SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
PROFESSIONALLY MANAGED PORTFOLIOS
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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PROFESSIONALLY MANAGED PORTFOLIOS
PRO-CONSCIENCE WOMEN'S EQUITY MUTUAL FUND
625 MARKET STREET
16TH FLOOR
SAN FRANCISCO, CA 94105
NOTICE OF SPECIAL MEETING
TO BE HELD FEBRUARY 18, 2000
To the shareholders of Pro-Conscience Women's Equity Mutual Fund (the
"Fund"), a series of Professionally Managed Portfolios (the "Trust"), for a
Special Meeting of the Fund to be held on February 18, 2000:
Notice is hereby given that a Special Meeting (the "Meeting") of
shareholders of the Fund, will be held on February 18, 2000, at 10:00 a.m.,
Pacific Standard Time, at the offices of the Fund, 625 Market Street, 16th
Floor, San Francisco, CA 94105. At the Meeting, you and the other shareholders
of the Fund will be asked to consider and vote:
1. To approve a new investment sub-advisory agreement by and among the Trust,
Pro-Conscience Funds, Inc. (the "Advisor") and United States Trust Company
of Boston (the "Sub-Advisor") pursuant to which the Sub-Advisor will
continue to act as sub-advisor with respect to the assets of the Fund, to
become effective upon the completion of the acquisition of the Sub-Advisor
by Citizens Financial Group, Inc.
2. To transact such other business as may properly come before the Meeting or
any adjournments thereof.
Shareholders of record at the close of business on January 7, 2000 are
entitled to notice of, and to vote at, the Meeting. Please read the accompanying
Proxy Statement. Regardless of whether you plan to attend the Meeting, PLEASE
COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD so that a quorum will
be present and a maximum number of shares may be voted. You may change your vote
at any time by notifying the undersigned or at the Meeting.
By Order of the Board of Trustees
Robin Berger, Secretary
San Francisco, California
January 28, 2000
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PROFESSIONALLY MANAGED PORTFOLIOS
PRO-CONSCIENCE WOMEN'S EQUITY MUTUAL FUND
625 MARKET STREET
16TH FLOOR
SAN FRANCISCO, CA 94105
PROXY STATEMENT
To the shareholders of the Pro-Conscience Women's Equity Mutual Fund (the
"Fund"), a series of Professionally Managed Portfolios (the "Trust"), an
open-end management investment company, for a Special Meeting of shareholders of
the Fund to be held on February 18, 2000.
This Proxy Statement is furnished by the Trust to the shareholders of the
Fund on behalf of the Trust's Board of Trustees in connection with the Fund's
solicitation of shareholders' proxies for use at a Special Meeting of
Shareholders of the Fund (the "Meeting") to be held on February 18, 2000 at
10:00 a.m., Pacific Standard Time, at the offices of the Fund, 625 Market
Street, 16th Floor, San Francisco, CA 94105 for the purposes set forth below and
in the accompanying Notice of Special Meeting. The approximate mailing date of
this Proxy Statement is January 28, 2000. At the Meeting, the shareholders of
the Fund will be asked:
1. To approve a new investment sub-advisory agreement by and among the Trust,
Pro-Conscience Funds, Inc. (the "Advisor") and United States Trust Company
of Boston, ("the Sub-Advisor") pursuant to which the Sub-Advisor will
continue to act as Sub-Advisor with respect to the assets of the Fund, to
become effective upon the completion of the acquisition of the Sub-Advisor
by Citizens Financial Group, Inc.
2. To transact such other business as may properly come before the Meeting or
any adjournments thereof.
Any voting instructions given to the Fund may be revoked at any time before
the Meeting by notifying the Secretary of the Trust.
The Trust will request broker-dealer firms, custodians, nominees and
fiduciaries to forward proxy materials to the beneficial owners of the shares of
the Fund held of record by such persons. The Sub-Advisor may reimburse such
broker-dealer firms, custodians, nominees and fiduciaries for their reasonable
expenses incurred in connection with such proxy solicitation. In addition to the
solicitation of proxies by mail, officers and employees of the Trust, without
additional compensation, may solicit proxies in person or by telephone. The
costs associated with such solicitation and the Meeting will be borne by the
Sub-Advisor and not by the Fund or the Trust.
