<PAGE> 1
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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN 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 the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
REPUBLIC FUNDS
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
N/A
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
REPUBLIC FUNDS
REPUBLIC ADVISOR FUNDS TRUST
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
Dear Shareholder:
The enclosed proxy materials relate to a joint Special Meeting of the
Shareholders (the "Meeting") of the Republic Funds and the Republic Advisor
Funds Trust (collectively, the "Companies"), to be held on March 12, 1998 at
10:00 a.m., Eastern time, at 3435 Stelzer Road, Columbus, Ohio 43219-3035.
The purpose of the Meeting is to allow you to consider the following
proposals with respect to the Companies or with respect to one or more of their
respective series or portfolios (each a "Fund" and collectively the "Funds")
and, for those Funds ("Feeder Funds") that seek to achieve their investment
objectives by investing in a series of Republic Portfolios (each a "Portfolio"
and collectively the "Portfolios"), with respect to the corresponding
Portfolios: (i) to approve certain changes to the fundamental investment
restrictions of the Funds and the Portfolios; (ii) to approve new investment
advisory contracts with Republic National Bank of New York ("Republic") and
related new sub-advisory contracts, authorizing Republic to retain and discharge
sub-advisers without the necessity of obtaining shareholder approval, subject to
receipt of an exemptive order from the Securities and Exchange Commission (the
"SEC"); (iii) in the event the requested exemptive relief is not obtained or the
new advisory contracts and sub-advisory contracts are not approved by
shareholders, to ratify continuation of the existing investment advisory and
sub-advisory contracts; and (iv) to ratify the selection of independent auditors
for the current fiscal year. The Board of Trustees of your Fund unanimously
recommends that you approve these proposals.
The Boards of Trustees of each Company and of Republic Portfolios have
approved revisions to the respective fundamental restrictions of each Fund and
each Portfolio in order to simplify, modernize and make more uniform those
investment restrictions that are required to be fundamental, and to eliminate
those fundamental restrictions that are not legally required. The Boards
anticipate that these changes will allow greater investment flexibility to
respond to future investment opportunities, without a material change in the
level of investment risk associated with an investment in any of the Funds.
The Boards believe that allowing Republic to hire and terminate
sub-advisers without obtaining shareholder approval will increase managerial
flexibility with respect to the Funds, and avoid the costs of obtaining
shareholder approval each time a new sub-adviser is retained or discharged. The
Boards also believe that this enhanced "manager of managers" structure will
enable the Funds to operate in a less costly and more efficient manner. In the
event, however, that either the SEC does not grant the exemptive relief
necessary to implement this structure or you do not approve it, the Boards ask
that you ratify the continuation of the existing advisory and sub-advisory
contracts.
Finally, the Boards ask that you ratify the selection of independent
auditors for the current fiscal year.
I am very pleased to present these proposals for your approval. After
reviewing these matters, the Boards approved them unanimously, and now ask that
you vote FOR each proposal. For more information about the proposals which
require your vote, please refer to the accompanying proxy materials. Please take
the time to review the enclosed proxy materials and vote your shares today by
signing and returning each enclosed proxy card in the postage prepaid envelope
provided. PLEASE MAKE THE EFFORT TO COMPLETE, SIGN, DATE AND MAIL EACH ENCLOSED
PROXY CARD PROMPTLY, IN ORDER TO AVOID THE EXPENSE OF ADDITIONAL MAILINGS AND
PROXY SOLICITATIONS.
<PAGE> 3
An outside firm that specializes in proxy solicitation may be retained to
assist us with any necessary follow-up. If we have not received your vote as the
meeting date approaches, you may receive a telephone call from Shareholder
Communications to ask for your vote. We hope that their telephone call does not
inconvenience you.
Thank you in advance for your prompt attention to this matter and for your
continued investment in the Funds.
Sincerely,
GEORGE O. MARTINEZ
President and Secretary
February 2, 1998
<PAGE> 4
REPUBLIC FUNDS
REPUBLIC ADVISOR FUNDS TRUST
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 12, 1998
NOTICE IS HEREBY GIVEN that a joint Special Meeting of the shareholders
(the "Meeting") of the above-listed investment companies (the "Companies") will
be held at 10:00 a.m., Eastern time, on March 12, 1998 at 3435 Stelzer Road,
Columbus, Ohio 43219-3035 for the purpose of considering the following proposals
with respect to one or more of the respective series or portfolios (each a
"Fund" and collectively the "Funds") of the Companies and, for those Funds
("Feeder Funds") that seek to achieve their investment objectives by investing
in a series of Republic Portfolios (each a "Portfolio" and collectively the
"Portfolios"), with respect to the corresponding Portfolios:
1. To approve certain changes to the fundamental investment
restrictions of the Funds and the Portfolios;
2. To approve new investment advisory contracts with Republic
National Bank of New York ("Republic") and related new sub-advisory
contracts, authorizing Republic to retain and discharge sub-advisers
without the necessity of obtaining shareholder approval, subject to receipt
of an exemptive order from the Securities and Exchange Commission (the
"SEC");
3. In the event the requested exemptive relief is not obtained or the
new advisory contracts and sub-advisory contracts are not approved by
shareholders, to ratify continuation of the existing investment advisory
and sub-advisory contracts;
4. To ratify the selection of independent auditors for the current
fiscal year; and
5. To transact such other business as may properly come before the
Meeting and any adjournment thereof.
This is a combined Notice and Proxy Statement for the Funds. The
shareholders of each Fund will vote only on those matters being considered by
their Fund and, in the case of a Feeder Fund, the corresponding Portfolio. If
you own shares of more than one of the Funds, you have received a separate proxy
for each Fund. Please complete, sign and return all proxies.
Shareholders of record as of the close of business on January 14, 1998 are
the only persons entitled to notice of, and to vote at, the Meeting or any
adjournment thereof. You are cordially invited to attend the Meeting. All
shareholders are requested to complete, sign and return each enclosed proxy card
promptly. THE BOARD OF TRUSTEES OF EACH COMPANY UNANIMOUSLY RECOMMENDS THAT YOU
CAST YOUR VOTE "FOR" EACH OF THE PROPOSALS.
PLEASE RESPOND -- YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING, PLEASE COMPLETE, SIGN, AND MAIL EACH PROXY IN THE ENVELOPE
PROVIDED.
By Order of the Boards of Trustees
GEORGE O. MARTINEZ,
President and Secretary
Columbus, Ohio
February 2, 1998
<PAGE> 5
REPUBLIC FUNDS
REPUBLIC ADVISOR FUNDS TRUST
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
------------------------
PROXY STATEMENT
JOINT SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON MARCH 12, 1998
------------------------
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Boards of
Trustees of the above-listed investment companies (the "Companies"), for use at
a joint Special Meeting of Shareholders (the "Meeting") of the Companies to be
held at 10:00 a.m., Eastern time, on March 12, 1998 at 3435 Stelzer Road,
Columbus, Ohio 43219-3035, and at any adjournment thereof, for the purposes set
forth in the accompanying Notice of Meeting ("Notice"). The date of the first
mailing of this proxy statement was on or about February 4, 1998.
Each Company is composed of one or more separate series or portfolios each
of which is referred to herein as a "Fund." Each Company is a registered,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and is organized as a Massachusetts business trust.
Certain of the Funds ("Feeder Funds") seek to achieve their investment objective
by investing in a series of Republic Portfolios (each a "Portfolio" and
collectively the "Portfolios"), which also is a registered, management
investment company under the 1940 Act. Under the rules applicable to
Master-Feeder Fund relationships, whenever a Feeder Fund is requested to vote on
a matter pertaining to a Portfolio, the Feeder Fund shall hold a meeting of its
Shareholders to consider the matter. Accordingly, the Shareholders of each
Feeder Fund are also being asked to vote on the proposals insofar as they relate
to the Portfolio in which the Feeder Fund invests.
The table below sets forth the proposals on which shareholders of each Fund
will vote. For those Funds that are Feeder Funds the corresponding Portfolio is
indicated parenthetically and the table identifies which proposals relate to the
Portfolio.
<TABLE>
<CAPTION>
REPUBLIC FUNDS PROPOSALS
------------------------------------------------------ -----------------------
<S> <C>
U.S. Government Money Market Fund 1, 2, 3 and 4
New York Tax-Free Money Market Fund 1, 2, 3 and 4
New York Tax-Free Bond Fund 1, 2, 3 and 4
Equity Fund 1, 2, 3 and 4
Bond Fund (Fixed Income Portfolio) 1 (Fund and Portfolio)
2 (Portfolio Only)
3 (Portfolio Only)
4 (Fund Only)
Overseas Equity Fund (International Equity Portfolio) 1 (Fund and Portfolio)
2 (Portfolio Only)
3 (Portfolio Only)
4 (Fund Only)
Opportunity Fund (Small Cap Equity Portfolio) 1 (Fund and Portfolio)
2 (Portfolio Only)
3 (Portfolio Only)
4 (Fund Only)
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
REPUBLIC ADVISOR FUNDS TRUST PROPOSALS
------------------------------------------------------ -----------------------
<S> <C>
Fixed Income Fund (Fixed Income Portfolio) 1 (Fund and Portfolio)
2 (Portfolio Only)
3 (Portfolio Only)
4 (Fund Only)
International Equity Fund (International Equity
Portfolio) 1 (Fund and Portfolio)
2 (Portfolio Only)
3 (Portfolio Only)
4 (Fund Only)
Small Cap Equity Fund (Small Cap Equity Portfolio) 1 (Fund and Portfolio)
2 (Portfolio Only)
3 (Portfolio Only)
4 (Fund Only)
</TABLE>
Copies of each Fund's most recent annual and semi-annual reports, including
financial statements, previously have been sent to shareholders. Copies of the
reports are available without charge upon request to the Companies by calling
(888) 525-5757 or by writing to the above address.
Shareholders of record at the close of business on January 14, 1998 (the
"Record Date") are entitled to notice of, and to vote at, the Meeting. Approval
of each of Proposals 1-3 requires a vote of 67% or more of the voting securities
present at the Meeting, if the holders of more than 50% of the outstanding
voting securities of a Fund are present or represented by proxy at the Meeting;
or the vote of more than 50% of the outstanding voting securities of the Fund,
whichever is less ("Majority Shareholder Vote"). Approval of Proposal 4 requires
a vote of a majority of the votes of each Company represented at the meeting;
provided at least a quorum is represented in person or by proxy.
With respect to the proposals affecting the Portfolios on which the
shareholders of the Feeder Funds are being asked to vote, the Feeder Fund will
cast all of its votes at the meeting of investors in the Portfolio in the same
proportion as the votes of the Feeder Fund's Shareholders even if all Feeder
Fund Shareholders did not vote. Each Portfolio, however, has more than one
Feeder Fund investor and accordingly, it is possible that the shareholders of a
single Feeder Fund may vote differently than the other investors in the
Portfolio. In such event, although the Trustees of the Feeder Fund may determine
to withdraw a Feeder Fund's investment in its corresponding Portfolio, the
Trustees currently anticipate that they will continue to invest in the
corresponding Portfolio.
Exhibit A hereto sets forth for each Fund as of the close of business on
the Record Date, the number of shares outstanding and those persons that, to the
knowledge of the Trust, owned 5% or more of the outstanding shares.
2
<PAGE> 7
PROPOSALS
INTRODUCTION
The purpose of the Meeting is to allow the Shareholders to consider several
proposals with respect to the Funds and, in the case of the Feeder Funds, the
corresponding Portfolios. First, the Boards of Trustees propose certain changes
to the fundamental investment restrictions of each Fund and, in the case of the
Feeder Funds, each corresponding Portfolio. These changes are desirable in order
to simplify, modernize and make more uniform those investment restrictions that
are required to be fundamental, and to eliminate those restrictions that are not
legally required. The Boards anticipate that the changes will allow the Funds
greater investment flexibility to respond to future investment opportunities. At
the same time, the Boards do not anticipate any material change in the level of
investment risk associated with an investment in any of the Funds as a result of
these proposed changes.
Second, the Boards propose that the existing investment advisory
arrangements be amended to provide Republic National Bank of New York
("Republic") greater management flexibility. Republic is the investment manager
for each of the Portfolios in which the Feeder Funds invest (the Feeder Funds do
not have separate investment advisory contracts) and for each Fund that is not a
Feeder Fund, pursuant to contracts entered with Republic Portfolios and Republic
Funds, respectively. The mailing address of Republic is 452 Fifth Avenue, New
York, New York 10018. As investment manager, Republic has entered into sub-
advisory contracts with non-affiliated investment firms (the "Sub-Advisers")
with respect to each of the Portfolios and the Equity Fund (collectively the
"Sub-Advised Funds"). To provide Republic greater management flexibility with
respect to the Sub-Advised Funds as well as the other Funds which currently are
managed directly by Republic but could at a later date be managed by a
sub-adviser, the Boards propose that the existing investment advisory contracts
with Republic, as well as the related sub-advisory contracts between Republic
and the Sub-advisers, be amended to authorize Republic to retain and discharge
sub-advisers without obtaining Shareholder approval. That authority would be
contingent upon the receipt by Republic of an exemptive order from the
Securities and Exchange Commission (the "SEC") allowing such an arrangement. The
Boards believe that allowing Republic to hire and terminate subadvisers without
obtaining shareholder approval will increase managerial flexibility with respect
to the Funds, and avoid the costs of obtaining shareholder approval each time a
new sub-adviser is retained or discharged. The advisory and sub-advisory
contracts would in all other material respects be substantially similar to those
currently in place.
Third, in the event that the SEC does not grant the requested exemptive
relief or, alternatively, the shareholders do not approve the new advisory and
sub-advisory agreements, or both, the Trustees believe that the advisory and
sub-advisory contracts that are currently in place should be continued. Proposal
3 requests that you ratify the continuation of those contracts in the event that
either Proposal 2 is not approved or the SEC does not grant Republic the
exemptive relief requested.
Fourth, the Trustees seek Shareholder ratification of the selection of
independent auditors for each Fund for the current fiscal year. The auditors for
each Fund are responsible for conducting an independent audit of each Fund's
financial statements for each year and for preparing each Fund's federal and
state income tax returns.
3
<PAGE> 8
PROPOSAL 1
CHANGES TO CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS
RELEVANT FUNDS All Funds and Portfolios.
DISCUSSION
REASONS FOR THE PROPOSED CHANGES
Pursuant to the 1940 Act, each of the Funds and, in the case of the Feeder
Funds, the corresponding Portfolios has adopted certain fundamental investment
restrictions and policies ("fundamental restrictions"), which are set forth in
the Fund's prospectus or statement of additional information, and which may be
changed only with Shareholder approval. Restrictions and policies that a Fund or
Portfolio has not specifically designated as being fundamental are considered to
be "non-fundamental" and may be changed by the appropriate Board without
Shareholder approval.
Certain of the fundamental restrictions that the Funds and Portfolios
adopted reflect regulatory, business or industry conditions, practices or
requirements that are no longer in effect. Other fundamental restrictions
reflect regulatory requirements which remain in effect, but which are not
required to be fundamental restrictions. Also, as new Funds have been created
over a period of years, substantially similar fundamental restrictions often
have been phrased in slightly different ways, sometimes resulting in minor but
unintended differences in effect or potentially giving rise to unintended
differences in interpretation.
Accordingly, the Boards have approved revisions to their respective Funds'
and, in the case of the Feeder Funds, the corresponding Portfolios', fundamental
restrictions in order to simplify, modernize and make more uniform those
investment restrictions that are required to be fundamental, and to eliminate
those fundamental restrictions that are not legally required.
