SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No.______)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[XX] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
MARSHALL FUNDS, INC.
(Name of Registrant as Specified In Its Charter)
FEDERATED INVESTORS, INC.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[XX] No filing fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy 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.
<PAGE>
1) Amount Previously Paid:
---------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------
3) Filing Party:
---------------------------------------------------------------
4) Date Filed:
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PROXY STATEMENT
MARSHALL FUNDS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 30, 1999
An Annual Meeting of the shareholders of the following portfolios of the
Marshall Funds, Inc. (the "Corporation") has been called and will be held on
April 30, 1999, at 8:00 a.m. (Central time) at the offices of the Corporation at
770 North Water Street, 3rd Floor, Milwaukee, Wisconsin:
Marshall Equity Income Fund Marshall Short-Term Income Fund
Marshall Large-Cap Growth & Income Fund Marshall Intermediate Bond Fund
Marshall Mid-Cap Value Fund Marshall Government Income Fund
Marshall Mid-Cap Growth Fund Marshall Intermediate Tax-Free Fund
Marshall Small-Cap Growth Fund Marshall Money Market Fund
Marshall International Stock Fund
The purpose of the Annual Meeting is to consider and vote upon the
following matters:
(1) To elect six (6) Directors of the Corporation;
(2) To make a change to the fundamental investment objective of the
MARSHALL MID-CAP VALUE FUND;
(3) To ratify the selection of the Corporation's independent auditors;
(4) To approve a new Sub-Advisory Contract between M&I Investment
Management Corp. and BPI Global Asset Management LLP, on behalf of
MARSHALL INTERNATIONAL STOCK FUND; and
(5) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors of the Corporation has fixed March 29, 1999 as
the record date for determination of shareholders entitled to vote at the
meeting.
By order of the Directors
/s/ Brooke J. Billick
Brooke J. Billick
Secretary
April 8, 1999
YOU CAN HELP THE CORPORATION AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY.
IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE, MARK, SIGN, DATE, AND RETURN
THE ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE ANNUAL
MEETING. THE ENCLOSED RETURN ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
<PAGE>
15
PROXY STATEMENT
MARSHALL FUNDS, INC.
1000 NORTH WATER STREET
MILWAUKEE, WI 53202
ABOUT THE PROXY SOLICITATION AND THE ANNUAL MEETING
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board") of Marshall Funds, Inc. (the "Corporation"). The Corporation consists
of 11 portfolios ("Funds"): MARSHALL EQUITY INCOME FUND, MARSHALL LARGE-CAP
GROWTH & INCOME FUND, MARSHALL MID-CAP VALUE FUND, MARSHALL MID-CAP GROWTH FUND,
MARSHALL SMALL-CAP GROWTH FUND, MARSHALL INTERNATIONAL STOCK FUND, MARSHALL
MONEY MARKET FUND, MARSHALL SHORT-TERM INCOME FUND, MARSHALL INTERMEDIATE BOND
FUND, MARSHALL GOVERNMENT INCOME FUND and MARSHALL INTERMEDIATE TAX-FREE FUND.
The proxies will be voted at the Annual Meeting of shareholders of the
Corporation to be held on April 30, 1999 at 770 North Water Street, 3rd Floor,
Milwaukee, Wisconsin 53202 at 8:00 a.m. (Central time).
Proxy solicitations will be made primarily by mail, but may also be made
by telephone, telegraph, or personal interview conducted by certain officers or
employees of the Corporation, Marshall & Ilsley Trust Company, M&I Investment
Management Corp. (the Corporation's investment adviser), Federated Shareholder
Services Company (the Corporation's transfer agent), or, if necessary, a
communications firm retained for this purpose. Any telephonic solicitations will
follow procedures designed to ensure accuracy and prevent fraud, including
requiring identifying shareholder information, recording the shareholder's
instruction and confirming to the shareholder after the fact. All shareholders
that sign, date and return the proxy ballot (or communicate their vote via
telephone or other permissible means) have the power and authority to revoke or
otherwise change their voting instructions at any time before it is voted by
sending written notice of revocation or by appearing in person at the Annual
Meeting. If a shareholder signs, dates, and returns the proxy ballot, but does
not indicate a choice as to the items on the appropriate proxy ballot, the proxy
attorneys will vote those shares in favor of each proposal. The cost of
preparing, printing, and mailing the proxy materials will be borne by the
Corporation.
At a special meeting of the Board on March 26, 1999, the Board nominated
five (5) new directors for election by all shareholders of the Corporation, and
reviewed and approved: (1) a change in the fundamental investment objective of
the MARSHALL MID-CAP VALUE FUND ("MID-CAP VALUE FUND"); and (2) the Sub-Advisory
Agreement between the Corporation's adviser and BPI Global Asset Management LLP
("BPI") on behalf of the MARSHALL INTERNATIONAL STOCK FUND ("INTERNATIONAL STOCK
FUND"). In addition, the Board has approved Arthur Andersen LLP as the
Corporation's independent auditors for the current fiscal year. The purposes of
the Annual Meeting are set forth in the accompanying Notice. The Directors know
of no business other than that mentioned in the Notice that will be presented
for consideration at the Annual Meeting. Should other business be properly
brought before the Annual Meeting, proxies will be voted in accordance with the
best judgment of the persons named as proxies.
This proxy statement and the enclosed proxy card(s) are only being
mailed to shareholders of record at the close of business on March 29, 1999
("Record Date"). This proxy statement and the enclosed proxy card(s) are
expected to be mailed on or about April 8, 1999. AS MORE FULLY DESCRIBED BELOW,
SHAREHOLDERS MAY NOT BE ENTITLED TO VOTE ON ALL MATTERS TO BE CONSIDERED AT THE
SHAREHOLDER MEETING - MATTERS THAT ONLY AFFECT A PARTICULAR FUND MAY ONLY BE
VOTED UPON BY SHAREHOLDERS OF THAT FUND. HOWEVER, ALL SHAREHOLDERS WILL BE
ENTITLED TO VOTE IN THE ELECTION OF THE SIX (6) DIRECTORS AND THE RATIFICATION
OF THE CORPORATION'S INDEPENDENT AUDITORS. There are 2,120,443,018 shares
entitled to vote for such Directors and independent auditors. Following is a
table showing the other matters to be considered at the Annual Meeting, which
shareholders are entitled to vote on each matter, and the total number of shares
entitled to vote on each matter.
<PAGE>
<TABLE>
<CAPTION>
SHAREHOLDERS OF SHAREHOLDERS OF
MID-CAP VALUE FUND INTERNATIONAL STOCK
MATTER TO BE VOTED UPON: ONLY FUND ONLY
<S> <C> <C>
Change in fundamental investment objective of
MID-CAP VALUE FUND
Approve Sub-Advisory contract with BPI Global
Asset Management LLP for INTERNATIONAL STOCK FUND
TOTAL SHARES ENTITLED TO VOTE 12,177,025 18,213,876
</TABLE>
The Annual Report for the Fund for the fiscal year ended August 31, 1998
has been previously mailed to shareholders. If you have not received this
report, or would like an additional copy free of charge, please write to the
Corporation at the above address or call Marshall Funds Investor Services at
1-800-236-FUND (3863). The Annual Report will be sent to you by first-class mail
within three business days.
PROPOSAL #1: ELECTION OF SIX (6) DIRECTORS
The Corporation is managed by the Board of Directors (the "Board"),
which currently consists of three persons, all of whom are independent. The
Board convenes at regular meetings quarterly and does not have any standing
audit, nominating, or compensation committees. The Board convened four board
meetings during the last calendar year. Two of the Directors, Ody J Fish, and
Paul E. Hassett will retire effective April 30, 1999.
