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]
Check the appropriate box:
[X] Preliminary proxy statement [ ] Confidential, for Use
of the Commission
Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
The PanAgora Institutional Funds
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(Name of Registrant as Specified in Its Charter
The PanAgora Institutional Funds
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(Name of Person(s) Filing Proxy Statement)
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THE PANAGORA INSTITUTIONAL FUNDS
Panagora Asset Allocation Fund
Panagora International Equity Fund
260 Franklin Street
Boston, Massachusetts 02109
1-800-423-6041
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
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To Be Held [ ], 1998
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of the PanAgora Asset Allocation Fund and the PanAgora International
Equity Fund (each a "Fund" and collectively the "Funds") will be held at the
offices of Hale and Dorr LLP, counsel to the Trust, at 60 State Street, 26th
Floor, Boston, Massachusetts 02109, at 2:00 p.m. (Boston time) on [ ], 1998.
Each Fund is a series of The PanAgora Institutional Funds, a Massachusetts
business trust (the "Trust"). The purpose of the Meeting is to consider and act
upon the following proposals:
(1) To approve the terms of a new Investment Management Agreement
between each Fund and PanAgora Asset Management, Inc.;
(2) To ratify the selection of Coopers & Lybrand LLP as
independent public accountants for each Fund for the fiscal
year ending May 31, 1998; and
(3) To transact such other business as may properly come before
the Meeting or any adjournments thereof.
Your Board of Trustees Recommends that You Vote in Favor of Proposals (1) and
(2)
Shareholders of record as of the close of business on [ ],
1997 are entitled to notice of and to vote at the Meeting or any adjournment
thereof.
By Order of the Board of Trustees,
Andrew S. Josef, Secretary
[ ], 1997
Boston, Massachusetts
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND
RETURN THE ENCLOSED FORM OF PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY STILL VOTE IN PERSON IF YOU
ATTEND THE MEETING.
<PAGE>
THE PANAGORA INSTITUTIONAL FUNDS
PanAgora Asset Allocation Fund
PanAgora International Equity Fund
260 Franklin Street
Boston, Massachusetts 02109
1-800-423-6041
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
To Be Held [ ], 1998
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Trustees of The PanAgora Institutional Funds (the
"Trust"), a Massachusetts business trust. The proxies will be used at the
Special Meeting of Shareholders (the "Meeting") of the two series of the Trust,
the PanAgora Asset Allocation Fund and the PanAgora International Equity Fund
(each a "Fund" and collectively the "Funds"), to be held on [day], [ ], 1998 at
2:00 p.m. (Boston time). The Meeting will be held at the offices of Hale and
Dorr LLP, counsel to the Fund, at 60 State Street, 26th Floor, Boston,
Massachusetts 02109.
The Board of Trustees (the "Board") has fixed the close of business on
[ ], 1997 as the record date for the determination of shareholders of each Fund
entitled to notice of and to vote at the Meeting. On the record date,
_______________ shares of beneficial interest of the PanAgora Asset Allocation
Fund were outstanding and ___________________ shares of beneficial interest of
the PanAgora International Equity Fund were outstanding.
On the record date, the Trustees and Officers of the Trust owned less
than 1% of each Fund's outstanding shares. The following shareholders were
deemed to be the beneficial owners of more than 5% of each Fund's shares as of
the record date:
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of the Fund
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PanAgora Asset Allocation Fund
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Kessler Institute for Rehabilitation
1199 Pleasant Valley Way
West Orange, NJ 07052
Information Alliance Pension Plan Trust
Box 3079
Pittsfield, MA 01202
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Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of the Fund
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American Express Trust Company
FBO American Express Trust
Retirement Services Plans
c/o Nancy Jendro N10/996
P. O. Box 534
Minneapolis, MN 55440-0534
PanAgora International Equity Fund
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Bankers Trust TR
Premark Retirement Savings Plan
34 Exchange Place
Jersey City, NJ 07302
Northwest Bank Minnesota
as custodian for
The Minneapolis Foundation Investment
Partnership
733 Marquette Avenue
Minneapolis, MN 55479-0036
Electric Energy Inc.