The Boards believe that eliminating the disparities among the Funds'
fundamental restrictions will enhance management's ability to manage efficiently
and effectively the Funds' assets in changing regulatory and investment
environments. In addition, by reducing to a minimum those policies that can be
changed only by Shareholder vote, each Fund and Portfolio will more often be
able to avoid the costs and delays associated with a Shareholder meeting when
making changes to its investment policies that, at a future time, its Board
considers desirable. Although the proposed changes in fundamental restrictions
will allow the Funds and Portfolios greater investment flexibility to respond to
future investment opportunities, the Boards do not anticipate that the changes,
individually or in the aggregate, will result at this time in a material change
in the level of investment risk associated with an investment in any Fund.
The text of each proposed change to the Funds' and Portfolios' fundamental
restrictions is set forth below. Part A sets forth the fundamental investment
restrictions proposed for approval and Part B sets forth those other current
fundamental investment restrictions which are proposed for elimination.
Shareholders should refer to Exhibit B to this proxy statement for the text of
the Funds' and Portfolios' existing fundamental restrictions. Shareholders
should note, however, that for some Funds certain of the fundamental
restrictions that are treated separately below currently are combined within a
single existing fundamental restriction.
If the proposed changes are approved by Shareholders of the respective
Funds at the Meeting, the Funds' prospectuses and statements of additional
information will be revised, as appropriate, to reflect those changes. This will
occur as soon as practicable following the Meeting. In those cases in which a
Fund's practice has been to state its fundamental restrictions both in its
prospectus and in its statement of additional information, adoption of Proposal
1 will result in a change to both. Proposal 1 will not result in a change to any
Fund's investment objective.
The proposed list of fundamental investment restrictions concern the
following subjects: (1) Borrowing/ Senior Securities; (2) Diversification; (3)
Industry Concentration; (4) Lending; (5) Underwriting Securities; (6)
Commodities; and (7) Real Estate. All of the restrictions except No. 2,
Diversification, are subject to approval by shareholders of each Fund. The
Diversification restriction is not subject to approval by the shareholders of
the New York Tax-Free Money Market Fund or the New York Tax-Free Bond Fund
because
4
<PAGE> 9
these Funds are non-diversified for purposes of the 1940 Act. To the extent that
Shareholders do not approve the amendment of a fundamental investment
restriction, the current restriction will remain in effect.
A. PROPOSED UNIFORM FUNDAMENTAL INVESTMENT RESTRICTIONS
The following is the list of proposed uniform fundamental investment
restrictions which Shareholders of each Fund are being asked to approve (except
for the Diversification restriction noted above) in connection with the
elimination of certain current fundamental restrictions of each Fund as
discussed later.
Under the new set of restrictions, subject to the right of any Fund to
invest all or substantially all of its assets in another registered investment
company having the same investment objective and policies and substantially the
same investment restrictions as those with respect to the Fund, a Fund
(Portfolio) will not:
1. BORROWING/SENIOR SECURITIES: issue senior securities or borrow
money, except as permitted by the 1940 Act;
2. DIVERSIFICATION: with respect to 75% of its assets, the Fund
(Portfolio) will not purchase securities of any issuer (excluding
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, and securities issued by other investment companies) if,
at the time of investment, more than 5% of the Fund's (Portfolio's) total
assets taken at market value would be invested in the securities of any
single issuer, or the Fund (Portfolio) would hold more than 10% of the
outstanding voting securities of any single issuer;
3. INDUSTRY CONCENTRATION: acquire any securities of companies within
one industry, if as a result of the acquisition, 25% or more of the value
of the Fund's (Portfolio's) total assets would be invested in securities of
companies within that industry; provided, however, that the limitation
would not apply to the purchase of obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities [or, in the case of the
U.S. Government and New York Tax-Free Money Market Funds, obligations of
domestic banks];
4. LENDING: make loans except (1) by purchasing debt securities and
other instruments evidencing debt, or participations or interests therein,
in accordance with its investment objectives and policies, (2) by lending
its portfolio securities, or (3) through repurchase agreements;
5. UNDERWRITING SECURITIES: underwrite securities issued by other
persons except insofar as the Fund (Portfolio) may technically be deemed an
underwriter under the [Securities Act of 1933] in selling a portfolio
security;
6. COMMODITIES: invest in physical commodities, unless acquired as a
result of owning securities or other instruments, or in contracts on
physical commodities; and
7. REAL ESTATE: purchase or sell real estate, although it may
purchase and sell securities of companies which deal in real estate, other
than real estate limited partnerships, may purchase and sell marketable
securities that are secured by interests in real estate, and may hold and
sell real estate acquired as a result of the Fund's (Portfolio's) ownership
of securities.
In addition, these fundamental investment restrictions would be subject to
the following interpretations:
1. For purposes of Restriction No. 1, reverse repurchase agreements,
forward roll transactions involving mortgage backed securities, or
comparable transactions will not constitute borrowing subject to this
restriction so long as the repayment/repurchase obligation is supported by
segregated assets or otherwise "covered" in compliance with guidance from
the Securities and Exchange Commission or its staff.
2. For purposes of Restriction No. 3, mortgage-backed securities will
not be considered to be issued by issuers in a single industry. Private
mortgage-backed securities (i.e., not issued or guaranteed by a
governmental agency or government-related organization) that are backed by
mortgages on commercial properties shall be treated as a separate industry
from private mortgage-backed securities backed by
5
<PAGE> 10
mortgages on residential properties. Positions in futures contracts also
will not be subject to this investment restriction.
B. OTHER PROPOSED CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS
In connection with approving the modified, uniform fundamental investment
restrictions, it is proposed that fundamental investment restrictions that now
apply to some, but not all, of the Funds be deleted. In each case, the current
restriction is not mandatory, and many reflect outdated state regulations or
duplicate unnecessary, non-fundamental investment restrictions. Where indicated,
the fundamental investment restriction will be replaced with a non-fundamental
investment policy to the same effect.
Shareholders are asked to approve the deletion of the following fundamental
investment restrictions, which currently limit each indicated Fund's ability to:
1. MARGIN PURCHASES
(a) U.S. Government Money Market Fund and New York Tax-Free Money
Market Fund
"purchase any security or evidence of interest therein on margin,
except that the Trust may obtain such short-term credit for the Fund
as may be necessary for the clearance of purchases and sales of
securities"
(b) New York Tax-Free Bond Fund
"purchase any security or evidence of interest therein on margin,
except that the Trust may obtain such short-term credit for the Fund
as may be necessary for the clearance of purchases and sales of
securities and except that deposits of initial and variation margin
in connection with the purchase, ownership, holding or sale of
Futures Contracts may be made"
2. OPTIONS
(a) U.S. Government Money Market Fund and New York Tax-Free Money
Market Fund
"write, purchase or sell any put or call option or any combination
thereof "
(b) New York Tax-Free Bond Fund
"write, purchase or sell any put or call option or any combination
thereof, provided that this shall not prevent the writing, purchase,
ownership, holding or sale of Futures Contracts"
3. RESTRICTED SECURITIES (to be replaced by a non-fundamental
investment policy to the same effect)
(a) New York Tax-Free Money Market Fund and New York Tax-Free Bond
Fund
"invest in securities which are subject to legal or contractual
restrictions on resale (other than fixed time deposits and repurchase
agreements maturing in not more than seven days) if, as a result
thereof, more than 10% of the net assets of the Fund would be so
invested (including fixed time deposits and repurchase agreements in
more than seven days); provided, however, that this Investment
Restriction shall not apply to (a) any security if the holder thereof
is permitted to receive payment upon a specified number of days'
notice of the unpaid principal balance plus accrued interest either
from the issuer or by drawing on a bank letter of credit, a guarantee
or an insurance policy issued with respect to such security or by
tendering or "putting" such security to a third party, or (b) the
investment by the Trust of all or substantially all of the Fund's
assets in another registered investment company having the same
investment objective and policies and substantially the same
investment restrictions as those with respect to the Fund"
6
<PAGE> 11
(b) U.S. Government Money Market Fund
"taken together with any investments described in [No. 9, below],
invest in securities which are subject to legal or contractual
restrictions on resale (other than fixed time deposits and repurchase
agreements maturing in not more than the seven days) if, as a result
thereof, more than 10% of the net assets of the Fund, (taken at
market value) would be so invested (including fixed time deposits and
repurchase agreements maturing in more than seven days)"
4. SHORT SALES
(a) U.S. Government Money Market Fund
"sell any security which it does not own unless by virtue of its
ownership of other securities it has at the time of sale a right to
obtain securities, without payment of further consideration,
equivalent in kind and amount to the securities sold; and provided,
that if such right is conditional the sale is made upon the same
conditions"
(b) New York Tax-Free Money Market Fund
"make short sales of securities or maintain a short position, unless
at all times when a short position is open, the Fund owns an equal
amount of such securities or securities convertible into or
exchangeable, without payment of any further consideration, for
securities of the same issue as, and equal in amount to, the
securities sold short, and unless not more than 10% of the net assets
of the Fund (taken at market value) is held as collateral for such
sales at any one time (it is the present intention of management to
make such sales only for the purpose of deferring realization of gain
or loss for federal income tax purposes)"
5. PLEDGING SECURITIES (U.S. Government Money Market Fund)
"pledge, mortgage or hypothecate for any purpose in excess of 10% of
the net assets of the Fund (taken at market value)"
6. INVESTING FOR CONTROL (U.S. Government Money Market Fund)
"invest for the purpose of exercising control or management"
7. INVESTMENT COMPANIES (U.S. Government Money Market Fund)
"purchase securities issued by any registered investment company,
except by purchase in the open market where no commission or profit
to a sponsor or dealer results from such purchase other than the
customary broker's commission and except when such purchase, though
not made in the open market, is part of a plan of merger or
consolidation; provided, however, that the Trust (on behalf of the
Fund) will not purchase the securities of any registered investment
company if such purchase at the time thereof would cause more than
10% of the total assets of the Fund (taken at the greater of cost or
market value) to be invested in the securities of such issuers or
would cause more than 3% of the outstanding voting securities of any
such issuer to be held by the Fund, and provided, further, that the
Fund shall not purchase securities issued by any open-end investment
company (for purposes of this clause . . ., securities of foreign
banks shall be treated as investment company securities except that
debt securities and nonvoting preferred stock of foreign banks are
not subject to the 10% limitation described herein)"
8. DEBT ACQUISITION (New York Tax-Free Bond Fund)
"purchase more than 10% of all outstanding debt obligations of any
one issuer (other than obligations issued by the U.S. Government, its
agencies or instrumentalities)"
9. ILLIQUID SECURITIES (U.S. Government Money Market Fund) (to be
replaced by a non-fundamental investment policy to the same effect)
"taken together with any investments described in [No. 3, above],
invest more than 10% of the net assets of the Fund in securities that
are not readily marketable, including debt securities for
7
<PAGE> 12
which there is no established market and fixed time deposits and
repurchase agreements maturing in more than seven days"
10. OIL & GAS INTERESTS (New York Tax-Free Bond Fund, Small Cap
Equity Fund, and Opportunity Fund)
"purchase or sell . . . interests in oil, gas or mineral leases
. . ."
11. AFFILIATED INVESTMENTS (U.S. Government Money Market Fund)
"purchase or retain any securities issued by any issuer any of whose
officers, directors, trustees or security holders is any officer or
Trustee of the Trust, or is an officer or director of the Adviser, if
after the purchaser of the securities of such issuer by the Trust, on
behalf of the Fund, one or more such persons owns beneficially more
than 1/2 of 1% of the shares or securities, or both, all taken at
market value, of such issuer, and such persons owning more than 1/2
of 1% of such shares or securities together own beneficially more
than 5% of such shares or securities, or both, all taken at market
value."
REQUIRED VOTE
Approval of Proposal 1 with respect to a Fund requires an affirmative
Majority Shareholder Vote. Shareholders will be given the option to approve all,
some or none of the proposed changes on the proxy card(s) enclosed with this
proxy statement.
To the extent that some portions of Proposal 1 are not approved by
Shareholders of a Fund, the applicable existing fundamental restrictions of the
Fund will continue in effect for that Fund, but disapproval of any part of
Proposal 1 by the Shareholders of one Fund will not affect any approvals of
Proposal 1 that are obtained with respect to any other Fund.
THE TRUSTEES' RECOMMENDATION
EACH BOARD OF TRUSTEES, INCLUDING ITS INDEPENDENT BOARD MEMBERS,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 1 IN ITS ENTIRETY.
8
<PAGE> 13
PROPOSAL 2
APPROVAL OF NEW INVESTMENT ADVISORY AND RELATED SUB-ADVISORY CONTRACTS
RELEVANT FUNDS All Funds and Portfolios.
DISCUSSION
All of the Sub-Advised Funds currently are managed pursuant to sub-advisory
agreements between Republic as adviser to the Fund or Portfolio, as the case may
be, and selected sub-advisers. In order to effect the replacement of
sub-advisers, it has been necessary to obtain the approval of the Shareholders
of the affected Fund or Portfolio, as required by the 1940 Act. This proxy
solicitation process, however, not only subjects the respective Fund or
Portfolio to additional costs, but it also delays the replacement of the sub-
adviser, resulting in potential managerial inefficiencies. For these reasons,
the Boards, at Republic's request and subject to Shareholder approval, have
authorized the preparation and submission to the SEC of an application seeking
appropriate exemptive relief to permit Republic to hire and terminate
sub-advisers in the future without the need for additional Shareholder
approvals.
In connection with this proposal, the Boards, including the independent
Board members, have authorized each Fund and Portfolio to enter into a new
investment advisory contract with Republic, and Republic to enter into a
corresponding new sub-advisory agreement on behalf of each of the Sub-Advised
Funds. The new advisory and sub-advisory contracts would be substantially
similar in all material respects to those currently in place, except that the
new contracts would also authorize Republic to retain and discharge sub-advisers
without obtaining Shareholder approval. Further, although it is not contemplated
at this time that Republic would enter into sub-advisory contracts for the other
Funds, the new investment advisory agreement would authorize Republic, with the
approval of the appropriate Board, to hire sub-advisers for those Funds in the
future without Shareholder approval. That authority would be contingent upon the
receipt by Republic of an appropriate exemptive order from the SEC.
The Trustees believe that allowing Republic to hire and terminate
sub-advisers without the need for obtaining Shareholder approval will increase
managerial flexibility of the Funds. The Trustees also believe that this
Proposal, if approved, offers the potential to benefit each Fund by avoiding the
expense of obtaining shareholder approval should a new sub-adviser be retained.
Approval of the new contracts will not result in any increase in the fees
payable to Republic or the Sub-advisers.
A form of each of the proposed advisory and sub-advisory agreements with
supplements, are included as Exhibit C to these proxy materials. The
compensation under the new agreements will remain the same as the compensation
under the current agreements which is set forth in the discussion of Proposal 3
below. Certain information about the Republic and the Sub-Advisers is set forth
in Exhibit D. The following summary of terms is qualified in its entirety by
reference to, and made subject to, the complete text of Exhibit C.
Under the current and new advisory contracts, subject to the general
supervision and control of the Boards of Trustees, Republic is required to (a)
provide investment guidance and policy direction in connection with the
management of each Fund/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 Fund/Portfolio and place orders pursuant to its
determinations; (c) determine what portion of each Fund/Portfolio's portfolio
shall be invested in securities described by the policies of such Fund/Portfolio
and what portion, if any, should be invested otherwise or held uninvested; (d)
provide administrative assistance to the officers of the Funds/Portfolios in
connection with the operation of the Funds/Portfolios; (e) make investments for
the account of each Fund/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
Fund/Portfolio and on the performance of its obligations under the agreement to
the Board; and (g) provide all services, equipment and facilities necessary to
perform its obligations under the agreement.
