SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement |_| Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2)
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PROGRESSIVE CAPITAL ACCUMULATION TRUST
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(formerly Anchor Capital Accumulation Trust)
(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.
|_| $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
|_| $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
|_| 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:
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PROGRESSIVE CAPITAL ACCUMULATION TRUST
579 Pleasant Street, Suite 4
Paxton, Massachusetts 01612
(508) 831-1171
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 30, 1999
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To The Shareholders of Progressive Capital Accumulation Trust:
Notice is hereby given that a Special Meeting of the Shareholders of
Progressive Capital Accumulation Trust (the "Trust") will be held at 579
Pleasant Street, Suite 4, Paxton, Massachusetts 01612 on December 30, 1999, at
12:05 p.m., or any adjournment thereof, for the following purposes:
(a) To consider and act upon a proposal to approve a new
Investment Advisory Contract between the Trust and Progressive
Investment Management Corporation ("Progressive"), containing the same
terms and conditions as the existing Investment Advisory Contract
between the Trust and Progressive. ("Proposal No. 1")
(b) To ratify the selection of Livingston A. Haynes, P.C. as
independent accountants for the Trust for its fiscal year ending
December 31, 1999. ("Proposal No. 2")
(c) To transact such other business as may properly come before the
meeting, or any adjournments thereof.
If any of such Proposals are not approved by the Trust's
shareholders, the Trust will not consummate the transactions contemplated in
such unapproved Proposal, and each such Proposal shall be deemed disapproved.
Shareholders of record at the close of business on November 1, 1999 are entitled
to vote at the meeting and at any adjournment thereof. The Proposals are more
fully discussed in the Proxy Statement. Please read it carefully before telling
us, through your proxy, how you wish your shares to be voted. The Board of
Trustees of the Trust, a majority of which is independent from the Investment
Adviser and Meeschaert & Co., Inc., the Trust's principal underwriter, has
unanimously approved each Proposal and recommends that you vote FOR each
proposal. WE URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
David Y. Williams, Secretary
December 14, 1999
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Shareholders who do not expect to attend the meeting are requested to indicate
voting instructions on the enclosed proxy and to date, sign and return it in the
accompanying postage-paid envelope. To avoid unnecessary duplicate mailings, we
ask your cooperation in promptly mailing your proxy no matter how large or small
your holdings may be.
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PROGRESSIVE CAPITAL ACCUMULATION TRUST
579 Pleasant Street, Suite 4
Paxton, Massachusetts 01612
(508) 831-1171
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PROXY STATEMENT
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Meeting of Shareholders
To Be Held December 30, 1999
I N T R O D U C T I O N
This statement is furnished to the shareholders of Progressive Capital
Accumulation Trust (the "Trust") in connection with the solicitation by, and on
behalf of, the Trust's Board of Trustees or proxies to be used at a meeting (the
"Meeting") to be held at 579 Pleasant Street, Suite 4, Paxton, Massachusetts
01612 on December 30, 1999, at 12:05 p.m., or any adjournment thereof. It is
expected that the mailing of this proxy statement and form of proxy will be made
on or about December 20, 1999.
The enclosed proxy, if properly executed and returned, will be voted (or
withheld from voting) in accordance with the choices specified therein. The
proxy will be voted in favor of each Proposal unless a choice is indicated to
vote against or to abstain from voting on that Proposal. If a shareholder
executes and returns a proxy but fails to indicate how the votes should be cast,
the proxy will be voted in favor of each Proposal. The proxy may be revoked at
any time prior to the voting by (1) writing to the Secretary of the Trust at 579
Pleasant Street, Suite 4, Paxton, Massachusetts 01612; (2) attending the meeting
and voting in person; or (3) signing and returning a new proxy (if returned and
received in time to be voted).
The cost of preparation and distribution of these proxy materials is an expense
of the Trust. In addition to the solicitation of proxies by mail, proxies may be
solicited by officers or employees of the Trust's Investment Adviser,
Progressive Investment Management Corporation (the "Investment Adviser"),
personally or by telephone or telegraph. Any expenses so incurred will also be
borne by the Trust. Brokers, banks, and other fiduciaries may be requested to
forward soliciting material to their principals and to obtain authorization for
the execution of proxies. For those services, if any, they will be reimbursed by
the Trust for their out-of-pocket expenses.
