SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
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 appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Republic Funds
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 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 calulated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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
number, or the Form or Schedule and the date of its filing:
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
REPUBLIC FUNDS
May 17, 1996
Dear Shareholder:
Enclosed is a Notice of Meeting for a Special Shareholders Meeting
which has been called for June 18, 1996 at 10:00 a.m. at the offices of
Signature Broker-Dealer Services, Inc. at 6 St. James Avenue, Boston,
Massachusetts 02116. The accompanying Proxy Statement details a proposal being
presented for your consideration and requests your prompt attention and vote via
the enclosed proxy ballot.
PLEASE TAKE A MOMENT TO FILL OUT, SIGN AND RETURN THE ENCLOSED PROXY
BALLOT.
This meeting is critically important. You are being asked to consider
and approve an Agreement and Plan of Reorganization that will result in an
exchange of shares of your Fund, Republic Fixed Income Fund or Republic
International Equity Fund, each a series of Republic Funds, for shares of the
following new series of Republic Advisor Funds Trust, respectively: Republic
Fixed Income Fund and Republic International Equity Fund, each a newly created
fund managed by Republic National Bank of New York ( "Republic Bank"). On the
date of the exchange, you will receive shares of the new fund equal in value to
your investment in your current Fund. Thereafter, the value of your investment
will fluctuate with market conditions and the investment performance of the
shares of the new fund. Each of the new funds will be managed according to the
same investment objective, policies and restrictions as your current Fund.
The proposed reorganization is intended to be a tax-free
reorganization under the Internal Revenue Code, as further described in the
accompanying Proxy Statement.
You are also being requested to consider and approve a new investment
management agreement with Republic Bank as investment manager to the Trust.
Because Republic Bank will lower the external fiduciary fees it
currently charges its trust clients that invest in the Funds (who are all of the
shareholders of the Funds) to offset any increase in investment management fees,
none of the existing shareholders will experience a net increase in total
expenses incurred as clients of Republic Bank and shareholders of the new funds
as a result of the proposed investment management fees.
Please take time to review this document and vote NOW! To ensure that
your vote is counted, indicate your position on the enclosed proxy ballot(s).
Sign and return your ballot(s) promptly. If you determine at a later date that
you wish to attend the meeting, you may revoke your proxy and vote in person.
Because the Trustees believe that this reorganization will benefit all
shareholders, the Trustees encourage you to vote in favor of the proposals.
Thomas M. Lenz,
Secretary
<PAGE>
REPUBLIC FUNDS
6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS 02116
(800) 782-8183
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 18, 1996
To the Shareholders:
A Special Meeting of Shareholders (the "Meeting") of Republic Fixed
Income Fund and Republic International Equity Fund (each a "Fund," and
collectively the "Funds"), each a series of Republic Funds (the "Trust"), a
Massachusetts business trust, will be held at the offices of Signature
Broker-Dealer Services, Inc. at 6 St. James Avenue, Boston, Massachusetts 02116,
on Tuesday, June 18, 1996 at 10:00 a.m. for the following purposes, all as set
forth in the accompanying proxy statement:
1. To consider and vote upon a reorganization (the "Reorganization")
of the Funds into corresponding series (each a "Successor Fund," and
collectively the "Successor Funds") of Republic Advisor Funds Trust (the
"Successor Trust"), a newly organized Massachusetts business trust, and approve
the adoption of an Agreement and Plan of Reorganization pursuant to which: (a)
all of the assets and liabilities of each Fund will be transferred to the
corresponding Successor Fund in exchange for shares of such Successor Fund; (b)
shareholders of each Fund will receive an equal number of shares of the
corresponding Successor Fund in exchange for his or her shares of the Fund; and
(c) each Fund will be liquidated and terminated.
2. To consider and vote upon the proposed Amended Master Investment
Management Contract, as supplemented, between Republic Portfolios and Republic
National Bank of New York ("Republic Bank"). Substantially all of the Trust's
investable assets are invested in Republic Portfolios.
3. To transact such other business as may properly come before the
Meeting and any adjournments thereof.
The Board of Trustees of the Trust has fixed the close of business on
April 30, 1996, as the record date for determination of shareholders entitled to
notice of, and to vote at, the Meeting and any adjournments thereof.
By Order of the Board of Trustees,
Thomas M. Lenz, Secretary
Boston, Massachusetts
May 17, 1996
YOUR VOTE IS IMPORTANT. YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE
OF SENDING FOLLOW-UP LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE
ENCLOSED PROXY. IF YOU ARE UNABLE TO BE PRESENT IN PERSON AT THE MEETING, PLEASE
MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN ORDER THAT THE NECESSARY
QUORUM MAY BE REPRESENTED AT THE MEETING. THE ENCLOSED ENVELOPE REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
REPUBLIC FUNDS
6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS 02116
(800) 782-8183
<PAGE>
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
JUNE 18, 1996
This Proxy Statement and Notice of Special Meeting of Shareholders (the
"Meeting") are being furnished in connection with the solicitation of proxies by
and on behalf of the Board of Trustees of Republic Funds (the "Trust"), a
Massachusetts business trust, to be used at a special meeting of shareholders
(the "Meeting") of Republic Fixed Income Fund (the "Fixed Income Fund") and
Republic International Equity Fund (the "International Equity Fund), each a
series of the Trust (each a "Fund," and collectively the "Funds"), to be held at
the offices of Signature Broker-Dealer Services, Inc. ("SBDS"), 6 St. James
Avenue, Boston, Massachusetts 02116, on Tuesday, June 18, 1996 at 10:00 a.m. and
at any adjournments thereof, for the purposes set forth in the accompanying
Notice of Special Meeting. This Proxy Statement and the accompanying Notice of
Special Meeting and form of proxy are being mailed on or about May 17, 1996 to
shareholders of record on April 30, 1996 (the "Record Date").
The Trust is an open-end, diversified management investment company
organized on April 22, 1987. The mailing address of the Trust is 6 St. James
Avenue, Boston, Massachusetts 02116, Attention: Thomas M. Lenz, Secretary. The
mailing address of SBDS, the Trust's principal underwriter and administrator, is
6 St. James Avenue, Boston, Massachusetts 02116, Attention: Molly S. Mugler,
Assistant Secretary.
The Trust seeks to achieve the investment objective of each Fund by
investing all of that Fund's investable assets in a corresponding series of
Republic Portfolios with the same investment objective as the Fund. Republic
Portfolios is an open-end, diversified management investment company.
Shareholders of the Funds are being asked to vote on certain matters with
respect to Republic Portfolios because Republic Portfolios has requested that
its investors (principally the Trust) vote on such matters.
The table below sets forth the proposals on which shareholders of each
Fund will vote:
FUND PROPOSALS TO BE CONSIDERED
Fixed Income Fund Proposals 1 and 2
International Equity Fund Proposals 1 and 2
Any person giving a proxy may revoke it at any time prior to its use. A
shareholder may revoke a proxy by appearing at the Meeting and voting in person,
by giving written notice of revocation to the Board of Trustees of the Trust or
by returning a later-dated proxy. Signed proxies received by the Board of
Trustees of the Trust in time for voting and not so revoked will be voted in
accordance with the instructions noted thereon. IF NO INSTRUCTIONS ARE GIVEN,
THE PROXY WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS DESCRIBED IN THIS
PROXY STATEMENT.
The Board of Trustees of the Trust expects to make this solicitation
primarily by mail. However, in addition to the solicitation of proxies by mail,
the Trust's officers and service contractors may, without remuneration, solicit
proxies personally or by telephone, telegram or other electronic means. The
costs of solicitation and expenses incurred in connection with preparing this
proxy statement and its enclosures, including any cost of retaining a proxy
solicitation firm, will be borne by Republic National Bank of New York
("Republic Bank").
On April 30, 1996, there were outstanding 3,789,693 and 6,789,373 shares
of Republic Fixed Income Fund and Republic International Equity Fund,
respectively.
Shareholders of record at the close of business on the Record Date will
be entitled to the same number of votes as the number of full and fractional
shares of beneficial interest held by such shareholder on the Record Date.
As of the close of business on the Record Date, the Trustees and
officers of the Trust as a group owned of record and beneficially less than 1%
of the shares of each Fund, and the following persons owned of record or
beneficially 5% or more of a Fund's shares. As of the close of business on the
Record Date, to the best knowledge of the Trust, the following persons
beneficially owned 5% or more of the outstanding shares of each Fund:
REPUBLIC FIXED INCOME FUND
Amount of
Name and Address Beneficial Percent
OF BENEFICIAL OWNER OWNERSHIP OF SHARES
Kinko & Co., Nominee/Executor
c/o RNB Securities Services
One Hanson Place,
Lower Level
Brooklyn, NY 11243 471,892 12.45%
Republic National Bank of New
York, Pension Plan & Trust
452 Fifth Avenue, 27th Floor
New York, NY 10018 1,109,345 29.27%
REPUBLIC FIXED INCOME FUND (CONTINUED)
Amount of
Name and Address Beneficial Percent
OF BENEFICIAL OWNER OWNERSHIP OF SHARES
Beiser & Drapkin Trustees
FBO Terry Semel
9460 Wilshire Blvd., Suite 600
Beverly Hills, CA 90212 231,311 6.10%
Friendly Hills Health Care
Foundation
501 South Idaho Street
La Habra, CA 90631 649,829 17.14%
Republic National Bank of New
York, Pooled Profit Sharing Plan
452 Fifth Avenue, 27th Floor
New York, NY 10018 440,870 11.63%
REPUBLIC INTERNATIONAL EQUITY FUND
Amount of
Name and Address Beneficial Percent
OF BENEFICIAL OWNER OWNERSHIP OF SHARES
Republic National Bank of New
York, Pension Plan & Trust
452 Fifth Avenue, 27th Floor
New York, NY 10018 2,052,337 30.22%
Beiser & Drapkin Trustees
FBO Terry Semel
9460 Wilshire Blvd., Suite 600
Beverly Hills, CA 90212 359,759 5.29%
Friendly Hills Health Care
Foundation
501 South Idaho Street
La Habra, CA 90631 584,576 8.61%
Republic National Bank of New
York, Pooled Profit Sharing Plan
452 Fifth Avenue, 27th Floor
New York, NY 10018 518,379 7.63%
For purposes of determining the presence or absence of a quorum and for
determining whether sufficient votes have been received for approval of any
matter to be acted upon at the Meeting, abstentions will be treated as shares
that are present at the Meeting but which have not been voted. For this reason,
abstentions will assist the Trust in obtaining a quorum but will have the
practical effect of a "no" vote for purposes of obtaining the requisite vote for
approval of the Proposals. Broker non-votes (i.e., proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other person entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated in the same manner as abstentions.
In the event a quorum is not present at the Meeting or in the event a
quorum is present at the Meeting but sufficient votes to approve any of the
proposals are not received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies, provided
that such persons determine such an adjournment and additional solicitation is
reasonable and in the interest of shareholders. A shareholder vote may be taken
on one or more of the proposals in this proxy statement prior to such
adjournment if sufficient votes have been received and such vote is otherwise
appropriate. Any such adjournment will require the affirmative vote of a
majority of those shares present at the Meeting in person or by proxy. Under the
By-Laws of the Trust, a quorum is constituted by the presence in person or by
proxy of the holders of more than 50% of the outstanding shares of a Fund or
Funds, as the case may be, entitled to vote at the Meeting.