Employees Revised Retirement Plan
c/o Boston Safe Deposit Trust Company
One Cabot Road
Medford, MA 02155
This Proxy Statement, the attached Notice and the enclosed proxy card
will be mailed to shareholders of each Fund on or about [ ], 1997. EACH FUND'S
ANNUAL REPORT FOR THE FISCAL YEAR ENDED MAY 31, 1997 HAS PREVIOUSLY BEEN MAILED
TO SHAREHOLDERS. ADDITIONAL COPIES OF EACH ANNUAL REPORT MAY BE OBTAINED FREE OF
CHARGE FROM FUNDS DISTRIBUTOR, INC., THE TRUST'S DISTRIBUTOR, BY CALLING
1-800-432-6041 OR WRITING TO THE ADDRESS ON THE FRONT COVER.
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PROPOSAL 1
APPROVAL OF NEW INVESTMENT MANAGEMENT AGREEMENTS
INTRODUCTION
PanAgora Asset Management, Inc. ("PanAgora") acts as the investment
manager to each Fund pursuant to investment management agreements entered into
by each Fund and PanAgora (each a "Current Investment Management Agreement" and
collectively the "Current Investment Management Agreements"). Each of Lehman
Brothers, Inc. ("Lehman") and Nippon Life Insurance Company ("Nippon Life") own
50% of the outstanding common stock of PanAgora. On November 25, 1997, Putnam
Investments, Inc. ("Putnam") entered into an agreement with Lehman pursuant to
which Putnam has agreed to purchase the 50% equity interest in PanAgora owned by
Lehman (the "Transaction"). Following completion of the Transaction, PanAgora
will be owned jointly by Putnam and Nippon Life.
Consummation of the Transaction may constitute an "assignment," as that
term is defined in the Investment Company Act of 1940, as amended (the "1940
Act"), of each of the Current Investment Management Agreements. As required by
the 1940 Act, each of the Current Investment Management Agreements provides for
its automatic termination in the event of its assignment. In anticipation of the
Transaction, a new investment management agreement (each a "New Investment
Management Agreement" and collectively the "New Investment Management
Agreements") between each Fund and PanAgora is being proposed for approval by
shareholders of each Fund. The New Investment Management Agreement for each Fund
is identical to the corresponding Current Investment Management Agreement in all
respects except for the date on which each Agreement takes effect and the date
on which each Agreement must initially be renewed by the Trustees of the Trust.
THE APPROVAL OF THIS PROPOSAL BY THE SHAREHOLDERS OF EACH FUND WILL NOT RESULT
IN AN INCREASE IN THE RATE OF THE MANAGEMENT FEE OR OTHER EXPENSES PAYABLE BY
EACH FUND.
BOARD OF TRUSTEES RECOMMENDATION
On October 8, 1997, the Board, including the Trustees who are not
parties to either New Investment Management Agreement and are not "interested
persons" (as defined under the 1940 Act) of PanAgora, Putnam or Lehman (the
"Independent Trustees"), voted to approve the New Investment Management
Agreements and to recommend their approval to shareholders. The Board recommends
that the shareholders of each Fund vote in favor of the approval of the New
Investment Management Agreements.
For information about the factors the Board considered in making its
recommendation, please see "Board of Trustees' Evaluation" below.
INFORMATION ABOUT THE TRANSACTION
PanAgora is a registered investment adviser with approximately $15
billion in assets under management as of October 30, 1997. Fifty percent of
PanAgora's outstanding voting stock is owned by Nippon Life, 2-2 Yurakucho
1-chrome Chiyoda-KU, Tokyo, 100, Japan, and
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the remaining fifty percent is currently owned by Lehman, 3 World Financial
Center, 200 Vesey Street, New York, New York 10285.
On November 25, 1997, Putnam signed a purchase and sale agreement with
Lehman pursuant to which Putnam will purchase Lehman's entire holding of
PanAgora stock, together with Lehman's 50% interest in an investment adviser
based in the United Kingdom and also jointly owned by Nippon Life. Pursuant to
the terms of the agreement, the Transaction is subject to certain conditions
being satisfied prior to closing, including the approval by clients whose
advisory contracts represent at least 85% of PanAgora's advisory fee revenues.
If the Transaction is consummated, Putnam will acquire 50% of the
outstanding voting stock of PanAgora, which may be deemed to constitute a change
in control of PanAgora. A change in control of PanAgora would constitute an
"assignment" of each Current Investment Management Agreement and would result in
the automatic termination of those Agreements. In order to eliminate any
uncertainty as to the effectiveness of the investment advisory arrangements for
the Funds following the Transaction, the Board has approved and presents to the
shareholders of each Fund for their approval New Investment Management
Agreements.
