SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use
of the Commission Only
(as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Section 240.14a-11(c) or Section
240.14a-12
MERRIMAC MASTER PORTFOLIO
AND MERRIMAC SERIES
(Name of Registrant/s as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- ------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- ------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- ------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ------------------------------------------------------------------------------
(5) Total fee paid:
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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:
- ------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
MERRIMAC TREASURY SERIES
(A SERIES OF MERRIMAC SERIES)
200 CLARENDON STREET
BOSTON, MASSACHUSETTS
02116
TO THE SHAREHOLDERS OF:
MERRIMAC TREASURY SERIES
Dear Shareholder:
The attached Proxy Statement from Merrimac Series discusses a proposal
that is being submitted to shareholders of the Merrimac Treasury Series (the
"Fund"). A Shareholder Meeting has been called for Friday, December 18, 1998,
to consider the proposal. As a shareholder in the Fund, we ask you to
review the Proxy Statement and cast your vote on the proposal. The Board of
Trustees of Merrimac Series has recommended that shareholders approve the
proposal.
The proposal affecting the Fund seeks approval of an investment
sub-advisory agreement between Investors Bank & Trust Company (the "Adviser")
and M&I Investment Management Corp. with respect to the assets of Merrimac
Treasury Portfolio, a series of the Merrimac Master Portfolio. The proposal is
discussed in greater detail in the attached Proxy Statement. We encourage you
to review the Proxy Statement and cast your vote at your earliest convenience.
Your vote is important. You do not need to be physically present at the
----------------------
meeting, but you should complete and sign the enclosed voting instruction/proxy
and return it promptly in the enclosed envelope. Every vote counts. We urge
you to complete and return your proxy card as soon as possible to avoid
adjournment of the Shareholder Meeting.
We look forward to receiving your votes in favor of the proposal.
Thank you for your support.
Sincerely,
/s/Paul J. Jasinski
Paul J. Jasinski
Treasurer
Merrimac Series
MERRIMAC TREASURY SERIES
(A SERIES OF MERRIMAC SERIES)
200 CLARENDON STREET
BOSTON, MASSACHUSETTS
02116
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD FRIDAY, DECEMBER 18, 1998
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of the Merrimac Treasury Series ("Treasury Series"), a series of
Merrimac Series (the "Series"), will be held at the Sheraton Tara Hotel, Spit
Brook Road, Nashua, New Hampshire, on Friday, December 18, 1998, at 10 a.m.,
Eastern Standard Time. At the Meeting Shareholders of the Treasury Series will
be asked to consider and vote upon the following proposal:
TO APPROVE OR DISAPPROVE A PROPOSAL TO ADOPT AN INVESTMENT SUB-ADVISORY
AGREEMENT, DATED AS OF JANUARY 4, 1999, BETWEEN INVESTORS BANK & TRUST
COMPANY ("INVESTORS BANK," OR THE "ADVISER") AND M&I INVESTMENT MANAGEMENT
CORP. ("M&I," OR THE "SUB-ADVISER") WITH RESPECT TO THE ASSETS OF MERRIMAC
TREASURY PORTFOLIO (THE "TREASURY PORTFOLIO"), A SERIES OF THE MERRIMAC
MASTER PORTFOLIO (THE "MASTER PORTFOLIO").
The Board of Trustees of the Series has fixed the close of business on
Monday, November 2, 1998, as the record date for the determination of
Shareholders entitled to notice of and to vote at the Meeting.
By Order of the Board of Trustees of the Series
Susan C. Mosher
Secretary
November 20, 1998
Boston, Massachusetts
YOUR VOTE IS IMPORTANT. YOU DO NOT NEED TO BE PHYSICALLY PRESENT AT THE
MEETING, BUT YOU SHOULD COMPLETE AND SIGN THE ENCLOSED VOTING INSTRUCTION/PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF
MAILED IN THE CONTINENTAL UNITED STATES. IF YOU DESIRE TO VOTE IN PERSON AT
THE MEETING, YOU MAY REVOKE YOUR VOTING INSTRUCTION/PROXY AT ANY TIME PRIOR TO
THE MEETING.
MERRIMAC TREASURY SERIES
(A SERIES OF MERRIMAC SERIES)
200 CLARENDON STREET
BOSTON, MASSACHUSETTS
02116
PROXY STATEMENT
This Proxy Statement is furnished by Merrimac Series (the "Series") to the
shareholders of its Merrimac Treasury Series (respectively, "Treasury Series
Shareholders" and "Treasury Series"), on behalf of the Board of Trustees of the
Series. This Proxy Statement is being provided to you in connection with the
Series' solicitation of the accompanying proxy, to be voted at a Special
Meeting of Treasury Series Shareholders (the "Meeting") to be held on Friday,
December 18, 1998 at 10 a.m., Eastern Standard Time, at the Sheraton Tara
Hotel, Spit Brook Road, Nashua, New Hampshire, for the purpose set forth below
and in the accompanying Notice of Special Meeting. This Proxy Statement is
being mailed to Treasury Series Shareholders on or about November 20, 1998. At
the Meeting, Shareholders will be asked to consider and vote upon the following
proposal:
TO APPROVE OR DISAPPROVE A PROPOSAL TO ADOPT AN INVESTMENT SUB-ADVISER
AGREEMENT, TO BE DATED AS OF JANUARY 4, 1999, BETWEEN INVESTORS BANK &
TRUST COMPANY ("INVESTORS BANK," OR THE "ADVISER") AND M&I INVESTMENT
MANAGEMENT CORP. ("M&I," OR THE "SUB-ADVISER") WITH RESPECT TO THE ASSETS
OF MERRIMAC TREASURY PORTFOLIO (THE "TREASURY PORTFOLIO"), A SERIES OF THE
MERRIMAC MASTER PORTFOLIO (THE "MASTER PORTFOLIO").