The Funds' Annual Report, containing audited financial statements for
the fiscal year ended October 31, 1995, may be obtained free of charge upon
request, by writing Republic Funds, 6 St. James Avenue, Boston, Massachusetts
02116, Attention: Thomas M. Lenz, Secretary, or by calling (800) 782-8183.
PROPOSAL 1 -- THE PROPOSED REORGANIZATION
The first proposal to be considered by shareholders at the Meeting is
the approval and adoption of an Agreement and Plan of Reorganization (the "Plan
of Reorganization"), which provides for the reorganization (the
"Reorganization") of the Funds into corresponding series (the "Successor Funds")
of Republic Advisor Funds Trust (the "Successor Trust"), a newly organized
Massachusetts business trust. On April 29, 1996, the Boards of Trustees of the
Trust and the Successor Trust unanimously approved the Plan of Reorganization,
which was proposed by Republic Bank. The address of the Successor Trust is 6 St.
James Avenue, Boston, Massachusetts 02116, Attention: Thomas M. Lenz, Secretary.
REASONS FOR REORGANIZATION
The principal purpose of the Reorganization is to restructure the Funds
into corresponding separate series of the Successor Trust. The Successor Trust
will continue to offer the Successor Funds (along with additional anticipated
series of the Successor Trust) only to clients of Republic Bank and its
affiliates for which Republic or its affiliate exercises investment discretion,
as part of Republic Bank's fiduciary and trust services for institutional and
high net worth clients. Closer alignment with the additional anticipated series
of the Successor Trust is expected to lead to a more focused and therefore
successful marketing effort of shares of all funds in the Successor Trust and
the Trust.
DESCRIPTION OF THE REORGANIZATION
The detailed terms and conditions of the Reorganization are contained in
the Plan of Reorganization. The information in this Proxy Statement with respect
to the Plan of Reorganization is qualified in its entirety by reference to, and
made subject to, the complete text of the Plan of Reorganization, a copy of
which is attached to this Proxy Statement as Exhibit A.
It is anticipated that each of the Funds will participate in the
Reorganization and that the Reorganization, if approved by the shareholders of
each Fund, will be effected contemporaneously as to each Fund. If shareholders
of one of the Funds do not approve the Reorganization, that Fund will continue
as a series of the Trust, but the other Fund may nevertheless implement the
Reorganization if the Reorganization is approved by the Fund's shareholders.
If the shareholders of a Fund approve the Reorganization, and the
conditions of the Reorganization are satisfied, all of the assets and
liabilities of that Fund will be transferred to the corresponding Successor Fund
and each shareholder of the Fund will receive for his or her Fund shares an
equal number of shares of the corresponding Successor Fund (the "New Shares").
The shareholder's New Shares will have a total net asset value equal to the
total net asset value of the shareholder's Fund shares immediately prior to the
consummation of the Reorganization. The New Shares will be issued to the
corresponding Fund in consideration of the transfer to the Successor Fund of all
assets and liabilities of the corresponding Fund. Immediately thereafter, each
Fund will liquidate and distribute the New Shares to the shareholders.
Certificates will not be issued by the Successor Trust after the
Reorganization to shareholders of any series of the Successor Trust.
Shareholders of the Funds will automatically have those shares designated as New
Shares.
If approved by Fund shareholders, it is currently contemplated that the
Reorganization will become effective at the close of business on June 28, 1996.
However, the Reorganization may become effective at another time and date should
the Meeting be adjourned to a later date or should any other conditions to the
Reorganization not be satisfied at that time. One such condition is that the
registration statement on Form N-1A of the Successor Trust be declared effective
by the U.S. Securities and Exchange Commission (the "SEC"). Notwithstanding
prior shareholder approval, the Plan of Reorganization may be terminated at any
time prior to its implementation by the mutual agreement of the parties thereto.
THE SUCCESSOR TRUST
The Successor Trust is a diversified, open-end management investment
company organized as a Massachusetts business trust on April 5, 1996 pursuant to
a Declaration of Trust (the "Declaration of Trust"). The Board of Trustees of
the Successor Trust is composed of the same individuals who currently serve as
Trustees of the Trust.
The Successor Trust is authorized to issue shares divisible into an
indefinite number of different series. The interests of investors in the various
series of the Successor Trust will be separate and distinct. All consideration
received for the sales of shares of a particular series of the Successor Trust,
all assets in which such consideration is invested, and all income, earnings and
profits derived from such investments, will be allocated to that series.
Immediately after the Reorganization, shares of the Successor Funds will
represent interests of the Funds as they existed prior to the Reorganization.
The Successor Trust will not engage in any activities prior to the
Reorganization, except as may be required in connection with effecting the
Reorganization or the public offering of shares of another series of the
Successor Trust.
If shareholders of each Fund approve the Reorganization, the Successor
Funds will constitute two of three active series of shares of the Successor
Trust as of the effective date of the Reorganization. It is expected that the
Successor Trust will commence the public offering of one additional series of
shares as soon as the registration statement regarding this series of shares is
declared effective by the SEC. The Declaration of Trust of the Successor Trust
provides that the Board of Trustees of the Successor Trust may: (a) establish
one or more additional series thereof; (b) issue the shares of any series in any
number of classes; and (c) issue shares of a series in classes in order to make
such shares available pursuant to differing sales commissions, fees or
arrangements, or to different groups of investors.
The Declaration of Trust of the Successor Trust provides for shareholder voting
on the following matters to the extent and as provided in the Declaration of
Trust: (a) the removal of Trustees; (b) the approval of any investment advisory
or management contract; (c) the termination of the Successor Trust; (d) any
amendment of the Declaration of Trust; (e) any merger, consolidation or sale of
assets; (f) the incorporation of a corporation or trust on behalf of the
Successor Trust or the reorganization of the Successor Trust or a series
thereof; (g) whether or not a court action, proceeding or claim should or should
not be brought or maintained on behalf of the Successor Trust or the
shareholders, and (h) with respect to such additional matters relating to the
Successor Trust as may be required by the Declaration of Trust, the By-Laws of
the Successor Trust or any registration of the Successor Trust or its shares.
Certain of the foregoing matters will involve separate votes of one or more of
the affected series (or affected classes of a series) of the Successor Trust,
while others will require a vote of the Successor Trust's shareholders as a
whole.
All shares of all series vote together as a single class for the
election or removal of Trustees of the Successor Trust and the ratification of
auditors, with each share having one vote irrespective of differences in per
share net asset value as among the different series.
As required by the 1940 Act, shareholders of each series of the
Successor Trust, voting separately, will have the power to vote at special
meetings for, among other things, changes in fundamental investment policies and
restrictions applicable to such series, approval of any new or amended advisory
contract and other matters that affect the shareholders of that series. If, at
any time, less than a majority of the Trustees holding office has been elected
by the shareholders, the Trustees then in office will call a shareholders'
meeting for the purpose of electing a Board of Trustees of the Successor Trust.
CERTAIN COMPARATIVE INFORMATION ABOUT THE TRUST AND THE SUCCESSOR TRUST
The Successor Trust's operations will be governed by the Declaration
of Trust of the Successor Trust rather than the Declaration of Trust of the
Trust (the "Current Declaration of Trust"). Both the Trust and the Successor
Trust are governed by applicable Massachusetts law. Therefore, any differences
between the governance of the Trust and the Successor Trust derive from
differences in the provisions of the Successor Trust's Declaration of Trust and
Bylaws. Shareholders entitled to vote at the Meeting may obtain a copy of the
Successor Trust's Declaration of Trust and By-laws without charge upon written
request addressed to Thomas M. Lenz, Secretary, Republic Advisor Funds Trust, 6
St. James Avenue, Boston, Massachusetts 02116.
SHARES OF BENEFICIAL INTEREST. The Declaration of Trust of the Successor
Trust permits the Trustees to issue an unlimited number of full and fractional
shares of beneficial interest (par value $0.01 per share) in the Successor Trust
and to divide or combine the shares of any series into a greater or lesser
number of shares without thereby changing their proportionate beneficial
interests in the Successor Trust allocated or belonging to that series. The
Successor Trust may issue an unlimited number of shares of one or more series or
classes thereof, all without shareholder approval. Each share of any Successor
Trust series represents an equal proportionate interest in the assets and
liabilities with each other share of that series only, and such interest shall
not extend to the assets of the Successor Trust generally. As such, each share
is entitled to dividends and distributions out of the income (after expenses)
belonging to that series only, as declared by the Board of Trustees. Upon
liquidation or termination of a series of the Successor Trust, shareholders of
such series shall be entitled to receive a pro data share of the net assets of
such series (or allocable to such series) only. Under the Current Declaration of
Trust, the Trust is also authorized to divide its shares into an unlimited
number of series or classes thereof. The Trust has the authority to issue an
unlimited number of shares of beneficial interest, $0.01 par value per share.
AMENDMENTS TO TRUST INSTRUMENT. Under the Current Declaration of Trust
of the Trust and the Declaration of Trust of the Successor Trust, the
affirmative vote of a majority of the shares entitled to be cast is generally
required to amend a Declaration of Trust, except that each Declaration of Trust
may be amended by its respective Trustees without the vote or consent of
shareholders in certain limited circumstances. The Declaration of Trust of the
Successor Trust provides that any amendment which the Trustees of the Successor
Trust have determined would affect the rights, privileges or interests of
holders of a particular series of shares or class thereof, but not the rights,
privileges or interests of holders of all series or classes of shares generally,
and which would otherwise require a majority vote of the shareholders, may be
made with the vote or consent by a majority of the outstanding voting securities
of such series or class. The Declaration of Trust of the Successor Trust also
provides that no amendment may be made to change any rights with respect to any
series or class of shares, by reducing the amount payable thereon upon
liquidation of the Trust or by diminishing or eliminating any voting rights of
said series or class, except with the affirmative vote of a majority of the
outstanding shares of such series or class. The Current Declaration of Trust
requires an affirmative vote of two-thirds of the outstanding shares with
respect to any series of shares.
VOTING RIGHTS. The Current Declaration of Trust of the Trust provides
that a special meeting of shareholders for the purpose of considering the
removal of a person serving as a trustee of the Trust shall be called upon the
written request of shareholders representing 10% of the outstanding shares of
the Trust. While no analogous provision is contained in the Declaration of Trust
of the Successor Trust, the Successor Trust has undertaken in its registration
statement as filed with the SEC to call a meeting of shareholders for the
purpose of voting upon the question of removal of a trustee when requested in
writing to do so by shareholders who hold in the aggregate at least 10% of the
outstanding shares of the Successor Trust, regardless of the values of shares
held by such requesting shareholders. In addition, the By-Laws of the Successor
Trust provide that a meeting of shareholders shall be called by any Trustee upon
written request, which request shall specify the purpose or purposes for which
such meeting is called, of shareholders holding in the aggregate not less than
10% of the outstanding shares entitled to vote on the matters specified in such
written request. Like the Trust, the Successor Trust will not be required to
hold annual meetings of its shareholders and, at this time, does not intend to
do so. As with the Trust, the Trustees of the Successor Trust may fix a record
date for determining shareholders who are entitled to notice of, and to vote at,
a shareholders' meeting, which date may not be more than 60 days preceding the
scheduled meeting date.