Putnam provides investment management services to mutual funds and
other institutional investors. As of November 1, 1997, Putnam's assets under
management were in excess of $200 billion.
Putnam has advised PanAgora and the Board that it does not expect the
Transaction to have an adverse effect on operations of PanAgora or on PanAgora's
ability to provide high quality advisory services to its clients. In addition,
Putnam anticipates that all of PanAgora's investment advisory personnel and
management team will continue in their present capacities after the Transaction.
All fees and expenses incurred by the Funds relating to the New Investment
Management Agreements and this Proxy Statement will be paid by Putnam and
Lehman. None of the Trust, the Funds or their shareholders will incur any
related expenses.
DESCRIPTION OF CURRENT AND PROPOSED AGREEMENTS
EXCEPT FOR ITS DATE OF EFFECTIVENESS AND DATE OF RENEWAL, EACH NEW
INVESTMENT MANAGEMENT AGREEMENT IS IDENTICAL IN ALL RESPECTS TO ITS
CORRESPONDING CURRENT INVESTMENT MANAGEMENT AGREEMENT.
Under each of the Current and New Investment Management Agreements,
PanAgora provides each Fund, subject to the supervision of the Board, with
continuing investment management services. PanAgora's responsibilities include
the purchase, retention and disposition of each Fund's portfolio securities and
other assets. In addition, PanAgora administers certain of the Trust's business
affairs, performs various shareholder servicing functions to the extent these
services are not provided by other organizations and monitors and evaluates the
performance of the Trust's service providers. For these services, the Trust, on
behalf of each Fund, pays PanAgora a monthly fee at the following annual rates
of each
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Fund's average daily net assets which was equal to the following aggregate
amounts for the most recent fiscal year ended May 31, 1997:
<TABLE>
<CAPTION>
Management
Accrued Fee Absent
Management Management Expense
Fund Assets Fee Rate Fee Paid Limitation
---- ------ -------- -------- ----------
<S> <C> <C> <C> <C>
PanAgora Asset Allocation Fund 36,081,000 0.60% -0-* $ 99,468*
PanAgora International Equity 26,496,000 0.80% -0-* $ 191,889*
Fund
</TABLE>
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* PanAgora has voluntarily agreed to waive all or a portion of its
advisory fee and to limit the expenses of each Fund to the extent
necessary to limit each Fund's total operating expenses to 0.90% of the
average daily net assets of the Asset Allocation Fund and to 1.10% of
the average daily net assets of the International Equity Fund.
The Trust, on behalf of each Fund, is responsible for all expenses
other than those expressly assumed by PanAgora under the terms of the Current or
New Investment Management Agreement for each Fund. The expenses borne by each
Fund include the Fund's advisory fee, transfer agent fee and taxes and its
proportionate share of custodian fees, administration fees, expenses of issuing
reports to shareholders, legal fees, auditing and tax fees, blue sky fees, fees
of the Securities and Exchange Commission, insurance expenses and Independent
Trustees fees.
Each of the Current and New Investment Management Agreements provides
that it will continue in effect for an initial term of two years from its date
of execution (which, in the case of the New Investment Management Agreements, is
expected to be approximately the time of the consummation of the Transaction)
and thereafter so long as it is approved at least annually in accordance with
the 1940 Act. The 1940 Act requires that, after the initial two-year term, all
investment management agreements be approved at least annually by (i) the vote,
cast in person at a meeting called for that purpose, of a majority of the
Independent Trustees and (ii) the majority vote of the full Board or the vote of
a majority of the outstanding voting securities (as defined in the 1940 Act) of
each Fund. Each of the Current and New Investment Management Agreements
terminates automatically in the event of its assignment, and may be terminated
by the Trust at any time without penalty on 60 days' written notice to PanAgora
and by PanAgora without penalty on 60 days' written notice to the Trust. Each of
the Current and New Investment Management Agreements generally may be amended
only by the affirmative vote of the holders of a "majority of the outstanding
voting securities" of each Fund.
The Board last approved the continuance of each Current Investment
Management Agreement at a meeting held on October 8, 1997 for the one year
period beginning October 31, 1997. The sole initial shareholder of the PanAgora
Asset Allocation Fund and the sole initial shareholder of the PanAgora
International Equity Fund approved their respective Current Investment
Management Agreements on [ ], 1993. The Current Investment Management Agreement
for the Panagora Asset Allocation Fund is dated May 19, 1993. The
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Current Investment Management Agreement for the Panagora International Equity
Fund is dated May 31, 1993.
