SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(b) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
TIP Funds
(Name of Registrant as Specified In Its Charter)
same
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11(1).
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0_11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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TIP FUNDS
Penn Capital Select Financial Services Fund
Dear Shareholder,
A Special Meeting of Shareholders of the Penn Capital Select Financial Services
Fund (the "Fund") of TIP Funds (the "Trust") has been scheduled for Monday,
December 11, 2000. If you are a shareholder of record as of the close of
business on November 15, 2000, you are entitled to vote at the meeting and any
adjournment of the meeting.
While you are, of course, welcome to join us at the meeting, most shareholders
cast their votes by filling out and signing the enclosed proxy card. Whether or
not you plan to attend the meeting, we need your vote. Please mark, sign, and
date the enclosed proxy card and return it promptly in the enclosed postage-paid
envelope so that the maximum number of shares may be voted.
The attached proxy statement is designed to give you information relating to the
proposal on which you are asked to vote. The proposal described in the proxy
statement relates to approving the selection of Turner Investment Partners, Inc.
("Turner") as investment adviser for the Fund and approval of a form of
investment advisory agreement between the Trust, on behalf of the Fund, and
Turner. We encourage you to support the Trustees' recommendation.
Your vote is important to us. Please do not hesitate to call 1-800-224-6312 if
you have any questions about the proposal under consideration. Thank you for
taking the time to consider this important proposal and for your investment in
the Fund.
Sincerely,
/s/ Richard Hocker /s/ Stephen J. Kneeley
Richard Hocker Stephen J. Kneeley
Chief Investment Officer President and Chief Executive Officer
Penn Capital Management Company Turner Investment Partners, Inc.
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IMPORTANT NOTICE
Although we recommend that you read the complete Proxy Statement, for your
convenience, we have provided a brief overview of the proposals.
QUESTIONS AND ANSWERS
Q. WHY AM I RECEIVING THIS PROXY STATEMENT?
A. The Board of Trustees is seeking the approval of Turner Investment Partners,
Inc. ("Turner") as the new investment adviser for the Fund and the approval
of the form of advisory agreement between the Trust and Turner on behalf of
the Fund.
Q. WHY AM I BEING ASKED TO VOTE ON THE APPROVAL OF TURNER AS INVESTMENT ADVISER
UNDER A NEW INVESTMENT ADVISORY AGREEMENT?
A. The Investment Company Act of 1940, which regulates investment companies
such as the Fund, requires shareholder approval of new investment advisers
and investment advisory agreements.
Q. HOW WILL THIS AFFECT MY ACCOUNT?
A. As the new investment adviser for the Fund, Turner will manage the assets
of the Fund in accordance with the Fund's prospectus as filed with the
Securities and Exchange Commission and as amended from time to time.
Turner will employ the same principal investment strategies in managing the
Fund as disclosed in the Prospectus and as employed by the Fund's current
investment adviser, Penn Capital Management Company ("Penn Capital").
The Trustees do not believe that the hiring of Turner will have a material
impact on the Fund in the foreseeable future. The terms of the proposed new
investment advisory agreement with Turner are substantially similar to the
terms of the Fund's current investment advisory agreement with Penn
Capital, except for the dates of execution and identity of the investment
adviser. However, as discussed in greater detail in the proxy materials,
the agreement with Turner provides for a performance-based fee.
Q. WILL MY VOTE MAKE A DIFFERENCE?
A. Yes. Your vote is needed to ensure that the proposal can be acted upon. We
encourage all shareholders to participate in the governance of their Fund.
Additionally, your immediate response on the enclosed proxy card will help
save the costs of any further solicitations.
Q. HOW DO THE TRUSTEES SUGGEST THAT I VOTE?
A. After careful consideration, the Trustees of your Fund, including the
independent Trustees who comprise a majority of the Fund's Board of
Trustees, unanimously recommended that you vote "FOR" the proposal.
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Q. WHOM DO I CALL IF I HAVE QUESTIONS?
A. We will be happy to answer your questions about this proxy solicitation.
Please call us at 1-800-224-6312 between 8:30 a.m. and 8:00 p.m., Eastern
Standard Time, Monday through Friday.