CERTAIN VOTING MATTERS
The Treasury Series is the sole shareholder of the Treasury Portfolio, a
series of the Master Portfolio, which has requested that shareholders take
action to approve an investment sub-adviser agreement for the Treasury
Portfolio. The Series has previously agreed with the Master Portfolio that all
actions requiring a vote of the Treasury Series, as a shareholder of the
Treasury Portfolio, will be taken in accordance with instructions received from
the underlying shareholders of the Treasury Series. For this reason, the
meeting of the shareholders of the Treasury Series has been called to vote on
the proposal described in this Proxy Statement.
Immediately following the Meeting, a separate meeting ("the Treasury
Portfolio Shareholder Meeting") of the shareholders of the Treasury Portfolio
will be held to consider and vote on the proposal described in this Proxy
Statement. This Proxy Statement also serves as the Proxy Statement for the
Treasury Portfolio Shareholder Meeting. With respect to the proposal, the
entire interest that the Treasury Series holds in the Treasury Portfolio will
be voted at the Treasury Portfolio Shareholder Meeting in direct proportion to
the votes cast by Treasury Series Shareholders for and against such proposal at
the Meeting. Shares not voted by Treasury Series Shareholders at the Meeting
will be voted at the Treasury Portfolio Shareholder Meeting in direct
1
proportion to the votes cast by Treasury Series Shareholders for and against
such proposal at the Meeting.
Only Treasury Series Shareholders of record at the close of business on
Monday, November 2, 1998, (the "Record Date"), will be entitled to vote at the
Meeting. As of the Record Date there were 83,125,905 shares of the Treasury
Series outstanding. Each share of a fund is entitled to one vote and each
fractional share is entitled to a proportionate share of one vote.
The persons named in the accompanying proxy will vote as directed by the
proxy, but in the absence of voting directions, any proxy that is signed and
returned will be voted FOR the proposal. With respect to any other matters
(none of which are now known to the Board of Trustees) that may be presented at
the Meeting, all proxies will be voted in the discretion of the persons
appointed as proxies.
A Shareholder may revoke the accompanying proxy at any time prior to its
use by filing with the Secretary of the Series a written revocation or a duly
executed proxy bearing a later date. The proxy will not be voted if the
Shareholder is present at the Meeting and elects to vote in person. Attendance
---
at the Meeting will not, by itself, serve to revoke the proxy.
Under the Master Trust Agreement of the Series, the presence in person or
by proxy of the holders of record of thirty percent of the shares issued and
outstanding and entitled to vote constitutes a quorum for the transaction of
business at a shareholders' meeting. If a Shareholder abstains, the shares
represented will be counted as present and entitled to vote on the matter for
purposes of determining a quorum at the Meeting, but the abstention will have
the effect of a negative vote on the proposal. If a broker indicates on the
form of proxy that it does not have discretionary authority as to certain
shares, those shares will be counted as present at the Meeting for quorum
purposes but not entitled to vote with respect to the proposal and thus will
also have the effect of a negative vote on the proposal.
As of the Record Date, the Treasury Series owns 100% of the outstanding
voting securities of the Treasury Portfolio.
The principal solicitation of proxies will be by mail, but proxies may
also be solicited by telephone, telegraph and personal contact by Trustees,
officers and employees of the Series. Certain costs associated with the
preparation, filing and distribution of this Proxy Statement, the solicitation
and the Meeting will be borne by the Treasury Series.
2
NEW INVESTMENT SUB-ADVISER AGREEMENT
BACKGROUND
As discussed in the Series' Prospectus, the Treasury Series is a feeder
fund within a two-tier structure, commonly referred to as a master/feeder
mutual fund structure. A fund in a master/feeder structure, unlike other
mutual funds which directly acquire and manage their own portfolio of
securities, seeks to achieve its investment objective by investing all of its
investable assets in a related portfolio. As a feeder fund in a master/feeder
structure, the Treasury Series seeks to achieve its investment objective by
investing all of its investable assets in the Treasury Portfolio.
