SCHEDULE 14A
(Rule 14a-101)
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:
( ) Preliminary Proxy Statement
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
( ) Confidential, for Use of the Commission Only (as permitted by Rule
14c-6(e)(2)
________________________________________________________________________________
Nottingham Investment Trust II
________________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
___________________________________________________
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of filing fee (Check the appropriate box):
(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11: (Set forth the amount on which the filing fee is
calculated and state how it was determined.)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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( ) Fee paid 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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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
Nottingham Investment Trust II
On behalf of the
Brown Capital Management Equity Fund
and the
Brown Capital Management Balanced Fund
105 North Washington Street
Post Office 69
Rocky Mount, North Carolina 27801-0069
November 28, 2000
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders
of the Brown Capital Management Equity Fund and the Brown Capital Management
Balanced Fund, each a series of the Nottingham Investment Trust II, to be held
at the offices of NC Shareholder Services, 107 North Washington Street, Post
Office Box 4365, Rocky Mount, North Carolina 27803-0365, on Wednesday, December
27, 2000 at 10:00 a.m. We hope that you can attend the Special Meeting in
person; however, we urge you in any event to vote your shares by completing and
returning the enclosed proxy in the envelope provided at your earliest
convenience.
At this Special Meeting, you will be asked to consider proposals to
approve new Investment Advisory Agreements and to discuss other matters of
interest to you as a shareholder. After carefully considering the proposals, the
Board of Trustees recommends that you vote "FOR" the proposals.
We appreciate your participation and prompt response in this matter and
thank you for your continued support.
Sincerely,
Eddie C. Brown
President, Brown Capital Management, Inc.
Trustee, Nottingham Investment Trust II
<PAGE>
NOTTINGHAM INVESTMENT TRUST II
on behalf of
Brown Capital Management Equity Fund
Brown Capital Management Balanced Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 27, 2000
To the Shareholders of the Brown Capital Management Equity Fund ("Equity Fund")
and the Brown Capital Management Balanced Fund ("Balanced Fund") (collectively,
the "Funds"):
A special meeting of the Shareholders of the Funds, each a series of the
Nottingham Investment Trust II ("Trust"), will be held at the offices of NC
Shareholder Services (the Trust's Dividend Disbursing and Transfer Agent), 107
North Washington Street, Post Office Box 4365, Rocky Mount, North Carolina
27803-0365, on Wednesday, December 27, 2000, at 10:00 a.m. for the following
purposes:
1. To approve a new Investment Advisory Agreement between Brown Capital
Management, Inc. ("Advisor"), and the Trust, on behalf of the Equity Fund,
that changes the investment advisory fees paid by the Equity Fund;
2. To approve a new Investment Advisory Agreement between the Advisor and the
Trust, on behalf of the Balanced Fund, that changes the investment advisory
fees paid by the Balanced Fund; and
3. To transact such other business as may properly come before the Special
Meeting of Shareholders or any adjournments thereof.
Shareholders of record at the close of business on October 27, 2000, are
entitled to notice of, and to vote at the Special Meeting. Regardless of whether
you plan to attend the Special 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. If you are present at the meeting, you may change
your vote, if desired, at that time.
For the Board of Trustees,
/s/ C. Frank Watson, III
___________________________
C. Frank Watson, III
Secretary
November 28, 2000
<PAGE>
PROXY STATEMENT
Special Meeting of Shareholders to be held on December 27, 2000
This Proxy Statement is furnished by the Board of Trustees of the
Nottingham Investment Trust II ("Trust") in connection with the solicitation of
votes for use at the Special Meeting of Shareholders (the "Meeting") of the
Brown Capital Management Equity Fund ("Equity Fund") and the and Brown Capital
Management Balanced Fund ("Balanced Fund") (collectively, the "Funds") to be
held on Wednesday, December 27, 2000, at 10:00 a.m., at the offices NC
Shareholders Services (the Trust's Dividend Disbursing and Transfer Agent), 107
North Washington Street, Post Office Box 4365, Rocky Mount, North Carolina
27803-0365, for the purposes set forth below and in the accompanying Notice of
Special Meeting. At the Meeting, the Funds' Shareholders will be asked:
1. To approve a new Investment Advisory Agreement ("New Agreement") between
Brown Capital Management, Inc. ("Advisor") and the Trust, on behalf of the
Equity Fund, that changes the investment advisory fees paid by the Equity
Fund;
2. To approve a new Investment Advisory Agreement ("New Agreement") between
the Advisor and the Trust, on behalf of the Balanced Fund, that changes the
investment advisory fees paid by the Balanced Fund; and
3. To transact such other business as may properly come before the Special
Meeting of Shareholders or any adjournments thereof.
Solicitation of Proxies
Solicitation of proxies is being made by the mailing of this Notice and
Proxy Statement with its enclosures on or about November 28, 2000. Shareholders
of the Funds whose shares are held by nominees, such as brokers, can vote their
proxies by contacting their respective nominee. The Advisor will pay the
expenses incurred in connection with this Notice and Proxy Statement and the
Meeting, including the printing, mailing, solicitation and vote tabulation
expenses, legal fees, and out of pocket expenses.
A shareholder may revoke the accompanying proxy at any time prior to
its use by filing with the Trust a written revocation or duly executed proxy
bearing a later date. In addition, any Shareholder who attends the Meeting in
person may vote by ballot at the Meeting, thereby canceling any proxy previously
given. The persons named in the accompanying proxy will vote as directed by the
proxy, but in the absence of voting directions in any proxy that is signed and
returned, they intend to vote "FOR" each of the Proposals and may vote at their
discretion with respect to other matters not now known to the Board of the Trust
that may be presented at the Meeting.
Voting Rights
The Proposals in this proxy statement affect only the Funds, which are
two separate series of the seven series of the Trust. As a result, the Board of
Trustees of the Trust is soliciting votes only from Shareholders of the Funds.