Q. WHERE DO I MAIL MY PROXY CARD?
A. You may use the enclosed postage-paid envelope to mail your proxy card.
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PENN CAPITAL SELECT FINANCIAL SERVICES FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 11, 2000
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of the Penn Capital Select Financial Services Fund (the "Fund") of
TIP Funds (the "Trust") will be held at the offices of SEI Investments Company
("SEI"), One Freedom Valley Drive, Oaks, Pennsylvania 19456, on Monday, December
11, 2000, at 3 p.m. Eastern Standard Time.
At the Meeting, shareholders of record of the Fund (the "Shareholders")
will be asked to consider and act on the following proposal:
1. To approve the selection of Turner as the investment adviser for the
Fund, and to approve the form of investment advisory agreement between the
Trust, on behalf of the Fund, and Turner.
2. Any other business properly brought before the Meeting.
All Shareholders are cordially invited to attend the Meeting. However,
if you are unable to attend the Meeting, you are requested to mark, sign and
date the enclosed Proxy Card and return it promptly in the enclosed,
postage-paid envelope so that the Meeting may be held and a maximum number of
shares may be voted.
Shareholders of record at the close of business on November 15, 2000
are entitled to notice of and to vote at the Meeting or any adjournment thereof.
By Order of the Board of Trustees
/s/ James W. Jennings
James W. Jennings, Secretary
November 29, 2000
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A SELF-
ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
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PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Trustees of TIP Funds (the "Trust") for use at the
Special Meeting of Shareholders to be held December 11, 2000 at 3 p.m. Eastern
Standard Time at the offices of SEI Investments Company ("SEI"), One Freedom
Valley Drive, Oaks, Pennsylvania 19456, and at any adjourned session thereof
(such Special Meeting and any adjournment thereof are hereinafter referred to as
the "Meeting"). Shareholders of the Penn Capital Select Financial Services Fund
(the "Fund") of record at the close of business on November 15, 2000
("Shareholders") are entitled to vote at the Meeting. As of November 15, 2000,
the Fund had 36,629.0880 units of beneficial interest ("shares") issued
and outstanding.
Each share is entitled to one vote and each fractional share is
entitled to a proportionate fractional vote on each matter as to which such
shares are to be voted at the Meeting. Approval of the Proposal requires
the affirmative vote of a majority of the outstanding securities of the Fund
entitled to vote as that term is defined in the Investment Company Act of 1940
(the "1940 Act").
In addition to the solicitation of proxies by mail, Trustees and
officers of the Trust and officers and employees of SEI, the shareholder
servicing agent for the Trust, and third parties hired for such purpose, may
solicit proxies in person or by telephone. Persons holding shares as nominees
will, upon request, be reimbursed for their reasonable expenses incurred in
sending soliciting materials to their principals. Penn Capital Management
Company ("Penn Capital") will bear the cost of the Shareholders' Meeting and
proxy materials. The proxy card and this Proxy Statement are being mailed to
Shareholders on or about November 29, 2000.
Shares represented by duly executed proxies will be voted in accordance
with the instructions given. Proxies may be revoked at any time before they are
exercised by a written revocation received by the President of the Trust at 1235
Westlakes Drive, Suite 350, Berwyn, PA 19312, by properly executing a
later-dated proxy, or by attending the Meeting and voting in person.
INTRODUCTION
The Trust is organized as a Massachusetts business trust and is not
required to hold annual meetings of Shareholders. The Meeting is being called in
order to permit the Shareholders of the Fund to consider and vote the Proposal.
Specifically, Shareholders are being asked to authorize Turner Investment
Partners, Inc. ("Turner") to act as investment adviser to the Fund, and to
approve the form of investment advisory agreement between the Trust, on behalf
of the Fund, and Turner.
1. APPROVAL OF INVESTMENT ADVISER AND THE INVESTMENT ADVISORY AGREEMENT FOR
THE FUND
The Board of Trustees recommends that Shareholders of the Fund approve
Turner as the new investment adviser to the Fund, and approve the form of
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investment advisory agreement (the "Investment Advisory Agreement") between the
Trust and Turner relating to the Fund (a copy of the agreement is attached as
Exhibit A to this Proxy Statement). The description of the Investment Advisory
Agreement in this Proxy Statement is qualified in its entirety by reference to
Exhibit A. The Trustees of the Trust, including all of the Trustees who are not
"interested persons" of the Trust as defined by Section 2(a)(19) of the 1940 Act
("Independent Trustees"), approved the Investment Advisory Agreement with
respect to the Fund at a meeting held November 17, 2000. Turner already serves
as investment adviser to twelve other funds of the Trust pursuant to an
Investment Advisory Agreement dated April 28, 1996, between Turner and the
Trust, on behalf of those funds. The Fund will change its name to the Turner
Financial Services Fund as of the date that Turner is approved by Shareholders
as the new investment adviser.
