 [NET-CHANGE-IN-ASSETS] 18,551,157 [ACCUMULATED-NII-PRIOR] 117,102 [ACCUMULATED-GAINS-PRIOR] (43,821) [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 107,452 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 392,973 [AVERAGE-NET-ASSETS] 30,611,394 [PER-SHARE-NAV-BEGIN] 9.96 [PER-SHARE-NII] 0.58 [PER-SHARE-GAIN-APPREC] 0.41 [PER-SHARE-DIVIDEND] (0.55) [PER-SHARE-DISTRIBUTIONS] (0.04) [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 10.36 [EXPENSE-RATIO] 0.68 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.N.27.3 20 FINANCIAL DATA SCHEDULE-CAM INTERMEDIATE [ARTICLE] 6 [CIK] 0000924727 [NAME] UAM FUNDS TRUST [SERIES] [NUMBER] 3 [NAME] CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] APR-30-1998 [PERIOD-START] MAY-01-1997 [PERIOD-END] APR-30-1998 [INVESTMENTS-AT-COST] 12,902,050 [INVESTMENTS-AT-VALUE] 13,089,243 [RECEIVABLES] 187,332 [ASSETS-OTHER] 77 [OTHER-ITEMS-ASSETS] 8,359 [TOTAL-ASSETS] 13,285,011 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 23,694 [TOTAL-LIABILITIES] 23,694 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 12,969,351 [SHARES-COMMON-STOCK] 1,258,182 [SHARES-COMMON-PRIOR] 975,130 [ACCUMULATED-NII-CURRENT] 87,263 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 17,510 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 187,193 [NET-ASSETS] 13,261,317 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 706,247 [OTHER-INCOME] 0 [EXPENSES-NET] (87,715) [NET-INVESTMENT-INCOME] 618,532 [REALIZED-GAINS-CURRENT] 19,841 [APPREC-INCREASE-CURRENT] 190,831 [NET-CHANGE-FROM-OPS] 829,204 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (596,183) [DISTRIBUTIONS-OF-GAINS] (4,101) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 272,351 [NUMBER-OF-SHARES-REDEEMED] (46,828) [SHARES-REINVESTED] 57,529 [NET-CHANGE-IN-ASSETS] 3,217,140 [ACCUMULATED-NII-PRIOR] 60,816 [ACCUMULATED-GAINS-PRIOR] 1,414 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 52,374 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 190,328 [AVERAGE-NET-ASSETS] 10,965,297 [PER-SHARE-NAV-BEGIN] 10.30 [PER-SHARE-NII] 0.57 [PER-SHARE-GAIN-APPREC] 0.24 [PER-SHARE-DIVIDEND] (0.57) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 10.54 [EXPENSE-RATIO] 0.80 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.27.N.4 21 FINANCIAL DATA SCHEDULE-CAM VALUE CONTRAR [ARTICLE] 6 [CIK] 0000924727 [NAME] UAM FUNDS TRUST [SERIES] [NUMBER] 2 [NAME] CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] APR-30-1998 [PERIOD-START] MAY-01-1997 [PERIOD-END] APR-30-1998 [INVESTMENTS-AT-COST] 19,772,188 [INVESTMENTS-AT-VALUE] 22,544,249 [RECEIVABLES] 146,713 [ASSETS-OTHER] 147 [OTHER-ITEMS-ASSETS] 7,533 [TOTAL-ASSETS] 22,698,642 [PAYABLE-FOR-SECURITIES] 100,284 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 46,586 [TOTAL-LIABILITIES] 146,870 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 18,387,505 [SHARES-COMMON-STOCK] 1,413,162 [SHARES-COMMON-PRIOR] 1,056,131 [ACCUMULATED-NII-CURRENT] 25,950 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 1,366,256 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 2,772,061 [NET-ASSETS] 22,551,772 [DIVIDEND-INCOME] 385,704 [INTEREST-INCOME] 21,032 [OTHER-INCOME] 0 [EXPENSES-NET] (183,113) [NET-INVESTMENT-INCOME] 223,623 [REALIZED-GAINS-CURRENT] 2,464,320 [APPREC-INCREASE-CURRENT] 2,363,924 [NET-CHANGE-FROM-OPS] 5,051,867 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (223,623) [DISTRIBUTIONS-OF-GAINS] (2,464,320) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 509,622 [NUMBER-OF-SHARES-REDEEMED] (250,654) [SHARES-REINVESTED] 98,063 [NET-CHANGE-IN-ASSETS] 8,747,366 [ACCUMULATED-NII-PRIOR] 30,593 [ACCUMULATED-GAINS-PRIOR] 81,888 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 120,386 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 306,522 [AVERAGE-NET-ASSETS] 19,275,791 [PER-SHARE-NAV-BEGIN] 13.07 [PER-SHARE-NII] 0.17 [PER-SHARE-GAIN-APPREC] 3.84 [PER-SHARE-DIVIDEND] (1.12) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 15.96 [EXPENSE-RATIO] 0.95 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.27.N.5 22 FINANCIAL DATA SCHEDULE-MJI INTER'L INST'L [ARTICLE] 6 [CIK] 0000924727 [NAME] UAM FUNDS TRUST [SERIES] [NUMBER] 101 [NAME] MJI INTERNATIONAL EQUITY PORTFOLIO, INSTITUTIONAL CLASS [MULTIPLIER] 1 [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] APR-30-1998 [PERIOD-START] MAY-01-1997 [PERIOD-END] APR-30-1998 [INVESTMENTS-AT-COST] 33,806,872 [INVESTMENTS-AT-VALUE] 40,660,641 [RECEIVABLES] 193,073 [ASSETS-OTHER] 299 [OTHER-ITEMS-ASSETS] 181,848 [TOTAL-ASSETS] 41,035,861 [PAYABLE-FOR-SECURITIES] 1,391,451 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 97,561 [TOTAL-LIABILITIES] 1,489,012 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 32,223,942 [SHARES-COMMON-STOCK] 2,628,369 [SHARES-COMMON-PRIOR] 2,705,133 [ACCUMULATED-NII-CURRENT] 176,583 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 290,631 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 6,855,693 [NET-ASSETS] 39,546,849 [DIVIDEND-INCOME] 672,254 [INTEREST-INCOME] 119,169 [OTHER-INCOME] 0 [EXPENSES-NET] (582,590) [NET-INVESTMENT-INCOME] 208,833 [REALIZED-GAINS-CURRENT] 1,765,346 [APPREC-INCREASE-CURRENT] 4,790,545 [NET-CHANGE-FROM-OPS] 6,764,724 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (108,747) [DISTRIBUTIONS-OF-GAINS] (1,117,397) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 997,759 [NUMBER-OF-SHARES-REDEEMED] (1,155,750) [SHARES-REINVESTED] 81,227 [NET-CHANGE-IN-ASSETS] 6,809,078 [ACCUMULATED-NII-PRIOR] 19,125 [ACCUMULATED-GAINS-PRIOR] (53,598) [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 284,464 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 610,929 [AVERAGE-NET-ASSETS] 37,835,437 [PER-SHARE-NAV-BEGIN] 10.65 [PER-SHARE-NII] 0.07 [PER-SHARE-GAIN-APPREC] 2.02 [PER-SHARE-DIVIDEND] (0.04) [PER-SHARE-DISTRIBUTIONS] (0.41) [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 12.29 [EXPENSE-RATIO] 1.50 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.27.N.6 23 FINANCIAL DATA SCHEDULE-MJI INTER'L-INST'L SER [ARTICLE] 6 [CIK] 0000924727 [NAME] UAM FUNDS TRUST [SERIES] [NUMBER] 102 [NAME] MJI INTERNATIONAL EQUITY PORTFOLIO, INSTITUTIONAL SERVICE CLASS [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] APR-30-1998 [PERIOD-START] MAY-01-1997 [PERIOD-END] APR-30-1998 [INVESTMENTS-AT-COST] 33,806,872 [INVESTMENTS-AT-VALUE] 40,660,641 [RECEIVABLES] 193,073 [ASSETS-OTHER] 299 [OTHER-ITEMS-ASSETS] 181,848 [TOTAL-ASSETS] 41,035,861 [PAYABLE-FOR-SECURITIES] 1,391,451 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 97,561 [TOTAL-LIABILITIES] 1,489,012 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 32,223,942 [SHARES-COMMON-STOCK] 591,675 [SHARES-COMMON-PRIOR] 368,199 [ACCUMULATED-NII-CURRENT] 176,583 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 290,631 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 6,855,693 [NET-ASSETS] 39,546,849 [DIVIDEND-INCOME] 672,254 [INTEREST-INCOME] 119,169 [OTHER-INCOME] 0 [EXPENSES-NET] (582,590) [NET-INVESTMENT-INCOME] 208,833 [REALIZED-GAINS-CURRENT] 1,765,346 [APPREC-INCREASE-CURRENT] 4,790,545 [NET-CHANGE-FROM-OPS] 6,764,724 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (108,747) [DISTRIBUTIONS-OF-GAINS] (1,117,397) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 351,711 [NUMBER-OF-SHARES-REDEEMED] (152,109) [SHARES-REINVESTED] 23,874 [NET-CHANGE-IN-ASSETS] 6,809,078 [ACCUMULATED-NII-PRIOR] 19,125 [ACCUMULATED-GAINS-PRIOR] (53,598) [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 284,464 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 610,929 [AVERAGE-NET-ASSETS] 37,835,437 [PER-SHARE-NAV-BEGIN] 10.65 [PER-SHARE-NII] 0.04 [PER-SHARE-GAIN-APPREC] 