If sufficient votes are not received by the date of the Meeting, a person
named as proxy may propose one or more adjournments of the Meeting for a period
or periods not more than 120 days in the aggregate to permit further
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solicitation of proxies. The persons named as proxies will vote all proxies in
favor of adjournment that voted in favor of Proposal No. 1 (or abstained) and
vote against adjournment all proxies that voted against Proposal No. 1.
Shareholders of the Fund at the close of business on January 7, 2000 will
be entitled to be present and vote at the Meeting. As of that date, there were
575,034.868 shares of the Fund outstanding and entitled to vote, representing
total net assets of approximately $11,343,589.
To the knowledge of the Trust's management, before the close of business on
January 7, 2000, the officers and Trustees of the Trust owned, as a group, less
than 1% of the shares of the Fund.
To the knowledge of the Trust's management, before the close of business on
January 7, 2000, persons owning of record more than 5% of the outstanding shares
of the Fund were as follows:
Name and Address Percent of the Fund
- ---------------- -------------------
Charles Schwab & Co., Inc. 21.83%
Special Custody Account for Customers
101 Montgomery Street
San Francisco, CA 94104
National Financial Services Corp. 6.73%
Attn: Mutual Funds
One World Financial Center
New York, NY 10281
The Fund's current investment advisor is Pro-Conscience Funds, Inc., 625
Market Street, 16th Floor, San Francisco, CA 94105. The Fund's current
sub-advisor is United States Trust Company of Boston, 40 Court Street, Boston,
MA 02108. The Fund's distributor is First Fund Distributors, Inc., 4455 E.
Camelback Road, Suite 261E, Phoenix, Arizona 85018. The Fund's transfer and
dividend disbursing agent is American Data Services, Inc, P.O. Box 5536,
Hauppauge, NY 11788-0132.
The persons named in the accompanying proxy will vote in each case as
directed in the proxy, but in the absence of such direction, they intend to vote
FOR Proposal No. 1 and may vote in their discretion with respect to other
matters not now known to the Board of Trustees that may be presented to the
Meeting.
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PROPOSAL NO. 1:
APPROVAL OF SUB-ADVISORY AGREEMENT BY AND AMONG THE TRUST, THE ADVISOR AND THE
SUB-ADVISOR
BACKGROUND
GENERAL. The Sub-Advisor has acted as such with respect to the assets of
the Fund since August 4, 1995. The Sub-Advisor has agreed to be acquired by
Citizens Financial Group, Inc., a Delaware corporation and a wholly-owned
subsidiary of The Royal Bank of Scotland, plc., a banking company organized
under the laws of Scotland (the "Proposed Acquisition"). Shareholders of the
Sub-Advisor approved the Proposed Acquisition in September 1999, and it is
expected to be completed before January 31, 2000.
The Meeting has been called for the purpose of considering a new
sub-advisory agreement for the Fund as a result of the Proposed Acquisition. The
Proposed Acquisition represents an ownership change of the Sub-Advisor and, as
such, has the effect of terminating the existing Sub-Advisory Agreement with
respect to the Fund. Accordingly, shareholders of the Fund are being asked to
approve a new Sub-Advisory Agreement (the "New Sub-Advisory Agreement") with
respect to the Fund. The New Sub-Advisory Agreement embodies substantially the
same terms and fees with the Sub-Advisor, differing only in the effective and
termination dates and minor updating changes. The Trust's Board of Trustees by
unanimous consent dated January 4, 2000 approved the submission of the New
Sub-Advisory Agreement to shareholders for shareholder approval.
EXISTING SUB-ADVISORY AGREEMENT
The Sub-Advisor currently serves as the sub-advisor for the Fund under a
Sub-Advisory Agreement (the "Existing Sub-Advisory Agreement") dated August 4,
1995. The Existing Sub-Advisory Agreement provides for its automatic termination
in the event of a legal assignment. A change in ownership of the Sub-Advisor
would, therefore, terminate the Existing Sub-Advisory Agreement. The Board of
Trustees of the Trust, including a majority of the "non-interested" Trustees,
most recently approved continuation of the Existing Sub-Advisory Agreement for
an additional one-year period on August 18, 1999. Under the Existing
Sub-Advisory Agreement, the Sub-Advisor is entitled to receive from the Advisor
an annual fee of 0.25% of the Fund's average net assets.
