-----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, F6daeFxsf643Jw3l5PmHKSk+wogZlqaQF7BwME++DPxfQtTrq4Mn1wtg5MBP/dNQ cOKlfg3/0VLtlWNthhNC0A== 0000922423-00-000425.txt : 20000302 0000922423-00-000425.hdr.sgml : 20000302 ACCESSION NUMBER: 0000922423-00-000425 CONFORMED SUBMISSION TYPE: PRER14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000229 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEAR STEARNS FUNDS CENTRAL INDEX KEY: 0000931145 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: PRER14A SEC ACT: SEC FILE NUMBER: 811-08798 FILM NUMBER: 557697 BUSINESS ADDRESS: STREET 1: 245 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10167 MAIL ADDRESS: STREET 2: 245 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10167 PRER14A 1 REVISED PRELIMINARY MATERIALS As filed, via EDGAR, with the Securities and Exchange Commission on February 29, 2000. File No.: 33-84842 ICA No.: 811-8798 SCHEDULE 14A (RULE 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the registrant [X] Filed by a party other than the registrant [ ] Check the appropriate box: [X] Preliminary proxy statement [ ] Confidential, for Use of the [ ] Definitive proxy statement Commission Only [ ] Definitive additional materials (as permitted by Rule 14a-6(e)(2)) [ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12 THE BEAR STEARNS FUNDS - -------------------------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of filing fee (Check the appropriate box): |X| No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount previously paid: (2) Form, schedule or registration statement no.: (3) Filing party: (4) Date filed:
APPENDIX Investment Advisory Agreements. Bear Stearns Asset Management Inc. ("BSAM") provides investment advisory services to each Portfolio pursuant to current Investment Advisory Agreements with the Fund (each a "Current Advisory Agreement") dated as shown in the following table: - ------------------------------------------------------------------------------------------------------------ Portfolios Current Advisory Agreement Date(s) Last Submitted to Purpose of Date(s) Shareholders for Approval Submission to Shareholders - ------------------------------------------------------------------------------------------------------------ Income, Large Cap, February 22, 1995, as February 22, 1995 Initial Approval Small Cap Portfolios revised May 4, 1995 - ------------------------------------------------------------------------------------------------------------ Money Market Portfolio June 2, 1997 July 14, 1997 Initial Approval - ------------------------------------------------------------------------------------------------------------ S&P STARS Portfolio June 25, 1997 June 18, 1997 Initial Approval - ------------------------------------------------------------------------------------------------------------ Balanced, High Yield, September 8, 1997 December 19, 1997 Initial Approval International Equity Portfolios - ------------------------------------------------------------------------------------------------------------ Focus List Portfolio December 29, 1997 December 29, 1997 Initial Approval - ------------------------------------------------------------------------------------------------------------ Insiders Select Fund January 20, 1998 January 20, 1998 New Benchmark - ------------------------------------------------------------------------------------------------------------ EMD Portfolio July 29, 1999 April 29, 1999 Initial Approval - ------------------------------------------------------------------------------------------------------------
As to each Portfolio, the Current Advisory Agreement is subject to annual approval by (i) the Board or (ii) the vote of a majority (as defined in the 1940 Act) of the Portfolio's outstanding voting securities, provided that in either event the continuance also is approved by a majority of the Trustees who are not "interested persons" (as defined in the 1940 Act) of the Fund or BSAM, by vote cast in person at a meeting called for the purpose of voting on such approval. The Trustees, including a majority of the Trustees who are not "interested persons" of any party to the Agreements, last approved the Current Advisory Agreements at a meeting held on February 7, 2000. Each Current Advisory Agreement is terminable, as to a Portfolio, without penalty, on 60 days' notice, by the Board or by vote of the holders of a majority of the Portfolio's