9
<PAGE> 14
Under the current agreements, Republic may appoint and employ one or more
sub-advisers to provide all or any portion of the services contemplated under
the agreement, subject to the supervision and oversight of Republic. Under the
new agreements, this authority would expressly not require shareholder approval.
The current and new management agreements provide that Republic 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 against any liability to the Fund/Portfolio or its investors to which
Republic 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 new contracts will remain in effect for an initial term of two years
and will continue in effect thereafter from year to year with respect to each of
the Funds/Portfolios, provided this continuance is approved annually (i) by the
holders of a majority of the outstanding voting securities of the respective
Fund/Portfolio or by the Board of Trustees of the Fund/Portfolio and (ii) by a
majority of the trustees who are not parties to the 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 agreement. The agreements may be terminated without
penalty by either party on 60 days' written notice and will terminate
automatically if assigned.
Under the current and new sub-advisory agreements, the sub-adviser will
provide a continuous investment program for the Fund/Portfolio, including
deciding what securities will be purchased and sold by the Fund/Portfolio, when
the purchases and sales are to be made, arranging for purchases and sales, and
providing investment management and research services, all in accordance with
the provisions of the 1940 Act, the governing documents of the Fund/Portfolio,
the investment objectives, fundamental policies and restrictions of the
Fund/Portfolio, any policies and determinations of the Board, and applicable
provisions of the Internal Revenue Code.
As compensation for its services to the Fund/Portfolio under the new
sub-advisory agreements, the Sub-Advisers will be entitled to receive from the
Fund/Portfolio fees calculated at the same rate as those charged under the
existing sub-advisory agreements detailed below. The new sub-advisory agreements
will continue in effect for two years from their effective date, and will
continue in effect thereafter for successive annual periods, provided
continuance is specifically approved at least annually by (1) a majority vote,
cast in person at a meeting called for that purpose, of the appropriate Board or
(2) a vote of the holders of a majority (as defined in the 1940 Act and the
rules thereunder) of the outstanding voting securities of the Fund/Portfolio,
and (3) in either event by a majority of the non-interested Trustees of the
Board. The new sub-advisory agreements may be terminated at any time, without
penalty, by either party upon 30 days' written notice and will terminate
automatically upon assignment.
The current and new sub-advisory agreements provide that the Sub-Adviser
shall not be liable for any error of judgment, mistake of law or any loss
suffered by the Fund/Portfolio or its Shareholders in connection with matters to
which the agreements relate, except a loss resulting from willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under the agreement.
REQUIRED VOTE
Approval of Proposal 2 with respect to a Fund requires an affirmative
Majority Shareholder Vote of that Fund.
THE TRUSTEES' RECOMMENDATION
EACH BOARD OF TRUSTEES, INCLUDING ITS INDEPENDENT BOARD MEMBERS,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 2.
10
<PAGE> 15
PROPOSAL 3
RATIFICATION FOR CONTINUATION OF EXISTING ADVISORY AND SUB-ADVISORY CONTRACTS
RELEVANT FUNDS All Funds and Portfolios.
DISCUSSION
In the event that Shareholders approve the new advisory contracts and
sub-advisory contracts contemplated by Proposal 2, but the requested exemptive
relief is not obtained or, alternatively, the shareholders do not approve the
new contracts, the Boards request that shareholders ratify continuation of the
existing investment advisory and sub-advisory contracts for each Fund. The
existing advisory and sub-advisory contracts are substantially the same in all
material respects as the proposed contracts, the forms of which are attached as
Exhibit C, except that they do not expressly authorize Republic to retain and
discharge sub-advisers without obtaining Shareholder approval.
Republic U.S. Government Money Market Fund. The current advisory contract
between the U.S. Government Money Market Fund and Republic as adviser was
originally approved on October 6, 1994, and its continuance was last approved by
the Board at its meeting on November 8 and 9, 1997. For its services under the
advisory contract, Republic is entitled to receive compensation from the Fund at
an annual rate equal to .20% of average daily net assets. For the fiscal year
ended September 30, 1997, advisory fees aggregated $734,759, $367,379 of which
was waived by Republic.
Republic New York Tax-Free Money Market Fund. The current advisory
contract between the New York Tax-Free Money Market Fund and Republic as adviser
was originally approved on October 6, 1994, and its continuance was last
approved by the Board at its meeting on November 8 and 9, 1997. For its services
under the advisory contract, Republic is entitled to receive compensation from
the Fund at an annual rate equal to .15% of average daily net assets. For the
fiscal year ended October 31, 1997, the advisory fees aggregated $147,161,
$101,227 of which was waived by Republic.
Republic New York Tax-Free Bond Fund. The current advisory contract
between the New York Tax-Free Bond Fund and Republic as adviser was originally
approved on October 6, 1994, and its continuance was last approved by the Board
at its meeting on November 8 and 9, 1997. For its services under the advisory
contract, Republic is entitled to receive compensation from the Fund at an
annual rate equal to .25% of average daily net assets. For the fiscal year ended
October 31, 1997, the advisory fees aggregated $55,654, the entire amount of
which was waived by Republic.
Republic Equity Fund. The current advisory contract between the Equity
Fund and Republic as adviser was originally approved on April 7, 1995, and its
continuance was last approved by the Board at its meeting on November 8 and 9,
1997. For its services under the advisory contract, Republic is entitled to
receive compensation from the Fund at an annual rate equal to .175% of average
daily net assets. For the fiscal year ended October 31, 1997, the advisory fees
aggregated $94,389, $30,089 of which was waived by Republic.
The current sub-advisory contract between Republic as adviser and Alliance
Capital Management, L.P. as subadviser became effective on January 23, 1997, and
was originally approved by the shareholders of the Fund on May 5, 1997. For its
services under the sub-advisory contract, Alliance is entitled to receive
compensation from the Fund at an annual rate equal to .325% of net assets up to
$50 million, .25% of net assets over $50 million up to $100 million, .20% of net
assets over $100 million up to $200 million, and .15% of net assets over $200
million. For the period from January 23, 1997, to October 31, 1997, the advisory
fees paid Alliance by the Fund aggregated $71,381.
The current sub-advisory contract between Republic as adviser and Brinson
Partners, Inc. as subadviser became effective on January 23, 1997, and was
originally approved by the shareholders of the Fund on May 5, 1997. For its
services under the sub-advisory contract, Brinson is entitled to receive
compensation from the Fund at an annual rate equal to .325% of net assets up to
$50 million, .25% of net assets over $50 million up to $100 million, .20% of net
assets over $100 million up to $200 million, and .15% of net assets over $200
million.
11
<PAGE> 16
For the period from January 23, 1997, to October 31, 1997, the advisory fees
paid Brinson by the Fund aggregated $71,381.
Republic Fixed Income Portfolio. The current advisory contract between the
Fixed Income Portfolio and Republic as adviser originally was approved by the
Board on April 28, 1996, by the shareholders of the Portfolio in June 1996, and
its continuance was last approved by the Board at its meeting on November 8 and
9, 1997. For its services under the advisory contract, Republic is entitled to
receive compensation from the Fund at an annual rate equal to .20% of average
daily net assets. For the fiscal year ended October 31, 1997, the advisory fee
aggregated $184,724, the entire amount of which was waived by Republic.
The current sub-advisory contract between Republic as adviser and Miller
Anderson & Sherrerd as sub-adviser was originally approved by the Board on
August 29, 1995, by the shareholders of the Portfolio in October 1995, and its
continuance was last approved by the Board at its meeting on November 8 and 9,
1997. For its services under the sub-advisory contract, Miller Anderson &
Sherrerd is entitled to receive compensation from the Fund at an annual rate
equal to .375% of net assets up to $50 million, .25% of net assets over $50
million up to $95 million, $300,000 on net assets over $95 million and up to
$150 million, .20% of net assets over $150 million up to $250 million, and .15%
of net assets over $250 million. For the fiscal year ended October 31, 1997, the
aggregate sub-advisory fee paid Miller Anderson & Sherrerd by the Fund was
$276,784.
Republic International Equity Portfolio. The current advisory contract
between the International Equity Portfolio and Republic as adviser was
originally approved on April 28, 1996, by the shareholders of the Portfolio in
June 1996, and its continuance was last approved by the Board at its meeting on
November 8 and 9, 1997. For its services under the advisory contract, Republic
is entitled to receive compensation from the Fund at an annual rate equal to
.25% of average daily net assets. For the fiscal year ended October 31, 1997,
the advisory fee aggregated $466,480, the entire amount of which was waived by
Republic.
The current sub-advisory contract between Republic as adviser and Capital
Guardian Trust Company as sub-adviser was originally approved on November 21,
1994, and its continuance was last approved by the Board at its meeting on
November 8 and 9, 1997. For its services under the sub-advisory contract,
Capital Guardian Trust Company is entitled to receive compensation from the Fund
at an annual rate equal to .70% of net assets up to $25 million, .55% of net
assets over $25 million up to $50 million, .425% of net assets over $50 million
up to $250 million, and .375% of net assets over $250 million. For the fiscal
year ended October 31, 1997, the aggregate sub-advisory fee paid Capital
Guardian Trust Company by the Fund was $893,016.
Republic Small Cap Equity Portfolio. The current advisory contract between
the Small Cap Equity Portfolio and Republic as adviser was originally approved
by the Board on July 22, 1996. For its services under the advisory contract,
Republic is entitled to receive compensation from the Fund at an annual rate
equal to .25% of average daily net assets. For the fiscal year ended October 31,
1997, the advisory fees aggregated $429,442, the entire amount of which was
waived by Republic.
The current sub-advisory contract between Republic as adviser and MFS
Institutional Advisors, Inc. as sub-adviser was originally approved by the Board
on July 22, 1996. For its services under the sub-advisory contract, MFS
Institutional Advisors, Inc. is entitled to receive compensation from the Fund
at an annual rate equal to .75% of net assets up to $50 million, and .60% of net
assets over $50 million. For the fiscal year ended October 31, 1997, the
aggregate sub-advisory fee paid MFS Institutional Advisors, Inc. by the Fund was
$1,104,635.
REQUIRED VOTE
Approval of Proposal 3 with respect to a Fund requires an affirmative
Majority Shareholder Vote of that Fund.
TRUSTEES' RECOMMENDATION
EACH BOARD OF TRUSTEES, INCLUDING ITS INDEPENDENT BOARD MEMBERS,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 3.
12
<PAGE> 17
PROPOSAL 4
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
RELEVANT FUNDS All Funds and Portfolios.
DISCUSSION
The Boards have selected KPMG Peat Marwick LLP as independent auditors (the
"Auditors") to examine the financial statements of the Funds for the fiscal year
ending October 31, 1998 (September 30, 1998 in the case of the U.S. Government
Money Market Fund). Audit services performed by KPMG Peat Marwick LLP during the
most recent fiscal year included examination of the financial statements of the
Funds, review of filings with the Securities and Exchange Commission and
preparation of tax returns. The Funds know of no direct or indirect interest of
the Auditors in the Funds. A representative of KPMG Peat Marwick LLP, if
requested by any shareholder, will be present at the Meeting and have the
opportunity to respond to questions from shareholders.
REQUIRED VOTE
The approval of a majority of the votes of each Company represented at the
Meeting, provided at least a quorum is represented in person or by proxy, is
necessary to ratify the selection of independent auditors. Unless otherwise
instructed, the proxies will vote for the ratification of the selection of KPMG
Peat Marwick LLP.
THE TRUSTEES' RECOMMENDATION
EACH BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS.
PROPOSAL 5
OTHER MATTERS
The Trustees know of no business to be brought before the Meeting other
than as set forth above. If, however, any other matters properly come before the
Meeting, it is the intention of the persons named in the enclosed form of proxy
to vote on such matters in accordance with their best judgment.
OTHER VOTING INFORMATION
Each Shareholder is entitled to one vote for each full share and an
appropriate fraction of a vote for each fractional share held. Shares
represented by timely and properly executed proxies will be voted as specified.
Executed proxies that are unmarked will be voted in favor of the proposals set
forth in the attached Notice. A proxy may be revoked at any time prior to its
exercise by written notice, by execution of a subsequent proxy, or by voting in
person by attending the Meeting. However, attendance at the Meeting alone will
not serve to revoke the proxy.
Shares held by shareholders present in person or represented by proxy at
the Meeting will be counted both for the purpose of determining the presence of
a quorum and for calculating the votes cast on the issues before the Meeting.
Abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
be counted for quorum purposes. However, abstentions and non-votes will have the
same effect as a negative vote on those proposals requiring a Majority
Shareholder Vote.
In the event that a quorum is present at the Meeting, but sufficient votes
to approve a proposal are not received, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a majority of
those
13
<PAGE> 18
shares represented at the Meeting in person or by proxy. Unless otherwise
instructed, the persons named as proxies will vote proxies in favor of such an
adjournment. A shareholder vote may be taken on any or all of the proposals in
this proxy statement prior to any such adjournment if sufficient votes have been
received for approval.
OTHER SERVICE PROVIDERS
BISYS Fund Services ("BISYS"), 3435 Stelzer Road, Columbus, Ohio
43219-3035, serves as administrator to the Funds, and BISYS Fund Services
(Ireland) Limited, Floor 2, Block 2, Harcourt Centre, Dublin 2, Ireland, serves
as administrator to the Portfolios pursuant to Administration Agreements dated
October 1, 1996. BISYS also distributes shares of the Funds.
EXPENSES OF THE MEETING
None of the costs of the Meeting, including the solicitation of proxies,
will be paid by the Funds or Shareholders. The principal solicitation of the
proxies will be by mail, but proxies also may be solicited by telephone or
personal interview by officers or agents of each Company or Republic, or by
proxy solicitation firms retained by the Companies.
PROPOSALS FOR FUTURE SHAREHOLDER MEETINGS
The Companies do not intend to hold Shareholder Meetings each year, but
meetings may be called by the Trustees from time to time. Proposals of
shareholders that are intended to be presented at a future shareholder meeting
must be received by a Company within a reasonable time prior to the Company's
solicitation of proxies relating to such meeting.
YOU ARE URGED TO COMPLETE, DATE, SIGN, AND RETURN THE ENCLOSED PROXY PROMPTLY.
By Order of the Trustees
GEORGE O. MARTINEZ,
President and Secretary
February 2, 1998
14
<PAGE> 19
EXHIBIT A
SHAREHOLDINGS
Set for below for each Fund are the names, addresses and number and
percentage of shares owned by those persons identified on the Fund's records as
owning more than 5% of the outstanding shares of any class of the Fund's shares.