Each share, $0.01 par value, of each of the Funds is entitled to one
vote. Shareholders of each of the Funds at the close of business on October 27,
2000 (the "Record Date") will be entitled to be present and give voting
instructions for each Fund at the Meeting with respect to their shares owned as
of such Record Date. As of October 27, 2000, there were 505,755.411 shares of
the Equity Fund outstanding and entitled to vote as of such Record Date,
representing total net assets of $11,414,900. As of October 27, 2000, there were
839,851.539 shares of the Balanced Fund outstanding and entitled to vote as of
such Record Date, representing total net assets of $14,924,162.
1
<PAGE>
A majority of the outstanding shares of each of the Funds on the Record
Date, represented in person or by proxy, must be present to constitute a quorum
for the transaction of each Fund's business at the Meeting. Approval of the
Proposals to adopt the New Agreement, as to each of the Funds, requires a
"Majority Vote." For purposes of this requirement, a "Majority Vote" shall mean
a "majority of the outstanding voting securities" of the Fund as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). That is, either (i)
67% or more of the shares of the Fund present at the Meeting, if more than 50%
of the outstanding shares of the Fund are present or represented by proxy, or
(ii) more than 50% of the outstanding shares of the Fund, whichever is less.
If a quorum is not present at the Meeting, or if a quorum is present
but sufficient votes to approve any or all of the Proposals are not received,
the persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies. In determining whether to adjourn the
Meeting, the following factors may be considered: the nature of the Proposals
that are the subject of the Meeting, the percentage of votes actually cast, the
percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to Shareholders with respect to
the reasons for the solicitation. Any adjournment will require the affirmative
vote of a majority of those shares represented at the Meeting in person or by
proxy. A shareholder vote may be taken on one or more of the Proposals in this
proxy statement prior to any adjournment if sufficient votes have been received
with respect to a Proposal.
In tallying shareholder votes, abstentions and "broker non-votes"
(i.e., shares held by brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or person entitled to vote and (ii) the
broker or nominee does not have discretionary voting power on a particular
matter) will be counted for purposes of determining whether a quorum is present
for purposes of convening the meeting. Abstentions and broker non-votes will be
considered to be both present at the meeting and issued and outstanding and, as
a result, will have the effect of being counted as voted against a particular
Proposal.
Principal Holders of Voting Securities
As of October 27, 2000, the Trustees and Officers of the Trust as a
group owned beneficially (i.e., had voting and/or investment power) 2.40% of the
then outstanding Institutional Class shares of the Equity Fund and 3.11% of the
Balanced Fund. On the same date the following Shareholders owned of record more
than 5% of the outstanding Institutional shares of the Funds. Except as provided
below, no person is known by the Trust to be the beneficial owner of more than
5% of the outstanding Institutional Class shares of either of the Funds as of
October 27, 2000.
EQUITY FUND
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent
---------------- -------------------- -------
Brown Family Limited Partnership 138,135.690 shares 27.31%
11102 Old Carriage Road
Glen Arm, Maryland 21057
Chris E. Dishman 99,010.091 shares 19.58%
Karen T. Dishman
5019 Mariposa Circle
Fresno, Texas 77545
Great West Life & Annuity 34,715.651 shares 6.86%
401(k) Plan
8515 E. Orchard Road
Englewood, Colorado 80111
2
<PAGE>
BALANCED FUND
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent
---------------- -------------------- -------
Brown Capital Management, Inc. 162,695.721 shares 19.37%
Money Purchase Pension & Profit
Sharing Trust
1201 North Calvert Street
Baltimore, Maryland 21202
Trustlynx & Co. 115,025.286 shares 13.70%
Post Office Box 173736
Denver, Colorado 80217
Great West Life & Annuity 102,563.245 shares 12.21%
fbo City of Baltimore 401(k) Plan
8515 E. Orchard Road
Englewood, Colorado 80111
Charles S. Thurston IRA 86,055.356 shares 10.25%
701 North St. Mary's Street #35
San Antonio, Texas 78205
Raymond Haysbert IRA 55,442.869 shares 6.60%
3300 Hillen Road
Baltimore, Maryland 21218
Diana M. Epps Beneficiary UTA 42,689.014 shares 5.08%
Charles Schwab & Co., Inc. IRA
1040 Deer Ridge Drive #144
Baltimore, Maryland 21210
PROPOSALS NO. 1 and 2: APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT
Brown Capital Management, Inc., serves as investment advisor to each of
the Funds pursuant to an existing Investment Advisory Agreement with the Trust,
on behalf of the Funds. The existing Investment Advisory Agreement was approved
by Trust's Board of Trustees, including a majority of the Trustees who were not
parties to the Investment Advisory Agreement or interested persons of such
parties ("Independent Trustees") at a meeting held on December 10, 1992, and was
last approved by the Trust's Board of Trustees, including a majority of the
Independent Trustees, at a meeting held on September 27, 2000.
3
<PAGE>
On September 27, 2000, a majority of the Board of Trustees, including a
majority of the Independent Trustees, approved the New Agreement that changes
the investment advisory fees paid by each of the Funds to the Advisor by
increasing the breakpoint of the tiered fee structure. The effect of this change
will be to increase the investment advisory fees incurred by each of the Funds.
Shareholders of the Funds are being asked to approve the New Agreement.
Set forth below is a description of the changes in the investment advisory fees
that would result if the Proposals to adopt the New Agreement are approved, as
well as a description of certain other provisions of the New Agreement, which
will not change as a result of approving the Proposals. The New Agreement is
attached hereto as Appendix A.