The persons named as proxies intend to vote in favor of the election of the
following persons as Directors of the Corporation: John DeVincentis, James
Mitchell, Duane F. Dingmann, Barbara J. Pope, John M. Blaser, and David W.
Schulz (collectively, the "Nominees"). Mr. DeVincentis is presently serving as a
Director. If elected by shareholders, the other Nominees are expected to assume
their responsibilities as Directors effective April 30, 1999. If all of the
Nominees are elected, the entire Board will consist of four independent
Directors and two Directors that will be considered to be "interested persons"
as defined by the Investment Company Act of 1940 (the "1940 Act"). Mr. Schulz is
currently a director, officer and employee of M&I Investment Management Corp.
(the Corporation's investment adviser), and an officer of its affiliate,
Marshall & Ilsley Trust Company (the Corporation's custodian and shareholder
servicing agent). Mr. Blaser is an officer and employee of Marshall & Ilsley
Trust Company.
None of the other Nominees were directors, officers, employees or
shareholders of the Adviser or its affiliates.
Messrs. Mitchell and Dingmann are being nominated to fill the positions now
held by Messrs. Fish and Hassett, who are retiring from the Board. Ms. Pope, Mr.
Blaser and Mr. Schulz are being proposed as a result of management's decision to
expand the size and diversity of the Board. All Nominees have consented to serve
as Directors upon their election. If elected, the Directors will hold office
until their death, resignation, or retirement, or removal or until the next
meeting of shareholders to elect Directors and the election and qualification of
their successors. Election of a Director is by plurality vote, which means that
the six (6) individuals receiving the greatest number of votes at the meeting
will be elected.
If any Nominee for election as a Director named above shall by reason of
death or for any other reason become unavailable as a candidate at the Annual
Meeting, votes pursuant to the enclosed proxy will be cast for a substitute
candidate by the proxies named on the proxy card, or their substitutes, present
and acting at the Annual Meeting. The selection of any substitute candidate for
election as a Director who is not an interested person shall be made by a
majority of the Directors who are not interested persons of the Corporation. The
Board has no reason to believe that any Nominee will become unavailable for
election as a Director.
Information about the Corporation's current Directors and officers can
be found under "Information About the Directors and Officers of the
Corporation". Set forth below is a listing of the Nominees standing for election
along with their addresses, ages, present positions with the Corporation, if
any, and their principal occupations during the last five years. Nominees with
an asterisk (*) are deemed to be "interested" directors.
<PAGE>
JOHN DEVINCENTIS
4700 21st Street
Racine, Wisconsin, 53406
Age: 65
Director of the Corporation
Independent Financial Consultant; Retired, formerly Senior Vice President of
Finance, In-Sink-Erator Division of Emerson Electric.
JAMES MITCHELL
4051 North 27th Street
Milwaukee, Wisconsin 53216
Age: 52
Group Vice President, Citation Corporation; formerly President and Chief
Executive Officer, Interstate Forging Industries; formerly Chairman, Ayrshire
Precision Engineering.
DUANE E. DINGMANN
1631 Harding Avenue
Eau Claire, Wisconsin 54701
Age: 68
Retired; formerly, President and owner, Trubilt Auto Body, Inc. and
Telephone Specialists, Inc.; formerly Class B (nonbanking) Director, Ninth
Federal Reserve District, Minneapolis, MN.
BARBARA J. POPE
115 South LaSalle Street
Suite 2285
Chicago, Illinois 60603
Age: 51
President, Barbara J. Pope, P.C., a financial consulting firm; President,
Sedgwick Street Partners LLC; general partner of a private investment
partnership.
JOHN M. BLASER*
1000 North Water Street
Milwaukee, Wisconsin, 53202
Age: 42
President and Director
Vice President, Marshall & Ilsley Trust Company; formerly, Partner, Artisan
Partners, L.P.; formerly, Chief Financial Officer and Principal Administrative
Officer, Artisan Funds; formerly, Senior Vice President, Kemper Securities, Inc.
DAVID W. SCHULZ*
1000 North Water Street
Milwaukee, Wisconsin, 53202
Age: 41
President and Director, M&I Investment Management Corp.; Vice President,
Marshall & Ilsley Trust Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
ELECT EACH OF THE NOMINEES AS A DIRECTOR OF THE CORPORATION
<PAGE>
PROPOSAL #2: CHANGE IN THE FUNDAMENTAL INVESTMENT OBJECTIVE OF THE MARSHALL
MID-CAP VALUE FUND
The current investment objective of the Mid-Cap Value Fund is to provide
"capital appreciation and income". M&I Investment Management Corp., the Fund's
investment adviser, believes that the "income" portion of the investment
objective is not consistent with a typical mid-cap value-style investment
company and places the Fund at a competitive disadvantage. As a result of the
"income" requirement, the Fund's performance may lag the performance of other
mid-cap value funds. In addition, the Adviser believes that most shareholders
purchase the Fund for capital appreciation and not for income. Therefore, it is
proposed that the investment objective of the Fund be changed to solely provide
"capital appreciation". Since the Fund will no longer be required to purchase
income-producing stocks and the adviser will focus more on selecting stocks that
have the potential for capital appreciation, it is possible that the Fund's
dividend distributions will be lower in the future as a result of this change.
The Fund's investment objective is fundamental, which means that it
cannot be changed without the approval of shareholders. Accordingly, the Board
has determined that changing the Fund's investment objective as proposed is in
the best interests of shareholders and has authorized the submission to the
Fund's shareholders for their approval the deletion of the "income" component of
the Fund's investment objective.
THE BOARD OF DIRECTORS RECOMMENDS THAT
MID-CAP VALUE FUND SHAREHOLDERS VOTE FOR THE PROPOSED CHANGE TO
THE FUND'S INVESTMENT OBJECTIVE
PROPOSAL #3: RATIFY THE SELECTION OF THE CORPORATION'S INDEPENDENT AUDITORS
The 1940 Act requires that the Corporation's independent auditors be
selected by the Board, including a majority of those Board members who are not
"interested persons" (as defined in the 1940 Act) of the Corporation, and
submitted for ratification or rejection at the next succeeding meeting of
shareholders. The Board of Directors of the Corporation, including a majority of
its members who are not "interested persons" of the Corporation, approved the
selection of Arthur Andersen LLP (the "Auditors") for the current fiscal year at
a Board meeting held on October 26, 1998.
The Board's selection of the Auditors as independent auditors for the
current fiscal year is being submitted to the shareholders for ratification.
Apart from their fees as independent auditors and certain consulting fees,
neither the Auditors nor any of their partners have a direct, or material
indirect, financial interest in the Corporation or its investment adviser. The
Auditors are a major international independent accounting firm. The Board
believes that the continued employment of the services of the Auditors for the
current fiscal year would be in the Corporation's best interests.
Representatives of the Auditors are not expected to be present at the
Meeting. If a representative is present, he or she will have the opportunity to
make a statement and would be available to respond to appropriate questions. The
ratification of the selection of the Auditors will require the affirmative vote
of a majority of the shares present and voting on the proposal at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
OF THE CORPORATION VOTE FOR THE INDEPENDENT AUDITORS
<PAGE>
PROPOSAL #4: APPROVE NEW SUB-ADVISORY CONTRACT ON BEHALF OF MARSHALL
INTERNATIONAL STOCK FUND
M&I Investment Management Corp. (the "Adviser") is the investment
adviser to the Marshall International Stock Fund (referred to in this section as
the "Fund") pursuant to an Investment Advisory Contract dated October 1, 1992,
as amended to add the Fund on August 1, 1994 ("Advisory Contract"). Affiliates
of the Adviser provide various other services to the Corporation for which they
receive fees as described below under "Information About the Corporation." Under
the terms of the Investment Advisory Contract, the Adviser may employ other
parties to assist it in carrying out its responsibilities, at its own cost and
expense. Since August 1, 1994, Templeton Investment Counsel, Inc. ("Templeton")
has been the sub-adviser to the Fund pursuant to a Sub-Advisory Agreement dated
August 1, 1994 ("Original Sub-Advisory Contract"). Both the Investment Advisory
Contract and Original Sub-Advisory Contract were approved by the initial
shareholder of the Fund on August 1, 1994.