The Trust's most recent annual and semi-annual reports are available upon
request without charge from the Secretary of the Trust at the address and
telephone number noted above.
Shares Outstanding and Entitled to Vote. As of November 1, 1999, the record
date, there were 257,719 shares of the Trust issued and outstanding. All shares
of the Trust have equal voting rights, and the holders of shares are entitled to
one vote for each share (and a fractional vote for a fractional share) held of
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record at the close of business on the record date. Each Trustee and 5%
shareholder named, and all Trustees and officers as a group, have sole voting
power and sole investment power with respect to the shares shown. Information
with respect to beneficial ownership by such shareholders is based upon
information furnished by each shareholder. As of November 1, 1999, the number of
shares beneficially owned by each 5% shareholder, Trustee and of the Trustees
and officers as a group was as follows:
Trustees and Officers Number of % of Outstanding
Shares Shares
Ernie Butler (1) 0 0
Spencer H. LeMenager (1) 351 0.14
David W. C. Putnam (1) 0 0
J. Stephen Putnam (1) 4,104 1.59
David Y. Williams (1) (2) 0 0
Christopher Y. Williams (1) 0 0
Joseph C. Williams (1) 0 0
All Trustees and Officers as 4,455 1.73
a group
Fox & Co. 47,533 18.44
Lazard Freres & Co. 128,744 49.96
(1) The address of each Trustee, officer and 5% shareholder is c/o Christopher
Williams, 579 Pleasant Street, Suite 4, Paxton, Massachusetts 01612.
(2) Interested person as defined in the Investment Company Act of 1940, as
amended, because of his affiliation with the Trust's Investment Adviser
and Distributor.
The Trust's Board of Trustees has an Audit Committee which is responsible for
reviewing financial and accounting matters and which met once in 1999. The
current members of the Audit Committee are Messrs. Spencer H. LeManager and
Ernie Butler. The Trust does not have a nominating or compensation committee.
The Trust pays each of the Trustees who are not "interested persons" as defined
in the Act a fee of $300 for each meeting of the Board of Trustees, subject to a
maximum of $1,200 per year, and reimburses them for their out-of-pocket expenses
for attendance at such meetings. In 1998, the Trust paid an aggregate of
$1,000.02 in Trustee's fees and expenses as follows: David W. C. Putnam,
$333.34; Spencer H. LeManager, $333.34; Maurice A.
Donahue, $333.34; Ernie Butler, $0.00.
There have been no purchases or sales of securities of the Investment Adviser,
or any Parents or Subsidiaries thereof since the beginning of the Trust's most
recent completed fiscal year by any trustee or nominee for election as a trustee
of the Trust.
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The Trust pays each Trustee, who is not a director, officer or employee of the
Investment Adviser, or any affiliated company, a meeting fee for each Board or
committee meeting attended by such Board Member and reimburses travel and other
out-of-pocket expenses incurred in connection with attending such meetings. The
table below summarizes the compensation of the Trust's Board members for the
fiscal year ended December 31, 1998 for the Trusts. The table also provides the
total compensation of the Board Members by the Fund complex for the 1998
calendar year.
COMPENSATION TABLE
NAME OF PERSON(1)(2) AGGREGATE COMPENSATION TOTAL COMPENSATION FROM
FROM TRUST THE TRUST AND
THE FUND COMPLEX
Ernie Butler (2) $ 0.00 $ 0.00
Maurice A. Donahue (2) $ 333.34 $3,000.00
Spencer H. LeMenager (2) $ 333.34 $3,000.00
David W.C. Putnam (2) $ 333.34 $3,000.00
J. Stephen Putnam $ 0.00 $ 0.00
David Y. Williams (1) (2) $ 0.00 $ 0.00
(1) Mr. David Y. Williams received no compensation from the Trust.
(2) The Board Members do not receive any pension or retirement benefits as
compensation for their services to the Trust.
APPROVAL OF INVESTMENT ADVISORY CONTRACT
BETWEEN THE TRUST AND
PROGRESSIVE INVESTMENT MANAGEMENT CORPORATION
(Proposal No. 1)
Background. The Trust is managed by the Investment Adviser, Progressive
Investment Management Corporation, pursuant to an Investment Advisory Contract
(the "Current Agreement") dated November 30, 1998, and subject to the authority
of its Board of Trustees. The Investment Adviser is located at 579 Pleasant
Street, Suite 4, Paxton, Massachusetts 01612, where the Trust's
principal offices are also located.