shares, or, on not less than 90 days' notice, by BSAM. As to the relevant Portfolio, the Current Advisory Agreement will terminate automatically in the event of its assignment (as defined in the 1940 Act). BSAM is a wholly owned subsidiary of The Bear Stearns Companies Inc. The following persons are directors and/or senior officers of BSAM: Mark A. Kurland, President, Chairman of the Board and Director; Robert S. Reitzes, Executive Vice President and Director; Doni L. Fordyce, Vice President, Chief Operating Officer and Director; Stephen A. Bornstein, Secretary; and Warren J. Spector and Robert M. Steinberg, Directors. Advisory Fees. The following table shows the monthly fees that the Fund has agreed to pay BSAM for advisory services to the Portfolios, at the indicated annual percentage of the value of a Portfolio's average daily net assets. Portfolio Advisory Fee --------- ------------ Money Market Portfolio 0.20% Income Portfolio 0.45% High Yield Portfolio 0.60% EMD Portfolio 1.00% of assets up to $50 million, 0.85% of assets between $50 million and $100 million and 0.55% of assets above $100 million S&P STARS Portfolio 0.75% Focus List Portfolio 0.65% Large Cap Portfolio 0.75% Small Cap Portfolio 0.75% Insiders Select Fund 1.00% Balanced Portfolio 0.65% International Equity Portfolio 1.00% The Insiders Select Fund. The monthly fee that The Insiders Select Fund will pay BSAM will be adjusted monthly if the Portfolio's performance outperforms or underperforms the S&P MidCap 400 Index. This adjustment may increase or decrease the total advisory fee payable to BSAM by an annual rate of up to 0.50% of the value of the Portfolio" average daily net assets. The following table details this adjustment.
- ---------------------------------------------------------------------------------------------------------------- Percentage Point Difference Between Designated Class Performance Performance (Net of Expenses Including Advisory Fees) and Adjustment Ttotal Percentage Change in the S&P MidCap 400 Index Basic Fee Rate (%) Fee - ---------------------------------------------------------------------------------------------------------------- +3.00 percentage points or more 1.00% 0.50% 1.50% - ---------------------------------------------------------------------------------------------------------------- +2.75 percentage points or more but less than +3.00 percentage points 1.00% 0.40% 1.40% - ---------------------------------------------------------------------------------------------------------------- +2.50 percentage points or more but less than +2.75 percentage points 1.00% 0.30% 1.30% - ---------------------------------------------------------------------------------------------------------------- +2.25 percentage points or more but less than +2.50 percentage points 1.00% 0.20% 1.20% - ---------------------------------------------------------------------------------------------------------------- +2.00 percentage points or more but less than +2.25 percentage points 1.00% 0.10% 1.10% Less than +2.00 percentage points but more than -2.00 percentage points 1.00% 0% 1.00% - ---------------------------------------------------------------------------------------------------------------- -2.00 percentage points or less but more than -2.25 percentage points 1.00% -0.10% 0.90% - ---------------------------------------------------------------------------------------------------------------- -2.25 percentage points or less but more than -2.50 percentage points 1.00% -0.20% 0.80% - ---------------------------------------------------------------------------------------------------------------- -2.50 percentage points or less but more than -2.75 percentage points 1.00% -0.30% 0.70% - ---------------------------------------------------------------------------------------------------------------- -2.75 percentage points or less but more than -3.00 percentage points 1.00% -0.40% 0.60% - ---------------------------------------------------------------------------------------------------------------- -3.00 percentage points or less 1.00% -0.50% 0.50% - ----------------------------------------------------------------------------------------------------------------
