As filed with the Securities and Exchange Commission on September 7, 2001
File # 333-66276
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT # 2
TIP FUNDS
(Exact Name of Registrant as Specified in Charter)
TIP Funds
c/o The CT Corporation System
101 Federal Street
Boston, Massachusetts 02110
(Address of Principal Executive Offices, Zip Code)
(610) 251-0268
(Registrant's Telephone Number, including Area Code)
STEPHEN KNEELEY
TURNER INVESTMENT PARTNERS, INC.
1235 WESTLAKES DR., SUITE 350
BERWYN, PENNSYLVANIA 19312-2414
Copies to:
JAMES W. JENNINGS, ESQUIRE MONICA L. PARRY, ESQUIRE
MORGAN, LEWIS & BOCKIUS LLP MORGAN, LEWIS & BOCKIUS LLP
1701 MARKET STREET 1800 M STREET, NW
PHILADELPHIA, PENNSYLVANIA WASHINGTON, DC 20036
JOHN H. GRADY, JR., ESQUIRE JULIE ALLECTA, ESQUIRE
TURNER INVESTMENT PARTNERS, INC. PAUL, HASTINGS, JANOFSKY & WALKER LLP
1235 WESTLAKES DR., SUITE 350 345 CALIFORNIA STREET, 29TH FLOOR
BERWYN, PENNSYLVANIA 19312-2414 SAN FRANCISCO, CALIFORNIA 94104
(Name and Address of Agent for Service)
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a)
may determine.
No filing fee is required because an indefinite number of shares have previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940.
TURNER FUNDS
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-14 REGISTRATION STATEMENT HEADING
PART A. INFORMATION REQUIRED IN PROSPECTUS
Item 1. Beginning of Registration Cover Page of Registration Statement
Statement and Outside Front Cover
Page of Prospectus
Item 2. Beginning and Outside Back Table of Contents
Cover Page of Prospectus
Item 3. Synopsis and Risk Factors Summary
Item 4. Information About the Transaction Summary; Information Relating to the
Reorganization; The Reorganization Agreement;
Reasons for the Reorganization; Considerations of
the Trustees of PMP Trust; Shareholder Rights
Item 5. Information About the Registrant Prospectus Cover Page; Summary; Reasons for the
Reorganization; Comparison of the Investment
Objectives, Policies and Risks of the Titan Fund
and the Turner Fund; Additional Information;
Additional Information about the Turner Fund;
Additional Information about both Funds;
Shareholder Rights
Item 6. Information About the Company Prospectus Cover Page; Summary; Reasons for the
Being Acquired Reorganization; Information Relating to the
Reorganization; Description of the PMP Trust;
Description of the Turner Trust; Comparison of the
Investment Objectives, Policies and Risks of the
Titan Fund and the Turner Fund; Shareholder Rights
Item 7. Voting Information Prospectus Cover Page; Notice of Special Meeting
of Shareholders of the Titan Financial Services
Fund; Summary; The Reorganization Agreement;
Voting on the Proposals
Item 8. Interest of Certain Persons and Experts Voting on the Reorganization
Item 9. Additional Information Required for Inapplicable
Reoffering by Persons Deemed to be
Underwriters
PART B. INFORMATION REQUIRED IN A STATEMENT OF
ADDITIONAL INFORMATION
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. Additional Information About Incorporated by Reference to the Registrant's
the Registrant Prospectus and SAI attached as Exhibits to this
Filing
Item 13. Additional Information About Incorporated by Reference to the Fund's Prospectus
the Company Being Acquired and SAI attached as Exhibits to this Filing
Item 14. Financial Statements Incorporated by Reference to the Fund's Prospectus
and SAI attached as Exhibits to this Filing
PART C. OTHER INFORMATION
Item 15. Indemnification Indemnification
Item 16. Exhibits Exhibits
Item 17. Undertakings Undertakings
PROFESSIONALLY MANAGED PORTFOLIOS
TITAN FINANCIAL SERVICES FUND
Dear Shareholder:
A Special Meeting of Shareholders of the Titan Financial Services Fund (the
"Titan Fund"), a series of Professionally Managed Portfolios (the "PMP Trust")
has been scheduled for Friday, September 21, 2001 ("Special Meeting"). If you
are a shareholder of record as of the close of business on Friday, August 24,
2001, you are entitled to vote at the Special Meeting and at any adjournment
thereof.
While you are, of course, welcome to join us at the Special Meeting, most
shareholders will cast their votes by filling out and signing the enclosed Proxy
Card. Whether or not you plan to attend the Special Meeting, we need your vote.
Please mark, sign, and date the enclosed Proxy Card and return it promptly in
the enclosed, postage-paid envelope so that the maximum number of shares may be
voted.
The attached Prospectus/Proxy Statement is designed to give you information
about the proposals upon which you will be asked to vote. The Board of Trustees
of the PMP Trust's Titan Financial Services Fund (the "Board") is recommending
that you approve a reorganization of the Titan Fund under which the Titan Fund
would be combined with and into the Turner Future Financial Services Fund (the
"Turner Fund"), a series of Turner Funds (the "Reorganization"). Turner
Investment Partners, Inc. ("Turner") serves as interim adviser to the Titan
Fund, and as adviser to the Turner Fund. Assuming approval by the Titan Fund's
shareholders, each shareholder of the Titan Fund will receive a number of shares
of the Turner Fund equal in dollar value to the Titan Fund's shares that
shareholder owned at the time of the Reorganization. The Reorganization should
not have any federal or state tax consequences for the Titan Fund or its
shareholders. Immediately before the Reorganization, the Titan Fund expects to
distribute ordinary income and capital gains to shareholders. The Board of the
PMP Trust has recommended approval of the Reorganization and encourages you to
support its recommendation to approve the proposal.