The Current Agreement was last submitted to and approved by shareholders at a
meeting held on November 30, 1998. Pursuant to the Current Agreement, the
Investment Adviser manages the investments and affairs of the Trust, subject to
the supervision of the Trust's Board of Trustees. The Investment Adviser
furnishes to the Trust investment advice and assistance, administrative
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services, office space, equipment, clerical personnel and investment advisory,
statistical and research facilities.
Proposal 1 is being submitted to stockholders as a result of the death of Paul
Jaspard, the former Chairman of the Board of Progressive, on October 30, 1999.
Mr. Jaspard had owned in excess of 25% of the outstanding voting shares of
Progressive. Under the Investment Company Act of 1940, as amended (the "Act"),
the transfer of more than 25% of the outstanding voting shares of an investment
adviser may be deemed to be a change in control of the investment adviser, which
is deemed to constitute an "assignment" of an investment advisory agreement with
the investment adviser. The Investment Company Act provides that investment
advisory agreements terminate automatically upon their "assignment."
Because Mr. Jaspard's death may be deemed to have resulted in an "assignment"
and termination of the Investment Adviser's Current Agreement, on December 3,
1999 the Board of Directors of the Trust approved a new investment advisory
agreement with Progressive on behalf of the Trust (the "New Investment Advisory
Agreement"), dated as of the date of Mr. Jaspard's death. Except for different
effective and termination dates, the terms of the New Investment Advisory
Agreement are identical in all respects to the terms of the Current Agreement
which it replaces.
In their consideration of the New Investment Advisory Agreement, the Trustees
received and reviewed information from the Investment Adviser, and particularly
from Alain Jaspard, the President of Progressive, who is Paul Jaspard's son and
who co-managed the Trust's portfolio with his father. The most significant
factors in the deliberations of the Trustees were the capabilities and resources
of the Investment Adviser following the death of Mr. Jaspard, and the nature,
quality and scope of services expected to be rendered by the Investment Adviser;
the intention of the Investment Adviser to continue to manage the Trust
utilizing the same investment philosophy, policies and strategies as have
previously been employed; and the investment advisory fees and other terms of
the Current and New Investment Advisory Agreements. The Trustees also considered
the investment advisory fees and expense ratios of other investment companies
and the historical performance of the Trust, and inquired as to the economics of
scale realized by the Investment Adviser, the profitability to the Investment
Adviser of its relationship with the Trust and possible alternatives to the
Trust to the arrangements with the Investment Adviser.
The rules under the Investment Company Act provide that the New Investment
Advisory Agreement may continue in effect without stockholder approval for a
period of up to 120 days from the date thereof. If approved by stockholders, the
New Investment Advisory Agreement will continue in effect for a period of one
year from the date thereof, and thereafter shall continue for successive annual
periods, subject to the provisions described below. In the event the
stockholders of a Trust to not approve the New Investment Advisory Agreement,
the Board of Trustees of the Trust will consider the appropriate course of
action.
The Proposal
Under Proposal 1, stockholders of the Trust are being asked to approve the New
Investment Advisory Agreement between the Trust and the Investment Adviser.
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The shares of the Investment Adviser which had been owned by Paul Jaspard were
held by the Estate of Paul Jaspard until on or about November 18, 1999. Under an
agreement that had been entered into by the Estate of Paul Jaspard, these shares
were transferred to Alain Jaspard on November 18, 1999. In the event that such
purchase is deemed to be a further "assignment" of the New Investment Advisory
Agreement, stockholder approval of Proposal 1, shall also be deemed to
constitute approval of such further assignment of the relevant New Investment
Advisory Agreement in connection with such repurchase.
Description of the New Investment Advisory Agreement
As indicated above, except for different effective and termination dates, the
terms of the New Investment Advisory Agreement are identical in all respects to
the terms of the Current Agreement which it replaces. The Current Agreement
between the Trust and the Investment Adviser was dated and last approved by the
stockholders on November 30, 1998, when the agreement was first entered into.
The New Investment Advisory Agreement was entered into as of October 30, 1999.