The following table shows the investment advisory fees that the Portfolios paid to BSAM and the amounts that BSAM waived for the fiscal year ended March 31, 1999. Portfolio Paid Waived --------- ---- ------ Money Market Portfolio $33,827 $400,797 Income Portfolio $0 $50,882 High Yield Portfolio $25,136 $416,687 EMD Portfolio $88,623 $335,209 S&P STARS Portfolio $1,291,152 $716,763 2 Insiders Select Fund $759 $321,688 Large Cap Portfolio $0 $165,850 Small Cap Portfolio $67,550 $400,694 Focus List Portfolio $0 $63,550 Balanced Portfolio $0 $101,976 International Equity Portfolio $0 $114,148 In addition, BSAM reimbursed the following amounts for the fiscal year ended March 31, 1999 in order to maintain applicable voluntary expense limitations. Portfolio Paid --------- ---- Money Market Portfolio $142,863 Income Portfolio $299,061 High Yield Portfolio $121,391 EMD Portfolio $137,134 Insiders Select Fund $42,908 Large Cap Portfolio $157,111 Small Cap Portfolio $28,865 Focus List Portfolio $218,241 Balanced Portfolio $224,243 International Equity Portfolio $157,011 In addition to the Fund, BSAM serves as investment adviser to the registered investment companies listed below. Name of Fund Managed Income Net Assets Amount of Annual Plus Fund, Inc. as of ________ Advisory Fee --------------- -------------- ---------------- ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ Sub-Investment Advisory Agreement. Marvin & Palmer Associates, Inc. ("M&P") provides investment advisory services to the International Equity Portfolio pursuant to a Sub-Investment Advisory Agreement with BSAM dated September 8, 1997 (the "Current Sub-Investment Advisory Agreement"). The Current Sub-Investment Advisory Agreement had an initial term of one year from the date of execution and will continue automatically for successive annual periods, provided such continuance is specifically approved at least annually by (i) the Board or (ii) a vote of a majority of the Portfolio's outstanding voting securities (as defined in the 1940 Act), provided that in either case its continuance also is approved by a majority of the Trustees who are not "interested persons" (as defined in the 1940 Act) of the Fund, BSAM or M&P, by vote cast in person at a meeting called for the purpose of voting on such approval. The Board most recently approved the Current Sub-Investment Advisory Agreement on February 7, 3 2000. The Current Sub-Investment Advisory Agreement may be terminated without penalty, (i) by BSAM upon 60 days' notice to M&P, (ii) by the Board or by vote of the holders of a majority of the Portfolio's shares upon 60 days' notice to M&P, or (iii) by M&P upon not less than 90 days' notice to the Fund and BSAM. The Current Sub-Investment Advisory Agreement will terminate automatically in the event of its assignment (as defined in the 1940 Act). As compensation for M&P's services, BSAM has agreed to pay M&P a monthly fee calculated on an annual basis equal to 0.20% of the Portfolio's total average daily net assets to the extent the Portfolio's average daily net assets are in excess of $25 million and below $50 million at the relevant month end, 0.45% of the Portfolio's total average daily net assets to the extent the Portfolio's average daily net assets are in excess of $50 million and below $65 million at the relevant month end, and 0.60% of the Portfolio's total average daily net assets to the extent the Portfolio's average daily net assets are in excess of $65 million at the relevant month end. The table below gives the name, address and principal occupation of each director and principal executive officer of M&P. Principal Name Address Position with M&P Occupation ---- ------- ----------------- ---------- _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ Administration Agreement. Bear Stearns Funds Management Inc. ("BSFM"), a wholly owned subsidiary of The Bear Stearns Companies Inc., 575 Lexington Avenue, New York, New York 10022, provides certain administrative services to the Fund pursuant to the Administration Agreement with the Fund dated February 22, 1995, as revised April 11, 1995, June 2, 1997, September 8, 1997, February 4, 1998 and July 29, 1999. The Administration Agreement was last approved as of February 7, 2000 and thereafter will be subject to annual approval by (i) the Board or (ii) vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Portfolio, provided that in either event its continuance also is approved by a majority of the Trustees who are not "interested persons" (as defined in the 1940 Act) of the Fund or BSFM, by vote cast in person at a meeting called for the purpose of voting on such approval. The Administration Agreement may be terminated