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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
HERITAGE SERIES TRUST
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $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 materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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HERITAGE SERIES TRUST -- SMALL CAP STOCK FUND
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
AUGUST 7, 1995
To the Shareholders:
A Special Meeting of the holders of shares of beneficial interest of the
Heritage Series Trust -- Small Cap Stock Fund (the "Fund") will be held at 8:30
a.m. Eastern time, on the 7th day of August, 1995, at 880 Carillon Parkway,
Classroom A, St. Petersburg, FL 33716, or any adjournment(s) thereof, for the
following purposes:
(1) To approve the Investment Subadvisory Agreement between Heritage
Asset Management, Inc. and Eagle Asset Management, Inc.;
(2) To transact such other business as may properly come before the
Special Meeting or any adjournment(s) thereof.
You will be entitled to vote at the meeting and any adjournment(s) thereof
if you owned shares of the Fund at the close of business on May 31, 1995. If you
attend the meeting, you may vote your shares in person. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY
CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE.
By Order of the Board of Trustees,
CLIFFORD J. ALEXANDER
Secretary
June 9, 1995
880 Carillon Parkway
St. Petersburg, Florida 33716
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy form, date
and sign the form, and return the form in the envelope provided. If you sign,
date and return the proxy form but give no voting instructions, your shares will
be voted "FOR" the proposals noticed above. In order to avoid the additional
expense of further solicitation, we ask your cooperation in mailing your proxy
card promptly. Unless proxy cards submitted by corporations and partnerships are
signed by the appropriate persons as indicated in the voting instructions on the
proxy card, they will not be voted.
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HERITAGE SERIES TRUST -- SMALL CAP STOCK FUND
880 CARILLON PARKWAY, ST. PETERSBURG, FLORIDA 33716
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PROXY STATEMENT
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INTRODUCTION
This is a proxy statement with respect to Heritage Series Trust (the
"Trust") -- Small Cap Stock Fund (the "Fund") in connection with the
solicitation of proxies made by, and on behalf of, the Trust's Board of
Trustees, to be used at the Fund's special meeting of shareholders or any
adjournment(s) thereof ("Meeting"). This proxy statement will first be mailed to
shareholders on or about June 9, 1995.
A majority of the shares of the Fund outstanding on May 31, 1995 ("Record
Date"), represented in person or by proxy, must be present for the transaction
of business at the Meeting. Only holders of securities as of this date are
entitled to notice of and to vote at the Meeting. In the absence of a quorum or
in the event that a quorum is present at the Meeting but votes sufficient to
approve any one of the Proposals are not received, the persons named as proxies
may propose one or more adjournments of the Meeting to permit the further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of those shares represented at the Meeting in person or by proxy.
If a quorum is present, the persons named as proxies will vote those proxies
that they are entitled to vote FOR such Proposal in favor of an adjournment and
will vote those proxies required to be voted AGAINST such Proposal against such
adjournment. A shareholder vote may be taken on one or more of the Proposals
described in this Proxy Statement prior to any such adjournment if sufficient
votes have been received and it is otherwise appropriate. A majority of the
outstanding Shares of the Fund shall constitute a quorum.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
persons entitled to vote and the broker does not have discretionary voting
power. Abstentions and broker non-votes will be counted for purposes of
determining whether a quorum is present, but will not be voted for or against
any adjournment. Accordingly, abstentions and broker non-votes effectively will
be a vote against adjournment or against the proposal where the required vote is
a percentage of the shares present. Abstentions and broker non-votes will not be
counted, however, as votes cast for purposes of determining whether sufficient
votes have been received to approve a proposal.
The individuals named as proxies in the enclosed proxy card will vote in
accordance with your directions as indicated thereon if your proxy card is
received properly executed. If you give no voting instructions your shares will
be voted in favor of the Proposals described in this proxy statement. The duly
appointed proxies may, in their discretion, vote upon such other matters as may
properly come before the Meeting. Your proxy card may be revoked by giving
another proxy, by letter or telegram revoking your proxy if received by the Fund
prior to the Meeting, or by appearing and voting at the Meeting.
As of May 31, 1995, the Fund had 2,717,887.014 shares outstanding and no
shareholder held of record or owned beneficially more than 5% of the outstanding
shares of the Fund. All costs associated with the Meeting, including the
solicitation of proxies, will be borne by Eagle Asset Management, Inc.
