SCHEDULE 14A INFORMATION
PRELIMINARY PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
The Barrett Funds
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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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
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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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<PAGE>
BARRETT GROWTH FUND
565 FIFTH AVENUE
NEW YORK, NY 10017
February 6, 2001
Dear Shareholder:
The attached Proxy Statement describes a proposal related to a change
in the ownership of Barrett Associates, Inc., the investment advisory firm
responsible for managing the assets of the Barrett Growth Fund. On February 5,
2001, Legg Mason, Inc., a diversified financial services organization
headquartered in Baltimore, Maryland, acquired a 70% ownership interest in
Barrett Associates. Legg Mason will acquire the remaining 30% of Barrett
Associates over the next five years. The acquisition provides Barrett Associates
with the resources for continued success in the future, while providing Legg
Mason with an ownership interest in a leading growth-oriented advisory firm.
Barrett Associates will retain its name and location, and will continue to be
operated by Mr. Barrett and the current management team. The ownership change is
not expected to affect the management of the Fund, as there are no anticipated
changes to the Barrett Associates investment team.
As a result of the transaction with Legg Mason, the Investment
Management Agreement under which Barrett Associates served as the Fund's
investment adviser automatically terminated as required by law. Barrett
Associates is currently continuing to advise the Fund under an interim agreement
as permitted by federal law.
The Fund's Board has scheduled a Special Meeting of Shareholders to be
held on March 7, 2001. At this meeting, shareholders will be asked to approve a
new Investment Management Agreement for the Fund with Barrett Associates, as
well as to elect a Board of Trustees for the Fund. We hope that you will take
the time to review the attached Proxy Statement and provide us with your vote on
these important issues.
This Proxy Statement provides information that addresses various
questions that you may have regarding the change in ownership, the new
Investment Management Agreement, the nominees to serve on the Board of Trustees,
the voting process and the shareholder meeting generally. I urge you to confirm
the Board of Trustees' recommendations by promptly completing, signing and
returning the enclosed proxy card in the enclosed postage-paid envelope.
Thank you for your continued support of the Barrett Growth Fund. If
you should have any questions regarding the proxy material or would like to vote
your shares by telephone, please call toll-free at (877) 363-6333 to speak to a
representative who will assist you.
Sincerely,
-------------------------------- --------------------------------
John D. Barrett, II, Chairman Robert E. Harvey, President
<PAGE>
BARRETT GROWTH FUND
A SERIES OF
THE BARRETT FUNDS
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 7, 2001
To our Shareholders:
A special meeting of the shareholders of the Barrett Growth Fund
series of The Barrett Funds (the "Trust") will be held on March 7, 2001 at 10:00
a.m. Eastern Time at the offices of Barrett Associates, Inc., located at 565
Fifth Avenue, New York, New York.
The purpose of the meeting is to consider and act upon the following
proposals:
1. To elect a Board of Trustees of the Trust.
2. To approve a new Investment Management Agreement for the Barrett
Growth Fund, between the Trust and Barrett Associates, Inc.
3. To vote upon any other business that may properly come before the
meeting.
The enclosed proxy is being solicited on behalf of the Board of
Trustees of the Trust. You are entitled to vote at the meeting and at any
adjournment thereof (the "Meeting") if you owned shares of the Barrett Growth
Fund at the close of business on January 23, 2001. If you attend the Meeting,
you may vote your shares in person. If you do not expect to attend the Meeting,
you are requested to complete, date and sign the enclosed proxy instruction form
and return it promptly in the enclosed postage-paid envelope.
By Order of the Board of Trustees,
Paula J. Elliott, Secretary
New York, New York
February 6, 2001
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND RETURN YOUR PROXY CARD REGARDLESS OF THE
NUMBER OF SHARES YOU OWN. VOTING YOUR SHARES EARLY WILL HELP PREVENT COSTLY
FOLLOW-UP MAIL AND TELEPHONE SOLICITATIONS. AFTER REVIEWING THE ATTACHED
MATERIALS, PLEASE COMPLETE, DATE AND SIGN YOUR PROXY CARD AND MAIL IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE TODAY. YOU MAY ALSO VOTE BY TELEPHONE OR IN
PERSON. YOUR PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE.
<PAGE>
PROXY STATEMENT
TABLE OF CONTENTS
Page
----
Questions and Answers 3
What proposals am I being asked to vote on? 3
Why am I being asked to elect a Board of Trustees? 3
Why am I being asked to approve a new Investment
Management Agreement? 3
How will the change in ownership of Barrett Associates 4
affect the management of the Fund? 4
Are there any differences between the original Investment
Management Agreement and the proposed new Investment
Management Agreement? 4
Who is asking for my vote? 4
Who is eligible to vote? 4
How can I vote my shares? 4
What will happen if there are not enough votes
to approve the new Investment Management Agreement
or the election of Trustees? 5
Proposal One: Election of a Board of Trustees 6
Proposal Two: Approval of new Investment Management Agreement 10
Proposal Three: Other Business 13
Additional Information 14
Exhibit: Form of new Investment Management Agreement A-1
2
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QUESTIONS AND ANSWERS
The Barrett Growth Fund (hereafter, the "Fund") is part of a Delaware
business trust called The Barrett Funds (hereafter, the "Trust"). The following
Questions and Answers are intended to provide an overview of the information
provided in this Proxy Statement and to summarize the proposals affecting the
Fund and Trust to be considered at the shareholder meeting, or of any
adjournment thereof (the "Meeting"). If you have any questions, please do not
hesitate to call us at (800) 363-6333.
WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?
You are being asked to elect a four person Board of Trustees of the
Trust that is comprised of two of the original members and two new, independent
members.
You are also being asked to approve a new Investment Management
Agreement for the Fund between Barrett Associates, Inc. and the Trust, that will
allow Barrett Associates to continue providing advisory services to the Fund
following the acquisition of a controlling ownership interest in Barrett
Associates by Legg Mason, Inc. There are no changes to the fees paid by the Fund
or the services provided by Barrett Associates. Following the Legg Mason
transaction, the existing Barrett Associates investment professionals will
continue to have a financial interest in continuing with the firm, and the team
responsible for managing the Fund is not expected to change.
WHY AM I BEING ASKED TO ELECT A BOARD OF TRUSTEES?
The Trust is devoted to serving the needs of the Fund's shareholders,
and the Board of Trustees is responsible for supervising the management of the
Trust's business affairs to meet those needs. The Investment Company Act of
1940, as amended (the "Investment Company Act") and related SEC rules contain
provisions requiring that certain percentages of a mutual fund's board of
directors or trustees be made up of members who are independent of the fund's
investment adviser. The current law requires at least 40% of the Trust's Board
to be independent, and recent U.S. Securities and Exchange Commission ("SEC")
rules increased the required percentage such that a majority of the Trust's
Board must be made up of independent members by July, 2002.