2.02 [PER-SHARE-DIVIDEND] (0.04) [PER-SHARE-DISTRIBUTIONS] (0.41) [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 12.26 [EXPENSE-RATIO] 1.75 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.27.N.7 24 FINANCIAL DATA SCHEDULE-HANSON EQUITY [ARTICLE] 6 [CIK] 0000924727 [NAME] UAM FUNDS TRUST [SERIES] [NUMBER] 10 [NAME] HANSON EQUITY PORTFOLIO [MULTIPLIER] 1 [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] APR-30-1998 [PERIOD-START] OCT-03-1997 [PERIOD-END] APR-30-1998 [INVESTMENTS-AT-COST] 23,139,488 [INVESTMENTS-AT-VALUE] 25,817,931 [RECEIVABLES] 28,356 [ASSETS-OTHER] 0 [OTHER-ITEMS-ASSETS] 879 [TOTAL-ASSETS] 25,847,166 [PAYABLE-FOR-SECURITIES] 104,538 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 52,814 [TOTAL-LIABILITIES] 157,352 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 22,886,905 [SHARES-COMMON-STOCK] 2,257,986 [SHARES-COMMON-PRIOR] 0 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 124,466 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 2,678,443 [NET-ASSETS] 25,689,814 [DIVIDEND-INCOME] 110,927 [INTEREST-INCOME] 33,551 [OTHER-INCOME] 0 [EXPENSES-NET] (186,469) [NET-INVESTMENT-INCOME] (41,991) [REALIZED-GAINS-CURRENT] 166,457 [APPREC-INCREASE-CURRENT] 2,678,443 [NET-CHANGE-FROM-OPS] 2,802,909 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] 0 [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 2,346,914 [NUMBER-OF-SHARES-REDEEMED] (88,928) [SHARES-REINVESTED] 0 [NET-CHANGE-IN-ASSETS] 25,689,814 [ACCUMULATED-NII-PRIOR] 0 [ACCUMULATED-GAINS-PRIOR] 0 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 83,786 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 186,584 [AVERAGE-NET-ASSETS] 20,823,968 [PER-SHARE-NAV-BEGIN] 10.00 [PER-SHARE-NII] (0.02) [PER-SHARE-GAIN-APPREC] 1.40 [PER-SHARE-DIVIDEND] 0.00 [PER-SHARE-DISTRIBUTIONS] 0.00 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 11.38 [EXPENSE-RATIO] 1.56 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.27.N.8 25 FINANCIAL DATA SCHEDULE-JACOBS INTER'L [ARTICLE] 6 [CIK] 0000924727 [NAME] UAM FUNDS TRUST [SERIES] [NUMBER] 9 [NAME] JACOBS INTERNATIONAL OCTAGON PORTFOLIO [MULTIPLIER] 1 [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] APR-30-1998 [PERIOD-START] MAY-01-1997 [PERIOD-END] APR-30-1998 [INVESTMENTS-AT-COST] 96,770,629 [INVESTMENTS-AT-VALUE] 106,116,645 [RECEIVABLES] 9,541,842 [ASSETS-OTHER] 2,816 [OTHER-ITEMS-ASSETS] 10,093 [TOTAL-ASSETS] 115,671,396 [PAYABLE-FOR-SECURITIES] 2,462,340 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 175,991 [TOTAL-LIABILITIES] 2,638,331 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 101,419,475 [SHARES-COMMON-STOCK] 9,541,635 [SHARES-COMMON-PRIOR] 3,524,602 [ACCUMULATED-NII-CURRENT] 435,850 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 1,834,281 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 9,343,459 [NET-ASSETS] 113,033,065 [DIVIDEND-INCOME] 1,606,670 [INTEREST-INCOME] 382,281 [OTHER-INCOME] 0 [EXPENSES-NET] (1,088,001) [NET-INVESTMENT-INCOME] 900,950 [REALIZED-GAINS-CURRENT] 2,888,359 [APPREC-INCREASE-CURRENT] 9,443,503 [NET-CHANGE-FROM-OPS] 13,232,812 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (493,305) [DISTRIBUTIONS-OF-GAINS] (1,198,681) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 7,481,824 [NUMBER-OF-SHARES-REDEEMED] (1,613,998) [SHARES-REINVESTED] 149,207 [NET-CHANGE-IN-ASSETS] 77,200,275 [ACCUMULATED-NII-PRIOR] 193,316 [ACCUMULATED-GAINS-PRIOR] (20,508) [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 730,085 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 1,092,216 [AVERAGE-NET-ASSETS] 73,104,821 [PER-SHARE-NAV-BEGIN] 10.17 [PER-SHARE-NII] 0.10 [PER-SHARE-GAIN-APPREC] 1.82 [PER-SHARE-DIVIDEND] (0.09) [PER-SHARE-DISTRIBUTIONS] (0.15) [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 11.85 [EXPENSE-RATIO] 1.49 