DESCRIPTION OF THE FUND. The Fund seeks to generate long term capital
appreciation. It invests primarily (and, under normal conditions, at least 65%
of its total assets), in the equity securities of companies principally engaged
in the banking industry and the financial services sector.
TERMINATION OF THE CURRENT INVESTMENT ADVISORY AGREEMENT. Penn Capital
currently serves as investment adviser to the Fund pursuant to an
investment advisory agreement dated August 14, 1997 ("Current Advisory
Agreement"). Penn Capital has served in this position since the Fund's
inception on October 20, 1997. Penn Capital had previously expressed
its interest in no longer advising the Fund, and is desirous of ensuring that
the Fund continues to receive high quality investment advice. Based upon its
understanding that Turner has been proposed as the new replacement adviser to
the Fund, Penn Capital submitted its resignation, which was accepted by the
Board at its meeting on November 17, 2000 and is subject to appropriate
shareholder approva;. At that same meeting, the Board approved Turner as
the new investment adviser, effective upon approval by Shareholders.
NEW INVESTMENT ADVISORY AGREEMENT. Other than the identity of the
investment adviser, the dates of execution and change in the amount of
investment advisory fees and how those fees are calculated, there are no other
material differences between the Investment Advisory Agreement and the Current
Advisory Agreement.
Under the Current Advisory Agreement, Penn Capital receives a
non-adjustable base investment advisory fee of 1.00%. Under the proposed
Investment Advisory Agreement, Turner's base fee is the same as that currently
payable to Penn Capital. This investment advisory fee may be adjusted, however,
based on the Fund's total return performance as compared to a benchmark, the
Lipper Financial Services Index. For purposes of this performance adjustment
mechanism, the investment performance of the Fund for any period is expressed as
a percentage of the Fund's net asset value per share at the beginning of the
period. This percentage is equal to the sum of (i) the change in the Fund's net
asset value per share during the period; (ii) the value of the Fund's cash
distributions per share having an ex-dividend date occurring within the period;
and (iii) the per share amount of capital gains taxes paid or accrued during the
period by the Fund for undistributed realized long-term capital gains. The
investment record for a specific index is expressed as a percentage of the
starting level of that index at the beginning of the period, as modified by the
change in the level of the index during the period and by the value computed
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consistently with the index, of cash distributions having an ex-dividend date
occurring within the period made by issuers whose securities are included in the
index.
Set forth below in chart form is important information regarding the impact on
Fund expenses of the proposal to engage Turner as the Fund's investment adviser.
This table sets forth the advisory fees payable to Turner under the
Investment Advisory Agreement:
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FUND NAME ADVISORY FEE
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LOW BASE HIGH
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Penn Capital Select Financial Services Fund 0.75%* 1.00% 1.25%**
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*Fund underperforms benchmark by 3%
**Fund outperforms benchmark by 3%
The table below sets forth information about the current and proposed
expense levels of the Fund:
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Current Fees Proposed Fees
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Investment Advisory Fees 1.00%* 1.00%**
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Distribution Fees None None
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Other Expenses 13.54% 13.54%
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Total Fund Operating Expenses 14.54% 14.54%
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Fee waivers and expense reimbursements 13.14% 13.14%
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Net Total Operating Expenses 1.40% 1.40%**
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*Does not include performance adjustment.
**Subject to performance adjustment.
Penn Capital had contractually agreed to waive fees and to reimburse
expenses in order to keep total operating expenses from exceeding 1.40% in the
first year, and 2.40% in the subsequent year. Turner has similarly
contractually agreed to waive fees and reimburse expenses to maintain
expenses at 1.40% in the first year and 2.40% in the subsequent year,
provided that this ceiling will be increased by 0.25% in the event that Turner
is entitled to a performance fee and decreased in the amount of 0.25% in the
event that the Fund underperforms its benchmark by more than 3%. This
performance fee will not be implemented until twelve months after Turner begins
advising the Fund. The waiver agreement shall be renewable at the end of each
one year period for an additional one year period upon the written agreement of
the Trust and Turner.