("Eagle"). Solicitations will be made primarily by mail but also may include
telephone communications by regular employees of Heritage Asset Management, Inc.
("Heritage"), the Fund's investment adviser and administrator, who will
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not receive any compensation therefor from the Fund. Each full Share of the Fund
is entitled to one vote, and each fractional Share is entitled to a
proportionate share of one vote. You may obtain a copy of the Fund's most recent
annual report to shareholders, free of charge, by writing to Heritage at 880
Carillon Parkway, St. Petersburg, Florida 33716 or by calling 1-800-421-4184.
PROPOSAL 1. APPROVAL OF THE INVESTMENT SUBADVISORY AGREEMENT
The Fund's assets currently are allocated among two investment subadvisers,
the Research Department of Raymond James & Associates, Inc. ("Research") and
Awad & Associates ("Awad"), each a separate division of Raymond James &
Associates ("RJA"), which is an affiliate of Heritage. Both RJA and Heritage are
wholly owned subsidiaries of Raymond James Financial, Inc. ("RJF"). Heritage
believes short-term volatility may be reduced by allocating the Fund's assets
among multiple subadvisers. While each subadviser to the Fund focuses on
investments in small capitalization companies, the different disciplines
employed by different subadvisers may cause the portion of the Fund allocated to
a subadviser to have better or worse relative performance than other portions
during certain market conditions. By employing multiple disciplines, Heritage
believes that short-term volatility may be reduced while the Fund participates
in returns available from small capitalization companies.
The Trust is proposing the addition of Eagle, an affiliate of both RJA and
Heritage, to act as a third subadviser, along with Awad and Research. If
shareholders approve Eagle's appointment as subadviser, Eagle will provide
portfolio management services based on the same subadvisory fee that each of the
Fund's current subadvisers receives.
Heritage intends to allocate the assets currently managed by Research to
Eagle. Eagle will follow an investment discipline similar to that employed by
Research in that Eagle will invest primarily in the "Buy 1" recommendations from
the Research Register. The Research Register is developed by Research and rates
stocks from Strong Buy "Buy 1" to Sell "5." The assets managed by Eagle will not
be invested in direct proportion to the Buy 1 stocks, as some of these stocks
may not be small capitalization companies or otherwise may be unsuitable for the
Fund.
The proportion of assets allocated to each subadviser will be reviewed
periodically by Heritage. The assets of the Fund may be reallocated between the
subadvisers at Heritage's discretion, subject to the oversight of the Board of
Trustees, when Heritage deems such reallocation in the best interests of the
Fund's shareholders.
At their May 8, 1995 meeting, the Members of the Board of Trustees
unanimously approved the appointment of Eagle as an investment subadviser to the
Fund and the proposed subadvisory agreement between Heritage and Eagle ("Eagle
Agreement"). These decisions included the unanimous approval of all Trustees who
are not "interested persons" of the Trust, Heritage, or Eagle as that term is
defined in the Investment Company Act of 1940, as amended ("Independent
Trustees").
DESCRIPTION OF THE SUBADVISORY AGREEMENT
The Eagle Agreement will be substantially similar to the current
subadvisory agreements between Heritage and Research and Heritage and Awad.
Eagle will manage the investment of Fund assets allocated to it, and will be
responsible for placing orders for the purchase and sale of portfolio securities
for the portion of the portfolio for which it is responsible, subject to the
supervision of the Trustees and Heritage. As compensation for Eagle's services
and for expenses borne by Eagle under the Agreement, Eagle will be paid
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monthly by Heritage (not by the Fund) at an annual rate equal to .50% of the
Fund's average daily net assets under its management. Once the assets of the
Fund exceed $50 million, Eagle has agreed to waive a proportionate share of the
fees waived by Heritage based on the assets of the Fund allocated to Eagle.
The Eagle Agreement provides that Eagle will not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in connection
with the performance of the Agreement, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under the
Subadvisory Agreement.
If approved by shareholders, the Eagle Agreement would be executed promptly
by Heritage and Eagle. Unless sooner terminated, it would remain in effect for
two years following its effective date. Thereafter, it would continue
automatically for successive annual periods, provided that it is specifically
approved at least annually (1) by a vote of a majority of the Independent
Trustees and (2) by all Trustees or by a vote of a majority of the outstanding
shares of the Fund. The Fund may terminate the proposed Eagle Agreement by a
vote of a majority of its Trustees or a majority of its outstanding voting
securities on 60 days' written notice to Heritage or Eagle. Heritage may at any
time terminate that agreement upon 60 days' written notice to Eagle. Eagle may
at any time terminate that agreement upon 90 days' written notice to Heritage.