The Current and New Investment Management Agreements provide that
PanAgora shall not be liable for any error in judgment or mistake of law or for
any loss suffered by the Trust or either Fund in connection with the performance
of PanAgora's obligations under its agreement with the Trust, except a loss
resulting from wilful misfeasance, bad faith or gross negligence on the part of
PanAgora in the performance of its duties or from reckless disregard of its
obligations and duties.
BOARD OF TRUSTEES' EVALUATION
The Trustees, including the Independent Trustees, reviewed all
materials provided by PanAgora, Putnam, and its affiliates, and requested and
received all information which they deemed relevant to form a judgment as to
whether the New Investment Management Agreements are in the best interests of
each Fund and its shareholders.
A primary consideration of the Independent Trustees was Putnam's
representation that it expects no reduction in the scope and quality of advisory
and other services to be provided by PanAgora under each New Investment
Management Agreement from that provided by PanAgora under the Current Investment
Management Agreements. The Independent Trustees considered the fact that each
New Investment Management Agreement would, except for the dates of effectiveness
and initial renewal, have terms and conditions identical to those of the Current
Investment Management Agreements. The Independent Trustees also considered
certain representations of PanAgora and Putnam, described below, with respect to
their plans for each Fund.
The Trustees determined that the advisory fee rates under the Current
and New Investment Management Agreements represent fee rates negotiated at
arm's-length between each Fund and PanAgora based on a variety of factors,
including the nature and quality of the services provided by PanAgora to each
Fund and the reasonableness of the overall compensation paid by each Fund to
PanAgora. The Trustees also noted that PanAgora may receive research services
from brokers in connection with portfolio securities transactions for each Fund.
The Trustees realize that research services furnished by brokers through which
the Fund affects securities transactions may be used by PanAgora in advising
other accounts that it advises. Conversely, research services furnished to
PanAgora in connection with other accounts PanAgora advises may be used by
PanAgora in advising each Fund. However, no material change in brokerage
arrangements is contemplated to result from the approval of the New Investment
Management Agreements.
PanAgora also furnished the Independent Trustees with information
regarding the Transaction, including information regarding the terms of the
Transaction and information regarding Putnam and its subsidiaries. PanAgora
advised the Independent Trustees that it did not expect that the Transaction
would have a material effect on the operations of the Funds or their
shareholders. Putnam also advised the Independent Trustees that the purchase and
sale agreement for the Transaction, by its terms, does not contemplate any
changes in the structure or operations of PanAgora, the Funds or the Trust.
Putnam
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representatives have informed the Trustees that both Putnam and PanAgora
currently intend to maintain the separate existence of the Funds and the Trust,
and intend not to change the advisory personnel and management team of PanAgora.
On October 8, 1997, the Trustees of the Trust, including the
Independent Trustees, unanimously approved the New Investment Management
Agreements.
ADDITIONAL INFORMATION
The principal executive officers and directors of PanAgora are: Richard
A. Crowell, Vice Chairman; Bruce Clarke, President, Chief Operating Officer and
a Director; Michael Turpin, Treasurer and Director of Finance and
Administration; and Peter Rathjens, Director of Global Investments. Edgar
Peters, Paul Samuelson, Rudolph Petralia, Karen Muller, Haruaki Deguchi, Ian
Lowitt, Masahiro Yamada and Hideichiro Kobayashi are all Directors of PanAgora.
Mr. Crowell is also President of the Trust.
The Trust's administrator is Investors Bank & Trust Company, 200
Clarendon Street, Boston, Massachusetts 02116. The principal underwriter for the
continuous offering of shares of the Funds is Funds Distributor, Inc., 60 State
Street, Boston, Massachusetts 02109.
PanAgora serves as the subadviser to the Preferred Asset Allocation
Fund (the "Preferred Fund") with net assets of approximately $[ ] as of June 30,
1997. The Preferred Fund is a series of The Preferred Group of Mutual Funds, a
registered open-end investment company. PanAgora receives a fee based on that
portion of the assets of the Preferred Fund which are subadvised by PanAgora.