The Adviser's ongoing responsibilities include: (i) overseeing the
relative performance and consistency of the Fund's sub-adviser; (ii) ensuring
that the sub-adviser adheres to the Fund's stated investment objective and
policies; (iii) monitoring the financial health of the sub-adviser; and (iv)
regularly communicating and/or visiting in-person with the sub-adviser to ensure
the above responsibilities are met. The Adviser has agreed to indemnify and hold
the Fund harmless for acts or omissions of the sub-adviser as a result of the
sub-adviser's bad faith, gross negligence, or reckless disregard of the
sub-adviser's responsibilities.
At a special meeting of the Corporation's Board on March 26, 1999, the
Adviser reported that it had considered a number of possible replacements for
Templeton and recommended that the Original Sub-Advisory Contract be terminated.
After performing preliminary performance screens on the universe of
international money managers, the Adviser conducted several in-person and
telephone interviews. At the meeting of the Board, the Adviser recommended that
a new sub-advisory contract ("New Sub-Advisory Contract") be approved and
entered into with BPI, located in Orlando, Florida.
The Board discussed the proposal to terminate the Original Sub-Advisory
Contract with Templeton and to consider approval of the New Sub-Advisory
Contract with BPI. A representative from BPI was present at the meeting and
discussed BPI's background, organization, financial condition, performance
history, and investment philosophies. After careful consideration, the Board
then voted to terminate the Original Sub-Advisory Contract, and because of its
desire to have BPI begin managing the Fund. The Board then approved the New
Sub-Advisory Contract on behalf of the Fund with BPI, subject to approval by
shareholders of the Fund. The New Sub-Advisory Agreement was executed and became
effective on March 29, 1999.
In selecting BPI as a new sub-adviser for the Fund, the Board considered
several factors. The most important of these factors was the consistency of
BPI's performance and expertise in the area of global and international
investing, the long-term performance record of the proposed portfolio manager,
its ongoing commitment to client service, and the stability and quality of the
organization (including BPI's financial condition), as well as the quality of
the individuals that make up their investment teams. The Board also considered
that because of the smaller size of BPI, the Fund was likely to receive greater
attention than that given by a larger organization such as Templeton.
In selecting BPI, the Board recognized its superior performance record.
BPI is the investment adviser to 10 mutual fund portfolios (9 in Canada and 1 in
the United States) with approximately $1.25 billion of total assets under
management and has a distinguished list of private account clients. The Board
considered that two of these mutual funds, the BPI International Equity Value
Fund and Masters Select International Fund, which have investment objectives
similar to that of the Marshall International Stock Fund, have an excellent
performance history. The following table compares the performance of the
Marshall International Stock Fund to two funds managed in whole or in part by
BPI for various periods ended December 31, 1998.
<PAGE>
- ------------------------------- --------- ----------- --------------
FUND NAME ONE YEAR THREE YEAR SINCE JUNE
30, 1997
- ------------------------------- --------- ----------- --------------
- ------------------------------- --------- ----------- --------------
Masters' Select International 11.7% N/A N/A
Fund1
- ------------------------------- --------- ----------- --------------
- ------------------------------- --------- ----------- --------------
BPI International Equity 29.8% N/A 26.1%
Value Fund2
- ------------------------------- --------- ----------- --------------
- ------------------------------- --------- ----------- --------------
Marshall International Stock 3.26% 36.97% 0.65%
Fund3
- ------------------------------- --------- ----------- --------------
1 BPI is one of five sub-advisers to the fund and manages the largest portion of
the fund (approximately 25%). Each sub-adviser to the fund is assigned a fixed
portion of the fund's assets, which may change slightly as total assets
fluctuate. Each sub-adviser's portion includes a minimum of eight and a maximum
of 15 securities. 2 The indicated rates of return are the total returns for the
one-year period and the annual compounded returns since the fund commenced
operations on June 30, 1997. The fund is a mutual fund trust governed by the
laws of the Province of Ontario, Canada, and is not an investment company
registered under the Investment Company Act of 1940. The fund was not registered
with the U.S. Securities and Exchange Commission under the Investment Company
Act of 1940 and therefore was not subject to certain investment restrictions
that are imposed by the 1940 Act. If the fund had been registered under the 1940
Act, the fund's performance may have been lower. 3 The average annual compounded
returns since the Marshall International Stock Fund commenced operations on
September 1, 1994 is 8.65%.
The Board believes that these returns stem from BPI's investment
philosophy and process. Also, the Board believes that stability in the BPI
organization will provide the Marshall International Stock Fund with the
opportunity to enjoy the results achieved by the same individuals who achieved
the performance results above, although past performance is no guarantee of
future results. The Board was informed that the portfolio manager for the Fund
would be Dan Jaworski. From June 1993 to December, 1994, Mr. Jaworski was a
portfolio manager at Lazard Freres & Co., and from January 1995 to March 1997
was a portfolio manager at STI Capital Management. In March 1997, he founded and
became a Managing Director and the Chief Investment Officer of BPI Global Asset
Management LLP. He received a B.A. in Economics and Computer Science in 1987
from Concordia College, and received his M.B.A. in Finance from the University
of Minnesota in 1988.
The terms of the New Sub-Advisory Contract are summarized below.
NEW SUB-ADVISORY CONTRACT
A copy of the New Sub-Advisory Contract between the Adviser and BPI is
attached as Exhibit 1. It is substantially similar to the Original Sub-Advisory
Contract with Templeton.
Under the terms of the New Sub-Advisory Contract, subject to the
supervision of the Adviser and the Board, BPI will: (i) manage the Fund's assets
in accordance with the Fund's objective, policies and limitations as stated in
the Fund's Prospectus and Statement of Additional Information; (ii) make
investment decisions for the Fund; and (iii) place orders to purchase and sell
securities.
The New Sub-Advisory Contract provides that BPI shall pay all expenses
incurred by it and its staff in connection with the performance of its services
under the New Sub-Advisory Contract, including the payment of salaries of all
officers and employees who are employed by it. The Adviser will pay BPI out of
its own advisory fee an annual fee of 0.40% of the Fund's average daily net
assets. The Fund pays the Adviser an annual fee of 1.00% of the Fund's average
daily net assets. The sub-advisory fee payable to BPI is slightly lower than the
effective rate of fee payable to Templeton. Under the terms of the Old
Sub-Advisory Contract, Templeton was entitled to receive 0.50% on assets up to
$70 million and 0.40% on assets in excess thereof (approximately 0.42% effective
rate. BPI is slightly lower than the fee payable to Templeton based on assets as
of 12/31/98). Although the total fee paid by the Marshall International Stock
Fund to the Adviser will not change as a result of the New Sub-Advisory
Contract, the Adviser will retain a slightly higher portion of the overall
advisory fee.
The new Sub-Advisory Contract provides that BPI shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Adviser
or the Fund in connection with the matters to which the New Sub-Advisory
Contract relates, provided that nothing in the New Sub-Advisory Contract shall
be deemed to protect or purport to protect BPI against any liability to the
Adviser or the Fund to which BPI would otherwise be subject by reason of willful
malfeasance, bad faith or gross negligence on its part in the performance of its
duties, or by reason of BPI's reckless disregard of its obligations and duties
under the New Sub-Advisory Contract.