If approved by the shareholders, the New Investment Advisory Agreement would be
effective as of the date of such approval and, like the Current Agreement, may
be extended from year to year if approved at least annually (a) by the vote of a
majority of the outstanding shares of the Trust or by the Board of Trustees, and
in either case, (b) by vote of a majority of the Trustees of the Trust who are
not parties to the contract or "interested persons" (as that term is defined in
the Investment Company Act of 1940) of any such party cast in person at a
meeting called for such purpose. The New Investment Advisory Agreement is
identical to the Current Agreement. Amendments to the New Investment Advisory
Agreement require similar approval by the shareholders and "disinterested"
Trustees. The Current Agreement and the New Investment Advisory Agreement are
terminable at any time without penalty by the Board of Trustees of the Trust or
by vote of a majority of the Trust's shares on 60 days' written notice or by the
Investment Adviser on 90 days' written notice. The Current Agreement and the New
Investment Advisory Agreement terminates automatically in the event of their
assignment.
The Trust pays the Investment Adviser, as compensation under the Current
Agreement, a fee of 3/4 of 1% per annum of the average of the daily aggregate
net values of the Trust computed as of the close of business of each business
day. This fee would remain in effect under the New Investment Advisory
Agreement. This fee is higher than that of most other investment companies. Such
fee is payable not more frequently than monthly and not less frequently than
quarterly. During the fiscal year ended December 31, 1998, the Trust paid an
aggregate management fee of $ 78,252 to the Investment Adviser and pricing and
bookkeeping fees in the amount of $ 15,000.
The Investment Adviser's Principal Executive Officer and Directors, including
their respective addresses and principal occupations and their office (if any)
with the Trust, are as follows:
Alain Jaspard, President and Director; his principal occupation is
being Chief Executive Officer of Progressive Investment Management,
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Inc. and Linden Investment Advisers, S.A.; his address is 67 Avenue
Terlinden, La Hulpe, Belgium;
David Y. Williams, Director; his principal occupation is President
of Anchor Investment Management Corporation, and President of
Meeschaert & Co., Inc.
Alain Jaspard is the sole record and beneficial owner of the issued and
outstanding stock of Progressive.
The total brokerage commissions paid by the Trust for its fiscal year ended
December 31, 1998, were $35,274. The only broker affiliated with the Trust,
Meeschaert & Co., Inc. (the "Distributor") received $32,154 in brokerage
commissions during such fiscal year, representing 91.15% of the total
commissions paid. The aggregate dollar value of transactions effected by the
Trust on which commissions were paid during such fiscal year was $19,002,320.
The dollar value of such transactions effected through the Distributor was
$18,422,320, representing 96.95% of such total transactions.
Decisions to buy and sell securities for the Trust are made pursuant to
recommendations by the Investment Adviser. The Trust, through the Investment
Adviser, seeks to execute its transactions on the most favorable terms and in
the most effective manner possible. To the extent consistent with the policy of
seeking best price and execution, a portion of the Trust's transactions may be
executed through the Distributor, which is an affiliate of the Investment
Adviser. In the event that this occurs, it will be on the basis of what
management believes to be current information as to rates which are generally
competitive with the rates available from other responsible brokers and the
lowest rates, if any, currently offered by the Distributor. In selecting among
broker-dealer firms to execute its transactions, the Trust, through the
Investment Adviser, may give consideration to those firms which have sole, or
are selling, shares of the Trust. No persons acting on behalf of the Trust are
authorized to pay a broker a brokerage commission in excess of that which
another broker might have charged for effecting the same transaction.
The Board of Trustees of the Trust, including a majority of the Disinterested
Trustees, approved the terms of the Proposed Advisory Contract at a meeting held
on September 13, 1999. A true, complete and correct copy of the New Investment
Advisory Agreement is attached hereto as Exhibit "A". The descriptions of such
Agreement set forth herein is qualified in its entirety by reference to Exhibit
"A". The Board of Trustees determined at that meeting to submit the terms of the
New Investment Advisory Agreement to the shareholders of the Trust for their
approval. The Board considered, with its counsel, the quality of the investment
advisory services which have been provided to the Trust and which would continue
to be provided after the execution of the New Investment Advisory Agreement by
the same personnel, with no change in fee rates payable by the Trust to the
Investment Adviser for such services. For the fiscal year ended December 31,
1998, the total advisory fees accrued or paid by the Trust to the Investment
Adviser were $78,252. Based on these and other considerations, the Board
unanimously recommended approval of the New Investment Advisory Agreement.