The subadvisory fee is calculated based on the average quarterly net asset value
determined as of the last business day of each month in the calendar quarter at
the annual rate of 0.50% of the first $10 million of assets, 0.40% of the next
$40 million of assets, 0.20% of the next $50 million of assets and 0.10% of the
assets in excess of $100 million.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of each Fund by PanAgora pursuant to authority contained in the
Current and New Investment Management Agreements. In selecting brokers or
dealers, PanAgora considers factors relating to execution on the best overall
terms available, including, but not limited to: the size and type of the
transaction; the nature and character of the markets of the security to be
purchased or sold; the execution efficiency, settlement capability and financial
condition of the dealer; the dealer's execution services rendered on a
continuing basis; and the reasonableness of any dealer spreads. The primary
consideration of PanAgora in selecting brokers or dealers is best execution at
the most favorable price.
PanAgora may select broker-dealers which provide brokerage and/or
research services to each Fund and/or other investment companies or accounts
managed by PanAgora. Such research services must be lawful and appropriate
assistance to PanAgora in the performance of its investment decision making
responsibilities and could include: advice concerning the value of securities;
the advisability of investing in, purchasing or selling
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securities; the availability of securities or the purchasers or sellers of
securities; furnishing analysis and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement).
If PanAgora determines in good faith that the amount of commissions
charged by a broker is reasonable in relation to the value of the brokerage and
research services provided by such broker, each Fund may pay commissions to such
broker in an amount greater than the amount another firm may charge. This
information might be useful to PanAgora in providing services to each Fund as
well as to other investment companies or accounts managed by PanAgora, although
not all of such research may be useful to the Funds. Conversely, such
information provided to PanAgora by brokers and dealers through whom other
clients of PanAgora effect securities transactions might be useful to PanAgora
in providing services to the Fund. The receipt of such research is not expected
to reduce PanAgora's normal independent research activities. However, it enables
PanAgora to avoid the additional expense which might otherwise be incurred if it
were to attempt to develop comparable information through its own staff.
REQUIRED VOTE
Approval of the New Investment Management Agreements will require the
consent of a "majority of the outstanding voting securities" of each Fund (as
defined in the 1940 Act), which means, with respect to each Fund, the
affirmative vote of the lesser of (i) more than 50% of the outstanding shares of
the Fund or (ii) 67% or more of the shares of the Fund present at a meeting if
more than 50% of the outstanding shares of the Fund are represented at the
meeting in person or by proxy. The Board unanimously recommends that the
shareholders of each Fund vote in favor of Proposal 1.
PROPOSAL 2
RATIFICATION OF THE
SELECTION OF INDEPENDENT ACCOUNTANTS
The Board, including a majority of the Independent Trustees, has
selected Coopers & Lybrand L.L.P. to act as independent accountants for each
Fund for the current fiscal year ending May 31, 1998. Coopers & Lybrand L.L.P.
are independent accountants and have advised the Funds that they have no direct
financial interest or material indirect financial interest in the Funds.
Representatives of Coopers & Lybrand L.L.P. are not expected to be present at
the Special Meeting but will have an opportunity to make a statement if they
attend and so desire. If they attend, such representatives would be available to
respond to appropriate questions posed by shareholders or management.
REQUIRED VOTE
Ratification of the selection of independent accountants requires the
affirmative vote of a majority of the shares of each Fund cast at the Meeting in
person or by proxy. The
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Board unanimously recommend that the shareholders of each Fund vote in favor of
this Proposal 2.
OTHER MATTERS
The Board is not aware of any other business to be brought before the
Meeting except as described above. Should any other matters requiring a vote of
shareholders properly come before the meeting, the proxy in the accompanying
form will confer upon the person or persons entitled to vote the shares
represented by such proxy the discretionary authority to vote the shares as to
any other matters in accordance with their best judgment in the interests of the
Trust and/or each Fund.
PROXIES, QUORUM AND VOTING AT THE MEETING
A proxy executed by a shareholder may be revoked at any time prior to
its exercise by execution of a superseding proxy, by submission of a written
notice of revocation to the Secretary of the Trust or by attending the Meeting
and voting in person. All properly executed and unrevoked proxies received in
time for the Meeting will be voted in accordance with the instructions contained
in the proxies. If no instruction is given, the persons named as proxies will
vote the shares represented thereby in favor of the matters set forth in the
attached Notice and will use their best judgment in connection with the
transaction of such other business as may properly come before the Meeting or
any adjournment thereof.