For the fiscal year ended March 31, 1999 and the six-month period ended
September 30, 1999, the Sub-Advisor was paid $7,641 and $4,279, respectively, in
sub-advisory fees by the Advisor under the Existing Sub-Advisory Agreement.
NEW SUB-ADVISORY AGREEMENT
Except for different effective and termination dates and minor updating
changes, the terms of the New Sub-Advisory Agreement are identical in all
respects to the terms of the Existing Sub-Advisory Agreement. A form of the New
Sub-Advisory Agreement is attached to this Proxy Statement as EXHIBIT A and the
description set forth in this Proxy Statement of the New Sub-Advisory Agreement
is qualified in its entirety by reference to EXHIBIT A.
Under the New Sub-Advisory Agreement, the Sub-Advisor will continue to
provide investment advisory services to the Fund, including deciding what
securities will be purchased and sold by the Fund, when such purchases and sales
are to be made, and arranging for such purchases and sales, all in accordance
with the provisions of the Investment Company Act of 1940, as amended (the
"Investment Company Act") and any rules or regulations thereunder; any other
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applicable provisions of law; the provisions of the Declaration of Trust and
By-Laws of the Trust as amended from time to time; any policies and
determinations of the Board of Trustees; and the fundamental policies of the
Trust relating to the Fund, as reflected in the Trust's Registration
Statement under the Investment Company Act (including by reference, the Fund's
Statement of Additional Information) as such Registration Statement is amended
from time to time.
As compensation for its services to the Fund under the New Sub-Advisory
Agreement, the Sub-Advisor will be entitled to receive from the Advisor fees
calculated at the same rate as those charged under the Existing Sub-Advisory
Agreement described above, i.e., an annual fee of 0.25% of the Fund's average
net assets.
The New Sub-Advisory Agreement will continue in effect for a period not to
exceed two years from its effective date, and will continue in effect thereafter
for successive annual periods, provided its continuance is specifically approved
at least annually by (1) a majority vote, cast in person at a meeting called for
that purpose, of the Trust's Board of Trustees or (2) a vote of the holders of a
majority of the outstanding voting securities (as defined in the Investment
Company Act) of the Fund, and (3) in either event by a majority of the Trustees
who are not parties to the New Sub-Advisory Agreement or interested persons of
the Trust or of any such party (the "Disinterested Trustees").
The New Sub-Advisory Agreement generally provides that it may be terminated
by the Trust, the Advisor, or Sub-Advisor at any time, without penalty, by
giving the other parties 60 days' written notice.
The Sub-Advisor will continue to provide, at its expense, office space,
facilities and equipment for carrying out its duties under the New Sub-Advisory
Agreement. All other expenses incurred in the operation of the Fund are borne by
the Fund. Fund expenses include legal and auditing fees, fees and expenses of
the Advisor, its custodian, accounting services and third-party shareholder
servicing agents, Trustees' fees, the cost of communicating with shareholders
and registration fees, as well as its other operating expenses.
The New Sub-Advisory Agreement provides that the Sub-Advisor shall not be
liable for any loss sustained by reason of the purchase, sale or retention of
any security whether the purchase, sale or retention has been based on its own
investigation and research or upon investigation and research made by any other
individual, firm or corporation, if the purchase, sale or retention has been
made and the other individual, firm or corporation has been selected in good
faith. The New Sub-Advisory Agreement, however, provides that nothing contained
in the New Sub-Advisory Agreement shall be construed to protect the Sub-Advisor
against any liability to the Trust or its security holders by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its duties, or
by reason of its reckless disregard of obligations and duties under the New Sub-
Advisory Agreement. Additionally, the New Sub-Advisory Agreement provides that
the federal securities laws impose liabilities under certain circumstances on
persons who act in good faith, and therefore nothing in the New Sub-Advisory
Agreement shall in any way constitute a waiver or limitation of any rights which
the Fund's shareholders may have under any federal securities laws. The New
Sub-Advisory Agreement provides that the Sub-Advisor shall follow the principles
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set forth in any investment advisory agreement in effect between the Trust and
the Advisor in connection with its duties to invest the Fund's assets. The New
Sub-Advisory Agreement provides that the Trust may indemnify the Sub-Advisor to
the full extent permitted by the Trust's Declaration of Trust and applicable
law.
