WASATCH FUNDS, INC.505 Wakara Way, 3rd Floor

150 Social Hall Avenue, 4th Floor
Salt Lake City, UT 84111
DECEMBER 30, 2009Utah 84108

June 6, 2018

Dear Wasatch Funds Shareholder:

Please take note that a Special Meeting of Shareholders of each separate series of Wasatch Funds Inc.Trust (the "Company"“Trust”), will be held on February 11, 2010,Thursday, July 26, 2018, at the offices of Wasatch Funds Inc., 150 Social Hall Avenue, 4thTrust, 505 Wakara Way, 3^rd Floor, Salt Lake City, Utah 8411184108 at 10:00 a.m., Mountain time ("Meeting"(“Meeting”).

The purpose of the Meeting is to ask shareholders to consider the following proposals:

1.  To approve the election of Directors;

2.  To approve a new Advisory and Service Contract between the Company and Wasatch Advisors, Inc. (the "Advisor");

3.  To approve a new Sub-Advisory Agreement between the Advisor and Hoisington Investment Management Company ("HIMCO") with respect to the Wasatch-Hoisington U.S. Treasury Fund (the "U.S. Treasury Fund");

4.  To approve a new Sub-Advisory Agreement between the Advisor and 1st Source Corporation Investment Advisors, Inc. ("1st Source") with respect to the Wasatch-1st Source Income Fund (the "Income Fund");

5.  To approve a proposed Agreement and Plan of Reorganization (the "Reorganization Agreement"), pursuant to which each series of the Company – Wasatch Core Growth Fund^® (the "Core Growth Fund"), Wasatch Emerging Markets Small Cap Fund^TM (the "Emerging Markets Small Cap Fund"), Wasatch Global Opportunities Fund^TM (the "Global Opportunities Fund"), Wasatch Global Science & Technology Fund^® (the "Global Science & Technology Fund"), Wasatch Heritage Growth Fund^® (the "Heritage Growth Fund"), Wasatch Heritage Value Fund^® (the "Heritage Value Fund"), Wasatch International Growth Fund^® (the "International Growth Fund"), Wasatch International Opportunities Fund^TM, (the "International Opportunities Fund"), Wasatch Micro Cap Fund^® (the "Micro Cap Fund"), Wasatch Micro Cap Value Fund^® (the "Mi cro Cap Value Fund"), Wasatch Small Cap Growth Fund^® (the "Small Cap Growth Fund"), Wasatch Small Cap Value Fund^® (the "Small Cap Value Fund"), Wasatch Strategic Income Fund^TM (the "Strategic Income Fund"), Wasatch Ultra Growth Fund^® (the "Ultra Growth Fund"), the U.S. Treasury Fund, the Income Fund, Wasatch-1st Source Income Equity Fund (the "Income Equity Fund") and Wasatch-1st Source Long/Short Fund (the "Long/Short Fund") (each a "Fund" and collectively, the "Funds") would be reorganized as separate series of Wasatch Funds Trust, a newly-created Massachusetts business trust (the "Trust") and the liquidation and dissolution of the Funds and the Company; and

6.  To transact such other business as may properly come before the Meeting and any adjournments or postponements thereof.

The Board of DirectorsTrustees of the CompanyTrust (referred to as the "Board"“Board”) has determined that shareholders of each Fund will benefit from each of the proposalsproposal and unanimously recommends that you vote "FOR" these proposals.

As discussed in more detail in“FOR” the enclosed proxy statement, a principal shareholder of WA Holdings, Inc. ("Wasatch"), the parent company of the Advisor, is intending to sell his Wasatch shares back to Wasatch. Because this transaction may be deemed a change of control of the Advisor, the advisory agreements between the Funds and the Advisor and the sub-advisory agreements with HIMCO and 1st Source (each a "Sub-Advisor" and collectively, the "Sub-Advisors") will automatically terminate in accordance with their terms and applicable law upon consummation of the transaction. Accordingly, for the Advisor and Sub-Advisors to continue to provide services to the respective Funds, shareholders of the Funds are being asked to approve a new advisory agreement with the Advisor, and the shareholders of the U.S. Treasury Fund and the Income Fund are being asked to approve new sub-advisory agreements with HIMCO and 1st Source, respectively.

In addition, the shareholders of the Funds are being asked to approve an agreement and plan of reorganization, which will change the state and form of the organization of the Company from a Minnesota corporation to a newly formed Massachusetts business trust. We are proposing the reorganization to take advantage of greater flexibility afforded by Massachusetts law. If approved, each Fund would be reorganized into a corresponding new series of the Massachusetts business trust. The closing of the reorganization is conditioned upon, among other things, an opinion of counsel to the effect that the reorganization will qualify as a tax-free reorganization for federal tax purposes.

proposal. We strongly invite your participation by asking you to review these materials and complete and return your proxy card as soon as possible.

Detailed information about each of the proposalsproposal is contained in the enclosed materials. Please exercise your right to vote by completing, dating and signing the enclosed proxy card. A self addressed, postage paidself-addressed,postage-paid envelope has been enclosed for your convenience. Alternatively, you may vote by telephone or via the internet following the instructions on the proxy card.It is very important that you vote and that your voting instructions be received no later than 10:8:00 a.m. on February 11, 2010.July 26, 2018.

NOTE: You may receive more than one proxy package if you hold shares in more than one account. You must return separate proxy cards for separate holdings. We have provided postage paidpostage-paid return envelopes for each, which require no postage if mailed in the United States.

If you have any questions after considering the enclosed materials, please call 866-521-4229.800.499.8541.

Samuel J. Stewart
President
Wasatch Funds, Inc.2

WASATCH FUNDS INC.TRUST

150 Social Hall Avenue, 4th

(each, a “Fund”, collectively, the “Funds”)

505 Wakara Way, 3rd Floor

Salt Lake City, UT 84111Utah 84108

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD FEBRUARY 11, 2010JULY 26, 2018

To the Shareholders:

Wasatch Funds Inc.Trust (the "Company"“Trust”), on behalf of each of its series will hold a special meeting of its shareholders (the "Meeting"“Meeting”) on February 11, 2010,Thursday, July 26, 2018, at the offices of Wasatch Funds Inc., 150 Social Hall Avenue, 4thTrust, 505 Wakara Way, 3^rd Floor, Salt Lake City, Utah 8411184108 at 10:00 a.m., Mountain time (“Meeting”) for the following purposes:

1.  To approve the election of Directors;

2.  To approve a new Advisory and Service Contract between the Company and Wasatch Advisors Inc. (the "Advisor");

You are entitled to vote at the Meeting and any adjournment(s) or postponement(s) thereof if you owned shares of anya Fund listed above at the close of business on December 14, 2009.May 31, 2018.

All shareholders are cordially invited to attend the Meeting. Whether or not you plan to attend the Meeting in person, please vote your shares. In order that your Shares may be represented at the Meeting, please vote your proxy as soon as possible either by mail, telephone, or via the internet as indicated on the enclosed proxy card. If voting by mail, you are requested to:

•  

In addition to voting by mail, you may also vote by either telephone or via the internet, as follows:

We encourage you to vote by telephone or via the internet using the control number that appears on your enclosed proxy card. Use of telephone or internet voting will reduce the time and costs associated with this proxy solicitation. Whichever method you choose, please read the enclosed proxy statement carefully before you vote.

Under Minnesota law, shareholders who do not wish to acceptIMPORTANT NOTICE REGARDINGTHE AVAILABILITYOF PROXY MATERIALSFORTHE SPECIAL SHAREHOLDER MEETING TO BE HELDON JULY 26, 2018. The Proxy Statement is available on the reorganization of their Fund (as described in Proposal 5) have a right to dissent and to receive the fair value of their shares. The provisions under Minnesota law addressing the rights of dissenters and the procedures to assert such rights have been attached as Exhibit A to the enclosed proxy statement. To exercise such rights, a shareholder must file with the Fund before the vote a written notice to demand fair value of shares and must not vote the shares in favor of the proposal. However, the Securities and Exchange Commission has stated that federal law supersedes the use of state appraisal procedures.internet at: https://www.proxyonline.com/docs/Wasatch2018.pdf.

PLEASE RESPOND –— WE ASK THAT YOU VOTE PROMPTLY IN ORDER TO

AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION.

YOUR VOTE IS IMPORTANT.

By Order of the Board of Directors,

June 6, 2018

Russell L. Biles
Secretary2

December 30, 2009

WASATCH FUNDS INC.TRUST

(each, a “Fund”, collectively, the “Funds”)

Proxy Statement

Special Meeting of Shareholders

to be held on February 11, 2010July 26, 2018

This Proxy Statement is being furnished to you in connection with the solicitation of proxies by the Board of DirectorsTrustees (the "Board"“Board” or "Directors"“Trustees”) of Wasatch Funds Inc.Trust (the "Company"“Trust”), on behalf of each of its series named below,above, to be voted at a Special Meeting of Shareholders to be held on February 11, 2010,Thursday, July 26, 2018, at the offices of Wasatch Funds Inc., 150 Social Hall Avenue, 4thTrust, 505 Wakara Way, 3^rd Floor, Salt Lake City, Utah 8411184108 at 10:00 a.m., Mountain time (the "Meeting"(“Meeting”), and at any and all adjournments, postponements or delays thereof, for the purposes set forth below and described in greater detail in this Proxy Statement. The date of the first mailing of proxy cards and this Proxy Statement to shareholders will be on or about December 30, 2009.June 12, 2018.

The following Proposalsproposal will be considered and acted upon at the Meeting:

In addition, shareholders will be asked to transact such other business as may properly come before the Meeting and any adjournments or postponements thereof. You are entitled to vote at the Meeting and any adjournment(s) or postponement(s) if you owned shares of the applicable Fund at the close of business on December 14, 2009 ("May 31, 2018 (“Record Date"Date”). Each shareholder is entitled to one vote for each share owned on the Record Date and proportionate fractional vote for any fraction of a share owned.

Only shareholders of record at the close of business on the Record Date will be entitled to notice of, and to vote at, the Meeting. Shares represented by proxies, unless previously revoked, will be voted at the Meeting in accordance with the instructions of the shareholders. If no instructions are given, the proxies will be voted in favor of the proposals. To revoke a proxy, the shareholder giving such proxy must either (1) submit to the respective Fund a subsequently dated proxy, (2) deliver to the respective Fund a written notice of revocation, or (3) otherwise give notice of revocation in the open Meeting or adjournment or postponement thereof, in all cases prior to the exercise of the authority granted in the proxy.

For eachthe proposal, the presence in person or by proxy of the holders of record of 10%30% of the shares outstanding and entitled to vote on such proposal shall constitute a quorum at the Meeting. A quorum of shareholders is necessary to take action at the Meeting.

In the event that the necessary

If a quorum to transact business or the vote required to approve or reject any proposal is not obtained by the date of the Meeting, those present either in person or by proxy for a matter to be considered at the Meeting, it may, by majority vote, approveaction of the Trustee or officer of the Trust presiding over the meeting, be adjourned with respect to any matters to be considered at the Meeting. The Meeting may, by motion of the presiding Trustee or officer of the Trust thereat, be adjourned with respect to one or more adjournmentsmatters to be considered at such Meeting, even if a quorum is present with respect to such matters, when such adjournment is approved by the vote of holders of shares representing a majority of the Meetingvoting power of the shares present and entitled to permit further solicitationvote with respect to the matter or matters adjourned. Unless a proxy is otherwise limited in this regard, any Shares present and entitled to vote at a meeting that are represented by brokernon-votes may, at the discretion of proxies.the proxies named therein, be voted in favor of such adjournment.

If a shareholder wishes to participate in the Meeting, but does not wish to authorize the execution of a proxy by telephone or through the internet, the shareholder may still submit the proxy form included with this Proxy Statement by mail or attend the Meeting in person.

THE MOST RECENT ANNUAL REPORT OF THE COMPANY,TRUST, INCLUDING FINANCIAL STATEMENTS, FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 20092017 AND THE MOST RECENT SEMI-ANNUAL REPORT OF THE TRUST, INCLUDING FINANCIAL STATEMENTS, FOR THE PERIOD ENDED MARCH 31, 2018 HAS BEEN MAILED PREVIOUSLY TO SHAREHOLDERS. IF YOU WOULD LIKE TO RECEIVE ADDITIONAL COPIES OF THIS SHAREHOLDER REPORT FREE OF CHARGE, OR COPIES OF ANY SUBSEQUENT SHAREHOLDER REPORT, PLEASE CONTACT THE COMPANYTRUST BY WRITING TO THE ADDRESS SET FORTH ON THE FIRST PAGE OF THIS PROXY STATEMENT OR BY CALLING 800.551.1700 OR WRITING TO WASATCH FUNDS AT P.O. BOX 2172, MILWAUKEE, WISCONSIN53201-2172. REQUESTED SHAREHOLDER REPORTS WILL BE SENT BY FIRST CLASS MAIL WITHIN THREE BUSINESS DAYS OF THE RECEIPT OF THE REQUEST.

IMPORTANT NOTICE REGARDING IMPORTANT NOTICE REGARDINGTHE AVAILABILITY AVAILABILITYOF PROXY MATERIALS PROXY MATERIALSFORTHE SHAREHOLDER MEETING TO BE HELD SHAREHOLDER MEETING TO BE HELDON FEBRUARY 11, 2010. JULY 26, 2018. This Proxy Statement is available on the internet at: www.proxyonline.com/docs/
Wasatch Proxy Statement.pdf.Wasatch2018.pdf. The Company'sTrust’s most recent annual and semi-annual report is also available on the internet at:www.wasatchfunds.com by selecting the tab labeled "Literature“Literature & Forms."” You may call 866-521-4229800.381.1065 for information on how to obtain directions to be able to attend the Meeting and 800.499.8541 for information on how to vote in person.

2

PROPOSAL 1 –— ALL FUNDS

ELECTION OF THE DIRECTORSTRUSTEES

Background

The purpose of this proposal is to elect a Board of DirectorsTrustees for the Company.Trust. You are being asked to elect the fivefour nominees listed below ("Nominees"(“Nominees”) as DirectorsTrustees of the Company.Trust. All Nominees named below except Miriam M. Allison are currently DirectorsTrustees of the CompanyTrust and each has served in that capacity since originally elected or appointed. Currently, threeall the Trustees are not “interested persons” of the Directors are not "interested persons" of the CompanyTrust as that term is defined in the Investment Company Act of 1940, as amended (the "1940 Act"“1940 Act”), and are therefore referred to as the "Independent Directors." If elected, Ms. Allison will be an Independent Director. Samuel S. Stewart, Jr. is the president of the Company and a director and officer of the Advisor and is referred to as the "Interested Director."“Independent Trustees.” Each DirectorTrustee will serve until the next regular meeting of shareholders next held after hiscalled for the purpose of considering the election or her electionre-election of such Trustee and his or her successor, if any, shall have been elected and shall qualify, , or until the DirectorTrustee shall resign, or shall have been removed as provided in the Company's Bylaws.Trust’s Declaration of Trust. Proxies cannot be voted for a greater number of persons than the number of nominees.

Information about the Nominees

Information about the Nominees, including their business addresses, ages and principal occupations during the past five years, and other current directorships of publicly traded companies or funds, are set forth in the table below. All Nominees have consented to serve if elected.

The business affairs of the Funds are overseen by its Board of Trustees. The Board consists of four Independent Trustees. Two of the Independent Trustees were elected by shareholders to serve until their successors are qualified, appointed or elected in accordance with the Trust’s Declaration of Trust andBy-Laws. Two Independent Trustees have been appointed by the elected Independent Trustees to serve until his or her successor is qualified, appointed or elected in accordance with the Trust’s Declaration of Trust andBy-Laws.

The Trustees and executive officers of the Funds and their principal occupations for at least the last five years are set forth below. Wasatch Advisors, Inc. (the “Advisor”) retains proprietary rights to the Trust name.

3

Miriam M. Allison

505 Wakara Way, 3rd Floor

4

Executive Officers

Russell L. Biles

505 Wakara Way, 3rd Floor

¹  A Director may serve until his death, resignation, removal or retirement. Each Independent Director shall retire as Director at the end of the calendar year in which he attains the age of 72 years.

²  Directorships are those held by a Director in any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or subject to the requirements of Section 15(d) of the Securities Exchange Act or any company registered as an investment company under the 1940 Act.

³  Mr. Stewart is an Interested Director because he serves as a director and officer of the Advisor.

⁴  Ms. Allison previously owned shares of UMB Financial Corp., the parent company of UMB Fund Services, Inc., the Funds' transfer agent. As of the date of this proxy statement, Ms. Allison no longer owns such shares.

Executive Officers

5

Share Ownership

As of the Record Date, each of the Nominees, DirectorsTrustees and executive officers of the CompanyTrust beneficially owned individually and collectively as a group ("Group"(the “Group”), less than 1% of the outstanding shares of each seriesFund, except for the Emerging Markets Select Fund-Investor Class, the Emerging Markets Select Fund-Institutional Class, the Emerging India Fund-Institutional Class, and the Global Opportunities Fund-Institutional Class. The Group owned 3.74% of the Company, respectively, except as follows:

*  Each beneficial owner holds sole votingoutstanding shares of the Emerging Markets Select Fund-Investor Class, 6.81% of the outstanding shares of the Emerging Markets Select Fund-Institutional Class, 5.01% of the outstanding shares of the Emerging India Fund-Institutional Class, and investment power with respect to all amounts shown.1.90% of the outstanding shares of the Global Opportunities Fund-Institutional Class. Eric Bergeson, the President of the Trust, individually owns 1.68% of the outstanding shares of the Emerging Markets Select Fund-Investor Class, 6.61% of the outstanding shares of the Emerging Markets Select Fund-Institutional Class and 4.52% of the outstanding shares of the Emerging India Fund-Institutional Class. Miriam Allison, a Trustee of the Trust, individually owns 1.84% of the outstanding shares of the Global Opportunities Fund-Institutional Class.

The following table sets forth the aggregate dollar range of equity securities owned by each Nominee of the Funds as of the Record Date. The information as to beneficial ownership is based on statements furnished by each Nominee.

6

7

Compensation

Compensation

The Funds'Beginning in the calendar year of 2017, the Funds’ method of compensating DirectorsTrustees is to pay each Independent DirectorTrustee a retainer of $36,000$120,000 per year for services rendered and a fee of $3,500$24,000 for each Board of DirectorsTrustees meeting attended and heldin person or telephonically. Also, the members of the Audit Committee receiveIn addition, each Independent Trustee receives a fee of $3,500$24,000 for each Audit Committee meeting attended andattendance at an executive session held telephonically, unless an Audit Committee meeting is held on the same day as a Board of Directors meeting, in which case there is no separate fee paidwith respect to the Audit Committee members.contract renewal process for the Funds. In addition, the Chairman of the Board receives an additional fee of $9,500$30,000 a year as Chairman and $6,000 for attendance in person or telephonically at a Board meeting and the Chairman of the Audit Committee receivesand the Chairman of the Nominating Committee each receive an additional $18,000 per year as Chairman and $3,600 for attendance in person or telephonically at a Board meeting.