If the Proposals are approved by Shareholders, the New Agreement will
continue from year to year (after its initital two year term), as to each of the
Funds, unless earlier terminated, provided that such continuance is specifically
approved at least annually (i) by the Trust's Board of Trustees or by the vote
of a majority of the outstanding voting securities of each of the Funds, and, in
either case, (ii) by a majority of the Trust's Independent Trustees. In the
event that the Shareholders of either the Balanced Fund or the Equity Fund do
not approve the New Agreement, the Advisor would continue to serve as investment
advisor to that particular Fund under the existing Investment Advisory
Agreement, and the Trustees may consider other possible courses of action to
accomplish the purposes for which the Proposals have been made, subject, as
required, to approval by the Shareholders of that Fund.
Rate of Compensation Under the New Investment Advisory Agreement
The proposed Agreement changes the investment advisory fees paid to the
Advisor by each of the Funds from a tiered fee with a breakpoint at $25 million
to a tiered fee with a breakpoint at $100 million. As a result, the investment
advisory fees paid by each of the Funds under the New Agreement would be greater
than would be paid under the existing fee structure.
The Advisor is paid for its services based on an annual percentage of
the average daily net assets of each of the Funds. The investment advisory fee
is computed and accrued daily and paid monthly. The following table compares the
current fee structure for the Funds with the proposed fee structure:
<TABLE>
<S> <C> <C>
---------------- ---------------------------------------- --------------------------------------------
Fee Rate Current Fee Structure Proposed Fee Structure
---------------- ---------------------------------------- --------------------------------------------
0.65% On the first $25 million of assets. On the first $100 million of assets.
---------------- ---------------------------------------- --------------------------------------------
0.50% On all assets in excess of $25 million. On all assets in excess of $100 million.
---------------- ---------------------------------------- --------------------------------------------
</TABLE>
4
<PAGE>
The table below describes the fees and expenses under the existing
Investment Advisory Agreement and under the New Agreement that you may pay if
you buy and hold shares of either of the Funds:
<TABLE>
<S> <C> <C> <C> <C>
Annual Fund Operating Expenses
(expenses that are deducted from Each of the Funds Assets)
----------------------------------------------------------
Fee Structure Under the Existing Fee Structure Under the New Investment
Investment Advisory Agreement Advisory Agreement
Equity Balanced Equity Balanced
Fund Fund Fund Fund
---- ---- ---- ----
Management Fees 0.65% 0.65% 0.65% 0.65%
Distribution and/or Service
(12b-1) Fees None None None None
Other Expenses 1.10% 0.94% 1.10% 0.94%
---- ---- ---- ----
Total Annual Fund Operating Expenses 1.75%^1 1.59%^1 1.75%^1 1.59%^1
Fee Waiver and/or Expense
Reimbursement (0.55)% (0.39)% (0.55)% (0.39)%
---- ---- ---- ----
Net Expenses 1.20% 1.20% 1.20% 1.20%
==== ==== ==== ====
</TABLE>
1. "Total Annual Fund Operating Expenses" are based upon actual expenses
incurred by each of the Funds for the fiscal year ended March 31, 2000.
Under an Expense Limitation Agreement between the Trust and the Advisor
(see below for more details), the Advisor has agreed to waive or reduce its
fees and to assume other expenses of each of the Funds, if necessary, in an
amount that limits Total Fund Operating Expenses (exclusive of interest,
taxes, brokerage fees and commissions, and extraordinary expenses, and
payments, if any, under a Rule 12b-1 Plan) to not more than 1.20% of the
average daily net assets for the Equity Fund and Balanced Fund for the
fiscal year to end March 31, 2001.
Example: This Example shows you the expenses you may pay over time by investing
in either of the Funds. Since all Funds use the same hypothetical conditions, it
should help you compare the costs of investing in the Funds versus other funds.
The Example assumes the following conditions:
(1) You invest $10,000 in either of the Balanced Fund or the Equity Fund for
the periods shown;
(2) You reinvest all dividends and distributions;
(3) You redeem all of your shares at the end of those periods;
(4) You earn a 5% total return; and
(5) The Fund's expenses remain the same.
5
<PAGE>
Although your actual costs may be higher or lower, the following table shows you
what your costs may be under the conditions listed above.
<TABLE>
<S> <C> <C> <C> <C> <C>
--------------------------- ------------------- ---------------- ---------------- ------------- -------------------
Fund 1 Year 3 Years 5 Years 10 Years
--------------------------- ------------------- ---------------- ---------------- ------------- -------------------
Fees Under the Equity Fund $122 $497 $897 $2,017
Existing Investment ------------------- ---------------- ---------------- ------------- -------------------
Advisory Agreement Balanced Fund $122 $464 $829 $1,856
--------------------------- ------------------- ---------------- ---------------- ------------- -------------------
Fees Under the Equity Fund $122 $497 $897 $2,017
New Agreement ------------------- ---------------- ---------------- ------------- -------------------
Balanced Fund $122 $464 $829 $1,856
--------------------------- ------------------- ---------------- ---------------- ------------- -------------------
</TABLE>
As of March 31, 2000, the net assets of the Equity Fund were $10.394
million. At that net asset level, the effective investment advisory fee under
the current fee structure is 0.65% of the Equity Fund's average daily net
assets. For the fiscal year ended March 31, 2000, the investment advisory fees
for the Equity Fund were $64,007. Under the New Agreement, the investment
advisory fees for the Equity Fund for the fiscal year ended March 31, 2000 would
have remained at $64,007, representing no increase above the fees that were
actually incurred because the net assets are below the current breakpoint of $25
million under the current fee structure.
As of March 31, 2000, the net assets of the Balanced Fund were $14.278
million. At that net asset level, the effective investment advisory fee under
the current fee structure is 0.65% of the Balanced Fund's average daily net
assets. For the fiscal year ended March 31, 2000, the investment advisory fees
for the Balanced Fund were $75,855. Under the New Agreement, the investment
advisory fees for the Balanced Fund for the fiscal year ended March 31, 2000
would have remained at $75,855, representing no increase above the fees that
were actually incurred because the net assets are below the current breakpoint
of $25 million under the current fee structure.