The Declaration of Trust of the Successor Trust provides for shareholder
voting in certain circumstances. See "The Proposed Reorganization --
The Successor Trust" above. Similarly, the Current Declaration of Trust
of the Trust grants shareholders of the Trust the power to vote on the same
matters to the extent and as provided in the Current Declaration of Trust.
The Current Declaration of Trust provides that Trustees shall be elected
by a plurality of the shares at a meeting called for such purpose. Any
termination of the Trust or any series thereof must be approved by the vote of
two-thirds of the shares outstanding and entitled to vote. The Declaration of
Trust of the Successor Trust provides that in the case of vacancy for any
reason, the remaining Trustees shall have the power to fill such vacancy by
appointing another individual as they in their discretion see fit, subject to
the provisions of Section 16(a) of the 1940 Act. Section 16(a) of the 1940 Act
currently provides that no person shall serve as Trustee unless elected to that
office by the holders of the outstanding voting securities of the Successor
Trust, except that vacancies occurring between shareholder meetings may be
filled by the Trustees if immediately after filling any such vacancy at least
two thirds of the Trustees then holding office shall have been elected by the
shareholders of the Successor Trust. The Declaration of Trust of the Successor
Trust also provides that any termination of the Successor Trust or a series
thereof may be approved by vote of "a majority of the outstanding voting
securities", or by majority vote of the Trustees by written notice to the
shareholders. As used in the Declaration of Trust of the Successor Trust and in
this Proxy Statement, a "majority of the outstanding voting securities" means
with respect to each series the vote of the lesser of (a) more than 50% of the
outstanding shares of the series, or (b) 67% of the shares of the series present
at a meeting of shareholders, if the holders of more than 50% of the outstanding
shares of the series are present or represented by proxy at such meeting.
The Current Declaration of Trust of the Trust permits removal of a
Trustee with cause by action of at least two-thirds of the other Trustees, or
with or without cause by vote of two-thirds of outstanding shares. The
Declaration of Trust of the Successor Trust contains substantially identical
provisions.
SHAREHOLDER LIABILITY. Like the Trust, the Successor Trust is an
entity of the type commonly known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a business trust may, under certain
circumstances, be held personally liable as partners for its obligations and
liabilities. However, the Declaration of Trust of the Successor Trust contains
an express disclaimer of shareholder liability for acts or obligations of the
Successor Trust and provides for indemnification and reimbursement of expenses
out of trust property for any shareholder held personally liable for the
obligations of the Successor Trust. The Declaration of Trust of the Successor
Trust also provides that the Successor Trust shall maintain appropriate
insurance (for example, fidelity bond and errors and omissions insurance) for
the protection of the Successor Trust, its shareholders, Trustees, officers,
employees and agents covering possible tort and other liabilities. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which both inadequate insurance existed
and the Successor Trust itself was unable to meet its obligations.
LIABILITY OF TRUSTEES. Under the Declaration of Trust of the Successor
Trust, a Trustee or officer is liable to the Successor Trust and its
shareholders only for such Trustees' own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee. The Declaration of Trust of the Successor Trust provides that
Trustees and officers otherwise will be indemnified against all liability and
for the expenses of litigation against them, unless it is determined that the
Trustee or officer did not act in good faith in the reasonable belief that his
action was in the best interest of the Trust, any such determination to be based
upon the final adjudication of a court action or administrative proceeding. In
the event of a settlement prior to final adjudication, Trustees and officers
similarly will be indemnified against all liability and for the expenses of
litigation against them. The Successor Trust may also advance money for these
expenses provided that the Trustee or officer undertakes to repay the Successor
Trust if his or her conduct is later determined to preclude indemnification and
certain other conditions are met. It should be noted that it is the view of the
staff of the Securities and Exchange Commission that to the extent that any
provisions such as those described above are inconsistent with the 1940 Act, the
provisions of the 1940 Act are preemptive. The Trustees of the Successor Trust
acknowledge that the 1940 Act supersedes any inconsistent Declaration of Trust
provisions.
The Current Declaration of Trust of the Trust provides that its Trustees
shall not be liable to the Trust or its shareholders, except for the Trustees'
acts of willful misfeasance, bad faith, gross negligence or reckless disregard
of duties involved in the conduct of their office. The Current Declaration of
Trust also provides that Trustees and officers of the Trust will be indemnified
against liability and expenses of litigation against them unless their conduct
constituted willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their office.
RIGHT OF INSPECTION. The By-laws of the Trust provide that no
shareholder shall have the right to inspect the books of account and stock
ledger of the Trust except as conferred by law, the By-laws, or as authorized by
the Board of Trustees of the Trust or a resolution of shareholders. The By-Laws
of the Successor Trust provide that shareholders of the Successor Trust shall
have the right to inspect the records of the Successor Trust to the same extent
as is permitted shareholders of a Massachusetts business corporation.
The foregoing is only a summary of certain of the similarities and
differences between the Current Declaration of Trust and By-laws of the Trust
and the Successor Trust's Declaration of Trust and By-laws. Shareholders should
refer directly to the provisions of the Current Declaration of Trust and By-laws
of the Trust, the Successor Trust's Declaration of Trust and Bylaws,
Massachusetts law, and all other sections of this Proxy Statement for a more
detailed and complete comparison.
HUB AND SPOKE(R) INVESTMENT FUND STRUCTURE.
Unlike other mutual funds which directly acquire and manage their own
portfolios of securities, the Trust currently seeks to achieve each Fund's
investment objective by investing all of that Fund's investable assets in a
corresponding series (a "Portfolio") of Republic Portfolios, an open-end
management investment company. Each Portfolio has the same investment objective
and policies as its corresponding Fund. The Funds invest in the Portfolios
through Signature Financial Group, Inc.'s Hub and Spoke investment fund
structure. Hub and Spoke employs a two-tier master/feeder fund structure and is
a registered service mark of Signature Financial Group, Inc. This structure
allows several funds (each, a "SpokeSM" or "feeder fund") with different
distribution features, but with the same investment objective, restrictions and
policies, to combine their investments in a single fund (the "HubSM" or "master
fund") instead of incurring the costs of managing them separately. The Hub and
Spoke structure may produce measurable benefits to shareholders of a feeder fund
when other feeder funds invest in the master fund, thereby increasing the master
fund's assets and producing economies of scale that result in reduced fund
expenses indirectly borne by shareholders of each feeder fund. The Successor
Trust is expected to invest all of the investable assets of each Successor Fund
in the same master fund in which the Trust currently invests all of the
investable assets of the corresponding Fund.
INVESTMENT POLICIES AND RESTRICTIONS
Each Successor Fund will have the same investment objective, policies
and restrictions as the corresponding Fund. Furthermore, as noted above, the
Successor Trust is expected to invest all of the investable assets of each
Successor Fund in the same master fund in which the Trust currently invests all
of the investable assets of the corresponding Fund. Neither the Successor Trust
with respect to the Successor Funds nor Republic Portfolios with respect to the
Portfolios presently intend to change in any material way the investment
objectives, policies or restrictions of each Successor Fund and Portfolio from
those presently employed with respect to the Funds.
CERTAIN VOTES TO BE TAKEN BY THE FUNDS
Prior to the Reorganization, each Fund will own a single outstanding
share of the corresponding Successor Fund. In voting to approve the
Reorganization, shareholders will be deemed to give authorization to a Fund, as
the sole shareholder of the corresponding Successor Fund, to take certain
actions required by the 1940 Act, such as the approval of the proposed Amended
Master Investment Management Contract and Supplements between Republic
Portfolios and Republic Bank on behalf of the Successor Funds, subject to
approval of the Amended Master Investment Management Contract and Supplements by
the shareholders of each Fund, as discussed below.
FEDERAL INCOME TAX CONSEQUENCES
The Board of Trustees of the Trust anticipates that the transactions
contemplated by the Plan of Reorganization will be tax-free. Dechert Price &
Rhoads, counsel to the Trust, has informed the Board that if substantially all
of the assets of the Funds are transferred to the corresponding Successor Funds,
it will issue an opinion that the Reorganization will not give rise to the
recognition of income, gain or loss to the Funds, the Successor Funds, or
shareholders of the Funds for federal income tax purposes pursuant to sections
361, 1032 (a) and 354(a)(1), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code"). Such opinion will be based upon customary
representations of the Trust and the Successor Trust and certain customary
assumptions. The receipt of such an opinion is a condition to the consummation
of the Reorganization.
A shareholder's adjusted basis for tax purposes in shares of the
Successor Funds after the Reorganization will be the same as the shareholder's
adjusted basis for tax purposes in the shares of the Funds immediately before
the Reorganization. The holding period for the shares of the Successor Funds
received in the Reorganization will include a shareholder's holding period for
shares of the Funds (provided that the shares of the Funds were held as capital
assets on the date of the Reorganization). Shareholders should consult their own
tax advisers with respect to the state and local tax consequences of the
proposed transaction.
REORGANIZATION EXPENSES
The expenses related to the Reorganization will be borne by Republic
Bank to the extent and as provided for in the Plan of Reorganization.
APPRAISAL RIGHTS
Neither the Current Declaration of Trust of the Trust nor
Massachusetts law grants shareholders any rights in the nature of appraisal or
dissenters rights with respect to any action upon which such shareholders may be
entitled to vote; however, the customary right of mutual fund shareholders to
redeem their shares is not affected by the proposed Reorganization.
RECOMMENDATION OF TRUSTEES
The Board of Trustees of the Trust requested, received and considered
such information as it deemed reasonably necessary to enable the members of the
Board to evaluate the Plan of Reorganization. At the meeting of the Trust's
Board of Trustees called for the purpose on April 29, 1996, the Trustees voted
to approve the proposed Plan of Reorganization and determined that participation
in the Reorganization is in the best interest of the Funds and that the
interests of existing shareholders will not be diluted as a result of the
Reorganization. The Trustees' decision was based on several factors, including
(i) the expected benefits resulting from the proposed realignment and
restructuring of the fund complex, and (ii) the continuity of service provider
relationships and investment objectives and policies between each Fund and its
corresponding Successor Fund. The Trustees expect that the Reorganization will
enable Republic Bank, the Trust and the Successor Trust to more effectively
service the shareholders.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF EACH FUND VOTE
TO APPROVE THE PROPOSED REORGANIZATION.
If the shareholders of a Fund do not approve Proposal 1, the Trustees
will consider what future action to take, including possible resubmission of the
Proposal to shareholders at a future date.
REQUIRED VOTE
Pursuant to the Declaration of Trust of the Trust, the affirmative
vote of a majority of the shares outstanding and entitled to vote of each of the
Funds is required to approve the Reorganization.
Approval by the shareholders of a Fund of Proposal 1 will be deemed an
authorization to the Trustees and officers of the Trust to take any steps
necessary or appropriate to transfer the assets of such Fund to its
corresponding Successor Fund.
PROPOSAL 2 -- APPROVAL OF PROPOSED AMENDED MASTER INVESTMENT MANAGEMENT CONTRACT
AND SUPPLEMENTS
As noted above, the Trust currently seeks to achieve each Fund's
investment objective by investing all of that Fund's investable assets in its
corresponding Portfolio. Shareholders of the Trust are being asked to vote on
certain matters with respect to Republic Portfolios because Republic Portfolios
has requested that its investors (including the Trust prior to the
Reorganization) vote on such matters.