The agreement automatically will terminate without penalty in the event of
assignment or termination of the Advisory Agreement.
INFORMATION ABOUT EAGLE
Eagle is a registered investment adviser that was organized in 1976. Eagle
provides investment advisory services to a diverse group of clients including
individuals and institutional clients, such as employee benefit plans,
endowments, foundations, other tax-exempt funds and registered investment
companies. Eagle advised approximately $1.7 billion for these clients as of
March 31, 1995.
In addition to advising private accounts, Eagle acts as investment adviser
to Eagle International Equity Portfolio of Heritage Series Trust, investment
subadviser to mutual funds, including Heritage Income-Growth Trust, the
Diversified Portfolio of Heritage Income Trust and the Value Equity Fund, a
series of Heritage Series Trust, and two variable annuity portfolios (Eagle
Growth Equity Portfolio for American Skandia and Eagle Value Equity Portfolio
for Golden Select). Eagle is a wholly-owned subsidiary of RJF, which together
with its subsidiaries, provides a wide range of financial services to retail and
institutional clients.
The principal address of Eagle and each of its directors and principal
executive officer is 880 Carillon Parkway, St. Petersburg, Florida 33716. The
directors and principal executive officer of Eagle are: Thomas A. James,
Director and Chief Executive Officer, Stephen G. Hill, Director and Richard K.
Riess, Director and President.
RECOMMENDATION OF THE BOARD OF TRUSTEES
In approving the Eagle Agreement, the Board analyzed the factors it deemed
relevant, including: the services provided by Eagle to its other clients; the
ability of Eagle to provide services to the Fund; its personnel, operations,
financial condition; its proposed fee schedule; and other factors that would
affect positively or negatively the provision of portfolio management services.
The Board also considered the experience of the proposed portfolio manager
for the Fund, Mr. Bert L. Boksen, Senior Vice President of Eagle. For some 16
years, Mr. Boksen was employed by RJA in its
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institutional research and sales department. While employed by RJA Mr. Boksen
served as co-head of Research, Chief Investment Officer and as Chairman of the
RJA Focus List Committee.
The Board also considered Eagle's policy of selecting brokers on the basis
of research or other services provided only when such use is consistent with
best available price and most favorable execution. The Board realizes that
research services furnished by brokers through which the Fund effects securities
transactions may be used by Eagle in advising other accounts that it advises.
Conversely, research services furnished to Eagle in connection with other
accounts Eagle advised may be used by Eagle in advising the Fund. Information
and research received from brokers will be in addition to, and not in lieu of,
the services required to be performed by Eagle under the Eagle Agreement.
If Proposal 1 is not approved by shareholders, Heritage will continue as
the Fund's investment adviser and Research and Awad will continue as the Fund's
subadvisers. The Trustees would then consider whether any other arrangements for
the provision of investment subadvisory services are appropriate and in the best
interests of the Fund's shareholders.
VOTE REQUIRED
Approval of Proposal 1 requires the affirmative vote of the holders of the
lesser of (1) 67% or more of the Shares of the Fund present at the Meeting, if
the holders of more than 50% of the outstanding Fund Shares are present or
represented by proxy at the Meeting, or (2) more than 50% of the outstanding
Shares of the Fund entitled to vote at the Meeting.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU
VOTE "FOR" PROPOSAL 1.
INFORMATION ABOUT THE FUND
CURRENT ADVISORY ARRANGEMENTS
Heritage is a Florida corporation organized in 1985 and registered as an
investment adviser under the Investment Advisers Act of 1940, as amended.
Heritage serves as investment adviser and administrator to the Fund pursuant to
an Investment Advisory and Administration Agreement between Heritage and the
Trust on behalf of the Fund, dated March 29, 1993. Research and Awad serve as
subadvisers to the Fund pursuant to separate subadvisory agreements dated March
29, 1993 (the "Subadvisory Agreements"). The Advisory and the Subadvisory
Agreements were each approved by the Fund's sole initial shareholder on March
29, 1993. All of the capital stock of Heritage is owned by RJF. Thomas A. James,
a Trustee of the Trust, by virtue of his direct or indirect ownership of RJF,
owns beneficially more than 10% of Heritage. RJF, through its subsidiaries, is
engaged primarily in providing customers with a wide variety of financial
services in connection with securities, limited partnerships, options,
investment banking and related fields. Heritage also serves as investment
adviser and manager to five other investment companies with aggregate assets of
approximately $1.6 billion as of March 31, 1995.