The Advisor voluntarily waived all or a portion of its fee and
reimbursed a portion of the Equity Fund's operating expenses for the fiscal
years ended March 31, 1998 and 1999. The total fees waived amounted to $41,375
(the Advisor received $248 of its fee), and $51,828 (the Advisor received $2,754
of its fee), respectively, and expenses reimbursed amounted to $8,549, and
$5,117, respectively. For the fiscal year ended March 31, 2000, the Advisor
received $9,936 of its fee after waiving $54,071 of its fee.
The Advisor voluntarily waived its fee and reimbursed a portion of the
Balanced Fund's operating expenses for the fiscal years ended March 31, 1998 and
1999. The total fees waived amounted to $32,686 and $44,418, respectively, and
expenses reimbursed amounted to $18,899 and $17,850, respectively. For the
fiscal year ended March 31, 2000, the Advisor received $30,866 of its fee after
waiving $44,989 of its fee.
Expense Limitation Agreement
In the interest of limiting the expenses of each Fund, the Advisor
entered into an Expense Limitation Agreement with the Trust on March 20, 2000,
with respect to each of the Funds ("Expense Limitation Agreement"), pursuant to
which the Advisor has agreed to waive or limit its fees and to assume other
expenses so that the total annual operating expenses of the Funds (other than
interest, taxes, brokerage commissions, other expenditures which are capitalized
in accordance with generally accepted accounting principles, and other
extraordinary expenses not incurred in the ordinary course of each Fund's
business, and amounts, if any, payable pursuant to a Rule 12b-1 Plan) are
limited to 1.20% of the average daily assets of the Equity Fund and the Balanced
Fund. The Expense Limitation Agreement shall continue in effect until March 31,
2001, and from year to year thereafter, provided each such continuance is
specifically approved by a majority of the Independent Trustees, and is not
otherwise terminated. There can be no assurances that the Expense Limitation
Agreement will be continued in the future.
6
<PAGE>
Each of the Funds may, at a later date, reimburse the Advisor the
investment advisory fees waived or limited and other expenses assumed and paid
by the Advisor pursuant to the Expense Limitation Agreement during any of the
previous five fiscal years, provided the particular Fund has reached a
sufficient asset size to permit such reimbursement to be made without causing
the total annual expense ratio of the particular Fund to exceed the percentage
limits stated above. Consequently, no reimbursement by either of the Funds will
be made unless: (i) the particular Fund's assets exceed $20 million; (ii) the
particular Fund's total annual expense ratio is less than the percentage stated
above; and (iii) the payment of such reimbursement has been approved by the
Trust's Board of Trustees on a quarterly basis.
The Board of Trustees Consideration of the New Agreement
In determining whether or not it was appropriate to approve the New
Agreement and to recommend its approval to Shareholders, the Board of Trustees,
including the Independent Trustees, considered various matters and materials
provided by Advisor. The Independent Trustees examined the nature, quality and
scope of the services provided to each Fund by Advisor. They reviewed the basis
for an increase in the investment advisory fees and analyzed the fees proposed
by Advisor in terms of the services provided by Advisor, Advisor's costs to
render the services, and the investment advisory fees charged by other
investment advisers that manage comparable funds. In addition, the Independent
Trustees examined mutual fund-related revenues and expenses of the Advisor.
In the Advisor's request for a fee increase, it referred to, among
other things, the increased competition for high quality investment management,
compliance, and other personnel, and the amount of research needed to keep
abreast of potential investment opportunities and to monitor developments in the
relevant markets. The Independent Trustees were provided with data as to the
qualifications of Advisor's personnel and the quality and extent of the services
rendered, as well as an analysis of the performance and expenses of each Fund
and comparative investment advisory fee information regarding other similar
mutual funds. The Independent Trustees also considered data presented by Advisor
showing the extent to which it plans to expand its personnel who render services
to each of the Funds.
In considering the New Agreement and the expectations of the Advisor,
the Trustees took into account the fact that the Funds' assets may increase
above $25 million in the future. As of November 22, 2000, the assets of the
Equity Fund and the Balanced Fund were approximately $11 million and $15
million, respectively. If either Fund's assets were to exceed $25 million and
the Expense Limitation Agreement was terminated, the particular Fund's expenses
would be higher under the New Agreement.
In approving the New Agreement and recommending its approval to
Shareholders, the Trustees, including the Independent Trustees, considered
several factors. The factors considered by the Trustees included (1) the nature,
quality and extent of the services furnished by the Advisor to the Funds and in
particular the performance that Advisor has achieved for the Funds; (2) the
necessity of the Advisor maintaining and enhancing its ability to retain and
attract capable personnel to serve the Funds; (3) the complexity of research and
investment activities in the relevant markets; (4) the performance of the
Advisor in managing each of the Funds with respect to its advisory, oversight,
advisory, administrative, and compliance monitoring services; (5) the effect of
the proposed investment advisory fees increase on the expense ratio of each of
the Funds; (6) comparative data to other funds as to investment performance,
investment advisory fees, and as to expense ratios; (7) current and developing
conditions in the financial services industry, including competition for and the
trend toward escalating compensation for investment personnel; (8) the financial
resources of the Advisor and the continuance of appropriate incentives to assure
that the Advisor will continue to furnish high quality services to each of the
Funds; and (9) the profitability of the Advisor derived from its relationship to
the Fund under the existing Investment Advisory Agreement and the reasonableness
of maintaining approximately the same profitability under the increased
investment advisory fees.