For the calendar year of 2016, the Funds’ method of compensating Trustees is to pay each Independent Trustee a retainer of $100,000 per year for services rendered and a fee of $12,000 for each Board of Trustees meeting attended in person or telephonically. Also, members of the Audit Committee received a fee of $8,000 for each Audit Committee meeting attended in person or telephonically, and members of the Nominating Committee received a fee of $8,000 for each Nominating Committee meeting attended in person or telephonically. In addition, each Independent Trustee received a fee of $12,000 for attendance at an executive session held with respect to the contract renewal process for the Funds. In addition, the Chairman of the Board received an additional fee of $4,000$25,000 a year as Chairman and $3,000 for attendance in person or telephonically at a Board meeting, the Chairman of the Audit Committee received an additional $15,000 per year as Chairman. Chairman and $1,200 for attendance in person or telephonically at an Audit Committee meeting, and the Chairman of the Nominating Committee received an additional $15,000 per year as Chairman, and $1,200 for attendance in person or telephonically at a Nominating Committee meeting.

The Funds also may reimburse the Independent DirectorsTrustees for travel expenses incurred in order to attend meetings of the Board of DirectorsTrustees and for continuing education expenses. Officers serve in that capacity without compensation from the Company.Trust. The table below sets forth the compensation paid to the Company's DirectorsTrust’s Trustees during the fiscal year ended September 30, 20092017 (exclusive of out of pocketout-of-pocket expenses reimbursed).

8

Standing Committees

¹ There are 19 separate series in the Trust.

² Effective December 31, 2017, Mr. Croft retired from the Board.

Leadership Structure and the Board of Trustees

The Board of DirectorsTrustees oversees the operations and management of the Funds, including the duties performed for the Funds by the Advisor and other service providers. The Board is currently composed of four Trustees, all who are not “interested persons” of the Trust, as that term is defined in the 1940 Act. Like all mutual funds, theday-to-day responsibility for the management and operation of the Funds is the responsibility of various service providers to the Fund, such as the Funds’ Advisor, distributor, administrator, custodian, and transfer agent. The Board approves all significant agreements between the Trust, on behalf of the Funds, and its service providers, including the agreements with the Advisor, distributor, administrator, custodian and transfer agent. The Board has appointed various officers of the Trust who also report to the Board on the Funds’day-to-day operations. In conducting this oversight responsibility, the Board receives regular reports from these officers and service providers regarding the Trust’s operations. The Board has appointed the officersChief Compliance Officer (“CCO”), who administers the Trust’s compliance program and regularly reports to the Board on compliance matters. These reports may be provided as part of the Companyformal “Board Meetings” which are typically held quarterly, in person, and involve the Board’s review of recent Fund operations, or the Board may also hold specialin-person and/or telephone meetings and informal conference calls to be responsible fordiscuss specific matters that may require action prior to the overall managementnext regularly scheduled meeting. In conjunction with the regularly scheduled Board meetings and day to day operationscommittee meetings, the Independent Trustees (who also comprise the Audit Committee) also meet in executive session periodically (but at least annually), and separately, with Trust officers, with personnel of the Company's businessservice providers, and with the Trust’s CCO. The Independent Trustees may also meet in executive session among themselves and periodically with independent legal counsel. In all cases, however, the role of the Board and of any individual Trustee is one of oversight and not of management of theday-to-day affairs between board meetings.of the Trust and its oversight role does not make the Board a guarantor of the Trust’s or Funds’ investments, operations or activities. The Board met eightfive times during the fiscal year ended September 30, 2009.2017. All Independent DirectorsTrustees were present at these meetings. Mr. Stewart was present at least 75% of these meetings.

Information about Each Trustee’s Qualification, Experience, Attributes or Skills

The Company'sBoard believes that each Trustee’s experience, qualifications, attributes or skills on an individual basis and in combination with those of the other Trustees lead to the conclusion that the Board possesses the requisite attributes and skills. In addition to the information provided in the table above, listed below for each Trustee is additional information concerning the experiences, qualifications and attributes that led to the conclusion, as of the date of this proxy statement that each current Trustee should serve as a trustee. References to the qualifications, attributes and skills of trustees are pursuant to requirements of the Securities and Exchange Commission (the “SEC”), do not constitute holding out of the Board or any Trustee as having any special expertise and shall not impose any greater responsibility or liability on any such person or on the Board by reason thereof.

9

James U. Jensen. Mr. Jensen’s experience, skills and education qualify him to serve as a Trustee of the Trust. Mr. Jensen, the Trust’s Independent Chairman, has significant experience with the Trust, having served as a Trustee of the Trust (or a director of its predecessor) since 1986. Since April 2008, Mr. Jensen has served as the Chief Executive Officer of Clearwater Law & Governance Group, where he devotes full time to corporate law practice and board governance consulting for operating companies. From 2001 to 2008, Mr. Jensenco-founded and was Chairman of the Board for Intelisum, Inc., a company pursuing computer and measurement technology and products. From 1986 to 2004, Mr. Jensen held key positions with NPS Pharmaceuticals, Inc., as Vice President, Corporate Development, Legal Affairs and General Counsel and Secretary. In addition to his business experience, Mr. Jensen is Trustee of Northern Lights Fund Trust III (representing 33 portfolios), and was a Director of the University of Utah Research Foundation. Mr. Jensen was the Chairman of the Board of Agricon Global Corporation (formerly known as Bayhill Capital Corporation) from December 2007 to February 2014 and founder and first President of the MountainWest Venture Group (now “MountainWest Capital Network”) in 1983. Mr. Jensen is a member of the National Association of Corporate Governance (“NACD”). Mr. Jensen graduated with a Bachelor of Arts degree from the University of Utah in 1967 and received degrees of Juris Doctor and Master of Business Administration from Columbia University in 1971.

Miriam M. Allison. Ms. Allison’s experience, skills and education qualify her to serve as a Trustee of the Trust. Ms. Allison, an Independent Trustee of the Trust, has 30 years of experience in investment and financial management and in management of investment companies, businesses providing financial, accounting and other services to investment companies and serving on the board of investment companies. Ms. Allison has served as a Trustee of the Trust since February 2010. In 1990, Ms. Allison founded Sunstone Financial Group (“Sunstone”), a private company and mutual fund administrator, fund accountant and transfer agent, and served as its chief executive officer and Chairman of the Board. In 2001, UMB Financial Corporation, a public company, acquired Sunstone, and renamed it UMB Fund Services, and Ms. Allison remained with the company as chief executive officer until 2003 and Chairman of the Board until 2005. Prior to founding Sunstone, Ms. Allison spent 5 years (from 1985 to 1990) as the business manager of Firstar Trust Company (“Firstar”), a registered investment adviser, and was responsible for overseeing the operations of the investment company for which Firstar served as investment advisor. In addition, from 1971 to 1985, Ms. Allison served as portfolio manager and financial planner of First Wisconsin Trust Company analyzing potential investments and financial and estate objectives of trust clients. Ms. Allison has served as a director for the board of Northwestern Mutual Fund Series, Inc. (representing 27 portfolios) since 2006 and has served as chair of its audit committee since 2009. Ms. Allison received her bachelor’s degree in economics from the University of Wisconsin Madison in 1971.

Heikki Rinne, Ph.D.Dr. Rinne, an Independent Trustee of the Trust, was appointed to serve as a Trustee of the Trust effective October 1, 2012. Dr. Rinne’s experience, skills and education qualify him to serve as a Trustee of the Trust. From 2002-2016, Dr. Rinne served as the Chief Executive Officer of Halton Group, an indoor environmental control manufacturing and technology company, with multiple business areas, and operating in 32 countries. Halton Group is headquartered in Finland, with regional headquarters in the USA and Malaysia. Dr. Rinne first served on the Board of Halton Group from 1995 to 2001 and returned to serve on the Board beginning January 2016, was President of Halton Systems Division from 1995-1997, and was an independent consultant to Halton

10

Group from 1982 to 1995. Additionally, Dr. Rinne served as the Dean of the College of Business at the University of California, Chico, from 1999 to 2001, a Professor of Business and the Head of the Consumer Sciences department at Purdue University from 1997 to 1999, and a Professor of Business at Brigham Young University from 1984 to 1995. Dr. Rinne also served on the Board of Touchfon International from 1991 to 2009, and Infosto Group from 1993 to 2009. Dr. Rinne received his Bachelor of Science in business from Brigham Young University in 1975, his Master of Business Administration from the University of Oregon in 1976, and his doctorate in Business Administration and Marketing from Purdue University in 1981.

Kristen M. Fletcher.Ms. Fletcher’s experience, skills and education qualify her to serve as a Trustee of the Trust. Kristen M. Fletcher, an Independent Trustee of the Trust, was appointed to serve as a Trustee of the Trust effective October 1, 2014, has over 35 years of experience in commercial and investment banking, and over five years of service on private andnon-profit boards of directors. Since 2015, Ms. Fletcher has served on the Board of Trustees of the Youth Sports Alliance, anon-profit organization supporting winter sports activities, while promoting good sportsmanship and healthy lifestyles through participation, education and competition. Ms. Fletcher served as a Director on the Utah Symphony/Utah Opera Board of Directors from 2005 through August 2017. Since September 2017, she has created anbeen a Director Emeritus and serves on the Finance Committee and the Deer Valley Music Festival Council. From 2009-2012, Ms. Fletcher served as a Trustee of Woodlands Commercial Banka.k.a.Lehman Brothers Commercial Bank, where she also served as Chairman of its Finance Committee, and a member of its Audit Committee whoseand its Special Committee of independent Board members are Messrs.formed to negotiate settlement terms with the Lehman Brothers bankruptcy estate. From 2002-2004, Ms. Fletcher served as the Chairman and CEO of ABN AMRO, Inc., ABN AMRO Bank’s U.S. broker-dealer, and was the head of ABN AMRO North America Wholesale Client Services, which was accountable for regulatory relationships and local implementation of ABN AMRO strategy related to large corporate and institutional clients. From 2000 to 2004, Ms. Fletcher served as Corporate Managing Director/Executive Vice President for the Global Trade & Advisory Group of ABN AMRO Bank, NV, in Amsterdam, Netherlands. From 1993 to 1999, Ms. Fletcher served as Senior Vice President of the North American Trade Group of ABN AMRO Bank NV, where she was the Head of Structured Trade Finance, and subsequently all trade finance, for ABN AMRO North America, including LaSalle Bank. Prior to her tenure at ABN AMRO, Ms. Fletcher served in various capacities at First Interstate Bank, Ltd./Standard Chartered Bank, Export-Import Bank of the U.S., and Wells Fargo Bank. Ms. Fletcher received her Bachelor of Arts in government from Hamilton College (Kirkland College) in 1975, and her Master of Science in accounting from Georgetown University in 1984. Ms. Fletcher also served as an intern to the United States Senate in 1974 and to the United States Chamber of Commerce in 1976.

Board Leadership Structure

The Board has structured itself in a manner that it believes allows it to effectively perform its oversight function. In an effort to enhance the independence of the Board, the Board is currently comprised entirely of Independent Trustees, including a Chairman that is an Independent Trustee. The Board recognizes that the chairman can perform an important role in setting the Board agenda, establishing the boardroom culture, serving as a point person on behalf of the Board with fund management, facilitating communications among Trustees and with service providers, and reinforcing the Board’s focus on the long-term interests of shareholders. The Board also recognizes that a chairman may be able to better

11

perform these functions without any conflicts of interests arising from a position with fund management. Currently, Mr. James U. Jensen Swinyardserves as the independent Chairman of the Board. Under the Trust’sBy-laws, the Chairman (or, if the Chairman is unable to attend any such meeting, the Chairman’s designee) shall preside at all meetings of the Trustees and Croft, allthe shareholders.

Standing Committees. Although the Board has direct responsibility over various matters (such as advisory contracts, underwriting contracts and Fund performance), the Board also exercises certain of its oversight responsibilities through its committees, the Audit Committee and the Governance and Nominating Committee (the “Governance Committee”), standing committees that it has established which report back to the Board. The Audit Committee is comprised entirely of the Independent Directors ofTrustees and operates under a written charter adopted and approved by the Company. The primary functionsBoard. Accordingly, Messrs. Jensen and Rinne, Ms. Allison and Ms. Fletcher are each members of the Audit Committee are to recommend to the Board of Directors the independent registered public accounting firm to be retained to perform the annual audit, to review the results of the audit, to review the Funds' internal controls and review certain other matters relating to the Funds' independent registered public accounting firm and financial records. The Audit Committee's actions are governed by the Company's written Audit Committee Charter.with Ms. Allison serving as Chair. The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. Under the charter, the primary purposes of the Audit Committee include to oversee the Funds’ accounting and financial reporting policies and practices, its internal controls and the internal controls of the Funds’ accounting, administration, transfer agency and custody service providers; to oversee the quality and integrity of the Funds’ financial statements and independent audit thereof; to assist the Board’s oversight of the Funds’ compliance with legal and regulatory requirements that relate to the Fund’s accounting and financial reporting, internal control over financial reporting and independent audits; to act as a liaison between the Funds’ independent public accountants and the full Board of Trustees; to assist the Board oversight of the Funds’ internal audit function (if any); and to approve prior to appointment, the engagement of the Funds’ independent public accountants and, in connection therewith, to review and evaluate the qualifications, independence and performance of the Funds’ independent public accountants. To fulfill its oversight duties, the Audit Committee receives annual and semi-annual reports and has regular meetings with the external auditors for the Funds. The Audit Committee’s actions are governed by the Trust’s written Audit Committee Charter. The Audit Committee met fivefour times during the fiscal year ended September 30, 2009.2017.

In addition to the Audit Committee, the Board has also established the Governance Committee. The Company'sGovernance Committee is comprised entirely of the Independent Trustees and operates under a written charter adopted and approved by the Board. Accordingly, Messrs. Jensen and Rinne, and Ms. Allison and Ms. Fletcher are each members of the Governance Committee with Mr. Rinne serving as Chair. Under the charter, the primary responsibilities of the Governance Committee include: determining matters of corporate governance (including the evaluation of Board of Directors has no other standing committees.

Ad Hoc Nominating Committee

The Board began a review ofand committee performance, committee processes, and trustee compensation); evaluating the composition of the Board duringand any constituent committees thereof and the summerprocess by which Board and committee chairs are selected; identification, consideration and nomination of 2009. That process revealedcandidates to become Board members; and other duties and responsibilities as may from time to time be delegated to the relative time periods available for existing Directors to serve in view of the Board's earlier decision to apply a suggested retirement datecommittee by year end of the year in which a Director turns 72. The Board found no indication that any current Director was planning an early departure from the Board. The Independent Directors began a discussionGovernance Committee met three times during the fiscal year ended September 30, 2017.

The Governance Committee may solicit suggestions for nominations from any source it deems appropriate including, but not limited to, the Funds’ investment advisor,sub-advisor, counsel or service providers. The Governance Committee also will consider nominees recommended by shareholders. Recommendations should be submitted in writing to the Committee care of the timeframe for considering any additions to the Board. It was determined that the Independent Directors would continue a measured discussionSecretary of the currentWasatch Funds Trust, 505 Wakara Way 3rd Floor, Salt Lake City, UT 84108. Candidates must meet the requirements established by the Board of Trustees, and prospective compositionmust be legally qualified to serve as a Trustee under all applicable federal and state securities laws and regulations, including Section 9 of the Board.1940 Act. In the falladdition, any nominee must not be an “interested person” as defined in Section 2(a)(19) of 2009, the Independent Directors began to consider the impending necessity of a shareholder meeting to approve new advisory agreements in light of the Transaction (as defined below). In view of its earlier deliberations and the requirement for a certain percentage of the Directors t o be elected by shareholders under the 1940 Act, or rules thereunder, if the Board took this opportunityvacancy to form a temporary ad hoc nomination committee to identify and evaluate possible qualified candidate(s) for election as Director to the Board. The ad hoc committee was comprisedbe filled is that of all thean Independent Directors: James U. Jensen, William R. Swinyard and D. James Croft. Given the temporary nature of this committee and its function, the Board did not have a standing committee charter or formal policy for the consideration of director candidates by shareholders. Notwithstanding the foregoing, when a vacancy on the Board occurs and nominations are sought to fillTrustee. Any such vacancy, the ad hoc committee may seek nominations from those sources it deems appropriate in its discretion, including shareholders of the Funds. Shareholders wishing to present one or more candidates for Director consideration may submit such request pursuant to the manner described in "Shareholder Communications" below. Such requestrecommendation should include the shareholder's n ame;shareholder’s name; address; name of broker or record holder, if applicable; number of shares owned;

12

name of Funds in which the shares are owned; whether the candidate consents

to being identified in the proxy statement in connection with the election of Directors;Trustees; the name and background information of the candidate; and a representation that the candidate is willing to provide additional information about him/herself, including assurances of his or her independence.

In evaluating potential candidates for the Board, the Independent Directors consideredTrustees may consider various factors including, among other things: high ethical standards; the legalintegrity and fiduciary duties associated with Board membership; any conflictsethics, breadth of interest that would interfere with the performance of their responsibilities (including various candidates' independence from the Funds' investment advisor, sub-advisorsexperience, profession, education and other principal service providers and the effect of any relationships that might impair their independence); theskills, life experiences, interpersonal skills, ability to devote sufficientthe necessary time and attention (including the time needed to review materials and attend meetings); and relevant skills and experience (including whether such skills and experience will enhance the Board's ability to effectively represent the interests of the Funds' shareholders and oversee the wide range of regulatory and business issues affecting the Funds, givenother board experience, contribution to Board diversity, and willingness to invest personal assets in the current compositionFunds. The Board believes that there is a meaningful relationship between diverse boards and constructive corporate governance and that diversity of Trustees can help boards more effectively discharge their duties. However, the Board andhas declined to develop a specific definition of “diversity” since the mix of skills and backgroundscharacteristics that create Board diversity are dependent upon the characteristics of the incumbent Directors). The Committee also considered for a small sub-setTrustees, the presence, absence and importance of proposed candidates, the communication style and temperament of the candidates. The Committee further considered evidence of prior successful board work and evidence of discernment and judgment applied in group decision making environments.which change over time. In reviewing candidates, the Directors used,Trustees will use, among other things, personal interviews, background checks, written submissions by the candidates, and third-party references, if any. The ad hoc committeeGovernance Committee would evaluate candidates submitted by shareholders in the same manner. The ad hoc committee has met telephonically 3 times duringmanner and use the last fiscal year in additionsame criteria it uses to separate discussions among the various members. With respect to Miriam M. Allison, such nominee was recommended by an Independent Director and was consideredevaluate other nominees identified by the Committee using the foregoing process.

Shareholder CommunicationsGovernance Committee.

Although the Funds have not adopted a specific process regarding shareholder communications, shareholders of the Funds may communicate with the Board (or individual DirectorsTrustees serving on the Board) by sending written communications, addressed to the Board as a group or any individual Director,Trustee, to the Secretary of the Wasatch Funds Inc., Attention: Board of Directors, 150 Social Hall Avenue, 4thTrust, 505 Wakara Way, 3rd Floor, Salt Lake City, Utah 84111.84108. The FundsSecretary of the Trust will ensure that this communication (assuming it is properly marked care of the Board or care of a specific Director)Trustee) is delivered to the Board or the specified Director,Trustee, as the case may be.

The Board believes that the committee structure is an effective means to permit Trustees to focus on particular operations or issues affecting the Funds. In addition to the standing committees, the Board may also from time to time create ad hoc committees or additional standing committees to focus on particular issues as the need arises.

The Board has determined that its leadership structure, including its committee structure permitting certain areas of responsibility to be allocated to the Independent Trustees together with its Independent Chairman, is appropriate given the characteristics of the Trust and Funds.