The Trust's Board of Trustees originally consisted of six persons,
three of whom (50%) were independent of the adviser. Following recent changes to
the structure of the Board related to the Legg Mason transaction, the Board
presently consists of three members, two of whom (67%) are independent of the
adviser. You are being asked to elect a four person Board consisting of the
three current members plus one additional independent Trustee. If elected, three
of the four Board members (75%) will be independent of the adviser.
Trustees are selected on the basis of their professional experience,
education, and their interest in, and capacity for understanding the
complexities of, the operation of a mutual fund. These individuals can bring
considerable experience to the impartial oversight of a fund's operations. This
Proxy Statement includes a description of each nominee's background and business
experience.
WHY AM I BEING ASKED TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT?
The Fund is registered under the Investment Company Act, which
requires that any investment advisory agreement for a mutual fund terminate
automatically if the investment adviser experiences a significant change in
ownership. This provision has the effect of requiring that
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shareholders vote on a new investment advisory agreement and is designed to
ensure that shareholders have a say in the company or persons that manage their
fund.
Since Legg Mason's acquisition of an ownership interest in Barrett
Associates on February 5, 2001, Barrett Associates has been providing investment
advisory services to the Fund under an interim Investment Management Agreement
that was approved by the Trust's Board of Trustees, as permitted by SEC rules.
In order for Barrett Associates to continue to provide advisory services to the
Fund on an ongoing basis, shareholders of the Fund must approve the new
Investment Management Agreement. Your vote to approve the new Agreement will
also have the effect of an approval of the interim Investment Management
Agreement and the advisory fees to be paid thereunder.
HOW WILL THE CHANGE IN OWNERSHIP OF BARRETT ASSOCIATES AFFECT THE MANAGEMENT OF
THE FUND?
The persons responsible for operating Barrett Associates and managing
the assets of the Fund are not expected to change as a result of the Legg Mason
acquisition, and the investment management fees and the Fund's overall operating
expenses will not change. The ownership change may, as anticipated, result in
increased financial strength and investment research capabilities that can
benefit the Fund. Also, the parties expect that Legg Mason clients may invest
additional assets in the Fund which could benefit the Fund and its shareholders.
ARE THERE ANY DIFFERENCES BETWEEN THE ORIGINAL INVESTMENT MANAGEMENT AGREEMENT
AND THE PROPOSED NEW INVESTMENT MANAGEMENT AGREEMENT?
The proposed new Investment Management Agreement is substantially
identical to the original Investment Management Agreement, except for the
effective and termination dates. Your approval of the new Agreement will not
increase the management fees or overall expenses of the Fund, or change the
level, nature or quality of services provided to the Fund.
WHO IS ASKING FOR MY VOTE?
The Board of Trustees of the Trust is requesting your vote on the
proposals discussed in this Proxy Statement. The Board has unanimously approved
the proposals and recommends that you vote in favor of each proposal.
WHO IS ELIGIBLE TO VOTE?
The Board of Trustees has fixed the close of business on January 23,
2001 as the record date for the determination of the shareholders entitled to
notice of and to vote at the Meeting. On the record date, the Fund had
[__________] outstanding shares of beneficial interest. Shareholders of record
at the close of business on the record date will be entitled to cast one vote
for each full share and a fractional vote for each fractional share they hold on
each matter presented at the Meeting. This Proxy Statement and the enclosed
proxy card are expected to be mailed on or about February 6, 2001 to
shareholders of record.
HOW CAN I VOTE MY SHARES?
You may vote by using any of the following methods:
By Mail: by signing, dating, voting and returning the proxy card in
the enclosed postage-paid envelope.
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By Phone: with a toll-free call to (877) 363-6333 between 9:00 a.m.
and 5:00 p.m. (Eastern Time).
In Person: by attending the meeting and voting your shares.
WHAT WILL HAPPEN IF THERE ARE NOT ENOUGH VOTES TO APPROVE THE NEW INVESTMENT
MANAGEMENT AGREEMENT OR THE ELECTION OF TRUSTEES?
It is important that shareholders complete and return signed proxy
cards to ensure that there is a quorum for the Meeting. If we do not receive
your proxy card after several weeks, you may be contacted by officers of the
Trust or Barrett Associates who will remind you to vote your shares and help you
return your proxy. If we do not receive sufficient votes to approve the new
Investment Management Agreement and the election of the Trustees by the date of
the Meeting, we may adjourn the Meeting to a later date so that we can continue
to seek more votes. In addition, if enough votes are not obtained to approve the
new Investment Management Agreement, Barrett Associates may only be able to
receive advisory fees for its service during the interim period equal to its
costs of advising the Fund during that period plus interest.
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PROPOSAL ONE: TO ELECT A BOARD OF TRUSTEES OF THE TRUST.
Shareholders are being asked to elect a Board of Trustees of the
Trust, consisting of the four nominees listed below. Each nominee has indicated
his willingness to serve if elected. Election of Trustees is by a plurality
vote, which means that the four individuals receiving the greatest number of
votes at the Meeting will be deemed to be elected.
If any of the nominees should withdraw or otherwise become unavailable
for election, the persons named as proxies will vote for such other nominees as
the Board of Trustees may recommend. The Board has no reason to believe that any
nominee will become unavailable for election as a Trustee. Mr. Harvey and Mr.
Kfoury have served as Trustees since the Fund's commencement of operations. Dr.
Mazze was appointed to the Board on January 9, 2001 and Mr. Hoffman is not
currently a member of the Board. The following is a listing of the nominees,
along with their addresses, ages, present positions with the Trust, if
applicable, and principal occupations during the past five years.
ROBERT E. HARVEY*
Barrett Associates, Inc.
565 Fifth Avenue
New York, NY 10017
Age: 47
Trustee and President of the Trust since its inception in 1998; President and
Chief Operating Officer of Barrett Associates, Inc. since 1994; Director of The
Ashforth Company, Stamford, Connecticut, since 1988 (commercial real estate).
Previously, Director of U.S. Equities at Bessemer Trust, New York, New York,
from 1991 until 1993; and Managing Director at Scudder, Stevens and Clark, New
York, New York, from 1976 until 1991.
RONALD E. KFOURY
Clockware, Inc.
110 W. Iowa Avenue
Sunnyvale, CA 94086
Age: 42
Independent Trustee of the Trust since its inception in 1998; Chief Executive
Officer of Clockware, Inc., Sunnyvale, California, since November, 2000
(software company); Managing Director of Analect Limited, New York, New York,
from 1992 through 2000 (management consulting firm).
