-----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, AeNqXvDHEDYvxcTNQxOy9v7CLfLk/aAzPUAXY0gWL8QYLAY6pr2qV+BH7Xe6P/3H igkbjHflHImSzY0IE0+32Q== 0000912057-99-009460.txt : 19991216 0000912057-99-009460.hdr.sgml : 19991216 ACCESSION NUMBER: 0000912057-99-009460 CONFORMED SUBMISSION TYPE: PRE 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000223 FILED AS OF DATE: 19991215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RS INVESTMENT TRUST CENTRAL INDEX KEY: 0000814232 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 946649069 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRE 14A SEC ACT: SEC FILE NUMBER: 811-05159 FILM NUMBER: 99774893 BUSINESS ADDRESS: STREET 1: 555 CALIFORNIA ST STE 2600 CITY: SAN FRANCISCO STATE: CA ZIP: 94104 BUSINESS PHONE: 8007663863 MAIL ADDRESS: STREET 1: 555 CALIFORNIA ST. STREET 2: SUITE 2600 CITY: SAN FRANCISCO STATE: CA ZIP: 94104 FORMER COMPANY: FORMER CONFORMED NAME: ROBERTSON STEPHENS INVESTMENT TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ROBERTSON STEPHENS EMERGING GROWTH FD DATE OF NAME CHANGE: 19920315 FORMER COMPANY: FORMER CONFORMED NAME: ROBERTSON STEPHENS EMERGING GROWTH FUND DATE OF NAME CHANGE: 19920312 PRE 14A 1 PRE 14A 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 / / Definitive Proxy Statement / / Definitive Additional Materials / / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) RS INVESTMENT TRUST - -------------------------------------------------------------------------------- (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 (Set forth the amount on which the filing fee is calculated and state how it was determined): ----------------------------------------------------------------------- (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) 1) Amount Previously Paid: ----------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ----------------------------------------------------------------------- (3) Filing Party: ----------------------------------------------------------------------- (4) Date Filed: ----------------------------------------------------------------------- RS INVESTMENT TRUST 388 MARKET STREET, SUITE 200 SAN FRANCISCO, CALIFORNIA 94111 December , 1999 Dear Shareholder: You are cordially invited to attend a Meeting of Shareholders of RS Emerging Growth Fund, a series of shares of RS Investment Trust, to be held on February 23, 2000 at [ time ], San Francisco Time, at [ place ], San Francisco, California. At the Meeting, shareholders will be asked to approve certain changes to the fundamental investment restrictions of the Fund. Although the Trustees would like very much to have each shareholder attend the Meeting, they realize that this is not possible. Whether or not you plan to be present at the Meeting, your vote is needed. Please complete, sign, and return the enclosed proxy card(s) promptly. A postage-paid envelope is enclosed for this purpose. We look forward to seeing you at the Meeting or receiving your proxy card(s) so your shares may be voted at the Meeting. Sincerely yours, G. RANDALL HECHT PRESIDENT SHAREHOLDERS ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE SO AS TO BE REPRESENTED AT THE MEETING. RS INVESTMENT TRUST RS EMERGING GROWTH FUND ------------------------ NOTICE OF MEETING OF STOCKHOLDERS ------------------------ A Meeting of shareholders of RS Emerging Growth Fund will be held at [place], San Francisco, California, on February 23, 2000 at [time], San Francisco time, for the following purposes: 1. To approve or disapprove certain changes to the fundamental investment restrictions of the Fund. 2. To consider and act upon such other matters as may properly come before the Meeting. Shareholders of record as of the close of business on December 15, 1999 are entitled to notice of and to vote at the Meeting. By order of the Trustees SUZANNE DUFRANE SECRETARY December , 1999 RS INVESTMENT TRUST 388 MARKET STREET, SUITE 200 SAN FRANCISCO, CALIFORNIA 94111 ------------------------ PROXY STATEMENT --------------------- The enclosed proxy is solicited by the Board of Trustees of RS Investment Trust (the "Trust") for use at the Meeting of shareholders of the RS Emerging Growth Fund to be held at [ place ], San Francisco, California, at [ time ] (San Francisco time) on February 23, 2000, and at any adjournment thereof. Shareholders of record at the close of business on December 15, 1999 (the "Record Date") are entitled to vote at the Meeting or any adjourned session. These proxy materials are first being made available to shareholders on or about December , 1999. Shares represented by duly executed proxies will be voted in accordance with the specification made. If no specification is made, shares will be voted in accordance with the recommendation of the Board of Trustees. You may revoke a proxy at any time before it is exercised by sending or delivering a written revocation to the Secretary of the Trust (which will be effective when it is received by the Secretary), by properly executing a later-dated proxy, or by attending the Meeting, requesting return of your proxy, and voting in person. THE TRUST WILL FURNISH TO YOU UPON REQUEST, WITHOUT CHARGE, A COPY OF THE ANNUAL REPORT FOR THE FUND'S MOST RECENT FISCAL YEAR AND A COPY OF THE FUND'S SEMI-ANNUAL REPORT FOR ANY SUBSEQUENT SEMI-ANNUAL PERIOD. PLEASE DIRECT ANY SUCH REQUESTS BY TELEPHONE TO THE TRUST AT 1-800-766-3836 OR BY WRITING TO THE SECRETARY OF THE TRUST AT 388 MARKET STREET, SUITE 200, SAN FRANCISCO, CALIFORNIA 94111. 