The Treasury Series is a separate series of Merrimac Series. Merrimac
Series is a Delaware business trust and is registered as an open end management
investment company. The Treasury Portfolio is a separate series of Merrimac
Master Portfolio, a New York common law trust registered as an open-end
diversified management investment company (the "Master Portfolio"). Investors
Bank serves as the Master Portfolio's investment adviser with respect to the
Treasury Portfolio. The address of the Adviser is 200 Clarendon Street, Boston,
Massachusetts 02116. The Adviser, in its capacity as the Master Portfolio's
investment adviser, has engaged an investment sub-adviser to manage the
Treasury Portfolio. Currently, Aeltus Investment Management, Inc. ("Aeltus")
serves as investment sub-adviser for the Treasury Portfolio under an investment
sub-adviser agreement among and between Aeltus, Investors Bank and the Master
Portfolio, dated February 24, 1997 (the "Current Investment Sub-Adviser
Agreement").
At a meeting held on October 26, 1998, the Board of Trustees of the Master
Portfolio voted to terminate the Current Investment Sub-Adviser Agreement and
to appoint M&I investment sub-adviser under a new investment sub-adviser
agreement. The terms of the new investment sub-adviser agreement with M&I (the
"New Investment Sub-Adviser Agreement"), to become effective as of January 4,
1999, or as soon thereafter as Shareholder approval is obtained, are, except as
described herein, the same as the terms of the Current Investment Sub-Adviser
Agreement.
As a result of the requirements of the Investment Company Act of 1940, as
amended (the "1940 Act"), shareholder approval is required prior to the
effectiveness of the New Investment Sub-Adviser Agreement with M&I.
At the Meeting, Treasury Series Shareholders are being asked to approve the
New Investment Sub-Adviser Agreement between the Adviser and M&I. The New
Investment Sub-Adviser Agreement is substantially the same as the Current
Investment Sub-Adviser Agreement. A copy of the New Investment Sub-Adviser
Agreement is set forth in Exhibit A to this Proxy Statement.
Under the investment adviser agreement between the Master Portfolio (on
behalf of the Treasury Portfolio) and the Adviser, the Adviser may select,
subject to the review and approval of
3
the Master Portfolio's Board of Trustees, a portfolio advisor or portfolio
advisors to manage the investments of the Treasury Portfolio. For information
regarding M&I that the Board of Trustees considered in making this selection,
see "Information about M&I" below.
CURRENT INVESTMENT SUB-ADVISER AGREEMENT
Aeltus serves as investment sub-adviser for the assets of the Treasury
Portfolio under the Current Investment Sub-Adviser Agreement. The Current
Investment Sub-Adviser Agreement was approved by the initial shareholder of
the Treasury Portfolio on April 3, 1997. Aeltus will resign as investment
sub-adviser to the Treasury Portfolio, and the Current Investment Sub-Adviser
Agreement will terminate, effective as of the close of business on December 31,
1998, or such later date as the New Investment Sub-Adviser Agreement is
approved by Treasury Series Shareholders.
Under the Current Investment Sub-Adviser Agreement, Aeltus receives from
the Adviser an annual fee for its services equal to 0.08% of the average daily
net assets of the Treasury Portfolio. At September 30, 1998, net assets of the
Treasury Portfolio were $63,952,453. For the fiscal year ended December 31,
1997, the Adviser paid fees of $37,201 to Aeltus for its services under the
Current Investment Sub-Adviser Agreement.
NEW INVESTMENT SUB-ADVISER AGREEMENT
The New Investment Sub-Adviser Agreement was approved by the Trustees of
the Series, including the Trustees who were not "interested persons," on
October 26, 1998. The terms of the New Investment Sub-Adviser Agreement are
identical in all material respects to those of the Current Investment
Sub-Adviser Agreement.
Under the New Investment Sub-Adviser Agreement, M&I will manage the
investment and reinvestment of the assets of the Treasury Portfolio, subject to
and in accordance with the investment objectives, policies and restrictions of
the Treasury Portfolio and any directions which the Adviser or the Master
Portfolio's Board of Trustees may give from time to time with respect to the
Treasury Portfolio. In this regard, M&I will make all determinations with
respect to the investment of the Treasury Portfolio's assets and the purchase
and sale of portfolio securities. M&I will render regular reports to the Master
Portfolio's Board of Trustees and to the Adviser.
The New Investment Sub-Adviser Agreement states that M&I will seek best
execution when selecting brokers or dealers and placing orders with such
brokers or dealers, which is to place transactions where the Treasury Portfolio
can obtain the most favorable combination of price and execution services in
particular transactions or provided on a continuing basis by a broker or
dealer, and to deal directly with a principal market in connection with over-
the-counter transactions, except when it is believed that best execution is
obtainable elsewhere.
4
The affiliated brokerage provisions in the New Investment Sub-Adviser
Agreement permit M&I to place brokerage transactions with broker-dealers
affiliated with M&I ("Affiliated Brokers").