The New Investment Advisory Agreement will become effective on the date that
shareholders approve the same. The New Investment Advisory Agreement will remain
in effect for 2 years after such effective date, and thereafter for successive
annual periods as long as such continuance is approved at least annually by the
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Trustees or by the vote of a majority of the outstanding voting securities of
the Trust. The New Investment Advisory Agreement is terminable at any time
without penalty by the Board of Trustees of the Trust or by vote of a majority
of the Trust's shares on 60 day's written notice or by the Investment adviser on
90 days' written notice.
Vote Required. An affirmative vote of the holders of a "majority" (as defined in
the Investment Company Act) of the outstanding voting securities of the Trust is
required for approval of the Proposed Contract. Such "majority" vote is defined
in the Investment Company Act as the vote of the holders of the lesser of: (i)
67% or more of the voting securities present or represented by proxy at the
Meeting, if the holders of more than 50% of the outstanding voting securities
are present or represented by proxy, or (ii) more than 50% of the outstanding
voting securities. The Board of Trustees recommends a vote in favor of approving
the Proposed Contracts.
SELECTION OF INDEPENDENT AUDITORS
(Proposal No. 2)
The Board of Trustees of the Trust, including a majority of the
Trustees who are not interested persons of the Trust, has selected the firm of
Livingston & Haynes, P.C. as independent auditors of the Trust for its fiscal
year ending December 31, 1999. The Trust knows of no direct or indirect
financial interest of such firm in the Trust. Such selection is subject to
ratification or rejection by the shareholders of the Trust. In addition, the
vote of the Trustees is subject to the right of the Trust, by vote of a majority
of its outstanding voting securities at any meeting called for the purpose of
voting on such action, to terminate such employment without penalty. Unless a
contrary specification is made, the accompanying proxy will be voted in favor of
ratifying the selection of such auditors. Representatives of Livingston &
Haynes, P.C. are not expected to be present at the meeting of the shareholders.
Livingston & Haynes, P.C. also acts as independent auditors for the
Investment Adviser and all the other investment companies for which the
Investment Adviser acts as investment adviser. The fees received by Livingston &
Haynes, P.C. from these other entities are substantially greater, in the
aggregate, than the total fees received by it from the Trust. The Board of
Trustees of the Trust considered the fact that Livingston & Haynes, P.C. has
been retained as the independent auditors of the Investment Adviser and the
other entities described above in its evaluation of the independence of
Livingston & Haynes, P.C. with respect to the Trust.
Vote Required. An affirmative vote of the holders of a "majority" of
the outstanding voting securities of the Trust is required for approval of this
Proposal. The requirements for such "majority" vote under the Investment Company
Act are the same as those described above for Proposal No. 1. The Board of
Trustees recommends a vote in favor of approving this Proposal.
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ADDITIONAL INFORMATION
RECEIPT OF SHAREHOLDER PROPOSALS
The Trust is not required to hold shareholder meetings on a regular basis.
Special meetings of shareholders may be called from time to time by either the
Trust or the shareholders. Under the Security Exchange Commission's proxy rules,
shareholder proposals which meet certain conditions may be included in the
Trust's proxy statement and proxy for a particular meeting. Those rules require
that for future meetings, the shareholder must be a record or beneficial owner
of Trust shares with a value of at least $1,000 at the time the proposal is
submitted and for one year prior thereto, and must continue to own such shares
through the date on which the meeting is held. Another requirement relates to
the timely receipt by the Trust of any such proposal. Under those rules, a
proposal submitted for inclusion in the Trust's proxy material for the next
meeting after the meet to which this proxy statement relates must be received by
the Trust a reasonable time before the solicitation is made. The fact that the
Trust receives a proposal from a qualified shareholder in a timely manner does
not ensure its inclusion in the proxy material, since there are other
requirements under the proxy rules for such inclusion.