EDWARD M. MAZZE, PH.D.
The University of Rhode Island
College of Business Administration
7 Lippit Road
301 Ballentine Hall
Kingston, RI 02881
Age: 59
Independent Trustee of the Trust since January, 2001. Presently, Dean, College
of Business Administration of the University of Rhode Island since 1998;
Director, Technitrol Incorporated since 1985; Director, McGettigan Partners,
1989-1993, 1997 to present; Honorary Board Member, Delaware
--------
* Mr. Harvey is an "interested person" of the Trust (as defined in the
Investment Company Act) due to his position with Barrett Associates.
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Valley College of Science and Agriculture, since 1997; Accreditation Panel
Member, Middle States Association of Colleges and Secondary School Commission of
Higher Education, since 1981. Previously, Dr. Mazze held the position of Dean at
The Belk College of Business Administration of The University of North Carolina
at Charlotte from 1993 to 1998, at the School of Business and Management at
Temple University from 1979 to 1986 and professor from 1979 to 1993, and at
Seton Hall University's W. Paul Stillman School of Business from 1975 to 1979.
From 1984 to 1997, Dr. Mazze was a Bankruptcy Trustee for the United States
Bankruptcy Court in the Eastern District of Pennsylvania, and from 1985 to 1987
he served as the Chairman of the Board and Chief Executive Officer of the
William Penn Bank in Philadelphia, Pennsylvania.
ROBERT T. HOFFMAN
Hoffman Capital Partners, LLC
17 Hulfish Street
Princeton, NJ 08540
Age: 42
Presently, Partner and Portfolio Manager of Hoffman Capital Partners, LLC,
Princeton, New Jersey (private investment fund manager), since 2000; Member of
the New Jersey State Investment Council from 1990 to present. Previously,
Managing Director and Portfolio Manager of the Scudder Growth and Income Fund
and the AARP Growth and Income Fund at Scudder, Stevens and Clark, New York, New
York, from 1990-2000; New Jersey Assistant State Treasurer for Pensions and
Investment from 1988 to 1990. Graduate of Dartmouth College (AB) and
Northwestern University (MBA).
The Trust's Agreement and Declaration of Trust provides that each
Trustee shall serve during the continued lifetime of the Trust until he dies,
resigns, is declared bankrupt or incompetent by the court, or is removed. In
addition, any Trustee may resign, or any Trustee may be removed at a meeting of
shareholders by a vote of two-thirds of the outstanding shares of the Trust. In
case a vacancy shall exist for any reason, the remaining Trustees will fill such
vacancy by appointment of another Trustee. The Trustees will not fill any
vacancy by appointment if, immediately after filling such vacancy, less than
two-thirds of the Trustees then holding office would have been elected by the
shareholders. If, at any time, less than a majority of the Trustees holding
office have been elected by the shareholders, the Trustees then in office will
call a shareholders' meeting for the purpose of electing Trustees to fill
vacancies. Otherwise, there will normally be no meeting of shareholders called
for the purpose of electing Trustees.
Recent Board of Trustees Changes. Under the Investment Company Act, at
--------------------------------
least 40% of the members of a mutual fund's board of trustees must be
independent of the fund's investment adviser. Recent SEC rule changes will
increase that percentage in most cases such that, effective July, 2002, at least
a majority of a fund's board must be made up of independent members. The Trust's
Board of Trustees originally consisted of six members, 50% of whom were
independent of the adviser. In connection with the Legg Mason transaction,
Barrett Associates desired to utilize the services of a law firm of which one of
the independent Trustees was a partner, and an investment banking firm of which
a separate independent Trustee was a partner. Because these business
relationships could potentially affect the independent status of these two
Trustees under the Investment Company Act, the Board members determined to
restructure the Board to ensure an appropriate percentage of independent Board
members going forward. At a meeting on December 12, 2000, the Board accepted the
resignations of R. Bruce Cameron and Gerard E. Jones, the two independent
Trustees whose firms had entered into business relationships with Barrett
Associates, as well as John D. Barrett, II and James R. Rutherford, each of whom
is employed by Barrett Associates. As a result, the Board was then comprised of
Ronald E. Kfoury, who was independent, and Robert E. Harvey, who was employed by
the adviser. At a subsequent Board meeting held on January 9, 2001, Edward M.
Mazze, Ph.D. was appointed by the Board as a new
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independent Trustee, and Robert T. Hoffman was nominated to stand for election
by shareholders as a third independent Trustee. If the nominees are elected by
shareholders at the March 7, 2001 Meeting, 75% of the Board members will be
independent of the adviser.
Trustee Compensation. The Trust does not compensate Trustees who are
---------------------
officers or employees of Barrett Associates. The independent Trustees receive a
fee from the Trust of $500 for each meeting of the Trustees that they attend in
person or by telephone, and are reimbursed for travel and other out-of-pocket
expenses in connection with attendance at Board meetings. The Trust does not
offer any retirement benefits for the Trustees. The Board holds regular
quarterly meetings. During the fiscal year ended June 30, 2000, there were four
meetings of the Board of Trustees, and the then current Trustees received the
following compensation from the Trust:
Aggregate
Name of Trustee Title Compensation
--------------- ----- from the Trust
--------------
John D. Barrett, II+ Trustee and Chairman None*
Robert E. Harvey Trustee and President None*
James R. Rutherford+ Trustee None*
R. Bruce Cameron+ Trustee (Independent) $1,000
Gerard E. Jones+ Trustee (Independent) $1,000
Ronald E. Kfoury Trustee (Independent) $1,000
* Messrs. Barrett, Harvey and Rutherford are "interested persons" of
the Trust (as described in the Investment Company Act), due to their
positions with Barrett Associates.
+ Messrs. Barrett, Rutherford, Cameron and Jones were members of the
Board until the Board was restructured on December 11, 2000. Since
that time, Messrs. Rutherford and Jones have served as Trustees
Emeritus and Mr. Barrett serves in the officer position of Chairman.
The Trust has an Audit Committee which assists the Board of Trustees
in fulfilling its duties relating to the Trust's accounting and financial
reporting practices, and also serves as a direct line of communication between
the Board of Trustees and the independent auditors. The specific functions of
the Audit Committee include recommending the engagement or retention of the
independent auditors, reviewing with the independent auditors the plan and the
results of the auditing engagement, approving professional services provided by
the independent auditors prior to the performance of such services, considering
the range of audit and non-audit fees, reviewing the independence of the
independent auditors, reviewing the scope and results of the Trust's procedures
for internal auditing, and reviewing the Trust's system of internal accounting
controls.