1 I. ADOPTION OF STANDARDIZED INVESTMENT RESTRICTIONS As described in the following proposals, the Trustees recommend that shareholders approve the elimination of and revisions to certain fundamental investment restrictions currently observed by the Fund. The purpose of these proposed changes is to increase the Fund's investment flexibility and reduce administrative and compliance burdens by: (1) eliminating restrictive policies that various state securities authorities formerly imposed on certain types of mutual funds, (2) simplifying and modernizing those investment restrictions that are still required under federal securities laws and (3) bringing the Fund's investment restrictions more closely in line with the investment restrictions of the majority of other series of the Trust. BACKGROUND The Investment Company Act of 1940, as amended, (the "1940 Act") requires a registered investment company like the Trust, and each series of the Trust, to have "fundamental" investment restrictions governing certain of its investment practices. Investment companies may also voluntarily designate restrictions relating to other investment practices as fundamental. "Fundamental" investment restrictions can be changed only by a shareholder vote. The Fund has adopted fundamental investment restrictions in the past in response to regulatory, business, or industry requirements and conditions that no longer prevail. For example, the National Securities Markets Improvement Act of 1996 eliminated many restrictions then required under state law by preempting state securities ("Blue Sky") regulations for many investment companies. The proposed elimination of and revisions to certain of the fundamental investment restrictions of the Fund are discussed below. Please refer to Appendix A for a complete description of the current and proposed fundamental investment restrictions for the Fund. By eliminating those fundamental investment restrictions that are not required and revising those fundamental investment restrictions that are required, the Trustees believe that the Fund's investment adviser, RS Investment Management, Inc. ("RSIM"), will be better able to manage the Fund's portfolio in a changing regulatory or investment environment. In addition, the process of monitoring the Fund's compliance with investment restrictions will be simplified because the Fund's investment restrictions will be brought more closely in line with those of the majority of the other series of RS Investment Trust. PROPOSALS 1. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN COMMODITIES. If this proposal is approved, the fundamental investment restriction of the Fund relating to investments in commodities will be revised. The investment restriction relating to investments in commodities will be replaced with the following fundamental restriction: The Fund may not: Purchase or sell commodities or commodity contracts, except that a Fund may purchase or sell financial futures contracts, options on financial futures contracts, and futures contracts, forward contracts, and options with respect to foreign currencies, and may enter into swap transactions or other financial transactions, and except as required in connection with otherwise permissible options, futures, and commodity activities as described elsewhere in the Fund's Prospectus or Statement of Additional Information at the time. DISCUSSION. The 1940 Act requires an investment company to provide a recital of the policy of the investment company as to, among other things, the purchase and sale of commodities. The revised investment restriction is intended to simplify and standardize the language of the Fund's policy concerning commodities and to provide greater flexibility to the Fund in its use of financial instruments. 2 2. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN REAL ESTATE. If this proposal is approved, the fundamental investment restriction of the Fund relating to investments in real estate will be revised. The investment restriction relating to investments in real estate will be replaced with the following fundamental restriction: The Fund may not: Purchase or sell real estate or interests in real estate, including real estate mortgage loans, although it may purchase and sell securities which are secured by real estate and securities of companies, including limited partnership interests, that invest or deal in real estate and it may purchase interests in real estate investment trusts. (For purposes of this restriction, investments by the Fund in mortgage-backed securities and other securities representing interests in mortgage pools shall not constitute the purchase or sale of real estate or interests in real estate or real estate mortgage loans.) DISCUSSION. The 1940 Act also requires an investment company to recite its policy as to the purchase and sale of real estate. The revised investment restriction is intended to clarify and standardize the language of the Trust's policy concerning real estate. 3. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO SHORT SALES AND PURCHASING SECURITIES ON MARGIN. If this proposal is approved, the fundamental investment restriction of the Fund relating to short sales and purchasing securities on margin will be eliminated. DISCUSSION. The Fund currently has a fundamental investment restriction prohibiting it from making short sales or purchasing securities on margin. Eliminating this restriction will enhance investment flexibility and could assist the Fund in achieving its investment objective. The Fund does not, however, currently intend to engage in short sales or to purchase securities on margin. In a typical short sale, the Fund borrows from a broker a security that it anticipates will decline in value in order to sell the security to a third party. The Fund is then obligated to return a security of the same issue and quantity at some future date, and it realizes a loss to the extent that the security increases in value or a profit to the extent the security declines in value (after including any associated costs). If the Fund engages in short sales, it may have to pay a premium to borrow the securities and must pay to the lender any dividends or interest it receives on the securities while they are borrowed. All short sales must be fully collateralized. Short sales "against the box" are those where the Fund owns or has the right to acquire at no added cost a security identical to that sold short. Short sales "against the box" may protect the Fund against the risk of losses in the value of its portfolio securities because any unrealized losses with respect to such securities should be wholly or partially offset by a corresponding gain in the short position. However, any potential gains in such securities would be wholly or partially offset by a corresponding loss in the short position. Purchases on margins are a type of borrowing, and will be restricted by applicable law and the Fund's fundamental investment restriction related to borrowings (see Proposal 8). 