OTHER BUSINESS
Management of the Trust knows of no business other than the matters specified
above which will be presented at the Meeting. Since matters not known at the
time of the solicitation may come before the Meeting, the proxy as solicited
confers discretionary authority with respect to such matters as properly come
before the Meeting, including any adjournment or adjournments thereof, and it is
the intention of the persons named as attorneys-in-fact in the proxy to vote the
proxy in accordance with their judgment on such matters.
By Order of the Board of Trustees,
David Y. Williams, Secretary
December 14, 1999
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PROXY
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PROGRESSIVE CAPITAL ACCUMULATION TRUST
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Special Meeting of Stockholders - December 30, 1999
The undersigned hereby appoints David Y. Williams, Christopher Y. Williams, and
Peter K. Blume, and each of them, the proxies of the undersigned, with power of
substitution to each of them to vote all shares of Progressive Capital
Accumulation Trust which the undersigned is entitled to vote at the Special
Meeting of Stockholders of Progressive Capital Accumulation Trust to be held on
December 30, 1999 at 12:05 p.m., at 579 Pleasant Street, Suite 4, Paxton,
Massachusetts 01612, and at any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" PROPOSALS (1), (2), AND (3).
1. Proposal to Approve New Investment Advisory FOR[_] AGAINST[_] ABSTAIN[_]
Contract
2. Ratification of the selection of Livingston FOR[_] AGAINST[_] ABSTAIN[_]
& Haynes, P.C. as independent certified
public accountants of the Trust for its fiscal
year ending December 31, 1999.
3. In their discretion on any other business FOR[_] AGAINST[_] ABSTAIN[_]
which may properly come before the meeting or
any adjournments thereof.
Please sign exactly as your name or
names appear at left. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title as such.
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(Signature of Stockholder)
----------------------------------
(Signature of joint owner, if any)
Date _______________________, 1999
PLEASE SIGN AND RETURN PROMPLY IN ENCLOSED ENVELOPE
NO POSTAGE IS REQUIRED
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PROPOSED INVESTMENT ADVISORY CONTRACT
AGREEMENT made this 30th day of October, 1999 by and between Progressive
Capital Accumulation Trust, a Massachusetts business trust (hereinafter
called the "Trust") and Progressive Investment Management Corporation,
a Massachusetts corporation (hereinafter sometimes called the "Advisor").
W I T N E S S E T H :
WHEREAS, the Trust and the Advisor wish to enter into an agreement setting
forth the terms on which the Advisor will perform certain investment advisory
and management services for the Trust;
NOW THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Advisor agree as follows:
l. The Trust hereby employs the Advisor to manage the investment and
reinvestment of the assets of the Trust, subject to the supervision of the Board
of Trustees of the Trust, for the period and on the terms in this agreement set
forth. The Advisor hereby accepts such employment and agrees during such period,
at its own expense, to render the services and to assume the obligations herein
set forth, for the compensation herein provided. The Advisor shall for all
purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an agent of the Trust.
2. The Advisor, at its own expense, shall furnish or cause to be furnished
to the Trust office space in the offices of the Advisor or in such other place
as may be agreed upon from time to time, and arrange for all necessary office
facilities, equipment and personnel for managing the investments of the Trust,
and shall arrange, if desired by the Trust, for members of the Advisor's
organization to serve without salaries from the Trust as officers or agents of
the Trust. The Advisor assumes and shall pay or reimburse the Trust for: (l) the
compensation (if any) of the Trustees of the Trust who are affiliated persons of
the Advisor and of all officers of the Trust as such and (2) all expenses
incurred by the Advisor or by the Trust in connection with the management of the
investment and reinvestment of the assets of the Trust, other than those
specifically assumed by the Trust herein. Except as otherwise expressly provided
above, the Trust assumes and shall pay, (l) all charges and expenses of any
custodian or depositary appointed by the Trust for the safekeeping of its cash,
securities and other property, (2) the charges and expenses of auditors and of
keeping the books of the Trust, (3) the charges and expenses of any transfer
agents and registrars appointed by the Trust, (4) the fees of all Trustees not
affiliated with the Advisor, (5) broader commissions and issue and transfer
taxes chargeable to the Trust in connection with securities transactions to
which the Trust is a party, (6) all taxes and corporate fees payable by the
Trust to federal, state or other governmental agencies, (7) the cost of stock
certificates representing shares of the Trust, (8) fees and expenses involved in
registering and maintaining registrations of the Trust and of its shares with
the Securities and Exchange Commission and qualifying its shares under state or
other securities laws including the preparation and printing of prospectuses for
filing with said Commission and other authorities, (9) all expenses of
shareholders' and trustees' meetings and of preparing and printing reports to
shareholders, (l0) charges and expenses of legal counsel for the Trust in
connection with legal matters relating to the Trust, including without
limitation, legal services rendered in connection with the Trust's corporate
existence, corporate and financial structure and relations with its
shareholders, registrations and qualifications of securities under federal,
state and other laws, issues of securities and expenses which the Trust has
herein assumed, and (11) the charges of the Trust's administrator for providing
and coordinating the foregoing administrative services to the Trust.