At the Meeting, shareholders of each Fund will be asked to authorize
the Trust to approve the proposed Amended Master Investment Management Contract
and Supplements with respect to each Portfolio (the "Amended Management
Agreement").
The Successor Trust is expected to invest all of the investable assets
of each Successor Fund in the same Portfolio in which the Trust currently
invests all of the investable assets of the corresponding Fund.
If shareholders of the Funds approve the Reorganization and the Amended
Management Agreement, each Fund will vote its share of the corresponding
Successor Fund to authorize the Successor Trust to approve the Amended
Management Agreement on behalf of the Successor Funds.
The terms and conditions of the current Master Investment Management
Contract and Supplements with respect to each Portfolio (the "Current Management
Agreement") between Republic Portfolios and Republic Bank are identical in all
material respects to those of the Amended Management Agreement, except as set
forth in the following sentence. Under the Amended Management Agreement,
Republic Bank will receive a fee as investment manager (i) from Fixed Income
Portfolio, computed daily and paid monthly, equal on an annual basis to 0.20% of
the Portfolio's average daily net assets for the then-current fiscal year, and
(ii) from International Equity Portfolio, computed daily and paid monthly, equal
on an annual basis to 0.25% of the Portfolio's average daily net assets for the
then-current fiscal year; under the Current Management Agreement, no such fees
are payable to Republic Bank as investment manager. Approval of the Amended
Management Agreement will introduce a new investment management fee and increase
the total expenses of each Fund (which includes the expenses of its
corresponding Portfolio). However, because Republic Bank will lower the external
fiduciary fees it currently charges its trust clients that invest in the Funds
(who are all of the shareholders of the Funds) to offset any increase in
investment management fees, none of the existing shareholders will experience a
net increase in total expenses incurred as clients of Republic Bank and
shareholders of the new funds as a result of the proposed investment management
fees.
The information in this Proxy Statement with respect to the Amended
Management Agreement is qualified in its entirety by reference to, and made
subject to, the complete text of the Amended Management Agreement, a copy of
which is attached to this Proxy Statement as Exhibit B.
DESCRIPTION OF CURRENT AND AMENDED MANAGEMENT AGREEMENTS
The Current Management Agreement is dated November 21, 1994, and was
approved by each Fund's initial shareholder on December 16, 1994. It will remain
in effect until November 21, 1996, and will continue in effect thereafter from
year to year with respect to each of the Portfolios, provided such continuance
is approved annually (i) by the holders of a majority of the outstanding voting
securities of the respective Portfolio or by the Board of Trustees of Republic
Portfolios, and (ii) by a majority of the Trustees of Republic Portfolios who
are not parties to the Current Management Agreement or "Interested persons" (as
defined in the 1940 Act) of any such party, at a meeting called for the purpose
of voting on the Current Management Agreement. The Current Management Agreement
may be terminated with respect to either Portfolio without penalty by either
party on 60 days' written notice and will terminate automatically if assigned.
Subject to the general supervision and control of the Board of Trustees
of Republic Portfolios, under the Current Management Agreement, Republic Bank is
required to: (a) provide to Republic Portfolios investment guidance and policy
direction in connection with the management of each Portfolio, including oral
and written research, analysis, advice, statistical and economic data and
information and judgments of both a macroeconomic and microeconomic character;
(b) determine the securities to be purchased or sold by each Portfolio and place
orders pursuant to its determinations; (c) determine what portion of each
Portfolio's portfolio shall be invested in securities described by the policies
of such Portfolio and what portion, if any, should be invested otherwise or held
uninvested; (d) provide administrative assistance to the officers of Republic
Portfolios in connection with the operation of Republic Portfolios and each of
the Portfolios; (e) make investments for the account of each Portfolio in
accordance with its best judgment and within all applicable investment
objectives, restrictions, laws and regulations; (f) furnish periodic reports on
the investment performance of each Portfolio and on the performance of its
obligations under the agreement to the Board of Trustees of Republic Portfolios;
and (g) provide all services, equipment and facilities necessary to perform its
obligations under the agreement.
Under the Current Management Agreement, Republic Bank may appoint and
employ one or more subadvisers to provide all or any portion of the services
contemplated under the agreement, subject to the supervision and oversight of
Republic Bank. Since the commencement of operations of each Portfolio on January
9, 1995, Miller Anderson & Sherrerd, One Tower Bridge, West Conshohocken,
Pennsylvania 19428, has served as investment subadviser with respect to Fixed
Income Portfolio, and Capital Guardian Trust Company, 333 South Hope Street, Los
Angeles, California 90071, has served as investment sub-adviser with respect to
International Equity Portfolio. Each such investment subadviser continuously
manages the investment portfolio of its corresponding Portfolio pursuant to a
Sub-Advisory Agreement with the corresponding Portfolio and Republic Bank.
Republic Portfolios does not presently intend to replace any of the subadvisers.
The Current Management Agreement provides that Republic Bank shall not
be liable under the agreement for any mistake in judgment or in any other event
whatsoever, provided that nothing in the agreement shall be deemed to protect
Republic Bank against any liability to Republic Portfolios or its investors to
which Republic Bank would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties under the
agreement, or by reason of its reckless disregard of its obligations and duties
thereunder.
The investment advisory services of Republic Bank to the Portfolio are
not exclusive under the terms of the Current Management Agreement. Republic Bank
is free to and does render investment advisory services to others.
As noted above, the terms and conditions of the Current Management
Agreement are identical in all material respects to those of the Amended
Management Agreement, except for the fees payable to Republic Bank as investment
manager. If the proposed investment management fees had been in effect for the
fiscal period from commencement of operations (January 9, 1995) through October
31, 1995, Republic Bank would have received the following aggregate amount of
investment management fees: $28,780 with respect to the Portfolio corresponding
to the Fixed Income Fund and $47,164 with respect to the Portfolio corresponding
to the International Equity Fund.
COMPARATIVE EXPENSES
The following Expense Tables summarize the current estimated aggregate
annual expenses of each Fund and its corresponding Portfolio, and a pro forma
adjustment thereto to reflect the proposed investment advisory fee under the
Amended Management Agreement, in each case as a percentage of the average daily
net assets of the Fund. The example that follows each Expense Table illustrates
the dollar cost of such expenses on a $1,000 investment in each Fund. The
Trustees of the Trust believe that the aggregate per share expenses of each Fund
and its corresponding Portfolio will be less than or approximately equal to the
expenses which a Fund would incur if the Trust retained the services of an
investment adviser on behalf of the Fund and the investable assets of the Fund
were invested directly in the type of securities being held by its corresponding
Portfolio.
EXPENSE TABLE
FIXED INCOME FUND CURRENT PRO FORMA
Shareholder Transaction Expenses............. None None
Annual Fund Operating Expenses
Investment Management Fee........... 0% 0.20%
Investment Subadvisory Fee.......... 0.33% 0.33%
Other Expenses...................... 0.50% 0.50%
----- -----
--Administrative Services Fee....... 0.10% 0.10%
--Other Operating Expenses.......... 0.40% 0.40%
Total Operating Expenses..................... 0.83% 1.03%
EXAMPLE
A shareholder of the Fixed Income Fund would pay the following expenses
on a $1,000 investment in the Fund, assuming (1) 5% annual return and (2)
redemption at the end of:
CURRENT PRO FORMA
1 Year.............................. $8 $11
3 Years............................. $26 $33
5 Years............................. $46 $57
10 Years............................ $103 $126
EXPENSE TABLE
INTERNATIONAL EQUITY FUND CURRENT PRO FORMA
Shareholder Transaction Expenses............. None None
Annual Fund Operating Expenses
Investment Management Fee........... 0% 0.25%
Investment Subadvisory Fee.......... 0.53% 0.53%
Other Expenses...................... 0.68% 0.68%
----- -----
--Administrative Services Fee....... 0.10% 0.10%
--Other Operating Expenses.......... 0.58% 0.58%
Total Operating Expenses..................... 1.21% 1.46%
EXAMPLE
A shareholder of the International Equity Fund would pay the following
expenses on a $1,000 investment in the Fund, assuming (1) 5% annual return and
(2) redemption at the end of:
CURRENT PRO FORMA
1 Year.............................. $12 $15
3 Years............................. $38 $46
5 Years............................. $67 $80
10 Years............................ $147 $175
The information in each Expense Table is based on the expenses a Fund
and its corresponding Portfolio are expected to incur for the current fiscal
year, assuming average daily net assets of $50 million in the Fixed Income Fund,
$75 million in the Fixed Income Portfolio, $75 million in the International
Equity Fund, and $100 million in the International Equity Portfolio.
The Examples set forth above should not be considered a representation
of future aggregate expenses of a Fund and its corresponding Portfolio, and
actual expenses may be greater or less than those shown.
REPUBLIC BANK
Republic Bank, whose principal business address is 452 Fifth Avenue, New
York, New York 10018, serves as investment manager to each Portfolio pursuant to
the Current Management Agreement. Republic Bank is a wholly owned subsidiary of
Republic New York Corporation, a registered bank holding company. The principal
business address of Republic New York Corporation is 452 Fifth Avenue, New York,
New York 10018. As of December 31, 1995, Republic Bank was the 20th largest
commercial bank in the United States measured by deposits and the 19th largest
commercial bank measured by shareholder equity.
Republic Bank and its affiliates may have deposit, loan and other
commercial banking relationships with the issuers of obligations purchased for
the Portfolios, including outstanding loans to such issuers which may be repaid
in whole or in part with the proceeds of obligations so purchased.
Republic complies with applicable laws and regulations, including the
regulations and rulings of the U.S. Comptroller of the Currency relating to
fiduciary powers of national banks. Based upon the advice of counsel, Republic
believes that the performance of investment advisory and other services for the
Portfolios will not violate the Glass-Steagall Act or other applicable banking
laws or regulations. However, future statutory or regulatory changes, as well as
future judicial or administrative decisions and interpretations of present and
future statutes and regulations, could prevent Republic from continuing to
perform such services for the Portfolios. If Republic were prohibited from
acting as investment manager to the Portfolios, it is expected that the
Successor Trust's Board of Trustees would recommend to Successor Fund
shareholders approval of a new investment advisory agreement with another
qualified investment adviser selected by such Board, or that the Board would
recommend other appropriate action.
PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF REPUBLIC BANK
The names and principal occupations of each director and the principal
executive officer of Republic Bank are set forth below. Unless otherwise
indicated by footnote, the business address of each person listed below is 452
Fifth Avenue, New York, New York 10018.
KURT ANDERSEN
Vice Chairman and a Director of Republic New York Corporation ("RNYC") and
Republic Bank.
ANTHONY G. CHAPPELL
Executive Vice President and Director of Republic Bank.
CYRIL S. DWEK
Vice Chairman of the Board and Director of Republic Bank and RNYC.
ERNEST GINSBERG
Vice Chairman of the Board and Director of RNYC and Republic Bank.
NATHAN HASSON
Vice Chairman of the Board, Director and Treasurer of Republic Bank and
Vice Chairman of the Board and Director of RNYC.