without penalty on 60 days' notice by the Board or by vote of the holders of a majority of the Portfolio's shares or, upon not less than 90 days' notice, by BSFM. As to each Portfolio, the Administration Agreement will terminate automatically in the event of its assignment (as defined in the 1940 Act). For administrative services, the Fund has agreed to pay BSFM a monthly fee at the annual rate of 0.15% of the average daily net assets of each Portfolio other than the Money Market Portfolio. The Fund has agreed to pay BSFM a monthly fee at the annual rate of 0.05% 4 of the average daily net assets of the Money Market Portfolio. The following table shows the administration fees that the Portfolios paid to BSFM for the fiscal year ended March 31, 1999. Portfolio Paid --------- ---- Money Market Portfolio $108,656 Income Portfolio $16,960 High Yield Portfolio $110,456 EMD Portfolio+ $0 S&P STARS Portfolio $401,582 Insiders Select Fund $68,666 Large Cap Portfolio $33,079 Small Cap Portfolio $99,413 Focus List Portfolio $14,665 Balanced Portfolio $23,533 International Equity Portfolio $17,122 + Prior to July 29, 1999, BSAM paid BSFM this fee from its management fee. Distribution Plans. Rule 12b-1 adopted by the SEC under Section 12 of the 1940 Act provides, among other things, that an investment company may bear expenses of distributing its shares only pursuant to a plan adopted in accordance with the Rule. The Board has adopted a distribution plan with respect to Class A, Class B and Class C shares (the "Current Distribution Plans"). Each Current Distribution Plan provides that it may not be amended to increase materially the costs which holders of a class of shares may bear pursuant to such Plan without approval of such affected shareholders and that other material amendments of the Plan must be approved by the Board, and by the Trustees who are neither "interested persons" (as defined by the 1940 Act) of the Fund nor have any direct or indirect financial interest in the operation of the Plan or in the related Plan agreements, by vote cast in person at a meeting called for the purpose of considering such amendments. In addition, because Class B shares automatically convert into Class A shares after eight years, the Fund is required by an SEC rule to obtain the approval of Class B as well as Class A shareholders for a proposed amendment to each Current Distribution Plan that would materially increase the amount to be paid by Class A shareholders under such Plan. Such approval must be by a "majority" of the Class A and Class B shares (as defined in the 1940 Act), voting separately by class. Each Current Distribution Plan and related agreement is subject to annual approval by such vote cast in person at a meeting called for the purpose of voting on such Plan. An amended and restated distribution plan was most recently approved on February 7, 2000. Each Current Distribution Plan may be terminated at any time by vote of a majority of the Trustees who are not "interested persons" and who have no direct or indirect financial interest in the operation of the Plan or in the Plan agreements or by vote of holders of a majority of the relevant class' shares. A Plan agreement may be terminated without penalty, at any time, by such vote of the Trustees upon not more than 60 days' written notice to the parties to such agreement or by vote of the holders of a majority of the relevant class' shares. A Plan agreement will terminate automatically in the event of its assignment (as defined in the 1940 Act). The following tables show the amounts that Class A, Class B and Class C shares of each Portfolio paid under (a) the relevant Current Distribution Plan, including amounts paid to 5 (i) broker-dealers, (ii) underwriters and (iii), if applicable, for advertising, printing, mailing prospectuses to prospective shareholders, compensation to sales personnel, and interest, carrying, or other financing charges ("Other Distribution"); and (b) the Shareholder Servicing Plan for personal services rendered to shareholders (see "Shareholder Servicing Plan"), for the fiscal year ended March 31 1999. Class A* Total Broker- Other Portfolio Payments Dealers Distribution --------- -------- ------- ------------ Income Portfolio $15,836 $11,276 $4,560 High Yield Portfolio $138,476 $13,924 $124,552 EMD Portfolio $113,931 $86,913 $27,018 S&P STARS Portfolio $682,524 $489,767 $192,757 Insiders Select Fund $124,069 $83,259 $40,810 Large Cap Portfolio $46,716 $33,523 $13,193 Small Cap Portfolio $111,413 $87,549 $40,810 Focus List Portfolio $21,863 $2,435 $19,428 Balanced Portfolio $23,454 $2,672 $20,782 International Equity Portfolio $30,684 $3,611 $27,073 *Class A shares made no payments to underwriters Class B* Total Broker- Portfolio Payments Dealers Underwriters --------- -------- ------- ------------ Income Portfolio $4,599 $36 $4,563 High Yield Portfolio $148,999 $1,881 $147,118 EMD Portfolio $12,295 $185 $12,110 S&P STARS Portfolio $193,055 $2,594 $190,461 Insiders Select Fund $63,310 $602 $67,708 Large Cap Portfolio $12,841 $134 $12,707 Small Cap Portfolio $21,972 $179 $21,793 Focus List Portfolio $31,426 $896 $30,530 Balanced Portfolio $14,094 $559 $13,535 International Equity Portfolio $26,946 $1,337 $25,609 *Class B shares made no payments for other distribution. Class C* Total Broker- Portfolio Payments Dealers Underwriters --------- -------- ------- ------------ Income Portfolio $17,360 $11,983 $5,377 High Yield Portfolio $183,211 $11,093 $172,118 EMD Portfolio $33,433 $21,054 $12,379 S&P STARS Portfolio $714,370 $510,458 $203,912 Insiders Select Fund $130,390 $85,454 $44,936 Large Cap Portfolio $55,531 $42,660 $12,871 Small Cap Portfolio $151,596 $115,051 $36,545 Focus List Portfolio $22,616 $3,367 $19,249 Balanced Portfolio $9,368 $2,286 $7,082 International Equity Portfolio $25,834 $6,123 $19,711 *Class C shares made no payments for other distribution. 6 Shareholder Servicing Plan. The Fund has adopted a shareholder servicing plan on behalf of Class A, Class B and Class C shares of the Portfolios (the "Current Shareholder Servicing Plan"). In accordance with the Current Shareholder Servicing Plan, the Fund may enter into agreements under which a Portfolio pays fees of up to 0.25% of the average daily net assets of a share Class for expenses incurred in connection with the personal service and maintenance of Portfolio shareholder accounts, responding to inquiries of, and furnishing assistance to, shareholders regarding ownership of the shares or their accounts or similar services not otherwise provided on behalf of the Portfolio. Prior to February 1999, service fees were paid through the distribution plan of Class A and Class C shares of the Income, Large Cap and Small Cap Portfolios. Brokerage Commissions. The following table shows the total brokerage commissions that each Portfolio paid during the fiscal year ended March 31, 1999 (including the amount paid to Bear Stearns). The table also shows the percentage of total commissions paid to Bear Stearns and commissions paid as a percentage of total transactions. No brokerage commissions were paid by the Money Market or Income Portfolios.
- -------------------------------------------------------------------------------------------------------- Portfolio Total Commissions Commissions Paid to % Paid to Bear % of Total Paid (including Bear Stearns Stearns Transactions commissions paid to Bear Stearns) - -------------------------------------------------------------------------------------------------------- High Yield $3,600 $900 25.00% 0.44% - -------------------------------------------------------------------------------------------------------- EMD $2,972 $0 0% 0.26% - -------------------------------------------------------------------------------------------------------- S&P STARS $780,970 $500,570 64.10% 0.18% - -------------------------------------------------------------------------------------------------------- Insiders Select Fund $161,821 $15,902 9.83% 0.19% - -------------------------------------------------------------------------------------------------------- Large Cap $23,164 $1,602 6.92% 0.14% - -------------------------------------------------------------------------------------------------------- Small Cap $120,832 $3,540 2.93% 0.27% - -------------------------------------------------------------------------------------------------------- Focus List $23,472 $23,472 100.00% 0.16% - -------------------------------------------------------------------------------------------------------- Balanced $12,605 $5,688 45.12% 0.16% - -------------------------------------------------------------------------------------------------------- International Equity $67,305 $259 0.38% 0.24% - --------------------------------------------------------------------------------------------------------
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