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The services of the Advisor to the Trust hereunder are not to be deemed
exclusive, and the Advisor shall be free to render similar services to others so
long as its services hereunder are not impaired thereby.
As compensation for the Advisor's services to the Trust, the Trust shall
pay to the Advisor a fee at the rate of 3/4 of 1% per annum of the average of
the daily aggregate net asset values of the Trust computed as of the close of
business of each business day.
Such compensation shall be payable in arrears at such intervals, not more
frequently than monthly and not less frequently than quarterly (except for an
additional fee), as the Board of Trustees of the Trust may from time to time
determine; provided that such compensation shall be paid proportionately for any
period ending with the termination of this agreement.
3. The Trust shall cause its books and accounts to be audited at least
once each year by a reputable, independent public accountant or organization of
public accountants who shall render a report to the Trust.
4. Subject to and in accordance with the Declaration of Trust of the Trust
and of the Advisor respectively, it is understood that the Trustees, officers,
agents and stockholders of the Trust are or may be interested in the Advisor (or
any successor thereof) as directors, officers or stockholders, or otherwise,
that directors, officers, agents and stockholders of the Advisor are or may be
interested in the Trust as Trustees, officers, stockholders or otherwise, that
the Advisor (or any such successor) is or may be interested in the Trust as
stockholder or otherwise and that the effect of any such adverse interests shall
be governed by said Declaration of Trust and the By-Laws.
5. No Trustee or shareholder of the Trust shall be personally liable under
this Agreement, all such liability being limited to the assets of the Trust.
6. The Advisor shall not be liable for any action taken, omitted or
suffered to be taken by it in its reasonable judgment, in good faith and
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement, or in accordance with (or in the absence
of) specific directions or instructions from the Trust, provided, however, that
such acts or omissions shall not have resulted from the Advisor's willful
misfeasance, bad faith or gross negligence or reckless disregard by it of its
obligations and duties under this Agreement.
7. This Agreement shall continue in effect from the date hereof until June
21, 2000 and from year to year thereafter (a) if its continuance is specifically
approved on or before said date and at least annually thereafter by vote of a
majority of the outstanding voting securities of the Trust or by the Board of
Trustees of the Trust and (b) if the terms and any renewal of this Agreement
have been approved by the vote of a majority of the Trustees of the Trust, who
are not parties to this Agreement or interested persons, as that term is defined
in the Investment Company Act of 1940, of any such party, cast in person at a
meeting called for the purpose of voting on such approval, provided, however,
that (1) this Agreement may at any time be terminated without the payment of any
penalty either by vote of the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Trust, on not more than
sixty days' prior written notice to the Advisor, (2) this Agreement shall
immediately terminate in the event of its assignment (within the meaning of the
Investment Company Act of 1940) by either party to this Agreement, and (3) this
Agreement may be terminated by the Advisor on ninety days' prior written notice
to the Trust. Any notice under this Agreement shall be given in writing
addresses and delivered or mailed postpaid to the other party at any office of
such party.
This agreement may be amended at any time by mutual consent of the
parties, provided that such consent on the part of the Trust shall have been
approved by a vote of a majority of the outstanding voting securities of the
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Trust. A "majority of the outstanding voting securities of the Trust" shall
have, for all purposes of this Agreement, the meaning provided therefore in said
Investment Company Act.
IN WITNESS WHEREOF, the parties hereto have executed this agreement on the
day and year first above written.
PROGRESSIVE CAPITAL ACCUMULATION TRUST
By:
President
PROGRESSIVE INVESTMENT MANAGEMENT, INC.
By:
President
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