A majority of the shares entitled to vote, either present in person or
represented by proxy, constitutes a quorum for the transaction of business with
respect to any proposal (unless otherwise noted in the Proxy Statement). In the
event that at the time any session of the Meeting is called to order a quorum is
not present in person or by proxy, the persons named as proxies may vote those
proxies which have been received to adjourn the Meeting to a later date. In the
event that a quorum is present but sufficient votes in favor of any of the
Proposals have not been received, the persons named as proxies may propose one
or more adjournments of the Meeting to permit further solicitation of proxies
with respect to such Proposals. Any such adjournment with respect to a Fund will
require the affirmative vote of more than one half of the shares of that Fund
present in person or by proxy at the session of the Meeting to be adjourned. The
persons named as proxies will vote those proxies which they are entitled to vote
in favor of any such Proposal in favor of such an adjournment and will vote
those proxies required to be voted against any such Proposal against any such
adjournment. A shareholder vote may be taken on one or more of the Proposals in
the proxy statement prior to such adjournment if sufficient votes for its
approval have been received and it is otherwise appropriate. Such vote will be
considered final regardless of whether the Meeting is adjourned to permit
additional solicitation with respect to any other Proposal.
Shares of a Fund represented at the Meeting (including shares which
abstain or do not vote with respect to one or more of the Proposals) will be
counted for purposes of determining whether a quorum, with respect to that
Fund's shareholders, is present at the Meeting. Abstentions will be treated as
shares that are present and entitled to vote for
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purposes of determining the number of shares that are present and entitled to
vote with respect to any particular Proposal, but will not be counted as a vote
in favor of such Proposal. Accordingly, an abstention from voting on a Proposal
has the same legal effect as a vote against the Proposal.
Adoption by the shareholders of Proposal (1) requires the affirmative
vote of the lesser of (i) 67% or more of the voting securities of the Fund
present at the Meeting if the holders of more than 50% of the shares of the fund
are present or represented by proxy at the Meeting, or (ii) 50% or more of the
outstanding shares of the Fund. If a broker or nominee holding shares in "street
name" indicates on the proxy that it does not have discretionary authority to
vote as to any Proposal, those shares will not be considered as present and
entitled to vote as to that Proposal. Accordingly, a "broker non-vote" has no
effect on the voting in determining whether a Proposal has been adopted pursuant
to item (i) above, provided that the holders of more than 50% of the outstanding
shares (excluding the "broker non-votes") of the Fund are present or represented
by proxy. However, with respect to determining whether a Proposal has been
adopted pursuant to item (ii) above, because shares represented by a "broker
non-vote" are considered outstanding shares, a "broker non- vote" has the same
legal effect as a vote against such Proposal.
SHAREHOLDER PROPOSALS
Each Fund is not required to hold annual meetings of shareholders and
does not currently intend to hold such a meeting in 1999. Instead, meetings will
be held only when and if required. Shareholders proposals for inclusion in the
proxy statement for any subsequent meeting must be received by the Trust at 60
Franklin Street, Boston, Massachusetts 02109 within a reasonable time before any
such meeting.
SIMULTANEOUS MEETINGS
The meeting of shareholders of each Fund will be held simultaneously.
If a Fund shareholder at the meeting objects to the holding of a simultaneous
meeting and moves for an adjournment of the Meeting to a time promptly after the
simultaneous meetings, the persons named as proxies will vote in favor of such
adjournment.
EXPENSES AND METHODS OF SOLICITATION
The cost of preparing, assembling and mailing this proxy statement and
the attached Notice of Special Meeting of Shareholders and the accompanying
proxy card will be borne by Putnam and Lehman. In addition to soliciting proxies
by mail, PanAgora may, at its expense, have one or more Fund officers,
representatives or compensated third-party agents, including PanAgora, aid in
the solicitation of proxies by personal interview or telephone and telegraph and
may request brokerage houses and other custodians, nominees and fiduciaries to
forward proxy soliciting material to the beneficial owners of the shares held of
record by such persons.
Each Fund may also arrange to have votes recorded by telephone. The
telephone voting procedure is designed to authenticate shareholders' identities,
to allow shareholders to
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authorize the voting of their shares in accordance with their instructions and
to confirm that their instructions have been properly recorded. Each Fund has
been advised by counsel that these procedures are consistent with the
requirements of applicable law. If these procedures were subject to a successful
legal challenge, such votes would not be counted at the Meeting. Each Fund is
unaware of any such challenge at this time. Shareholders would be called at the
phone number PanAgora has in its records for their accounts, and would be asked
for their Social Security number or other identifying information. The
shareholders would then be given an opportunity to authorize proxies to vote
their shares at the Meeting in accordance with their instructions. To ensure
that the shareholders' instructions have been recorded correctly, they will also
receive a confirmation of their instructions in the mail. A special toll-free
number will be available in case the information contained in the confirmation
is incorrect.