After reviewing and analyzing the materials provided by Advisor, the
Board of Trustees concluded that the compensation to be paid to the Advisor
under the New Agreement is fair and reasonable. The Board of Trustees believes
that approving the New Agreement is in the best interests of each of the Funds
and each of the Funds' Shareholders. Accordingly, after consideration of the
above factors, and such other factors and information it considered relevant,
the Board of Trustees unanimously approved the New Agreement and voted to
recommend its approval by each of the Funds' Shareholders.
7
<PAGE>
The Other Terms of the New Agreement
The terms of the New Agreement, other than those related to the amount
of the investment advisory fees, will not be changed.
The New Agreement continues to require the Advisor to provide, subject
to the supervision of the Board of Trustees, investment advice and investment
services to each of the Funds and to furnish advice and recommendations with
respect to investments of each of the Funds' assets and the purchase or sale of
its portfolio securities. The Advisor also will continue to provide investment
research and analysis.
Under the New Agreement, the Advisor is not liable for any error of
judgment or mistake of law or for any loss suffered by the Funds in connection
with the performance of such New Agreement, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Advisor in the performance of its duties or from
its reckless disregard of its duties and obligations under the New Agreement.
The New Agreement will terminate automatically in the event of its
assignment. In addition, it may be terminated by the Advisor upon sixty days'
written notice to either Fund, and by either Fund upon the vote of a majority of
the Trust Board of Trustees or a majority of the outstanding voting shares of
that particular Fund, upon sixty days' written notice to the Advisor.
Information Concerning the Advisor
Brown Capital Management, Inc., 1201 N. Calvert Street, Baltimore,
Maryland 21202, serves as investment advisor to each of the Funds. Subject to
the authority of the Trustees, the Advisor provides guidance and policy
direction in connection with its daily management of each of the Funds' assets.
The Advisor manages the investment and reinvestment of each of the Funds'
assets. The Advisor is also responsible for the selection of broker-dealers
through which the Funds execute portfolio transactions, subject to the brokerage
policies established by the Trustees, and it provides certain executive
personnel to each of the Funds.
The Advisor, organized as a Maryland corporation in 1983, is controlled
by Eddie C. Brown. The Advisor has been managing each of the Funds since their
inception and has been providing investment advice to investment companies,
individuals, corporations, pension and profit sharing plans, endowments, and
other business and private accounts since the firm was founded in 1983. The
Advisor currently has approximately $4.5 billion in assets under management.
The names, addresses, and principal occupations of the principal
executive officers and directors of Brown Capital Management, Inc. are as
follows:
-------------------------------- -----------------------------------------------
Name and Address Principal Occupation
-------------------------------- -----------------------------------------------
Eddie C. Brown Director, President, & Treasurer
1201 N. Calvert Street
Baltimore, Maryland 21202
-------------------------------- -----------------------------------------------
Keith A. Lee Senior Vice President
1201 N. Calvert Street
Baltimore, Maryland 21202
-------------------------------- -----------------------------------------------
Robert E. Hall Senior Vice President
1201 N. Calvert Street
Baltimore, Maryland 21202
-------------------------------- -----------------------------------------------
Theodore M. Alexander III Vice President
1201 N. Calvert Street
Baltimore, Maryland 21202
-------------------------------- -----------------------------------------------
8
<PAGE>
-------------------------------- -----------------------------------------------
Calvin H. Baker Vice President
1201 N. Calvert Street
Baltimore, Maryland 21202
-------------------------------- -----------------------------------------------
Maurice L. Haywood Vice President
1201 N. Calvert Street
Baltimore, Maryland 21202
-------------------------------- -----------------------------------------------
Stephon A. Jackson Vice President
1201 N. Calvert Street
Baltimore, Maryland 21202
-------------------------------- -----------------------------------------------
Edward Ramos Vice President
1201 N. Calvert Street
Baltimore, Maryland 21202
-------------------------------- -----------------------------------------------
The following table identifies each Officer and Trustee of the Trust
who is also an officer, employee, director or shareholder of the Advisor.
<TABLE>
<S> <C> <C>
----------------------------------- ---------------------------------- ------------------------------------------------
Principal Occupation(s)
Name, Age and Address Position with the Trust During Past 5 Years
----------------------------------- ---------------------------------- ------------------------------------------------
Eddie C. Brown, 59 Trustee and President of the President, Brown Capital Management, Inc.,
1201 N. Calvert Street Brown Capital Management Funds Baltimore, Maryland
Baltimore, Maryland 21202
----------------------------------- ---------------------------------- ------------------------------------------------
Keith A. Lee, 40 Vice President of the Brown Senior Vice President, Brown Capital Management,
1201 N. Calvert Street Capital Management Funds Inc., Baltimore, Maryland
Baltimore, Maryland 21202
----------------------------------- ---------------------------------- ------------------------------------------------
</TABLE>
THE BOARD OF TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, OF THE TRUST HAS
UNANIMOUSLY APPROVED THE PROPOSALS AND RECOMMENDS THEM FOR YOUR APPROVAL.
3. OTHER MATTERS
The Trust is not aware of any other matters that will come before the
meeting. If any other business should come before the meeting however, your
proxy, if signed and returned, will give discretionary authority to the persons
designated in it to vote according to their best judgment.
4. OTHER INFORMATION
Administrator
The Administrator for the Trust is The Nottingham Company, 105 North
Washington Street, Post Office 69, Rocky Mount, North Carolina 27801-0069.
The Distributor
Capital Investment Group, Inc., Post Office Box 32249, Raleigh, North
Carolina 27622, is the principal underwriter and distributor of each of the
Funds' shares and serves as the Funds' exclusive agent for the distribution of
each of the Funds' shares.
9
<PAGE>
Shareholder Proposals
The Trust does not hold regular or annual meetings of its Shareholders.
Proposals of Shareholders which are intended to be presented at a future
Shareholders' meeting must be received by the Trust by a reasonable time prior
to the Trust's solicitation of proxies relating to such future meeting.