From the Fund's inception through December 11, 2000, the Audit
Committee was comprised of Messrs. Kfoury, Cameron and Jones, being all of the
independent Trustees. During that period, there were two meetings of the Audit
Committee. All of the members of the Audit Committee were present for each
meeting.
Officers of the Trust. The executive officers of the Trust are elected
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by the Board of Trustees. Each officer holds the office until qualification of
his or her successor. The names, ages and principal occupations during the past
five years of the executive officers of the Trust are set forth below. The
address for each officer listed is 565 Fifth Avenue, New York, NY 10017.
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<TABLE>
<CAPTION>
Principal
Occupation(s)
Name Position with the Trust During the
---- ----------------------- Past Five Years
---------------
<S> <C> <C>
John D. Barrett, II Chairman Chairman and Chief Executive
Age 65 Officer of Barrett Associates
Christina A. Bater Assistant Vice President Associate Managing Director of
Age 38 Barrett Associates
Henry A. Collins Vice President Managing Director of Barrett
Age 59 Associates
Paula J. Elliott Secretary Vice President of Barrett
Age 50 Associates
Robert E. Harvey Trustee and President Mr. Harvey's business
Age 46 background is described at the
beginning of this proposal.
Janis M. Inscho Vice President Managing Director of Barrett
Age 47 Associates; previously, Director
and Chief Investment Officer of
the Private Client Group of
Lazard Asset Management; Senior
Vice President at Warburg,
Pincus Counselors
Larry W. Seibert Vice President Managing Director of Barrett
Age 38 Associates; previously,
Technology Analyst and Portfolio
Manager of Avatar Associates,
Inc.
Peter H. Shriver Vice President and Treasurer Managing Director of Barrett
Age 48 Associates
Robert J. Voccola Vice President Managing Director and Director
Age 63 of Research of Barrett Associates
</TABLE>
Share Ownership of the Trustees. [As of January 23, 2001, the officers
-------------------------------
and Trustees of the Trust owned beneficially [____%] of the Fund's outstanding
shares. As of January 23, 2001, the nominees and current Trustees standing for
election as Trustees of the Trust owned beneficially [____%] of the Fund's
outstanding shares.]
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PROPOSAL TWO: TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT FOR THE BARRETT
GROWTH FUND, BETWEEN THE TRUST AND BARRETT ASSOCIATES, INC.
The Board of Trustees of the Trust is recommending that shareholders
approve a proposed new Investment Management Agreement for the Fund (hereafter,
the "New Agreement"), between Barrett Associates and the Trust, which would
become effective immediately following shareholder approval. The New Agreement
is substantially identical to the Fund's original Investment Management
Agreement with Barrett Associates for the Fund (the "Original Agreement") and
differs only in its effectiveness and termination dates.
As described in this Proxy Statement, the New Agreement is necessary
because the Original Agreement terminated as a result of a change in ownership
of Barrett Associates, the Fund's investment adviser. The termination and
resulting shareholder vote is required under the Investment Company Act. Barrett
Associates is currently continuing to manage the Fund under a temporary Interim
Investment Management Agreement (the "Interim Agreement") as permitted by SEC
rules.
This proposal sets forth information about Barrett Associates, a
description of the recent changes in ownership of the adviser, a summary of the
relevant Investment Management Agreements, and a discussion of the factors
considered by the Board when it approved the New Agreement.
Investment Manager. Barrett Associates is an SEC-registered investment
------------------
adviser with offices located at 565 Fifth Avenue, New York, NY 10017. Barrett
Associates was founded in 1937 and currently manages approximately $2 billion in
client assets. The firm has approximately 500 client relationships, including
families, individuals, foundations and other organizations or entities. Barrett
Associates has served as the Fund's manager since the Fund's inception on
December 29, 1998. The Original Agreement requires Barrett Associates to manage
the investment and reinvestment of the Fund's assets and to provide
administration of the Fund not otherwise provided by third party service
providers, subject to the direction of the Board of Trustees.
Description of Ownership Changes. Until February 5, 2001, Barrett
----------------------------------
Associates was an independent, privately-owned firm. Its stockholders consisted
of the senior officers of the firm, together with A.P. Development & Services
Corporation ("APDS"), an affiliate of The Ashforth Company, 3001 Summer Street,
Stamford, Connecticut, which is a privately-held commercial real estate firm.
APDS held a greater than 55% ownership interest in Barrett Associates and was
deemed to control the firm under the Investment Company Act.
Barrett Associates and certain of its shareholders entered into a
share purchase agreement, dated as of December 6, 2000 (the "Share Purchase
Agreement"), to divest in three stages the interest in Barrett Associates to
Legg Mason, Inc., a financial services holding company with $3.5 billion in
equity capital headquartered in Baltimore, Maryland. Legg Mason, through its
subsidiaries, is engaged in securities brokerage and trading, investment
management of institutional and individual accounts and company-sponsored mutual
funds, investment banking for corporations and municipalities, commercial
mortgage banking and other financial services. Legg Mason's principal investment
management subsidiaries include Western Asset Management Company, Batterymarch
Financial Management, Inc., Legg Mason Funds Management, Inc., Bartlett & Co.,
Brandywine Asset Management, Inc., Legg Mason Capital Management, Inc. and Gray,
Seifert & Co., Inc. Through its investment advisory subsidiaries, Legg Mason has
more than $130 billion in assets under management.
There are three separate closings associated with Legg Mason's
acquisition of Barrett Associates: 70% of the shares (which primarily consisted
of those shares owned by APDS) were sold in an initial closing on February 5,
2001, 10% of the shares are scheduled to be sold in two years, and the
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remaining 20% of the shares are scheduled to be sold in five years. The Share
Purchase Agreement and related agreements contain numerous provisions, including
employment agreements with key personnel of Barrett Associates for certain time
periods and certain non-compete provisions. Barrett Associates will retain its
name and location and will continue to be managed by John D. Barrett, II,
Chairman of Barrett Associates. No changes in the management of the firm are
anticipated as a result of the sale of Barrett Associates.
Barrett Associates intends to adhere to the provisions of Section
15(f) of the Investment Company Act, to the extent possible. Section 15(f) of
the Investment Company Act provides that when a change in control of a mutual
fund investment adviser occurs, the investment adviser or any of its affiliated
persons may receive any amount or benefit in connection therewith as long as two
conditions are satisfied. First, no "unfair burden" may be imposed on the fund
as a result of the transaction relating to the change of control, or any express
or implied terms, conditions or understandings applicable thereto. The term
"unfair burden," as defined in the Investment Company Act, includes any
arrangement during the two-year period after the change in control whereby the
investment adviser (or predecessor or successor adviser), or any interested
person of any such adviser, receives or is entitled to receive any compensation,
directly or indirectly from the fund or its shareholders (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 fund (other than fees for bona fide principal underwriting
services). No such compensation arrangements are contemplated with respect to
the change in control.
The second condition is that during the three-year period immediately
following consummation of the transaction, at least 75% of the fund's board of
directors or trustees must not be "interested persons" of the investment adviser
or predecessor investment adviser within the meaning of the Investment Company
Act. Currently, two of three Trustees are independent of the adviser. If the
nominees for election to the Board are approved by shareholders at the Meeting,
three of the four Trustees (75%) then will be independent of the adviser, and
the percentage contained in Section 15(f) will be attained.
Interim Agreement. As noted, a new advisory agreement is needed for
------------------
the Fund because the Original Agreement under which Barrett Associates managed
the Fund terminated as a result of the Legg Mason acquisition. Generally,
shareholders of a fund must approve an advisory agreement before it takes
effect. In this case, the Board, including the independent Trustees, relied on
Rule 15a-4 under the Investment Company Act, which enabled the Board to approve
the Interim Agreement under which Barrett Associates can continue managing the
Fund after the Legg Mason acquisition, until shareholders can approve the New
Agreement. Under Rule 15a-4, an adviser can serve pursuant to an interim
advisory agreement for up to 150 days while the fund seeks shareholder approval
of a new investment advisory agreement. Rule 15a-4 imposes the following
conditions, all of which were met in the case of the Interim Agreement relating
to the Fund:
(i) the compensation under the interim contract may be no
greater than under the previous contract;
(ii) the fund's board of trustees, including a majority of the
independent trustees, has voted in person to approve the
interim contract before the previous contract is terminated;
(iii) the fund's board of trustees, including a majority of the
independent trustees, determines that the scope and quality
of services to be provided to the fund under
11
<PAGE>
the interim contract will be at least equivalent to the
scope and quality of services provided under the previous
contract;
(iv) the interim contract provides that the fund's board of
trustees or a majority of the fund's outstanding voting
securities may terminate the contract at any time, without
the payment of any penalty, on not more than 10 calendar
days written notice to the investment adviser;
(v) the interim contract contains the same provisions as the
previous contract with the exception of effective and
termination dates, provisions required by Rule 15a-4 and
other differences determined to be immaterial by the board
of the fund; and
(vi) the interim contract provides in accordance with the
specific provisions of Rule 15a-4 for the establishment of
an escrow account for fees received under the interim
contract pending approval of a new contract by shareholders.
The advisory fees earned by Barrett Associates during the interim
period are being held in an escrow account until the shareholder meeting. If the
New Agreement is approved, that approval will be viewed as an implicit approval
of the Interim Agreement by shareholders, and Barrett Associates will receive
the escrowed fees plus interest. If the New Agreement is not approved, Barrett
Associates may only be able to receive fees for the interim period equal to the
costs it incurred in advising the Fund for that period.
Original and New Agreements. The Original Agreement under which
-----------------------------
Barrett Associates provided advisory services to the Fund was dated as of
December 18, 1998 and was originally approved by the Trust's Board, including
all of the independent Trustees, as well as by the Fund's initial shareholder.
The New Agreement is substantially identical to the Original Agreement except
for the effective and termination dates. The New Agreement will take effect
immediately after it is approved by shareholders and will have an initial term
of two years. Thereafter, it can be renewed for successive one-year periods,
provided its renewal is approved by the Board or by a majority of the
outstanding voting securities (as defined in the Investment Company Act) of the
Fund and, in either event, by the vote cast in person of a majority of the
independent Trustees.
The terms of the Original and New Agreements are substantially
identical. There is no change in the advisory fees paid to Barrett Associates,
which total 1.00% of average daily net assets annually. In addition, Barrett
Associates has contractually agreed through October 31, 2001 to waive its
advisory fees and/or assume as its own expense certain expenses otherwise
payable by the Fund to the extent necessary to ensure that total annual Fund
operating expenses do not exceed 1.25% of the average daily net assets.
The Original Agreement and the New Agreement both provide that Barrett
Associates will provide research, analysis, advice and recommendations with
respect to the purchase or sale of securities and the making of investment
commitments for the Fund. Both Agreements also provide that, in the absence of
willful misfeasance, bad faith or gross negligence in the performance of its
duties, Barrett Associates shall not be liable for errors of judgment or losses
related to its advisory services to the Fund. The Agreements also each provide
that they may be terminated without penalty upon 60 days written notice by the
Fund or by Barrett Associates. Finally, the Agreements each contain provisions
limiting the Fund's ability to use the name "Barrett" if Barrett Associates does
not continue as adviser to the Fund. The form of the New Agreement is attached
as an Exhibit to this Proxy Statement.
12
<PAGE>
Board of Trustees Deliberations. On January 9, 2001, the Board of
---------------------------------
Trustees of the Trust held its regular quarterly meeting, at which it reviewed
the proposed acquisition of Barrett Associates by Legg Mason, and considered the
proposed Interim and New Agreements with Barrett Associates to take effect
following the Legg Mason acquisition. At the meeting, the Board reviewed
materials furnished by Barrett Associates and discussed the proposed acquisition
with Mr. Barrett and Mr. Harvey of Barrett Associates. Mr. Barrett and Mr.
Harvey outlined the various reasons why Barrett Associates believed that the
acquisition would benefit Barrett Associates and the Fund, specifically noting
that being part of a larger financial organization would strengthen Barrett
Associates' technological, research and investment capabilities. Among other
benefits, the Board discussed the potential inflow of assets to the Fund from
Legg Mason clients, and the potential benefits to the Fund and its shareholders.
They also presented information about the terms of the acquisition, the
anticipated logistical effects and the strong financial incentives designed to
retain key employees. The Board learned that the Fund's existing portfolio
management team and supporting investment professionals were expected to remain
with the firm and will continue to manage the Fund.
The Board of Trustees, including a majority of the independent
Trustees, approved the proposed Interim Agreement with Barrett Associates after
determining that the Agreement: (1) provided for the same compensation to
Barrett Associates as the Original Agreement; (2) contained satisfactory terms
and conditions in view of Section 15 of the Investment Company Act and Rule
15a-4 thereunder; and (3) provided for services of at least equivalent scope and
quality as the Original Agreement. The Board of Trustees, including a majority
of the independent Trustees, also approved the New Agreement and authorized it
to be submitted to shareholders for approval.
In approving the New Agreement, the Board considered the terms of the
New Agreement, the quality of services historically provided by Barrett
Associates and the benefits of continuity of the advisory relationship. The
Board also considered the fact that shareholder approval of the New Agreement
would permit Barrett Associates to receive payment of the fees it earned under
the Interim Agreement. Based on these and other considerations, the Board
unanimously determined to recommend that shareholders approve the New Agreement.
Required Vote. Provided that a quorum is present, the approval of the
-------------
New Agreement requires the affirmative vote of the lesser of: (i) more than 50%
of the outstanding voting securities of the Fund; or (ii) 67% or more of the
voting securities of the Fund present at the Meeting, if the holders of more
than 50% of the Fund's outstanding voting securities are present or represented
by proxy.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT YOU VOTE TO APPROVE THE NEW AGREEMENT.
PROPOSAL THREE: TO GRANT THE PROXYHOLDERS AUTHORITY TO VOTE UPON ANY OTHER
BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING.
The Trustees do not intend to bring any matters before the Meeting
other than Proposals One, Two and Three and are not aware of any other matters
to be brought before the Meeting by others. If any other matters do properly
come before the Meeting, the persons named in the enclosed proxy will use their
best judgment in voting on such matters.
13
<PAGE>
ADDITIONAL INFORMATION
The Fund's last audited financial statements and annual report, for
the fiscal year ended June 30, 2000, and the semiannual report dated December
31, 2000 are available upon request and free of charge. To obtain a copy, please
call the Fund toll-free at (877) 363-6333, or you may forward a written request
to The Barrett Funds, c/o Firstar Mutual Fund Services, LLC, 615 East Michigan
Street, Milwaukee, WI 53202.
Ownership of the Fund. As of January 23, 2001, the Fund had
------------------------
[_________] shares outstanding and total net assets of [$__________]. From time
to time, the number of shares held in "street name" accounts of various
securities dealers for the benefit of their clients may exceed 5% of the total
shares outstanding. To the knowledge of the Fund's management, as of January 23,
2001, the following entities held beneficially or of record more than 5% of the
Fund's outstanding shares.
<TABLE>
<CAPTION>
Name and Address of Holder Number of Shares Percentage of Fund Ownership
-------------------------- ---------------- ----------------------------
<S> <C> <C>
P. C. Potter and L. M. Potter, ___%
Trustees Philip C. Potter Charitable
Remainder Unitrust
44 Rockwood Lane
Greenwich, CT 06830-3844
Braun Fund LP ___%
6 East 45th Street
Room 1401
New York, NY 10017-2414
Charles Schwab & Co., Inc. ___%
Special Custody Account for the
Benefit of Customers
Attention: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
</TABLE>
Voting Information. You may attend the Meeting and vote in person or
-------------------
you may complete and return the proxy card. Proxy cards that are properly
signed, dated and received at or prior to the Meeting will be voted as
specified. If you specify a vote for any of the Proposals One, Two or Three,
your proxy will be voted as you indicate. If you simply sign and date the proxy
card, but don't specify a vote for any of the Proposals One, Two or Three, your
shares will be voted FOR Proposals One and Two and to GRANT discretionary
authority to the persons named in the proxy card as to any other matters that
properly may come before the Meeting (Proposal Three). You may revoke your proxy
at any time before it is voted by: (1) delivering a written revocation to the
Secretary of the Fund; (2) forwarding to the Fund a later-dated proxy card that
is received by the Fund at or prior to the Meeting; or (3) attending the Meeting
and voting in person.
Solicitation of Proxies. The cost of soliciting proxies will be borne
-----------------------
by Barrett Associates and Legg Mason, who will also reimburse brokerage firms
and others for their expenses in forwarding proxy material to the beneficial
owners and soliciting them to execute proxies. Barrett Associates expects that
the solicitation will be primarily by mail, but also may include telephone
solicitations. In addition to solicitations by mail, some of the executive
officers and employees of the Fund and/or Barrett Associates,
14
<PAGE>
without extra compensation, may conduct additional solicitations by telephone,
personal interviews and other means.
Voting by Broker-Dealers. The Fund expects that, before the Meeting,
-------------------------
broker-dealer firms holding shares of the Fund in "street name" for their
customers will request voting instructions from their customers and beneficial
owners. If these instructions are not received by the date specified in the
broker-dealer firms' proxy solicitation materials, the Fund understands that
stock exchange rules will not permit the broker-dealers to vote on the New
Agreement on behalf of their customers and beneficial owners. Certain
broker-dealers may exercise discretion over shares held in their name for which
no instructions are received by voting those shares in the same proportion as
they vote shares for which they received instructions.
Quorum. A majority of the Fund's outstanding shares, present in person
------
or represented by proxy, constitutes a quorum at the Meeting. Proxies returned
for shares that represent "broker non-votes" (i.e., shares held by brokers or
nominees 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), and shares
whose proxies reflect an abstention on any item are all counted as shares
present and entitled to vote for purposes of determining whether the required
quorum of shares exists. Abstentions and broker non-votes will be treated as
votes present but not cast.
Other Matters and Discretion of Attorneys Named in the Proxy. The Fund
------------------------------------------------------------
is not required, and does not intend, to hold regular annual meetings of
shareholders. Shareholders wishing to submit proposals for consideration for
inclusion in a proxy statement for any future meeting of shareholders should
send their written proposals to the Fund, c/o Firstar Mutual Fund Services, LLC,
615 East Michigan Avenue, Milwaukee, WI 53202, so they are received within a
reasonable time before any such meeting. No business other than the matters
described above is expected to come before the Meeting, but should any other
matter requiring a vote of shareholders arise, including any question as to an
adjournment or postponement of the Meeting, the persons named on the enclosed
proxy card will vote on such matters according to their best judgment in the
interests of the Fund.
By Order of the Board of Trustees,
Paula J. Elliott, Secretary
New York, New York
February 6, 2001
15
<PAGE>
EXHIBIT: FORM OF INVESTMENT MANAGEMENT AGREEMENT
BARRETT GROWTH FUND
A SERIES OF
THE BARRETT FUNDS
565 FIFTH AVENUE
NEW YORK, NY 10017
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT, dated March 7, 2001, is made by and between THE
BARRETT FUNDS, a Delaware business trust (the "Trust"), on behalf of the BARRETT
GROWTH FUND (the "Fund"), and BARRETT ASSOCIATES, INC., a New York corporation
(the "Investment Advisor").
W I T N E S S E T H:
WHEREAS, the Trust has been organized and operates as an investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and engages in the business of investing and
reinvesting its assets in securities; and
WHEREAS, the Investment Advisor is a registered investment advisor
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
engages in the business of providing investment management services; and
WHEREAS, the Trust has selected the Investment Advisor to serve as the
investment advisor for the Fund effective as of the date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it is
agreed as follows:
1. The Trust on behalf of the Fund hereby employs the
Investment Advisor to manage the investment and reinvestment of the
Fund's assets and to provide administration of the Fund not otherwise
provided by third party service providers, subject to the direction of
the Board of Trustees and officers of the Trust, for the period and on
the terms hereinafter set forth. The Investment Advisor hereby accepts
such employment and agrees during such period to render the services
and assume the obligations herein set forth for the compensation
herein provided. The Investment Advisor shall for all purposes herein,
be deemed to be an independent contractor, and shall, unless otherwise
expressly provided and authorized, have no authority to act for or to
represent the Trust or the Fund in any way, or in any way be deemed an
agent of the Trust or the Fund. The Investment Advisor shall regularly
make decisions as to what securities and other investments to purchase
and sell on behalf of the Fund and shall effect the purchase and sale
of such investments in furtherance of the Fund's objectives and
policies. The Investment Advisor shall record and implement such
decisions and shall furnish the Board of Trustees of the Trust with
such information and reports regarding the Fund's investments as the
Investment Advisor deems appropriate or as the Trustees of the Trust
may reasonably request. Subject to compliance with the requirements of
the Investment Company Act, the Investment Advisor may retain as a
sub-advisor to the Fund, at the Investment Advisor's own expense, any
investment advisor registered under the Advisers Act.
A-1
<PAGE>
2. (a) The Trust shall conduct its own business and affairs
and shall bear the expenses and salaries necessary and incidental
thereto including, but not in limitation of the foregoing, the costs
incurred in: the maintenance of its corporate existence; the
maintenance of its own books, records and procedures; dealing with its
own shareholders; the payment of dividends; transfer of stock,
including issuance, redemption and repurchase of shares; preparation
of share certificates; reports and notices to shareholders; calling
and holding of shareholders' meetings; miscellaneous office expenses;
brokerage commissions; custodian fees; legal and accounting fees;
taxes, and state and federal registration fees. Directors, officers,
and employees of the Investment Advisor may be trustees/directors,
officers and employees of the funds of which the Investment Advisor
serves as Investment Advisor. Directors, officers and employees of the
Investment Advisor who are trustees, officers and/or employees of the
Trust shall not receive any compensation from the Trust for acting in
such dual capacity.
In the conduct of the respective businesses of the parties
hereto and in the performance of this Agreement, the Trust and the
Investment Advisor may share facilities common to each, with
appropriate proration of expenses between them.
(b) To the extent the Investment Advisor incurs any costs by
assuming expenses which are an obligation of the Fund as set forth
herein, the Fund shall promptly reimburse the Investment Advisor for
such costs and expenses, except to the extent the Investment Advisor
has otherwise agreed to bear such expenses. To the extent the services
for which the Fund is obligated to pay are performed by the Investment
Advisor, the Investment Advisor shall be entitled to recover from the
Fund to the extent of the Investment Advisor's actual costs for
providing such services.
3. (a) The Investment Advisor shall place and execute Fund
orders for the purchase and sale of portfolio securities with
broker-dealers. Subject to obtaining the best available execution, the
Investment Advisor is authorized to place orders for the purchase and
sale of portfolio securities for the Fund with such broker-dealers as
it may select from time to time. Subject to subparagraph (b) below,
the Investment Advisor is also authorized to place transactions with
broker-dealers who provide research or statistical information or
analyses to the Fund, to the Investment Advisor, or to any other
client for whom the Investment Advisor provides investment management
services. Subject to obtaining the best available execution, the
Investment Advisor may also place brokerage transactions with
broker-dealers who sell shares of the Fund. Broker-dealers who sell
shares of the Fund shall only receive orders for the purchase or sale
of portfolio securities to the extent that the placing of such orders
is in compliance with the rules of the U.S. Securities and Exchange
Commission and the National Association of Securities Dealers, Inc.
The Investment Advisor also agrees that it will cooperate with the
Trust to execute instructions from the Trust that brokerage
transactions be allocated to broker-dealers who provide benefits
directly to the Fund.
(b) Notwithstanding the provisions of subparagraph (a) above
and subject to such policies and procedures as may be adopted by the
Board of Trustees and officers of the Trust, the Investment Advisor is
authorized to pay a member of an exchange, broker or dealer an amount
of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange, broker or dealer
would have charged for effecting that transaction, in such instances
where the Investment Advisor has determined in good faith that such
amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such member, broker or
dealer, viewed in terms of either that particular transaction or the
Investment Advisor's overall responsibilities with respect to the Fund
and to other clients for which the Investment Advisor exercises
investment discretion.
A-2
<PAGE>
(c) The Investment Advisor is authorized to direct portfolio
transactions to a broker-dealer which is an affiliated person of the
Investment Advisor or the Fund in accordance with such standards and
procedures as may be approved by the Board in accordance with
Investment Company Act Rule 17e-1, or other rules promulgated by the
Securities and Exchange Commission. Any transaction placed with an
affiliated broker-dealer must (i) be placed at the best available and
execution, and (ii) may not be a principal transaction.
4. (a) As compensation for the services to be rendered to
the Fund by the Investment Advisor under the provisions of this
Agreement, the Trust on behalf of the Fund shall pay to the Investment
Advisor from the Fund's assets an annual fee equal to 1.00% of the
average daily net assets of the Fund, payable on a monthly basis.
(b) If this Agreement is terminated prior to the end of any
calendar month, the management fee shall be prorated for the portion
of any month in which this Agreement is in effect according to the
proportion which the number of calendar days, during which the
Agreement is in effect, bears to the number of calendar days in the
month, and shall be payable within 10 days after the date of
termination.
(c) The Investment Advisor may voluntarily reduce any
portion of the compensation or reimbursement of expenses due to it
pursuant to this Agreement and may agree to make payments to limit
expenses which are the responsibility of the Fund under this
Agreement. Any such reduction or payment shall be applicable only to
such specific reduction or payment and shall not constitute an
agreement to reduce any future compensation or reimbursement due to
the Investment Advisor hereunder or to continue future payments. Any
such reduction will be agreed upon prior to accrual of the related
expense or fee and will be estimated daily. Any fee withheld shall be
voluntarily reduced and any Fund expense paid by the Investment
Advisor voluntarily or pursuant to an agreed expense limitation shall
be reimbursed by the Fund to the Investment Advisor in the first,
second, or third (or any combination thereof) fiscal year next
succeeding the fiscal year of the withholding, reduction, or payment
to the extent permitted by applicable law if the aggregate expenses
for the next succeeding fiscal year, second fiscal year or third
succeeding fiscal year do not exceed any limitation to which the
Investment Advisor has agreed. Such reimbursement may be paid prior to
the Fund's payment of current expenses if so requested by the
Investment Advisor even if such payment may require the Investment
Advisor to waive or reduce its fees hereunder or to pay current Fund
expenses.