REPUBLIC FUNDS
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER CLASS SHARES OWNED SHARES OF CLASS
- --------------------- ---------------------------------- ----- ------------ ---------------
<S> <C> <C> <C> <C>
U.S. Government Kinco & Co. A 35,479,963 6.37
Money Market Fund c/o Securities Services
One Hanson Place -- Lower Level
Brooklyn, NY 11243
BHC Securities Inc. A 64,490,653 11.58
Attn: Cash Sweeps Department
Twelve Hundred
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-3212
Republic National Bank of New York A 433,260,411 77.78
Attn: John Pirraglia
10 East 40th Street
10th Floor
New York, NY 10016
Kinco & Co. Y 19,814,504 63.97
c/o Securities Services
One Hanson Place -- Lower Level
Brooklyn, NY 11243
New York Tax-Free Kinco & Co. A 13,867,355 11.26
Money Market Fund c/o Securities Services
One Hanson Place -- Lower Level
Brooklyn, NY 11243
Republic National Bank of New York A 94,921,428 77.07
Attn: John Pirraglia
10 East 40th Street
10th Floor
New York, NY 10016
Kinco & Co. Y 18,125,689 85.34
c/o Securities Services
One Hanson Place -- Lower Level
Brooklyn, NY 11243
New York Tax-Free BHC Securities Inc. A 1,840,068 89.93
Bond Fund Attn: Cash Sweeps Department
Twelve Hundred
One Commerce Square
2005 Market Square
Philadelphia, PA 19103-3212
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER CLASS SHARES OWNED SHARES OF CLASS
- --------------------- ---------------------------------- ----- ------------ ---------------
<S> <C> <C> <C> <C>
Kinco & Co. Y 167,775 19.81
c/o Securities Services
One Hanson Place -- Lower Level
Brooklyn, NY 11243
Kinco & Co. Y 656,726 77.53
c/o Securities Services
One Hanson Place -- Lower Level
Brooklyn, NY 11243
Bond Fund BHC Securities Inc. A 371,199 99.71
Trade House Account
Attention: Mutual Funds
One Commerce Square
2005 Market Square
Philadelphia, PA 19103
Equity Fund Kinco & Co. A 72,437 7.20
c/o Securities Services
One Hanson Place -- Lower Level
Brooklyn, NY 11243
Sara Leifer A 78,749 7.83
4 Dogwood Lane
Lawrence, NY 11559
Republic New York Securities Corp. A 81,017 8.01
Special Custody Accounts for the
Exclusive Benefit of Customers
Attention: Paul Botta
One Hanson Place -- Lower Level
Brooklyn, NY 11243
BHC Securities Inc. A 633,992 63.95
Trade House Account
Attention: Mutual Funds
One Commerce Square
2005 Market Square
Philadelphia, PA 19103
Kinco & Co. Y 3,928,930 38.36
c/o Securities Services
One Hanson Place -- Lower Level
Brooklyn, NY 11243
Republic New York Securities Corp. Y 5,825,340 56.88
Special Custody Accounts for the
Exclusive Benefit of Customers
Attention: Paul Botta
One Hanson Place -- Lower Level
Brooklyn, NY 11243
</TABLE>
2
<PAGE> 21
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER CLASS SHARES OWNED SHARES OF CLASS
- --------------------- ---------------------------------- ----- ------------ ---------------
<S> <C> <C> <C> <C>
Overseas Equity Fund Republic New York Securities Corp. A 68,477 19.34
Special Custody Accounts for the
Exclusive Benefit of Customers
Attention: Paul Botta
One Hanson Place -- Lower Level
Brooklyn, NY 11243
BHC Securities Inc. A 277,171 78.29
Trade House Account
Attention: Mutual Funds
One Commerce Square
2005 Market Square
Philadelphia, PA 19103
Opportunity Fund Republic New York Securities Corp. A 79,375 8.66
Special Custody Accounts for the
Exclusive Benefit of Customers
Attention: Paul Botta
One Hanson Place -- Lower Level
Brooklyn, NY 11243
Trussal & Co. A 306,868 33.49
A/C # 300723400
Attention: Kathleen Baily
P.O. Box 771072
Detroit, MI 48277-1072
BHC Securities Inc. A 491,414 53.64
Trade House Account
Attention: Mutual Funds
One Commerce Square
2005 Market Square
Philadelphia, PA 19103
</TABLE>
REPUBLIC ADVISOR FUNDS TRUST
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF CLASS
- --------------------------- -------------------------------------- ------------ ---------------
<S> <C> <C> <C>
Fixed Income Fund Republic National Bank of New York 3,223,968 44.92
Pension Plan & Trust
452 Fifth Avenue, 27th Floor
New York, NY 10018
Kinco & Co. 828,392 11.54
c/o Securities Services
One Hanson Place -- Lower Level
Brooklyn, NY 11243
Republic New York Securities Corp. 737,656 10.28
Customer Account No. 10122
Attention: Paul Botta
One Hanson Place -- Lower Level
Brooklyn, NY 11243
</TABLE>
3
<PAGE> 22
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME OF FUND NAME AND ADDRESS OF RECORD OWNER SHARES OWNED SHARES OF CLASS
- --------------------------- -------------------------------------- ------------ ---------------
<S> <C> <C> <C>
Republic National Bank of New York 525,026 7.32
Pooled Profit Sharing Plan
452 Fifth Avenue, 27th Floor
New York, NY 10018
International Equity Fund Republic National Bank of New York 2,877,680 27.97
Pension Plan & Trust
452 Fifth Avenue, 27th Floor
New York, NY 10018
Kinco & Co. 1,259,624 12.24
c/o Securities Services
One Hanson Place -- Lower Level
Brooklyn, NY 11243
Republic National Bank of New York 771,791 7.50
Pooled Profit Sharing Plan
452 Fifth Avenue, 27th Floor
New York, NY 10018
Small Cap Equity Fund Republic National Bank of New York 2,608,109 24.37
Pension Plan & Trust
452 Fifth Avenue, 27th Floor
New York, NY 10018
Republic National Bank of New York 1,963,790 18.35
Pooled Profit Sharing Plan
452 Fifth Avenue, 27th Floor
New York, NY 10018
Kinco & Co. 878,629 8.21
c/o Securities Services
One Hanson Place -- Lower Level
Brooklyn, NY 11243
</TABLE>
4
<PAGE> 23
EXHIBIT B
TEXT OF THE FUNDS' EXISTING FUNDAMENTAL RESTRICTIONS
U.S. GOVERNMENT MONEY MARKET FUND:
The Trust, on behalf of the Fund, may not:
1. borrow money, except that as a temporary measure for extraordinary
or emergency purposes, the Fund may borrow from banks in an amount not to
exceed 1/3 of the value of the net assets of the Fund including the amount
borrowed (moreover, the Trust (on behalf of the Fund) may not purchase any
securities at any time at which borrowings exceed 5% of the total assets of
the Fund) taken in each case at market value;
2. purchase any security or evidence of interest therein on margin,
except that the Trust may obtain such short-term credit for the Fund as may
be necessary for the clearance of purchases and sales of securities;
3. underwrite securities issued by other persons, except insofar as
the Trust may technically be deemed an underwriter under the Securities Act
of 1933, as amended (the "1933 Act"), in selling a portfolio security for
the Fund;
4. make loans to other persons except (a) through the lending of
securities held by the Fund, but not in excess of 1/3 of the Fund's net
assets taken at market value, (b) through the use of fixed time deposits or
repurchase agreements or the purchase of short term obligations, (c) by
purchasing all or a portion of an issue of debt securities of types
commonly distributed privately to financial institutions; for purposes of
this Investment Restriction (4) the purchase of short-term commercial paper
or a portion of an issue of debt securities which are part of an issue to
the public shall not be considered the making of a loan;
5. purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or commodity
contracts in the ordinary course of business (the Trust reserves the
freedom of action to hold and to sell for the Fund real estate acquired as
a result of its ownership of securities);
6. concentrate its investments in any particular industry (except for
obligations of the U.S. Government and domestic banks), but if it is deemed
appropriate for the achievement of the Fund's investment objective, up to
25% of the assets of the Fund (taken at market value at the time of each
investment) may be invested in any one industry;
7. issue any senior security (as that term is defined in the 1940
Act) if such issuance is specifically prohibited by the 1940 Act or the
rules and regulations promulgated thereunder, except as appropriate to
evidence a debt incurred without violating Investment Restriction (1)
above;
8. pledge, mortgage or hypothecate for any purpose in excess of 10%
of the net assets of the Fund (taken at market value);
9. sell any security which it does not own unless by virtue of its
ownership of other securities it has at the time of sale a right to obtain
securities, without payment of further consideration, equivalent in kind
and amount to the securities sold; and provided, that if such right is
conditional the sale is made upon the same conditions;
10. invest for the purpose of exercising control or management;
11. purchase securities issued by any registered investment company,
except by purchase in the open market where no commission or profit to a
sponsor or dealer results from such purchase other than the customary
broker's commission and except when such purchase, though not made in the
open market, is part of a plan of merger or consolidation; provided,
however, that the Trust (on behalf of the Fund) will not purchase the
securities of any registered investment company if such purchase at the
time
<PAGE> 24
thereof would cause more than 10% of the total assets of the Fund (taken at
the greater of cost or market value) to be invested in the securities of
such issuers or would cause more than 3% of the outstanding voting
securities of any such issuer to be held by the Fund; and provided,
further, that the Fund shall not purchase securities issued by any open-end
investment company (for purposes of this clause (11), securities of foreign
banks shall be treated as investment company securities except that debt
securities and nonvoting preferred stock of foreign banks are not subject
to the 10% limitation described herein). (The Trust, on behalf of the Fund,
has no current intention of investing in the obligations of foreign
banks.);
12. taken together with any investments described in clause (15)
below, invest more than 10% of the net assets of the Fund in securities
that are not readily marketable, including debt securities for which there
is no established market and fixed time deposits and repurchase agreements
maturing in more than seven days;
13. purchase or retain any securities issued by any issuer any of
whose officers, directors, trustees or security holders is an officer or
Trustee of the Trust, or is an officer or director of the Adviser, if after
the purchase of the securities of such issuer by the Trust, on behalf of
the Fund, one or more of such persons owns beneficially more than 1/2 of 1%
of the shares or securities, or both, all taken at market value, of such
issuer, and such persons owning more than 1/2 of 1% of such shares or
securities together own beneficially more than 5% of such shares or
securities, or both, all taken at market value;
14. write, purchase or sell any put or call option or any combination
thereof;
15. taken together with any investments described in clause (12)
above, invest in securities which are subject to legal or contractual
restrictions on resale (other than fixed time deposits and repurchase
agreements maturing in not more than seven days) if, as a result thereof,
more than 10% of the net assets of the Fund, (taken at market value) would
be so invested (including fixed time deposits and repurchase agreements
maturing in more than seven days);
16. purchase securities of any issuer if such purchase at the time
thereof would cause more than 10% of the voting securities of such issuer
to be held for the Fund; or
17. make short sales of securities or maintain a short position,
unless at all times when a short position is open the fund owns an equal
amount of such securities or securities convertible into or exchangeable,
without payment of any further consideration, for securities of the same
issue as, and equal in amount to, the securities sold short, and unless not
more than 10% of the net assets of the Fund (taken at market value) is held
as collateral for such sales at any one time.
NEW YORK TAX-FREE MONEY MARKET FUND
The Trust, on behalf of the Fund, may not:
1. borrow money or pledge, mortgage or hypothecate assets of the
Fund, except that as a temporary measure for extraordinary or emergency
purposes it may borrow in an amount not to exceed 1/3 of the value of the
net assets of the Fund, including the amount borrowed, and may pledge,
mortgage or hypothecate not more than 1/3 of such assets to secure such
borrowings (it is intended that money would be borrowed only from banks and
only to accommodate requests for the redemption of shares of the Fund while
effecting an orderly liquidation of portfolio securities); for additional
related restrictions, see clause (i) under the caption "State and Federal
Restrictions" below;
2. purchase any security or evidence of interest therein on margin,
except that the Trust may obtain such short-term credit for the Fund as may
be necessary for the clearance of purchases and sales of securities;
3. underwrite securities issued by other persons, except insofar as
the Trust may technically be deemed an underwriter under the Securities Act
of 1933, as amended (the "1933 Act"), in selling a portfolio security for
the Fund;
2
<PAGE> 25
4. make loans to other persons except (a) through the lending of
securities held by the Fund, but not in excess of 1/3 of the Fund's net
assets taken at market value, (b) through the use of fixed time deposits or
repurchase agreements or the purchase of short-term obligations, (c) by
purchasing all or a portion of an issue of debt securities of types
commonly distributed privately to financial institutions; for purposes of
this Investment Restriction (4) the purchase of short-term commercial paper
or a portion of an issue of debt securities which are part of an issue to
the public shall not be considered the making of a loan;
5. purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or commodity
contracts in the ordinary course of business (the Trust reserves the
freedom of action to hold and to sell for the Fund real estate acquired as
a result of its ownership of securities);
6. concentrate its investments in any particular industry, but if it
is deemed appropriate for the achievement of the Fund's investment
objective, up to 25% of the assets of the Fund (taken at market value at
the time of each investment) may be invested in any one industry, except
that the Trust may invest all or substantially all of the Fund's assets in
another registered investment company having the same investment objective
and policies and substantially the same investment restrictions as those
with respect to the Fund;
7. issue any senior security (as that term is defined in the 1940
Act) if such issuance is specifically prohibited by the 1940 Act or the
rules and regulations promulgated thereunder, except as appropriate to
evidence a debt incurred without violating Investment Restriction (1)
above;
8. write, purchase or sell any put or call option or any combination
thereof;
9. invest in securities which are subject to legal or contractual
restrictions on resale (other than fixed time deposits and repurchase
agreements maturing in not more than seven days) if, as a result thereof,
more than 10% of the net assets of the Fund would be so invested (including
fixed time deposits and repurchase agreements maturing in more than seven
days); provided, however, that this Investment Restriction shall not apply
to (a) any security if the holder thereof is permitted to receive payment
upon a specified number of days' notice of the unpaid principal balance
plus accrued interest either from the issuer or by drawing on a bank letter
of credit, a guarantee or an insurance policy issued with respect to such
security or by tendering or "putting" such security to a third party, or
(b) the investment by the Trust of all or substantially all of the Fund's
assets in another registered investment company having the same investment
objective and policies and substantially the same investment restrictions
as those with respect to the Fund;
10. make short sales of securities or maintain a short position,
unless at all times when a short position is open the Fund owns an equal
amount of such securities or securities convertible into or exchangeable,
without payment of any further consideration, for securities of the same
issue as, and equal in amount to, the securities sold short, and unless not
more than 10% of the net assets of the Fund (taken at market value) is held
as collateral for such sales at any one time (it is the present intention
of management to make such sales only for the purpose of deferring
realization of gain or loss for federal income tax purposes).
BOND FUND AND FIXED INCOME FUND
The Trust, on behalf of the Portfolio (Fund), will not:
1. invest in physical commodities or contracts on physical
commodities;
2. purchase or sell real estate, although it may purchase and sell
securities of companies which deal in real estate, other than real estate
limited partnerships, and may purchase and sell marketable securities which
are secured by interests in real estate;
3. make loans except: (i) by purchasing debt securities in accordance
with its investment objective and policies, or entering into repurchase
agreements, and (ii) by lending its portfolio securities;
3
<PAGE> 26
4. with respect to 75% of its assets, purchase a security if, as a
result, it would hold more than 10% (taken at the time of such investment)
of the outstanding voting securities of any issuer;
5. with respect to 75% of its assets, purchase securities of any
issuer, if, as the result, more than 5% of the Portfolio's (Fund's) total
assets, taken at market value at the time of such investment, would be
invested in the securities of such issuer, except that this restriction
does not apply to securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities;
6. underwrite the securities of the other issuers, (except to the
extent that the Portfolio (Fund) may be deemed to be an underwriter within
the meaning of the 1933 Act in the deposition of restricted securities);
7. acquire any securities of companies within one industry if as a
result of such acquisition, more than 25% of the value of the Portfolio's
(Fund's) total assets would be invested in securities of companies within
such industry; provided, however, that there shall be no limitation on the
purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, when the Portfolio (Fund) adopts a temporary
defense position; and provided further that mortgage-based securities shall
to be considered a single industry for the purposes of this investment
restriction;
8. borrow money (including from a bank or through reverse repurchase
agreements or forward dollar roll transactions involving mortgage-backed
securities or similar investment techniques entered into for leveraging
purposes), except that the Portfolio (Fund) may borrow as a temporary
measure to satisfy redemption requests or for extraordinary or emergency
purposes, provided that the Portfolio (Fund) maintains asset coverage of at
least 300% for all such borrowings;
9. issue senior securities, except as permitted under the 1940 Act.