LEGAL REQUIREMENTS UNDER THE INVESTMENT COMPANY ACT
Section 15(f) of the Investment Company Act provides that, when a change in
control of an investment advisor occurs, the investment advisor or any of its
affiliated persons may receive any amount or benefit in connection with the
change in control as long as two conditions are satisfied. The same conditions
apply to investment sub-advisors that operate under investment advisory
contracts with investment companies. The first condition specifies that no
"unfair burden" may be imposed on the investment company as a result of the
transaction relating to the change of control, or any express or implied terms,
conditions or understandings. The term "unfair burden," as defined in the
Investment Company Act, includes any arrangement during the two-year period
after the change in control whereby the investment sub-advisor (or predecessor
or successor sub-advisor), or any interested person of any such sub-advisor,
receives or is entitled to receive any compensation, directly or indirectly,
from the investment company or its security holders (other than fees for bona
fide investment sub-advisory or other services) or from any person in connection
with the purchase or sale of securities or other property to, from, or on behalf
of the investment company (other than fees for bona fide principal underwriting
services). No such compensation arrangements are contemplated in the Proposed
Acquisition. The Sub-Advisor has agreed to use its best efforts to ensure that
the Proposed Acquisition will not cause the imposition of an unfair burden, as
that term is defined in Section 15(f) of the Investment Company Act, on the
Fund.
The second condition specifies that, during the three-year period
immediately following consummation of the transaction, at least 75% of the
investment company's board of directors must not be "interested persons" of the
investment sub-advisor or predecessor investment sub-advisor within the meaning
of the Investment Company Act ("Disinterested Trustees"). Currently, the Board
of Trustees of the Trust meets this 75% requirement.
The Sub-Advisor has represented that the Proposed Acquisition will
culminate in January, 2000. In addition, the Board of Trustees of the Trust
approved the New Sub-Advisory Agreement, which occurred by unanimous written
consent on January 4, 2000. The approval will be affirmed in person at the next
regular meeting of the Board of Trustees of the Trust on February 17, 2000.
If the Proposed Acquisition is not ultimately consummated, the Existing
Sub-Advisory Agreement will continue and remain in effect. However, if the
Proposed Acquisition is consummated and the Board of Trustees of the Trust
approves the New Sub-Advisory Agreement, but the New Sub-Advisory Agreement is
not approved by the Fund's shareholders, the Trustees will promptly seek to
enter into a new sub-advisory arrangement for the Fund, subject to approval by
the Fund's shareholders.
For the fiscal year ended March 31, 1999 and the six-month period ended
September 30, 1999, the Sub-Advisor was paid $7,641 and $4,279, respectively, in
sub-advisory fees by the Advisor under the Existing Sub-Advisory Agreement.
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INFORMATION REGARDING THE SUB-ADVISOR
The Sub-Advisor, United States Trust Company of Boston, is a
Massachusetts-chartered banking and trust company and wholly-owned subsidiary of
UST Corporation, a Massachusetts bank holding company. The Sub-Advisor's address
is 40 Court Street, Boston, MA 02108.
Upon consummation of the Proposed Acquisition, the Sub-Advisor will be a
wholly-owned subsidiary of Citizens Financial Group, Inc., a Delaware
corporation and a wholly-owned subsidiary of The Royal Bank of Scotland, plc, a
banking company organized under the laws of Scotland and one of the 100 largest
banking organizations in the world. Citizens Financial Group, Inc. is
headquartered in Providence Rhode Island and offers a wide range of commercial
and consumer banking services through its bank subsidiaries which currently
operate in Rhode Island, Massachusetts, Connecticut and New Hampshire.
TRUSTEES' CONSIDERATION
The New Sub-Advisory Agreement was approved by the Board of Trustees of the
Trust, including a majority of the Disinterested Trustees, by unanimous written
consent on January 4, 2000 and is expected to be affirmed in person by the Board
of Trustees of the Trust, including the Disinterested Trustees, at the next
regularly scheduled Board meeting on February 17, 2000. The Board of Trustees of
the Trust, by unanimous written consent on January 4, 2000, adopted a resolution
recommending that the New Sub-Advisory Agreement be submitted to the
shareholders of the Fund for approval in advance of the Board of Trustee's
formal in person review. If the Board of Trustees does not approve the New
Sub-Advisory Agreement, the shareholders of the Fund will be notified and the
Meeting will be adjourned.