Shareholder proposals must meet certain requirements and there is no guarantee
that any proposal will be presented at a shareholder's meeting.
Annual Report
The Trust's annual report to Shareholders for the fiscal period ended
March 31, 2000 was mailed to Shareholders on May 26, 2000. Any shareholder who
desires an additional copy of the annual report may obtain it upon request
(without charge) by contacting NC Shareholder Services, 107 North Washington
Street, Post Office Box 4365, Rocky Mount, North Carolina, 27803-0365 or by
calling (800) 773-3863.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
BY ORDER OF THE BOARD OF TRUSTEES:
C. Frank Watson, III
Secretary
10
<PAGE>
APPENDIX A
----------
FORM OF AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT, entered into as of the 27th day of
December, 2000, by and between THE NOTTINGHAM INVESTMENT TRUST II (the "Trust"),
a Massachusetts business trust, and BROWN CAPITAL MANAGEMENT, INC., a Maryland
corporation (the "Advisor"), registered as an investment advisor under the
Investment Advisors Act of 1940, as amended (the "Advisors Act").
WHEREAS, the Trust is registered as a diversified, open-end management
investment company of the series type under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Advisor to furnish investment advisory
and administrative services to each series of the Trust set forth in Exhibit A
(each a "Fund," collectively the "Funds"), as amended from time to time, and the
Advisor is willing to so furnish such services;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Advisor to act as Investment
Advisor to each Fund for the period and on the terms set forth in this
Agreement. The Advisor accepts such appointment and agrees to furnish
the services herein set forth, for the compensation herein provided.
2. Delivery of Documents. The Trust will furnish the Advisor with copies
properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, as filed with the State of
Massachusetts (such Declaration, as presently in effect and as
it shall from time to time be amended, is herein called the
"Declaration");
(b) The Trust's By-Laws (such By-Laws, as presently in effect and
as they shall from time to time be amended, are herein called
the "By-Laws");
(c) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Advisor and approving this Agreement;
(d) The Trust' Registration Statement on Form N-1A under the 1940
Act and under the Securities Act of 1933 as amended, (the
"1933 Act"), relating to shares of beneficial interest of each
Fund (herein called the "Shares") as filed with the Securities
and Exchange Commission ("SEC") and all amendments thereto;
(e) The Funds' Prospectus (such Prospectus, as presently in effect
and all amendment and supplements thereto are herein called
the "Prospectus").
<PAGE>
The Trust will furnish the Advisor from time to time with copies,
properly certified or authenticated, of all amendments of or
supplements to the foregoing at the same time as such documents are
required to be filed with the SEC.
3. Management. Subject to the supervision of the Trust's Board of
Trustees, the Advisor will provide a continuous investment program for
each Fund, including investment research and management with respect to
all securities, investments, cash and cash equivalents in each Fund.
The Advisor will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund. The
Advisor will provide the services under this Agreement in accordance
with the Fund's investment objectives, policies and restrictions as
stated in the Prospectus. The Advisor further agrees that it:
(a) Will conform its activities to all applicable Rules and
Regulations of the Securities and Exchange Commission and
will, in addition, conduct its activities under this Agreement
in accordance with regulations or any other Federal or State
agencies which may now or in the future have jurisdiction over
its activities under this Agreement;
(b) Will place orders pursuant to its investment determination for
each Fund either directly with the issuer or with any broker
or dealer. In placing orders with brokers or dealers, the
Advisor will attempt to obtain the best net price and the most
favorable execution of its orders. Consistent with this
obligation, when the Advisor believes two or more brokers or
dealers are comparable in price and execution, the Advisor may
prefer: (i) brokers or dealers who provide research advice and
other services for each Fund, or who recommend or sell shares
of each Fund, and (ii) brokers who are affiliated with the
Trust or its Advisor(s), provided, however, that in no
instance will portfolio securities be purchased from or sold
to the Advisor or any affiliated person of the Advisor in
principal transactions;
(c) Will provide certain executive personnel for the Trust as may
be mutually agreed upon from time to time with the Board of
Trustees, the salaries and expenses of such personnel to be
borne by the Advisor unless otherwise mutually agreed upon;
and
(d) Will provide, at its own cost, all office space, facilities
and equipment necessary for the conduct of its advisory
activities on behalf of each Fund.
4. Services Not Exclusive. The advisory services furnished by the Advisor
hereunder are not to be deemed exclusive, and the Advisor shall be free
to furnish similar services to others so long as its services under
this Agreement are not impaired thereby provided, however, that without
the written consent of the Trustees, the Advisor will not serve as
investment Advisor to any other investment company having a similar
investment object to that of each Fund.
2
<PAGE>
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Advisor hereby agrees that all records which it
maintains for the benefit of the Trust are the property of the Trust
and further agrees to surrender promptly to the Trust any of such
records upon the Fund's request. The Advisor further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by it pursuant to Rule 31a-1 under the Act
that are not maintained by others on behalf of the Trust.
6. Expenses. During the term of this Agreement, the Advisor will pay all
expenses incurred by it in connection with its investment advisory
services pertaining to each Fund. In the event that there is no
distribution plan under Rule 12b-1 of the 1940 Act in effect for a
particular Fund, the Advisor will pay, out of the Advisor's resources
generated from sources other than fees received from the Trust, the
entire cost of the promotion and sale of that Fund's shares.