The New Investment Sub-Adviser Agreement will, assuming it is approved by
shareholders pursuant to this Proxy Statement, continue in effect until
January 4, 2001, and it will continue thereafter provided that such continuance
is specifically approved at least annually by: (1) the vote of the holders of
a majority of the outstanding voting securities of the Treasury Portfolio or by
vote of a majority of the Master Portfolio's Board of Trustees and (2) by the
vote of a majority of the Trustees of the Master Portfolio who are not parties
to the New Investment Sub-Adviser Agreement or interested persons of either the
Adviser, M&I or the Master Portfolio cast in person at a meeting called for the
purpose of voting on such approval.
The New Investment Sub-Adviser Agreement may be terminated at any time,
without payment of any penalty (1) by the Adviser, by the Master Portfolio's
Board of Trustees or by a vote of the majority of the outstanding voting
securities of the Treasury Portfolio, in any such case upon at least 60 days'
prior written notice to M&I, and (2) by M&I upon at least 60 days' prior
written notice to the Adviser and the Master Portfolio. The New Investment
Sub-Adviser Agreement terminates automatically in the event of its assignment.
The New Investment Sub-Adviser Agreement provides that, absent willful
misfeasance, bad faith or negligence in the performance of its duties under the
New Investment Sub-Adviser Agreement on the part of M&I, M&I will not be
subject to liability to the Adviser, the Treasury Portfolio, the Master
Portfolio or to any holder of an interest in the Treasury Portfolio for any act
or omission in the course of, or connected with, rendering services under the
New Investment Sub-Adviser Agreement. As compensation for its services, M&I
will be paid a monthly fee by the Adviser equal on an annual basis to 0.08% of
the average daily net assets of the Treasury Portfolio. Marshall & Ilsley
Corporation, M&I's parent company, guarantees the performance of M&I's
obligations under the New Investment Sub-Adviser Agreement.
INFORMATION ABOUT M&I
M&I, located at 1000 North Water Street, Milwaukee, Wisconsin 53202-6629,
provides investment advisory services primarily to banking institutions. M&I is
a first-tier wholly owned subsidiary of Marshall & Ilsley Corporation, a
publicly held bank holding company with shares listed on the NASDAQ Stock
Market. The address of Marshall & Ilsley Corporation is 770 North Water Street,
Milwaukee, Wisconsin.
M&I serves as the investment adviser to the 11 separate investment
portfolios of Marshall Funds, Inc., which consist of six equity portfolios,
four fixed-income portfolios and one money market fund. M&I does not act as
investment adviser or sub-adviser to any mutual fund having an investment
objective similar to that of the Treasury Portfolio. As of September 30, 1998,
5
M&I had over $8.5 billion in assets under management, of which $2 billion
represents money market fund assets.
M&I Brokerage Services, Inc. is an "affiliated broker" of M&I. M&I
Brokerage Services, Inc. is a wholly owned first tier subsidiary of Marshall &
Ilsley Corporation. For the fiscal year ended December 31, 1997, and for the
year to date through September 30, 1998, M&I has neither directed any brokerage
transactions nor paid any brokerage commissions to M&I Brokerage Services, Inc.
Listed below are the names, addresses and principal occupations of the
Directors and principal executive officers of M&I:
<TABLE>
<CAPTION>
<S> <C> <C>
Name Title with M&I Principal Occupation
- ---- -------------- --------------------
David Walter Schulz Director and President President, M&I
Michael Allen Hatfield* Secretary Senior Vice President
and Secretary, Marshall
& Ilsley Corporation
Paul Harold Ewig Treasurer Vice President and Chief
Financial Officer,
Marshall & Ilsley Trust
Company
Ross Hume Dean Director President, Fibrcon, Inc.
Burleigh Edmund Jacobs Director Chairman of the Board,
Chief Executive Officer,
Grede Foundries, Inc.
Jack Frederick Kellner Director Retired Chairman,
Western Industries, Inc.
</TABLE>
*The address for Michael Hatfield is c/o Marshall & Ilsley Corporation, 770
North Water Street, Milwaukee, WI 53202. The address for all other persons
identified above is c/o M&I Investment Management Corp., 1000 North Water
Street, Milwaukee, WI 53202.
6
PORTFOLIO MANAGEMENT
The Treasury Portfolio will be managed by Richard M. Rokus. Mr. Rokus is
a Vice President of M&I and has managed the Marshall Money Market Fund since
January 1, 1994. Mr. Rokus is a Chartered Financial Analyst and holds a B.B.A.
in Finance from the University of Wisconsin-Whitewater. He has been employed by
M&I since January 1993.