The Corporation and BPI entered into the New Sub-Advisory Contract in
reliance on Rule 15a-4 under the Investment Company Act of 1940. Under that
rule, a mutual fund may enter into an advisory agreement that has not been
approved by shareholders if: (1) the fund's old advisory agreement was
terminated either: (i) by reason of certain types of assignments or (ii) at any
time by a majority of the fund's board of directors; (2) the new advisory
agreement has been approved by the fund's board, including a majority of the
independent directors; and (3) the compensation paid to the adviser under the
new advisory contract is not more than was paid under the old advisory contract.
These requirements have been met with respect to the New Sub-Advisory Contract.
An agreement entered into in reliance on Rule 15a-4 may not last more than 120
days. For that reason, the New Sub-Advisory Contract will terminate 120 days
from the date of its execution unless approved by shareholders at the Annual
Meeting.
Thereafter, it will continue in effect annually from the date of its
execution, unless terminated, and may be continued from year to year thereafter
by a majority of the Directors, including a majority of the disinterested
Directors.
The Board, including the disinterested Directors, has concluded that the
New Sub-Advisory Contract would be in the best interests of the Fund and the
Fund's shareholders. The Board, including the disinterested Directors,
unanimously approved the New Sub-Advisory Contract for the Fund and recommended
such contract for approval of the shareholders of the Fund at the Annual
Meeting. If the New Sub-Advisory Contract is not approved by the Fund's
shareholders, the current agreements will continue in effect pending further
consideration by the Fund's Board at the first Board meeting subsequent to the
shareholder meeting, of such further action as they may deem to be in the best
interests of the shareholders of the Fund.
THE BOARD OF DIRECTORS RECOMMENDS THAT
INTERNATIONAL STOCK FUND SHAREHOLDERS APPROVE THE SUB-ADVISORY
CONTRACT WITH BPI GLOBAL ASSET MANAGEMENT LLP
ADDITIONAL INFORMATION ABOUT BPI AND THE MARSHALL FUNDS
ABOUT BPI GLOBAL ASSET MANAGEMENT LLP
BPI, headquartered in Orlando, Florida, provides portfolio management
services for investment companies, corporations, trusts, estates, pension and
profit sharing plans, individuals, and other institutions located in both Canada
and the United States, and is an investment adviser registered with the U.S.
Securities and Exchange Commission. BPI was formed in March 1997 as a Delaware
limited liability partnership between BPI Global Holdings USA, Inc. ("BPI
Holdings USA") as a 51% partner, and JBS Advisors, Inc. ("JBS") as a 49%
partner. BPI Holdings USA is a wholly-owned subsidiary of BPI Global Holdings,
Inc., which is a wholly-owned subsidiary of BPI Financial Corporation, located
at Toronto, Ontario (Canada). JBS is owned by BPI's portfolio managers and its
President.
Following is a list of the principal executive officer and managing
directors of BPI and their occupations during the last five years. Unless
otherwise noted, the address of each person listed is: BPI Global Asset
Management LLP, Tower Place at the Summit, 1900 Summit Tower Boulevard, Suite
450, Orlando, Florida 32810.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------- ----------------------- ----------------------------------------------
NAME POSITION WITH BPI PRIOR BUSINESS EXPERIENCE
- -------------------------- ----------------------- ----------------------------------------------
- -------------------------- ----------------------- ----------------------------------------------
Ryan R. Burrow President, Managing o August 1993 to March 1997: Managing
Director and Manager Director, Business Development, STI
(March 1997 to Capital Management
Present)
- -------------------------- ----------------------- ----------------------------------------------
- -------------------------- ----------------------- ----------------------------------------------
Frederick F. Dalley Manager o January 1991 to Present: Executive
(March 1997 to Vice President, Portfolio Management and
Present) Director, BPI Financial Corporation
- -------------------------- ----------------------- ----------------------------------------------
- -------------------------- ----------------------- ----------------------------------------------
Paul V. Holland Managing Director o December 1987 to March 1997:
(March 1997 to Stockbroker, A.G. Edwards & Sons
Present)
- -------------------------- ----------------------- ----------------------------------------------
- -------------------------- ----------------------- ----------------------------------------------
Daniel R. Jaworski Managing Director, o January 1995 to March 1997:
Chief Investment Portfolio manager, STI Capital Management
Officer, and Manager o June 1993 to December 1994:
(March 1997 to Portfolio manager, Lazard Freres & Co.
Present)
- -------------------------- ----------------------- ----------------------------------------------
- -------------------------- ----------------------- ----------------------------------------------
James L. McGovern Manager o September 1986 to Present:
(March 1997 to President, CEO and Director, BPI
Present) Financial Corporation
- -------------------------- ----------------------- ----------------------------------------------
- -------------------------- ----------------------- ----------------------------------------------
Pablo Salas-Schoofield Managing Director and o January 1996 to March 1997:
Manager Portfolio manager, Emerging Markets, STI
(March 1997 to Capital Management
Present) o February 1994 to January 1996:
Portfolio manager, Lazard Freres & Co.
- -------------------------- ----------------------- ----------------------------------------------
- -------------------------- ----------------------- ----------------------------------------------
J. Brian Sheedy Treasurer and Manager o January 1995 to Present: Chief
(March 1997 to Financial Officer, BPI Financial
Present) Corporation
o September 1980 to January 1995:
Partner, Deloitte & Touche (Toronto,
Ontario)
- -------------------------- ----------------------- ----------------------------------------------
- -------------------------- ----------------------- ----------------------------------------------
Thomas J. Sudyka, Jr. Managing Director o March 1993 to March 1997: Vice
(March 1997 to President, portfolio manager, KPM
Present) Investment Management
- -------------------------- ----------------------- ----------------------------------------------
- -------------------------- ----------------------- ----------------------------------------------
Stuart D. Waugh Secretary and Manager o April 1998 to Present: Executive
(January 1999 to Vice President, General Counsel, BPI
Present) Financial Corporation
o June 1992 to April 1998: Attorney,
McCarthy T trault
(Toronto, Ontario).
- -------------------------- ----------------------- ----------------------------------------------
</TABLE>
BPI currently serves as either investment adviser or sub-adviser to two
other mutual funds with similar objectives. Following is a description of these
funds and the compensation paid to BPI for its advisory services:
<TABLE>
<CAPTION>
- --------------------------------------- ---------------------------- ----------------------------
NAME OF FUND TOTAL FUND ASSETS AS OF ADVISORY FEE1
12/31/98
<S> <C> <C>
- --------------------------------------- ---------------------------- ----------------------------
- --------------------------------------- ---------------------------- ----------------------------
Masters' Select International Fund $95.3 million2 0.50%
- --------------------------------------- ---------------------------- ----------------------------
- --------------------------------------- ---------------------------- ----------------------------
BPI International Equity Value Fund $29.7 million 0.50%3
- --------------------------------------- ---------------------------- ----------------------------
</TABLE>
1 Expressed as a percentage of each fund's average daily net assets. 2 Of total
assets, BPI manages $21.7 million. 3 BPI receives 0.50% for investment
management services.
INFORMATION ABOUT THE MARSHALL FUNDS
Following is a list of the Directors of the Corporation during the last fiscal
year, their occupations, and compensation. An asterisk (*) denotes a Director
who is deemed to be an interested person as defined in the Investment Company
Act of 1940.
<PAGE>
<TABLE>
<CAPTION>
NAME AGGREGATE
AGE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS FROM
POSITION WITH FOR PAST 5 YEARS CORPORATION
CORPORATION
<S> <C> <C>
EDWARD C. GONZALES* Vice Chairman, Federated Investors, $0
Age: 69 Inc.; Vice President, Federated
1001 Liberty Avenue Advisers, Federated Management,
Pittsburgh, PA Federated Research, Federated Research
DIRECTOR, CHAIRMAN AND Corp., Federated Global Research Corp.