REDEMPTION FEE. The Fund may charge a redemption fee, payable at a rate
of 2% as a percentage of amount redeemed, on redemptions made within 90 days of
purchase. Currently, the Fund does not intend to charge a redemption fee, but
will notify all shareholders prior to implementing such a fee.
The following examples for the current fees and proposed fees are
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. Although your actual costs and returns might be
different, your approximate costs of investing $10,000 in the Fund would be:*
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Current Fees Proposed Fees
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One Year $ 143 $143
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Three Years $ 443 $653
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Five Years $ 766 $1,190
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Ten Years $ 1,680 $2,660
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*The example above assumes that you invest $10,000 in the Fund for the time
periods indicated and that you sell your shares at the end of the period. The
examples also assume that each year your investment has a 5% return, and
you reinvest all dividends and distributions. Fund operating expenses reflect
the 1.40 ceiling fee waiver and expense reimburement in the first year and the
2.40 ceiling fee waiver and expense reimbursement in the second year. The
example does not reflect any redemption fees.If such fees were included, your
costs would be higher.
COMPENSATION. As Turner did not previously serve as investment advisor
to the Fund, the aggregate investment advisory fee paid to Turner during the
last fiscal year was $0. For the fiscal year year ended September 30, 2000, the
Fund paid Penn Capital advisory fees of $O (NET OF $3,276 in fees and $126,661
in expenses reimbursed). If the proposed fee had been in place, the Fund would
have paid advisory fees of $0 (net of $4,095 in fees waived and $126,661 in
expenses reimbursed) for the fiscal year ended September 30, 2000, a difference
of $0 (net of an additional $819 before fee waivers and expense reimburement)
from the advisory fee paid to Penn Capital for the same period. This represents
a 0.63 increase in advisory fees.
DUTIES UNDER THE PROPOSED INVESTMENT ADVISORY AGREEMENT. Under the
Investment Advisory Agreement, Turner will make the investment decisions for the
assets of the Fund and continuously review, supervise, and administer the Fund's
investment program with respect to these assets.
Turner will discharge its responsibilities subject to the supervision
of the Trustees of the Trust and in a manner consistent with the Fund's
investment objective, policies and limitations. The Investment Advisory
Agreement provides that Turner shall not be liable for any error of judgement or
mistake of law or for any loss arising out of any investment or for any act or
omission in carrying out its duties thereunder, except a loss resulting from
willful misfeasance, bad faith, or gross negligence in the performance of its
duties, or by reason of reckless disregard by Turner of its obligations or
duties thereunder.
DURATION AND TERMINATION. Unless terminated earlier, the Investment
Advisory Agreement shall continue in effect as to the Fund until December 11,
2002, and thereafter, for periods of one year for so long as such continuance is
specifically approved with respect to the Fund at least annually (i) by the vote
of the holders of a majority of the outstanding shares of the Fund or by the
Trustees of the Trust, and (ii) by the vote of a majority of Interested
Trustees, cast in person at a meeting called for the purpose of voting on such
approval. The Investment Advisory Agreement will terminate automatically in the
event of its assignment. It is terminable at any time without penalty by the
Trustees of the Trust or with respect to the Fund by a vote of a majority of the
outstanding shares of the Fund on not less than 30 days' nor more than 60 days'
written notice to Turner. In addition, it is terminable by Turner upon 90 days'
written notice to the Trust.
DESCRIPTION OF THE INVESTMENT ADVISER. Turner is a professional
investment management firm founded in March, 1990. Robert E. Turner is the
Chairman and controlling shareholder of Turner. As of September 30, 2000, Turner
had discretionary management authority with respect to approximately $12 billion
of assets. Turner has provided investment advisory services to investment
companies since 1992.
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Listed below are the names and principal occupations of each of the
directors and the principal executive officers of Turner. The principal business
address of each director and the principal executive officers, as it relates to
their duties at Turner, is 1235 Westlakes Drive, Suite 350, Berwyn, PA 19312.
NAME TITLE
Robert E. Turner Chairman and Chief Investment Officer
Stephen J. Kneeley President and Chief Operating Officer
Janet Rader Rote Director of Compliance
Thomas R. Trala Treasurer
Mark D. Turner Vice Chairman, Senior Portfolio Manager
TRUSTEES' CONSIDERATION. At a meeting held on November 17, 2000, the
Board of Trustees reviewed Turner's qualifications to act as investment adviser
for the Fund, placing particular emphasis on its performance as investment
adviser for other funds of the Trust and its track record/investment personnel
with experience in the financial services arena. In recommending that the
Shareholders approve the Investment Advisory Agreement, the Trustees carefully
evaluated the experience of Turner's key personnel and the quality of services
Turner is expected to provide to the Fund, including, but not limited to: (1)
the nature and quality of the services expected to be rendered to the Fund by
Turner; (2) the distinct investment objective and policies of the Fund; (3) the
history, reputation, qualification and background of Turner as well as the
qualifications of its personnel and its financial condition; (4) its overall
performance record; and (5) other factors deemed relevant.
In the event Shareholders of the Fund do not approve the selection of
Turner as investment adviser and the Investment Advisory Agreement between the
Trust, on behalf of the Fund and Turner, at the Meeting to which this
Proxy Statement relates, or any adjournment thereof, the Trustees will
consider an appropriate course of action.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL.
GENERAL INFORMATION ABOUT THE TRUST AND OTHER MATTERS
TRUSTEES AND OFFICERS. Information is set forth below about the Trust's
current Trustees and principal executive officers, including their names,
positions with the Trust, and association with Turner.
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NAME POSITION WITH THE FUND
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Robert E. Turner Chairman of the Board of Trustees
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Janet F. Sansone Trustee
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Michael E. Jones Trustee
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Richard Hocker Trustee
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Dr. John Wholihan Trustee
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Alfred Salvato Trustee
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Stephen J. Kneeley President
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Robert DellaCroce Controller and Chief Accounting Officer
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Janet Rader Rote Vice President & Assistant Secretary
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Todd B. Cipperman Vice President & Assistant Secretary
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Lydia A. Gavalis Vice President & Assistant Secretary
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William E. Zitelli, Jr. Vice President & Assistant Secretary
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Timothy D. Barto Vice President & Assistant Secretary
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Christine M. McCullough Vice President & Assistant Secretary
Toni Neff Vice President & Assistant Secretary
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Brian Ferko Vice President & Assistant Secretary
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James W. Jennings Secretary
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DISTRIBUTION. SEI Investments Distribution Co. ("SIDCO."), Oaks,
Pennsylvania 19456, a wholly-owned subsidiary of SEI, acts as the distributor
of the Trust's shares pursuant to the Distribution Agreement dated April 28,
1996 between the Trust and SIDCO.
FUND TRANSACTIONS. For the Fund's fiscal year ended September 30,
2000, the Fund did not pay commissions to any affiliated broker.
5% SHAREHOLDERS. As of September 30, 2000, the following persons were
the only persons who were record owners or, to the knowledge of the Trust, were
beneficial owners of 5% or more of shares of the Fund. The Trust believes that
most of the shares referred to above were held by the below persons in accounts
for their fiduciary, agency, or custodial customers.
NAME AND ADDRESS OF SHAREHOLDER NUMBER OF SHARES PERCENT OF FUND
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The Trust's Trustees and officers own less than 1% of the shares of the
Trust.
ADJOURNMENT. In the event that sufficient votes in favor of the
Proposal set forth in the Notice of the Special Meeting are not received by the
time scheduled for the Meeting, the persons named as proxies may propose one or
more adjournments of the Meeting for a period or periods of not more than 60
days in the aggregate to permit further solicitation of proxies with respect to
the Proposal. Any such adjournment will require the affirmative vote of a
majority of the votes cast on the question at the session of the Meeting to be
adjourned. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of the Proposal. They
will vote against any such adjournment those proxies required to be voted
against the Proposal. The costs of any such additional solicitation and of any
adjourned session will be borne by Penn Capital.
REQUIRED VOTE. Each share of beneficial interest of the Fund is
entitled to one vote, and a proportionate fractional vote for each fractional
share held. Approval of the Proposal with respect to the Fund requires the
affirmative vote of a majority of the outstanding voting securities of the Fund,
entitled to vote as that term is defined in the 1940 Act. Any shareholder
given a proxy may revoke it at any time before it is exercised by
submitting to the Trust a specific written notice of revocation.
Abstentions and "broker non-votes" will not be counted for or against
any Proposal to which they relate, but will be counted for purposes of
determining whether a quorum is present. Abstentions will be counted as votes
present for purposes of determining a "majority of the outstanding voting
securities" present at the Meeting and will therefore have the effect of
counting against the Proposal to which they relate.
SHAREHOLDER PROPOSALS. The Trust does not hold annual Shareholder
Meetings. Shareholders wishing to submit proposals for inclusion in a proxy
statement for a subsequent meeting should send their written proposals to the
Secretary of the Trust c/o Turner Investment Partners, Inc., 1235 Westlakes
Drive, Suite 350, Berwyn, PA 19312.
REPORTS TO SHAREHOLDERS. The Trust will furnish, without charge, a copy
of the most recent Annual Report to Shareholders of the Trust and the most
recent Semi-Annual Report succeeding such Annual Report, if any, upon request.
Requests should be directed to the Trust at 1235 Westlakes Drive, Suite 350,
Berwyn, PA 19312, or by calling 1-800-224-6312.
OTHER MATTERS. The Trustees know of no other business to be brought
before the Meeting. However, if any other matters properly come before the
Meeting, it is their intention that proxies which do not contain specific
restrictions to the contrary will be voted on such matters in accordance with
the judgment of the persons named in the enclosed form of proxy.
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SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
CARD AND RETURN IT PROMPTLY.
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EXHIBIT A
FORM OF INVESTMENT ADVISORY AGREEMENT
TIP FUNDS
AGREEMENT made this _____ day of _____, 2000, by and between TIP Funds,
a Massachusetts business trust (the "Trust"), and Turner Investment Partners,
Inc. (the "Adviser").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended; and
WHEREAS, the Trust has retained SEI Fund Resources (the
"Administrator") to provide administration of the Trust's operations, subject to
the control of the Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to the Penn Capital Select Financial Services
Fund (the "Fund") and such other portfolios as the Trust and the Adviser may
agree upon (each a "Fund") and as are set forth in the attached schedule, and
the Adviser is willing to render such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained,
the parties hereto agree as follows:
1. DUTIES OF ADVISER. The Trust employs the Adviser to manage the
investment and reinvestment of the assets of the Fund, and to
continuously review, supervise and (where appropriate)
administer the investment program of each Fund, to determine
in its discretion (where appropriate) the securities to be
purchased or sold, to provide the Administrator and the Trust
with records concerning the Adviser's activities which the
Trust is required to maintain, and to render regular reports
to the Administrator and to the Trust's officers and Trustees
concerning the Adviser's discharge of the foregoing
responsibilities. The retention of a sub-adviser by the
Adviser shall not relieve the Adviser of its responsibilities
under this Agreement.
The Adviser shall discharge the foregoing responsibilities
subject to the control of the Board of Trustees of the Trust
and in compliance with such policies as the Trustees may from
time to time establish, and in compliance with the objectives,
policies, and limitations for each such Portfolio set forth in
the Portfolio's prospectus and statement of additional
information as amended from time to time, and applicable laws
and regulations.
The Adviser accepts such employment and agrees, at its own
expense, to render the services and to provide the office
space, furnishings and equipment and the personnel (including
any sub-advisers) required by it to perform the services on
the terms and for the compensation provided herein. The
Adviser will not, however, pay for the cost of securities,
commodities, and other investments (including brokerage
commissions and other transaction charges, if any) purchased
or sold for the Trust.
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2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select
the brokers or dealers that will execute the purchases and
sales of portfolio securities for the Portfolios and is
directed to use its best efforts to obtain the best net
results as described from time to time in the Portfolios'
Prospectuses and Statement of Additional Information. The
Adviser will promptly communicate to the Administrator and to
the officers and the Trustees of the Trust such information
relating to portfolio transactions as they may reasonably
request.
It is understood that the Adviser will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the
Trust or be in breach of any obligation owing to the Trust
under this Agreement, or otherwise, by reason of its having
directed a securities transaction on behalf of the Trust to a
broker-dealer in compliance with the provisions of Section
28(e) of the Securities Exchange Act of 1934 or as described
from time to time by the Portfolios' Prospectuses and
Statement of Additional Information.
3. COMPENSATION OF THE ADVISER. For the services to be rendered
by the Adviser as provided in Sections 1 and 2 of this
Agreement, the Trust shall pay to the Adviser compensation at
the rate specified in the Schedule(s) which are attached
hereto and made a part of this Agreement. Such compensation
shall be paid to the Adviser at the end of each month, and
calculated by applying a daily rate, based on the annual
percentage rates as specified in the attached Schedule(s), to
the assets. The fee shall be based on the average daily net
assets for the month involved. The Adviser may, in its
discretion and from time to time, waive a portion of its fee.
All rights of compensation under this Agreement for services
performed as of the termination date shall survive the
termination of this Agreement.
4. OTHER EXPENSES. The Adviser shall pay all expenses of printing
and mailing reports, prospectuses, statements of additional
information, and sales literature relating to the solicitation
of prospective clients. The Trust shall pay all expenses
relating to mailing to existing shareholders prospectuses,
statements of additional information, proxy solicitation
material and shareholder reports.
5. EXCESS EXPENSES. If the expenses for any Portfolio for any
fiscal year (including fees and other amounts payable to the
Adviser, but excluding interest, taxes, brokerage costs,
litigation, and other extraordinary costs) as calculated every
business day would exceed the expense limitations imposed on
investment companies by any applicable statute or regulatory
authority of any jurisdiction in which shares of a Portfolio
are qualified for offer and sale, the Adviser shall bear such
excess cost.
However, the Adviser will not bear expenses of any Portfolio
which would result in the Portfolio's inability to qualify as
a regulated investment company under provisions of the
Internal Revenue Code. Payment of expenses by the Adviser
pursuant to this Section 5 shall be settled on a monthly basis
(subject to fiscal year end reconciliation) by a reduction in
the fee payable to the Adviser for such month pursuant to
Section 3(a) or 3(b) and, if such reduction shall be
insufficient to offset such expenses, by reimbursing the
Trust.
6. REPORTS. The Trust and the Adviser agree to furnish to each
other, if applicable, current prospectuses, proxy statements,
reports to shareholders, certified copies of their financial
statements, and such other information with regard to their
affairs as each may reasonably request.
12
<PAGE>
7. STATUS OF ADVISER. The services of the Adviser to the Trust
are not to be deemed exclusive, and the Adviser shall be free
to render similar services to others so long as its services
to the Trust are not impaired thereby. The Adviser shall be
deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority
to act for or represent the Trust in any way or otherwise be
deemed an agent of the Trust.
8. CERTAIN RECORDS. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule
31a-2 promulgated under the Investment Company Act of 1940
which are prepared or maintained by the Adviser on behalf of
the Trust are the property of the Trust and will be
surrendered promptly to the Trust on request.
9. LIMITATION OF LIABILITY OF ADVISER. The duties of the
Adviser shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be
asserted against the Adviser hereunder. The Adviser shall
not be liable for any error of judgment or mistake of law or
for any loss arising out of any investment or for any
act or omission in carrying out its duties hereunder, except
a loss resulting from willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by
reason of reckless disregard of its obligations and duties
hereunder, except as may otherwise be provided under
provisions of applicable state law or Federal securities law
which cannot be waived or modified hereby. (As used in
this Paragraph 9, the term "Adviser" shall include
directors, officers, employees and other corporate agents of
the Adviser as well as that corporation itself).
10. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of
the Trust are or may be interested in the Adviser (or any
successor thereof) as directors, partners, officers, or
shareholders, or otherwise; directors, partners, officers,
agents, and shareholders of the Adviser are or may be
interested in the Trust as Trustees, shareholders or
otherwise; and the Adviser (or any successor) is or may be
interested in the Trust as a shareholder or otherwise. In
addition, brokerage transactions for the Trust may be effected
through affiliates of the Adviser if approved by the Board of
Trustees, subject to the rules and regulations of the
Securities and Exchange Commission.
11. LICENSE OF ADVISER'S NAME. The Adviser hereby agrees to grant
a license to the Trust for use of its name in the names of the
Portfolios for the term of this Agreement and such license
shall terminate upon termination of this Agreement.
12. DURATION AND TERMINATION. This Agreement, unless sooner
terminated as provided herein, shall remain in effect until
two years from date of execution, and thereafter, for
periods of one year so long as such continuance thereafter is
specifically approved at least annually (a) by the vote of
a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Trustees
of the Trust or by vote of a majority of the outstanding
voting securities of each Portfolio; provided, however,
that if the shareholders of any Portfolio fail to approve
the Agreement as provided herein, the Adviser may
continue to serve hereunder in the manner and to the extent
permitted by the Investment Company Act of 1940 and rules
and regulations thereunder. The foregoing requirement
that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder.
This Agreement may be terminated as to any Portfolio at any
time, without the payment of any penalty by vote of a majority
of the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Portfolio on not less
than 30 days nor more than 60 days written notice to the
Adviser, or by the Adviser at any time without the payment of
any penalty, on 90 days written notice to the Trust. This
Agreement will automatically and immediately terminate in the
event of its assignment. Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed
postpaid, to the other party at any office of such party.
As used in this Section 12, the terms "assignment",
"interested persons", and a "vote of a majority of the
outstanding voting securities" shall have the respective
meanings set forth in the Investment Company Act of 1940 and
the rules and regulations thereunder; subject to such
exemptions as may be granted by the Securities and Exchange
Commission under said Act.
13. NOTICE. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by
registered or certified mail, postage prepaid, addressed by
the party giving notice to the other party at the last address
furnished by the other party to the party giving notice: if to
the Trust, at One Freedom Valley Drive, Oaks, PA 19456, and if
to the Adviser at 1235 Westlakes Drive, Suite 350, Berwyn, PA
19312.
14. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
15. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts and the
applicable provisions of the 1940 Act. To the extent that the
applicable laws of the Commonwealth of Massachusetts, or any
of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
A copy of the Declaration of Trust of the Trust is on file with the Secretary of
the Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as Trustees, and
are not binding upon any of the Trustees, officers, or shareholders of the Trust
individually but binding only upon the assets and property of the Trust.
Further, the obligations of the Trust with respect to any one Portfolio shall
not be binding upon any other Portfolio.
13
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
TIP FUNDS, ON BEHALF OF THE FINANCIAL SERVICES FUND
By: -----------------------
Attest:--------------------
TURNER INVESTMENT PARTNERS, INC.
By: -----------------------
Attest:--------------------
<PAGE>
SCHEDULE A DATED ________, 2000
TO THE
INVESTMENT ADVISORY AGREEMENT
DATED _______, 2000
BETWEEN
TIP FUNDS
AND
TURNER INVESTMENT PARTNERS, INC.
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:
PORTFOLIO FEE (IN BASIS POINTS)
Financial Services Fund 1.00% of the average daily net assets*
*The advisory fee is subject to a performance adjustment based on the Fund's
performance relative to the performance of such Fund's comparative index.
<PAGE>
TIP FUNDS
PENN CAPITAL SELECT FINANCIAL SERVICES FUND
SPECIAL MEETING OF THE SHAREHOLDERS
PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR
THE SPECIAL MEETING OF SHAREHOLDERS, DECEMBER 11, 2000
The undersigned, revoking previous proxies with respect to the Shares (defined
below), hereby appoints Todd Cipperman and William E. Zitelli, Jr., as proxies
and each of them singly, each with full power of substitution, to vote at the
Special Meeting of Shareholders of the Penn Capital Select Financial Services
Fund (the "Fund") of TIP Funds (the "Trust") to be held in the offices of SEI
Investments Company ("SEI Investments"), Oaks, Pennsylvania 19456, on Monday,
December 11, 2000, at 3 p.m. Eastern Standard Time, and any adjournments or
postponements thereof (the "Meeting") all shares of beneficial interest of said
Trust that the undersigned would be entitled to vote if personally present at
the Meeting ("Shares") on the proposal set forth below, and in accordance with
their own discretion, any other matters properly brought before the Meeting.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE PROPOSAL TO:
PROPOSAL 1 Approval of Turner Investment Partners, Inc. ("Turner") as
investment adviser to the Fund, and approval of the form of
advisory agreement between the Trust and Turner, on behalf of
the Fund.
______ For ______ Against ______ Abstain
THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED AS DIRECTED HEREIN BY THE
SIGNING SHAREHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS
RETURNED, THIS PROXY WILL BE VOTED FOR THE FOREGOING PROPOSAL AND WILL BE VOTED
IN THE APPOINTED PROXIES' DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
The undersigned acknowledges receipt with this Proxy of a copy of the Notice of
Special Meeting and the Proxy Statement of the Board of Trustees. Your
signature(s) on this Proxy should be exactly as your name(s) appear on this
Proxy. If the shares are held jointly, each holder should sign this Proxy.
Attorneys-in-fact, executors, administrators, trustees or guardians should
indicate the full title and capacity in which they are signing.
Dated:_______ , 2000
--------------------------------
Signature of Shareholder
--------------------------------
Signature (Joint owners)
PLEASE DATE, SIGN AND RETURN PROMPTLY USING THE ENCLOSED, POSTAGE-PAID ENVELOPE
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING; YOU MAY, NEVERTHELESS, VOTE IN
PERSON IF YOU DO ATTEND.