The Board of Trustees of the Trust will be presented with information
demonstrating that the terms of the New Sub-Advisory Agreement are fair to, and
in the best interest of, the Trust, the Fund and the shareholders of the Fund.
In considering the New Sub-Advisory Agreement, the Trustees will have before
them information that will allow them to evaluate the experience of the
Sub-Advisor's key personnel in portfolio management, the quality of services the
Sub-Advisor is expected to provide to the Fund, and the compensation proposed to
be paid to the Sub-Advisor. The Trustees will be asked to give equal
consideration to all factors deemed to be relevant to the Fund, including, but
not limited to the following: (1) the quality of services provided to the Fund
since the Fund's commencement of operations; (2) the positive relationship of
the Sub-Advisor with the Trust and the Advisor; (3) the performance of the Fund
since commencement of operations; (4) the research-intensive nature and quality
of the services expected to be rendered to the Fund by the Sub-Advisor; (5) the
compensation payable to the Sub-Advisor by the Advisor under the proposed New
Sub-Advisory Agreement, which will be at the same rate as the compensation now
payable by the Advisor to the Sub-Advisor under the Existing Sub-Advisory
Agreement; (6) the terms of the Existing Sub-Advisory Agreement, which will be
unchanged under the New Sub-Advisory Agreement except for different effective
and termination dates and minor updating changes; (7) the favorable history,
reputation, qualification and background of the Sub-Advisor, as well as the
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qualifications of their personnel and financial condition, with particular
reference to the Sub-Advisor's expertise in socially responsible investing,
given the Fund's investment policies; (8) the Sub-Advisor's favorable overall
investment performance record; and (9) other factors deemed relevant.
The Sub-Advisor has advised the Advisor and the Board of Trustees that it
expects that there will be no diminution in the scope and quality of
sub-advisory services provided to the Fund as a result of the Proposed
Acquisition.
Along with the approval of the Board of Trustees of the Trust, the
affirmative vote of the holders of a majority of the outstanding shares of the
Fund is required for the New Sub-Advisory Agreement with respect to the Fund to
become effective. "Majority" for this purpose under the Investment Company Act
means the lesser of (i) 67% of the shares represented at the meeting if more
than 50% of the outstanding shares is represented, or (ii) shares representing
more than 50% of the outstanding shares. Abstentions will count as votes present
at the Meeting for quorum purposes. All properly executed proxies received prior
to the Meeting will be voted at the Meeting in accordance with the instructions
marked thereon. Proxies received prior to the Meeting on which no vote is
indicated will be voted "for" each proposal as to which it is entitled to vote.
Abstentions do not constitute votes "for" a proposal and are treated as votes
"against" a proposal. Broker non-votes (I.E., proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other person entitled to vote shares on a particular matter with
respect to which the broker or nominees do not have discretionary power) do not
constitute votes "for" or "against" a proposal and are disregarded in
determining the "votes cast" when the voting requirement for a proposal is based
on achieving a percentage of the outstanding shares entitled to vote present in
person or by proxy at the Meeting. Broker non-votes do not constitute votes
"for" and are treated as votes "against" when the voting requirement for a
proposal is based on achieving a percentage of the outstanding shares entitled
to vote. 40% of the outstanding shares entitled to vote on a proposal must be
present in person or by proxy to have a quorum to conduct business at the
Meeting. Broker non-votes will count as votes present at the Meeting for quorum
purposes.
ADDITIONAL INFORMATION ON THE TRUST AND THE SUB-ADVISOR
The following is a list of the executive officers and Trustees of the
Trust, their positions with the Trust, and their positions with the Sub-Advisor,
if any:
Position With
Name Position with Trust Sub-Advisor
- ---- ------------------- -----------
Steven J. Paggioli* President and Trustee None
Dorothy A. Berry Chairman and Trustee None
Wallace L. Cook Trustee None
Carl A. Froebel Trustee None
Rowley W.P. Redington Trustee None
Robert H. Wadsworth Vice President None
Robert M. Slotky Treasurer None
Robin Berger Secretary None
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* Steven J. Paggioli is an interested Trustee with respect to the Trust only.
With the exception of transactions which are not related to the business or
operation of the Trust and to which the Trust is not a party, since March
31, 1999 no Trustee of the Trust has had any direct or indirect interest in
any transaction with the Sub-Advisor or any parent or subsidiary of the
Sub-Advisor. In addition, no Trustee has had such an interest in any
proposed transaction with any of the above entities.