TREASURER and Passport Research, Ltd.; Executive
Vice President and Director, Federated
Securities Corp.; Trustee, Federated
Shareholder Services Company.
JOHN DEVINCENTIS Independent Financial Consultant; $11,000
Age: 65 Retired, formerly, Senior Vice President
4700 21st Street of Finance, In-Sink-Erator Division of
Racine, WI 53406 Emerson Electric..
DIRECTOR
ODY J. FISH Formerly, Director, Newton Income Fund, $11,000
Age: 73 Inc. and Newton Growth Fund, Inc.;
520 Progress Drive Private Investor; Formerly President
P.O. Box 78 Pal-O-Pak Insulation Company; Director,
Hartland, WI Quest Technologies; President, Wisconsin
DIRECTOR Academy of Science, Arts and Letters;
formerly, Director, Stokely U.S.A.
PAUL E. HASSETT Formerly, Director, Newton Income Fund, $11,000
Age: 81 Inc. and Newton Growth Fund, Inc.;
1630 Capital Avenue Retired, formerly President, Wisconsin
Madison, WI Manufacturers and Commerce; formerly,
DIRECTOR Executive Secretary for Governor Warren
Knowles for three terms.
</TABLE>
* Retired as a Director, effective January 25, 1999.
Anticipated to retire as a Director, effective April 30, 1999.
NAMES AND ADDRESSES OF SERVICE PROVIDERS OF THE CORPORATION
INVESTMENT ADVISER: M&I Investment Management Corp.
1000 North Water Street
Milwaukee, Wisconsin 53202
ADMINISTRATOR: Federated Services Company
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
PRINCIPAL UNDERWRITER: Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
<PAGE>
MARSHALL FUNDS SHARE OWNERSHIP INFORMATION
At the close of business on the Record Date, the following persons owned
more than 5% of the outstanding shares of each Fund's outstanding shares:
EQUITY INCOME FUND
CLASS Y SHARES: Vallee & Co., Marshall & Ilsley Corporation Operations,
Milwaukee, Wisconsin, owned 21,171,944 shares (63.97%); and Mitra & Co.,
Marshall & Ilsley
Corporation Operations, Milwaukee, Wisconsin, owned 10,125,822 shares (30.59%).
CLASS A SHARES: Marshall & Ilsley Trust Company, Milwaukee, Wisconsin, owned 319
shares (52.56%); and Minnie L. Patrick, Milwaukee, Wisconsin, owned 288 shares
(47.44%).
LARGE-CAP GROWTH & INCOME FUND
CLASS Y SHARES: Mitra & Co., Marshall & Ilsley Corporation Operations,
Milwaukee, Wisconsin, owned 12,271,779 shares (53.63%); and Vallee & Co.,
Marshall & Ilsley Corporation Operations, Milwaukee, Wisconsin, owned 7,082,518
shares (30.95%). CLASS A SHARES: Marshall & Ilsley Trust Company, Milwaukee,
Wisconsin, owned 2,697 shares (58.71%); Paul and Harriet Ross, Kenosha,
Wisconsin, owned 1,119 shares (24.38%); and Minnie L. Patrick, Milwaukee,
Wisconsin, owned 273 shares (5.93%).
MID-CAP VALUE FUND
CLASS Y SHARES: Vallee & Co., Marshall & Ilsley Corporation Operations,
Milwaukee, Wisconsin, owned 6,820,773 shares (56.03%); and Mitra & Co., Marshall
& Ilsley Corporation Operations, owned 4,847,791shares (39.83%).
CLASS A SHARES: Marshall & Ilsley Trust Company, Milwaukee, Wisconsin,
owned 3,287 shares (100%).
MID-CAP GROWTH FUND
CLASS Y SHARES: Mitra & Co., Marshall & Ilsley Corporation Operations,
Milwaukee, Wisconsin, owned 8,623,382 shares (51.61%); and Vallee & Co.,
Marshall & Ilsley Corporation Operations, Milwaukee, Wisconsin, owned 7,229,889
shares (43.26%).
CLASS A SHARES: Federated Administrative Services, Pittsburgh,
Pennsylvania, owned 7 shares (100%).
SMALL-CAP GROWTH FUND
CLASS Y SHARES: Mitra & Co., Marshall & Ilsley Corporation Operations,
Milwaukee, Wisconsin, owned 4,264,714 shares (48.90%); Vallee & Co., Marshall &
Ilsley Corporation Operations, Milwaukee, Wisconsin, owned 2,933,159 shares
(33.63%); and Capinco & Co., Firstar Corporation Company, Milwaukee, Wisconsin,
owned 687,098 shares (7.88%).
CLASS A SHARES: Marshall & Ilsley Trust Company, Milwaukee, Wisconsin,
owned 3,054 shares (92%).
INTERNATIONAL STOCK FUND
CLASS Y SHARES: Mitra & Co., Marshall & Ilsley Corporation Operations,
Milwaukee, Wisconsin, owned 8,678,199 shares (47.64%); and Vallee & Co.,
Marshall & Ilsley Corporation Operations, Milwaukee, Wisconsin, owned 7,336,362
shares (40.28%). CLASS A SHARES: Marshall & Ilsley Trust Company, Milwaukee,
Wisconsin, owned 72 shares (90.16%); and Federated Administrative Services,
Pittsburgh, Pennsylvania, owned 8 shares (9.84%).
SHORT-TERM INCOME FUND (CLASS Y SHARES ONLY)
Mitra & Co., Marshall & Ilsley Corporation Operations, Milwaukee, Wisconsin,
owned 7,584,085 shares (53.91%); and Vallee & Co., Marshall & Ilsley Corporation
Operations, Milwaukee, Wisconsin , owned 5,525,520 shares (39.28%).
<PAGE>
INTERMEDIATE BOND FUND
CLASS Y SHARES: Vallee & Co., Marshall & Ilsley Corporation Operations,
Milwaukee, Wisconsin, owned 37,209,158 shares (58.72%); and Mitra & Co.,
Marshall & Ilsley Corporation Operations, Milwaukee, Wisconsin, owned 24,606,540
shares (38.83%).
CLASS A SHARES: Marshall & Ilsley Trust Company, Milwaukee, Wisconsin, owned
864 shares (98.84%).
GOVERNMENT INCOME FUND
CLASS Y SHARES: Mitra & Co., Marshall & Ilsley Corporation Operations,
Milwaukee, Wisconsin, owned 17,188,408 shares (53.85%); and Vallee & Co.,
Marshall & Ilsley Corporation Operations, Milwaukee, Wisconsin, owned 12,194,165
shares (38.21%). CLASS A SHARES: Marshall & Ilsley Trust Company, Milwaukee,
Wisconsin, owned 3,621 shares (94.41%); and Joan B. Rose, Milwaukee, Wisconsin,
owned 214 shares (5.58%).
INTERMEDIATE TAX-FREE FUND (CLASS Y SHARES ONLY)
Vallee, Marshall & Ilsley Corporation Operations, Milwaukee, Wisconsin, owned
9,959,770 shares (90.82%); and Mitra & Co., Marshall & Ilsley Corporation
Operations, Milwaukee, Wisconsin, owned 662,611 shares (6.04%).
MONEY MARKET FUND
CLASS Y SHARES: Maril & Co., Milwaukee, Wisconsin, owned 1,101,683,332
shares (62.28%).
CLASS A SHARES: M&I BSS, Appleton, Wisconsin, owned 58,021,062 shares (48.56%).
PROXIES, QUORUM AND VOTING AT THE MEETING
Only shareholders of record on the Record Date will be entitled to vote
at the Annual Meeting. All shares of each portfolio or class in the Corporation
have equal voting rights, except that only shares of a particular portfolio or
class are entitled to vote on matters affecting that portfolio or class.