JEFFREY C. KEIL
President and Director of RNYC and Vice Chairman of the Board and
Director of Republic Bank.
PETER KIMMELMAN
A private investor and a Director of RNYC and Republic Bank.(1)
PAUL L. LEE
Executive Vice President and Director of Republic Bank;
Executive Vice President and General Counsel of RNYC.
LEONARD LIEBERMAN
Director of various companies, including Consolidated Cigar Corporation and
Outlet Communications, Inc.; Director of RNYC and Republic Bank.
WILLIAM C. MACMILLEN, JR.
President, William C. MacMillen & Co., Inc. (Investment Banking) and
a Director of RNYC and Republic Bank.(2)
PETER J. MANSBACH
Director and Chairman of the Executive Committee of Republic Bank and RNYC.
MARTIN F. MERTZ
Director of RNYC and Republic Bank.
CHARLES G. MEYER, JR.
President of Cord Meyer Development Co. and Director of Republic Bank.(3)
JAMES L. MORICE
Partner in the management consulting and executive search firm of
Mirtz Morice, Inc. and a Director of RNYC and Republic Bank.(4)
E. DANIEL MORRIS
President, Corsair Capital Corporation and Director of RNYC.
DR. JANET L. NORWOOD
Senior Fellow at The Urban Institute (research organization); Director of RNYC
and Republic Bank.
JOHN A. PANCETTI
Director of RNYC and Republic Bank.
VITO S. PORTERA
Vice Chairman of the Board, and a Director of RNYC and Republic Bank. Also,
Chairman of the Board of Republic International Bank of New York, the Florida
Edge Act subsidiary of Republic Bank.
WILLIAM P. ROGERS
Partner, Rogers & Wells and Director of RNYC and Republic Bank.
SLIAS SAAL
Vice Chairman and Director of Republic Bank and RNYC; Chief Trading Officer of
Republic Bank.
DOV C. SCHLEIN
President and Chief Operating Officer of Republic Bank, and a Director of RNYC
and Republic Bank.
RICHARD C. SPIKERMAN
Executive Vice President and Director of Republic Bank.
JOHN TAMBERLANE
Director of Republic Bank; President of the Consumer Bank Division of Republic
Bank.
WALTER H. WEINER
Chairman of the Board, Director and Chief Executive Officer of Republic Bank
and RNYC.
GEORGE T. WENDLER
Vice Chairman and Director of Republic Bank; Senior Credit Officer of Republic
Bank.
PETER WHITE
Senior Consultant and a Director of RNYC and Republic Bank.
- -----------------------------------
(1) 1270 Avenue of the Americas, Suite 3010, New York 10020.
(2) 254 Victoria Place, Lawrence, New York 11559.
(3) 111-15 Queens Boulevard, 2nd Floor, Forest Hills, New York,
New York 11375.
(4) One Dock Street, Stamford, CT 06902
EVALUATION AND RECOMMENDATION OF TRUSTEES
The Trustees of the Trust, the Successor Trust and Republic Portfolios
believe the Amended Management Agreement and the investment management fees
payable thereunder to be reasonable, fair and in the best interests of the
Successor Funds' shareholders. In connection with the Trustees's consideration
of the Amended Management Agreement and the investment management fees, at
meetings of the Boards of Trustees of the Trust, the Successor Trust and
Republic Portfolios held on April 29, 1996, Republic Bank informed the Trustees
that it was prepared to lower the external fiduciary fees it currently charges
its trust clients that invest in the Funds (who are all of the shareholders of
the Funds) to offset any increase in investment management fees, such that none
of the existing shareholders will experience a net increase in total expenses
incurred as clients of Republic Bank and shareholders of the Successor Funds as
a result of the proposed investment management fees. In considering the Amended
Management Agreement, the Trustees of the Trust, the Successor Trust and
Republic Portfolios considered Republic Bank's position as stated above and
considered and evaluated, among other things, the nature, quality and scope of
the services to be provided to the Portfolios and the investment record of
Republic Bank in managing the Portfolios and other accounts, comparative fees
charged to other investment companies by other investment advisers, comparative
performance results, and expense ratio data comparing the Funds and Portfolios
with other investment companies with similar size and with similar investment
objectives.
At the meeting of the Board of Trustees of the Trust held on April 29,
1996, the Trustees, including the Trustees who are not "interested persons" of
the Trust, as that term is defined in the 1940 Act, voted to (a) authorize the
Trust (as an investor in Republic Portfolios) to approve the Amended Management
Agreement and the investment management fees to be paid to Republic Bank by
Republic Portfolios thereunder, subject to the approval of each Fund's
shareholders (Proposal 2), and (b) subject to approval of the Reorganization by
the shareholders of each Fund, authorize the Trust to vote its initial share of
each Successor Fund to authorize the Successor Trust (as an investor in Republic
Portfolios) to approve the agreement and said fees. At a meeting called for the
purpose on April 29, 1996, the Board of Trustees of the Successor Trust,
including the Trustees who are not "interested persons" of the Successor Trust,
as that term is defined in the 1940 Act, voted to authorize the Successor Trust
(as investor in Republic Portfolios) to approve the Amended Management Agreement
and the investment management fees to be paid thereunder, subject to
authorization from the shareholders of each Fund upon approval of the
Reorganization and the Amended Management Agreement.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE TO APPROVE THE AMENDED MASTER INVESTMENT MANAGEMENT CONTRACT
AND SUPPLEMENTS.
REQUIRED VOTE
An affirmative vote of a "majority of the outstanding voting securities"
of a Fund will be required to authorize the Trust to approve the Amended
Management Agreement with respect to the corresponding Portfolio. As used in
this Proxy Statement, a "majority of the outstanding voting securities" means
with respect to each series the vote of the lesser of (a) more than 50% of the
outstanding shares of the series, or (b) 67% of the shares of the series present
at a meeting of shareholders, if the holders of more than 50% of the outstanding
shares of the series are present or represented by proxy at such meeting.
Approval of the Amended Management Agreement pursuant to Proposal 2 is
not contingent upon approval of Proposal 1. If the shareholders authorize the
Trust on behalf of a Fund to approve the Amended Management Agreement, but the
Reorganization is not consummated, the Amended Management Agreement will remain
in effect with respect to the corresponding Portfolio until two years after the
date of its execution, and will continue in effect thereafter from year to year
with respect to that Portfolio, provided such continuance is approved annually
(i) by the holders of a majority of the outstanding voting securities of the
Portfolio or by the Board of Trustees of Republic Portfolios, and (ii) by a
majority of the Trustees of Republic Portfolios who are not parties to the
Amended Management Agreement or "interested persons" (as defined in the 1940
Act) of any such party, at a meeting called for the purpose of voting on the
Amended Management Agreement. If the shareholders do not authorize the Trust on
behalf of a Fund to approve the Amended Management Agreement with respect to the
corresponding Portfolio, the Trustees will consider what future action to take,
including possible resubmission to said shareholders for approval at a later
date.
PROPOSAL 3 -- OTHER BUSINESS
The Trust's management knows of no business to be brought before the
Meeting except as described above. However, if any other matters properly come
before the Meeting, the persons named in the enclosed form of proxy intend to
vote on these matters in accordance with their best judgment.
If shareholders would like to receive additional information about the
matters proposed for action, the Trust's management will be glad to hear from
them and to provide further information.
SUBMISSION OF CERTAIN PROPOSALS
Proposals of shareholders which are intended to be presented at a future
shareholder meeting must be received by the Trust at a reasonable time prior to
the Trust's solicitation of proxies relating to such future meeting. The Trust
is the type of entity commonly referred to as a "Massachusetts business trust."
As such, it is not required to hold, and has no intention of holding, annual
meetings, although the Trust may hold special shareholder
meetings.
YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY
PROMPTLY.
By Order of the Board of Trustees,
Thomas M. Lenz, Secretary
Boston, Massachusetts
May 17, 1996
<PAGE>
EXHIBIT A -- AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") made this
29th day of April, 1996, by and between Republic Funds ("Republic"), a
Massachusetts business trust, on behalf of its series, Republic Fixed Income
Fund (the "Fixed Income Fund") and Republic International Equity Fund (the
"International Equity Fund"; collectively with Republic Fixed Income Fund, the
"Funds"), and Republic Advisor Funds Trust ("RAFT"), a Massachusetts business
trust, on behalf of its series, Republic Fixed Income Fund (the "RAFT Fixed
Income Fund") and Republic International Equity Fund (the "RAFT International
Equity Fund").
WITNESSETH:
WHEREAS, Republic and RAFT are open-end, registered investment companies
of the management type;
WHEREAS, Republic and RAFT are both authorized to issue their shares of
beneficial interest in separate series, each of which maintains a separate and
distinct portfolio of assets;
WHEREAS, each of the Fixed Income Fund and the International Equity Fund
is a separate series of Republic, and each of the RAFT Fixed Income Fund and the
RAFT International Equity Fund is a separate series of RAFT, each of which is
diversified;
WHEREAS, the Fixed Income Fund owns securities which are assets of the
character in which the RAFT Fixed Income Fund is permitted to invest, and the
International Equity Fund owns securities which are assets of the character in
which the RAFT International Equity Fund is permitted to invest;
WHEREAS, Republic National Bank of New York ("RNB"), the investment
manager to Republic Portfolios, has recommended to the Board of Trustees of
Republic and to the Board of Trustees of RAFT a transfer of all of the assets
and liabilities of the Fixed Income Fund and the International Equity Fund to
the RAFT Fixed Income Fund and the RAFT International Equity Fund, respectively;
WHEREAS, the Boards of Trustees of Republic and RAFT have determined
that the transfer of all of the assets and liabilities of the Fixed Income Fund
to the RAFT Fixed Income Fund and the transfer of all of the assets and
liabilities of the International Equity Fund to the RAFT International Equity
Fund is in the best interests of each Fund and its respective shareholders, and
that the interests of the existing shareholders of each such series of Republic
would not be diluted as a result of this transaction; and
WHEREAS, the parties hereto, together with RNB, intend to provide for
the reorganization of the Fixed Income Fund and the International Equity Fund
through the transfer to the RAFT Fixed Income Fund and the RAFT International
Equity Fund, respectively, of all of the assets, subject to all of the
liabilities, of the Fixed Income Fund and the International Equity Fund in
exchange for voting shares of beneficial interest of the RAFT Fixed Income Fund
and the RAFT International Equity Fund (the "RAFT Shares"), the termination of
the Fixed Income Fund and the International Equity Fund and the distribution to
shareholders of the corresponding RAFT Shares, all pursuant to the provisions of
Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the
"Code");
NOW THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. PLAN OF REORGANIZATION AND LIQUIDATION.