Board Oversight of Risk Management

The Board’s oversight responsibilities extend also to risk oversight, including but not limited to, risks related to investments and operations. Because risk management is a broad concept comprised of many elements (including, for example, but not limited to, investment risks, issuer risks, compliance risks, valuation risks, counterparty risks, operational risks, business continuity risks, and legal, compliance and regulatory risks) the oversight of different types of risks is addressed through various risk management reports and assessments received from the relevant management personnel and service providers. Through its direct oversight role, and indirectly through its Audit Committee, the Board performs a risk oversight function for the Funds which may consist of, among other things, the following activities: (1) receiving and reviewing reports related to the performance and operations of the Funds, including but not limited to investment, compliance, liquidity, valuation and operation risks; (2) reviewing and approving, as applicable, compliance policies and procedures of the Fund; (3) meeting with portfolio management teams to review investment strategies, techniques and processes and the investment risks associated therewith; (4) reviewing reports generated by and/or meeting with representatives of key service providers to review and discuss the risks associated with their activities for the Fund and any

13

measures taken to mitigate those risks; (5) receiving written and/or oral reports of the CCO, meeting privately with the CCO, and receiving the annual report of the CCO regarding the operations of the Funds’ Compliance Program, the CCO’s evaluation of the service providers’ compliance programs (including material issues that have arisen with the effectiveness of service providers’ compliance programs and changes resulting thereof, and third-party evaluations of the effectiveness of service providers’ operational effectiveness, if any) as well as any recommendations for modifications thereto; and (6) the Audit Committee meeting with the Treasurer and the Trust’s independent public accounting firm to discuss, among other things, the internal control structure of the Trust’s financial reporting function.

The Board recognizes that not all risks that may affect the Funds can be identified, that it may not be practical or cost-effective to eliminate or mitigate certain risks, that it may be necessary to bear certain risks (such as investment-related risks) to achieve a Fund’s goals, and that the processes, procedures and controls employed to address certain risks may be limited in their effectiveness. Moreover, reports received by the Trustees as to risk management matters are typically summaries of the relevant information. As a result of the foregoing and other factors, the Board’s risk management oversight is subject to certain limitations.

Shareholder Approval

Election of the Nominees for DirectorsTrustees must be approved by a plurality of the votes validly cast in person or by proxy at the Meeting at which a quorum exists. The shareholders of the CompanyTrust will vote together for the election of Directors.Trustees.

THE BOARD OF DIRECTORSTRUSTEES RECOMMENDS A VOTE "FOR"“FOR” APPROVAL OF

THE ELECTION OF EACH OF THE NOMINEES TO THE BOARD OF DIRECTORS.

PROPOSAL 2 – ALL FUNDSTRUSTEES.

APPROVAL OF ADVISORY AND SERVICE CONTRACT

Background

Shareholders are being asked to approve a new Advisory and Service Contract (the "New Advisory Agreement") with the Advisor on behalf of their Fund, a form of which is set forth as Exhibit B.

The Advisor is a wholly-owned subsidiary of WA Holdings, Inc. ("Wasatch"). Wasatch is 100% owned by the employees of the Advisor. Wasatch has agreed to buy back Mr. Samuel Stewart's ownership interest in Wasatch effective December 31, 2009, with payments to extend over the next four years (the "Transaction"). Wasatch will use this opportunity to redistribute equity ownership in Wasatch more broadly across the employees of the firm. Mr. Stewart's sale of stock back to Wasatch may technically be considered a "change in control" of the Advisor because Mr. Stewart currently owns more than 25% of the firm, even though all Wasatch stock will remain in the hands of current Wasatch employees and there will be no change to the management of the firm or to Mr. Stewart's role at the firm. This "change in control" will also result in the assignment and automatic termination of the existing advisory agreements between the Funds and the Advisor as well as the existing investment sub-advisory agreements between the Advisor and HIMCO on behalf of the U.S. Treasury Fund and the Advisor and 1st Source on behalf of the Income Fund. The New Advisory Agreement must be approved by the shareholders in order to ensure the continued provision of advisory services to the Funds by the Advisor.

Information about the Advisor

The Advisor was organized in September 1975 and has been in the business of investment management since November 1975, and had total assets under management including the assets of the Funds of approximately $6.1 billion as of October 31, 2009.

Mr. Stewart founded the Advisor in 1975. Over the past 34 years, he has provided other employees of the Advisor opportunities to acquire ownership interests. Mr. Stewart currently owns 29% of the outstanding voting securities of Wasatch. Now, at age 67, Mr. Stewart would like to sell his ownership of Wasatch back to Wasatch for redistribution to other employees as part of the Advisor's ongoing succession planning. The payout amount is unknown at this time as it will fluctuate based on the revenues of the Advisor. Wasatch will continue to be 100% employee owned. No shareholder will own over 25% of Wasatch following the Transaction and no individual employee will be deemed to control Wasatch.

Mr. Stewart will continue to be very involved with the Advisor and the Funds, serving as the President of Wasatch Funds and the Chairman of the Board of the Advisor. He will also continue to serve as a portfolio manager on the Strategic Income Fund as well as the Global Science & Technology Fund.

The principal executive officers and directors of the Advisor are Samuel S. Stewart, Jr., Ph.D., Chairman of the Board; Jeff S. Cardon, Chief Executive Officer and Director; Karey D. Barker, Vice President and Director; Eric S. Bergeson, Director; Eugene Podsiadlo, Director; J.B. Taylor, Director; Daniel D. Thurber, General Counsel, Vice President, Secretary and Chief Compliance Officer; and Michael K. Yeates, Chief Financial Officer, Treasurer and Vice President. In addition to positions held with the Advisor, the following also hold positions with the Company: Dr. Stewart, President; and Mr. Thurber, Vice President. In addition to the extent the foregoing owns interests in the Advisor, they may be considered to have an interest in this Proposal.

Advisory Agreements

The Advisor provides the Funds (other than the Income Equity Fund, the Long/Short Fund and the Income Fund (collectively, the "1st Source Funds")) with investment advisory services under an advisory and service contract dated January 27, 1998 (the "Initial Prior Advisory Agreement") and provides the 1st Source Funds with investment advisory services under an advisory and service contract dated December 15, 2008 (the "1st Source Prior Advisory Agreement," and the Initial Prior Advisory Agreement and 1st Source Prior Advisory Agreement are each a "Prior Advisory Agreement" and collectively, the "Prior Advisory Agreements"). Each of the foregoing Prior Advisory Agreements, as required by Section 15 of the 1940 Act, provides for its automatic termination in the event of its assignment (as defined in the 1940 Act). Any change in control of the Advisor is deemed to be an assignment. The consummation of the Transaction may result in a change of con trol of the Advisor and, therefore, cause the automatic termination of each of the foregoing Prior Advisory Agreements. Accordingly, in anticipation of the Transaction, the Board considered whether it was in the best interests of each Fund and its shareholders to approve a new advisory and service contract between the Advisor and the Company on behalf of each Fund (the "New Advisory Agreement"). The Board, including the Independent Directors, approved the New Advisory Agreement and recommended its approval by shareholders. The 1940 Act also requires that the New Advisory Agreement be approved by the respective Fund's shareholders in order to become effective. To ensure the continuity of investment advisory services to the Funds after the closing of the Transaction and before shareholder approval of the New Advisory Agreement, the Board approved interim advisory agreements between the Advisor and the Company on behalf of the respective Funds (the "Interim Advisory Agreements") in accordance with Rule 15a-4 of the 1940 Act. See "Board Considerations" following Proposal 4 for the Board's consideration of the New and Interim Advisory Agreements.

The Initial Prior Advisory Agreement for the Funds (other than the 1st Source Funds) was approved by the Company's initial shareholder on December 5, 1986 for the Core Growth Fund, Micro Cap Fund, Small Cap Growth Fund, U.S. Treasury Fund and Ultra Growth Fund, on December 15, 2000 for the Global Science & Technology Fund, on June 19, 2002 for the International Growth Fund, on July 14, 2003 for the Micro Cap Value Fund, on May 10, 2004 for the Heritage Growth Fund, on December 22, 2004 for the International Opportunities Fund, on January 27, 2006 for the Strategic Income

Fund, on October 1, 2007 for the Emerging Markets Small Cap Fund, on September 1, 2007 for the Heritage Value Fund and on November 13, 2008 for the Global Opportunities Fund. The 1st Source Prior Advisory Agreement for the 1st Source Funds was approved by the Funds' initial shareholder on December 11, 2008. The Prior Advisory Agreements were last approved by the Board of Directors of the Company, including a majority of the Independent Directors, at a meeting of the Board of Directors held on January 28, 2009 for each Fund other than the Heritage Value Fund and the 1st Source Funds, on May 13, 2009 for the Heritage Value Fund, on May 14, 2008 for the Global Opportunities Fund and on August 27, 2008 for the 1st Source Funds.

Interim Advisory Agreements

Many of the terms of the Interim Advisory Agreements are similar to those of the corresponding Prior Advisory Agreements; however, there are differences in provisions relating to effective date, termination and compensation as described below.

The Interim Advisory Agreements will be effective upon the consummation of the Transaction and will continue to be in effect until the earlier of (i) 150 days following the date of its execution or (ii) the effective date of the New Advisory Agreement (provided such agreement has been approved in the manner required under the 1940 Act), unless terminated sooner in accordance with its terms. If shareholders of the Funds do not approve the New Advisory Agreement on behalf of their respective Fund, the Board will take such action as it deems to be in the best interests of the Fund. In addition, each Interim Advisory Agreement may be terminated with respect to any Fund by the Board of Directors of the Company or by a vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of such Fund, without payment of any penalty, upon 10 days' written notice or by the Advisor upon 60 days' written notice to the other party.

The rate of compensation paid to the Advisor is the same under the Interim Advisory Agreement and the corresponding Prior Advisory Agreement. However, the compensation accrued under the Interim Advisory Agreements is being held in an interest bearing escrow account with the Funds' custodian or a bank. If the New Advisory Agreement is approved by shareholders of a Fund by the end of the 150 days following the effective date of the Interim Advisory Agreements, the amount held in the escrow account (including interest thereon) with respect to that Fund will be paid to the Advisor. However, if shareholders of a Fund do not approve the New Advisory Agreement by such date, the Advisor will be paid with respect to that Fund, out of the escrow account, the lesser of: (i) any costs incurred by the Advisor in performing the applicable Interim Advisory Agreement (plus interest earned on that amount while in escrow); or (ii) the total amount in the escr ow account (plus interest earned on that amount while in escrow) relating to that Fund.

New Advisory Agreement

The Board has unanimously approved and recommended that shareholders approve the New Advisory Agreement with the Advisor on behalf of their respective Fund. Subject to certain differences described below, the terms of the New Advisory

Agreement are substantially similar to those of the corresponding Prior Advisory Agreement. In this regard, the Advisor's fee under the Prior Advisory Agreement on behalf of the respective Fund will be the same under the New Advisory Agreement.

A form of the New Advisory Agreement is attached to this Proxy Statement as Exhibit B. The description of the terms of the New Advisory Agreement below is qualified in its entirety by reference to that Exhibit. Although the majority of provisions in the New Advisory Agreement are substantially identical to the Prior Advisory Agreements, certain significant differences between the Prior Advisory Agreements and the New Advisory Agreement are discussed below.

For each Fund, if approved by its shareholders, the New Advisory Agreement will become effective for such Fund on February 11, 2010, or such later date as shareholder approval is received.

Comparison of the Prior Advisory Agreements and New Advisory Agreement

The majority of the terms of the New Advisory Agreement are substantially identical to the Prior Advisory Agreements; however, there are some differences including the effective and termination dates, the elimination of a shareholder approval requirement of the advisory contract if the Advisor grants the use of the name to other entities (as described below), the ability to amend the New Advisory Agreement without shareholder approval if such approval is not required under applicable law, and an expanded ability to retain sub-advisors for Funds.

Advisory Services

The investment management services to be provided by the Advisor to each Fund under the New Advisory Agreement are the same as those services currently provided by the Advisor to each Fund under the Prior Advisory Agreements. Pursuant to both the Prior Advisory Agreements and New Advisory Agreement, the Advisor manages the investment and reinvestment of the assets of each Fund in accordance with each Fund's investment objective and policies and limitations, and administers each Fund's affairs to the extent requested by and subject to the supervision of the Board. There are no changes in the scope of services being provided. The Advisor does not anticipate any changes in the portfolio managers of the Funds as a result of the change of control. Further, there are no changes contemplated to the Funds' investment goals or strategies as a result therefrom.

Fees

Under the Prior Advisory Agreements and the New Advisory Agreement, each Fund pays to the Advisor an annual management fee, payable monthly, computed based on the Fund's average daily net assets, as shown on Exhibit C. The aggregate advisory fees for the Funds for the fiscal year ended September 30, 2009 are set forth in Exhibit C. The fees payable to the Advisor by each Fund under the New Advisory Agreement are the same as the fees payable by each Fund to the Advisor under the Prior Advisory Agreements. The Advisor has also contractually agreed to reimburse expenses for certain Funds to the extent necessary to limit the Funds' total operating

expenses. More information about the contractual fee waivers are discussed below under "Expense Limitation Agreements".

Proprietary Rights

Under the Prior Advisory Agreements, the Advisor had proprietary rights in the Funds' names and the Company's name. The Advisor could withdraw from the Funds or the Company the use of their names. In addition, the Advisor reserved the right to grant the use of a similar name to another investment company or business enterprise. However, in doing so, the Advisor agreed to submit the question of continuing the Prior Advisory Agreements to a vote of the Funds' shareholders at the time.

This provision restricts the Advisor's ability to utilize its marks and reputation in the marketplace because the Advisor must incur the time and the cost of a proxy solicitation before permitting its name to be used with respect to entities other than the Company and its series. Under the New Advisory Agreement, the Advisor may grant the use of a similar name to another investment company or business enterprise, subject to approval by the Directors.

Amendments to Advisory Agreement

No amendment to the Prior Advisory Agreements was effective with respect to any Fund until approved by the vote of: (i) a majority of the directors of the Company who were not parties to the Prior Advisory Agreement ("Independent Directors") or "interested persons" (as defined in the 1940 Act) of the Advisor or of the Company cast in person at a meeting called for the purpose of voting on such approval; and (ii) a majority of the outstanding voting securities of the applicable Fund.

Generally, the 1940 Act would require shareholder approval to materially amend an advisory agreement. Under certain circumstances, however, the Securities and Exchange Commission (the "SEC") has permitted an advisory agreement to be amended without shareholder approval, such as to reduce the advisory fee or to modify the allocation of the fee between an advisor and sub-advisor, provided certain conditions were met. Although the Prior Advisory Agreements would require, in relevant part, shareholder approval for any amendment to the advisory contract, the New Advisory Agreement would permit amendments without shareholder approval if such approval is not required under the 1940 Act as interpreted by the SEC and its staff. Any amendment to the New Advisory Agreement, however, must still be approved by the Board of Directors, including a majority of the Independent Directors.

Retention of Sub-Advisor

In the Initial Prior Advisory Agreement, such agreement permitted the Advisor only with respect to the U.S. Treasury Fund, at its option and expense, to retain a sub-advisor or sub-advisor(s) to assist the Advisor in furnishing investment advice to such Fund. To clarify the Advisor's authority to retain a sub-advisor, at its own option and expense, for Funds other than the U.S. Treasury Fund, the New Advisory Agreement eliminates the reference to the U.S. Treasury Fund. This modified provision is similar to that in the 1st Source Prior Advisory Agreement which did not limit the authority to retain a sub-advisor to a specific fund. As with the Prior Advisory Agreements, any

retention of a sub-advisor shall be subject to approval by the Board of Directors and to the extent required by law, the shareholders of such Funds. In addition, the Advisor shall still be responsible for monitoring compliance by such sub-advisor(s) with the investment policies and restrictions of the Company and such Fund and with such other limitations or directions as the Board may from time to time prescribe. Any appointment of a sub-advisor pursuant to the New Advisory Agreement shall in no way limit or diminish the Advisor's obligations and responsibility under the New Advisory Agreement.

Continuance

Each Prior Advisory Agreement was originally in effect for an initial term of two years and could be continued thereafter for successive one year periods if such continuance was specifically approved at least annually (i) by the Board of Directors of the Company or by the vote of a majority of the outstanding voting securities of the applicable Fund and (ii) by the vote of a majority of the Directors of the Company who are not parties to the Prior Advisory Agreement or "interested persons", as defined in the 1940 Act, of the Advisor or the Company cast in person at a meeting called for the purpose of voting on such proposal. The New Advisory Agreement has an initial term of one year from the date of its execution and may continue subject to annual approval in the same manner as outlined in the Prior Advisory Agreements.

If approved by each Fund's shareholders at the Meeting, the New Advisory Agreement will continue in effect after its initial term provided that its continuance is approved for each Fund at least annually by (1) the Board of Directors of the Company or by the vote of a majority of the outstanding voting securities of each Fund and (2) the vote of a majority of the Independent Directors.

Termination

The Prior Advisory Agreements and New Advisory Agreement provide that the respective agreement will terminate automatically in the event of its assignment (as defined in the 1940 Act). In addition, the Prior Advisory Agreements and New Advisory Agreement are each terminable with respect to a Fund at any time, without payment of any penalty, by the Board of Directors or by a vote of a majority of a Fund's outstanding voting securities on 60 days' written notice to the Advisor, or by the Advisor upon 60 days' written notice to the other party.

Limitation on Liability

The Prior Advisory Agreements and New Advisory Agreement provide that the Advisor shall not be liable for any error of judgment or of law, or for any loss suffered by the Funds in connection with the matters to which the agreement relates, except loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Advisor in the performance of its obligations and duties, or by reason of its reckless disregard of its obligations and duties under the agreement.

Expense Limitation Agreements

Pursuant to expense limitation agreements, the Advisor has contractually agreed to limit until January 31, 2011 the total annual fund operating expenses of the Core Growth Fund and Small Cap Growth Fund to 1.50%, Global Science & Technology Fund, International Growth Fund and Small Cap Value Fund to 1.95%, Global Opportunities Fund, International Opportunities Fund, Micro Cap Fund and Micro Cap Value Fund to 2.25%, Ultra Growth Fund to 1.75%, U.S. Treasury Fund to 0.75%, Heritage Growth Fund, Heritage Value Fund and Strategic Income Fund to 0.95%, Income Equity Fund to 1.10%, and Emerging Markets Small Cap Fund to 2.10% of average net assets calculated on a daily basis and will pay all expenses excluding interest, taxes, brokerage commissions, other investment related costs and extraordinary expenses, in excess of such limitations. Acquired Fund fees and expenses are excluded from these contractual fee waivers. The expense limitation fo r the Emerging Markets Small Cap Fund will decrease to 2.05% when average net assets of the Fund reach $50 million; to 2.00% when average net assets of the Fund reach $100 million; and to 1.95% when average net assets of the Fund reach $150 million. The decrease will take effect on the first day of the quarter after such Fund's assets reach such threshold. After the Emerging Markets Small Cap Fund's assets reach a particular threshold, the expense limitation will remain at the applicable percentage even if the Fund's assets subsequently decrease below the required level.

Evaluation by the Board of Directors

The Board of Directors, including the Independent Directors, at its meeting on November 19, 2009, unanimously approved the New Advisory Agreement between the Company and the Advisor, and authorized the submission of this proposal to shareholders for approval. The New Advisory Agreement was approved by the Board after consideration of all factors which it determined to be relevant to its deliberations, including those discussed below. See "Board Considerations" following Proposal 4 below for a discussion of the Board's considerations in approving the New Advisory Agreement.

Shareholder Approval

Approval of Proposal 2 by a Fund requires the affirmative vote of the lesser of (i) 67% or more of the shares of the Fund entitled to vote thereon present at the Meeting if the holders of more than 50% of such outstanding shares of such Fund are present in person or represented by proxy; or (ii) more than 50% of the outstanding shares of such Fund entitled to vote thereon.

THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF EACH FUND APPROVE THE NEW ADVISORY AGREEMENT.

PROPOSAL 3 – U.S. TREASURY FUND

APPROVAL OF SUB-ADVISORY AGREEMENT

Background

As described in Proposal 2, Wasatch has agreed to buy back Mr. Samuel Stewart's interest in Wasatch, the holding company of the Advisor (i.e., the Transaction). The consummation of the Transaction may trigger a change in control of the Advisor, which would, in turn, result in the assignment and automatic termination of the sub-advisory agreement between the Advisor and HIMCO on behalf of the U.S. Treasury Fund.

Information about the Sub-Advisor

HIMCO is the sub-advisor to the U.S. Treasury Fund. HIMCO is a Texas corporation, and its principal place of business is 1250 S. Capital of Texas Highway, Building 3, Suite 600, Austin, Texas 78746. HIMCO had total assets under management of approximately $4.5 billion as of November 30, 2009.

The principal executive officers and directors of HIMCO are Van R. Hoisington, President, Ethel J. Hoisington, Vice President, Janice Teague Bright, Senior Vice President, Lacy Harris Hunt, Executive Vice President and Chief Compliance Officer, Van R. Hoisington, Jr., Executive Vice President and David M. Hoisington, Executive Vice President. Van R. Hoisington and Ethel J. Hoisington each control more than 25% of HIMCO.

HIMCO Sub-Advisory Agreement

HIMCO provides the investment sub-advisory services pursuant to a sub-advisory agreement between the Advisor and HIMCO dated June 21, 1996 (the "Prior HIMCO Sub-Advisory Agreement").

Pursuant to the Prior HIMCO Sub-Advisory Agreement and subject to the supervision of the Advisor, HIMCO directs the investment of the U.S. Treasury Fund's assets and is responsible for the continuing management of the Fund's assets, including the placement of purchase and sale orders on behalf of the Fund. The Prior HIMCO Sub-Advisory Agreement provides that the Advisor shall pay HIMCO a monthly management fee computed at the annual rate of 0.02% of the Fund's average daily net assets as long as and whenever the Fund has net assets less than $20 million and one half (1/2) of the monthly fee the Advisor receives from the Fund under the Prior HIMCO Advisory Agreement as long as and whenever the Fund has net assets of $20 million or more.

The Prior HIMCO Sub-Advisory Agreement, as required by Section 15 of the 1940 Act, provides for its automatic termination in the event of its assignment (as defined in the 1940 Act). A change in control of the Advisor is deemed to be an assignment. The consummation of the Transaction may result in a change of control of the Advisor and, therefore, cause the automatic termination of the Prior HIMCO Sub-Advisory Agreement. Accordingly, in anticipation of the Transaction, the Board considered whether it was in the best interests of the U.S. Treasury Fund and its

shareholders to approve a new sub-advisory agreement between the Advisor and HIMCO on behalf of the U.S. Treasury Fund (the "New HIMCO Sub-Advisory Agreement"). The Board, including the Independent Directors, unanimously approved the New HIMCO Sub-Advisory Agreement and recommended its approval by shareholders. The 1940 Act also requires that the New HIMCO Sub-Advisory Agreement be approved by the Fund's shareholders in order to become effective. To assure the continuity of investment sub-advisory services to the U.S. Treasury Fund after the closing of the Transaction and before shareholder approval of the New HIMCO Sub-Advisory Agreement, the Board approved an Interim Sub-Advisory Agreement between the Advisor and HIMCO on behalf of the U.S. Treasury Fund (the "Interim HIMCO Sub-Advisory Agreement") in accordance with Rule 15a-4 of the 1940 Act. See "Board Considerations" following Proposal 4 for the Board's consideration of the New and Int erim HIMCO Sub-Advisory Agreements.

The Prior HIMCO Sub-Advisory Agreement was approved by the Company's initial shareholder on December 6, 1986 for the U.S. Treasury Fund and was last approved by the Board of Directors of the Company, including a majority of the Independent Directors, at a meeting of the Board of Directors held on January 28, 2009.

Interim HIMCO Sub-Advisory Agreement

Many of the terms of the Interim HIMCO Sub-Advisory Agreement are similar to those of its corresponding Prior HIMCO Sub-Advisory Agreement; however, there are differences in provisions relating to effective date, termination and compensation as described below.

The Interim HIMCO Sub-Advisory Agreement will be effective upon the consummation of the Transaction and will continue to be in effect until the earlier of (i) 150 days following the date of its execution or (ii) the effective date of the New HIMCO Sub-Advisory Agreement (provided such agreement has been approved in the manner required under the 1940 Act), unless terminated sooner in accordance with its terms. If shareholders of the U.S. Treasury Fund do not approve the New HIMCO Sub-Advisory Agreement on behalf of the Fund, the Board will take such action as it deems to be in the best interests of the Fund. In addition, the Interim HIMCO Sub-Advisory Agreement may be terminated with respect to the U.S. Treasury Fund by the Board of Directors of the Company or by a vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, without payment of any penalty, upon 10 days' written notice or by the Advisor or HIMCO upon 60 days' written notice to the other party.

The rate of compensation paid to HIMCO is the same under the Interim HIMCO Sub-Advisory Agreement and the Prior HIMCO Sub-Advisory Agreement. However, the compensation accrued under the Interim HIMCO Sub-Advisory Agreement is to be held in an interest bearing escrow account with the Fund's custodian or a bank. If the New HIMCO Sub-Advisory Agreement is approved by shareholders by the end of the 150 days following the effective date of the Interim HIMCO Sub-Advisory Agreement, the amount held in the escrow account (including interest thereon) will be paid to HIMCO. However, if shareholders do not approve the New HIMCO

Sub-Advisory Agreement by such date, HIMCO will be paid, out of the escrow account, the lesser of: (i) any costs incurred by HIMCO in performing the Interim HIMCO Sub-Advisory Agreement (plus interest earned on that amount while in escrow); or (ii) the total amount in the escrow account (plus interest earned on that amount while in escrow).

New HIMCO Sub-Advisory Agreement

The Board has unanimously approved and recommended that shareholders approve the New HIMCO Sub-Advisory Agreement between the Advisor and HIMCO on behalf of the U.S. Treasury Fund. If approved by shareholders of the U.S. Treasury Fund, the New HIMCO Sub-Advisory Agreement will become effective on February 11, 2010, or such later date as shareholder approval is received.

The form of New HIMCO Sub-Advisory Agreement is attached to this Proxy Statement as Exhibit D.1. The description of the terms of the New HIMCO Sub-Advisory Agreement is qualified in its entirety to that Exhibit. Subject to certain differences described below, the terms of the New HIMCO Sub-Advisory Agreement are substantially similar to that of the Prior HIMCO Sub-Advisory Agreement. In this regard, the Sub-Advisor's fee under the Prior HIMCO Sub-Advisory Agreement on behalf of the U.S. Treasury Fund will be the same under the New HIMCO Sub-Advisory Agreement.

Comparison of the Prior HIMCO Sub-Advisory Agreement and New HIMCO Sub-Advisory Agreement

The majority of the terms of the New HIMCO Sub-Advisory Agreement are substantially identical to the Prior HIMCO Sub-Advisory Agreement; however, there are some differences including the effective and termination dates and the ability to amend the New HIMCO Sub-Advisory Agreement without shareholder approval if such approval is not required under applicable law.

Sub-Advisory Services

The services to be provided under the New HIMCO Sub-Advisory Agreement are the same as those provided under the Prior HIMCO Sub-Advisory Agreement. There are no changes in the scope of services being provided. The Advisor does not anticipate any changes in the portfolio managers of the U.S. Treasury Fund as a result of the change of control. Further, there are no changes contemplated to the Fund's investment goals or strategies as a result therefrom.

Fees

The fees payable to HIMCO by the Advisor under the New HIMCO Sub-Advisory Agreement are the same as the fees payable under the Prior HIMCO Sub-Advisory Agreement. The fee paid to HIMCO by the Advisor for the U.S. Treasury Fund for the fiscal year ended September 30, 2009 was $376,977.

Amendments to HIMCO Sub-Advisory Agreement

No amendment to or modification of the Prior HIMCO Sub-Advisory Agreement would be effective unless and until approved by the vote of a majority of the outstanding shares of the U.S. Treasury Fund. The New HIMCO Sub-Advisory Agreement, however, may be changed by the Board without shareholder vote when those changes are permitted by the SEC. Generally, the 1940 Act would require shareholder approval to materially amend an advisory agreement, including sub-advisory agreements. Under certain circumstances, however, the SEC has permitted an advisory or sub-advisory agreement to be amended without shareholder approval, such as to reduce the advisory fee or to modify the allocation of the fee between an advisor and sub-advisor, provided certain conditions were met. Although the Prior HIMCO Sub-Advisory Agreement required, in relevant part, shareholder approval for any amendment to it, the New HIMCO Sub-Advisory Agreement would permit amendments wi thout shareholder approval if such approval is not required under the 1940 Act as interpreted by the SEC and its staff. Any amendment to the New HIMCO Sub-Advisory Agreement, however, must still be approved by the Board of Directors, including a majority of the Independent Directors.

Continuance

The Prior HIMCO Sub-Advisory Agreement was originally in effect for an initial term of two years and could be continued thereafter for successive one-year periods if such continuance was specifically approved at least annually (i) by the Board of Directors of the Company or by the vote of a majority of the outstanding voting securities of the Company and (ii) by the vote of a majority of the Directors who were not parties to the Prior HIMCO Sub-Advisory Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting of such proposal. The New HIMCO Sub-Advisory Agreement has an initial term of one year from the date of its execution and may continue thereafter subject to annual approval in the same manner as outlined in the Prior HIMCO Sub-Advisory Agreement.

If approved by the U.S. Treasury Fund's shareholders at the Meeting, the New HIMCO Sub-Advisory Agreement will continue in effect after its initial term provided that its continuance is approved for the U.S. Treasury Fund at least annually by (1) the Board of Directors of the Company or by the vote of a majority of the outstanding voting securities of the U.S. Treasury Fund and (2) the vote of a majority of the Independent Directors.

Termination

The Prior HIMCO Sub-Advisory Agreement and New HIMCO Sub-Advisory Agreement provide that the Agreement will terminate automatically in the event of its assignment (as defined in the 1940 Act). In addition, the Prior HIMCO Sub-Advisory Agreement and New HIMCO Sub-Advisory Agreement are each terminable with respect to the U.S. Treasury Fund (a) by vote of the Board of Directors, or by the holders of a majority of the outstanding voting securities of the U.S. Treasury Fund, at any time without penalty, on 60 days' written notice to the Advisor and HIMCO, or (b) by the Advisor, upon 60 days' written notice to HIMCO, or (c) by HIMCO, upon 60 days' written notice to the Advisor.

Limitation on Liability

The Prior HIMCO Sub-Advisory Agreement and New HIMCO Sub-Advisory Agreement provide that HIMCO shall not be liable for any error of judgment or of law, or for any loss suffered by the U.S. Treasury Fund or its shareholders in connection with the performance of its duties under the Agreement, except a loss resulting from willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard by it of its duties under the Agreement.

Evaluation by the Board of Directors

The Board of Directors, including the Independent Directors, at its meeting on November 19, 2009, unanimously approved the New HIMCO Sub-Advisory Agreement between the Advisor and HIMCO, and authorized the submission of this proposal to shareholders of the U.S. Treasury Fund for approval.

The New HIMCO Sub-Advisory Agreement was approved by the Board after consideration of all factors which it determined to be relevant to its deliberations, including those discussed below. See "Board Considerations" following Proposal 4 for a discussion of the Board's considerations in approving the New and Interim HIMCO Sub-Advisory Agreements.

Shareholder Approval

Approval of Proposal 3 by the U.S. Treasury Fund requires the affirmative vote of the lesser of (i) 67% or more of the shares of the Fund entitled to vote thereon present at the Meeting if the holders of more than 50% of such outstanding shares of such Fund are present in person or represented by proxy; or (ii) more than 50% of the outstanding shares of such Fund entitled to vote thereon.

THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF THE U.S. TREASURY FUND APPROVE THE NEW HIMCO SUB-ADVISORY AGREEMENT.

PROPOSAL 4 – INCOME FUND

APPROVAL OF SUB-ADVISORY AGREEMENT

Background

As described in Proposal 2, the Advisor has agreed to buy back Mr. Samuel Stewart's interest in Wasatch, the holding company of the Advisor (i.e., the Transaction). The consummation of the Transaction may trigger a change in control of the Advisor, which will, in turn, result in the assignment and automatic termination of the sub-advisory agreement between the Advisor and 1st Source on behalf of the Income Fund.

Information about 1st Source

1st Source is the sub-advisor to the Income Fund. 1st Source is a registered investment advisor that has been in business since 2001. Its offices are located at 100 North Michigan Street, South Bend, Indiana 46601. 1st Source is a wholly owned subsidiary of 1st Source Bank, which is a wholly owned subsidiary of 1st Source Corporation, a publicly held bank holding company. 1st Source Bank, which was founded in 1936, and its affiliates, administer and manage on behalf of their clients, assets of approximately $2.3 billion. 1st Source had total assets under management of approximately $1.65 billion as of November 30, 2009.

The principal executive officers and directors of 1st Source are Philip M. Allen, Director, Paul W. Gifford, Vice President, Chief Investment Officer, Secretary and Treasurer, Lawrence E. Lentych, Director, Steven J. Wessell, President, Bruno P. Riboni, Vice President and Portfolio Manager, Robert W. Nelson, Vice President and Portfolio Manager, Tamara L. Simon, Chief Compliance Officer, Jason W. Cooper, Investment Officer and Scott R. Tapley, Vice President and Portfolio Manager.

1st Source Sub-Advisory Agreement

1st Source provides the investment sub-advisory services pursuant to a sub-advisory agreement between the Advisor and 1st Source dated December 15, 2008 (the "Prior 1st Source Sub-Advisory Agreement"). Pursuant to the Prior 1st Source Sub-Advisory Agreement, and subject to the supervision of the Advisor, 1st Source directs the investment of the Income Fund's assets and is responsible for the continuing management of the Fund's assets, including the placement of purchase and sale orders on behalf of the Fund. Under the Prior 1st Source Sub-Advisory Agreement, the Advisor has agreed to pay 1st Source a management fee, which is currently equal to 0.52% of the Income Fund's average daily net assets. 1st Source may voluntarily waive a portion or all of its fee in which case the Advisor may retain more of the advisory fee paid by the Income Fund under the Prior 1st Source Sub-Advisory Agreement and 1st Source may reimburse the Advisor for certain expenses.

The Prior 1st Source Sub-Advisory Agreement, as required by Section 15 of the 1940 Act, provides for its automatic termination in the event of its assignment (as defined in the 1940 Act). A change in control of the Advisor is deemed to be an assignment. The consummation of the Transaction may result in a change of control of

the Advisor and, therefore, may cause the automatic termination of the Prior 1st Source Sub-Advisory Agreement. Accordingly, in anticipation of the Transaction, the Board considered whether it was in the best interests of the Income Fund and its shareholders to approve a new sub-advisory agreement between the Advisor and 1st Source on behalf of the Income Fund (the "New 1st Source Sub-Advisory Agreement"). The Board, including the Independent Directors, unanimously approved the New 1st Source Sub-Advisory Agreement and recommended its approval by shareholders. The 1940 Act also requires that the New 1st Source Sub-Advisory Agreement be approved by the Fund's shareholders in order to become effective. To assure the continuity of investment sub-advisory services to the Income Fund after the closing of the Transaction and before shareholder approval of the New 1st Source Sub-Advisory Agreement, the Board approved an Interim Advisory Agreement b etween the Advisor and 1st Source on behalf of the Income Fund (the "Interim 1st Source Sub-Advisory Agreement") in accordance with Rule 15a-4 of the 1940 Act. See "Board Considerations" following Proposal 4 for the Board's consideration of the New and Interim 1st Source Sub-Advisory Agreements.

The Prior 1st Source Sub-Advisory Agreement was approved by the Company's initial shareholder on December 11, 2008 for the Income Fund and was last approved by the Board of Directors of the Company, including a majority of the Independent Directors, at a meeting of the Board of Directors held on August 27, 2008.

Interim 1st Source Sub-Advisory Agreement

Many of the terms of the Interim 1st Source Sub-Advisory Agreement are similar to those of its corresponding Prior 1st Source Sub-Advisory Agreement; however, there are differences in provisions relating to effective date, termination and compensation as described below.

The Interim 1st Source Sub-Advisory Agreement will be effective upon the consummation of the Transaction and will continue to be in effect until the earlier of (i) 150 days following the date of its execution or (ii) the effective date of the New 1st Source Sub-Advisory Agreement (provided such agreement has been approved in the manner required under the 1940 Act), unless terminated sooner in accordance with its terms. If shareholders of the Income Fund do not approve the New 1st Source Sub-Advisory Agreement on behalf of the Fund, the Board will take such action as it deems to be in the best interests of the Fund. In addition, the Interim 1st Source Sub-Advisory Agreement may be terminated with respect to the Income Fund by the Board of Directors of the Company or by a vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, without payment of any penalty, upon 10 days' written notice or by the Advis or or 1st Source upon 60 days' written notice to the other party.

The rate of compensation paid to 1st Source is the same under the Interim 1st Source Sub-Advisory Agreement and the Prior 1st Source Sub-Advisory Agreement. However, the compensation accrued under the Interim 1st Source Sub-Advisory Agreement is to be held in an interest bearing escrow account with the Fund's custodian or bank. If the New 1st Source Sub-Advisory Agreement is approved by shareholders by the end of the 150 days following the effective date of the Interim 1st

Source Sub-Advisory Agreement, the amount held in the escrow account (including interest thereon) will be paid to 1st Source. However, if shareholders do not approve the New 1st Source Sub-Advisory Agreement by such date, 1st Source will be paid, out of the escrow account, the lesser of: (i) any costs incurred by 1st Source in performing the Interim 1st Source Sub-Advisory Agreement (plus interest earned on that amount while in escrow); or (ii) the total amount in the escrow account (plus interest earned on that amount while in escrow).

New 1st Source Sub-Advisory Agreement

The Board has unanimously approved and recommended that shareholders approve the New 1st Source Sub-Advisory Agreement between the Advisor and 1st Source on behalf of the Income Fund. If approved by shareholders of the Income Fund, the New 1st Source Sub-Advisory Agreement will become effective on February 11, 2010, or such later date as shareholder approval is received.

The form of the New 1st Source Sub-Advisory Agreement is attached to this Proxy Statement as Exhibit D.2. The description of the terms of the New 1st Source Sub-Advisory Agreement is qualified in its entirety by reference to that Exhibit. Subject to certain differences described below, the terms of the New 1st Source Sub-Advisory Agreement are substantially similar to those of the corresponding Prior 1st Source Sub-Advisory Agreement. In this regard, although the Income Fund will continue to pay the same advisory fee, the allocation of this fee between the Advisor and 1st Source is being modified. Under the New 1st Source Sub-Advisory Agreement, 1st Source's sub-advisory fee is being reduced and the Advisor will retain a greater portion of the fee.

Comparison of the Prior 1st Source Sub-Advisory Agreement and New 1st Source Sub-Advisory Agreement

The majority of the terms of the New 1st Source Sub-Advisory Agreement are substantially similar to the Prior 1st Source Sub-Advisory Agreement; however, there are some differences including the effective and termination dates, the fees, and the ability to amend the New 1st Source Sub-Advisory Agreement without shareholder approval if such approval is not required under applicable law.