Fractional shares are entitled to proportionate shares of one vote. Under both
the Investment Company Act of 1940, the favorable vote of a "majority of the
outstanding voting shares" of the Corporation or a Fund means: (a) the holders
of 67% or more of the outstanding voting securities present at the Annual
Meeting, if the holders of 50% or more of the outstanding voting securities of
the Corporation or a Fund are present or represented by proxy; or (b) the vote
of the holders of more than 50% of the outstanding voting securities, whichever
is less.
Any person giving a proxy has the power to revoke it any time prior to
its exercise by executing a superseding proxy or by submitting a written notice
of revocation to the Secretary of the Corporation. In addition, although mere
attendance at the Annual Meeting will not revoke a proxy, a shareholder present
at the Annual Meeting may withdraw his or her proxy and vote in person. All
properly executed and unrevoked proxies received in time for the Annual Meeting
will be voted in accordance with the instructions contained in the proxies. IF
NO INSTRUCTION IS GIVEN ON THE PROXY, THE PERSONS NAMED AS PROXIES WILL VOTE THE
SHARES REPRESENTED THEREBY IN FAVOR OF THE MATTERS SET FORTH IN THE ATTACHED
NOTICE.
In order to hold the Meeting, a "quorum" of shareholders must be
present. Holders of one-third of the total number of outstanding shares of the
Corporation, and the MID-CAP VALUE FUND and INTERNATIONAL STOCK FUND, present in
person or by proxy, shall be required to constitute a quorum for the purpose of
voting on the proposals made.
For purposes of determining a quorum for transacting business at the
Annual Meeting, abstentions and broker "non-votes" (that is, proxies from
brokers or nominees indicating that such persons have not received instructions
from the beneficial owner or other persons entitled to vote shares on a
particular matter with respect to which the brokers or nominees do not have
discretionary power) will be treated as shares that are PRESENT but which have
not been VOTED. For this reason, abstentions and broker non-votes will have the
effect of a "no" vote for purposes of obtaining the requisite approval of the
proposals.
If a quorum is not present or if the requisite number of shares under
the 1940 Act are not present to vote, the persons named as proxies may vote
those proxies which have been received to adjourn the Annual Meeting to a later
date. In the event that a quorum is present but sufficient votes in favor of one
or more of the proposals have not been received, the persons named as proxies
may propose one or more adjournments of the Annual Meeting to permit further
solicitations of proxies with respect to such proposal(s). All such adjournments
will require the affirmative vote of a majority of the shares present in person
or by proxy at the session of the Meeting to be adjourned. The persons named as
proxies will vote against any such adjournment those proxies which they are
required to vote AGAINST the proposal and will vote in FAVOR of the adjournment
other proxies which they are entitled to vote. A shareholder vote may be taken
on other proposals in this Proxy Statement prior to any such adjournment if
sufficient votes have been received for approval.
G02602-01
<PAGE>
Exhibit 1
SUBADVISORY CONTRACT
AGREEMENT made as of the 29th day of March, 1999 by and between
M&I Investment Management Corp., an investment adviser registered under the
Investment Advisers Act of 1940, organized under the laws of Wisconsin and
having its principal place of business in Milwaukee, Wisconsin (the "Adviser"),
and BPI Global Asset Management, LLP, a limited liability partnership organized
under the laws of Delaware (the "Subadviser").
WITNESSTH
WHEREAS, Marshall Funds, Inc. (the "Corporation") is an open-end,
management investment company, registered under the Investment Company Act of
1940, as amended (the "1940 Act"), the Corporation has eleven (11) Portfolios
including the Marshall International Stock Fund (the "Fund") and the Subadviser
is an investment adviser registered under the Investment Advisers Act of 1940
(the "Advisers Act"), and
WHEREAS, pursuant to authority granted the Adviser by the
Corporation's Directors and pursuant to the provisions of the Investment
Advisory Contract dated October 1, 1992 between the adviser and the Corporation
with respect to the Fund (the "Advisory Contract"), the Adviser has selected the
Subadviser to act as a sub-investment adviser of the Fund and to provide certain
other services, as more fully set forth below, and to perform such services
under the terms and conditions hereinafter set forth,
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, it is agreed as follows:
1. THE SUBADVISER'S SERVICES.
(a) Within the framework of the fundamental policies, investment
objectives, and investment restrictions of the Fund, and subject
to the supervision and review of the Adviser and of the Directors
of the Corporation, the Subadviser shall have the sole and
exclusive responsibility for the making and execution of all
investment decisions for that portion or all of the Fund's
portfolio as designated by the Adviser (the "Portfolio"),
including the purchase, retention and disposition of securities,
in accordance with the Fund's investment objectives, policies and
restrictions as stated in the Corporation's Registration
Statement, including the Prospectus and Statement of Additional
Information (such Registration Statement, as currently in effect
and as amended or supplemented from time to time, collectively
called the "Prospectus") and subject to the following
understandings:
(i) The Subadviser shall supervise the Portfolio's investments
and determine from time to time what securities will be
purchased, retained, sold or loaned by the Portfolio, and
what portion of the assets will be invested or held
uninvested as cash.
(ii) In performance of its duties and obligations under this
Agreement, the Subadviser shall act in conformity with the
Corporation's Articles of Incorporation and By-Laws and
the Fund's Prospectus and with the instructions and
directions received in writing from the Adviser or the
Directors of the Corporation and will conform to and
comply with the requirements of the 1940 Act, the Internal
Revenue Code of 1986, as amended (including the
requirements for qualification as a regulated investment
company) and all other applicable federal and state laws
and regulations.
(b). The Subadviser shall not be responsible for the provision of
administrative, bookkeeping or accounting services to the Fund,
except as otherwise provided herein or as may be necessary for
the Subadviser to supply to the Adviser, the Corporation or its
Directors the information required to be supplied under this
Contract.
The Subadviser shall maintain separate books and detailed records
of all matters pertaining to the Fund and the Portfolio (the
"Fund's Books and Records"), including without limitation a daily
ledger of such assets and liabilities relating thereto and
brokerage and other records of all securities transactions. The
Subadviser shall also require that its Access Persons (as defined
in the Corporation's Code of Ethics) provide the Subadviser with
monthly reports of their personal securities transactions. The
Fund's Books and Records shall be available by overnight delivery
of copies or for telecopying without delay to the Adviser during
any day that the Fund is open for business, upon reasonable
notice to the Subadviser.
(c). The Subadviser shall determine the securities to be purchased or
sold by the Fund in respect of the Portfolio and will place
orders with or through such persons, brokers or dealers to carry
out the policy with respect to brokerage as set forth in the
Fund's Prospectus or as the Directors may direct from time to
time. Subject to the provisions of the following paragraph, the
Subadviser will take reasonable steps to assure that Portfolio
transactions are effected at the best price and execution
available, as such phrase is used in the Fund's Prospectus, as in
effect from time to time.
In using its best efforts to obtain for the Fund the most
favorable price and execution available, the Subadviser, bearing
in mind the Fund's best interests at all times, shall consider
all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for
the security, the amount of the commission, the timing of the
transaction taking into account market prices and trends, the
reputation, experience and financial stability of the broker or
dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the
Directors of the Corporation may determine, the Subadviser is
specifically authorized to allocate brokerage business to firms
that provide such services or facilities and to cause the Fund to
pay a member of a securities exchange or any other securities
broker or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission
another member of an exchange, broker, or dealer would have
charged for effecting that transaction, if the Subadviser
determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research
services (as such services are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided by such member, broker,
or dealer, viewed in terms either of that particular transaction
or the Subadviser's overall responsibilities with respect to the
accounts as to which it exercises investment discretion.