5. The services to be rendered by the Investment Advisor to
the Trust on behalf of the Fund under the provisions of this Agreement
are not to be deemed to be exclusive, and the Investment Advisor shall
be free to render similar or different services to others so long as
its ability to render the services provided for in this Agreement
shall not be impaired thereby.
6. The Investment Advisor, its directors, officers,
employees, and agents may engage in other businesses, may render
investment management services to other investment companies, or to
any other corporation, association, firm or individual, and may render
underwriting services to the Trust on behalf of the Fund or to any
other investment company, corporation, association, firm or
individual.
7. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of duties of
the Investment Advisor to the Fund, the Investment Advisor shall not
be subject to liabilities to the Fund or to any shareholder of the
Fund for any action or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained
in the purchase, holding or sale of any security, or otherwise.
A-3
<PAGE>
8. In accordance with the Agreement and Declaration of Trust
of the Trust, in the event that the Investment Advisor ceases to be
the Fund's investment manager for any reason, the Trust will (unless
the Investment Advisor otherwise agrees in writing) take all necessary
steps to cause the Fund to change to a name not including the word
"Barrett," within a reasonable period of time.
9. This Agreement shall be executed and become effective as
of the date written below if approved by the vote of a majority of the
outstanding voting securities of the Fund. It shall continue in effect
for a period of two years and may be renewed thereafter only so long
as such renewal and continuance is specifically approved at least
annually by the Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund and only if the terms and
the renewal hereof have been approved by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons
of any such party, cast in person at a meeting called for the purpose
of voting on such approval. Notwithstanding the foregoing, this
Agreement may be terminated by the Trust at any time, without the
payment of a penalty, on sixty days written notice to the Investment
Advisor of the Trust's intention to do so, pursuant to action by the
Board of Trustees of the Trust or pursuant to a vote of a majority of
the outstanding voting securities of the Fund. The Investment Advisor
may terminate this Agreement at any time, without the payment of
penalty on sixty days written notice to the Trust of its intention to
do so. Upon termination of this Agreement, the obligations of all the
parties hereunder shall cease and terminate as of the date of such
termination, except for any obligation to respond to a breach of this
Agreement committed prior to such termination, and except for the
obligation of the Trust to pay to the Investment Advisor the fee
provided in Paragraph 4 hereof, prorated to the date of termination.
This Agreement shall automatically terminate in the event of its
assignment.
10. This Agreement shall extend to and bind the heirs,
executors, administrators and successors of the parties hereto.
11. For the purposes of this Agreement, the terms "vote of a
majority of the outstanding voting securities"; "interested persons";
and "assignment" shall have the meaning defined in the Investment
Company Act.
A-4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their corporate
seals to be affixed and duly attested and their presents to be signed by their
duly authorized officers as of the 7th day of March, 2001.
Attest: THE BARRETT FUNDS
By:
--------------------------------
Robert E. Harvey, President
Attest: BARRETT ASSOCIATES, INC.
By:
--------------------------------
John D. Barrett, II, Chairman
A-5
<PAGE>
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
PLEASE VOTE YOUR
PROXY TODAY!
Please fold and detach card at perforation before mailing.
PROXY PROXY
--------------------------------------------------------------------------------
SPECIAL MEETING OF SHAREHOLDERS
OF THE BARRETT GROWTH FUND
MARCH 7, 2001
The undersigned hereby revokes all previous proxies for his or her shares and
appoints Robert E. Harvey and John D. Barrett, II, and each of them, proxies of
the undersigned with full power of substitution to vote all shares of the
Barrett Growth Fund (the "Fund") that the undersigned is entitled to vote at the
Special Meeting of Shareholders, including any adjournments thereof (the
"Meeting"), to be held at the offices of Barrett Associates, Inc., located at
565 Fifth Avenue, 25th floor, New York, New York at 10:00 a.m., Eastern Time on
March 7, 2001, upon such business as may properly be brought before the Meeting.
YOU ARE URGED TO DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY. THIS WILL SAVE
THE EXPENSE OF FOLLOW-UP LETTERS TO SHAREHOLDERS WHO HAVE NOT RESPONDED.
NOTE: Please sign exactly as your name
appears on the proxy. If signing for
estates, trusts or corporations, title
or capacity should be stated. If shares
are held jointly, each holder must sign.
----------------------------------------
Date
----------------------------------------
Signature(s)
IMPORTANT: PLEASE VOTE YOUR PROXY...TODAY.
---------
(Please see reverse side.)
<PAGE>
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
PLEASE VOTE YOUR PROXY TODAY
-----
PLEASE SIGN AND PROMPTLY RETURN IN THE ACCOMPANYING ENVELOPE OR VOTE BY PHONE.
NO POSTAGE REQUIRED IF MAILED IN THE U.S.
Please fold and detach card at perforation before mailing.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE BARRETT FUNDS
(THE "TRUST"). IT WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS
PROXY SHALL BE VOTED IN FAVOR OF PROPOSALS 1, 2 AND 3. IF ANY OTHER MATTERS
PROPERLY COME BEFORE THE MEETING ABOUT WHICH THE PROXYHOLDERS WERE NOT AWARE
PRIOR TO THE TIME OF THE SOLICITATION, PROPOSAL 3 GIVES AUTHORIZATION TO THE
PROXYHOLDERS TO VOTE IN ACCORDANCE WITH THE VIEWS OF MANAGEMENT ON SUCH MATTERS.
MANAGEMENT IS NOT AWARE OF ANY SUCH MATTERS.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE IN FAVOR OF PROPOSALS 1, 2 AND 3
PROPOSAL 1 TO ELECT ROBERT E. HARVEY, RONALD E. KFOURY, ROBERT T. HOFFMAN AND
EDWARD M. MAZZE, PH.D. AS TRUSTEES OF THE TRUST.
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted
"FOR" a particular nominee, mark the "VOTE
FOR ALL EXCEPT" box and strike a line
through the name of each nominee for whom
you are NOT voting. Your shares will be
voted for the remaining nominees.
PROPOSAL 2 TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT FOR THE BARRETT
GROWTH FUND BETWEEN THE TRUST AND BARRETT ASSOCIATES, INC.
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 3 TO GRANT THE PROXYHOLDERS AUTHORITY TO VOTE UPON ANY OTHER BUSINESS
THAT MAY PROPERLY COME BEFORE THE MEETING.
GRANT [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
ABSTAIN [ ]