3 4. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN ONE ISSUER. If this proposal is approved, the fundamental investment restriction of the Fund relating to investments in one issuer will be revised. The investment restriction relating to investments in one issuer will be replaced with the following fundamental restriction: The Fund may not: (i) AS TO 75% OF THE FUND'S TOTAL ASSETS, PURCHASE ANY SECURITY (OTHER THAN U.S. GOVERNMENT SECURITIES), IF AS A RESULT MORE THAN 5% OF THE FUND'S TOTAL ASSETS (TAKEN AT CURRENT VALUE) WOULD THEN BE INVESTED IN SECURITIES OF A SINGLE ISSUER, or (ii) purchase any security if as a result 25% or more of the Fund's total assets (taken at current value) would be invested in a single industry. DISCUSSION. The 1940 Act imposes restrictions on an investment company's ability to concentrate its investments in securities of any issuer. This revised investment restriction is intended to clarify and standardize the language of the Fund's policies as to diversification. The restriction will also be combined with the restriction as to the Fund's concentration of investments in one industry (see Proposal 5), as is the case for the majority of the other Funds. 5. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO CONCENTRATION OF INVESTMENTS IN ONE INDUSTRY. If this proposal is approved, the fundamental investment restriction of the Fund relating to concentration of investments in one industry will be revised. The investment restriction relating to concentration of investments in one industry will be replaced with the following fundamental restriction: The Fund may not: (i) As to 75% of the Fund's total assets, purchase any security (other than U.S. Government securities) if as a result more than 5% of the Fund's total assets (taken at current value) would then be invested in securities of a single issuer, or (ii) PURCHASE ANY SECURITY IF AS A RESULT 25% OR MORE OF THE FUND'S TOTAL ASSETS (TAKEN AT CURRENT VALUE) WOULD BE INVESTED IN A SINGLE INDUSTRY. DISCUSSION. The 1940 Act imposes restrictions on an investment company's ability to concentrate its investments in securities of any particular industry or group of industries. This revised investment restriction is intended to clarify and standardize the language of the Fund's policies as to diversification. The restriction will also be combined with the restriction relating to concentration of investments in one issuer (see Proposal 4) as is the case for the majority of the other Funds. 6. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO PLEDGING ASSETS. If this proposal is approved, the existing fundamental investment restriction of the Fund relating to pledging assets will be eliminated. DISCUSSION. The Fund currently has a fundamental investment restriction prohibiting it from pledging its assets. This restriction was formerly derived from certain states' Blue Sky laws. The Trustees recommend the elimination of this restriction in order to provide the Fund with greater investment flexibility. There are currently no regulatory limits on pledging activity. 4 Pledging assets does entail certain risks. To the extent that the Fund pledges its assets, it may have less flexibility in liquidating assets. This may delay the Fund's ability to meet redemption requests or other obligations. 7. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO MAKING LOANS. If this proposal is approved, the fundamental investment restriction of the Fund relating to making loans will be revised. The investment restriction relating to making loans will be replaced with the following fundamental restriction: The Fund may not: Make loans, except by purchase of debt obligations or other financial instruments in which the Fund may invest consistent with its investment policies, by entering into repurchase agreements, or through the lending of its portfolio securities. DISCUSSION. This proposed new restriction would clarify the Fund's policies as to its making loans, and will permit the Fund to lend securities. The Fund is not currently permitted to lend securities. It is expected that the Fund will engage in securities lending transactions if the proposed change is approved. When it lends its portfolio securities, the Fund has the potential to increase its current income while retaining the securities' potential for capital appreciation. Such loans are at all times secured by cash or equivalent collateral. The advantage of such loans is that the Fund continues to earn interest and dividends on the loaned securities while at the same time earning a return on the invested collateral. Such a loan involves some risk to the Fund if the other party should default on its obligation. If the other party should become involved in bankruptcy proceedings, it is possible that the Fund may encounter a delay in recovery of or even a loss of rights in the collateral. However, loans of a Fund's securities will only be made to borrowers deemed by RSIM to be creditworthy. 8. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO BORROWINGS. If this proposal is approved, the fundamental investment restriction of the Fund relating to borrowings will be revised. The investment restriction relating to borrowings will be replaced with the following fundamental restriction: The Fund may not: Borrow money, except to the extent permitted by applicable law, regulation or order. DISCUSSION. The Fund is currently allowed to borrow only in an amount not in excess of 5% of the value of the Fund's total assets. The 1940 Act prohibits mutual funds from borrowing more than one-third of their assets, including the amount borrowed, and permits borrowing only from banks. Accordingly, the revised policy on borrowing would provide the Fund with additional authority to borrow. The Fund occasionally borrows money to fund substantial shareholder redemptions or exchange requests or for the clearance of transactions when available cash is not sufficient for these needs. The proposed change would afford the Fund increased capacity to satisfy net redemptions of its shares on a temporary basis without having to resort to sales of portfolio securities at possibly disadvantageous prices. This proposal, if adopted, will also allow the Fund to borrow money to take advantage of investment opportunities. This type of borrowing involves the additional risk that interest expense may be greater than the income from or appreciation of the securities financed and the value of such securities may decline below the amount borrowed. If the Fund were to follow this practice, any investment gains made on the 5 securities in excess of the interest paid on the borrowing would cause the net asset value of the Fund to rise faster than would otherwise be the case. Conversely, if the investment performance of the additional securities purchased failed to cover their cost (including any interest on the money borrowed) to the Fund, the net asset value would decrease faster than would otherwise be the case. This effect is known as "leverage." If the Fund borrows money for leverage and its investments increase or decrease in value, the Fund's net asset value will normally increase or decrease more than if it had not borrowed money. The Fund does not have any current intention to borrow money for leverage, but the proposed revised restriction would permit borrowing for such purposes, to the extent approved from time to time by the Trustees. 9. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO UNDERWRITING OF SECURITIES. If this proposal is approved, the fundamental investment restriction of the Fund relating to underwriting of securities will be revised. The investment restriction relating to underwriting of securities will be replaced with the following fundamental restriction: The Fund may not: Act as underwriter of securities of other issuers except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws. DISCUSSION. The federal securities laws regulate an investment company's ability to act as an underwriter of securities issued by others. This investment restriction is intended to state clearly and simply that the limits set forth in those laws will apply to the Fund. 10. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO ISSUANCE OF SENIOR SECURITIES. If this proposal is approved, the fundamental investment restriction of the Fund relating to issuance of senior securities will be revised. The investment restriction relating to issuance of senior securities will be replaced with the following fundamental restriction: The Fund may not: Issue any class of securities which is senior to the Fund's shares of beneficial interest, except to the extent the Fund is permitted to borrow money or otherwise to the extent contemplated by applicable law. DISCUSSION. The 1940 Act imposes limitations on an investment company's ability to issue senior securities. This revised investment restriction is intended to simplify and standardize the language of the Fund's policy concerning senior securities, and to permit the Fund to take full advantage of all investment flexibility permitted under applicable law, subject to the Fund's investment restriction relating to borrowings (see Proposal 8). 11. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS MADE FOR THE PURPOSE OF EXERCISING CONTROL OR MANAGEMENT. If this proposal is approved, the fundamental investment restriction of the Fund relating to investments made for the purpose of exercising control or management will be eliminated. 6 DISCUSSION. Eliminating this investment restriction would permit the Fund to exercise its rights as shareholder in the various companies in which it can invest, consistent with any limitation imposed from time to time by the relevant adviser's or sub-adviser's internal code of conduct and proxy voting policies. These rights may include the active opposition or support of such companies' management. These activities could at times fall within the technical definition of exercising control under the securities laws. Although the Fund does not currently intend to invest in a company for the purpose of exercising control over the company, the Trustees believe that approval of this proposal will provide the Fund with the additional capability to protect the value of its investments through the exercise of influence, in appropriate circumstances, on the management of the companies in which it invests. The Fund would be able to communicate its views as a shareholder on company policies that affect the value of the Fund's investment. Activities in which the Fund would then be able to engage include seeking changes in a company's goals, management, or board of directors, seeking the sale of some or all of a company's assets, or voting to participate in or oppose a takeover effort with respect to the company. 12. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO THE PURCHASE OF MORE THAN 10% OF THE SECURITIES OF ANY ONE ISSUER. If this proposal is approved, the fundamental investment restriction of the Fund relating to the purchase of more than 10% of the securities of any one issuer would be eliminated. DISCUSSION. The Fund is classified as "diversified" under the 1940 Act, which means that the Fund must comply with, among other requirements, the investment restriction set forth in Proposal 4 above, which limits, as to 75% of the Fund's assets, the percentage of the Fund's assets invested in a single issuer. As to the remaining 25% of the Fund's assets, the Fund may concentrate its investment in securities of a single issuer although it currently has no intention to do so. The Trustees believe that the proposed change eliminates any redundancy in the policy and will enhance the Fund's ability to make substantial investments in a limited number of issuers. Should the Fund desire to become non-diversified in the future, the Fund would need to obtain a shareholder vote approving its reclassification from diversified to non-diversified. Until the Fund obtains such a shareholder vote, the Fund must continue to comply with the diversification requirements of the 1940 Act. 13. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN OTHER INVESTMENT COMPANIES. If this proposal is approved, the fundamental investment restriction of the Fund relating to investments in other investment companies will be eliminated. DISCUSSION. The 1940 Act imposes limitations on an investment company's ability to purchase and sell securities of other investment companies. If this proposal is approved, the Fund will be able to invest in other investment companies to the extent allowed by the 1940 Act and the Fund's investment policies. Investment in these entities may involve duplication of certain fees and expenses, but the Trustees believe that this enhanced flexibility could provide attractive investment opportunities and may assist the Fund in meeting its investment objective. 7 14. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN BUSINESSES LESS THAN THREE YEARS OLD. If this proposal is approved, the fundamental investment restriction of the Fund relating to investments in businesses less than three years old will be eliminated. DISCUSSION. The Fund currently has a fundamental investment restriction related to investments of more than 5% of its assets in "unseasoned issuers" (i.e., companies which have been in operation for less than three years). This restriction was formerly found in certain states' Blue Sky laws. The Trustees recommend the elimination of this restriction in order to provide the Fund with greater flexibility in making investments. The Trustees believe that elimination of this investment restriction will increase RSIM's flexibility in managing the Fund's assets by permitting investments by the Fund in unseasoned issuers that are otherwise permissible and appropriate under the investment objective and policies of the Fund. While securities of these issuers may be subject to greater risk, the Trustees believe that the increasing prevalence of unseasoned issuers, the investment opportunities offered by such issuers, and the fact that any such investments would be subject to the other investment policies of the Fund, warrants the elimination of the current investment restriction. 15. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN UNREGISTERED SECURITIES. REPLACE WITH A NON-FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN UNREGISTERED SECURITIES. If this proposal is approved, the fundamental investment restriction of the Fund relating to investments in unregistered securities will be eliminated. It will be replaced by the following non-fundamental restriction: The Fund may not: Invest more than 15% of its net assets in securities which are not readily marketable, including securities restricted as to resale but determined by the Trustees, or persons designated by the Trustee's to make such determinations, to be readily marketable. DISCUSSION. The Trustees believe that fundamental restrictions relating to unregistered securities are unnecessary in light of current regulatory requirements. The Trustees believe that elimination of this investment restriction will increase the flexibility of RSIM in managing the Fund's assets by permitting investments in unregistered securities that are otherwise permissible and appropriate under the investment objective and policies of the Fund. The Trustees believe that the elimination of this investment restriction will allow the Fund to have greater flexibility to respond quickly to legal, regulatory, and market developments regarding unregistered securities. To the extent that the Fund invests in unregistered securities, the Fund may encounter difficulty in determining the fair value of such securities for purposes of computing net asset value. In addition, the Fund could encounter difficulty satisfying redemption requests within seven days if it could not readily dispose of its unregistered securities. TRUSTEE RECOMMENDATION THE TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF THE FUND VOTE TO APPROVE THE PROPOSED ELIMINATION OF AND REVISIONS TO THE FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND. 8 The required vote for approval of the proposed elimination of and revisions to the fundamental investment policies of the Fund is the lesser of (1) 67% of the shares of the Fund represented at the Meeting and entitled to vote, if more than 50% of the shares of the Fund are represented at the Meeting, or (2) more than 50% of the outstanding shares of the Fund. If the shareholders of the Fund do not approve these proposals, the Trustees of the Trust will consider such alternate actions as may be in the best interest of the Fund. II. ADDITIONAL INFORMATION OWNERSHIP OF SHARES. As of the Record Date, the number of outstanding shares of the Fund was . To the Trust's knowledge, the following persons owned beneficially more than 5% of the outstanding shares of the Fund at the Record Date: [TO BE SUPPLIED] OWNERSHIP OF SHARES BY TRUSTEES AND OFFICERS. As of the Record Date, the following Trustees and Officers owned beneficially the following number of shares of the Fund, representing the indicated percentage of the outstanding shares of the Fund: [TO BE SUPPLIED] CERTAIN SERVICE PROVIDERS. RSIM, located at 388 Market Street, Suite 200, San Francisco, California, 94111 acts as investment advisor and administrator to the Fund. Provident Distributors, Inc., located at Four Falls Corporate Center, 6th Floor, West Conshohocken, PA, is the Fund's distributor. SOLICITATION OF PROXIES. The costs of solicitation of proxies will be borne by the Fund. Solicitation of proxies by personal interview, mail, telephone, and telegraph may be made by officers and Trustees of the Trust (who will receive no compensation therefor in addition to their regular salaries). In addition, the firm of D.F. King & Co., Inc. has been retained by RSIM to assist in the solicitation of proxies at a cost to RSIM which is not expected to exceed $ . The Trust may also arrange to have votes recorded by telephone. The telephone voting procedure is designed to authenticate shareholders' identities, to allow shareholders to authorize the voting of their shares in accordance with their instructions, and to confirm that their instructions have been properly recorded. The Trust has been advised by counsel that these procedures are consistent with the requirements of applicable law. If these procedures were subject to a successful legal challenge, such votes would not be counted at the Meeting. The Trust is unaware of any such challenge at this time. Shareholders would be called at the phone number the Trust (or a shareholder's financial institution) has in its records for their accounts, and would be asked for their Social Security number or other identifying information. The shareholders would then be given an opportunity to authorize proxies to vote their shares at the Meeting in accordance with their instructions. To ensure that the shareholders' instructions have been recorded correctly, they will also receive a confirmation of their instructions in the mail. A special toll-free number will be available in case the information contained in the confirmation is incorrect. QUORUM. The Agreement and Declaration of Trust provides that forty percent (40%) of the shares entitled to vote on a matter shall constitute a quorum for the transaction of business on that matter at a meeting. However, approval of the proposed changes to the fundamental investment restrictions of the Fund will require the presence of a greater percentage of the Fund's shares at the meeting in person or by proxy. ADJOURNMENT. In the event that sufficient votes in favor of any of the proposals set forth in the Notice of the Meeting are not received by the time scheduled for the Meeting, the persons named as proxies may propose one or more adjournments of the Meeting with respect to those proposals for a period or periods of not more than 60 days in the aggregate to permit further solicitation of proxies with respect to those proposals. In addition, if, in the judgment of the persons named as proxies, subsequent developments 9 make it advisable to defer action on one or more proposals, but not all proposals, the persons named as proxies may propose one or more adjournments of the Meeting with respect to those proposals for a reasonable time in order to defer action on such proposals as they deem advisable. Any such adjournments will require the affirmative vote of a majority of the votes cast on the question in person or by proxy at the session of the Meeting to be adjourned, as required by the Trust's Agreement and Declaration of Trust and By-laws. The persons named as proxies will vote in favor of such adjournment with respect to a proposal those proxies which they are entitled to vote in favor of the proposal. They will vote against any such adjournment those proxies which they have been instructed to vote against such proposal, and they will vote to abstain any such proxies which they are required to abstain from voting on such proposal. The costs of any such additional solicitation and of any adjourned session will be borne by RSIM. Any proposals for which sufficient favorable votes have been received by the time of the Meeting may be acted upon and considered final regardless of whether the Meeting is adjourned to permit additional solicitation with respect to any other proposal. TABULATION OF VOTES. Votes cast by proxy or in person at the Meeting will be counted by persons appointed by the Trust to act as tellers for the Meeting. The tellers will count the total number of votes cast "for" approval of each proposal for purposes of determining whether sufficient affirmative votes have been cast. The tellers will count shares represented by proxies that withhold authority to vote or that reflect abstentions or "broker non-votes" (I.E., shares held by a broker or nominee as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote and (ii) the broker or nominee does not have the discretionary voting power on a particular matter) as shares that are present and entitled to vote on the matter for purposes of determining the presence of a quorum. Abstentions and broker non- votes will have the effect of negative votes on the proposals to approve the changes to the fundamental investment restrictions of the Fund. OTHER BUSINESS. The Board of Trustees knows of no other business to be brought before the Meeting. However, if any other matters properly come before the Meeting, it is the Board's intention that proxies which do not contain specific restrictions to the contrary will be voted on such matters in accordance with the judgment of the persons named as proxies in the enclosed form(s) of proxy. DATE FOR RECEIPT OF SHAREHOLDERS' PROPOSALS FOR SUBSEQUENT MEETINGS OF SHAREHOLDERS. The Trust's Agreement and Declaration of Trust does not provide for annual meetings of shareholders, and the Trust does not currently intend to hold such a meeting in 2000. Shareholder proposals for inclusion in the Trust's proxy statement for any subsequent meeting must be received by the Trust a reasonable period of time prior to any such meeting. 10 APPENDIX A RS EMERGING GROWTH FUND FUNDAMENTAL INVESTMENT RESTRICTIONS CURRENT RESTRICTIONS PROPOSED RESTRICTIONS The Fund may not: (1) Purchase or sell commodities or commodity Eliminate. Replace with the following contracts, or interests in oil, gas, or other fundamental restriction: mineral leases, or other mineral exploration PURCHASE OR SELL COMMODITIES OR COMMODITY CON- or development programs, although it may TRACTS, EXCEPT THAT A FUND MAY PURCHASE OR invest in companies that engage in such SELL FINANCIAL FUTURES CONTRACTS, OPTIONS ON businesses to the extent otherwise permitted FINANCIAL FUTURES CONTRACTS, AND FUTURES by a Fund's investment policies and CONTRACTS, FORWARD CONTRACTS, AND OPTIONS WITH restrictions and by applicable law, except as RESPECT TO FOREIGN CURRENCIES, AND MAY ENTER required in connection with otherwise INTO SWAP TRANSACTIONS OR OTHER FINANCIAL permissible options, futures and commodity TRANSACTIONS, AND EXCEPT AS REQUIRED IN activities as described elsewhere in the CONNECTION WITH OTHERWISE PERMISSIBLE OPTIONS, [Fund's] Prospectus and this Statement [of FUTURES, AND COMMODITY ACTIVITIES AS DESCRIBED Additional Information]. ELSEWHERE IN THE FUND'S PROSPECTUS OR THE STATEMENT OF ADDITIONAL INFORMATION AT THE TIME. (2) Purchase or sell real estate, although it Eliminate. Replace with the following may invest in securities secured by real fundamental restriction: estate or real estate interests, or issued by PURCHASE OR SELL REAL ESTATE OR INTERESTS IN companies, including real estate investment REAL ESTATE, INCLUDING REAL ESTATE MORTGAGE trusts, that invest in real estate or real LOANS, ALTHOUGH IT MAY PURCHASE AND SELL estate interests. SECURITIES WHICH ARE SECURED BY REAL ESTATE AND SECURITIES OF COMPANIES, INCLUDING LIMITED PARTNERSHIP INTERESTS, THAT INVEST OR DEAL IN REAL ESTATE AND IT MAY PURCHASE INTERESTS IN REAL ESTATE INVESTMENT TRUSTS. (FOR PURPOSES OF THIS RESTRICTION, INVESTMENTS BY THE FUND IN MORTGAGE-BACKED SECURITIES AND OTHER SECURITIES REPRESENTING INTERESTS IN MORTGAGE POOLS SHALL NOT CONSTITUTE THE PURCHASE OR SALE OF REAL ESTATE OR INTERESTS IN REAL ESTATE OR REAL ESTATE MORTGAGE LOANS.) (3) Make short sales or purchases on margin, Eliminate. although it may obtain short-term credit necessary for the clearance of purchases and sales of its portfolio securities and except as required in connection with permissible options, futures, short selling and leverage activities as described elsewhere in the Prospectus and this Statement [of Additional Information].
(4) With respect to 75% of its total assets, Eliminate fundamental restrictions 4 and 5. invest in the securities of any one issuer Replace both with the following single (other than the U.S. Government and its fundamental restriction: agencies and instrumentalities), if (I) AS TO 75% OF THE TOTAL ASSETS, PURCHASE immediately after and as a result of such ANY SECURITY (OTHER THAN U.S. GOVERNMENT investment more than 5% of the total assets of SECURITIES), IF AS A RESULT MORE THAN 5% OF the Fund would be invested in such issuer (the THE FUND'S TOTAL ASSETS (TAKEN AT CURRENT remaining 25% of its total assets may be VALUE) WOULD THEN BE INVESTED IN SECURITIES OF invested without restriction except to the A SINGLE ISSUER, OR (II) PURCHASE ANY SECURITY extent other investment restrictions may be IF AS A RESULT 25% OR MORE OF THE FUND'S TOTAL applicable). ASSETS (TAKEN AT CURRENT VALUE) WOULD BE (5) Invest more than 25% of the value of the INVESTED IN A SINGLE INDUSTRY. Fund's total assets in the securities of companies engaged in any one industry (except securities issued by the U.S. Government its agencies or instrumentalities). (6) Mortgage, hypothecate, or pledge any of Eliminate. its assets as security for any of its obligations, except as required for otherwise permissible borrows (including reverse repurchase agreements), short sales, financial options and other hedging activities. (7) Make loans of the Fund's assets, including Eliminate. Replace with the following loans of securities (although it may, subject fundamental restriction: to the other restrictions or policies stated MAKE LOANS, EXCEPT BY PURCHASE OF DEBT OBLIGA- herein, purchase debt securities or enter into TIONS OR OTHER FINANCIAL INSTRUMENTS IN WHICH repurchase agreements with banks or other THE FUND MAY INVEST CONSISTENT WITH ITS institutions to the extent a repurchase INVESTMENT POLICIES, BY ENTERING INTO agreement is deemed to be a loan). REPURCHASE AGREEMENTS, OR THROUGH THE LENDING OF ITS PORTFOLIO SECURITIES.
2 (8) Borrow money, except from banks for tempo- Eliminate. Replace with the following rary or emergency purposes or in connection fundamental restriction: with otherwise permissible leverage BORROW MONEY, EXCEPT TO THE EXTENT PERMITTED activities, and then only in an amount not in BY APPLICABLE LAW, REGULATION OR ORDER. excess 5% of the Fund's total assets (in any case as determined at the lesser of acquisition cost or current market value and excluding collateralized reverse repurchase agreements). (9) Underwrite securities of any other Eliminate. Replace with the following company, although it may invest in companies fundamental restriction: that engage in such businesses if it does so ACT AS UNDERWRITER OF SECURITIES OF OTHER in accordance with policies established by the ISSUERS EXCEPT TO THE EXTENT THAT, IN Trust's Board of Trustees (the Board's current CONNECTION WITH THE DISPOSITION OF PORTFOLIO policy permits a Fund to invest in companies SECURITIES, IT MAY BE DEEMED TO BE AN that directly or through subsidiaries execute UNDERWRITER UNDER CERTAIN FEDERAL SECURITIES portfolio transactions for a Fund or have LAWS. entered into selling agreements with the Distributor to sell Fund shares, to the extent permitted by applicable law), and except to the extent that the Fund may be considered an underwriter within the meaning of the Securities Act of 1933, as amended, in the disposition of restricted securities. (10) Issue senior securities, as defined in Eliminate. Replace with the following the 1940 Act, except that this restriction fundamental restriction: shall not be deemed to prohibit the Fund from ISSUE ANY CLASS OF SECURITIES WHICH IS SENIOR making any otherwise permissible borrowings, TO THE FUND'S SHARES OF BENEFICIAL INTEREST, mortgages or pledges, or entering into EXCEPT TO THE EXTENT THE FUND IS PERMITTED TO permissible reverse repurchase agreements, and BORROW MONEY OR OTHERWISE TO THE EXTENT options and futures transactions. CONTEMPLATED BY APPLICABLE LAW. (11) Purchase the securities of any company Eliminate. for the purpose of exercising management or control. (12) Purchase more than 10% of the outstanding Eliminate. voting securities of any one issuer. (13) Purchase the securities of any registered Eliminate. investment company, except as part of a merger or similar reorganization transaction.
3 (14) Invest more than 5% of the value of its Eliminate. total assets in securities of any issuer which has not had a record, together with its predecessors, of at least three years of continuous operations. (15) Invest more than 10% of the value of its Eliminate. Replace with the following total assets in securities that are not non-fundamental restriction: readily marketable or that would require INVEST MORE THAN 15% OF ITS NET ASSETS IN registration under the Securities Act of 1933, SECURITIES WHICH ARE NOT READILY MARKETABLE, as amended, upon disposition (as a matter of INCLUDING SECURITIES RESTRICTED AS TO RESALE operating policy, the Fund interprets this BUT DETERMINED BY THE TRUSTEES, OR PERSONS restriction as including venture capital DESIGNATED BY THE TRUSTEE'S TO MAKE SUCH investments such as venture capital partner- DETERMINATIONS, TO BE READILY MARKETABLE. ships whose securities are not registered under the Securities Act of 1933 and unregistered securities of companies which are not yet publicly held; furthermore, and as an additional matter of operating policy, the Board of Trustees has adopted a further restriction that no more than 5% of the Fund's total assets may be held in such restricted securities).
4 [LOGO] [RS INVESTMENT MANAGEMENT] RS INVESTMENT MANAGEMENT 388 MARKET STREET, SUITE 200 SAN FRANCISCO, CA 94111 Please sign your name exactly as it appears on this card. If you are a joint owner, each owner should sign. When signing as executor, administrator, attorney, trustee, or guardian, or as custodian for a minor, please give your full title as such. If you are signing for a corporation, please sign the full corporate name and indicate the signer's office. If you are a partner, sign in the partnership name. YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE PHONE BY CALLING 1-800-690-6903 OR THROUGH THE INTERNET AT www.proxyvote.com RS EMERGING GROWTH FUND PROXY SOLICITED BY THE BOARD OF TRUSTEES PROXY FOR MEETING OF SHAREHOLDERS February 23, 2000 The undersigned hereby appoints G. Randall Hecht, Suzanne DuFrane, and Steve Cohen, and each of them separately, proxies, with power of substitution to each, and hereby authorizes them to represent and to vote, as designated below, at the Meeting of shareholders of RS Emerging Growth Fund, on February 23, 2000 at [time], San Francisco time, and at any adjournments thereof, all of the shares of RS Emerging Growth Fund which the undersigned would be entitled to vote if personally present. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED FOR PROPOSALS 1 THROUGH 15. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH PROPOSAL. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: RSEMER KEEP THIS PORTION FOR YOUR RECORDS - -------------------------------------------------------------------------------- DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. RS EMERGING GROWTH FUND To vote FOR all 15 proposals, mark this box [ ] and sign and date below. (No additional vote is necessary.)
VOTE ON PROPOSALS FOR AGAINST ABSTAIN 1. Revise the fundamental restriction relating to investments in commodities. [ ] [ ] [ ] 2. Revise the fundamental restriction relating to investments in real estate. [ ] [ ] [ ] 3. Eliminate the fundamental restriction relating to short sales and purchasing securities on margin. [ ] [ ] [ ] 4. Revise the fundamental restriction relating to investments in one issuer. [ ] [ ] [ ] 5. Revise the fundamental restriction relating to investments in one industry. [ ] [ ] [ ] 6. Eliminate the fundamental restriction relating to pledging assets. [ ] [ ] [ ] 7. Revise the fundamental restriction relating to making loans. [ ] [ ] [ ] 8. Revise the fundamental restriction relating to borrowings. [ ] [ ] [ ] 9. Revise the fundamental restriction relating to underwriting of securities. [ ] [ ] [ ] 10. Revise the fundamental restriction relating to issuance of senior securities. [ ] [ ] [ ] 11. Eliminate the fundamental restriction relating to investments made for the purpose of exercising control or management. [ ] [ ] [ ] 12. Eliminate the fundamental restriction relating to the purchase of more than 10% of the securities of any one issuer. [ ] [ ] [ ] 13. Eliminate the fundamental restriction relating to investments in other investment companies. [ ] [ ] [ ] 14. Eliminate the fundamental restriction relating to investments in businesses less than three years old. [ ] [ ] [ ] 15. Eliminate the fundamental restriction relating to investments in unregistered securities. [ ] [ ] [ ]
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