Consistent with the foregoing paragraph, nothing in this
agreement is intended to inhibit the Subadviser's selection of
broker-dealers used to execute trades for the Fund, including
trades placed with broker-dealers who provide investment research
services to the Subadviser. Such research services may include,
but are not limited to, advice provided either directly or
through publications or writings, including electronic
publications, telephone contacts and personal meetings with
security analysts, economists and corporate and industry
spokespersons, and analyses and reports concerning issues,
industries, securities economic factors and trends, accounting
and tax law interpretations and political developments. Research
so provided is in addition to and not in lieu of the services
required to be performed by the Subadviser.
It is understood that the Subadviser may have advisory,
management, service or other contracts with other individuals or
entities, and may have other interests and businesses. When a
security proposed to be purchased or sold for the Fund is also
being purchased or sold for other accounts managed by the
Subadviser at the same time, the Subadviser shall make such
purchases or sales on a pro-rata, rotating or other equitable
basis so as to avoid any one account being systematically
preferred over any other account.
The Subadviser will advise the Adviser and, if instructed by the
Adviser, the Fund's custodian or sub-custodians on a prompt basis
each day by electronic telecommunication of each confirmed
purchase and sale of a Portfolio security specifying the name of
the issuer, the full description of the security including its
class, and amount or number of shares of the security purchased
or sold, the market price, commission, government charges and
gross or net price, trade date, settlement date and identity of
the clearing broker. Under no circumstances may the Subadviser or
any affiliates of the Subadviser act as a principal in a
securities transaction with the Fund or any other investment
company managed by the Adviser unless (i) permitted by an
exemptive provision, rule or order under the 1940 Act and (ii)
upon obtaining prior approval of the securities transaction from
the Adviser. Any such transactions shall be reported quarterly to
the Corporation's Directors.
(d). From time to time as the Adviser or the Directors of the
Corporation may reasonably request, the Subadviser shall furnish
to the Adviser and to each of the Corporation's Directors reports
of Portfolio transactions and reports on securities held in the
Portfolio, all in such detail as the Adviser or the Directors may
reasonably request. The Subadviser will also promptly inform the
Adviser and the Corporation's Directors of changes in investment
strategy or tactics or in key personnel.
It shall be the duty of the Subadviser to furnish to the
Corporation's Directors such information as may reasonably be
necessary in order for such Directors to evaluate this Contract
or any proposed amendments thereto for the purpose of casting a
vote pursuant to Section 8 or 9 hereof.
2. ALLOCATION OF CHARGES AND EXPENSES. The Subadviser will bear its own costs of
providing services hereunder. Other than as specifically indicated herein the
Subadviser shall not be responsible for the Corporation's or the Adviser's
expenses, including, without limitation, the expenses of organizing the
Corporation and continuing its existence; fees and expenses of Directors and
officers of the Corporation; fees for investment advisory services and
administrative personnel and services, expenses incurred in the distribution of
its shares ("Shares"), including expenses of administrative support services,
fees and expenses of preparing and printing its Registration Statements under
the Securities Act of 1933 and the 1940 Act, and any amendments thereto,
expenses of registering and qualifying the Corporation, the Fund and Shares of
the Fund under federal and state laws and regulation; expenses of preparing,
printing and distributing prospectuses (and any amendments thereto) to
shareholders, interest expense, taxes, fees and commissions of every kind,
expenses of issue (including cost of Share certificates), purchase, repurchase
and redemption of Shares including expenses attributable to a program of
periodic issue, charges and expenses of custodians, transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars, printing and
mailing costs, auditing, accounting and legal expenses; reports to shareholders
and governmental officers and commissions; expenses of meetings of Directors and
shareholders and proxy solicitations in connection with such meetings; insurance
expenses; association membership dues and such nonrecurring items as may arise,
including all losses and liabilities incurred in administrating the Corporation
and the Fund. The Corporation or the Adviser, as the case may be, shall
reimburse the Subadviser for any such expenses or other expenses of the Fund or
the Adviser, as may be reasonably incurred by such Subadviser on behalf of the
Fund or the Adviser. The Subadviser shall keep and supply to the Corporation and
the Adviser adequate records of all such expenses.
3. INFORMATION SUPPLIED BY THE ADVISER. The Adviser shall provide the Subadviser
with the Corporation's Articles of Incorporation and By-Laws, the Fund's most
current Prospectus and Statement of Additional Information, and the
Corporation's Code of Ethics and instructions, policies and directions of the
Directors of the Corporation pertaining to the Adviser and the Fund, as in
effect from time to time; and the Subadviser shall have no responsibility for
actions taken in reliance on any such documents. The Adviser shall promptly
furnish to the Subadviser copies of all material amendments or supplements to
the foregoing documents.
4. REGISTRATION AS AN ADVISER. The Adviser and the Subadviser represent and
warrant to each of the Corporation and each other that they are registered as an
"investment adviser" under the Advisers Act and covenant that they will remain
so registered for the duration of this Contract.
5. SUBADVISER'S COMPENSATION. The Adviser shall pay to the Subadviser, as
compensation for the Subadviser's services hereunder 0.40% per annum of the
Fund's average daily net assets ("Sub-Advisory Fee"). Such fee shall be computed
daily and paid monthly. The method of determining net assets of the Fund for
purposes hereof shall be the same as the method of determining net assets for
purposes of establishing the offering and redemption price of Fund shares as
described in the Fund's Prospectus. If this Contract shall be effective for only
a portion of a month, the aforesaid fee shall be prorated for the portion of
such month during which this contract is in effect.
Notwithstanding any other provision of the Contract, the
Subadviser may from time to time agree not to impose all or any portion of its
fee otherwise payable hereunder (in advance of the time such fee or portion
thereof would otherwise accrue). Any such fee reduction may be discontinued or
modified by the Subadviser at any time.
6. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder,
the Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Corporation in any way or otherwise be
deemed to be an agent of the Corporation or of the Adviser.
7. SALES LITERATURE. The Adviser and Subadviser acknowledge that all
sales literature for investment companies (such as the Corporation) are subject
to strict regulatory oversight. The Subadviser agrees to submit any proposed
sales literature for the Corporation (or any Fund) or for itself or its
affiliates which mentions the Corporation (or any Fund) to the Corporation's
distributor for review and filing with the appropriate regulatory authorities
prior to the public release of any such sales literature, provided, however,
that nothing herein shall be construed so as to create any obligation or duty on
the part of the Subadviser to produce sales literature for the Corporation (or
any Fund). Further, the Adviser agrees to submit to the Subadviser any and all
sales literature referencing Subadviser by name or any affiliate of Subadviser
for review and approval prior to filing or public release.
8. ASSIGNMENT AND AMENDMENTS. This Contract may not be assigned by the
Subadviser and shall automatically terminate, without the payment of any
penalty, in the event (i) its assignment, including any change of control of the
Adviser or the Subadviser, or (ii) in the event of the termination of the
Advisory Contract, provided that such termination shall not relieve the Adviser
or the Subadviser of any liability incurred hereunder. The Subadviser, as a
limited liability partnership, will promptly notify Adviser of any change in the
membership of Subadviser.
The terms of this Contract shall not be changed unless such
change is approved at a meeting by the affirmative vote of a majority of the
outstanding voting securities of the Fund and unless also approved by the
affirmative vote of a majority of Directors of the Corporation voting in person,
including a majority of the Directors who are not interested persons of the
Corporation, the Adviser or the Subadviser, at a meeting called for the purpose
of voting at such change.