Notwithstanding the foregoing, the Trust shall pay the expenses and
costs of the following (as they pertain to the Funds):
(a) Taxes, interest charges and extraordinary expenses;
(b) Brokerage fees and commissions with regard to portfolio
transaction of each Fund;
(c) Fees and expenses of the custodian of each Fund's portfolio
securities;
(d) Fees and expenses of the Trust's administrator, transfer and
dividend disbursing agent and the Trust's fund accounting
agent or, if the Trust performs any such services without an
agent, the costs of the same;
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Trust's existence as a legal
entity;
(g) Compensation of trustees who are not interested persons of the
Advisor as that term is defined by law;
(h) Costs of Trust meetings;
(i) Federal and State registration or qualification fees and
expenses;
(j) Costs of setting in type, printing and mailing Prospectuses,
reports and notices to existing shareholders;
(k) The investment advisory fee payable to the Advisor, as
provided in paragraph 7 herein; and
(l) Plan of Distribution expenses, but only in accordance with the
Plan of Distribution as approved by the shareholders of each
Fund.
It is understood that the Trust may desire to register each Fund's
shares for sale in certain states which impose expense limitations on
mutual funds. The Trust agrees that it will register each Fund's shares
in such states only with the prior written consent of the Advisor.
3
<PAGE>
7. Compensation. The Trust will pay the Advisor and the Advisor will
accept as full compensation an investment advisory fee, based upon the
average daily net assets of each Fund, computed at the end of each
month and payable within five (5) business days thereafter, based upon
the schedules attached hereto as Exhibit A.
8(a) Limitation of Liability. The Advisor shall not be liable for any error
of judgment, mistake of law or for any other loss whatsoever suffered
by the Trust in connection with the performance of this Agreement,
except a loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the
Advisor in the performance of its duties or from reckless disregard by
it of its obligations and duties under this Agreement.
8(b) Indemnification of Advisor. Subject to the limitations set forth in
this Subsection 8(b), the Trust shall indemnify, defend and hold
harmless (from the assets of the Trust or Trusts to which the conduct
in question relates) the Advisor against all loss, damage and
liability, including reasonable accountants' and counsel fees, incurred
by the Advisor in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, related to or resulting
from this Agreement or the performance of services hereunder, except
with respect to any matter as to which it has been determined that the
loss, damage or liability is a direct result of (i) a breach of
fiduciary duty with respect to the receipt of compensation for
services, or (ii) willful misfeasance, bad faith or gross negligence on
the part of the Advisor in the performance of its duties or from
reckless disregard by it of its duties under this Agreement (either and
both of the conduct described in clauses (i) and (ii) above being
referred to hereinafter as "Disabling Conduct"). A determination that
the Advisor is entitled to indemnification may be made by (i) a final
decision on the merits by a court or other body before whom the
proceeding was brought that the Advisor was not liable by reason of
Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against the Advisor for insufficiency of
evidence of Disabling Conduct, or (iii) a reasonable determination,
based upon a review of the facts, that the Advisor was not liable by
reason of Disabling Conduct by, (a) vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as the
quoted phrase is defined in Section 2(a)(19) of the 1940 Act nor
parties to the action, suit or other proceeding on the same or similar
grounds that is then or has been pending or threatened (such quorum of
such Trustees being referred to hereinafter as the "Independent
4
<PAGE>
Trustees"), or (b) an independent legal counsel in a written opinion.
Expenses, including accountants' and counsel fees so incurred by the
Advisor (but excluding amounts paid in satisfaction of judgment, in
compromise or as fines or penalties), may be paid from time to time by
the Fund or Funds to which the conduct in question related in advance
of the final disposition of any action, suit or proceeding; provided,
that the Advisor shall have undertaken to repay the amounts so paid if
it is ultimately determined that indemnification of such expenses is
not authorized under this Subsection 8(b) and if (i) the Advisor shall
have provided security for such undertaking, (ii) the Trust shall be
insured against losses arising by reason of any lawful advances, or
(iii) a majority of the Independent Trustees, or an independent legal
counsel in a written opinion, shall have determined, based on a review
of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the Advisor ultimately will be
entitled to indemnification hereunder.
As to any matter disposed of by a compromise payment by the Advisor
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any
other expenses shall be provided unless such indemnification shall be
approved (i) by a majority of the Independent Trustees or (ii) by an
independent legal counsel in a written opinion. Approval by the
Independent Trustees pursuant to clause (i) shall not prevent the
recovery from the Advisor of any amount paid to the Advisor in
accordance with either of such clauses as indemnification of the
Advisor is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief
that the Advisor's action was in or not opposed to the best interests
of the Funds or to have been liable to the Funds or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in its conduct under the Agreement.
The right of indemnification provided by this Subsection 8(b) shall not
be exclusive of or affect any of the rights to which the Advisor may be
entitled. Nothing contained in this Subsection 8(b) shall affect any
rights to indemnification to which Trustees, officers or other
personnel of the Trust, and other persons may be entitled by contract
or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such person.
The Board of Trustees of the Trust shall take all such action as may be
necessary and appropriate to authorize the Trust hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Advisor is
entitled to indemnification hereunder and the reasonable amount of any
indemnity due it hereunder, or employ independent legal counsel for
that purpose.
8(c) The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and
protect the Advisor and its directors, officers, employees and agents
and shall inure to the benefit of its/their respective successors,
assigns and personal representatives.
9. Duration and Termination. With respect to any new series of the Trust
that is advised by the Advisor, this Agreement shall continue in effect
for an initial two year period from the date such new series is added
to this Agreement, as set forth in Exhibit A, unless sooner terminated
as provided herein. Unless terminated as herein provided, this
Agreement shall continue in effect, with respect to each Fund (after
its initial two year term), for successive periods of one year each,
provided such continuance is specifically approved annually:
a. By the vote of a majority of those members of the Board of
Trustees who are not parties to this Agreement or interested
persons of any such party (as that term is defined in the 1940
Act), cast in person at a meeting called for the purpose of
voting on such approval; and
5
<PAGE>
b. By vote of either the Board or a majority (as that term is
defined in the 1940 Act) of the outstanding voting securities
of each Fund.