The principal address of Heritage, RJF, Thomas A. James and each of
Heritage's directors and principal executive officer is at 880 Carillon Parkway,
St. Petersburg, Florida 33716. The directors and principal executive officer of
Heritage are: Jeffrey P. Julien, Director; Richard K. Riess, Director; and
Stephen G. Hill, Director, President and Chief Executive Officer.
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Under the Advisory Agreement, and subject to the supervision of the
Trustees, Heritage has agreed, among other duties, to provide a continuous
investment program for the Fund's portfolio, supervise all aspects of the Fund's
operation and hold itself available to respond to shareholder inquiries. The
Advisory Agreement expressly permits advisory services to be delegated to and
performed by a subadviser. Under the Advisory Agreement, the Fund bears all of
its expenses not specifically assumed by Heritage incurred in its operation and
the offering of shares. As required by state regulations, Heritage will
reimburse the Fund if and to the extent that the aggregate operating expenses of
the Fund in any fiscal year exceed applicable limits. To date, no such
reimbursements have been required.
For services provided under the Advisory Agreement, the Fund pays Heritage
an annualized advisory fee, computed daily and paid monthly, of 1.00% of the
Fund's average daily net assets. Heritage has voluntarily agreed to waive .25%
of this fee on average daily net assets in excess of $50 million. These fees are
higher than those charged by most other investment companies, but are not higher
than the fees charged by many other investment companies with similar investment
objectives and policies. During any period that Class A expenses exceed 2.00% of
average daily net assets, or Class C expenses exceed 2.75% of average daily net
assets, Heritage will waive management fees as necessary to limit Fund expenses
to these levels. During the fiscal year ended October 31, 1994, the Fund paid
(or accrued) to Heritage fees of approximately $416,788.
Under the current Subadvisory Agreement, Heritage pays Research and Awad a
monthly fee at an annual rate equal to .50% of the Fund's average daily net
assets under their respective management. Once the assets of the Fund exceed $50
million, Research and Awad voluntarily agree to waive a proportionate share of
the fee waived by Heritage based on the respective assets of the Funds allocated
to Research and Awad. During the fiscal year ended October 31, 1994, Heritage
paid fees to Research and Awad of $99,764 and $101,249, respectively.
Heritage is also the fund accountant and transfer and dividend disbursing
agent for the Fund. For the fiscal year ended October 31, 1994, the Fund paid
Heritage approximately $44,240 for its services as transfer and dividend
disbursing agent. For the period May 14, 1994 (commencement of engagement as
fund accountant) to October 31, 1994, the Fund paid Heritage approximately
$12,775 for its services as fund accountant. Heritage will continue to provide
these services to the Fund after the subadvisory contract is approved.
In addition, an affiliate of Heritage, RJA, serves as the Trust's principal
underwriter. RJA was paid $100,506 pursuant to the Trust's Rule 12b-1
distribution plan for the fiscal year ended October 31, 1994, as compensation
for certain distribution and shareholder servicing activities. RJA will continue
to serve as principal underwriter to the Trust after the advisory contract is
approved. The Fund does not currently execute any securities transactions
through RJA or any other affiliated broker-dealer.
The Advisory Agreement and the Subadvisory Agreements provide that
Heritage, Research and/or Awad, as applicable, will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in connection
with the matter to which the Agreements relate, except a loss resulting from
willful misfeasance, bad faith, or gross negligence on their part in the
performance of their duties or from reckless disregard by them of their
obligations and duties thereunder.
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EXECUTIVE OFFICERS
Officers of the Fund who are employed by Heritage are:
STEPHEN G. HILL, President. Mr. Hill is a director and the Chief Executive
Officer and President of Heritage.
DONALD H. GLASSMAN, Treasurer. Mr. Glassman serves as Treasurer of
Heritage.
PATRICIA SCHNEIDER, Assistant Secretary. Ms. Schneider serves as
Compliance Administrator of Heritage.