(a) Republic, on behalf of the Fixed Income Fund and the International
Equity Fund, shall transfer to the RAFT Fixed Income Fund and the RAFT
International Equity Fund, respectively, at the closing provided for in Section
2 (the "Closing"), all of the then existing assets of each of the Fixed Income
Fund and the International Equity Fund of every kind and nature. In
consideration therefor, the RAFT Fixed Income Fund and the RAFT International
Equity Fund shall at the Closing: (1) assume all of the corresponding Republic
Fund's liabilities then existing, whether absolute, accrued, contingent or
otherwise, including, without limitation, all obligations of each of the Fixed
Income Fund and the International Equity Fund, whether asserted or contingent,
arising out of occurrences on or before the Closing Date (as defined in Section
2 hereof), to indemnify the Trustees of Republic to the fullest extent permitted
by law and the Amended and Restated Declaration of Trust of Republic as in
effect on the Closing Date; and (2) deliver to the corresponding Republic Fund
that number of full and fractional RAFT Shares equal to the number of full and
fractional shares of the corresponding Republic Fund then outstanding. The
number of shares of the Fixed Income Fund and the International Equity Fund
issued and outstanding and the number of RAFT Shares to be issued to the Fixed
Income Fund and the International Equity Fund shall in each case be determined
by RAFT, subject to the approval of Republic, as of 4:00 p.m., Eastern Time, on
the Closing Date, after the declaration of any dividends on that date. This
determination shall be conclusive and binding on each Fund and its respective
shareholders.
(b) Upon consummation of the transactions described in paragraph (a) of
this Section 1, each of the Fixed Income Fund and the International Equity Fund
shall distribute in complete liquidation to its shareholders of record as of the
Closing Date (on a pro rata basis) the RAFT Shares that were received by the
Fixed Income Fund and the International Equity Fund. Such distribution and
liquidation shall be accomplished by the establishment of an open account on the
share records of the RAFT Fixed Income Fund and the RAFT International Equity
Fund in the name of each shareholder of the Fixed Income Fund and the
International Equity Fund, representing a number of RAFT Fixed Income Fund and
RAFT International Equity Fund shares equal to the number of shares of the Fixed
Income Fund and/or the International Equity Fund owned of record by the
shareholder at the Closing Date. Certificates representing the RAFT Shares will
not be physically issued.
(c) As promptly as practicable after the Closing Date, the Fixed Income
Fund and the International Equity Fund shall be terminated pursuant to the
provisions of the laws of the Commonwealth of Massachusetts and Republic's
Amended and Restated Declaration of Trust. After the Closing Date, each of the
Fixed Income Fund and the International Equity Fund shall not conduct any
business except in connection with its liquidation and termination.
2. CLOSING AND CLOSING DATE. The Closing shall occur at the offices of
Signature Financial Group, Inc., 6 St. James Avenue, Boston, MA 02116 at 4:00
p.m., Eastern Time, June 28, 1996, or at such later time and date, or at such
other location, as the parties may mutually agree (the "Closing Date"). All acts
taking place at the Closing shall be deemed to take place simultaneously as of
the time of the Closing unless otherwise provided.
3. CONDITIONS PRECEDENT. The obligations of Republic and RAFT to effect
the transactions contemplated hereunder shall be subject to the satisfaction of
each of the following conditions:
(a) All filings shall have been made with, and all authority and orders
shall have been received from, the U.S. Securities and Exchange Commission
("SEC") and state securities commissions as may be necessary to permit the
parties to carry out the transactions contemplated by this Agreement;
(b) The investment objectives and the permitted investments of the RAFT
Fixed Income Fund and the RAFT International Equity Fund are substantially
identical to those of the Fixed Income Fund and the International Equity Fund,
respectively;
(c) Republic and RAFT shall have received an opinion of Dechert Price &
Rhoads substantially to the effect that, based on the facts, assumptions and
representations of the parties, the transactions contemplated by this Agreement
will be treated for federal income tax purposes as reorganizations within the
meaning of Section 368(a) of the Code. Notwithstanding anything herein to the
contrary, neither Republic nor RAFT may waive the condition set forth in this
Section 3(c);
(d) This Agreement and the reorganization contemplated hereby shall have
been approved by the Boards of Trustees of Republic and of RAFT and shall have
been recommended for approval to the shareholders of each of the Fixed Income
Fund and the International Equity Fund by Republic's Board of Trustees;
(e) This Agreement and the reorganization contemplated hereby shall have
been adopted and approved by the affirmative vote of a majority of the shares of
beneficial interest, of each of the Fixed Income Fund and the International
Equity Fund, that are outstanding and entitled to vote on this Agreement and the
reorganization contemplated hereby;
(f) Republic Portfolios, on behalf of its series, Republic Fixed Income
Portfolio and Republic International Equity Portfolio, shall have entered into
an Investment Management Agreement with RNB, RNB shall have entered into a Sub
- -Advisory Agreement with Miller, Anderson & Sherrerd and a Sub-Advisory
Agreement with Capital Guardian Trust Company with respect to Republic Fixed
Income Portfolio and Republic International Equity Portfolio, respectively, and
RAFT shall have entered into a Distribution Contract with Signature
Broker-Dealer Services, Inc. on behalf of RAFT Fixed Income Fund and RAFT
International Equity Fund, such agreements to be in each case substantially
identical in substance to the respective agreement in effect at the Closing Date
with respect to Republic Fixed Income Portfolio and Republic International
Equity Portfolio or the Fixed Income Fund and the International Equity Fund, as
the case may be, and such agreements shall have been approved by the Trustees of
RAFT and, to the extent required by law, by the Trustees of RAFT who are not
"interested persons" of RAFT as defined in the Investment Company Act of 1940
(the "1940 Act") as well as by the shareholders of the RAFT Fixed Income Fund
and the RAFT International Equity Fund (it being understood that the Fixed
Income Fund, as the sole shareholder of the RAFT Fixed Income Fund, and
International Equity Fund, as the sole shareholder of the RAFT International
Equity Fund, prior to the consummation of the reorganization, will vote for such
approval);
(g) The Trustees of RAFT who are not "interested persons" of RAFT as
defined in the 1940 Act shall have selected auditors for RAFT, and such
selection shall have been ratified by the shareholders of RAFT (it being
understood that RNB, as sole shareholder of the Republic Small Cap Equity Fund
of RAFT prior to the consummation of the reorganization, will vote for such
ratification;
(h) Republic shall file proxy materials (the "Proxy Statement") with the
SEC complying in all material respects with the requirements of the Securities
Exchange Act of 1934, as amended, the 1940 Act, and applicable rules and
regulations thereunder, relating to a meeting of its shareholders to be called
to consider and act upon the transactions contemplated herein. RAFT agrees to
provide Republic with information applicable to RAFT required under such Acts,
rules and regulations for inclusion in the Proxy Statement;
(i) All securities of each of the Fixed Income Fund and the
International Equity Fund at the time of the Closing will be owned by the Fixed
Income Fund and the International Equity Fund, respectively, free and clear of
any liens, claims, charges, options and encumbrances, and none of such
securities is or, after the reorganization as contemplated hereby, will be
subject to any restrictions, legal or contractual, on the disposition thereof,
including restrictions as to the public offering or sale thereof under the
Securities Act of 1933, as amended, and all such securities are or will be
readily marketable; and
(j) Immediately prior to the Closing, RAFT shall establish the net asset
value per share of the RAFT Fixed Income Fund and the RAFT International Equity
Fund at an amount equal to the net asset value per share of the Fixed Income
Fund and the International Equity Fund, respectively, at such time, after the
declaration of any dividends on that date.
4. AMENDMENT. This Agreement may be amended at any time upon the mutual
agreement of the Trustees of Republic and the Trustees of RAFT, notwithstanding
approval thereof by the shareholders of each of the Fixed Income Fund and the
International Equity Fund, provided that no amendment shall have a material
adverse effect on the interests of the shareholders of any Fund.
5. TERMINATION. The Board of Trustees of Republic and the Board of
Trustees of RAFT may each terminate this Agreement and abandon the
reorganization contemplated hereby, notwithstanding approval thereof by the
shareholders of each of the Fixed Income Fund and the International Equity Fund,
at any time prior to the Closing if circumstances should develop that, in their
judgment, make proceeding with the Agreement inadvisable. In the event that the
reorganization contemplated by this Agreement is consummated, any remaining
obligation to indemnify the Trustees of Republic pursuant to Section 1(a) shall
terminate on a date that is five years from the Closing Date.
6. NO BROKER'S OR FINDER'S FEE . Republic and RAFT each represents that
there is no person with whom it has dealt who by reason of such dealings is
entitled to any broker's or finder's or other similar fee or commission arising
out of the transactions contemplated by this Agreement.
7. NO SURVIVAL OF REPRESENTATIONS, ETC. The representations, warranties,
covenants and agreements of the parties contained herein shall not survive the
Closing Date, except for the provisions of Section 1(a), Section l(c), Section
5, and Section 12.
8. WAIVER. Republic or RAFT, after consultation with its counsel and by
consent of its Board of Trustees, Executive Committee or an officer authorized
by such Board of Trustees, may waive any condition to its obligations hereunder
if in its judgment such waiver will not have a material adverse effect on the
interests of its shareholders. If the transactions contemplated by this
Agreement have not been substantially completed by June 30, 1997, the Agreement
shall automatically terminate on that date unless a later date is agreed to by
both Republic and RAFT.
9. RELIANCE. All covenants, agreements,
representations and warranties made under this Agreement shall be deemed
to have been material and relied upon by each of the parties notwithstanding any
investigation made by such party or on its behalf.
10. NOTICES. All notices required or permitted under this Agreement
shall be given in writing to Republic or RAFT at 6 St. James Avenue, Boston, MA
02116, Attention: Philip W. Coolidge, or at such other place as shall be
specified in a written notice given by either party to the other to this
Agreement and shall be validly given if mailed by first class mail, postage
prepaid, and telecopy.
11. EXPENSES. RNB has agreed to provide to the Funds all of the services
necessary to effect the reorganization. RNB shall bear all of the Funds'
expenses in connection with the transactions contemplated under this Agreement.
12. INDEMNIFICATION. RAFT's assumption of the liability to indemnify and
hold harmless the Trustees of Republic as provided in Section 1(a) shall, in
respect to obligations arising from the Fixed Income Fund, be limited in amount
to the total assets of the Fixed Income Fund as of the Closing Date, and, in
respect to obligations arising from the International Equity Fund, be limited in
amount to the total assets of the International Equity Fund as of the Closing
Date. The parties agree that any person who served as a Trustee of Republic on
or prior to the Closing Date shall be an express third party beneficiary of this
Agreement and shall have the right to enforce RAFT's obligation to pay for any
indemnification of such Trustee assumed pursuant to Section 1(a).
13. MISCELLANEOUS PROVISIONS. This Agreement shall bind and inure to the
benefit of the parties and their respective successors and assigns. It shall be
governed by and carried out in accordance with the laws of the Commonwealth of
Massachusetts. It is executed in several counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one
Agreement.
All persons dealing with Republic must look solely to Republic property
for the enforcement of any claim against Republic, as neither the Trustees,
officers, agents or shareholders assume any personal liability for obligations
entered into on behalf of Republic. No series of Republic shall be liable for
claims against any other series of Republic.
All persons dealing with RAFT must look solely to RAFT property for the
enforcement of and claims against RAFT, as neither the Trustees, officers,
agents or shareholders assume any personal liability for obligations entered
into on behalf of RAFT. No series of RAFT shall be liable for claims against any
other series of RAFT.
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to
be executed and delivered by their duly authorized officers as of the day and
year first written above.