GENERAL INFORMATION
OTHER MATTERS TO COME BEFORE THE MEETING
The Trust's management does not know of any matters to be presented at the
Meeting other than those described in this Proxy Statement. If other business
should properly come before the Meeting, the proxyholders will vote thereon in
accordance with their best judgment.
SHAREHOLDER PROPOSALS
The Meeting is a special meeting of shareholders. The Trust is not required
to, nor does it intend to, hold regular annual meetings of its shareholders. If
such a meeting is called, any shareholder who wishes to submit a proposal for
consideration at the meeting should submit the proposal promptly to the Trust.
Any proposal to be considered for submission to shareholders must comply with
Rule 14a-8 under the Securities Exchange Act of 1934.
REPORTS TO SHAREHOLDERS
The Fund will furnish, without charge, a copy of the most recent Annual
Report to Shareholders of the Fund, and the most recent Semi-Annual Report
succeeding such Annual Report, if any, on request. Requests for such reports
should be directed to Pro-Conscience Women's Equity Mutual Fund, 625 Market
Street, 16th Floor, San Francisco, CA 94105, 1-888-552-9363.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED, PROMPT
EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A SELF-ADDRESSED,
POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
Robin Berger, Secretary
San Francisco, California
January 28, 2000
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Exhibit A
PROFESSIONALLY MANAGED PORTFOLIOS
SUB-ADVISORY AGREEMENT
AGREEMENT made this 18th day of February, 2000, by and among PROFESSIONALLY
MANAGED PORTFOLIOS (the "Trust"), a Massachusetts business trust, PRO-CONSCIENCE
FUNDS, INC. (the "Advisor"), a California corporation, and UNITED STATES TRUST
COMPANY OF BOSTON (the Sub-Advisor), a Massachusetts corporation.
WHEREAS, the Advisor serves as Investment Advisor to the Pro-Conscience
Women's Equity Mutual Fund (the "Fund") of the Trust under an Investment
Advisory Agreement dated August 16, 1993;
WHEREAS, in connection with the Investment Advisory Agreement, the parties
wish to retain the Sub-Advisor to perform the services enumerated herein;
THEREFORE, in consideration of the mutual promises and agreements herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, it is hereby agreed by and among the parties hereto as
follows:
1. IN GENERAL
The Sub-Advisor agrees, as more fully set forth herein, to act as
Sub-Advisor to the Trust with respect to the investment and reinvestment of the
assets of the Fund and to supervise and arrange the purchase and sale of
securities and other assets held in the portfolio of the Fund.
2. DUTIES AND OBLIGATIONS OF THE SUB-ADVISOR WITH RESPECT TO INVESTMENTS OF
ASSETS OF THE FUND
(a) Subject to the succeeding provisions of this section and subject to the
oversight and review of the Advisor and the direction and control of the Board
of Trustees of the Trust, the Sub-Advisor, as agent and attorney-in-fact with
respect to the Trust, is authorized, in its discretion and without prior
consultation with the Trust to:
(i) Buy, sell, exchange, convert, lend and otherwise trade in any
stocks, bonds and any other securities or assets;
(ii) Place orders and negotiate the commissions (if any) for the
execution of transactions in securities or other assets with or
through such brokers, dealers, underwriters or issuers as the
Sub-Advisor may select; and
(iii) Provide the Advisor and the Trustees with such reports as may
reasonably be requested in connection with the discharge of the
foregoing responsibilities and the discharge of the Advisor`s
responsibilities under the Investment Advisory Agreement with the
Trust and those of First Fund Distributors, Inc.(the "Distributor")
under the Distribution Agreement with the Trust.
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Written procedures with respect to (i), (ii) and (iii) above may be set forth as
agreed to among the Trust, the Advisor, Sub-Advisor and Distributor.
(b) Any investment purchases or sales made by the Sub-Advisor under this
section shall at all times conform to, and be in accordance with, any
requirements imposed by: (1) the provisions of the Investment Company Act of
1940, as amended (the "Act") and of any rules or regulations in force
thereunder; (2) any other applicable provisions of law; (3) the provisions of
the Declaration of Trust and By-Laws of the Trust as amended from time to time;
(4) any policies and determinations of the Board of Trustees of the Trust; and
(5) the fundamental policies of the Trust, as reflected in its registration
statement under the Act, as such registration statement is amended from time to
time (including the Trust's Statement of Additional Information) or as amended
by the shareholders of the Trust; provided that copies of the items referred to
in clauses (3), (4) and (5) shall have been furnished to the Sub-Advisor.
(c) The Sub-Advisor shall give the Trust the benefit of its best judgment
and effort in rendering services hereunder. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties ("disabling conduct") hereunder on the part of the Sub-
Advisor (and its officers, directors, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Sub-Advisor) the
Sub-Advisor shall not be subject to liability to the Trust or to any shareholder
of the Trust for any act or omission in the course of, or connected with
rendering services hereunder, including without limitation, any error of
judgment or mistake of law or for any loss suffered by any of them in connection
with the matters to which this Agreement relates, except to the extent specified
in Section 36(b) of the Act concerning loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services. Except for such
disabling conduct, the Trust shall indemnify the Sub-Advisor (and its officers,
directors, agents, employees, controlling persons, shareholders and any other
person or entity affiliated with the Sub-Advisor) against any liability arising
from the Sub-Advisor`s conduct under this Agreement to the extent permitted by
the Declaration of Trust and applicable law.
(d) Nothing in this Agreement shall prevent the Sub-Advisor or any
affiliated person (as defined in the Act) of the Sub-Advisor from acting as
investment advisor or manager for any other person, firm or corporation and
shall not in any way limit or restrict the Sub-Advisor or any such affiliated
person from buying, selling or trading any securities for its or their own
accounts or for the accounts of others for whom it or they may be acting,
provided, however, that the Sub-Advisor expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement. It is agreed
that the Sub-Advisor shall have no responsibility or liability for the accuracy
or completeness of the Trust's Registration Statement under the Act and the
Securities Act of 1933 except for information supplied by the Sub-Advisor for
inclusion therein. The Sub-Advisor shall be deemed to be an independent
contractor and, unless otherwise expressly provided or authorized, have no
2
<PAGE>
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
(e) In connection with its duties to arrange for the purchase and sale of
the Fund's portfolio securities and other assets, the Sub-Advisor shall follow
the principles set forth in any investment advisory agreement in effect from
time to time between the Trust and the Advisor, provided that a copy of any such
agreement shall have been provided to the Sub-Advisor. The Sub-Advisor will
promptly communicate to the Advisor and to the officers and the Trustees of the
Trust such information relating to portfolio transactions as they may reasonably
request.
(f) Nothing in this Agreement shall require the Sub-Advisor to act in a
manner which violates applicable banking laws or regulations, and the
Sub-Advisor shall not be liable for any loss or damages sustained by its failure
to take such actions.
3. ALLOCATION OF EXPENSES
The Sub-Advisor agrees that it will furnish the Trust, at the Sub-Advisor's
expense, with all office space and facilities, equipment and clerical personnel
necessary for carrying out its duties under this Agreement. The Sub-Advisor will
also pay all compensation of those of the Trust`s officers and employees, if
any, and of those Trustees, if any, who in each case are affiliated persons of
the Sub-Advisor.
4. CERTAIN RECORDS
Any records required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 under the Act which are prepared or
maintained by the Sub-Advisor on behalf of the Trust are the property of the
Trust and will be surrendered promptly to the Trust or Advisor on request.
5. REFERENCE TO THE SUB-ADVISOR
Neither the Trust, the Advisor nor any affiliate or agent thereof shall
make reference to or use the name of the Sub-Advisor or any of its affiliates in
any advertising or promotional materials without the prior approval of the
Sub-Advisor, which approval shall not be unreasonably withheld.
6. COMPENSATION OF THE SUB-ADVISOR
The Advisor agrees to pay the Sub-Advisor and the Sub-Advisor agrees to
accept as full compensation for all services rendered by the Sub-Advisor as
such, a sub-advisory fee, payable monthly and computed on the value of the net
assets of the Fund as of the close of business each business day at the annual
rate of 0.25 of 1% of such net assets.
7. DURATION AND TERMINATION
(a) This Agreement shall go into effect on the date set forth above and
shall, unless terminated as hereinafter provided, continue in effect until
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<PAGE>
February 18, 2002 and thereafter from year to year, but only so long as such
continuance is specifically approved at least annually by the Trust`s Board of
Trustees, including the vote of a majority of the Trustees who are not parties
to this Agreement or "interested persons" (as defined in the Act) of any such
party cast in person at a meeting called for the purpose of voting on such
approval, or by the vote of the holders of a "majority" (as defined in the Act)
of the outstanding voting securities of the Trust, or with respect to any Fund
by the vote of a majority of the outstanding shares of such Fund.
(b) This Agreement may be terminated by the Sub-Advisor at any time without
penalty upon giving the Trust and the Advisor sixty (60) days' written notice
(which notice may be waived by the Trust and the Advisor) and may be terminated
by the Trust or the Advisor at any time without penalty upon giving the
Sub-Advisor sixty (60) days' written notice (which notice may be waived by the
Sub-Advisor), provided that such termination by the Trust shall be directed or
approved by the vote of a majority of all of its Trustees in office at the time
or by the vote of the holders of a majority (as defined in the Act) of the
voting securities of the Trust, or with respect to the Fund by the vote of a
majority of the outstanding shares of the Fund. This Agreement shall
automatically terminate in the event of its assignment (as defined in the Act).
This Agreement will also terminate in the event that the Investment Advisory
Agreement is terminated.
8. AGREEMENT BINDING ONLY ON TRUST PROPERTY
The Sub-Advisor understands that the obligations of this Agreement are not
binding upon any shareholder of the Trust personally, but bind only the Trust`s
property; the Sub-Advisor represents that it has notice of the provisions of the
Trust`s Declaration of Trust disclaiming shareholder liability for acts or
obligations of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument
to be executed by their duly authorized officers and their seals to be hereunto
affixed, all as of the day and year first above written.
PROFESSIONALLY MANAGED PORTFOLIOS
By
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ATTEST:
- ---------------------------
PRO-CONSCIENCE FUNDS, INC.
By
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ATTEST:
- ---------------------------
UNITED STATES TRUST COMPANY OF BOSTON
By
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ATTEST:
- ---------------------------
<PAGE>
PROXY
PRO-CONSCIENCE WOMEN'S EQUITY MUTUAL FUND
SPECIAL MEETING OF SHAREHOLDERS
FEBRUARY 18, 2000
SOLICITED ON BEHALF OF THE
BOARD OF TRUSTEES OF
PROFESSIONALLY MANAGED PORTFOLIOS
The undersigned hereby appoints Linda Pei, Jane Drake and Robert M. Slotky, and
each of them, as proxies of the undersigned, each with the power to appoint his
substitute, for the Special Meeting of Shareholders of Pro-Conscience Women's
Equity Mutual Fund (the "Fund"), a series of Professionally Managed Portfolios
(the "Trust"), to be held on February 18, 2000 at the offices of the Fund, 625
Market Street, 16th Floor, San Francisco, CA 94015, or at any and all
adjournments thereof (the "Meeting"), to vote, as designated below, all shares
of the Fund, held by the undersigned at the close of business on January 7,
2000. Capitalized terms used without definition have the meanings given to them
in the accompanying Proxy Statement.
A SIGNED PROXY WILL BE VOTED IN FAVOR OF THE PROPOSAL LISTED BELOW UNLESS YOU
HAVE SPECIFIED OTHERWISE. PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY. YOU
MAY VOTE ONLY IF YOU HELD SHARES IN THE FUND AT THE CLOSE OF BUSINESS ON JANUARY
7, 2000. YOUR SIGNATURE AUTHORIZES THE PROXIES TO VOTE IN THEIR DISCRETION UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING, INCLUDING WITHOUT
IMITATION ALL MATTER INCIDENT TO THE CONDUCT OF THE MEETING.
<PAGE>
1. Approval of a new sub-advisory agreement by and among the Trust,
Pro-Conscience Funds, Inc. and United States Trust Company of Boston (the
"Sub-Advisor") pursuant to which the Sub-Advisor will continue to act as
sub-advisor with respect to the assets of the Fund, to become effective
upon the completion of the acquisition of the Sub-Advisor by Citizens
Financial Group, Inc.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Dated: ______________, 2000
-----------------------------------
Signature
-----------------------------------
Title (if applicable)
-----------------------------------
Signature (if held jointly)
-----------------------------------
Title (if applicable)
Please sign exactly as name or names appear on your shareholder account
statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder should sign.