SHAREHOLDER PROPOSALS
As a general matter, the Fund does not hold regular annual or other
meetings of shareholders. Any shareholder who wishes to submit proposals to be
considered at a special meeting of the Fund's shareholders should send such
proposals to the Fund at 880 Carillon Parkway, St. Petersburg, Florida 33733, so
as to be received a reasonable time before the proxy solicitation for that
meeting is made.
Shareholder proposals that are submitted in a timely manner will not
necessarily be included in the Fund's proxy materials. Inclusion of such
proposals is subject to limitations under the federal securities laws.
OTHER BUSINESS
Management knows of no other business to be presented at the Meeting other
than the matter set forth in this Proxy Statement, but should any other matter
requiring a vote of shareholders arise, the proxies will vote thereon according
to their best judgment in the interests of the Fund.
By Order of the Board of Trustees,
CLIFFORD J. ALEXANDER,
Secretary
IT IS IMPORTANT THAT YOU VOTE AND RETURN YOUR PROXY PROMPTLY.
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APPENDIX A
[LOGO]
June 9, 1995
Dear Shareholder:
The enclosed proxy materials relate to a special meeting of the shareholders of
the Heritage Series Trust - Small Cap Stock Fund ("Fund") to be held on August
7, 1995. The purpose of this meeting is to seek shareholder approval of a
Subadvisory Agreement under which Eagle Asset Management, Inc. ("Eagle") would
become an additional investment subadviser of the Fund. Under the proposed
agreement, Eagle would be compensated by Heritage Asset Management, Inc.
("Heritage"), the Fund's investment adviser, and not by the Fund. The primary
purpose of this change is to enable the Fund to utilize as portfolio manager
Bert L. Boksen, who recently joined Eagle after over 17 years with Raymond James
and Associates, Inc. ("RJA") where he had served as co-head of research and
Chairman of the RJA Focus List Committee. Heritage intends, upon shareholder
approval of Eagle, to allocate to Eagle the portion of the Fund currently
subadvised by the Research Department of RJA ("Research"). Thus, Eagle would co-
manage the Fund with Awad & Associates ("Awad"), a current subadviser. Research
would remain a sub-adviser but have no assets currently allocated to it.
Heritage has recommended, and the Fund's Board of Trustees has approved, the
appointment of Eagle as subadviser to the Fund. Eagle, an investment management
firm that provides investment advisory services to retail and institutional
clients, including registered investment companies, currently has assets under
management of approximately $1.6 billion. Eagle also acts as subadviser to the
Heritage Income-Growth Trust, the Heritage Capital Appreciation Trust, the
Diversified Portfolio of Heritage Income Trust, the Heritage Series
Trust - Value Equity Fund and as adviser to the Heritage Series Trust - Eagle
International Equity Portfolio. Heritage, Eagle, and RJA are wholly owned
subsidiaries of Raymond James Financial, Inc. Awad and Research are divisions of
RJA.
Please take the time to review the enclosed proxy statement and vote your shares
today by signing and returning the proxy ballot below. Your prompt attention to
this matter will enable the Fund to avoid the expenses of further proxy
solicitations.
Very truly yours,
[sig]
Stephen G. Hill
President, Heritage Series Trust
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The undersigned hereby appoints as proxies Stephen G. Hill, K.C. Clark and
Donald H. Glassman, each with the power of substitution, to vote for the
undersigned shares of beneficial interest of the undersigned at the
aforementioned meeting and any adjournment thereof with all the power the
undersigned would have if personally present. The shares represented by this
proxy will be voted as instructed. UNLESS INDICATED TO THE CONTRARY, THIS PROXY
SHALL BE DEEMED TO INDICATE AUTHORITY TO VOTE "FOR" ALL PROPOSALS. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
Please vote by placing an "X" in the appropriate space below, date and sign this
proxy. Return it in the enclosed prepaid envelope.
The Board of Trustees recommends a vote "FOR":
1. Approval of the proposed Subadvisory Agreement between Heritage Asset
Management, Inc. and Eagle Asset Management, Inc. with respect to the
Heritage Series Trust - Small Cap Stock Fund.
FOR AGAINST ABSTAIN
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---------------------------------
Signature
---------------------------------
Signature
---------------------------------
Date
If shares are held jointly, each shareholder
named should sign; if only one signs, his/her
signature will be binding. If the shareholder
is a corporation, the President or Vice
President should sign his/her own name,
indicating title. If the shareholder is a
partnership, a partner should sign in his/her
own name, indicating that he/she is a
"Partner."