Notwithstanding the foregoing, this Agreement may be terminated, with
respect to any series, by The Trust or by the Advisor at any time on
sixty (60) days' written notice, without the payment of any penalty,
provided that termination by The Trust must be authorized either by
vote of the Board of Trustees or by vote of a majority of the
outstanding voting securities of each Fund. This Agreement will
automatically terminate in the event of its assignment (as that term is
defined in the 1940 Act).
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by a written
instrument signed by the party against which enforcement of the change,
waiver, discharge or termination is sought. No material amendment of
this Agreement shall be effective as to any Fund until approved by vote
of the holders of a majority of that Fund's outstanding voting
securities (as defined in the 1940 Act).
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby. This Agreement shall be
binding and shall inure to the benefit of the parties hereto and their
respective successors.
12. Applicable Law. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of North Carolina.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: THE NOTTINGHAM INVESTMENT TRUST II
By: By:
_________________________________ ______________________________
Title: Title:
______________________________ ___________________________
ATTEST: BROWN CAPITAL MANAGEMENT, INC.
By: By:
_________________________________ ______________________________
Title: Title:
______________________________ ___________________________
7
<PAGE>
EXHIBIT A
to the
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISOR'S COMPENSATION SCHEDULE
As Approved by a Shareholder Proxy on December 27, 2000
For the services set forth in the AMENDED AND RESTATED INVESTMENT ADVISORY
AGREEMENT, the Investment Advisor shall be compensated monthly, as of the last
day of each month, within five business days of the month end, a fee based upon
average daily net assets according to the following schedule:
The Brown Capital Management Equity Fund
Date added to this Agreement - December 10, 1992
Net Assets Annual Fee
---------- ----------
On the first $100 million 0.65%
On all assets over $100 million 0.50%
The Brown Capital Management Balanced Fund
Date added to this Agreement - December 10, 1992
Net Assets Annual Fee
---------- ----------
On the first $100 million 0.65%
On all assets over $100 million 0.50%
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and may help avoid the time and expense involved in validating
your vote if you fail to sign your proxy card properly.
1. INDIVIDUAL ACCOUNTS: sign your name exactly as it appears in the
registration on the proxy card.
2. JOINT ACCOUNTS: either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration
on the proxy card.
3. ALL OTHER ACCOUNTS: the capacity of the individual signing the
proxy card should be indicated unless it is reflected in the form
of registration. For example:
Registration Valid Signature
------------ ---------------
CORPORATE ACCOUNTS
(1) ABC Corp............................... ABC Corp. John Doe, Treasurer
(2) ABC Corp............................... John Doe, Treasurer
(3) ABC Corp. c/o John Doe................. John Doe, Treasurer
(4) ABC Corp. Profit Sharing Plan.......... John Doe, Trustee
PARTNERSHIP ACCOUNTS
(1) The XYZ Partnership.................... Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership... Jane B. smith, General Partner
TRUST ACCOUNTS
(1) ABC Trust.............................. Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/28/78.... Jane B. Doe, Trustee
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. f/b/o John B. Smith, Jr.
UGMA/UTMA.............................. John B. Smith
(2) Estate of John B. Smith................ John B. Smith, Jr., Executor
<PAGE>
BROWN CAPITAL MANAGEMENT EQUITY FUND
SPECIAL MEETING OF SHAREHOLDERS ON DECEMBER 27, 2000
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
In order to vote your shares, please sign and date this card and return it in
the envelope provided. By returning this card, you authorize the proxies to vote
on each of the Proposals as marked, or, if not marked, as indicated.
The Board of Trustees recommends voting "FOR" Proposals 1.
1. FOR AGAINST ABSTAIN Approval of the New Investment Advisory
( ) ( ) ( ) Agreement with Brown Capital Management, Inc.,
on behalf of the Brown Capital Management
Equity Fund.
By signing and dating this card,
you authorize C. Frank Watson,
III, with the power of
substitution to vote your shares
of the Equity Fund at the
Special Meeting of Shareholders
of the Equity Fund and at any
adjournment of the Meeting.
MR. WATSON SHALL VOTE AS
RECOMMENDED BY THE BOARD, UNLESS
OTHERWISE INDICATED, AND IN HIS
DISCRETION UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
x_______________________________
x_______________________________
Dated ____________________, 2000
Please sign name or names as
they appear to authorize the
voting of your shares as
indicated. Where shares are
registered with joint owners,
all joint owners should sign.
Persons signing as executors,
administrators, trustees, etc.,
should so indicate.
<PAGE>
BROWN CAPITAL MANAGEMENT BALANCED FUND
SPECIAL MEETING OF SHAREHOLDERS ON DECEMBER 27, 2000
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
In order to vote your shares, please sign and date this card and return it in
the envelope provided. By returning this card, you authorize the proxies to vote
on each of the Proposals as marked, or, if not marked, as indicated.
The Board of Trustees recommends voting "FOR" Proposals 2.
2. FOR AGAINST ABSTAIN Approval of the New Investment Advisory
( ) ( ) ( ) Agreement with Brown Capital Management, Inc.,
on behalf of the Brown Capital Management
Balanced Fund.
By signing and dating this card,
you authorize C. Frank Watson,
III, with the power of
substitution to vote your shares
of the Balanced Fund at the
Special Meeting of Shareholders
of the Balanced Fund and at any
adjournment of the Meeting.
MR. WATSON SHALL VOTE AS
RECOMMENDED BY THE BOARD, UNLESS
OTHERWISE INDICATED, AND IN HIS
DISCRETION UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
x_______________________________
x_______________________________
Dated ____________________, 2000
Please sign name or names as
they appear to authorize the
voting of your shares as
indicated. Where shares are
registered with joint owners,
all joint owners should sign.
Persons signing as executors,
administrators, trustees, etc.,
should so indicate.