TRUSTEES' CONSIDERATION
In considering the New Investment Sub-Adviser Agreement, the combined
Board of Trustees of the Master Portfolio and the Series considered a number of
factors, including the nature, quality and extent of the services furnished by
M&I; M&I's experience in investing; M&I's investment record with respect to
money market funds; comparative data as to investment performance, advisory
fees and other fees, including administrative fees, and expense ratios,
particularly fee and expense ratios of funds similar to the Treasury Portfolio,
and other investment advisers; the advantages and possible disadvantages to the
Treasury Portfolio of having a sub-adviser which also serves other investment
companies as well as other accounts; possible benefits to M&I from serving as
sub-adviser to the Treasury Portfolio; M&I's financial resources and the
continuance of appropriate incentives to assure that M&I will continue to
furnish high quality services to the Treasury Portfolio; and various other
factors. After a comprehensive review of the matter, the combined Board of
Trustees of the Master Portfolio and the Series concluded that the Treasury
Portfolio should receive investment advisory services under the New Investment
Sub-Adviser Agreement equal or superior to those it had received under the
Current Investment Sub-Adviser Agreement.
The combined Board of Trustees of the Master Portfolio and the Series
believes that the terms of the New Investment Sub-Adviser Agreement are fair
to, and in the best interest of, the Treasury Portfolio, Merrimac Series and
the Treasury Series. The combined Board of Trustees of the Master Portfolio and
the Series, including the independent Trustees of the Master Portfolio and the
Series voting separately, recommends that Shareholders of the Master Portfolio
and the Series approve the New Investment Sub-Adviser Agreement between M&I and
the Adviser.
THE BOARD OF TRUSTEES OF THE SERIES RECOMMENDS SHAREHOLDERS
VOTE IN FAVOR OF THE PROPOSAL.
REQUIRED VOTE TO APPROVE THE NEW INVESTMENT SUB-ADVISER
CONTRACT
At the Meeting, Treasury Series Shareholders will vote on the New
Investment Sub-Adviser Agreement.
7
The affirmative vote of the holders of a "majority of the outstanding
voting securities" of the Treasury Portfolio, is required to approve the New
Investment Sub-Adviser Agreement. "Majority of the outstanding voting
securities" of the Treasury Portfolio for this purpose under the 1940 Act means
the lesser of (1) 67% of the securities of the Treasury Portfolio present, if
more than 50% of the outstanding securities of the Treasury Portfolio are
represented and voting, or (2) more than 50% of such outstanding securities.
Should the New Investment Sub-Adviser Agreement not receive Shareholder
approval at the Meeting, the Current Sub-Adviser Agreement would continue in
effect until such time as a new investment sub-adviser agreement is approved by
Shareholders.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
<CAPTION>
As of November 2, 1998, the following person was beneficial owner of more
than 5% of the outstanding shares of the Treasury Series:
<S> <C> <C>
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class
- ------------------------------------ -------------------- ----------------
Saturn & Co. 83,125,905 100% (Institutional)
c/o Investors Bank & Trust Company
PO Box 9130 FPG90
Boston, Massachusetts 02117-9130
</TABLE>
To the knowledge of the Series, no other Shareholder beneficially owned
more than 5% of the outstanding shares of the Treasury Series as of November 2,
1998.
As of November 2, 1998, the Trustees and officers of the Merrimac Series
as a group beneficially owned less than 1% of the outstanding shares of the
Treasury Series.
GENERAL INFORMATION
INVESTMENT ADVISER, ADMINISTRATOR AND DISTRIBUTOR
Investors Bank, located at 200 Clarendon Street, Boston, Massachusetts
02116, provides administrative, custodial and fund accounting services for the
Series and the Master Portfolio and serves as transfer agent for the Master
Portfolio. Investors Bank also serves as the investment adviser to the Master
Portfolio.
Funds Distributor, Inc., located at 60 State Street, Suite 1300, Boston,
Massachusetts 02109, serves as distributor for the Series.
8
OTHER MATTERS TO COME BEFORE THE MEETING
Management of the Series does not know of any matters to be presented at
the Meeting other than those described in this Proxy Statement. If other
business should properly come before the Meeting, the proxy holders will vote
thereon in accordance with their best judgment.
PORTFOLIO TRANSACTIONS
The Treasury Portfolio does not allocate its portfolio brokerage on the
basis of the sale of its shares, although brokerage firms whose customers
purchase shares of the Treasury Series may participate in brokerage
commissions. Brokerage transactions are not placed with any person affiliated
with the Series, the Master Portfolio or the Adviser.
SHAREHOLDER PROPOSALS
The Meeting is a special meeting of Shareholders. Neither the Series nor
the Master Portfolio is required to, nor do either of them intend to, hold
regular annual meetings of its shareholders or interest holders. If such a
meeting is called, any shareholder who wishes to submit a proposal for
consideration at the meeting should submit the proposal promptly to the Series
or the Master Portfolio, as the case may be.
REPORTS TO SHAREHOLDERS
The Series will furnish, without charge, a copy of its most recent Annual
and Semi-Annual Reports to Shareholders upon request within three business days
of the request. Requests for such reports can be made by calling 1-888-MERRMAC
or in writing to the Series at 200 Clarendon Street, Boston, Massachusetts
02116.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED, PROMPT
EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A SELF-ADDRESSED,
POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
By Order of the Board of Trustees of the Series.
Susan C. Mosher
Secretary
November 20, 1998
Boston, Massachusetts
9
EXHIBIT A
INVESTMENT SUB-ADVISER AGREEMENT
Agreement made as of this day of January 1999, between Investors Bank and
---
Trust Company (the "Adviser"), a Massachusetts banking corporation, and M&I
Investment Management Corp. (the "Sub-Adviser"), a Wisconsin corporation.
WHEREAS, Merrimac Treasury Portfolio (the "Portfolio") is a series of the
Merrimac Master Portfolio (the "Trust"), which is an open-end diversified
management investment company registered as such with the Securities and
Exchange Commission (the "SEC") pursuant to the Investment Company Act of 1940,
as amended (the "1940 Act"), and the Trust has appointed the Adviser as the
investment adviser for the Portfolio, pursuant to the terms of an Investment
Adviser Agreement (the "Adviser Agreement"); and
WHEREAS, the Merrimac Treasury Fund (the "Fund"), an open-end diversified
management investment company registered as such with the SEC pursuant to the
1940 Act, will invest all of its investable assets in the Portfolio and the
Merrimac Treasury Series (the "Series"), an open-end diversified management
investment company registered as such with the SEC pursuant to the 1940 Act and
the Securities Act of 1933, as amended (the "1933 Act") will invest all of its
investable assets in the Portfolio; and
WHEREAS, the Adviser Agreement provides that the Adviser may, at its option,
subject to approval by the Trustees of the Trust and, to the extent necessary,
shareholders of the Portfolio, appoint a sub-adviser to assume certain
responsibilities and obligations of the Adviser under the Adviser Agreement;
and
WHEREAS, the Adviser desires to appoint the Sub-Adviser as its sub-adviser for
the Portfolio and the Sub-Adviser is willing to act in such capacity upon the
terms herein set forth; and
NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the Adviser and the Sub-Adviser, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Appointment
- ---------------
(a) The Adviser hereby appoints the Sub-Adviser as the investment
sub-adviser of the Portfolio to provide investment advice and to
perform for the Portfolio such other duties and functions as are
hereinafter set forth. The Sub-Adviser hereby accepts such appointment
and agrees to give the Portfolio and the Trust's Board of Trustees (the
"Trustees"), directly or through the Adviser, the benefit of the
Sub-Adviser's best judgment, effort, advice and recommendations in
respect of its duties as defined in Section 2.
(b) The Adviser hereby represents and warrants to the Sub-Adviser,
which representations and warranties shall be deemed to be continuing,
that (i) it has full power and authority to enter into this Agreement
and to delegate investment management discretion on behalf of the
Portfolio to the Sub-Adviser, and (ii) it has taken all necessary and
proper action to authorize the execution and delivery of this
Agreement.
10
(c) The Sub-Adviser hereby represents and warrants to the Adviser,
which representations and warranties shall be deemed to be continuing,
that (i) it has full power and authority to enter into this Agreement,
and (ii) it has taken all necessary and proper action to authorize the
execution and delivery of this Agreement.
2. Delivery of Documents
- -------------------------
Prior to the execution of this Agreement, the Adviser will furnish the
Sub-Adviser with copies, properly certified or authenticated, of each of the
following documents:
(a) The Trust's Agreement and Declaration; and all amendments thereto
or restatements thereof;
(b) The Trust's By-Laws; and all amendments thereto;
(c) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Sub-Adviser and approving this Agreement;
(d) The Trust's original Notification of Registration on Form N-8A
under the 1940 Act;
(e) The Trust's initial Registration Statement on Form N-1A under the
1940 Act and all amendments thereto;
(f) The current Confidential Offering Circular, Prospectus or similar
document of any entity which the Trust has authorized as an investor
(the "Authorized Investor") in the Portfolio (the "Investor Offering
Documents");
(g) The policies and procedures applicable to the Portfolio as adopted
by the Trustees; and all amendments and supplements thereto.
(h) Any further documents, materials or information that the
Sub-Adviser may reasonably request from time to time to enable it to
perform its duties pursuant to this Agreement.
3. Sub-Adviser Duties
- ----------------------
The Sub-Adviser shall, subject to the direction and control of the Trustees or
the Adviser, and in accordance with the objective and policies of the Portfolio
and the implementation thereof as set forth in the Investor Offering Documents,
the Portfolio's Registration Statement on Form N-1A and any applicable federal
and state laws: (i) regularly provide investment advice and recommendations to
the Portfolio, with respect to the Portfolio's investments, investment policies
and the purchase and sale of securities; (ii) supervise and monitor
continuously the investment program of the Portfolio and the composition of its
portfolio and determine what securities shall be purchased and sold by the
Portfolio; (iii) arrange, subject to the provisions of Section 5 hereof, for
the purchase of securities and other investments for the Portfolio and the sale
of securities and other investments of the Portfolio; (iv) provide reports on
the foregoing to the Adviser in such detail as the Adviser may reasonably deem
to be appropriate in order to permit the Adviser to determine the adherence by
the Sub-Adviser to the investment policies and legal requirements of the
Portfolio; and (v) make its officers and employees available to the Adviser at
reasonable times to review the
11
investment policies of the Portfolio and to consult with the Adviser regarding
the investment affairs of the Portfolio.