Sub-Advisory Services

The services to be provided by 1st Source under the New 1st Source Sub-Advisory Agreement are the same as those provided under the Prior 1st Source Sub-Advisory Agreement. There are no changes in the scope of services being provided from 1st Source, although the New 1st Source Sub-Advisory Agreement clarifies that among the services provided, 1st Source will provide timely advice regarding the valuation and voting of proxies for securities held by the Funds. The Advisor does not anticipate any changes in the portfolio managers of the Income Fund as a result of the change of control. Further, there are no changes contemplated to the Income Fund's investment goals or strategies as a result therefrom.

The Prior 1st Source Sub-Advisory Agreement had a Schedule A which listed services provided to the Income Fund by the Advisor. The New 1st Source Sub-Advisory

Agreement will not have this Schedule since the advisory services provided by the Advisor are set forth in the New Advisory Agreement and therefore the Schedule is not necessary.

Fees

The Income Fund currently pays an advisory fee of 0.55% of the Income Fund's average daily net assets to the Advisor. The Advisor (and not the Fund) pays 1st Source a fee currently equal to 0.52% of the Income Fund's average daily net assets under the Prior 1st Source Sub-Advisory Agreement. The Advisor will pay 1st Source 0.28% of the Income Fund's average daily net assets under the New 1st Source Sub-Advisory Agreement. This modification in the allocation of fees between the Advisor and 1st Source does not change the rate of management fee paid by the Income Fund. The fee paid to 1st Source by the Advisor for the Income Fund for the fiscal year ended September 30, 2009 was $416,014.

Amendments to Sub-Advisory Agreement

No amendment to or modification of the Prior 1st Source Sub-Advisory Agreement was effective unless and until approved by the vote of a majority of the outstanding shares of the Income Fund. The New 1st Source Sub-Advisory Agreement, however, may be changed without shareholder vote when those changes are permitted by the SEC. Generally, the 1940 Act would require shareholder approval to materially amend an advisory agreement, including sub-advisory agreements. Under certain circumstances, however, the SEC has permitted an advisory or sub-advisory agreement to be amended without shareholder approval, such as to reduce the advisory fee or to modify the allocation of the fee between an advisor and sub-advisor, provided certain conditions were met. Although the Prior 1st Source Sub-Advisory Agreement required, in relevant part, shareholder approval for any amendment to it, the New 1st Source Sub-Advisory Agreement would permit amendments without shareholder approval if such approval is not required under the 1940 Act as interpreted by the SEC and its staff. Any amendment to the New 1st Source Sub-Advisory Agreement, however, must still be approved by the Board of Directors, including a majority of the Independent Directors.

Continuance

In the Prior 1st Source Sub-Advisory Agreement, the agreement was originally in effect for an initial term of two years and could be continued thereafter for successive one year periods if such continuance was specifically approved at least annually (i) by the Board of Directors of the Company or by the vote of a majority of the outstanding voting securities of the Company and (ii) by the vote of a majority of the Directors who are not parties to the Prior 1st Source Sub-Advisory Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting of such proposal. The New 1st Source Sub-Advisory Agreement has an initial term of one year from the date of its execution and may continue subject to annual approval in the same manner as outlined in the Prior 1st Source Sub-Advisory Agreement.

If approved by the Income Fund's shareholders at the Meeting, the New 1st Source Sub-Advisory Agreement will continue in effect after its initial term provided that its

continuance is approved for the Income Fund at least annually by (1) the Board of Directors of the Company or by the vote of a majority of the outstanding voting securities of the Income Fund and (2) the vote of a majority of the Independent Directors.

Termination

The Prior 1st Source Sub-Advisory Agreement and New 1st Source Sub-Advisory Agreement provide that the respective agreement will terminate automatically in the event of its assignment (as defined in the 1940 Act). In addition, the Prior 1st Source Sub-Advisory Agreement and New 1st Source Sub-Advisory Agreement are each terminable with respect to the Income Fund (a) by vote of the Board of Directors, or by the holders of a majority of the outstanding voting securities of the Income Fund, at any time without penalty, on 60 days' written notice to the Advisor and 1st Source, or (b) by the Advisor, upon 60 days' written notice to 1st Source, or (c) by 1st Source, upon 60 days' written notice to the Advisor.

Limitation on Liability

Each of the Prior 1st Source Sub-Advisory Agreement and the New 1st Source Sub-Advisory Agreement provides that the Advisor shall not be liable for any error of judgment or of law, or for any loss suffered by the Fund or its shareholders in connection with the performance of its duties under the Agreement, except a loss resulting from willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard by it of its duties under the Agreement.

Evaluation by the Board of Directors

The Board of Directors, including the Independent Directors, at its meeting on November 19, 2009, unanimously approved the New 1st Source Sub-Advisory Agreement between the Advisor and 1st Source, and authorized the submission of this proposal to shareholders for approval.

The New 1st Source Sub-Advisory Agreement was approved by the Board after consideration of all factors which it determined to be relevant to its deliberations, including those discussed below. See "Board Considerations" following this Proposal 4 for a discussion of the Board's considerations in approving the New and Interim 1st Source Sub-Advisory Agreements.

Shareholder Approval

Approval of Proposal 4 by the Income Fund requires the affirmative vote of the lesser of (i) 67% or more of the shares of the Fund entitled to vote thereon present at the Meeting if the holders of more than 50% of such outstanding shares of such Fund are present in person or represented by proxy; or (ii) more than 50% of the outstanding shares of such Fund entitled to vote thereon.

THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF THE INCOME FUND APPROVE THE NEW 1ST SOURCE SUB-ADVISORY AGREEMENT.

BOARD CONSIDERATIONS

At a meeting held on November 19, 2009, the Board of Directors of the Company, including the Independent Directors, unanimously approved the New Advisory Agreement between the Company and the Advisor on behalf of each Fund; the New HIMCO Sub-Advisory Agreement between the Advisor and HIMCO on behalf of the U.S. Treasury Fund; and the New 1st Source Sub-Advisory Agreement between the Advisor and 1st Source on behalf of the Income Fund. As noted above, HIMCO and 1st Source are each a "Sub-Advisor" and the New HIMCO Sub-Advisory Agreement and New 1st Source Sub-Advisory Agreement are each a "New Sub-Advisory Agreement" and collectively, the "New Sub-Advisory Agreements."

Prior to the meeting, the Independent Directors had been advised that Wasatch intended to acquire Mr. Samuel Stewart's shares in Wasatch, the parent company of the Advisor (i.e., the Transaction). Mr. Stewart currently owns over 25% of the outstanding voting securities of Wasatch and therefore is presumably a controlling person of Wasatch. Currently, the Advisor provides the Funds (other than the 1st Source Funds) with investment advisory services under the Initial Prior Advisory Agreement and provides the 1st Source Funds with investment advisory services under the Prior 1st Source Advisory Agreement (each a Prior Advisory Agreement and collectively, the Prior Advisory Agreements (as defined above)). In addition, HIMCO provides sub-advisory services to the U.S. Treasury Fund pursuant to the Prior HIMCO Sub-Advisory Agreement. Similarly, 1st Source provides sub-advisory services to the Income Fund pursuant to the Prior 1st Source Sub-Advisor y Agreement. The Prior HIMCO Sub-Advisory Agreement and Prior 1st Source Sub-Advisory Agreement are each a "Prior Sub-Advisory Agreement" and collectively, the "Prior Sub-Advisory Agreements".

Each of the foregoing advisory and sub-advisory agreements, as required by Section 15 of the 1940 Act, provides for its automatic termination in the event of its assignment (as defined in the 1940 Act). A change in control of the Advisor is deemed to be an assignment. The consummation of the Transaction may result in a change of control of the Advisor and, therefore, cause the automatic termination of each of the foregoing agreements. Accordingly, in anticipation of the Transaction, the Board considered whether it was in the best interests of each Fund and its shareholders to approve the New Advisory Agreement between the Advisor and the Company on behalf of the Funds; whether it was in the best interests of the U.S. Treasury Fund and its shareholders to approve the New Sub-Advisory Agreement between HIMCO and the Advisor on behalf of the U.S. Treasury Fund; and whether it was in the best interests of the Income Fund and its shareholders to approve the New 1st Source Sub-Advisory Agreement between 1st Source and the Advisor on behalf of the Income Fund to take effect immediately after shareholder approval of the New Advisory Agreement and New Sub-Advisory Agreements. The Board, including the Independent Directors, approved the New Advisory Agreement and New Sub-Advisory Agreements and recommended their approval by shareholders. The 1940 Act also requires that the New Advisory Agreement and New Sub-Advisory Agreements be approved by the respective Fund's shareholders in order to become effective. To

assure the continuity of investment advisory services to the Funds after the closing of the Transaction and before shareholder approval of the New Advisory Agreement and New Sub-Advisory Agreements, the Board approved Interim Advisory Agreements between the Advisor and Company on behalf of the respective Funds, the Interim HIMCO Sub-Advisory Agreement between the Advisor and HIMCO on behalf of the U.S. Treasury Fund and the Interim 1st Source Sub-Advisory Agreement between the Advisor and 1st Source on behalf of the Income Fund to take effect upon the closing of the Transaction. See below for the Board's consideration of the new interim agreements.

The Board of Directors considered the New Advisory Agreement and New Sub-Advisory Agreements at their meetings held on November 11, 2009 and November 19, 2009 (collectively, the "Board Meetings"). In preparation for their role in the evaluation of the New Advisory Agreement and New Sub-Advisory Agreements, the Independent Directors also met in Executive Sessions on November 2, 2009, November 10, 2009, November 11, 2009 and November 19, 2009. At these Board Meetings and Executive Sessions, they were joined by independent legal counsel. In advance of these Board Meetings, the Board and independent legal counsel received materials and other information which outlined, among other things:

•  the terms and conditions of the New Advisory Agreement and New Sub-Advisory Agreements, including the nature, extent and quality of services provided by the Advisor and each Sub-Advisor;

•  the organization and business operations of the Advisor and Sub-Advisors, including the experience of persons who have managed and who will manage the respective Fund;

•  the profitability of the Advisor from serving as adviser to the respective Fund (plus profitability analysis for advisers to unaffiliated investment companies);

•  the management fees of the Advisor, including comparisons of such fees with the management fees of comparable, unaffiliated funds prepared by an independent third party and the Advisor's fees for other clients;

•  the sub-advisory fees of each Sub-Advisor with respect to the U.S. Treasury Fund and Income Fund (including the respective Sub-Advisor's fee schedule for other clients);

•  the expenses of each Fund, including comparisons with the expense ratios of comparable, unaffiliated funds compiled by an independent third party; and

•  the respective Fund's past performance plus such Fund's performance compared to funds of similar investment objectives compiled by independent third parties and with recognized benchmarks.

In connection with their review of the New Advisory Agreement and New Sub-Advisory Agreements, the Independent Board Members, through their independent legal counsel, also requested in writing and received information regarding the

proposed Transaction and its impact on the provision of services by the Advisor. The materials described, among other things:

•  the structure of the Transaction;

•  the strategic plan for the Advisor following the Transaction, including succession plans for personnel;

•  the governance structure for the Advisor following the Transaction;

•  any anticipated changes in the operations of the Funds following the Transaction, including discussing the day-to-day management, infrastructure and advisory or other applicable services provided to the Funds; and

•  any changes to senior management or key personnel who work on Fund related matters (including portfolio management and investment oversight); the continuing role of Mr. Stewart with the Advisor following the Transaction; and any retention or incentive arrangements for such persons.

The Independent Directors also received from independent counsel a legal memorandum outlining, among other things, the duties of the Independent Directors under the 1940 Act, as well as the general principles of relevant state law in reviewing and approving advisory contracts, including with respect to a change of control; the requirements of the 1940 Act in such matters; an adviser's fiduciary duty with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards of directors have fulfilled their duties and factors to be considered by the Board in voting on advisory agreements.

During the Executive Sessions noted above, the Independent Directors had several meetings and deliberations with and without Advisor personnel present, and with the advice of legal counsel, regarding the proposed Transaction and the terms of the New Advisory Agreement and New Sub-Advisory Agreements. During the Meetings and Executive Sessions, the Independent Directors considered, among other things, the terms of the proposed Transaction; the impact of the purchase of the shares of Wasatch from Mr. Stewart and other personnel on the Advisor's cash flow; the impact, if any, of the Transaction on the services provided to the Funds; the compensation arrangements of Advisor personnel (including the distribution of equity ownership in Wasatch among various employees in conjunction with the Transaction); the general plans and intentions with respect to the Advisor (including with respect to management, employees, future growth prospects and succes sion planning); the costs associated with obtaining the necessary shareholder approvals; the services provided by the Advisor, including its research capabilities; Fund performance; the Advisor's fees and profitability; economies of scale and breakpoints; the approach of closing Funds to investors; the expense limitation agreements; and soft dollars. The Independent Directors, in consultation with independent counsel, also reviewed the factors set out in judicial decisions and SEC directives relating to the approval of advisory contracts. The information provided for the Board Meetings supplements the information the Board receives throughout the year regarding a Fund's performance, expense ratios, portfolio composition, trade execution and sales activity. In this regard,

the Independent Directors have considered and recognized the challenging market conditions that have existed during recent times and have therefore considered the Funds' performance in light of these market conditions.

As outlined in more detail below, the Independent Directors considered all factors they believed relevant with respect to the Funds, including the following: (a) the nature, extent and quality of the services to be provided by the Advisor and Sub-Advisors; (b) the investment performance of the respective Fund (as described in further detail in Section (B) below); (c) the profits to be realized by the Advisor from the relationship with the Fund; (d) the extent to which economies of scale would be realized as a Fund grows; and (e) whether fee levels reflect these economies of scale for the benefit of Fund investors. The Independent Directors also considered such factors in light of the pending Transaction and its impact, if any.

A.  Nature, Extent and Quality of Services

In evaluating the nature, extent and quality of the Advisor's and Sub-Advisors' services, the Independent Directors reviewed information concerning the types of services (advisory and non-advisory or administrative services) that the Advisor and Sub-Advisors provide to the respective Fund; the performance record of the applicable Fund; and information describing the Advisor's and Sub-Advisors' organization and business, including the impact of the Transaction on the Advisor and its ability to perform its services following the Transaction. In connection with their service as Independent Directors of the Company, the Independent Directors also periodically have met with the Advisor's and Sub-Advisors' personnel and have evaluated their professional experience, qualifications and credentials as well as their investment approach and research process. Given the Independent Directors' experience with the Funds, Advisor and Sub-Advisors, the Indep endent Directors were familiar with and have a good understanding of the organization, operations, investment philosophy and personnel of the Advisor and Sub-Advisors.

In connection with their review of the advisory services being provided, the Independent Directors considered the investment philosophy and investment mandates of each Fund and whether the Advisor and Sub-Advisors (as applicable) have performed consistently with such philosophy and mandates. While the Directors believe that the Advisor and Sub-Advisors have consistently applied their traditional investment philosophy and processes in managing the applicable Funds, the Directors also recognized the Advisor's continual review of its research process in order to keep refining and improving its investment process, particularly in light of recent market conditions. The Independent Directors further recognized that the Advisor's investment process and philosophy were not expected to change following the Transaction.

The Independent Directors also considered the expected impact, if any, of the Transaction on the operations, organization and personnel of the Advisor. In this regard, the Independent Directors recognized the continuing role of Mr. Stewart with the Advisor who has contractually agreed to remain with the Advisor for at least three additional years. The Independent Directors also considered the recent

changes in the capacities of certain Advisor personnel, including a new chief executive officer. The Independent Directors noted that the Transaction was not expected to modify the advisory services provided to the Funds. In this regard, the advisory services to be provided under the New Advisory Agreement are the same as provided by the Advisor under its Prior Advisory Agreement. The portfolio manager(s) of the respective Funds were expected to be the same following the Transaction. The Independent Directors recognized that the Transaction was, in part, the result of the Advisor's succession planning providing other Advisor personnel with an equity ownership interest in the Advisor. Accordingly, in its review of the succession planning of the Advisor, the Independent Directors considered the compensation arrangements of the Advisor's personnel (including the new distribution of equity shares in Wasatch), to evaluate the Advisor's ability to attract and retain key employees (including portfolio managers), preserve stability over the long term and reward performance without providing an incentive for taking undue risks.

In addition to the foregoing, in light of the regulatory emphasis on compliance, in reviewing the services that have been provided to a Fund, the Independent Directors also considered the Advisor's and Sub-Advisors' compliance and regulatory history.

In their review of services, the Independent Directors also evaluated the quality of administrative or non-advisory services provided. The terms of the New Advisory Agreement provide that the Advisor shall administer the Company's affairs to the extent requested by and subject to the supervision of the Board for the period and terms of the contract. In this regard, the Advisor provides business, administrative, compliance, marketing and other services required to operate the Funds, such as assistance with preparation and filing of regulatory and tax reports, preparation and distribution of prospectuses and shareholder reports, provision of information to Fund directors, analysis to ensure compliance with federal and state laws and regulations, valuation of portfolio securities, and oversight of the performance of the Funds' service providers (e.g., administrator, fund accountant, transfer agent and custodian). The Advisor also pays for offic e space and facilities for each Fund. In reviewing the services provided, the Independent Directors noted that the Transaction was not expected to adversely affect the nature, quality or extent of these services provided by the Advisor.

With respect to the Sub-Advisors, it was noted that the Sub-Advisory Agreements are essentially agreements for portfolio management services only and the Sub-Advisors were not expected to supply other significant administrative services. In addition, the Transaction was not expected to modify the allocation of services between the Advisor and Sub-Advisors nor the services provided by the respective Sub-Advisor.

Based on their review, the Independent Directors found that, overall, the nature, extent and quality of services provided under the New Advisory Agreement and the New Sub-Advisory Agreements were satisfactory on behalf of each applicable Fund.

B.  The Investment Performance of the Funds

In evaluating each Fund's performance, the Directors reviewed both short-term and long-term performance of each Fund relative to its peer group and relevant benchmarks. More specifically, the Independent Directors reviewed, among other things, materials reflecting the respective Fund's historic performance for the quarter, one-, three-, five-, and ten-year periods ending September 30, 2009 (as applicable and the average annual return since inception for Funds with a shorter duration) compared to its respective benchmarks and unaffiliated funds in its investment category. Additionally, the Independent Directors reviewed a report prepared by an unaffiliated third party comparing the respective Fund's total return for the one-, two-, three-, four-, five-, and ten-year periods ending September 30, 2009 (as applicable) compared to the performance of unaffiliated funds with similar investment objectives or classifications (a "Peer Group") and a be nchmark (the "Benchmark") for the prescribed periods. In addition, the Independent Directors received reports prepared by a second unaffiliated party, which generally included an analyst report on the respective Fund for the following Funds: Core Growth, Heritage Growth, Income Equity, International Growth, Micro Cap, Micro Cap Value, Small Cap Growth, Small Cap Value, and Ultra Growth. This information supplemented the performance information provided to the Board at each of its quarterly meetings as well as at other meetings or executive sessions during the year. Further, the Independent Directors also recognized the limitations on some of the usefulness of the performance comparison information as the closest Peer Group for a Fund may not adequately reflect the Wasatch Fund's investment strategies and may be invested in sectors or industries in which the respective Fund has limited or no exposure. The Independent Directors further considered the performance of the Funds in the context of the volatile mark et conditions during recent times. As noted above, the Independent Directors also considered that the portfolio management personnel responsible for the management of the Funds' portfolios were expected to continue to manage the portfolios following the completion of the Transaction. Based on their review and factoring in the severity of market turmoil in recent periods, the Independent Board Members determined that each Fund's investment performance over time had been satisfactory. In reaching this assessment, the Independent Directors considered that the Emerging Market Small Cap Fund, Global Opportunities Fund and Heritage Value Fund are each relatively new funds with available performance history of two years or less. Although short performance periods limit the ability to assess performance, such Funds outperformed their Benchmarks for the one-, two-year or since inception periods (as available). Similarly, the Micro Cap Value and Small Cap Growth Funds outperformed their Benchmarks during their perform ance history. With the exception of the four- and five-year periods for the Heritage Growth Fund and the two-year period for the International Opportunities Fund, such Funds outperformed their Benchmarks. The 1st Source Funds are new to the Wasatch family and with the exception of the one-year period ending September 30, 2009 for the Income Fund, such Funds outperformed their Benchmarks. Although the Ultra Growth and Core Growth Funds outperformed

their Benchmarks over the ten-year period, the Independent Directors have recognized that these Funds had underperformed their Benchmarks during more recent periods. However, these Funds have now outperformed their Benchmarks for the one-year period ended September 30, 2009. Similarly, the International Growth Fund had been underperforming its Benchmark but outperformed it in the one-year ended September 30, 2009. Although the Micro Cap Fund outperformed its Benchmark over the ten-year period, the Fund has underperformed its Benchmark in more recent periods. In addition, the Strategic Income and Global Science & Technology Funds have underperformed their Benchmarks. However, during this period, the Board has met with management to review the performance of the Funds, including the foregoing Funds, the factors affecting performance, the investment process and philosophy, and investment strategies. As noted above, the Independent Directors recognized that the Advisor consistently reviews its investment process to refine and improve its process, including focusing more on larger positions and enhancing its shared research and collaborative culture among its more experienced investment personnel, and were satisfied with the initiatives taken.

C.  Fees, Expenses and Profitability

1.  Fees and Expenses

The Independent Directors considered the fees of the Advisor and Sub-Advisors. In their evaluation of fees and expenses, the Independent Directors reviewed the Advisor's management fees and expense ratios for each Fund in absolute terms as well as with comparisons of fees and expenses of funds with similar objectives. In this regard, the Independent Directors reviewed and considered, among other things, comparisons of the respective Fund's actual management fees, total expenses (including and excluding 12b-1/non-12b-1 service fees), and non-management expenses (such as transfer agency, custodian, administrative and accounting fees) with those of unaffiliated funds in its Peer Group compiled by an independent third party. In this regard, the Independent Directors noted that the following Funds had advisory fees and/or total expense ratios below or near the median for its respective Peer Group (the Heritage Growth Fund, Heritage Value Fund, Sm all Cap Growth Fund (an advisory fee above the median but actual total expenses were the same as or slightly above the median), the Strategic Income Fund and the Long/Short Fund (an advisory fee above the median but total expense ratio below or the same as the median). The remaining Funds have advisory and total expenses that were higher than the median of their Peer Group. In reviewing these fees, the Independent Directors considered that the following Funds also have generally good performance (the 1st Source Funds, U.S. Treasury Fund, Micro Cap Value Fund, International Opportunities Fund, Global Opportunities Fund and Emerging Market Small Cap Fund) or generally good long-term ten-year performance (the Core Growth Fund, Micro Cap Fund, Small Cap Value Fund and Ultra Growth Fund). In addition, the Independent Directors recognized that the advisory fees and expense caps of the International Opportunities Fund,

Micro Cap Fund, and Micro Cap Value Fund were reduced last year. With respect to the Global Opportunities Fund, the Independent Directors recognized the considerable experience of the portfolio manager.

In reviewing fees, the Independent Directors also considered the expense limitation agreement provided by the Advisor for the applicable Funds and the amounts the Advisor has reimbursed to the Funds for the last three fiscal years (if any) which effectively reduces the amount of advisory fees paid to the Advisor. As a result of the market declines in 2008 and 2009, the Independent Directors recognized that the Advisor has been reimbursing various Funds for expenses pursuant to its expense limitation agreement. In this regard, the Advisor reimbursed certain expenses for the following Funds: Emerging Markets Small Cap, Global Opportunities, Global Science & Technology, Heritage Growth, Heritage Value, International Opportunities, Micro Cap Value, Strategic Income, Ultra Growth, U.S. Treasury, and Income Equity.

The Independent Directors noted that the fees under the New Advisory Agreement and New Sub-Advisory Agreements were the same as under the corresponding Prior Advisory Agreement and Prior Sub-Advisory Agreement, except for the sub-advisory fee of the Income Fund. With respect to the Income Fund, the Independent Directors noted that while the advisory fee remained the same under the New Advisory Agreement, the sub-advisory fee under the New Sub-Advisory Agreement was reduced, as described below. Accordingly, because the Advisor pays 1st Source the sub-advisory fee, the Advisor would retain a greater portion of the overall management fee of the Income Fund.

In addition to reviewing fees and expenses in absolute terms and in comparisons to peers, the Independent Directors recognized the Advisor's research intensive investment approach and the related costs, including, in particular, the Advisor's significant investment in its research personnel as well as its global research process to cover an international landscape (such as for Funds including Emerging Markets Small Cap, Global Opportunities, Global Science & Technology, International Growth, and International Opportunities). The Independent Directors also noted the Advisor's continued investment philosophy to close a Fund to new and/or existing investors when necessary to preserve the integrity of a Fund's investment strategy, particularly for Funds that primarily invest in smaller companies. Although all the Funds are currently open to investors, the Funds that have been closed to investors in the past include: Core Growth, Global Scien ce & Technology, International Growth, International Opportunities, Micro Cap, Micro Cap Value, Small Cap Growth, Small Cap Value and Ultra Growth Funds. The Independent Directors recognized that this practice may result in the Advisor foregoing additional fees on a larger asset base and exposing the Advisor to reduced revenues from asset outflows. The Independent Directors seek to encourage the Advisor's practice of closing Funds when necessary or appropriate to maintain or enhance performance. Given the foregoing factors, the Independent Directors determined that the current advisory fee levels were acceptable.

2.  Fees Charged to Other Advisor and Sub-Advisor Clients

In reviewing fees, the Independent Directors also compared the advisory fees to the fees the Advisor assesses other types of clients, including institutional and high net worth separate accounts and a private investment company. Currently, the Advisor manages separate account client assets in styles similar to those used for certain Funds, including Core Growth, Emerging Markets Small Cap, Heritage Growth, International Growth, Micro Cap, Small Cap Growth, Small Cap Value, Ultra Growth and Income Equity Funds. With respect to separate accounts, the fees for these accounts are generally lower than the comparable Fund (except the fees are the same in the case of the Heritage Growth Fund). The Independent Directors considered the differences in the product types, including the services provided. In this regard, the Independent Directors have noted that the range of services provided to a Fund in managing and operating a registered investment co mpany is more extensive than those provided to a separately managed account. The Advisor provides services to each Fund that extends beyond the portfolio management services provided to its separate account clients. As described in more detail above, these services include business, administrative, compliance, marketing and other services required to operate a Fund. Further, the Independent Directors recognized that each Fund operates in a highly regulated industry requiring extensive compliance. Such responsibilities generally are not required to the same extent for separate accounts. Accordingly, the Independent Directors determined that the nature and number of services provided to operate a Fund merit higher fees than those of separate accounts. Similarly, with respect to the private investment company, such company is not subject to the extensive regulatory scheme required of operating registered investment companies such as the Funds, and therefore the services required differ. In addition, the Indepen dent Directors noted the advisory fee arrangement of the private investment company with the Advisor provides for a performance fee and therefore its fee structure differs significantly from that of the Funds.

In considering the fees of the Sub-Advisors for the Income Fund and U.S. Treasury Fund, the Independent Directors also considered the pricing schedule the respective Sub-Advisor charges for similar investment management services for other clients. In this regard, the sub-advisory fee for the U.S. Treasury Fund was at the lower end of the Sub-Advisor's fee schedule. Similarly, the sub-advisory fee for the Income Fund was at the low end of fees 1st Source assesses for institutional accounts. In addition, as noted above, the Independent Directors recognized that although the overall advisory fee paid by the Income Fund remained the same, the sub-advisory fee to 1st Source was proposed to be reduced from 0.52% of average daily net assets to 0.28% of average daily net assets. Accordingly, the Advisor would retain a greater portion of the advisory fee paid by the Income Fund. The Independent Directors also noted that the sub-advisory fees were est ablished through arm's length negotiations between the Advisor and the Sub-Advisors which are unaffiliated with the Advisor.

3.  Profitability of Advisor

The Independent Directors reviewed pro forma profitability information for the Advisor derived from its relationship with each Fund for the fiscal year ending September 30, 2009. In reviewing profitability, the Independent Directors reviewed the methodology utilized to allocate revenue and expenses of the Advisor among the Funds. In considering profitability, the Independent Directors recognized the inherent limitations in determining profitability which may be affected by many factors, including the allocation of expenses across multiple investment products served by the Advisor. The allocation of research and personnel expenses is also particularly difficult given the Advisor's shared research culture. In addition, the Independent Directors noted that it is difficult to predict with any degree of certainty the impact of the Transaction on the Advisor's profitability. Notwithstanding the foregoing, the Independent Directors considered the o bligations of Wasatch to purchase the shares in Wasatch of Mr. Stewart and other personnel and the impact of this obligation on the Advisor's cash flow.

In addition to reviewing the Advisor's profitability, the Directors also reviewed the Advisor's relative profitability compared to publicly available information concerning unaffiliated advisers. However, the Independent Directors recognized the difficulties in comparing the profitability of various advisors given that individual fund or product line profitability of other advisers generally is not publicly available and the profitability information that is available for certain advisers or management firms may not be representative of the industry and may be affected by numerous factors including the structure of the particular adviser, the types of funds managed, its business mix, expense allocations, and the adviser's capital structure and cost of capital. The Independent Directors noted that the Advisor's profitability is within a reasonable range compared to the peer group of unaffiliated advisers. Based on their review, the Independen t Directors were satisfied that the Advisor's level of profitability from its relationship with each Fund was not unreasonable in light of the services provided.

The Directors also noted that during the past year the Advisor's revenues have shrunk significantly due to reductions in assets under management caused by the generally poor market for equities and shareholder withdrawal. The Directors also discussed the Advisor's response to this reduction in revenue which included, among other things, reductions in administrative staff (but not reductions in research personnel) and significant salary freezes and reductions for Advisor employees. The Directors carefully considered the impact, if any, of these reductions on the Advisor's profitability and on the respective Funds.

With respect to the Sub-Advisors, although a profitability analysis was not available, the Independent Directors received certain financial statements of the Sub-Advisors. Given that the Sub-Advisors' fee is at the low end of their respective fee schedules, the fact that the sub-advisory fee is established through arm's length negotiations, and the range of fees the Sub-Advisor

assesses to other clients, the Independent Directors concluded that HIMCO's and 1st Source's profitability from its relationship with the U.S. Treasury Fund and Income Fund, respectively, is not unreasonable.

In addition to the above, the Independent Directors also considered that the Advisor benefits from soft dollar arrangements whereby it receives brokerage and research services from brokers that execute a Fund's purchases and sales of securities, as described in further detail below.

D.  Economies of Scale and Whether Fee Levels Reflect These Economies of Scale

In reviewing advisory fees, the Independent Directors recognized that the advisory fee schedules for the Funds do not contain breakpoints that reduce the fee rate on assets above certain levels. With respect to funds investing in small and micro-cap companies including the Emerging Markets Small Cap, International Opportunities, Micro Cap, Micro Cap Value, Small Cap Growth, Small Cap Value, Core Growth, Global Opportunities, International Growth and Ultra Growth Funds, the Independent Directors recognized that the economies of scale and profit potential that may be achieved may be limited. In this regard, the Independent Directors were aware that it is more difficult to replicate performance in the small and micro-cap funds at larger asset sizes and therefore, as noted above, a Fund may be closed to new and/or existing shareholders from time to time. This practice enhances the Advisor's focus on achieving performance by maintaining assets at levels it can effectively manage but may limit economies of scale derived from a larger asset base. The Independent Directors, as noted, also recognized that this practice may limit the Advisor's profit potential from earning additional fees on a larger asset base and expose the Advisor to reduced revenues caused by asset outflows when Funds are closed to investors. The Independent Directors also noted the costs associated with the Advisor's research intensive investment approach. With respect to the larger-cap Funds, the Independent Directors further recognized the Advisor's position that to the extent economies of scale exist, the proposed level of advisory fee reflects such economies of scale. In addition, the Independent Directors recognized the reduction in assets under management of the Funds during the past year and the corresponding impact on the Advisor to reimburse fees pursuant to its expense limitation agreement discussed above. Considering the factors above, the Independent Directors concluded the absence of breakpoints was acceptable and that such economies as exist are adequately reflected in the Advisor's fee structure.

E.  Indirect Benefits

In evaluating fees, the Independent Directors also considered any indirect benefits or profits the Advisor or its affiliates may receive as a result of its relationship with the Funds. In this regard, the Independent Directors considered that the Advisor benefits from soft dollar arrangements pursuant to which it receives research from brokers that execute the applicable Fund's brokerage transactions. The Advisor may receive soft dollar benefits from each Fund, subject to the exceptions noted below for the sub-advised Funds. The Independent Directors reviewed information regarding the soft dollar arrangements including, among other things, the

commissions paid, the research credits earned and the services provided. Further, the Independent Directors at prior meetings have had extensive discussions regarding the soft dollar arrangements. The Independent Directors recognized that soft dollar arrangements provide benefits to the Advisor derived from a Fund's transactions by obtaining research that it would otherwise have to acquire with hard dollars. Accordingly, the Advisor's profitability would be somewhat lower if it did not receive the research services pursuant to soft dollar arrangements. With respect to the Sub-Advisors, the Independent Directors recognized that HIMCO currently does not have soft dollar arrangements although 1st Source may benefit from soft dollar arrangements. The Independent Directors took these "fall out" benefits, if any, into account when reviewing the level of advisory or sub-advisory fees.

F.  Approval

The Independent Directors did not identify any single factor discussed previously as all important or controlling. The Independent Directors, including a majority of Independent Directors, concluded that the terms of the New Advisory Agreement for each Fund, the New HIMCO Sub-Advisory Agreement for the U.S. Treasury Fund, and the New 1st Source Sub-Advisory Agreement for the Income Fund were fair and reasonable, that the Advisor's and Sub-Advisors' fees are reasonable in light of the services provided to the respective Fund, and that the New Advisory Agreement should be and was approved on behalf of each Fund and the New Sub-Advisory Agreements should be and were approved on behalf of the U.S. Treasury Fund and the Income Fund, respectively.

Approval of Interim Agreements

At the Meeting on November 19, 2009, the Board, including the Independent Directors, also unanimously approved the Interim Advisory Agreements, the Interim HIMCO Sub-Advisory Agreement and Interim 1st Source Sub-Advisory Agreement (the Interim HIMCO Sub-Advisory Agreement and Interim 1st Source Sub-Advisory Agreement are collectively, the "Interim Sub-Advisory Agreements"). If necessary to ensure continuity of advisory services, the Interim Advisory Agreements and Interim Sub-Advisory Agreements will take effect upon the closing of the Transaction. The terms of each Interim Advisory Agreement and Interim Sub-Advisory Agreement are substantially identical to those of the corresponding Prior Advisory Agreement and Prior Sub-Advisory Agreement, respectively, except for the effective date, termination and escrow provisions required under applicable law. In light of the foregoing, the Board, including the Independent Directors, unanimously determ ined that the scope and quality of services to be provided to the Funds under the respective Interim Advisory Agreement and Interim Sub-Advisory Agreement are at least equivalent to the scope and quality of services provided under the applicable Prior Advisory Agreement and Prior Sub-Advisory Agreement.

Section 15(f) of the 1940 Act

Section 15(f) of the 1940 Act provides in substance that when a sale of a controlling interest in an investment adviser occurs, the investment adviser or any of its affiliated persons may receive any amount or benefit in connection with the sale so long as two conditions are satisfied. The first condition of Section 15(f) is that, during the three-year

period following the consummation of a transaction, at least 75% of the investment company's board of directors must not be "interested persons" (as defined in the 1940 Act) of the investment adviser or predecessor advisor. The Board of the Company currently meets this test and will do so for the prescribed period. Second, an "unfair burden" (as defined in the 1940 Act) must not be imposed on the investment company as a result of the transaction relating to the sale of such interest, or any express or implied terms, conditions or understandings applicable thereto. The term "unfair burden" (as defined in the 1940 Act) includes any arrangement, during the two-year period after the transaction, whereby the investment advisor (or predecessor or successor adviser), receives or is entitled to receive any compensation directly or indirectly, from the investment company or its securities holders (other than fees for bona fide investment advisory or other services) or from any person in connection with the purchase or sale of securities or other property to, from or on behalf of the investment company (other than bona fide ordinary compensation as principal underwriter for the investment company). The Board of Directors have not been advised of any circumstances arising under the Transaction that might result in the imposition of an "unfair burden" being imposed on the Funds. In addition, the Advisor has agreed that it shall conduct its business and use commercially reasonable efforts to enable the provisions of Section 15(f) to be true in relation to the Funds.

PROPOSAL 5 – ALL FUNDS

APPROVAL OF AN AGREEMENT AND PLAN OF
REORGANIZATION AND REDOMICILIATION

At a meeting of the Board held on November 19, 2009, the Board approved an Agreement and Plan of Reorganization (the "Reorganization Agreement") substantially in the form attached to this Proxy Statement as Exhibit E. The terms and conditions are set forth in the Reorganization Agreement. Significant provisions are summarized below; however, this summary is qualified in its entirety by reference to the Reorganization Agreement. Fund shareholders are being asked to approve the Reorganization Agreement. The Company is a Minnesota corporation and each Fund is a series of the Company. The Reorganization is being proposed to change the state and form of organization of the Company from a Minnesota corporation to a newly formed Massachusetts business trust (the "Trust"). Each Fund would be reorganiz ed into a corresponding new series of the Trust (each a "New Fund"). The Reorganization of the Company and its Funds is expected to provide greater flexibility in conducting its business and responding to changing market conditions. Each New Fund (i) will not engage in any operations prior to the Reorganization other than organizational activities; and (ii) was created solely for the purpose of acquiring and carrying on the business of the corresponding Fund. If the Reorganization is approved by shareholders, each Fund will transfer all of its assets to its corresponding New Fund in exchange for shares of the corresponding New Fund and the corresponding New Fund's assumption of the respective Fund's liabilities. The Reorganization Agreement further provides that each Fund will then distribute the shares received from the corresponding New Fund to its shareholders and then terminate. As a result of the Reorganization, the total value of the shares held by a shareholder of a Fund immediately prior to the Reorg anization will be equal to the total value of shares that a shareholder will receive from the corresponding New Fund. We expect the

Reorganization to take effect on or about February 26, 2010 ("Closing Date"), although that date may be adjusted in accordance with the Reorganization Agreement.

Background

If the Reorganization Agreement is approved by shareholders and the Reorganization is implemented, the Trust will adopt, pursuant to Rule 414 of the Securities Act of 1933, the registration statement of the Company. Accordingly, after the Reorganization, each New Fund's investment objective, investment strategies, fees and expenses will be the same as those of the corresponding Fund.

The Board (assuming the Nominees, as described in Proposal 1 of this Proxy Statement are elected) and officers of the Trust, would be the same as those of the Company and would govern and operate the Trust and New Funds in essentially the same manner as they previously governed and operated the corresponding Company and Funds. However, instead of "Directors," the members of the Board would be Trustees.

On the effective date of the Reorganization, shareholders of a Fund will own shares of a corresponding New Fund that are equal in number and in value to the shares of the Fund. For example, if a shareholder currently owns 100 shares of a Fund, immediately after the closing of the Reorganization, he or she would own 100 shares of the corresponding New Fund having the same net asset value as his or her original 100 shares of the Fund. Accordingly, shareholders of the Funds would hold an interest in the applicable New Fund that is equivalent to his or her interest in the corresponding Fund. For all practical purposes, a shareholder's financial interest in the Fund would not change. As described below, the Reorganization is intended to be tax-free for federal income tax purposes.

As a result of the Reorganization, shareholders of the Funds, each of which is a series of the Company, a Minnesota corporation, will become shareholders of the corresponding New Funds, each of which is a series of the Trust, a Massachusetts business trust. For a comparison of certain attributes of these entities that may affect shareholders of the Funds, please see the "Comparison of the Trust and the Company."

The Reorganization will not result in any change in a Fund's name, investment objective or principal investment strategies, investment advisor, sub-advisor, portfolio managers, administrator or other service providers of any of the Funds. Each New Fund will offer the same shareholder services as its corresponding Fund.

Approval of Reorganization Agreement by Directors

The Board of Directors determined that the Reorganization is in the best interests of the shareholders of the Funds and unanimously recommended that shareholders approve the Reorganization. In approving the Reorganization, the Board of Directors considered that:

•  Funds organized as Massachusetts business trusts have greater flexibility in structuring shareholder voting rights and shareholder meetings. For example, under Minnesota law, certain fund transactions, such as mergers, certain types of reorganizations and liquidations, are subject to mandatory shareholder votes. Massachusetts business trust law allows a fund to provide in its governing

documents that each of these transactions may go forward with only trustee approval; all remain subject, however, to any special voting requirements of the 1940 Act, which would not be limited or restricted by the Reorganization. The Trustees of the Trust therefore will have greater flexibility to manage the New Funds more effectively and efficiently by expanding their ability to revise the Declaration of Trust to respond to future contingencies, and changes in industry standards, economic conditions and regulatory conditions. The Reorganization will, among other things, minimize the time and expense of shareholder meetings and allow the Board to act quickly when it is in the interests of shareholders to do so. For example, subject to certain exceptions, the Trustees will not need to undergo the costly and time consuming process of procuring shareholder approval to liquidate a Fund or for amendments to the Declaration of Trust to address pre ssing issues;

•  The Reorganization will not dilute the interests of the shareholders of the Funds or the New Funds;

•  There are differences between the Company being organized as a Minnesota corporation and the Trust being organized as a Massachusetts business trust, including the rights of shareholders which in certain cases will be less under the Trust's Declaration of Trust. The protections afforded shareholders under federal law, however, will not be affected;

•  The Company is governed by both Minnesota law, and its Articles of Incorporation and Bylaws. Minnesota law prescribes many aspects of the Company's governance. In contrast, Massachusetts law allows the trustees of a Massachusetts business trust to set many terms of a fund's governance in its Declaration of Trust;

•  Many mutual funds are organized as Massachusetts business trusts. The Board believes that the proposed Massachusetts business trust form provides a more flexible and cost-efficient method of operating the Funds in the future for the benefit of Fund shareholders;

•  The New Funds will have the same investment objective(s), principal investment strategies and risks as the corresponding Funds. In fact, the Trust will assume the registration statement of the Company in which those principal investment strategies and risks are described;

•  The Advisor will also serve as the investment adviser to the New Funds on substantially similar terms and conditions as set forth in the Prior Advisory Agreement, and HIMCO and 1st Source will also serve as the investment sub-adviser to the New Funds corresponding to the U.S. Treasury Fund and Income Fund, respectively, on substantially similar terms and conditions set forth in the Prior HIMCO Sub-Advisory Agreement and the Prior 1st Source Sub-Advisory Agreement, as applicable;

•  The expenses of the Funds are not expected to increase as a result of the Reorganization;

•  The shareholder services available to shareholders of the New Funds will be substantially the same as those available to shareholders of the Funds;

•  For Federal income tax purposes, the Reorganization is intended to be a tax-free transaction for the Funds and their shareholders; and

•  Because the Reorganization would benefit the Funds and their shareholders and the election of directors is required under applicable law, the Board has authorized the Funds to bear the cost of the Reorganization, subject to the following. With respect to the costs of the proxy solicitation of the Proposals herein, the Funds will share such costs with the Advisor, up to a maximum of $200,000, which shall be allocated among the Funds pro rata based on the number of shareholder accounts.

With respect to certain differences in shareholder rights noted above, please see "Comparison of the Trust and Company" below and Exhibit F for a fuller discussion of such differences.

Reorganization of Funds

The proposed Reorganization Agreement for the Funds, approved by the Board of Directors of the Company, contemplates the sale of all the assets of the Company and each Fund into the recently organized corresponding Trust and New Fund, each of which has substantially identical investment objectives, principal strategies, and risks as the Funds. As a result of the Reorganization, the assets and liabilities of each Fund will be transferred to a corresponding New Fund, and the shareholders of a Fund will become shareholders of the corresponding New Fund. More specifically, the Reorganization Agreement contemplates:

•  the transfer of all of the assets of each Fund to the corresponding New Fund in exchange for shares of the corresponding New Fund having an aggregate value equal to the assets and liabilities of the Fund and the assumption by such New Fund of all of the liabilities of such Fund;

•  the distribution to each shareholder of each Fund of the same number of shares of the corresponding New Fund having an aggregate net asset value equal to the aggregate net asset value of the shares of the Fund held by that shareholder on the Closing Date; and

•  the subsequent complete liquidation and dissolution of each Fund and the Company.

For a more detailed discussion of the terms of the Reorganization Agreement, please refer to "Summary of the Reorganization Agreement" below.

Under the 1940 Act, the shareholders of an investment company must, among other things, elect trustees and approve the initial investment advisory agreements. Theoretically, if the Reorganization Agreement is approved and the Funds are reorganized as series of a Massachusetts business trust, the shareholders of the New Funds would need to vote on these items in order to comply with the 1940 Act. Immediately prior to the shares of the New Funds being distributed to the corresponding Fund's shareholders, however, each Fund, as sole shareholder of the corresponding New Fund, will vote on a number of issues regarding the organization of the Trust and the New Funds. Thus, if shareholders of the Funds approve the proposed Reorganization, they will also, in effect, be approving the following matters with respect to the Trust and New Funds:

•  Election of the Trustees (who will be the Nominees set forth in Proposal 1);

•  Investment advisory agreements which will be substantially similar to the New Advisory Agreement set forth in Proposal 2, except as noted below;

•  If applicable, an investment sub-advisory agreement, which will be substantially similar to the applicable New Sub-Advisory Agreements set forth in Proposals 3 and 4, except as noted below; and

•  Any other matter for which shareholder approval is required.

Shareholders are also approving the liquidation and dissolution of the Company and Funds. Shareholders of the Funds are not being asked to vote separately on these issues. More information on each of these items is discussed below under "Matters on Which the New Funds Will Vote."

Federal income tax consequences of the Reorganization

The Reorganization is intended to be tax-free under federal tax law (although there can be no assurance that the Internal Revenue Service will adopt a similar position). Consummation of the Reorganization is subject to receipt of a legal opinion from Chapman and Cutler LLP, counsel to the Company and Trust, that based on certain assumptions made and representations to be made on behalf of the Funds and New Funds, the transfer to the New Funds of all the assets of the corresponding Funds and the assumption by the New Funds of all of the liabilities of the corresponding Fund, followed by the distribution of such New Fund shares to the shareholders of the applicable Fund and the dissolution and termination of the Funds will constitute a "reorganization" within the meaning of Section 368(b) of the Internal Revenue Code of 1986, as amended. However, immediately prior to the Reorganization, each Fund intends to declare and pay a final distribution to its shareholders of all of its net investment company taxable income, if any (and net tax-exempt income, if any) for taxable years ending on or before the effective time of the Reorganization and all of its net capital gain, if any, recognized in those years.

Timing of the Reorganization

The meeting of shareholders to consider the proposal is scheduled to occur on February 11, 2010. If all necessary approvals are obtained, the proposed Reorganization will likely occur on or about February 26, 2010, although the date may be adjusted in accordance with the Reorganization Agreement.

Expenses related to the proxy and shareholder meetings

Because the Reorganization would benefit the Funds and their shareholders and the election of directors is required under applicable law, the Board has authorized the Funds to bear the cost of the Reorganization, subject to the following. With respect to the costs of the proxy solicitation of the Proposals herein, the Funds will share such costs with the Advisor, up to a maximum of $200,000, which shall be allocated among the Funds pro rata based on the number of shareholder accounts.

SUMMARY OF THE REORGANIZATION AGREEMENT

If shareholders approve the Reorganization, the Reorganization will take place if the parties to the Reorganization Agreement satisfy various conditions set forth in that agreement.

The Reorganization Agreement provides that each Fund will transfer to the corresponding New Funds its assets on the Closing Date in exchange solely for shares

of the corresponding New Fund and the corresponding New Fund's assumption of the applicable Fund's liabilities. The Reorganization Agreement further provides that each Fund will distribute the shares received from the corresponding New Fund proportionately to its shareholders and terminate and dissolve in accordance with applicable Minnesota state law. The number of full and fractional shares of the New Fund you will receive in the Reorganization will be equal to the number and value of the full and fractional shares of the Fund you own on the Closing Date.

We will accomplish the liquidation and distribution with respect to each Fund's shares by the transfer of the New Fund shares then credited to the account of the Fund on the books of the corresponding New Fund to newly-opened accounts on the books of that New Fund in the names of the Fund shareholders. The aggregate net asset value of the New Fund shares to be credited to the Fund shareholders of the corresponding Fund shall be equal to the aggregate net asset value of the Fund shares owned by such Fund shareholder on the Closing Date. All issued and outstanding shares of the Fund will simultaneously be canceled on the books of the Fund. The New Fund will not issue certificates representing the New Fund shares issued in connection with such exchange.

After such distribution, the Company will take all necessary steps under applicable state law, its respective governing instruments, and any other applicable law to effect a complete dissolution of the Funds and the Company. The Board has determined, with respect to each Fund, that the interests of shareholders of each Fund will not be diluted as a result of the Reorganization and that participation in the Reorganization is in the best interests of each Fund and its shareholders.

The Reorganization must be approved by a majority of the voting power of the shares of each Fund entitled to vote. The Reorganization must be approved by shareholders of each Fund in order to be effected.

The Reorganization Agreement further provides that the warranties, representations and agreements contained in the Reorganization Agreement are severable with respect to each Fund and its corresponding New Fund. The Board of the Company or the Trust may terminate the Reorganization Agreement and abandon transactions contemplated thereby, with respect to any New Fund or Fund, at any time prior to the Effective Time (as defined in the Reorganization Agreement) of the Reorganization, before or after approval by the shareholders of the Funds, if circumstances should develop that, in the opinion of that Board, make proceeding with the Reorganization inadvisable with respect to such Fund(s). The Reorganization is conditioned upon, among other things, the requisite approval of shareholders, the absence of certain legal proceedings, the receipt of certain regulatory consents deemed necessary to consummate the Reorganization, the amendment to the Com pany's registration statement to reflect the Reorganization and permit the Trust to adopt such registration statement, the Company's and Trust's receipt of an opinion substantially to the effect that the Reorganization will qualify as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended and certain legal opinions regarding the organization of the Trust and issuance of its shares in connection with the Reorganization. The Reorganization Agreement provides that the Company and the Trust may waive compliance with any of the covenants or conditions made therein for

the benefit of any Fund or New Fund, as applicable, other than the requirements that: (1) the Reorganization Agreement be approved by shareholders of the Funds; and (2) the Company receives an opinion of counsel that the transactions contemplated by the Reorganization Agreement will constitute a tax-free reorganization for Federal income tax purposes.

COMPARISON OF THE TRUST AND THE COMPANY

The Company is a Minnesota corporation governed by its own Articles of Incorporation, By-Laws and a Board of Directors, as well as the Minnesota Business Corporation Act (the "MBCA"). The Trust is a Massachusetts business trust governed by its own Declaration of Trust, By-Laws and a Board of Trustees as well as the Massachusetts law as it applies to Massachusetts business trusts. The operations of the Company and the Trust are also governed by applicable Federal law.

Certain differences and similarities between these entities are summarized below and in Exhibit F, although this is not a complete list of comparisons. Shareholders should refer to the provisions of these governing documents and the relevant state law directly for a more thorough comparison. Copies of these governing documents are available to shareholders without charge upon written request.

General

Under the Declaration of Trust and By-Laws of the Trust, the Trustees of the Trust will have more flexibility than the Directors of the Company and, subject to applicable requirements of the 1940 Act and Massachusetts law, broader authority to act, as further described below and in Exhibit F. The increased flexibility may allow the Trustees of the Trust to react more quickly to changes in competitive and regulatory conditions and, as a consequence, may allow the Trust to operate in a more efficient and economical manner. Although the Trust's Declaration of Trust reduces or removes certain shareholder voting and other rights permitting the Trustees to approve certain matters without shareholder approval (such as certain mergers, liquidations and certain amendments to the Declaration of Trust), the protections afforded shareholders under federal law will not be affected. In addition, the Trustees still have the fiduciary obligations to act with due care and in the shareholders' best interests. Before utilizing the increased flexibility that the Declaration of Trust might afford, the Trustees have a fiduciary responsibility to first determine that the proposed transaction is in the shareholders' interest. Any exercise of the Trustees' authority under the Declaration of Trust is also subject to any applicable requirements of the 1940 Act and Massachusetts law. Of course, shareholders would receive appropriate written notification of any material transactions.

Shareholder Liability

With respect to the Company, the MBCA provides that a shareholder of a Minnesota corporation generally has no obligation to the corporation or its creditors with respect to the shares he or she owns, other than to pay the corporation the full agreed-upon consideration for which the shares are issued.

Under Massachusetts law, however, shareholders of a Massachusetts business trust could, under certain circumstances, be held personally liable for the obligations of the

trust. However, the Declaration of Trust for the Trust contains an express disclaimer of shareholder liability for debts or obligations of the Trust or any series and requires that notice of such limited liability be given in each contract, instrument or other undertaking made or issued by the Trustees or any officer on behalf of the Trust or a New Fund. The Declaration of Trust further provides for indemnification out of the assets and property of the applicable New Fund for all loss and expense of any shareholder held personally liable for such liabilities solely by reason of his or her being or having been a shareholder of a New Fund.

Mergers and Liquidations

Under the MBCA, a merger, sale of substantially all or all the assets not in the ordinary course of business, liquidation or dissolution generally requires shareholder approval. In contrast, under the Trust's Declaration of Trust, the Trustees may authorize the sale of all or substantially all Trust property (including Trust property belonging to a particular series or class of the Trust) without shareholder approval. In addition, the Trustees may terminate the Trust or any series (including a New Fund) by written notice to the shareholders without shareholder approval.

Liability of Trustees and Directors

With respect to the Company, the Company's articles of incorporation generally provide that to the fullest extent permitted by the MBCA (except as prohibited by the 1940 Act), a director of the Company shall not be liable to the Company or its shareholders for monetary damages for breach of fiduciary duty. The Company's articles of incorporation also generally provide that the Company may indemnify the Directors for such expenses and liabilities, in such manner, under such circumstances, and to the full extent permitted under the MBCA, provided, however, that no such indemnification may be made if it would be in violation of the 1940 Act.

With respect to the Trust, the Trust's Declaration of Trust provides that no person who is or has been a Trustee, officer or employee of the Trust shall be liable to the Trust or to any shareholder for any action or failure to act except for his or her own bad faith, willful misfeasance, gross negligence or reckless disregard of his or her duties involved in the conduct of the individual's office, and for nothing else, and shall not be liable for errors of judgment or mistakes of fact or law. The Declaration of Trust further provides that a Trustee shall not be responsible for or liable for any event for any neglect or wrongdoing of any officer, employee, investment adviser, sub-adviser, principal underwriter, custodian or other agent of the Trust or a New Fund, nor responsible for the act or omission of any other Trustee (or the failure to compel in any way any former or acting Trustee to redress any breach of trust), except in the case of such Trustee's own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

The Trust's Declaration of Trust also generally provides that except to the extent prohibited by applicable federal law, the Trust or applicable New Fund shall indemnify Trustees, among others, to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by

virtue of his being or having been such a Trustee, director, officer, or agent and against amounts paid or incurred by him in settlement thereof. Such indemnification provision also extends to investigations, regulatory inquiries or other occurrences of a similar nature.

Rights of Inspection

With respect to the Company, the MBCA allows shareholders, upon written demand, stating a proper purpose, at any reasonable time to examine and copy the share register and other corporate records reasonably related to the stated purpose and described with reasonable particularity in the written demand upon demonstrating the stated purpose to be a proper purpose.

With respect to the Trust, except to the extent otherwise required by law, shareholders shall only have such right to inspect the records, documents, accounts and books of the Trust as may be granted from time to time by the Trustees.

Dissenters Rights

Under the MBCA, shareholders of a corporation which engages in certain merger, exchange or sale-of-asset transactions, may be entitled to exercise dissenters rights. Such shareholders, who comply with the applicable statutory procedures, may receive a judicial determination of the fair value of their shares and to receive payment of such statutory value in cash, together with a statutory rate of interest thereon. To exercise such rights, such shareholder must file with the Fund before the vote a written notice to demand fair value of shares and must not vote the shares in favor of the proposal. The procedures to exercise dissenters' rights under the MBCA have been set forth in Exhibit A. However, as described in further detail in Exhibit F, the SEC has taken the position that federal law pre-empts such statutory rights of appraisal in the case of certain transactions to which an open-end investment company is a party.

With respect to the Trust, the Trust's Declaration of Trust provides that shareholders have no right or title in or to the Trust property or to call for any partition or division of any property, profits, rights or interests of the Trust or any series thereof and the shareholders shall have no interest therein other than the beneficial interest conferred by their shares. In addition, the Trust's Declaration of Trust provides that shareholders shall not have any preference, preemptive, appraisal, conversion or exchange rights, except as the Trustees may determine from time to time.

Derivative Actions

With respect to the Trust, as described in further detail in Exhibit F, the Trust's Declaration of Trust imposes conditions on the manner in which shareholders may bring derivative actions, which are actions in the name of the company against others. The Company's articles of incorporation do not impose such conditions.

Shareholder Meetings

Neither the Company nor the Trust is required to hold annual meetings of shareholders, although each may hold special meetings. As further noted in Exhibit F, the Company and the Trust significantly differ in the percentage of outstanding shares

necessary for shareholders to call a special meeting and in the ability of shareholders to take action by written consent.

Amendment of Charter Documents

With respect to the Company, an amendment to the articles of incorporation may be proposed by the board of directors or by a shareholder or shareholders holding 3% of more of the voting power of the shares entitled to vote. Such an amendment is generally subject to shareholder approval. In certain instances, shareholders are entitled to vote on an amendment by separate series or class. If an amendment does not affect the interests of a particular series or class, holders of that series or class are not entitled to vote on the amendment.

With respect to the Trust, the Trustees may amend the Declaration of Trust without shareholder approval. However, no amendment to the Declaration of Trust may impair the exemption from or limitation of personal liability of any person who is or has been a shareholder, trustee, officer or employee of the Trust, or limit the rights to indemnification, advancement of expenses or insurance provided therein with respect to actions or omissions of persons entitled to such indemnification, advancement or insurance prior to such amendment.

Forum Selection

The Trust's Declaration of Trust requires that actions by shareholders, against or on behalf of the Trust, a series or class thereof, its Trustees, officers or employees be brought only in the United States District Court, District of Utah, or if such action may not be brought in that court, then such action shall be brought in the State of Utah, Salt Lake City District Court. In addition, the Trust's Declaration of Trust provides that there shall be no right to a jury trial. The Company's articles of incorporation do not contain a similar provision.

Quorum

With respect to the Trust, the Trust's Declaration of Trust provides that the Trustees shall set forth in the by-laws the quorum requirement for the transaction of business by shareholders, which cannot be less than 30% of the voting power of the shares entitled to vote on the matter at the meeting. The by-laws provide that the shareholders entitled to vote and present in person or by proxy representing 30% of the voting power of the Trust shall constitute a quorum at any shareholders meeting, except that where any provision of law, the Declaration of Trust or the by-laws require a vote be taken by series or class, then 30% of the voting power of that series or class shall constitute a quorum.

With respect to the Company, the Company's by-laws provide that the holders of 10% of the shares outstanding and entitled to vote at the meeting shall constitute a quorum for the transaction of business at any regular or special shareholders' meeting.

This is only a summary of certain characteristics of the operations of the Company and the Trust, their relevant corporate governance documents and relevant state law. This is not a complete description of the documents cited. Shareholders should refer to

Exhibits A and F and the provisions of such documents and state laws governing each Fund for a more thorough description.

MATTERS ON WHICH THE NEW FUNDS WILL VOTE

As noted above, in approving the Reorganization Agreement, shareholders of each Fund will also be authorizing that Fund to vote on various actions regarding the New Funds and the Trust. Fund shareholders are not being asked to vote separately on these issues. One of these actions will be to approve the election of Trustees of the Trust. The nominees for election will be the same Nominees elected under Proposal 1 at the Meeting. In addition, shareholders of each Fund approving the Reorganization will also be approving the liquidation and dissolution of that Fund and the Company. Below is additional information regarding some of the other actions to be taken by the Funds with respect to the New Funds and the Trust in connection with the Reorganization.

Advisory Agreement and Sub-Advisory Agreements

The Reorganization Agreement requires each Fund, while it is the sole shareholder of the corresponding New Fund, to among other things, approve an investment advisory agreement and, if applicable, an investment sub-advisory agreement, that are substantially the same as the New Advisory Agreement and New Sub-Advisory Agreements, except as noted below. The proposed investment advisory and sub-advisory agreements are the following:

(1)  For all Funds

A proposed advisory and service agreement between the Trust, on behalf of each New Fund, and the Advisor that will be substantially the same as the New Advisory Agreement described in Proposal 2 and attached as Exhibit B hereto;

(2)  For U.S. Treasury Fund:

A proposed Sub-Advisory Agreement with respect to the U.S. Treasury Fund between the Advisor and HIMCO that will be substantially the same as the New Sub-Advisory Agreement as described in Proposal 3 and attached as Exhibit D.1 hereto; and

(3)  For Income Fund:

A proposed Sub-Advisory Agreement with respect to the Income Fund between the Advisor and 1st Source that will be substantially the same as the New Sub-Advisory Agreement as described in Proposal 4 and attached as Exhibit D.2 hereto.

The Trust's Declaration of Trust provides, in relevant part, that every contract made or issued by the Trustees or by any officers or officer on behalf of the Trust or series shall contain certain disclaimer of liability language on behalf of Trustees, officers and shareholders, although the omission thereof shall not operate to bind any Trustees, officers or shareholders. In accordance with this provision, the advisory agreement on behalf of each New Fund and the sub-advisory agreements on behalf of the Income Fund and U.S. Treasury Fund will provide that all parties to the respective agreement

are expressly put on notice of the Trust's Declaration of Trust and all amendments thereto, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts, and the limitation of shareholder and Trust liability contained therein. The New Advisory Agreement and the New Sub-Advisory Agreements are executed on behalf of the Trust by a Trust's officer as an officer and not individually and the obligations imposed upon the Trust and Funds by those Agreements are not binding upon any of the Trust's Trustees, officers or shareholders individually but are binding only upon the assets and property of the applicable Fund of the Trust, and persons dealing with the Trust must look solely to the assets and property of the subject Fund for the enforcement of any claims.

Shareholder Approval

Approval of Proposal 5 will require the affirmative vote of the holders of a majority of the voting power of the shares of each Fund entitled to vote.

THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF THE FUNDS APPROVE THE REORGANIZATION AGREEMENT.

If the Reorganization is not approved by shareholders of every Fund, or the Board of the Company or Trust terminates and abandons the Reorganization, the Company will continue to operate as a Minnesota corporation.

GENERAL INFORMATION ABOUT THE FUNDS

MANAGEMENT AND OTHER SERVICE PROVIDERS

Set forth below is a description of the current service providers of the CompanyTrust and the proposed service providers of the Trust.

Advisor.The investment advisor for the CompanyTrust is Wasatch Advisors, Inc. The Advisor is located at 150 Social Hall Avenue, 4th505 Wakara Way, 3^rd Floor, Salt Lake City, Utah 84111.84108.

Sub-Advisors. HIMCO performs the duty of portfolio management of the U.S. Treasury Fund. HIMCO has offices at 1250 S. Capital of Texas Highway, Building 3, #600, Austin, TX 78746-6464.

1st Source performs the duty of portfolio management for the Income Fund. 1st Source has offices at 100 North Michigan Street, South Bend, Indiana 46601. 1st Source is a wholly owned subsidiary of 1st Source Bank, which is a wholly owned subsidiary of 1st Source Corporation, a publicly held bank holding company.

Distributor.Shares of the Funds are offered on a continuous basis through ALPS Distributors, Inc. ("ADI"(“ADI”), 1290 Broadway, Suite 1100, Denver, Colorado 80203, as distributor of the Funds pursuant to a Distribution Agreement between the CompanyTrust and ADI. ADI also serves as distributor for other mutual funds. As distributor, ADI acts as the Company'sTrust’s agent to underwrite, sell and distribute shares in a continuous offering, pursuant to a best efforts arrangement.

Administrator. The CompanyTrust has entered into an administration agreement with State Street Bank and Trust Company ("(“State Street"Street”), 801 Pennsylvania Avenue,

Kansas City, Missouri 64105, pursuant to which State Street provides administrative services to the Funds.

Independent Auditors.The firm of PricewaterhouseCoopers LLP ("PwC"(“PwC”), 1055 Broadway, 10th Floor, Kansas City, Missouri 64105, has been selected as independent auditors of the Funds of the Company.Trust. Certain information concerning the fees and services provided by PwC to the Funds and to the Advisor for the most recent fiscal years of the Funds is provided below.

14

PwC, in accordance with Independence Standards Board Standard No. 1 (ISB No. 1), has confirmed to the Audit Committee that they are independent auditors with respect to the Funds.

Audit Fees –- The aggregate fees billed for professional services rendered by PwC for the audit of the Company'sTrust’s annual financial statements or services normally provided in connection with statutory and regulatory filings or engagements for the last two fiscal years ended September 30, 20092017 and September 30, 20082016 were $295,100$603,830 and $262,871,$503,459, respectively.

Audit Related Fees – The Company–The Trust was not billed any fees by PwC for the fiscal years ended September 30, 20082017 and September 30, 20092016 for assurance and related services rendered by PwC to the CompanyTrust that are reasonably related to the performance of the audit of the Company'sTrust’s financial statements and are not reported under Audit Fees above.

During the fiscal years ended September 30, 20092017 and September 30, 2008,2016, no fees for assurance and related services that relate directly to the operations and financial reporting of the CompanyTrust were billed by PwC to the Company'sTrust’s investment adviser or any other entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Company.Trust.

Tax Fees –- The aggregate fees billed for professional services rendered by PwC to the CompanyTrust for tax compliance, tax advice, tax planning and tax return preparation for the last two fiscal years ended September 30, 20092017 and September 30, 20082016 were $76,000$105,500 and $69,400,$101,430, respectively. These services consisted of PwC reviewing the Company'sTrust’s excise tax returns, distribution requirements and registered investment company tax returns, as well as consultations regarding the tax consequencesliquidation of specific investments.a series of the Trust.

During the fiscal years ended September 30, 20092017 and September 30, 2008,2016, no fees for tax compliance, tax advice or tax planning services that relate directly to the operations and financial reporting of the CompanyTrust were billed by PwC to the Company'sTrust’s investment adviser or any other entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Company.Trust.

All Other Fees – The aggregate fees billed for professional services rendered by PwC to the Company regarding the implementation of Financial Accounting Standards Board Release No. 48Trust, other than services reported above, for the fiscal years ended September 30, 2008 was $2,500. There were no fees billed for the fiscal year ended2017 and September 30, 20092016 were $107,193 and $0, respectively. The fees for products and services provided by PwCSeptember 30, 2017 are related to the Company, other than the services reported in Audit Fees, Audit Related Feesfiling for EU reclaims and Tax Fees above.advice regarding foreign capital gain tax accruals.

During the fiscal years ended September 30, 2009 and 2008,2017and September 30, 2016 no fees for other services that relate directly to the operations and financial reporting of the CompanyTrust were billed by PwC to the Company'sTrust’s investment adviser or any other entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Company.Trust.

PwC did not bill the CompanyTrust for any othernon-audit services for the fiscal years ended September 30, 20092017 and 2008September 30, 2016 for the CompanyTrust other than as disclosed above.

The Audit Committee shallpre-approve any engagement of the independent registered public accounting firm to provide any services (other than prohibitednon-audit services) including the fees and other compensation to be paid to the independent registered public accounting firm. The independent registered public accounting firm is authorized by the Audit Committee to providenon-audit services to the extent allowable under the Sarbanes-Oxley Act of 2002 for the CompanyTrust provided that (i) the fees payable with respect to such services do not exceed $5,000 in any calendar quarter and (ii) such fees are ratified by the Audit Committee at its next meeting. The fees payable with respect tonon-audit services may be increased by the affirmative vote of a majority of the members of the Audit Committee.

15

There were nopre-approval requirements waived for the audit, audit-related, tax and other services described above by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule2-01 of RegulationS-X.

Representatives of PwC are not expected to be present at the Special Meeting, but have been given the opportunity to make a statement if they so desire and will be available should any matter arise requiring their attention.

OTHER BUSINESS

The Board does not intend to present any other business at the Meeting. If, however, any other matters are properly brought before the Meeting, the persons named in the accompanying form of proxy will vote thereon in accordance with their judgment.

SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS

The CompanyTrust does not hold annual shareholder meetings. Any shareholder proposal intended to be presented at any future meeting of shareholders must be received by the Company or the Trust at its principal office a reasonable time before the solicitation of proxies for such meeting in order for such proposal to be considered for inclusion in that Proxy Statement relating to such meeting. Shareholders wishing to submit proposals for inclusion in a proxy statement for a subsequent shareholder meeting should send their written proposals to the Secretary of the Wasatch Funds 150 Social Hall Avenue, 4thTrust, 505 Wakara Way, 3^rd Floor, Salt Lake City, Utah 84111.84108.

DELIVERY OF ANNUAL REPORTS AND OTHER DOCUMENTS

Please note that only one annual or semi-annual report, or proxy statement, or Notice of Availability of Proxy Materials, as applicable, may be delivered to two or more shareholders of thea Fund who share an address, unless thesuch Fund has received instructions to the contrary. To request a separate copy of an annual or semi-annual

report, or proxy statement, or Notice of Availability of Proxy Materials, as applicable, or for instructions as to how to request a separate copy of such documents or as to how to request a single copy if multiple copies of such documents are received, shareholders should contact the applicable Fund at the following address: Wasatch Funds, P.O. Box 2172, Milwaukee, Wisconsin 53201-2172 or call800-551-1700. Pursuant to a request, a separate copy will be delivered promptly.

VOTING INFORMATION

This Proxy Statement is furnished in connection with a solicitation of proxies by the Board to be used at the Meeting. This Proxy Statement, along with a Notice of the Meeting and proxy card, is first being mailed to shareholders of the Funds on or about December 30, 2009.June 12, 2018. Only shareholders of record as of the close of business on the Record Date, December 14, 2009,May 31, 2018, will be entitled to notice of, and to vote at, the Meeting. If the enclosed form of proxy card is properly executed and returned in time to be voted at the Meeting, the proxies named therein will vote the shares represented by the proxy in accordance with the instructions marked thereon. Unmarked but properly executed proxy cards will be voted FOR the proposed Reorganization, the proposed New Advisory Agreement and the proposed New Sub-Advisory Agreementsproposal and at the discretion of the named proxies on any other matters deemed appropriate. A proxy may be revoked at any time at or b eforebefore the Meetingvote on the matter by written notice toreceived by the Secretary of the Funds, 150 Social Hall Avenue, 4thTrust, 505 Wakara Way, 3^rd Floor, Salt Lake City, Utah 84111,84108 prior to the vote on the matter, by submitting a subsequently dated proxy or by attending and voting at the Meeting.Meeting or the adjournment or

16

postponement thereof. Unless revoked, all valid and executed proxies will be voted in accordance with the specifications thereon or, in the absence of such specifications, for approval of the matters contemplated thereby.

Quorum

The holders of tenthirty percent (10%(30%) of the shares outstanding and entitled to vote on the applicable Proposalproposal at the Meeting shall constitute a quorum for purposes of voting upon a Proposalthe proposal at the Meeting.

Voting Requirement

Nominees for DirectorTrustee receiving a plurality of the votes cast in person or by proxy at the Meeting at which a quorum exists will be elected to the Board of DirectorsTrustees of the Trust in Proposalproposal 1. Proposal 5 requires the affirmative vote of the holders of a majority of the voting power of the shares of each Fund entitled to vote. Proposals 2, 3 and 4 each require the vote of the majority of a Fund's outstanding voting securities, which, for these purposes, is the vote of (1) 67% or more of the voting securities entitled to vote on the proposal that are present at the Meeting, if the holders of more than 50% of the outstanding shares are present or represented by proxy, or (2) more than 50% of the outstanding voting securities entitled to vote on the proposal, whichever is less.

EFFECT OF ABSTENTIONS AND BROKER "NON VOTES"“NON-VOTES”

Abstentions and "broker non-votes"“brokernon-votes” (i.e., shares held by brokers or nominees, typically in "street“street name,"” 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 discretionary voting power on a particular matter) will be treated as present for purposes of determining a quorum. In addition, under the rules of the New York Stock Exchange, if a broker has not received instructions from beneficial owners or persons entitled to vote and the proposal to be voted upon may "affect substantially"“affect substantially” a shareholder'sshareholder’s rights or privileges, the broker may not vote the shares as to that proposal even if it has discretionary voting power. As a result, these shares also will be treated as brokernon-votes for purposes of proposals that may "affect substantially"“affect substantially” a shareholder'sshareholder’s rights or privileges (but will not be treated as brokernon-votes for other proposals, including adjournment of the Meeting).

Abstentions and brokernon-votes will be treated as shares voted against a proposal as noted below. Treating broker non-votes as votes against a proposal can have the effect of causing shareholders who choose not to participate in the proxy vote to prevail over shareholders who cast votes or provide voting instructions to their brokers or nominees.

Accordingly, abstentions and broker non-votes will have no effect on Proposalproposal 1, for which the required vote is a plurality of the votes cast, and will effectively be a vote against Proposals 2, 3, 4 and 5 for which the required vote is a percentage of the shares outstanding and entitled to vote on the matter.cast.

PROXY SOLICITATION

Proxies are solicited primarily by mail. Additional solicitations may be made by telephone,e-mail, or other personal contact by officers or employees of the Advisor and its affiliates or by proxy soliciting firms retained by the Funds. The Advisor hasFunds have retained The Altman GroupAST Fund Solutions (the "Solicitor"“Solicitor”), to provide proxy solicitation services in connection with the Meeting at an estimated cost of $1.3 million.$441,000. In addition, the Funds may reimburse persons holding shares in their names or names of their nominees for expenses incurred in forwarding solicitation material to their beneficial owners. With respect to the costs of the proxy solicitation of the Proposals herein, the Funds will share such costs with the Advisor, up to a maximum of $200,000, which shall be allocated among the Funds pro rata based on the number of shareholder accounts.

As the Meeting date approaches, shareholders of the Funds may receive a call from a representative of the Solicitor if the Funds have not yet received their vote. Authorization to permit the Solicitor to execute proxies may be obtained by telephonic or electronically transmitted instructions from Fund shareholders. Proxies that are obtained telephonically will be recorded in accordance with the procedures set forth below. Management of the Funds believes that these procedures are reasonably designed to ensure that the identity of the shareholder casting the vote is accurately determined and that the voting instructions of the shareholder are accurately determined. In all cases where a telephonic proxy is solicited, the solicitor'ssolicitor’s representative is required to ask the shareholder for the shareholder'sshareholder’s full name, address, social security number or employer identification number, title (if the person giving the proxy is authorized to act on be halfbehalf of an entity, such as a corporation), the number of shares owned and to confirm that the shareholder has received this Proxy Statement in the mail.

17

If the shareholder information solicited agrees with the information provided to the Solicitor by the Funds, the Solicitor representative has the responsibility to explain the process, read the proposals listed on the proxy card, and ask for the shareholder'sshareholder’s instructions on each proposal. The Solicitor representative, although permitted to answer questions about the process, is not permitted to recommend to the shareholder how to vote, other than to read any recommendation set forth in this Proxy Statement. The Solicitor will record the shareholder'sshareholder’s instructions on the card. Within 72 hours, the Solicitor will send the shareholder a letter or mailgram to confirm the shareholder'sshareholder’s vote and asking the shareholder to call the Solicitor immediately if the shareholder'sshareholder’s instructions are not correctly reflected in the confirmation.

ADJOURNMENTS

If a quorum is not present at the Meeting, those present in personthe Chairman of the Board or by proxy shall adjourn to such day as they shall, by majority vote, agree upon without further notice other than an announcementhis designee presiding at the Meeting may adjourn the Meeting with respect to one or more matters. If a quorum is present with respect to such matters, the Trustee or officer of the Trust presiding at whichthe Meeting may adjourn the Meeting with respect to one or more matters when such adjournment is taken. In the event that sufficient votes to approve one or more of the proposals are not received, the persons named as proxies may propose one or more adjournments of the Meeting to permit further solicitation of proxies. Any such adjournment will require an affirmative voteapproved by the holders ofshareholders representing a majority of the voting power of the shares present and entitled to vote with respect to the matter or matters adjourned. Unless a proxy is otherwise limited in person or by proxythis regard, any shares present and entitled to vote at the Meeting.Meeting that are represented by brokernon-votes, may, at the discretion of the proxies named therein, be voted in favor of such an adjournment. The persons named as proxies will vote upon such adjournment in their discretion after consideration of the best interests of allthe shareholders. Unless otherwise specifically limited by their terms, proxies shall entitle the holder thereof to vote at any postponement or adjournment of the Meeting.

SHARE INFORMATION

The chart below lists the number of shares of the Funds that are outstanding as of the close of business on the Record Date:

18

FUND SHARES OWNED BY CERTAIN BENEFICIAL OWNERS

For a list of persons or entities that owned beneficially or of record 5% or more of the outstanding shares of a class of each of the Funds, please refer toExhibit G A.

LEGAL MATTERS

Certain legal matters concerning the Company and the Trust will be passed upon by Chapman and Cutler LLP, counsel to the Company and the Trust.