Persons holding shares as nominees will be reimbursed by Putnam and
Lehman, upon request, for the reasonable expenses of mailing soliciting
materials to the principals of the accounts.
PANAGORA INSTITUTIONAL FUNDS
PANAGORA ASSET ALLOCATION FUND
PANAGORA INTERNATIONAL EQUITY FUND
[ ], 1997
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PRELIMINARY COPY
PROXY
THE PANAGORA INSTITUTIONAL FUNDS
PANAGORA ASSET ALLOCATION FUND
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD [ ], 1998
The undersigned, having received notice of the meeting and management's
proxy statement therefor, and revoking all prior proxies, hereby appoint(s)
Richard A. Crowell, Paul J. Jasinski and Andrew S. Josef, each of them,
attorneys or attorney of the undersigned (with full power of substitution in
them and each of them) for and in the name(s) of the undersigned to attend the
Special Meeting of Shareholders of the Panagora Asset Allocation Fund (the
"Fund") of The PanAgora Institutional Funds (the "Trust") to be held on [day],
[month], 1998 at 2:00 p.m. (Boston time) at the offices of Hale and Dorr LLP,
counsel to the Trust, 60 State Street, 26th Floor, Boston, Massachusetts 02109
(the "Meeting"), and any adjourned session or sessions thereof, and there to
vote and act upon the following matters (as more fully described in the
accompanying Proxy Statement) in respect of all shares of the Fund which the
undersigned will be entitled to vote or act upon, with all the powers the
undersigned would possess if personally present:
(1) To approve the terms of a new Investment Management Agreement
between the Fund and PanAgora Asset Management, Inc.:
FOR |_| AGAINST |_| ABSTAIN |_|
(2) To ratify the selection of Coopers & Lybrand LLP as
independent public accountants for the Fund for the fiscal
year ending May 31, 1998:
FOR |_| AGAINST |_| ABSTAIN |_|
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DI RECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1
AND FOR PROPOSAL 2.
DATED: ......................, 1998
....................................
....................................
Signature(s)
In signing, please write name(s)
exactly as appearing hereon. When
signing as attorney, executor,
administrator or other fiduciary,
please give your full title as such.
Joint owners should each sign
personally.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST AND
SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED
<PAGE>
PRELIMINARY COPY
PROXY
THE PANAGORA INSTITUTIONAL FUNDS
PANAGORA INTERNATIONAL EQUITY FUND
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD [ ], 1998
The undersigned, having received notice of the meeting and management's
proxy statement therefor, and revoking all prior proxies, hereby appoint(s)
Richard A. Crowell, Paul J. Jasinski and Andrew S. Josef, each of them,
attorneys or attorney of the undersigned (with full power of substitution in
them and each of them) for and in the name(s) of the undersigned to attend the
Special Meeting of Shareholders of the Panagora International Equity Fund (the
"Fund") of The PanAgora Institutional Funds (the "Trust") to be held on [day],
[month], 1998 at 2:00 p.m. (Boston time) at the offices of Hale and Dorr LLP,
counsel to the Trust, 60 State Street, 26th Floor, Boston, Massachusetts 02109
(the "Meeting"), and any adjourned session or sessions thereof, and there to
vote and act upon the following matters (as more fully described in the
accompanying Proxy Statement) in respect of all shares of the Fund which the
undersigned will be entitled to vote or act upon, with all the powers the
undersigned would possess if personally present:
(1) To approve the terms of a new Investment Management Agreement
between the Fund and PanAgora Asset Management, Inc.:
FOR |_| AGAINST |_| ABSTAIN |_|
(2) To ratify the selection of Coopers & Lybrand LLP as
independent public accountants for the Fund for the fiscal
year ending May 31, 1998:
FOR |_| AGAINST |_| ABSTAIN |_|
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF.
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DI RECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1
AND FOR PROPOSAL 2.
DATED: ......................, 1998
....................................
....................................
Signature(s)
In signing, please write name(s)
exactly as appearing hereon. When
signing as attorney, executor,
administrator or other fiduciary,
please give your full title as such.
Joint owners should each sign
personally.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST AND
SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED