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.27.N.9 26 FINANCIAL DATA SCHEDULE-TJ CORE EQUITY [ARTICLE] 6 [CIK] 0000924727 [NAME] UAM FUNDS TRUST [SERIES] [NUMBER] 5 [NAME] TJ CORE EQUITY PORTFOLIO [MULTIPLIER] 1 [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] APR-30-1998 [PERIOD-START] MAY-01-1997 [PERIOD-END] APR-30-1998 [INVESTMENTS-AT-COST] 9,365,370 [INVESTMENTS-AT-VALUE] 11,582,653 [RECEIVABLES] 112,005 [ASSETS-OTHER] 168 [OTHER-ITEMS-ASSETS] 939 [TOTAL-ASSETS] 11,695,765 [PAYABLE-FOR-SECURITIES] 219,156 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 128,566 [TOTAL-LIABILITIES] 347,772 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 8,750,770 [SHARES-COMMON-STOCK] 655,964 [SHARES-COMMON-PRIOR] 221,292 [ACCUMULATED-NII-CURRENT] 83 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 379,907 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 2,217,283 [NET-ASSETS] 11,348,043 [DIVIDEND-INCOME] 131,795 [INTEREST-INCOME] 35,270 [OTHER-INCOME] 0 [EXPENSES-NET] (105,056) [NET-INVESTMENT-INCOME] 62,009 [REALIZED-GAINS-CURRENT] 512,167 [APPREC-INCREASE-CURRENT] 1,815,201 [NET-CHANGE-FROM-OPS] 2,389,377 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (64,393) [DISTRIBUTIONS-OF-GAINS] (179,488) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 610,019 [NUMBER-OF-SHARES-REDEEMED] (191,077) [SHARES-REINVESTED] 15,730 [NET-CHANGE-IN-ASSETS] 8,459,685 [ACCUMULATED-NII-PRIOR] 2,467 [ACCUMULATED-GAINS-PRIOR] 47,228 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 63,097 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 232,811 [AVERAGE-NET-ASSETS] 8,412,307 [PER-SHARE-NAV-BEGIN] 13.05 [PER-SHARE-NII] 0.10 [PER-SHARE-GAIN-APPREC] 4.55 [PER-SHARE-DIVIDEND] (0.11) [PER-SHARE-DISTRIBUTIONS] (0.29) [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 17.30 [EXPENSE-RATIO] 1.25 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.27.N.10 27 FINANCIAL DATA SCHEDULE-FPA INST'L CLASS [ARTICLE] 6 [CIK] 0000924727 [NAME] UAM FUNDS TRUST [SERIES] [NUMBER] 081 [NAME] FPA CRESCENT PORTFOLIO, INSTITUTIONAL CLASS [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] MAR-31-1998 [PERIOD-START] APR-01-1997 [PERIOD-END] MAR-31-1998 [INVESTMENTS-AT-COST] 239,634,432 [INVESTMENTS-AT-VALUE] 264,007,290 [RECEIVABLES] 3,993,582 [ASSETS-OTHER] 6,564,786 [OTHER-ITEMS-ASSETS] 1,138 [TOTAL-ASSETS] 274,566,796 [PAYABLE-FOR-SECURITIES] 3,274,001 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 4,559,905 [TOTAL-LIABILITIES] 7,833,906 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 236,750,850 [SHARES-COMMON-STOCK] 15,273,878 [SHARES-COMMON-PRIOR] 4,874,819 [ACCUMULATED-NII-CURRENT] 1,258,006 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 5,178,188 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 23,545,846 [NET-ASSETS] 266,732,890 [DIVIDEND-INCOME] 2,389,503 [INTEREST-INCOME] 5,206,357 [OTHER-INCOME] 0 [EXPENSES-NET] 2,232,285 [NET-INVESTMENT-INCOME] 5,363,575 [REALIZED-GAINS-CURRENT] 7,332,464 [APPREC-INCREASE-CURRENT] 19,022,777 [NET-CHANGE-FROM-OPS] 31,718,816 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (3,845,555) [DISTRIBUTIONS-OF-GAINS] (2,382,178) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 12,585,249 [NUMBER-OF-SHARES-REDEEMED] (2,561,193) [SHARES-REINVESTED] 375,003 [NET-CHANGE-IN-ASSETS] 201,082,576 [ACCUMULATED-NII-PRIOR] 339,182 [ACCUMULATED-GAINS-PRIOR] 403,521 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 1,489,678 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 2,237,290 [AVERAGE-NET-ASSETS] 148,794,099 [PER-SHARE-NAV-BEGIN] 13.46 [PER-SHARE-NII] 0.55 [PER-SHARE-GAIN-APPREC] 2.88 [PER-SHARE-DIVIDEND] (0.40) [PER-SHARE-DISTRIBUTIONS] (0.26) [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 16.23 [EXPENSE-RATIO] 1.48 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.27.N.11 28 FINANCIAL DATA SCHEDULE-FPA INST'L SERVICE [ARTICLE] 6 [CIK] 0000924727 [NAME] UAM FUNDS TRUST [SERIES] [NUMBER] 082 [NAME] FPA CRESCENT PORTFOLIO, INSTITUTIONAL SERVICE CLASS [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] MAR-31-1998 [PERIOD-START] APR-01-1997 [PERIOD-END] MAR-31-1998 [INVESTMENTS-AT-COST] 239,634,432 [INVESTMENTS-AT-VALUE] 264,007,290 [RECEIVABLES] 3,993,582 [ASSETS-OTHER] 6,564,786 [OTHER-ITEMS-ASSETS] 1,138 [TOTAL-ASSETS] 274,566,796 [PAYABLE-FOR-SECURITIES] 3,274,001 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 4,559,905 [TOTAL-LIABILITIES] 7,833,906 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 236,750,850 [SHARES-COMMON-STOCK] 1,170,063 [SHARES-COMMON-PRIOR] 2,349 [ACCUMULATED-NII-CURRENT] 1,258,006 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 5,178,188 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 23,545,846 [NET-ASSETS] 266,732,890 [DIVIDEND-INCOME] 2,389,503 [INTEREST-INCOME] 5,206,357 [OTHER-INCOME] 0 [EXPENSES-NET] 2,232,285 [NET-INVESTMENT-INCOME] 5,363,575 [REALIZED-GAINS-CURRENT] 7,332,464 [APPREC-INCREASE-CURRENT] 19,022,777 [NET-CHANGE-FROM-OPS] 31,718,816 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] (305,815) [DISTRIBUTIONS-OF-GAINS] (179,223) [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 1,328,525 [NUMBER-OF-SHARES-REDEEMED] (193,182) [SHARES-REINVESTED] 32,371 [NET-CHANGE-IN-ASSETS] 201,082,576 [ACCUMULATED-NII-PRIOR] 339,182 [ACCUMULATED-GAINS-PRIOR] 403,521 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 1,489,678 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 2,237,290 [AVERAGE-NET-ASSETS] 148,794,099 [PER-SHARE-NAV-BEGIN] 13.43 [PER-SHARE-NII] 0.53 [PER-SHARE-GAIN-APPREC] 2.84 [PER-SHARE-DIVIDEND] (0.39) [PER-SHARE-DISTRIBUTIONS] (0.26) [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 16.15 [EXPENSE-RATIO] 1.73 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
EX-99.O 29 AMENDED AND RESTATED RULE 18F-3 Exhibit O UAM FUNDS TRUST Amended and Restated Multiple Class Plan Pursuant to SEC Rule 18f-3 This Multiple Class Plan (the "Plan") has been adopted pursuant to Rule 18f-3 under the Investment Company Act of 1940 (the "Act") by UAM Funds Trust (the "Fund") for its portfolios and classes of its portfolios. The Plan sets forth the provisions relating to the establishment of multiple classes of shares of the Fund as follows: 1. At the date of adoption of this Plan, the Fund has authorized the issuance of three classes of shares which are subject to this Plan: Institutional Class Shares, Institutional Service Class Shares and Advisor Class Shares. The Fund may offer an unlimited number of different classes of shares, either in connection with a Distribution Plan adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), (a "Distribution Plan") and/or in connection with a shareholder services plan ("Shareholder Services Plan"), with more than one Plan, or without any of the Plans. 2. Institutional Class Shares are no-load and do not impose a service fee or asset-based sales charge. 3. Institutional Service Class Shares shall be subject to a service fee at an annual rate of up to 0.25 of 1% of the average daily net asset value of Institutional Service Class Shares and/or a distribution fee of up to .50 of 1% of daily net assets per annum. 4. Advisor Class Shares shall be subject to a service fee at an annual rate of up to 0.25 of 1% of the average daily net asset value of Advisor Class Shares, a distribution fee of up to .50 of 1% of daily net assets per annum and a maximum front-end sales charge of 4.75%. 5. The Distribution Plan adopted by the Fund pursuant to Rule 12b-1 associated with the Institutional Service Class Shares and the Advisor Class Shares may be used to reimburse the Fund's underwriter or others for expenses incurred in the promotion and distribution of the Institutional Service Class Shares and the Advisor Class Shares. The distribution-related services to be provided to the Fund and/or its shareholders under the Distribution Plan may include, but are not limited to, the following: . advertising the availability of services and products; . designing material to send to customers and developing methods of making such materials accessible to customers; . providing information about the product needs of customers; . providing facilities to solicit Fund sales and to answer questions from prospective and existing investors about the Fund; . receiving and answering correspondence from prospective investors, including requests for sales literature, prospectuses and statements of additional information; . displaying and making sales literature and prospectuses available on the servicing organization's premises; . acting as liaison between shareholders and the Fund, including obtaining information from the Fund and providing performance and other information about the Fund; and . providing additional personal services and/or shareholder account maintenance services. The Shareholder Services Plan adopted by the Fund associated with the Institutional Service Class Shares and the Advisor Class Shares may be used to reimburse the Fund's underwriter or others for expenses incurred in providing personal and account maintenance services to holders of Institutional Service Class Shares and Advisor Class Shares. The personal and account maintenance services to be provided to shareholders under the Shareholder Services Plan of the Fund may include, but are not limited to, the following: . acting as the sole shareholder of record and nominee for all beneficial owners; . maintaining account records for each shareholder who beneficially owns Shareholder Services Plan shares; . opening and closing accounts; answering questions and handling correspondence from shareholders about their accounts; . processing shareholder orders to purchase, redeem and exchange Shareholder Services Plan shares; . posting interest; -2- . handling the transmission of funds representing the purchase price or redemption proceeds; . issuing confirmations for transactions in Shareholder Services Plan shares by shareholders; . distributing current copies of prospectuses, statements of additional information and shareholder reports; . assisting Customers in completing application forms, selecting dividend and other account options and opening custody accounts with the service organizations; . providing account maintenance and accounting support for all transactions; and . similar personal services and/or shareholder account maintenance services as may be agreed to in the future. The Distribution Plan shall operate in accordance with the Conduct Rules of the National Association of Securities Dealers. 6. Expenses incurred by a class of shares of the Fund shall differ from each other class of shares of the Fund only as to the differences in the respective Distribution Plan and/or Shareholder Service Plan expenses for such class of shares. 7. There shall be no conversion features associated with the Institutional Class Shares, Institutional Service Class Shares and Advisor Class Shares. 8. Shares of the Institutional Class Shares, Institutional Service Class Shares and Advisor Class Shares may be exchanged only for shares of the same class in another portfolio of the Fund, according to the terms and conditions stated in each portfolio's prospectus, as it may be amended from time to time, and to the extent permitted by the 1940 Act and the rules and regulations adopted thereunder. 9. Each class of shares of the Fund shall have: (a) exclusive voting rights on any matter submitted to shareholders that relates solely to its distribution or shareholder servicing arrangements; (b) separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of any other class; and (c) in all other respects the same rights and obligations as each other class. 10. On an ongoing basis, the Board of Trustees, pursuant to their fiduciary responsibilities under the 1940 Act and otherwise, will monitor the Fund for the existence of -3- any material conflicts between the interests of the various classes of shares. The Board, including a majority of the independent members of the Board, shall take such action as is reasonably necessary to eliminate any such conflict that may develop. 11. Before any material amendment to the Plan, a majority of the members of the Board of the Fund, and a majority of the members of the Board who are not interested persons of the Fund, shall find that the Plan as proposed to be adopted or amended, including any expense allocation, is in the best interests of each class individually and the Fund as a whole. Before any material amendment, the Board shall request and evaluate such information as may be reasonably necessary to evaluate the Plan. Adopted June 18, 1998 -4- EX-99.P 30 POWERS OF ATTORNEY Exhibit P. SEC FILINGS POWER OF ATTORNEY The undersigned Trustee/Director of UAM Funds, Inc., UAM Funds Trust and UAM Funds Trust II (the "Funds") hereby appoints Michael E. DeFao, Audrey C. Talley and Martin J. Wolin his true and lawful attorneys-in-fact with authority to execute in the name of such Trustee/Director on behalf of the Fund and to file with the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, National Futures Association or any other federal or state regulatory body ("Regulatory Agency"), on behalf of the Fund any and all regulatory materials necessary or advisable to enable the Fund to comply with the Securities Act of 1933, as amended, and/or the Investment Company Act of 1940, as amended, and other pertinent federal securities statutes, and any other rules, regulations and requirements of such Regulatory Agency. The powers of the aforesaid attorneys-in-fact are hereby expressly limited to the execution and filing of such documents with the appropriate Regulatory Agency. /s/ Norton H. Reamer ---------------------------- Norton H. Reamer Date: June 18, 1998 SEC FILINGS POWER OF ATTORNEY The undersigned Trustee/Director of UAM Funds, Inc., UAM Funds Trust and UAM Funds Trust II (the "Funds") hereby appoints Michael E. DeFao, Audrey C. Talley and Martin J. Wolin his true and lawful attorneys-in-fact with authority to execute in the name of such Trustee/Director on behalf of the Fund and to file with the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, National Futures Association or any other federal or state regulatory body ("Regulatory Agency"), on behalf of the Fund any and all regulatory materials necessary or advisable to enable the Fund to comply with the Securities Act of 1933, as amended, and/or the Investment Company Act of 1940, as amended, and other pertinent federal securities statutes, and any other rules, regulations and requirements of such Regulatory Agency. The powers of the aforesaid attorneys-in-fact are hereby expressly limited to the execution and filing of such documents with the appropriate Regulatory Agency. /s/ William A. Humenuk -------------------------------- William A. Humenuk, Esq. Date: June 18, 1998 SEC FILINGS POWER OF ATTORNEY The undersigned Trustee/Director of UAM Funds, Inc., UAM Funds Trust and UAM Funds Trust II (the "Funds") hereby appoints Michael E. DeFao, Audrey C. Talley and Martin J. Wolin his true and lawful attorneys-in-fact with authority to execute in the name of such Trustee/Director on behalf of the Fund and to file with the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, National Futures Association or any other federal or state regulatory body ("Regulatory Agency"), on behalf of the Fund any and all regulatory materials necessary or advisable to enable the Fund to comply with the Securities Act of 1933, as amended, and/or the Investment Company Act of 1940, as amended, and other pertinent federal securities statutes, and any other rules, regulations and requirements of such Regulatory Agency. The powers of the aforesaid attorneys-in-fact are hereby expressly limited to the execution and filing of such documents with the appropriate Regulatory Agency. /s/ Philip D. English ----------------------------- Philip D. English Date: June 18, 1998 SEC FILINGS POWER OF ATTORNEY The undersigned Trustee/Director of UAM Funds, Inc., UAM Funds Trust and UAM Funds Trust II (the "Funds") hereby appoints Michael E. DeFao, Audrey C. Talley and Martin J. Wolin his true and lawful attorneys-in-fact with authority to execute in the name of such Trustee/Director on behalf of the Fund and to file with the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, National Futures Association or any other federal or state regulatory body ("Regulatory Agency"), on behalf of the Fund any and all regulatory materials necessary or advisable to enable the Fund to comply with the Securities Act of 1933, as amended, and/or the Investment Company Act of 1940, as amended, and other pertinent federal securities statutes, and any other rules, regulations and requirements of such Regulatory Agency. The powers of the aforesaid attorneys-in-fact are hereby expressly limited to the execution and filing of such documents with the appropriate Regulatory Agency. /s/ Nancy J. Dunn -------------------------- Nancy J. Dunn Date: June 18, 1998 SEC FILINGS POWER OF ATTORNEY The undersigned Trustee/Director of UAM Funds, Inc., UAM Funds Trust and UAM Funds Trust II (the "Funds") hereby appoints Michael E. DeFao, Audrey C. Talley and Martin J. Wolin his true and lawful attorneys-in-fact with authority to execute in the name of such Trustee/Director on behalf of the Fund and to file with the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, National Futures Association or any other federal or state regulatory body ("Regulatory Agency"), on behalf of the Fund any and all regulatory materials necessary or advisable to enable the Fund to comply with the Securities Act of 1933, as amended, and/or the Investment Company Act of 1940, as amended, and other pertinent federal securities statutes and any other rules, regulations and requirements of such Regulatory Agency. The powers of the aforesaid attorneys-in-fact are hereby expressly limited to the execution and filing of such documents with the appropriate Regulatory Agency. /s/ John T. Bennett Jr. ------------------------------ John T. Bennett, Jr. Date: June 18, 1998 SEC FILINGS POWER OF ATTORNEY The undersigned Trustee/Director of UAM Funds, Inc., UAM Funds Trust and UAM Funds Trust II (the "Funds") hereby appoints Michael E. DeFao, Audrey C. Talley and Martin J. Wolin his true and lawful attorneys-in-fact with authority to execute in the name of such Trustee/Director on behalf of the Fund and to file with the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, National Future Association or any other federal or state regulatory body ("Regulatory Agency"), on behalf of the Fund any and all regulatory materials necessary or advisable to enable the Fund to comply with the Securities Act of 1933, as amended, and/or the Investment Company Act of 1940, as amended, and other pertinent federal securities statutes, and any other rules, regulations and requirements of such Regulatory Agency. The powers of the aforesaid attorneys-in-fact are hereby expressly limited to the execution and filing of such documents with the appropriate Regulatory Agency. /s/ Peter M. Whitman, Jr. -------------------------------- Peter M. Whitman, Jr. Date: June 18, 1998 -----END PRIVACY-ENHANCED MESSAGE-----