REPUBLIC FUNDS (on behalf of its series,
Republic Fixed Income Fund and Republic
International Equity Fund)
By: ______________________________
Its: ______________________________
Attest:
(Seal)
By: ______________________________
Its: ______________________________
REPUBLIC ADVISOR FUNDS TRUST (on behalf of
its series, Republic Fixed Income Fund and
Republic International Equity Fund)
By: ______________________________
Its: ______________________________
Attest:
(Seal)
By: ______________________________
Its: ______________________________
REPUBLIC PORTFOLIOS (on behalf of its
series, Republic Fixed Income Portfolio and
Republic International Equity Portfolio)
By: ______________________________
Its: ______________________________
Attest:
(Seal)
By: ______________________________
Its: ______________________________
<PAGE>
EXHIBIT B -- AMENDED MANAGEMENT AGREEMENT WITH SUPPLEMENTS
AMENDED MASTER INVESTMENT MANAGEMENT CONTRACT
Republic Portfolios
P.O. Box 2494
Elizabethan Square, 2nd Floor
George Town, Grand Cayman
Cayman Islands, BWI
(809) 945-1824
November 21, 1994,
as amended April 29, 1996
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Portfolio Trust") and Republic National Bank of New York (the "Adviser") as
follows:
1. The Portfolio Trust is as open-end investment company organized as a
New York trust and consists of one or more separate investment portfolios (the
"Portfolio Series") as may be established and designated by the Trustees from
time to time. This Contract shall pertain to such Portfolio Series as shall be
designated in Supplements to this Contract as further agreed between the
Portfolio Trust and the Adviser. Separate interests in the Portfolio Trust are
offered to investors with respect to each Portfolio Series. The Portfolio Trust
engages in the business of investing and reinvesting the assets of each
Portfolio Series in the manner and in accordance with the investment objectives
and restrictions specified in the currently effective Registration Statement
relating to the Portfolio Trust and the Portfolio Series, as amended from time
to time (the "Registration Statement"), filed by the Portfolio Trust under the
Investment Company Act of 1940 (the "1940 Act"). Copies of the documents
referred to in the preceding sentence have been furnished to the Adviser. Any
amendments to those documents shall be furnished to the Adviser promptly.
2. The Portfolio Trust hereby appoints the Adviser to provide the
investment advisory services specified in this Contract and the Adviser hereby
accepts such appointment. The Portfolio Trust expressly authorizes the Adviser,
subject to compliance with applicable law, to employ one or more subadvisers to
provide all or any portion of the services contemplated hereby, subject to
supervision and oversight of the Adviser, on such terms and conditions as the
Adviser determines appropriate.
3. (a) The Adviser shall, at its expense, (i) employ or associate with
itself such persons as it believes appropriate to assist it in performing its
obligations under this Contract and (ii) provide all services, equipment and
facilities necessary to perform its obligations under this Contract.
(b) The Portfolio Trust shall be responsible for all of its expenses and
liabilities, including compensation of its Trustees who are not affiliated with
the Administrator, the Exclusive Placement Agent or any affiliates of the
Administrator or the Exclusive Placement Agent; taxes and governmental fees;
interest charges; fees and expenses of the Portfolio Trust's independent
accountants and legal counsel; trade association membership dues; fees and
expenses of any custodian (including maintenance of books and accounts and
calculation of the net asset value of the Portfolio Series), transfer agent,
registrar and disbursing agent of the Portfolio Trust; expenses of preparing and
printing Registration Statements and reports to investors, notices, proxy
statements and reports to regulatory agencies; the cost of office supplies,
including stationery; travel expenses of all officers, Trustees and employees;
insurance premiums; brokerage and other expenses of executing portfolio
transactions; expenses of investors' meetings; organization expenses; and
extraordinary expenses.
4. (a) The Adviser shall provide to the Portfolio Trust investment
guidance and policy direction in connection with the management of the portfolio
of each Portfolio Series, including oral and written research, analysis, advice,
statistical and economic data and information and judgments of both a
macroeconomic and microeconomic character.
The Adviser will determine the securities to be purchased or sold by
each Portfolio Series and will place orders pursuant to its determinations
either directly with the issuer or with any broker or dealer who deals in such
securities. The Adviser will determine what portion of each Portfolio Series'
portfolio shall be invested in securities described by the policies of such
Portfolio Series and what portion, if any, should be invested otherwise or held
uninvested.
The Portfolio Trust will have the benefit of the investment analysis and
research, the review of current economic conditions and trends and the
consideration of long-range investment policy generally available to investment
advisory customers of the Adviser. It is understood that the Adviser will not
use any inside information pertinent to investment decisions undertaken in
connection with this Contract that may be in its possession or in the possession
of any of its affiliates nor will the Adviser seek to obtain any such
information.
(b) The Adviser also shall provide to the Portfolio Trust's officers
administrative assistance in connection with the operation of the Portfolio
Trust and each of the Portfolio Series, which shall include (i) compliance with
all reasonable requests of the Portfolio Trust for information, including
information required in connection with the Portfolio Trust's filings with the
Securities and Exchange Commission and (ii) such other services as the Adviser
shall from time to time determine, upon consultation with the Administrator, to
be necessary or useful to the administration of the Portfolio Trust and each of
the Portfolio Series.
(c) As manager of the assets of each Portfolio Series, the Adviser shall
make investments for the account of each Portfolio Series in accordance with the
Adviser's best judgment and within the investment objectives and restrictions
set forth in the Registration Statement, the 1940 Act and the provisions of the
Internal Revenue Code relating to regulated investment companies subject to
policy decisions adopted by the Portfolio Trust's Board of Trustees.
(d) The Adviser shall furnish to the Portfolio Trust's Board of Trustees
periodic reports on the investment performance of each Portfolio Series and on
the performance of its obligations under this Contract and shall supply such
additional reports and information as the Portfolio Trust's officers or Board of
Trustees shall reasonably request.
(e) On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of a Portfolio Series as well as other
customers, the Adviser, to the extent permitted by applicable law, may aggregate
the securities to be so sold or purchased in order to obtain the best execution
or lower brokerage commissions, if any. The Adviser may also on occasions
purchase or sell a particular security for one or more customers in different
amounts. On either occasion, and to the extent permitted by applicable law and
regulations, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to that Portfolio Series and to such other customers.
5. The Adviser shall give the Portfolio Trust the benefit of the
Adviser's best judgment and efforts in rendering services under this Contract.
As an inducement to the Adviser's undertaking to render these services, the
Portfolio Trust agrees that the Adviser shall not be liable under this Contract
for any mistake in judgment or in any other event whatsoever provided that
nothing in this Contract shall be deemed to protect or purport to protect the
Adviser against any liability to the Portfolio Trust or its investors to which
the Adviser would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of the Adviser's duties under this
Contract or by reason of the Adviser's reckless disregard of its obligations and
duties hereunder.
6. The Adviser shall receive such fee in consideration of the services
to be rendered under this Contract as shall be established in Supplements to
this Contract as further agreed between the Portfolio Trust and the Adviser.
7. If the aggregate expenses of every character incurred by or allocated
to a feeder fund in a two tier mutual fund structure which invests substantially
all of its investable assets in a Portfolio Series (a "Feeder Fund") in any
fiscal year, other than interest, taxes, brokerage commissions and other
portfolio transaction expenses, other expenditures which are capitalized in
accordance with generally accepted accounting principles and any extraordinary
expense (including, without limitation, litigation and indemnification expense)
otherwise allocable to the Feeder Fund, but including the aggregate allocable
fees payable under this Contract ("includable expenses"), shall exceed the
expense limitations applicable to that Feeder Fund imposed by state securities
law or regulations thereunder, as these limitations may be raised or lowered
from time to time, the Adviser shall pay the corresponding Portfolio Series an
amount equal to 50% of that excess. With respect to portions of a fiscal year in
which this Contract shall be in effect, the foregoing limitations shall be
prorated according to the proportion which that portion of the fiscal year bears
to the full fiscal year. At the end of each month of the Portfolio Trust's
fiscal year, the Sponsor will review the includable expenses accrued during that
fiscal year to the end of the period and shall estimate the contemplated
includable expenses for the balance of that fiscal year. If, as a result of that
review and estimation, it appears likely that the includable expenses will
exceed the limitations referred to in this paragraph 7 for a fiscal year with
respect to a Feeder Fund, the monthly fees relating to the corresponding
Portfolio Series payable to the Adviser under this Contract for such month shall
be reduced, subject to a later reimbursement to reflect actual expenses, by an
amount equal to 50% of a pro rata portion (prorated on the basis of the
remaining months of the fiscal year, including the month just ended) of the
amount by which the includable expenses for the fiscal year (less an amount
equal to the aggregate of actual reductions made pursuant to this provision with
respect to prior months of the fiscal year) are expected to exceed the
limitations provided in this paragraph 7. For purposes of the foregoing, the
value of the net assets of each Portfolio Series shall be computed in the manner
specified in paragraph 6, and any payments required to be made by the Adviser
shall be made once a year promptly after the end of the Portfolio Trust's fiscal
year.
8. (a) This Contract and any Supplement shall become effective with
respect to a Portfolio Series on the date specified in the Supplement and shall
thereafter continue in effect with respect to that Portfolio Series for a period
of more than two years from such date with respect to the Portfolio Series only
so long as the continuance is specifically approved at least annually (i) by the
vote of a majority of the outstanding voting interests of the Portfolio Series
(as defined in the 1940 Act) or by the Portfolio Trust's Board of Trustees and
(ii) by the vote, cast in person at a meeting called for that purpose, of a
majority of the Portfolio Trust's Trustees who are not parties to this Contract
or "interested persons" (as defined in the 1940 Act) of any such party.
(b) This Contract and any Supplement hereto may be terminated with
respect to a Portfolio Series at any time, without the payment of any penalty,
by a vote of a majority of the outstanding voting interests of that Portfolio
Series (as defined in the 1940 Act) or by a vote of a majority of the entire
Board of Trustees on 60 days' written notice to the Adviser or by the Adviser on
60 days' written notice to the Portfolio Trust. This Contract shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).
9. Except to the extent necessary to perform the Adviser's obligations
under this Contract, nothing herein shall be deemed to limit or restrict the
right of the Adviser, or any affiliate of the Adviser, or any employee of the
Adviser, to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association.
10. The investment management services of the Adviser to the Portfolio
Trust under this Contract are not to be deemed exclusive as to the Adviser and
the Adviser will be free to render similar services to others.
11. This Contract shall be construed in accordance with the laws of
the State of New York provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act.
12. In the event that the Board of Trustees of the Portfolio Trust
shall establish one or more additional investment portfolios, it shall so notify
the Adviser in writing. If the Adviser wishes to render investment advisory
services to such portfolio, it shall so notify the Portfolio Trust in writing,
whereupon such portfolio shall become a Portfolio Series hereunder.
13. The Declaration of Trust establishing the Portfolio Trust, (the
"Declaration"), provides that the name "Republic Portfolios" refers to the
Trustees under the Declaration collectively as Trustees and not as individuals
or personally, and that no investor, trustee, officer, employee or agent of the
Portfolio Trust shall be subject to claims against or obligations of the
Portfolio Trust to any extent whatsoever, but that the Portfolio Trust estate
only shall be liable.
If the foregoing correctly sets forth the agreement between the
Portfolio Trust and the Adviser, please so indicate by signing and returning to
the Portfolio Trust the enclosed copy hereof.
Very truly yours,
REPUBLIC PORTFOLIOS
By:
ACCEPTED: REPUBLIC NATIONAL BANK OF NEW YORK
By:
<PAGE>
AMENDED INVESTMENT MANAGEMENT CONTRACT SUPPLEMENT
Republic Portfolios
P.O. Box 2494
Elizabethan Square, 2nd Floor
George Town, Grand Cayman
Cayman Islands, BWI
(809) 945-1824
November 21, 1994,
as amended April 29, 1996
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
Dear Sirs:
Re: International Equity Portfolio
This will confirm the agreement between the undersigned (the "Portfolio
Trust") and Republic National Bank of New York (the "Adviser") as follows:
1. The Portfolio Trust is an open-end management investment company
organized as a New York trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Portfolio
Trust from time to time. A separate class of shares of beneficial interest of
the Portfolio Trust is offered to investors with respect to each investment
portfolio. International Equity Portfolio (the "Portfolio Series") is a separate
investment portfolio of the Portfolio Trust.
2. The Portfolio Trust and the Adviser have entered into an Amended
Master Investment Management Contract ("Master Management Contract") pursuant to
which the Portfolio Trust has employed the Adviser to provide investment
advisory and other services specified in that Contract and the Adviser has
accepted such employment.
3. As provided in paragraph 1 of the Master Management Contract, the
Portfolio Trust hereby adopts the Master Management Contract with respect to the
Portfolio Series and the Adviser hereby acknowledges that the Master Management
Contract shall pertain to the Portfolio Series, the terms and conditions of the
Master Management Contract being hereby incorporated herein by reference.
4. For the services to be rendered, the Portfolio Trust shall pay to the
Adviser an investment advisory fee on behalf of the Portfolio Series computed
and paid monthly at an annual rate equal to 0.25% of the Portfolio Series'
average daily net assets for its then-current fiscal year. If the Adviser serves
in such capacity for less than the whole of any period specified in this
paragraph 4, the compensation of the Adviser shall be prorated.
5. The term "Portfolio Series" as used in the Master Management Contract
shall, for purposes of this Supplement, pertain to the Portfolio Series.
6. This Supplement and the Master Management Contract (together, the
"Contract") shall become effective with respect to the Portfolio Series on April
29, 1996 and shall thereafter continue in effect with respect to the Portfolio
Series for a period of more than two years from such date only so long as the
continuance is specifically approved at least annually (a) by the vote of a
majority of the outstanding voting securities of the Portfolio Series (as
defined in the 1940 Act) or by the Portfolio Trust's Board of Trustees and (b)
by the vote, cast in person at a meeting called for that purpose, of a majority
of the Portfolio Trust's Board of Trustees who are not parties to this Contract
or "interested persons" (as defined in the Investment Company Act of 1940 ("1940
Act)) of any such party. This Contract may be terminated with respect to the
Portfolio Series at any time, without the payment of any penalty, by vote of a
majority of the outstanding voting securities of the Portfolio Series (as
defined in the 1940 Act) or by a vote of a majority of Portfolio Trust's entire
Board of Trustees on 60 days' written notice to the Portfolio Trust. This
Contract shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).
If the foregoing correctly sets forth the agreement between the
Portfolio Trust and the Adviser, please so indicate by signing and returning to
the Portfolio Trust the enclosed copy hereof.
Very truly yours,
REPUBLIC PORTFOLIOS
By:
ACCEPTED:REPUBLIC NATIONAL BANK OF NEW YORK
By:
<PAGE>
AMENDED INVESTMENT MANAGEMENT CONTRACT SUPPLEMENT
Republic Portfolios
P.O. Box 2494
Elizabethan Square, 2nd Floor
George Town, Grand Cayman
Cayman Islands, BWI
(809) 945-1824
November 21, 1994,
as amended April 29, 1996
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
Dear Sirs:
Re: Fixed Income Portfolio
This will confirm the agreement between the undersigned (the "Portfolio
Trust") and Republic National Bank of New York ( "Republic" or the "Adviser") as
follows:
1. The Portfolio Trust is an open-end management investment company
organized as a New York trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Portfolio
Trust from time to time. A separate class of shares of beneficial interest of
the Portfolio Trust is offered to investors with respect to each investment
portfolio. Fixed Income Portfolio (the "Portfolio Series") is a separate
investment portfolio of the Portfolio Trust.
2. The Portfolio Trust and the Adviser have entered into an Amended
Master Investment Management Contract ("Master Management Contract") pursuant to
which the Portfolio Trust has employed the Adviser to provide investment
advisory and other services specified in that Contract and the Adviser has
accepted such employment.
3. As provided in paragraph 1 of the Master Management Contract, the
Portfolio Trust hereby adopts the Master Management Contract with respect to the
Portfolio Series and the Adviser hereby acknowledges that the Master Management
Contract shall pertain to the Portfolio Series, the terms and conditions of the
Master Management Contract being hereby incorporated herein by reference.
4. For the services to be rendered, the Portfolio Trust shall pay to the
Adviser an investment advisory fee on behalf of the Portfolio Series computed
and paid monthly at an annual rate equal to 0.20% of the Portfolio Series'
average daily net assets for its then-current fiscal year. If the Adviser serves
in such capacity for less than the whole of any period specified in this
paragraph 4, the compensation of the Adviser shall be prorated.
5. The term "Portfolio Series" as used in the Master Management Contract
shall, for purposes of this Supplement, pertain to the Portfolio Series.
6. This Supplement and the Master Management Contract (together, the
"Contract") shall become effective with respect to the Portfolio Series on April
29, 1996 and shall thereafter continue in effect with respect to the Portfolio
Series for a period of more than two years from such date only so long as the
continuance is specifically approved at least annually (a) by the vote of a
majority of the outstanding voting securities of the Portfolio Series (as
defined in the 1940 Act) or by the Portfolio Trust's Board of Trustees and (b)
by the vote, cast in person at a meeting called for that purpose, of a majority
of the Portfolio Trust's Board of Trustees who are not parties to this Contract
or "interested persons" (as defined in the Investment Company Act of 1940 ("1940
Act)) of any such party. This Contract may be terminated with respect to the
Portfolio Series at any time, without the payment of any penalty, by vote of a
majority of the outstanding voting securities of the Portfolio Series (as
defined in the 1940 Act) or by a vote of a majority of Portfolio Trust's entire
Board of Trustees on 60 days' written notice to the Portfolio Trust. This
Contract shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).
If the foregoing correctly sets forth the agreement between the
Portfolio Trust and the Adviser, please so indicate by signing and returning to
the Portfolio Trust the enclosed copy hereof.
Very truly yours,
REPUBLIC PORTFOLIOS
By:
ACCEPTED:REPUBLIC NATIONAL BANK OF NEW YORK
By:
<PAGE>
PROXY BALLOT
REPUBLIC FIXED INCOME FUND
A SERIES OF
REPUBLIC FUNDS
The undersigned, revoking any prior proxy or proxies, hereby appoints
Thomas M. Lenz, Linda T. Gibson and Andres E. Saldana, or any of them
individually, proxies, with full powers of substitution, to vote for the
undersigned at the Special Meeting of Shareholders of Republic Fixed Income Fund
(the "Fund"), a series of Republic Funds (the "Trust"), a Massachusetts business
trust, to be held at the offices of Signature Broker-Dealer Services, Inc., 6
St. James Avenue, Boston, Massachusetts 02116, on Tuesday, June 18, 1996, at
10:00 a.m., Eastern Time, Notice of which Meeting and the Proxy Statement
accompanying the same have been received by the undersigned, or at any
adjournment thereof, upon the following matters as described therein:
1. To approve or disapprove a reorganization of the Fund into a series
(the "Successor Fund") of Republic Advisor Funds Trust (the "Successor Trust"),
a Massachusetts business trust, and approve or disapprove an Agreement and Plan
of Reorganization pursuant to which: (a) all of the assets and liabilities of
the Fund will be transferred to the Successor Fund in exchange for shares of
such Successor Fund; (b) shareholders of the Fund will receive an equal number
of shares of the Successor Fund in exchange for his or her shares of the Fund;
and (c) the Fund will be liquidated and terminated.
[_] FOR [_] AGAINST [_] ABSTAIN
2. To approve or disapprove the proposed Amended Master Investment
Management Contract , as supplemented, between Republic Portfolios and Republic
National Bank of New York ("Republic Bank").
[_] FOR [_] AGAINST [_] ABSTAIN
3. In their discretion, upon such other matters as may properly come
before the Meeting.
Said proxies will vote this proxy as directed, or if no direction is
indicated, FOR items 1, 2 and 3, unless authority to do so is specifically
withheld in the manner provided, and in accordance with said proxies' best
judgment as to any other matter.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
Dated __________________, 1996
(Please date this proxy)
- ------------------------------
- ------------------------------
Please sign exactly as your names or names
appear at left. Corporate proxies should
be signed by an authorized officer.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY BALLOT PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
PROXY BALLOT
REPUBLIC INTERNATIONAL EQUITY FUND
A SERIES OF
REPUBLIC FUNDS
The undersigned, revoking any prior proxy or proxies, hereby appoints
Thomas M. Lenz, Linda T. Gibson and Andres E. Saldana, or any of them
individually, proxies, with full powers of substitution, to vote for the
undersigned at the Special Meeting of Shareholders of Republic International
Equity Fund (the "Fund"), a series of Republic Funds (the "Trust"), a
Massachusetts business trust, to be held at the offices of Signature Broker-
Dealer Services, Inc., 6 St. James Avenue, Boston, Massachusetts 02116, on
Tuesday, June 18, 1996, at 10:00 a.m., Eastern Time, Notice of which Meeting and
the Proxy Statement accompanying the same have been received by the undersigned,
or at any adjournment thereof, upon the following matters as described therein:
1. To approve or disapprove a reorganization of the Fund into a series
(the "Successor Fund") of Republic Advisor Funds Trust (the "Successor Trust"),
a Massachusetts business trust, and approve or disapprove an Agreement and Plan
of Reorganization pursuant to which: (a) all of the assets and liabilities of
the Fund will be transferred to the Successor Fund in exchange for shares of
such Successor Fund; (b) shareholders of the Fund will receive an equal number
of shares of the Successor Fund in exchange for his or her shares of the Fund;
and (c) the Fund will be liquidated and terminated.
[_] FOR [_] AGAINST [_] ABSTAIN
2. To approve or disapprove the proposed Amended Master Investment
Management Contract , as supplemented, between Republic Portfolios and Republic
National Bank of New York ("Republic Bank").
[_] FOR [_] AGAINST [_] ABSTAIN
3. In their discretion, upon such other matters as may properly come
before the Meeting.
Said proxies will vote this proxy as directed, or if no direction is
indicated, FOR items 1, 2 and 3, unless authority to do so is specifically
withheld in the manner provided, and in accordance with said proxies' best
judgment as to any other matter.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
Dated __________________, 1996
(Please date this proxy)
- ------------------------------
- ------------------------------
Please sign exactly as your names or names
appear at left. Corporate proxies should
be signed by an authorized officer.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY BALLOT PROMPTLY USING
THE ENCLOSED ENVELOPE.