4. Compensation of the Sub-Adviser
- -----------------------------------
The Adviser will pay to the Sub-Adviser as compensation for the Sub-Adviser's
services rendered and for the expenses borne by the Sub-Adviser, a fee,
determined as described in Schedule A which is attached hereto and made a part
hereof. Such fee shall be paid by the Adviser and the Trust shall have no
liability therefor.
5. Portfolio Transactions and Brokerage
- ----------------------------------------
The Sub-Adviser shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with issuers, brokers or dealers
selected by the Sub-Adviser, which may include where permissible under the 1940
Act, brokers or dealers affiliated with the Sub-Adviser. In the selection of
such brokers or dealers and the placing of such orders, the Adviser always
shall seek best execution, which is to place transactions where the Portfolio
can obtain the most favorable combination of price and execution services in
particular transactions or provided on a continuing basis by a broker or
dealer, and to deal directly with a principal market in connection with over-
the-counter transactions, except when it is believed that best execution is
obtainable elsewhere. Nothing in this Agreement shall preclude the combining
of orders for the sale or purchase of securities or other investments with
other accounts managed by the Sub-Adviser or its affiliates, provided that the
Sub-Adviser does not favor any account over any other account and provided that
any purchase or sale orders executed contemporaneously shall be allocated in an
equitable manner among the accounts involved in accordance with procedures
adopted by the Sub-Adviser and reviewed and approved by the Adviser.
6. Interested Trustees or Parties
- ----------------------------------
It is understood that Trustees, officers, and shareholders of the Trust may be
or become interested in the Adviser or the Sub-Adviser as directors, officers
or employees and that directors, officers and stockholders of the Adviser or
the Sub-Adviser may be or become similarly interested in the Trust, and that
the Adviser or the Sub-Adviser may be or become interested in the Trust as a
shareholder or otherwise.
7. Services Not Exclusive
- --------------------------
The services of the Sub-Adviser to the Adviser are not to be deemed exclusive,
the Sub-Adviser being free to render services to others and engage in other
activities, provided, however, that such other services and activities do not,
during the term of this Agreement, interfere, in a material manner, with the
Sub-Adviser's ability to meet all of its obligations with respect to rendering
investment advice hereunder. The Sub-Adviser, its affiliates and its other
clients may at any time acquire or dispose of securities which are at the same
time being acquired or disposed of for the account of the Portfolio. The
Sub-Adviser shall not be obligated to acquire for the Portfolio any security or
other investment which the Sub-Adviser or its affiliates may acquire for its or
their own accounts or for the account of another client.
12
8. Compliance; Books and Records
- ----------------------------------
(a) The Sub-Adviser agrees to maintain compliance procedures which are
reasonably designed to ensure the Portfolio's compliance with the
applicable provisions of the 1940 Act and any rules or regulations
thereunder and the investment objective, policies and restrictions of
the Portfolio as set forth in the current Investor Offering Documents
or any other applicable provisions or state or federal law.
(b) The Sub-Adviser shall furnish to the Adviser, at the Adviser's
expense, copies of all records prepared and maintained in connection
with the performance of this Agreement and the maintenance of
compliance procedures pursuant to this Section 8 as the Adviser may
reasonably request.
(c) The Sub-Adviser agrees to provide upon reasonable request of the
Adviser, information regarding the Sub-Adviser, including but not
limited to, background information about the Sub-Adviser and its
personnel and performance data, for use in connection with efforts to
promote the Fund and the sale of its shares.
(d) In compliance with the requirements of Rule 31a-3 under the 1940
Act, the Sub-Adviser hereby agrees that all records which it maintains
for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's
request. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it is
required to maintain by Rule 31a-1 under the 1940 Act. The Sub-Adviser
will treat confidentially and as proprietary information of the Trust
all records and other information obtained from the Trust relative to
the Authorized Investors and prior or potential shareholders, except as
otherwise required by law.
9. Limitation of Liability of Sub-Adviser; Indemnification
- -----------------------------------------------------------
In consideration of the Sub-Adviser's undertaking to render the services
described in this Agreement, the Adviser agrees that the Sub-Adviser shall not
be liable for any loss suffered by the Adviser, the Trust, the Authorized
Investors or their shareholders, or the Portfolio in connection with the
performance of this Agreement, provided that nothing in this Agreement shall be
deemed to protect or purport to protect the Sub-Adviser against any liability
to the Adviser, the Trust, the Authorized Investors or their shareholders, or
the Portfolio to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or negligence in the performance of its duties
under this Agreement.
10. Duration, Amendment and Termination
- ----------------------------------------
(a) Subject to prior termination as provided in sub-section (d) of this
Section 10, this Agreement shall continue in effect until two years
from the date hereof and for successive annual periods thereafter, but
only so long as the continuance after such initial two year period
shall be specifically approved at least annually by vote of the Board
of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio and the Authorized Investors.
(b) This Agreement may be modified by the written agreement of the
Adviser, the Sub-Adviser and the Portfolio, such consent on the part of
the Portfolio to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio and the Authorized Investors if
required by
13
law. The execution of any such modification or amendment by a party
shall constitute a representation and warranty to the other parties
that all necessary consents or approvals with respect to such
modification or amendment have been obtained.
(c) In addition to the requirements of sub-sections (a) and (b) of this
Section 10, the terms of any continuance, modification or amendment of
the Agreement must have been approved by the vote of a majority of
those Trustees who are not parties to such Agreement or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, and in the
case of the Portfolio, by action of its Board of Trustees, or by vote
of a majority of its outstanding voting securities.
(e) This Agreement shall terminate automatically in the event of its
assignment.
(f) Termination of this Agreement shall not relieve the Adviser nor the
Sub-Adviser from any liability or obligation in respect of any matters,
undertakings or conditions which shall not have been done, observed or
performed prior to such termination. All records of the Portfolio in
the possession of the Sub-Adviser shall be returned to the Portfolio as
soon as reasonably practicable after the termination of this Agreement.
11. Disclaimer of Shareholder Liability
- ----------------------------------------
The Adviser and the Sub-Adviser understand that the obligations of the Trust
under this Agreement are not binding upon any Trustee or shareholder of the
Trust personally, but bind only the Trust and the Trust's property.
12. Miscellaneous
- ------------------
(a) The terms "vote of a majority of the outstanding voting
securities," "assignment," and "interested persons," when used herein,
shall have the respective meanings specified in the 1940 Act as now in
effect or as hereafter amended.
(b) The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(c) 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.
(d) This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors.
(e) This Agreement may be executed in two or more counterparts, which
taken together shall constitute one and the same instrument.
14
(f) Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such
notice. No notice shall be effective until received.
IN WITNESS WHEREOF, the parties have caused this instrument to be
executed by their respective officers designated below as of the day and year
first above written.
INVESTORS BANK & TRUST COMPANY ("ADVISER")
By:
-----------------------------
Name: Kevin J. Sheehan
Title: President
M&I INVESTMENT MANAGEMENT CORP. ("SUB-ADVISER")
By:
-----------------------------
Name: David W. Schulz
Title: President
The Merrimac Master Portfolio on behalf of the
Merrimac Treasury Portfolio hereby acknowledges
the execution of this Agreement
Merrimac Master Portfolio
("THE TRUST")
By:
--------------------------
Name: Paul J. Jasinski
Title: President
15
SCHEDULE A
The Adviser will pay to the Sub-Adviser as full compensation for the
Sub-Adviser's services rendered an annual fee, computed and paid monthly at an
annual rate of 0.08% of the average daily net assets of the Portfolio. The fee
for each month shall be payable within 30 business days after the end of the
month.
If the Sub-Adviser shall serve for any period less than a full month, the
foregoing compensation shall be prorated according to the proportion which such
period bears to a full month.
16
MERRIMAC TREASURY SERIES
(A SEPARATE SERIES OF MERRIMAC SERIES)
THIS SOLICITATION IS MADE ON BEHALF OF THE TRUSTEES OF MERRIMAC SERIES
The undersigned appoints Philip Newman, Paul J. Jasinski and Susan C.
Mosher and each of them, with full power of substitution, as attorneys and
proxies of the undersigned, and does thereby request that the votes
attributable to the undersigned be cast at the Special Meeting of Shareholders
of the Merrimac Treasury Series (a separate series of Merrimac Series) to be
held at 10 a.m. on Friday, December 18, 1998, at the Sheraton Tara Hotel, Spit
Brook Road, Nashua, New Hampshire, and at any adjournment thereof.
- ------------------------------------------------------------------------------
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BELOW, OR IF NO
DIRECTION IS INDICATED, WILL BE VOTED FOR THE PROPOSAL BELOW. THE BOARD OF
TRUSTEES OF THE SERIES RECOMMENDS A VOTE FOR THE PROPOSAL.
PLEASE VOTE BY CHECKING YOUR RESPONSE.
Approval of an Investment Sub-Advisory FOR [ ] AGAINST [ ] ABSTAIN [ ]
Agreement between Investors Bank &
Trust Company and M&I Investment
Management Corp.
TOTAL SHARES ATTRIBUTABLE TO THE UNDERSIGNED:
NOTE: THE UNDERSIGNED HEREBY
ACKNOWLEDGES RECEIPT OF THE
NOTICE OF MEETING AND PROXY
PLEASE VOTE, DATE AND SIGN EXACTLY AS YOUR STATEMENT AND REVOKES ANY
NAME APPEARS ON THIS CARD, AND RETURN THIS PROXY HERETOFORE GIVEN WITH
FORM IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. RESPECT TO THE VOTES COVERED
BY THIS PROXY.
Dated:
---------------------, 1998 ------------------------------
Signature
------------------------------
Signature If Jointly Held