NEW YORK TAX-FREE BOND FUND
The Trust, on behalf of the Fund, may not:
1. borrow money or pledge, mortgage or hypothecate assets of the
Fund, except that as a temporary measure for extraordinary or emergency
purposes it may borrow in an amount not to exceed 1/3 of the value of the
net assets of the Fund, including the amount borrowed, and may pledge,
mortgage or hypothecate not more than 1/3 of such assets to secure such
borrowings (it is intended that money would be borrowed only from banks and
only to accommodate requests for the redemption of shares of the Fund while
effecting an orderly liquidation of portfolio securities), provided that
collateral arrangements with respect to Futures Contracts, including
deposits of initial and variation margin, are not considered a pledge of
assets for purposes of this Investment Restriction; for additional related
restrictions, see clause (i) under the caption "Other Restrictions" below;
2. purchase any security or evidence of interest therein on margin,
except that the Trust may obtain such short-term credit for the Fund as may
be necessary for the clearance of purchases and sales of securities and
except that deposits of initial and variation margin in connection with the
purchase, ownership, holding or sale of Futures Contracts may be made;
3. underwrite securities issued by other persons, except insofar as
the Trust may technically be deemed an underwriter under the Securities Act
of 1933, as amended (the "1933 Act"), in selling a portfolio security for
the Fund;
4. make loans to other persons except (a) through the lending of
securities held by the Fund, but not in excess of 1/3 of the Fund's net
assets taken at market value, (b) through the use of fixed time deposits or
repurchase agreements or the purchase of short-term obligations, (c) by
purchasing all or a portion of an issue of debt securities of types
commonly distributed privately to financial institutions; for purposes of
this Investment Restriction (4) the purchase of short-term commercial paper
or a portion of an issue of debt securities which are part of an issue to
the public shall not be considered the making of a loan;
4
<PAGE> 27
5. purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or commodity
contracts in the ordinary course of business (the Trust reserves the
freedom of action to hold and to sell for the Fund real estate acquired as
a result of its ownership of securities);
6. concentrate its investments in any particular industry, but if it
is deemed appropriate for the achievement of the Fund's investment
objective, up to 25% of the assets of the Fund (taken at market value at
the time of each investment) may be invested in any one industry, except
that positions in Futures Contracts shall not be subject to this Investment
Restriction and except that the Trust may invest all or substantially all
of the Fund's assets in another registered investment company having the
same investment objective and policies and substantially the same
investment restrictions as those with respect to the Fund;
7. issue any senior security (as that term is defined in the 1940
Act) if such issuance is specifically prohibited by the 1940 Act or the
rules and regulations promulgated thereunder, except as appropriate to
evidence a debt incurred without violating Investment Restriction (1)
above, and provided that collateral arrangements with respect to Futures
Contracts, including deposits of initial and variation margin, are not
considered to be the issuance of a senior security for purposes of this
Investment Restriction;
8. write, purchase or sell any put or call option or any combination
thereof, provided that this shall not prevent the writing, purchase,
ownership, holding or sale of Futures Contracts;
9. invest in securities which are subject to legal or contractual
restrictions on resale (other than fixed time deposits and repurchase
agreements maturing in not more than seven days) if, as a result thereof,
more than 10% of the net assets of the Fund would be so invested (including
fixed time deposits and repurchase agreements maturing in more than seven
days); provided, however, that this Investment Restriction shall not apply
to (a) any security if the holder thereof is permitted to receive payment
upon a specified number of days' notice of the unpaid principal balance
plus accrued interest either from the issuer or by drawing on a bank letter
of credit, a guarantee or an insurance policy issued with respect to such
security or by tendering or "putting" such security to a third party, or
(b) the investment by the Trust of all or substantially all of the Fund's
assets in another registered investment company having the same investment
objective and policies and substantially the same investment restrictions
as those with respect to the Fund;
10. purchase securities of any issuer if such purchase at the time
thereof would cause more than 10% of the voting securities of such issuer
to be held for the Fund, except that the Trust may invest all or
substantially all of the Fund's assets in another registered investment
company having the same investment objective and policies and substantially
the same investment restrictions as those with respect to the Fund; or
11. purchase more than 10% of all outstanding debt obligations of any
one issuer (other than obligations issued by the U.S. Government, its
agencies or instrumentalities).
EQUITY FUND
The Trust on behalf of the Fund will not:
1. invest in physical commodities or contracts on physical
commodities;
2. purchase or sell real estate, although it may purchase and sell
securities of companies which deal in real estate, other than real estate
limited partnerships, and may purchase and sell marketable securities which
are secured by interests in real estate;
3. make loans except for the lending of portfolio securities pursuant
to guidelines established by the Board of Trustees and except as otherwise
in accordance with the Fund's investment objective and policies;
5
<PAGE> 28
4. borrow money, except from a bank as a temporary measure to satisfy
redemption requests or for extraordinary or emergency purposes, provided
that the Fund maintains asset coverage of at least 300% for all such
borrowings;
5. underwrite the securities of other issuers (except to the extent
that the Fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 (the "1933 Act") in the disposition of restricted
securities);
6. acquire any securities of companies within one industry, if as a
result of such acquisition, more than 25% of the value of the Fund's total
assets would be invested in securities of companies within such industry;
provided, however, that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, when the Fund adopts a temporary defensive position;
7. issue senior securities, except as permitted under the 1940 Act;
8. with respect to 75% of its assets, the Fund will not purchase
securities of any issuer if, as a result, more than 5% of the Fund's total
assets taken at market value would be invested in the securities of any
single issuer; and
9. with respect to 75% of its assets, the Fund will not purchase a
security if, as a result, the Fund would hold more than 10% of the
outstanding voting securities of any issuer.
OVERSEAS EQUITY FUND AND INTERNATIONAL EQUITY FUND
The Trust, on behalf of the Portfolio (Fund), will not:
1. invest in physical commodities or contracts on physical
commodities;
2. purchase or sell real estate, although it may purchase and sell
securities of companies which deal in real estate, other than real estate
limited partnerships, and may purchase and sell marketable securities which
are secured by interests in real estate;
3. make loans except for the lending of portfolio securities pursuant
to guidelines established by the Board of Trustees and except as otherwise
in accordance with the Portfolio's (Fund's) investment objective and
policies;
4. borrow money, except from a bank as a temporary measure to satisfy
redemption requests or for extraordinary or emergency purposes, provided
that the Portfolio (Fund) maintains asset coverage of at least 300% for all
such borrowings;
5. underwrite the securities of other issuers (except to the extent
that the Portfolio (Fund) may be deemed to be an underwriter within the
meaning of the Securities Act of 1933 (the "1933 Act") in the disposition
of restricted securities);
6. acquire any securities of companies within one industry, if as a
result of such acquisition, more than 25% of the value of the Portfolio's
(Fund's) total assets would be invested in securities of companies within
such industry; provided, however, that there shall be no limitation on the
purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, when the Portfolio (Fund) adopts a temporary
defensive position;
7. issue senior securities, except as permitted under the 1940 Act;
8. with respect to 75% of its assets, the Portfolio (Fund) will not
purchase securities of any issuer if, as a result, more than 5% of the
Portfolio's (Fund's) total assets taken at market value would be invested
in the securities of any single issuer;
9. with respect to 75% of its assets, the Portfolio (Fund) will not
purchase a security if, as a result, the Portfolio (Fund) would hold more
than 10% of the outstanding voting securities of any issuer.
6
<PAGE> 29
OPPORTUNITY FUND AND SMALL CAP EQUITY FUND
The Trust, on behalf of the Portfolio (Fund), will not:
1. borrow money or mortgage or hypothecate assets of the Portfolio,
except that in an amount not to exceed 1/3 of the current value of the
Portfolio's net assets, it may borrow money (including from a bank or
through reverse repurchase agreements, forward roll transactions involving
mortgage backed securities or other investment techniques entered into for
the purpose of leverage), and except that it may pledge, mortgage or
hypothecate not more than 1/3 of such assets to secure such borrowings,
provided that collateral arrangements with respect to options and futures,
including deposits of initial deposit and variation margin, are not
considered a pledge of assets for purposes of this restriction and except
that assets may be pledged to secure letters of credit solely for the
purpose of participating in a captive insurance company sponsored by the
Investment Company Institute; for additional related restrictions, see
clause (i) under the caption "State and Federal Restrictions" below;
2. underwrite securities issued by other persons except insofar as
the Portfolios may technically be deemed an underwriter under the
1933 Act in selling a portfolio security;
3. make loans to other persons except: (a) through the lending of the
Portfolio's portfolio securities and provided that any such loans not
exceed 30% of the Portfolio's total assets (taken at market value); (b)
through the use of repurchase agreements or the purchase of short term
obligations; or (c) by purchasing a portion of an issue of debt securities
of types distributed publicly or privately;
4. purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or commodity
contracts (except futures and option contracts) in the ordinary course of
business (except that the Portfolio may hold and sell, for the Portfolio's
portfolio, real estate acquired as a result of the Portfolio's ownership of
securities);
5. concentrate its investments in any particular industry (excluding
U.S. Government securities), but if it is deemed appropriate for the
achievement of a Portfolio's investment objective(s), up to 25% of its
total assets may be invested in any one industry;
6. if such issuance is specifically prohibited by the 1940 Act or the
rules and regulations promulgated thereunder, provided that collateral
arrangements with respect to options and futures, including deposits of
initial deposit and variation margin, are not considered to be the issuance
of a senior security for purposes of this restriction; and
7. with respect to 75% of its assets, invest more than 5% of its
total assets in the securities (excluding U.S. Government securities) of
any one issuer.
7
<PAGE> 30
EXHIBIT C
FORMS OF PROPOSED ADVISORY AND SUB-ADVISORY AGREEMENTS
Form of Investment Advisory Contract between Republic Funds and Republic
National Bank of New York.
Form of Investment Advisory Contract Supplement between Republic Funds and
Republic National Bank of New York.
Form of Investment Advisory Contract between Republic Portfolios and Republic
National Bank of New York.
Form of Investment Advisory Contract Supplement between Republic Portfolios and
Republic National Bank of New York.
Form of Sub-Advisory Agreement between Republic National Bank of New York and
Sub-Adviser.
<PAGE> 31
EXHIBIT C-1
INVESTMENT ADVISORY CONTRACT
REPUBLIC FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43219
, 1998
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
Dear Sirs:
This will confirm the agreement between the undersigned (the "Trust") and
Republic National Bank of New York (the "Adviser") as follows:
1. The Trust is an open-end investment company organized as a
Massachusetts business trust and consists of one or more separate
investment portfolios (the "Funds") as may be established and designated by
the Trust's Board of Trustees (the "Board of Trustees") from time to time.
This Contract shall pertain to such Funds as shall be designated in
Supplements to this Contract as further agreed between the Trust and the
Adviser (the "Covered Funds"). A separate series of shares of beneficial
interest in the Trust are offered to investors with respect to each Fund.
The Trust engages in the business of investing and reinvesting the assets
of each Fund in the manner and in accordance with the investment objectives
and restrictions specified in the currently effective prospectus (the
"Prospectus") relating to the Trust and the Funds included in the Trust's
registration statement, as amended from time to time (the "Registration
Statement"), filed by the Trust under the Investment Company Act of 1940
(the "1940 Act") and the Securities Act of 1933. 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. Pursuant to a Distribution Agreement, as supplemented, and an
Administration Agreement, as supplemented, between the Trust and BISYS Fund
Services (the "Sponsor"), the Trust has employed the Sponsor to act as
principal underwriter for each Fund and to provide to the Trust management
and other services.
2. The Trust hereby appoints the Adviser to provide the investment
advisory services specified in this Contract and the Adviser hereby accepts
such appointment. The Trust expressly authorizes the Adviser, subject to
the approval of the Board of Trustees and compliance with applicable law,
to employ (without obtaining the approval of Trust's shareholders) one or
more sub-advisers 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 Trust shall be responsible for all of its expenses and
liabilities, including compensation of its Trustees who are not affiliated
with the Sponsor or any of its affiliates; taxes and governmental fees;
interest charges; fees and expenses of the 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 shares of the Funds), transfer agent, registrar
and dividend disbursing agent of the Trust; expenses of issuing, selling,
redeeming, registering and qualifying for sale shares of beneficial
interest in the Trust; expenses of preparing and printing share
certificates,
<PAGE> 32
prospectuses and reports to shareholders, 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 shareholders' meetings; organization expenses;
and extraordinary expenses.
4. (a) The Adviser shall provide to the Trust investment guidance and
policy direction in connection with the management of the portfolio of each
Covered Fund, 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
Covered Fund 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 Covered Fund's
portfolio shall be invested in securities described by the policies of such
Covered Fund and what portion, if any, should be invested otherwise or held
uninvested.
The 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 Trust's officers
administrative assistance in connection with the operation of the Trust and
each of the Covered Funds, which shall include (i) compliance with all
reasonable requests of the Trust for information, including information
required in connection with the Trust's filings with the Securities and
Exchange Commission and state securities commissions and (ii) such other
services as the Adviser shall from time to time determine, upon
consultation with the Sponsor, to be necessary or useful to the
administration of the Trust and each of the Covered Funds.
(c) As manager of the assets of each Covered Fund, the Adviser shall
make investments for the account of that Fund in accordance with the
Adviser's best judgment and within the investment objectives and
restrictions set forth in the Prospectus, the 1940 Act and the provisions
of the Internal Revenue Code of 1986 relating to regulated investment
companies subject to policy decisions adopted by the Board of Trustees.
(d) The Adviser shall furnish to the Board of Trustees periodic
reports on the investment performance of each Covered Fund and on the
performance of its obligations under this Contract and shall supply such
additional reports and information as the 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 Covered Fund 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 Fund and to
such other customers.
5. The Adviser shall give the 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 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 Trust or its shareholders 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.
2
<PAGE> 33
6. In consideration of the services to be rendered by the Adviser
under this Contract, each Covered Fund shall pay the Adviser a monthly fee
on the first business day of each month based upon the average daily value
(as determined on each business day at the time set forth in the Prospectus
for determining net asset value per share) of the net assets of that Fund
during the preceding month, at annual rates set forth in a Supplement to
this Contract with respect to that Fund. If the fees payable to the Adviser
pursuant to this paragraph 6 begin to accrue before the end of any month or
if this Contract terminates before the end of any month, the fees for the
period from that date to the end of that month or from the beginning of
that month to the date of termination, as the case may be, shall be
prorated according to the proportion which the period bears to the full
month in which the effectiveness or termination occurs. For purposes of
calculating the monthly fees, the value of the net assets of each Covered
Fund shall be computed in the manner specified in the Prospectus for the
computation of net asset value. For purposes of this Contract, a "business
day" is any day the New York Stock Exchange is open for trading.
7. If the aggregate expenses of every character incurred by, or
allocated to, each Covered Fund in any fiscal year, other than interest,
taxes, expenses under the Distribution Agreement and the Amended and
Restated Master Distribution Plan and Supplements, 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), but including the fees payable under this
Contract and the fees payable to the Sponsor under the Distribution
Agreement and the Amended and Restated Master Distribution Plan and
Supplements ("includible expenses"), shall exceed any applicable expense
limitations, the Adviser shall pay that Fund 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 Trust's fiscal year, the
Sponsor will review the includible expenses accrued during that fiscal year
to the end of the period and shall estimate the contemplated includible
expenses for the balance of that fiscal year. If, as a result of that
review and estimation, it appears likely that the includible expenses will
exceed the limitations referred to in this paragraph 7 for a fiscal year
with respect to a Covered Fund, the monthly fees relating to that Fund
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 includible 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 Covered Fund 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 Trust's
fiscal year.
8. (a) This Contract and any Supplement hereto shall become effective
with respect to a Covered Fund on the date specified in such Supplement and
shall thereafter continue in effect with respect to that Fund for a period
of more than two years from such date only so long as the continuance is
specifically approved at least annually (i) by the vote of a majority of
the outstanding voting securities of the Fund (as defined in the 1940 Act)
or by the Board of Trustees and (ii) by the vote, cast in person at a
meeting called for that purpose, of a majority of the members of the Board
of 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 Covered Fund at any time, without the payment of any penalty,
by a vote of a majority of the outstanding voting securities of that Fund
(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 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
3
<PAGE> 34
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 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 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 Trust in writing, whereupon such
portfolio shall become a Covered Fund hereunder.
13. The Declaration of Trust establishing the Trust, together with
all amendments thereto (the "Declaration"), a copy of which is on file in
the Office of the Secretary of the Commonwealth of Massachusetts, provides
that the name of the Trust refers to the Trustees under the Declaration
collectively as Trustees and not as individuals or personally, and that no
shareholder, Trustee, officer, employee or agent of the Trust shall be
subject to claims against or obligations of the Trust to any extent
whatsoever, but that the Trust estate only shall be liable.
If the foregoing correctly sets forth the agreement between the Trust and
the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
REPUBLIC FUNDS
By
------------------------------------
Name:
Title:
ACCEPTED:
REPUBLIC NATIONAL BANK OF NEW YORK
By
--------------------------------------------------------
Title:
4
<PAGE> 35
EXHIBIT C-2
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
REPUBLIC FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43219
, 1998
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
Dear Sirs:
Re: [Fund]
This will confirm the agreement between the undersigned (the "Trust") and
Republic National Bank of New York (the "Adviser") as follows:
1. The Trust is an open-end management investment company organized
as a Massachusetts business trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust
from time to time. A separate class of shares of beneficial interest of the
Trust is offered to investors with respect to each investment portfolio.
(the "Fund") is a separate investment portfolio of the Trust.
2. The Trust and the Adviser have entered into an Investment Advisory
Contract ("Advisory Contract") pursuant to which the Trust has employed the
Adviser to provide investment advisory and other services specified in the
Advisory Contract and the Adviser has accepted such employment. Terms used
but not otherwise defined herein shall have the same meanings assigned to
them by the Advisory Contract.
3. As provided in paragraph I of the Advisory Contract, the Trust
hereby adopts the Advisory Contract with respect to the Fund and the
Adviser hereby acknowledges that the Advisory Contract shall pertain to the
Fund, the terms and conditions of the Advisory Contract being hereby
incorporated herein by reference.
4. The term "Covered Fund" as used in the Advisory Contract shall,
for purposes of this Supplement, pertain to the Fund.
5. As provided in paragraph 6 of the Advisory Contract and subject to
further conditions as set forth therein, the Trust shall with respect to
the Fund pay the Adviser a monthly fee on the first business day of each
month at the annual rate of % of the average daily value (as
determined on each business day at the time set forth in the Prospectus for
determining net asset value per share) of the net assets of the Fund during
the preceding month.
6. This Supplement and the Advisory Contract (together, the
"Contract") shall become effective with respect to the Fund on ,
1998 and shall continue in effect with respect to the Fund for an initial
term of two years from that date, and shall continue in effect thereafter,
but 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 Fund (as defined in the 1940 Act) or by the Board of Trustees and
(b) by the vote, cast in person at a meeting called for that purpose, of a
majority of the members of the Board of Trustees who are not parties to
this Contract or "interested persons" (as defined in the 1940 Act) of any
such party. This Contract may be terminated with respect to the Fund at any
time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or
by a vote of a majority of the members of the Board of Trustees on 60 days'
written notice to the Adviser, or by the Adviser on 60 days' written notice
to the Trust. This Contract shall terminate automatically in the event of
its assignment as defined in the 1940 Act.
<PAGE> 36
If the foregoing correctly sets forth the agreement between the Trust and
the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
REPUBLIC FUNDS
By
------------------------------------
Name:
Title:
ACCEPTED:
REPUBLIC NATIONAL BANK OF NEW YORK
By
--------------------------------------------------------
Title:
2
<PAGE> 37
EXHIBIT C-3
INVESTMENT ADVISORY CONTRACT
REPUBLIC PORTFOLIOS
FLOOR 2, BLOCK 2
HARCOURT CENTRE
DUBLIN 2, IRELAND
, 1998
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
Dear Sirs:
This will confirm the agreement between the undersigned (the "Trust") and
Republic National Bank of New York (the "Adviser") as follows:
1. The Trust is an open-end investment company organized as a New
York trust and consists of one or more separate investment portfolios (the
"Funds") as may be established and designated by the Trust's Board of
Trustees (the "Board of Trustees") from time to time. This Contract shall
pertain to such Funds as shall be designated in Supplements to this
Contract as further agreed between the Trust and the Adviser (the "Covered
Funds"). Separate interests in the Trust are offered to investors with
respect to each Fund. The Trust engages in the business of investing and
reinvesting the assets of each Fund in the manner and in accordance with
the investment objectives and restrictions specified in the currently
effective registration statement relating to the Trust and the Funds, as
amended from time to time (the "Registration Statement"), filed by the
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. Pursuant to an Exclusive Placement Agent Agreement, as
supplemented, and an Administration Agreement, as supplemented, between the
Trust and BISYS Fund Services (Ireland) Ltd. (the "Sponsor"), the Trust has
employed the Sponsor to act as principal underwriter for each Fund and to
provide to the Trust management and other services.
2. The Trust hereby appoints the Adviser to provide the investment
advisory services specified in this Contract and the Adviser hereby accepts
such appointment. The Trust expressly authorizes the Adviser, subject to
the approval of the Board of Trustees and compliance with applicable law,
to employ (without obtaining the approval of the Trust's shareholders) one
or more sub-advisers 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 Trust shall be responsible for all of its expenses and
liabilities, including compensation of its Trustees who are not affiliated
with the Sponsor or any of its affiliates; taxes and governmental fees;
interest charges; fees and expenses of the 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 shares of the Funds), transfer agent, registrar
and dividend disbursing agent of the Trust; expenses of issuing, selling,
and redeeming interests in the Trust; expenses of preparing and printing
prospectuses and reports to shareholders, 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
<PAGE> 38
portfolio transactions; expenses of shareholders' meetings; organization
expenses; and extraordinary expenses.
4. (a) The Adviser shall provide to the Trust investment guidance and
policy direction in connection with the management of the portfolio of each
Covered Fund, 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 Covered Fund 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 Covered
Fund's portfolio shall be invested in securities described by the policies
of such Covered Fund and what portion, if any, should be invested otherwise
or held uninvested.
The 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 Trust's officers
administrative assistance in connection with the operation of the Trust and
each of the Covered Funds, which shall include (i) compliance with all
reasonable requests of the Trust for information, including information
required in connection with the 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 Sponsor, to be necessary
or useful to the administration of the Trust and each of the Covered Funds.
(c) As manager of the assets of each Covered Fund, the Adviser shall
make investments for the account of that Fund 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 of 1986 relating to regulated
investment companies subject to policy decisions adopted by the Board of
Trustees.
(d) The Adviser shall furnish to the Board of Trustees periodic
reports on the investment performance of each Covered Fund and on the
performance of its obligations under this Contract and shall supply such
additional reports and information as the 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 Covered Fund 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 Fund and to
such other customers.
5. The Adviser shall give the 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 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 Trust or its shareholders 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.
2
<PAGE> 39
6. In consideration of the services to be rendered by the Adviser
under this Contract, each Covered Fund shall pay the Adviser a monthly fee
on the first business day of each month based upon the average daily value
(as determined on each business day at the time set forth in the Prospectus
for determining net asset value per share) of the net assets of that Fund
during the preceding month, at annual rates set forth in a Supplement to
this Contract with respect to that Fund. If the fees payable to the Adviser
pursuant to this paragraph 6 begin to accrue before the end of any month or
if this Contract terminates before the end of any month, the fees for the
period from that date to the end of that month or from the beginning of
that month to the date of termination, as the case may be, shall be
prorated according to the proportion which the period bears to the full
month in which the effectiveness or termination occurs. For purposes of
calculating the monthly fees, the value of the net assets of each Covered
Fund shall be computed in the manner specified in the Registration
Statement for the computation of net asset value. For purposes of this
Contract, a "business day" is any day the New York Stock Exchange is open
for trading.
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 Covered Fund (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 fees payable under this Contract ("includible
expenses"), shall exceed any applicable expense limitations, the Adviser
shall pay the corresponding Covered Fund 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 Trust's fiscal year, the
Sponsor will review the includible expenses accrued during that fiscal year
to the end of the period and shall estimate the contemplated includible
expenses for the balance of that fiscal year. If, as a result of that
review and estimation, it appears likely that the includible 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 Covered Fund 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 includible 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 Covered
Fund 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 Trust's fiscal year.
8. (a) This Contract and any Supplement hereto shall become effective
with respect to a Covered Fund on the date specified in such Supplement and
shall thereafter continue in effect with respect to that Fund for a period
of more than two years from such date only so long as the continuance is
specifically approved at least annually (i) by the vote of a majority of
the outstanding voting securities of the Fund (as defined in the 1940 Act)
or by the Board of Trustees and (ii) by the vote, cast in person at a
meeting called for that purpose, of a majority of the members of the Board
of 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 Covered Fund at any time, without the payment of any penalty,
by a vote of a majority of the outstanding voting securities of that Fund
(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 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
3
<PAGE> 40
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 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 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 Trust in writing, whereupon such
portfolio shall become a Covered Fund hereunder.
13. The Declaration of Trust establishing the Trust, together with
all amendments thereto (the "Declaration"), provides that the name of the
Trust refers to the Trustees under the Declaration collectively as Trustees
and not as individuals or personally, and that no shareholder, Trustee,
officer, employee or agent of the Trust shall be subject to claims against
or obligations of the Trust to any extent whatsoever, but that the Trust
estate only shall be liable.
If the foregoing correctly sets forth the agreement between the Trust and the
Adviser, please so indicate by signing and returning to the Trust the enclosed
copy hereof.
Very truly yours,
REPUBLIC PORTFOLIOS
By
--------------------------------------
Name:
Title:
ACCEPTED:
REPUBLIC NATIONAL BANK
OF NEW YORK
By
- -----------------------------------------------------
Title:
4
<PAGE> 41
EXHIBIT C-4
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
REPUBLIC PORTFOLIOS
FLOOR 2, BLOCK 2
HARCOURT CENTRE
DUBLIN 2, IRELAND
, 1998
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
Dear Sirs:
Re: [Fund]
This will confirm the agreement between the undersigned (the "Trust") and
Republic National Bank of New York (the "Adviser") as follows:
1. The 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 Trust from time to
time. Separate interests of the Trust are offered to investors with respect
to each investment portfolio. (the "Fund") is a separate investment
portfolio of the Trust.
2. The Trust and the Adviser have entered into an Investment Advisory
Contract ("Advisory Contract") pursuant to which the Trust has employed the
Adviser to provide investment advisory and other services specified in the
Advisory Contract and the Adviser has accepted such employment. Terms used
but not otherwise defined herein shall have the same meanings assigned to
them by the Advisory Contract.
3. As provided in paragraph I of the Advisory Contract, the Trust
hereby adopts the Advisory Contract with respect to the Fund and the
Adviser hereby acknowledges that the Advisory Contract shall pertain to the
Fund, the terms and conditions of the Advisory Contract being hereby
incorporated herein by reference.
4. The term "Covered Fund" as used in the Advisory Contract shall,
for purposes of this Supplement, pertain to the Fund.
5. As provided in paragraph 6 of the Advisory Contract and subject to
further conditions as set forth therein, the Trust shall with respect to
the Fund pay the Adviser a monthly fee on the first business day of each
month at the annual rate of % of the average daily value (as
determined on each business day at the time set forth in the Prospectus for
determining net asset value per share) of the net assets of the Fund during
the preceding month.
6. This Supplement and the Advisory Contract (together, the
"Contract") shall become effective with respect to the Fund on
, 1998 and shall continue in effect with respect to the
Fund for an initial term of two years from that date, and shall continue in
effect thereafter, but 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 Fund (as defined in the 1940 Act) or by the Board
of Trustees, and (b) by the vote, cast in person at a meeting called for
that purpose, of a majority of the members of the Board of Trustees who are
not parties to this Contract or "interested persons" (as defined in the
1940 Act) of any such party. This Contract may be terminated with respect
to the Fund at any time, without the payment of any penalty, by vote of a
majority of the outstanding voting securities of the Fund (as defined in
the 1940 Act) or by a vote of a majority of the members of the Board of
Trustees on 60 days'
<PAGE> 42
written notice to the Adviser or by the Adviser on 60 days' written notice
to the 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 Trust and
the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
REPUBLIC PORTFOLIOS
By
------------------------------------
Name:
Title:
ACCEPTED:
REPUBLIC NATIONAL BANK OF NEW YORK
By
-------------------------------------------------------
Title:
2
<PAGE> 43
EXHIBIT C-5
[REPUBLIC FUNDS] [REPUBLIC PORTFOLIOS]
[FUND]
SUB-ADVISORY AGREEMENT
AGREEMENT, effective commencing on , 1998, between
(the "Sub-adviser") and Republic National Bank of New York (the "Manager").
WHEREAS, the Manager has been retained by (the "Trust"), a
[Massachusetts business trust] [New York trust] registered as an open-end
diversified investment management company under the Investment Company Act of
1940, as amended (the "1940 Act"), to provide investment advisory services to
(the "Fund") pursuant to an Investment Advisory Contract and
Supplement thereto dated , 1998 (the "Advisory Agreement");
WHEREAS, the Trust's Board of Trustees, including a majority of the
Trustees who are not parties to this Agreement or "interested persons," as
defined in the 1940 Act, of any party to this Agreement, have approved the
appointment of the Sub-adviser to perform certain investment advisory services
for the Fund pursuant to this Sub-advisory Agreement and the Sub-adviser is
willing to perform such services for the Fund;
WHEREAS, pursuant to an order of exemption from the Securities and Exchange
Commission ("SEC"), the performance by Sub-adviser of the services contemplated
herein is not subject to approval by the shareholders of the Trust or the Fund;
WHEREAS, the Sub-adviser is registered or exempt from registration as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act");
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the Manager and the Sub-adviser as follows:
1. Appointment. The Manager hereby appoints the Sub-adviser to
perform advisory services to the Fund for the periods and on the terms set
forth in this Sub-advisory Agreement. The Sub-adviser accepts such
appointment and agrees to furnish the services herein set forth, for the
compensation herein provided.
2. Investment Advisory Duties. Subject to the supervision of the
Board of Trustees of the Trust and the Manager, the Sub-adviser will, in
coordination with the Manager, (a) provide a program of continuous
investment management for the portion of the Fund allocated by the Manager
to the Sub-adviser (the "Sub-adviser's Portfolio") for management in
accordance with the Fund's investment objectives, policies and limitations
as stated in the Fund's Prospectus and Statement of Additional Information
included as part of the Trust's Registration Statement on behalf of the
Fund filed with the Securities and Exchange Commission, as they may be
amended from time to time, copies of which shall be provided to the
Sub-adviser by the Manager; (b) make investment decisions for the
Sub-adviser's Portfolio; and (c) place orders to purchase and sell
securities for the Sub-adviser's Portfolio. In particular, the Sub-adviser
will be responsible for the market timing of purchases and sales and for
all yield enhancement strategies used in managing the Sub-adviser's
Portfolio.
In performing its investment management services to the Fund hereunder, the
Sub-adviser will provide the Fund with ongoing investment guidance and policy
direction, including oral and written research, analysis, advice, statistical
and economic data and judgments regarding individual investments, general
economic conditions and trends and long-range investment policy, with respect,
in all cases, to the Sub-adviser's Portfolio. The Sub-adviser will determine the
securities, instruments, repurchase agreements, options and other investments
and techniques that the Sub-adviser's Portfolio will purchase, sell, enter into
or use, and will provide an ongoing evaluation of the Sub-adviser's Portfolio.
The Sub-adviser will determine what portion of the Sub-adviser's Portfolio shall
be invested in securities and other assets.
<PAGE> 44
The Sub-adviser further agrees that, in performing its duties hereunder, it
will:
(a) comply with the 1940 Act and all rules and regulations thereunder,
the Advisers Act, the Internal Revenue Code of 1986, as amended (the
"Code"), and all other applicable federal and state laws and regulations,
and with any applicable procedures adopted by the Trustees;
(b) manage the Sub-adviser's Portfolio so that it will qualify, and
continue to qualify (except where extraordinary circumstances dictate
otherwise), as a regulated investment company under Subchapter M of the
Code and regulations issued thereunder, and conduct periodically such
Subchapter M compliance reviews as the Manager and Sub-adviser determine
appropriate;
(c) place orders pursuant to its investment determinations for the
Sub-adviser's Portfolio directly with the issuer, or with any broker or
dealer, in accordance with applicable policies expressed in the Fund's
Prospectus and/or Statement of Additional Information and in accordance
with applicable legal requirements;
(d) furnish to the Trust whatever statistical information the Trust
may reasonably request with respect to the Sub-adviser's Portfolio's assets
or contemplated investments. In addition, the Sub-adviser will keep the
Trust and the Trustees informed of developments materially affecting the
Sub-adviser's Portfolio and shall, on the Sub-adviser's own initiative,
furnish to the Trust from time to time whatever information the Sub-adviser
believes appropriate for this purpose;
(e) provide the Manager and the Board of Trustees of the Trust with a
copy of a written code of ethics complying with the requirements of Rule
17j-1 under the 1940 Act, together with evidence of its adoption. Within
fifteen days of the end of the calendar quarter of each year that this
Sub-advisory Agreement is in effect, the president or a vice-president of
the Sub-adviser shall certify to the Manager that the Sub-adviser has
complied with the requirements of Rule 17j-1 during the previous year and
that there has been no violation of the Sub-adviser's code of ethics or, if
such a violation has occurred, that appropriate action was taken in
response to such violation. Upon the written request of the Manager, the
Sub-adviser shall permit the Manager, its employees or its agents to
examine the reports required to be made to the Sub-adviser by Rule
17j-l(c)(1) and all other records relevant to the Sub-adviser's code of
ethics;
(f) provide the Manager with a copy of its Form ADV as most recently
filed with the SEC and promptly will furnish a copy of all amendments to
the Manager at least annually;
(g) notify the Manager of any change of control of the Sub-adviser and
any changes in the key personnel or general partners of the Sub-adviser, in
each case prior to or promptly after such change;
(h) make available to the Manager and the Trust, promptly upon their
request, such copies of its investment records and ledgers with respect to
the Sub-adviser's Portfolio as may be required to assist the Manager and
the Trust in their compliance with applicable laws and regulations. The
Sub-adviser will furnish the Trustees with such periodic and special
reports regarding the Sub-adviser's Portfolio as they may reasonably
request;
(i) immediately notify the Manager and the Trust in the event that the
Sub-adviser or any of its affiliates: (1) becomes aware that it is subject
to a statutory disqualification that prevents the Sub-adviser from serving
as an investment adviser pursuant to this Sub-advisory Agreement; or (2)
becomes aware that it is the subject of an administrative proceeding or
enforcement action by the SEC or other regulatory authority. The
Sub-adviser further agrees to notify the Trust and the Manager immediately
of any material fact known to the Sub-adviser respecting or relating to the
Sub-adviser that is not contained in the Trust's Registration Statement
with respect to the Fund, or any amendment or supplement thereto, but that
is required to be disclosed therein, and of any statement contained therein
that becomes untrue in any material respect.
3. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this Section 3, the Sub-adviser shall pay the compensation and
expenses of all its directors, partners, officers and employees, if any, who
serve as officers and executive employees of the Trust (including the Fund's
share of payroll taxes),
2
<PAGE> 45
and the Sub-adviser shall make available, without expense to the Fund, the
service of its directors, partners, officers and employees, if any, who may be
duly elected officers of the Trust, subject to their individual consent to serve
and to any limitations imposed by law.
The Sub-adviser shall not be required to pay any expenses of the Fund other
than those specifically allocated to the Sub-adviser in this Section 3. In
particular, but without limiting the generality of the foregoing, the
Sub-adviser shall not be responsible for any of the following expenses of the
Fund: organization and offering expenses of the Fund (including out-of-pocket
expenses); fees payable to the Manager and to any other Fund advisers or
consultants; legal expenses; auditing and accounting expenses; interest
expenses; telephone, telex, facsimile, postage and other communications
expenses; taxes and governmental fees; dues and expenses incurred by or with
respect to the Fund in connection with membership in investment company trade
organizations; cost of insurance relating to fidelity coverage for the Trust's
officers and employees; fees and expenses of any custodian, subcustodian,
transfer agent, registrar, or dividend disbursing agent of the Fund; payments
for maintaining the Fund's financial books and records and calculating the daily
net asset value of the Fund's shares; other payments for portfolio pricing or
valuation services to pricing agents, accountants, bankers and other
specialists, if any; expenses of preparing share certificates and other expenses
in connection with the issuance, offering, distribution or sale of securities
issued by the Fund; expenses relating to investor and public relations; expenses
of registering and qualifying shares of the Fund for sale (if any); freight,
insurance and other charges in connection with the shipment of the portfolio
securities of the Fund; brokerage commissions or other costs of acquiring or
disposing of any portfolio securities or other assets of the Fund, or of
entering into other transactions or engaging in any investment practices with
respect to the Fund; expenses of printing and distributing prospectuses,
Statements of Additional Information, reports, notices and dividends to
stockholders; costs of stationery; litigation expenses; costs of stockholders'
and other meetings; the compensation and all expenses (specifically including
travel expenses relating to the Fund's business) of officers, trustees and
employees of the Trust who are not interested persons of the Sub-adviser; and
travel expenses (or an appropriate portion thereof) of officers or trustees of
the Trust who are officers, directors or employees of the Sub-adviser to the
extent that such expenses relate to attendance at meetings of the Board of
Trustees of the Trust or any committees thereof or advisers thereto.
4. Compensation. As compensation for the services provided and expenses
assumed by the Sub-adviser under this Agreement, the Trust will pay the
Sub-adviser within 21 calendar days after the end of each calendar quarter an
advisory fee computed daily on the basis of the Sub-adviser's Portfolio's
average daily net assets allocated to the Sub-adviser at an annual rate of
. The "average daily net assets" of the Sub-adviser's Portfolio
shall mean the average of the values placed on the Sub-adviser's Portfolio's net
assets as of 4:00 p.m. (New York time) on each day on which the net asset value
of the Fund is determined consistent with the provisions of Rule 22c-1 under the
1940 Act or, if the Fund lawfully determines the value of its net assets as of
some other time on each business day, as of such other time. The value of net
assets of the Fund shall always be determined pursuant to the applicable
provisions of the Trust's Declaration of Trust and Registration Statement. If,
pursuant to such provisions, the determination of net asset value is suspended
for any particular business day, then for the purposes of this Section 4, the
value of the net assets of the Fund as last determined shall be deemed to be the
value of its net assets as of the close of regular trading on the New York Stock
Exchange, or as of such other time as the value of the net assets of the Fund's
portfolio may lawfully be determined, on that day. If the determination of the
net asset value of the shares of the Fund has been so suspended for a period
including any quarter end when the Sub-adviser's compensation is payable
pursuant to this Section, then the Sub-adviser's compensation payable at the end
of such month shall be computed on the basis of the value of the net assets of
the Fund as last determined (whether during or prior to such quarter). If the
Fund determines the value of the net assets of its portfolio more than once on
any day, then the last such determination thereof on that day shall be deemed to
be the sole determination thereof on that day for the purposes of this Section
4. In the event that this Agreement is terminated pursuant to Section 10 hereof,
the Sub-adviser shall be entitled to a pro rata portion of the fee under this
Section 4 through and including the date upon which the Agreement is terminated
and the Sub-adviser ceases to provide investment advisory services to the Fund
hereunder.
3
<PAGE> 46
5. Books and Records. The Sub-adviser agrees to maintain such books and
records with respect to its services to the Fund as are required by Section 31
under the 1940 Act, and rules adopted thereunder, and by other applicable legal
provisions, and to preserve such records for the periods and in the manner
required by that Section, and those rules and legal provisions. The Sub-adviser
also agrees that records it maintains and preserves pursuant to Rules 31a-1 and
Rule 31a-2 under the 1940 Act and otherwise in connection with its services
hereunder are the property of the Fund and will be surrendered promptly to the
Fund upon its request. The Sub-adviser further agrees that it will furnish to
regulatory authorities having the requisite authority any information or reports
in connection with its services hereunder which may be requested in order to
determine whether the operations of the Fund are being conducted in accordance
with applicable laws and regulations.
6. Standard of Care and Limitation of Liability. The Sub-adviser shall
exercise its best judgment in rendering the services provided by it under this
Sub-advisory Agreement. The Sub-adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund or the holders
of the Fund's shares in connection with the matters to which this Sub-advisory
Agreement relate, provided that nothing in this Sub-advisory Agreement shall be
deemed to protect or purport to protect the Sub-adviser against any liability to
the Fund or to holders of the Fund's shares to which the Sub-adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or by reason of the
Sub-adviser's reckless disregard of its obligations and duties under this
Sub-advisory Agreement. As used in this Section 6, the term "Sub-adviser" shall
include any officers, directors, partners, employees or other affiliates of the
Sub-adviser performing services for the Fund.
7. Indemnification.
(a) The Sub-adviser hereby agrees to indemnify and hold harmless the
Manager from any controversies, claims, suits, losses, liabilities, judgments,
awards or settlements, and costs or expenses, including reasonable legal fees,
caused by, or in any way related to, the investment decisions rendered by the
Sub-adviser concerning the Sub-adviser's Portfolio in a manner inconsistent with
Section 6 hereof, any failure of the Sub-adviser to fulfill any of its other
obligations under this Sub-advisory Agreement, any material misrepresentation,
or omission to disclose material facts, by the Sub-adviser to the Manager or any
shareholder of the Fund, or any violation of applicable law by the Sub-adviser.
The Sub-adviser also agrees to indemnify and hold harmless the Manager with
respect to any losses incurred as the result of errors made by the Sub-adviser
in transmitting orders to any broker for execution.
(b) The Manager hereby agrees to indemnify and hold harmless the
Sub-adviser from any controversies, claims, suits, losses, liabilities,
judgments, awards or settlements, and costs or expenses, including reasonable
legal fees, caused by, or in any way related to, its failure to fulfill any of
its obligations under this Sub-advisory Agreement. The Manager also agrees to
indemnify and hold harmless the Sub-adviser with respect to any losses related
to the failure of any other sub-adviser to the Fund to perform its obligations
to the Fund in a manner consistent with the applicable sub-advisory agreement
between the Manager and such other sub-adviser, provided that the Manager's
liability to the Sub-adviser shall be limited to the extent that the Manager is
indemnified by the other sub-adviser and the Manager uses all reasonable efforts
to obtain any indemnification that is available to the Manager from the other
sub-adviser.
(c) If any party seeks indemnification under this Agreement (an
"indemnified party"), it shall notify the other party (the "indemnifying party")
in writing of the assertion of any third party claim or action and shall deliver
all copies of materials received in connection with the matter to the
indemnifying party. The indemnifying party shall have the right to participate
at its own expense in the defense of any such claim or action with counsel of
its own choosing satisfactory to the indemnified party, and the indemnified
party shall cooperate fully with the indemnifying party in the defense or
settlement of any matter that is covered by paragraphs (a) or (b) above, subject
to reimbursement by the indemnifying party for expenses incurred by the
indemnified party in connection with the indemnifying party's participation in
the defense.
8. Services Not Exclusive. It is understood that the services of the
Sub-adviser are not exclusive, and that nothing in this Sub-advisory Agreement
shall prevent the Sub-adviser from providing similar services to other
individuals, institutions or investment companies (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities, provided such other services and
4
<PAGE> 47
activities do not, during the term of this Sub-advisory Agreement, interfere in
a material manner with the Sub-adviser's ability to meet its obligations to the
Trust and the Fund hereunder. When the Sub-adviser recommends the purchase or
sale of a security for other investment companies and other clients, and at the
same time the Sub-adviser recommends the purchase or sale of the same security
for the Fund, the Sub-adviser may, but shall not be obligated to, aggregate the
orders for securities to be purchased or sold. It is understood that in light of
its fiduciary duty to the Fund, such transactions will be executed on a basis
that is fair and equitable to the Fund. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Sub-adviser nor
any of its directors, partners, officers or employees shall act as a principal
or agent or receive any commission.
9. Documentation. The Fund shall provide the Sub-adviser with the
following documents, as soon as they are available:
(a) the Trust's registration statement relating to the Fund, and any
amendments thereto;
(b) the Declaration of Trust and By-laws (and any amendments thereto)
of the Trust;
(c) resolutions of the Board of Trustees of the Trust authorizing the
appointment of to serve as Sub-adviser and approving
this Sub-advisory Agreement;
(d) the Trust's Notification of Registration on Form N-8A; and
(e) the Fund's current Prospectus and Statement of Additional
Information, and any supplements thereto.
10. Duration and Termination. This Sub-advisory Agreement shall continue
for an initial term of two years from the date set forth above, and shall
thereafter continue in effect only so long as continuance is specifically
approved at least annually by the vote of a majority of the Board of Trustees,
including a majority of the Trustees who are not parties to this Agreement or
"interested persons" of any party to this Agreement, at a meeting called for
that purpose, unless sooner terminated as provided herein. Notwithstanding the
foregoing, this Sub-advisory Agreement may be terminated: (a) at any time
without penalty upon thirty (30) days' written notice to the Sub-adviser by (i)
the Fund upon the vote of a majority of the Trustees or upon the vote of a
majority of the Fund's outstanding voting securities, or (ii) the Manager, or
(b) by the Sub-adviser upon thirty (30) days' written notice to the Fund,
provided that the Sub-adviser shall continue to be responsible for managing the
assets of the Fund for sixty (60) business days after the end of the notice
period unless the Fund shall agree in writing to shorten the period. Anything to
the contrary herein notwithstanding, any termination carried out pursuant to
this Section 10(b) shall be without penalty and, further, the compensation
schedule set forth in Section 4 hereof shall apply to the service of the
Sub-adviser beyond the end of the notice period provided in this Section 10(b).
This Sub-advisory Agreement will also terminate automatically in the event of
its assignment (as defined in the 1940 Act) or the assignment or termination of
the Advisory Agreement.
11. Amendments. No provision of this Sub-advisory Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Sub-advisory
Agreement shall be effective until approved by an affirmative vote of (i) a
majority of the outstanding voting securities of the Fund, and (ii) a majority
of the Trustees of the Fund, including a majority of Trustees who are not
interested persons of any party to this Sub-advisory Agreement, cast in person
at a meeting called for the purpose of voting on such approval, if such approval
is required by applicable law.
5
<PAGE> 48
12. Notices. Any notice or other communication required or permitted to
be given hereunder shall be given in writing and mailed, faxed or delivered to
the other party at its address as follows:
If to the Manager:
Republic National Bank of New York
452 Fifth Avenue
New York, New York 10018
Attention: Ms. Mary E. Martinez
If to the Sub-adviser:
[Name]
[Address]
Attention:
Any party may specify a different or additional address for notice by
sending a written notice to the other at the address above, or at that or those
last given hereunder.
13. Miscellaneous.
(a) This Sub-advisory Agreement shall be governed by the laws of the State
of New York, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC
thereunder. Exclusive original jurisdiction to any claim, action or dispute
between the parties arising out of this Agreement shall be solely in state or
federal district courts sitting in the State of New York.
(b) The captions of this Sub-advisory Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
(c) If any provision of this Sub-advisory Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Sub-advisory Agreement shall not be affected hereby and, to this extent, the
provisions of this Sub-advisory Agreement shall be deemed to be severable. Where
the effect of a requirement of the federal securities laws reflected in any
provision of this Sub-advisory Agreement is made less restrictive by a rule,
regulation or order of the SEC, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order. This Agreement may be signed in counterpart.
(d) Nothing herein shall be construed as constituting the Sub-adviser, or
any of its directors, officers or employees, an agent of the Manager or the
Fund, nor the Manager, or any of its directors, officers or employees, an agent
of the Sub-adviser.
6
<PAGE> 49
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of , 199 .
SUB-ADVISER
By
------------------------------------
Name:
Title:
REPUBLIC NATIONAL BANK OF
NEW YORK
By
------------------------------------
Name:
Title:
7
<PAGE> 50
EXHIBIT D
SUMMARY INFORMATION ON REPUBLIC AND THE SUB-ADVISERS
REPUBLIC NATIONAL BANK OF NEW YORK
Republic, 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 also serves as investment adviser to the
U.S. Government Money Market Fund, the New York Tax-Free Money Market Fund and
the New York Tax-Free Bond Fund and as investment manager to the Equity Fund.
Republic 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 June 30,
1997, Republic was the 16th largest commercial bank in the United States
measured by deposits.
Republic 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's principal executive officers are set forth below. The address of
each as it relates to his or her duties at Republic, is the same as that of
Republic.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
-------------------------------------- --------------------------------------------------
<S> <C>
Walter H. Weiner...................... Chairman of the Board and Chief Executive Officer
Peter J. Mansbach..................... Chairman of the Executive Committee
Kurt Andersen......................... Vice Chairman of the Board
Robert A. Cohen....................... Vice Chairman of the Board
Cyril S. Dwek......................... Vice Chairman of the Board
Ernest Ginsberg....................... Vice Chairman of the Board
Nathan Hasson......................... Vice Chairman of the Board and Treasurer
Vito S. Portera....................... Vice Chairman of the Board
Elias Saal............................ Vice Chairman of the Board
Dov C. Schlein........................ President
Paul L. Lee........................... Executive Vice President
Thomas F. Robards..................... Executive Vice President
George T. Wendler..................... Vice Chairman of the Board
Richard C. Spikerman.................. Executive Vice President
</TABLE>
<PAGE> 51
MILLER ANDERSON & SHERRED
Miller Anderson & Sherred ("MAS") is the Sub-Adviser to the Republic Fixed
Income Portfolio. MAS has been in the investment advisory business since 1969,
and as of September 30, 1997, had in excess of $55.7 billion in assets under
management. MAS is a Pennsylvania limited liability partnership with principal
offices at One Tower Bridge, West Conshohocken, Pennsylvania 19428.
On January 3, 1996, Morgan Stanley Group, Inc. acquired MAS in a
transaction in which Morgan Stanley Asset Management Holdings, Inc., an indirect
wholly owned subsidiary of Morgan Stanley Group Inc., became the sole general
partner of MAS. Morgan Stanley Asset Management Holdings Inc. and two other
wholly owned subsidiaries of Morgan Stanley Group Inc. became the limited
partners of MAS. Morgan Stanley Group Inc. and various of its directly or
indirectly owned subsidiaries are engaged in a wide range of financial services.
MAS's principal executive officers are set forth below. The address of each
as it relates to his or her duties at MAS, is the same as that of MAS.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
------------------------------------------------------- ---------------------------
<S> <C>
Thomas L. Bennett...................................... Executive Committee Member
Gary G. Schlarbaum..................................... Executive Committee Member
Marna C. Whittington................................... Executive Committee Member
Richard B. Worley...................................... Executive Committee Member
</TABLE>
ALLIANCE CAPITAL MANAGEMENT L.P.
Alliance Capital Management L.P. ("Alliance") is one of the two
Sub-Advisers to the Equity Fund. Alliance, a Delaware limited partnership with
principal offices at 1345 Avenue of the Americas, New York 10105, is a leading
international investment manager supervising client accounts with assets as of
September 30, 1997 totaling approximately $217 billion. Alliance's clients are
primarily major corporate employee benefit funds, public employee retirement
systems, investment companies, foundations and endowment funds.
Alliance Capital Management Corporation ("ACMC") is the general partner of
Alliance and conducts no other active business. Units representing assignment of
beneficial ownership of limited partnership interests of Alliance are publicly
traded on the New York Stock Exchange. As of September 30, 1997, The Equitable
Life Assurance Society of the United States ("Equitable"), ACMC, Inc. and
Equitable Capital Management Corporation ("ECMC") were the beneficial owners of
approximately 57% of the outstanding units of Alliance. ACMC, ECMC, and ACMC,
Inc. are wholly owned subsidiaries of Equitable, a New York life insurance
company. Equitable is a wholly owned subsidiary of The Equitable Companies
Incorporated, a Delaware corporation ("ECI"), whose shares are publicly traded
on the New York Stock Exchange. As of March 1, 1996, AXA, a French insurance
holding company, owned 59% of the issued and outstanding shares of the common
stock of ECI.
Alliance's principal executive officers are set forth below. The address of
each as it relates to his or her duties at Alliance, is the same as that of
Alliance.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
------------------------------------ --------------------------------------------------
<S> <C>
Dave H. Williams.................... Chairman of the Board and Chief Executive Officer
John D. Carifa...................... President and Chief Operations Officer
Bruce W. Calvert.................... Vice Chairman and Chief Investment Officer
Alfred Harrison..................... Executive Vice President
David R. Brewer, Jr................. Senior Vice President, General Counsel and
Secretary
Robert H. Joseph, Jr................ Senior Vice President and Chief Financial Officer
</TABLE>
2
<PAGE> 52
BRINSON PARTNERS, INC.
Brinson Partners, Inc. ("Brinson") is one of the two Sub-Advisers to the
Equity Fund. Brinson, a Delaware corporation, is an investment management firm
managing, as of June 30, 1996, approximately $58 billion, primarily for pension
and profit sharing institutional accounts. Brinson was organized in 1989 when it
acquired the institutional asset management business of The First National Bank
of Chicago and First Chicago Investment Advisors, N.A. Brinson and its
predecessor entities have managed domestic and international investment assets
since 1974 and global investment assets since 1982. Brinson is an indirect
wholly owned subsidiary of Swiss Bank Corporation ("Swiss Bank"). Swiss Bank,
with headquarters in Basel, Switzerland, is an internationally diversified
organization with operations in many aspects of the financial services industry.
On December 8, 1997, Swiss Bank announced its intention to merge with Union Bank
of Switzerland. Subject to shareholder approval, the merger is scheduled to
occur during the second quarter of 1998.
Brinson's principal executive officers are set forth below. The address of
each as it relates to his or her duties at Brinson, is the same as that of
Brinson.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
------------------------------- --------------------------------------------------------
<S> <C>
Gary P. Brinson................ President and Managing Partner
Henry Doorn, Jr................ Treasurer, Chief Financial Officer and Managing Partner
Samuel W. Anderson............. Managing Partner
Richard C. Carr................ Managing Partner
Jeffrey J. Diermeir............ Managing Partner
John G. Fencik................. Managing Partner
M. Dale Fritz.................. Managing Partner
Dennis L. Hesse................ Managing Partner
A. Bert Holaday................ Managing Partner
Denis S. Karnosky.............. Managing Partner
Benjamin F. Lenhardt, Jr....... Managing Partner
E. Thomas McFarlane............ Managing Partner
Nicholas C. Rassas............. Managing Partner
</TABLE>
3
<PAGE> 53
CAPITAL GUARDIAN TRUST COMPANY
Capital Guardian Trust Company ("CGTC") is the Sub-Adviser to the
International Equity Portfolio. CGTC, which was founded in 1968, is a wholly
owned subsidiary of The Capital Group Companies, Inc., both of which are located
at 333 South Hope Street, Los Angeles, California 90071. As of September 30,
1997, CGTC managed in excess of $70 billion of assets primarily for large
institutional clients.
CGTC's principal executive officers are set forth below. The address of
each as it relates to his or her duties at CGTC, is the same as that of CGTC
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- --------------------------------------------------------- ------------------------------------
<S> <C>
David I. Fisher.......................................... Chairman
Robert G. Kirby.......................................... Chairman Emeritus
Robert Ronus............................................. President
John H. Seiter........................................... Executive Vice President-Client
Relations & Marketing
Eugene P. Stein.......................................... Executive Vice President
Michael D. Beckman....................................... Senior Vice President & Treasurer
Roberta A. Conroy........................................ Senior Vice President & Counsel
William H. Hurt.......................................... Senior Vice President
Nancy J. Kyle............................................ Senior Vice President-International
John R. McIlwraith....................................... Senior Vice President-International
Theodore R. Samuels...................................... Senior Vice President
Fred R. Betts............................................ Senior Vice President
John B. Emerson.......................................... Senior Vice President
Michael E. Ericksen...................................... Senior Vice President
Richard N. Havas......................................... Senior Vice President
Frederick M. Hughes, Jr.................................. Senior Vice President
Shelby Notkin............................................ Senior Vice President
Mary M. O'Hern........................................... Senior Vice President-International
Jeffrey C. Paster........................................ Senior Vice President
Robert V. Pennington..................................... Senior Vice President
Merlin E. Robertson...................................... Senior Vice President
Robert L. Spare.......................................... Senior Vice President
Philip A. Swan........................................... Senior Vice President
</TABLE>
4
<PAGE> 54
MFS INSTITUTIONAL ADVISORS, INC.
MFS Institutional Advisors, Inc. ("MFSI") is the Sub-Adviser to the Small
Cap Equity Portfolio. MFSI, together with its parent company, Massachusetts
Financial Services Company ("MFS"), is America's oldest mutual fund
organization. MFS and its predecessor organizations have a history of money
management dating from 1924 and the founding of the first mutual fund in the
U.S.; Massachusetts Investors Trust. Net assets under the management of the MFS
organization were approximately $69.4 billion on behalf of approximately 2.7
million investor accounts as of November 30, 1997. As of such date, the MFS
organization managed approximately $44.2 billion of assets invested in equity
securities, approximately $20.1 billion of assets invested in fixed income
securities, and $4.1 billion of assets invested in securities of foreign issuers
and non-U.S. dollar securities. MFS is a wholly owned subsidiary of Sun Life
Assurance Company of Canada (U.S.), which in turn is a wholly owned subsidiary
of Sun Life Assurance Company of Canada ("Sun Life"). Sun Life, a mutual life
insurance company, is one of the largest international life insurance companies
and has been operating in the U.S. since 1895, establishing a headquarters
office in the U.S. in 1973. The executive officers of MFS report to the Chairman
of Sun Life.
MFSI's principal executive officers are set forth below. The address of
each as it relates to his or her duties at MFSI, is the same as that of MFSI.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
- ------------------------------------------------------ ---------------------------------------
<S> <C>
Alan K. Brodkin....................................... Chairman
Thomas J. Cashman, Jr................................. President and Chief Investment Officer
Leslie J. Nanberg..................................... Managing Director
Joseph W. Dello Russo................................. Treasurer
Robert T. Burns....................................... Secretary
</TABLE>
5
<PAGE> 55
REPUBLIC FUNDS
REPUBLIC ADVISOR FUNDS TRUST
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
PROXY CARD FOR [NAME OF FUND]
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of each of the
above-listed Companies (the "Companies") for use at a joint Special Meeting of
their Shareholders (the "Meeting") to be held on March 12, 1998 at 10:00 a.m.,
Eastern time, at the address above.
The undersigned, revoking previous proxies, hereby appoints Craig C.
Rudesill and Frank M. Deutchki, and either or both of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated Meeting,
and at all adjournments thereof, all interests in the Fund that are held of
record by the undersigned on the record date of the Meeting, upon the following
matters and upon any other matter which may come before the Meeting, in their
discretion:
1. To approve the proposed changes to the Fund's fundamental investment
restrictions,
01) Borrowing/Senior Securities, 02) Diversification, 03) Industry
Concentration, 04) Lending, 05) Underwriting Securities, 06) Commodities
07) Real Estate, 08) Margin Purchases, 09) Options, 10) Restricted
Securities, 11) Short Sales, 12) Pledging Securities, 13) Investing for
Control, 14) Investment Companies, 15) Debt Acquisition, 16) Illiquid
Securities, 17) Oil & Gas Interests, 18) Affiliated Investments [ ]
[ ] For All [ ] Withhold All [ ] For All Except
If you do NOT wish to approve a proposed change to the fundamental
investment restrictions, please write the number below indicating the
change you do NOT want to approve.
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2. To approve new investment advisory contracts with Republic National Bank
of New York ("Republic") and related new sub-advisory contracts,
authorizing Republic to retain and discharge sub-advisers without the
necessity of obtaining shareholder approval, subject to receipt of an
exemptive order from the Securities and Exchange Commission (the "SEC").
[ ] For [ ] Against [ ] Abstain
3. In the event the requested exemptive relief is not obtained or the new
advisory contracts and sub-advisory contracts are not approved by
shareholders, to ratify continuation of the existing investment advisory
and sub-advisory contracts.
<PAGE> 56
[ ] For [ ] Against [ ] Abstain
4. To ratify the selection of independent auditors for its current fiscal
year.
[ ] For [ ] Against [ ] Abstain
5. To transact such other business as may properly come before the Meeting
and any adjournment thereof.
Every properly signed proxy will be voted in the manner specified therein and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
FOR PROPOSALS 1 - 4 ABOVE.
PLEASE SIGN, DATE AND RETURN PROMPTLY
Receipt of Notice of Special Meeting of
Shareholders and Proxy Statement is hereby
acknowledged.
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Sign here exactly as name(s) appears on account.
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Dated: _____________________, 1998
IMPORTANT: Joint owners must EACH sign. When signing as attorney, trustee,
executor, administrator, guardian or corporate officer, please give your FULL
title.
2