9. DURATION AND TERMINATION. This Contract shall become effective as of the date
first above written and shall terminate 120 days from such date of execution,
unless this Contract is approved by shareholders of the Fund. Upon such
shareholder approval, this contract shall remain in full force and effect
continually thereafter unless terminated automatically as set forth in Section 8
hereof or until terminated as follows:
(a) The Corporation or the Adviser may at any time terminate this
Contract, without payment of any penalty, on sixty (60) days'
written notice delivered or mailed by registered mail, postage
prepaid, to the Subadviser. Action of the Corporation under this
Subsection may be taken either (i) by vote of its Directors or
(ii) by the affirmative vote of a majority of the outstanding
voting securities of the Fund.
(b) The Subadviser may at any time terminate this Contract by not less than
sixty (60) days' written notice delivered or mailed by registered mail,
postage prepaid, to the Adviser; or
(c) This Contract shall automatically terminate on May 1, of any year
beginning in 2000, in which its terms and renewal shall not have
been approved by (i) a majority vote of the Directors of the
Corporation voting in person, including a majority of the
Directors who are not interested persons of the Corporation, the
Adviser or the Subadviser, at a meeting called for the purpose of
voting on such approval or (ii) the affirmative vote of a
majority of the outstanding voting securities of the Fund;
provided, however, that if the continuance of this Contract is
submitted to the shareholders of the Fund for their approval and
such shareholders fail to approve such continuance of this
contract as provided herein, the Subadviser may continue to serve
hereunder as to the Fund in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
(d) Termination of this Contract pursuant to this Section shall be
without payment of any penalty.
(e) In the event of termination of this Contract for any reason, the
Subadviser shall, immediately upon notice of termination or on
such later date as may be specified in such notice, cease all
activity on behalf of the Fund and with respect to any of its
assets, except as expressly directed by the Adviser. In addition,
the Subadviser shall deliver the Fund's Books and Records to the
Adviser by such means and in accordance with such schedule as the
Adviser shall direct and shall otherwise cooperate, as reasonably
directed by the Adviser, in the transition of portfolio assets
management to any successors of the Subadviser, including the
Adviser.
10. CERTAIN DEFINITIONS. For the purposes of this Contract:
(a) "Affirmative vote of a majority of the outstanding voting
securities of the Fund" means the affirmative vote, at an annual
or Annual meeting of shareholders of the Fund, duly called and
held, (a) of 67% or more of the shares of the Fund present (in
person or by proxy) and entitled to vote at such meeting, if the
holder or more than 50% of the outstanding shares of the Fund
entitled to vote at such meeting are present (in person or by
proxy), or (b) of more than 50% of the outstanding shares of the
Fund entitled to vote at such meeting, whichever is less.
(b) "Interested persons" and "Assignment" shall have their respective meanings
as set forth in the 1940 Act, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission under said Act.
11. STANDARD OF CARE, LIABILITY AND INDEMNIFICATION.
(a) The Subadviser shall exercise its best judgment in rendering the
services provided by it under this contract. In the absence of
willful misfeasance, bad faith or gross negligence on the part of
the Subadviser, or of reckless disregard of its obligations and
duties hereunder, the Subadviser shall not be subject to any
liability to the Adviser or the Corporation, to any shareholder
of the Fund, or to any person, firm or organization, for any act
or omission in the course of, or connected with the rendering of
services by Subadviser. Nothing herein, however, shall derogate
from the Subadviser's obligations under federal and state
securities laws.
(b) The Subadviser shall indemnify and hold the Adviser harmless from
and against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liabilities arising out of or
attributable to any action or failure or omission to act by the
Subadviser as a result of the Subadviser's willful misfeasance,
bad faith, gross negligence or reckless disregard of its
obligations and duties hereunder.
(c) The Adviser shall indemnify and hold the Subadviser harmless from
and against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liabilities arising out of or
attributable to any action or failure or omission to act by the
Adviser as a result of the Adviser's willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations
and duties hereunder.
12. JURISDICTION. This Contract shall be governed by and construed to be
consistent with the Advisory Contract and in accordance with substantive laws of
the State of Wisconsin without giving regard to the conflicts of law principals
thereof and in accordance with the 1940 Act. In the case of any conflict between
state law and the 1940 Act, the 1940 Act shall control.
13. COUNTERPARTS. This Contract may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14. MISCELLANEOUS.
(a) Subadviser is a limited liability partnership formed under
Delaware law. Subadviser will notify the Adviser of any changes
in the membership of such partnership within a reasonable time
after such changes.
(b) Adviser acknowledges having received, not less than 48 hours
prior to entering into this Investment Advisory Agreement, and
reviewed the Subadviser's most recent Form ADV.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be signed on behalf by their duly authorized officers as the date
first above written.
M&I INVESTMENT MANAGEMENT CORP.
/S/ M.A. HATFIELD By /S/ DAVID W. SCHULZ
ATTEST: Secretary President
BPI GLOBAL ASSET MANAGEMENT, LLP.
/S/ STUART D. WAUGH By /S/ RYAN R. BURROW
ATTEST: Secretary President
[LOGO]
[Account Number]
MARSHALL FUNDS, INC.
Proxy for Special Meeting of Shareholders April 30, 1999
The undersigned hereby appoints Brooke J. Billick, John M. Blaser, John
V. Gray and David W. Schulz as proxies to vote and act at the Special Meeting of
Shareholders of the Marshall Funds, Inc. (Corporation), to be held at the
offices of the Corporation at 770 North Water Street, 3rd Floor, Milwaukee,
Wisconsin, at 8:00 a.m. (Central time) on April 30, 1999and at all adjournments
thereof, in respect of all Shares of the Corporation as to which the undersigned
may be entitled to vote or act. Each proxy shall have power of substitution and
a majority of said proxies or their substitutes, or any one if only one be
present and acting, shall have all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth on this side of this
proxy. If no choice is indicated as to a proposal, the proxies shall vote FOR
such proposal. Each of the matters is proposed by the Corporation, and none of
the matters are related to or conditioned on the approval of any other matter.
The proxies may vote in their discretion on any other matter which may properly
come before the meeting.
SPECIAL VOTING INSTRUCTIONS: All shareholders should vote on proposals 1 and 2.
ONLY Marshall Mid-Cap Value Fund shareholders may vote on proposal 3. ONLY
Marshall International Stock Fund shareholders may vote on proposal 4.
Please sign and return.
The proxies are hereby instructed to vote as specified.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Please indicate any fiduciary titles. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. KEEP THIS
PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
MARSHALL FUNDS, INC.
ELECTION OF DIRECTORS ___ FOR all nominees
(1) J. DeVincentis, J. Mitchell, D. Dingmann, B. Pope,
___ Withheld authority for all nominees
J. Blaser, D. Schulz
___ To withhold authority to vote, mark "For All
Nominees Except" and write the nominee's name on
the line below.
----------------------------------------------
INDEPENDENT PUBLIC ACCOUNTANTS
(2) Ratification of the selection of Arthur Andersen LLP as Independent Public
Accountants for the Corporation
FOR [ ]
AGAINST[ ]
ABSTAIN[ ]
MARSHALL MID-CAP VALUE FUND SHAREHOLDERS ONLY - INVESTMENT OBJECTIVE
(3) To approve or disapprove an amendment to the Fund's fundamental investment
objective
FOR [ ]
AGAINST[ ]
ABSTAIN[ ]
MARSHALL INTERNATIONAL STOCK FUND SHAREHOLDERS ONLY - SUB-ADVISORY CONTRACT
(4) To approve or disapprove the Sub-Advisory Contract between M&I Investment
Management Corp. and BPI Global Asset Management LLP, on behalf of the Fund
FOR [ ]
AGAINST[ ]
ABSTAIN[ ]
x x________________________ _______
Signature (Sign here exactly as name(s)
appear above.) Signature (Joint Owners) Date