The Board also is recommending that you approve the Titan Fund's interim
advisory contract with Turner. Turner has served as the interim investment
adviser to the Titan Fund since June 17, 2001, pursuant to an interim investment
advisory agreement (the "Interim Agreement") approved by the Board. The Board
appointed Turner as interim adviser after the termination of the Titan Fund's
advisory agreement with Titan Investment Advisers, LLC and Harris Bretall
Sullivan & Smith L.L.C.'s interim subadvisory agreement with the Titan Fund.
The Interim Agreement automatically will terminate on the date of the
Reorganization unless earlier terminated upon 60 days' notice by either the
Board or Turner. If shareholders fail to approve both the Reorganization and the
Interim Agreement, the Reorganization will not proceed and Turner will be paid
only its costs for managing the Titan Fund's assets under the Interim Agreement.
If shareholders fail to approve the Reorganization, but approve the Interim
Agreement, the Reorganization will not proceed, but Turner will be paid all
advisory fees owed
to it under the Agreement. In either case, Turner has advised the Board that it
does not expect to continue as interim adviser to the Titan Fund if the Titan
Fund's shareholders fail to approve the Reorganization and the Interim
Agreement, or if shareholders approve the Interim Agreement but not the
Reorganization. Turner has, however, agreed that if the Titan Fund's
shareholders fail to approve the Reorganization and the Interim Agreement by the
requisite vote, or approve the Interim Agreement but not the Reorganization, it
will continue to serve as interim adviser to the Titan Fund for a reasonable
period of time until the Board selects a replacement adviser or chooses another
course of action (which may include liquidating the Fund). The Board believes
that in such a case the prospects of finding another replacement adviser will be
substantially diminished considering the amount of assets the Titan Fund likely
will have and the Fund's history of interim advisers. Thus, a failure to approve
the Reorganization may in fact ultimately result in the liquidation of the Titan
Fund. If shareholders approve the Reorganization, but fail to approve the
Interim Agreement, the Reorganization will proceed and Turner will be paid only
its costs for managing the Titan Fund's assets under the Interim Agreement. If
shareholders approve both the Reorganization and the Interim Agreement, the
Reorganization will proceed and Turner will be paid all advisory fees owed to it
under the Agreement.
Your vote is important to us. Please do not hesitate to call 1-800-282-2340
if you have any questions about the proposal under consideration. Thank you for
taking the time to consider this important proposal and for your investment in
the Titan Fund.
Sincerely,
Steven J. Paggioli,
President
________, 2001
INFORMATION ABOUT YOUR PROSPECTUS/PROXY STATEMENT
Q. WHY AM I RECEIVING THIS PROSPECTUS/PROXY STATEMENT?
A. Professionally Managed Portfolios (the "PMP Trust") seeks your approval of
a reorganization (the "Reorganization") of the Titan Financial Services
Fund (the "Titan Fund") with and into the Turner Future Financial Services
Fund (the "Turner Fund"), a series of Turner Funds (the "Turner Trust").
The PMP Trust's Board of Trustees recommends approval of the Reorganization
because it believes that merging the Titan Fund into the Turner Fund will
provide the Titan Fund's shareholders with professional management in the
financial services sector, and also will allow them access to the funds
advised by Turner Investment Partners, Inc. ("Turner"), through the Turner
Trust's exchange privilege.
The Trust also seeks your approval of the interim advisory contract between
Turner and the Titan Fund ("Interim Agreement"). Turner has served as the
Titan Fund's interim adviser since June 17, 2001. The Interim Agreement
will automatically terminate on the day of the Reorganization.
Q. HOW WILL THE REORGANIZATION WORK?
A. The Titan Fund will transfer all of its assets and liabilities to the
Turner Fund in return for shares of the Turner Fund having an equivalent
aggregate value pursuant to an Agreement and Plan of Reorganization (the
"Plan"). The assets of the Titan Fund will be transferred at their current
value as of the Reorganization date, and the shares provided in return will
have a total value equal to the transferred net assets, again as of the
Reorganization date. Finally, the Titan Fund will distribute the Turner
Fund shares it received to its shareholders. Shareholders of the Titan Fund
will thus effectively be converted into shareholders of the Turner Fund. If
the Plan is carried out as proposed, no federal or state tax consequences
are expected to result to the Titan Fund or its shareholders. Immediately
before the Reorganization, the Titan Fund expects to distribute ordinary
income and capital gains to shareholders.
Please refer to the prospectus/proxy statement for a detailed explanation
of the proposals, and for full descriptions of the PMP Trust, the Titan
Fund, Turner, the Turner Trust, and the Turner Fund.
Q. HOW WILL THIS AFFECT MY ACCOUNT?
A. Following the Reorganization, you will be a shareholder of the Turner Fund,
which has investment objectives and policies similar to the Titan Fund. As
more fully described in the prospectus/proxy statement, Turner is the
adviser to the Turner Fund and the interim adviser to the Titan Fund. You
will receive shares of the Turner Fund equal in value to shares of the
Titan Fund you currently hold. It is likely that the net asset value per
share price of your Fund shares will change. The Reorganization will not,
however, affect the
value of your account at the time of Reorganization. The Reorganization is
expected to be tax-free to the Titan Fund and its shareholders. Immediately
before the Reorganization, the Titan Fund expects to distribute ordinary
income and capital gains to shareholders.
Q. WHAT WILL HAPPEN IF THE REORGANIZATION AND THE INTERIM TURNER AGREEMENT ARE
NOT APPROVED?
A. If shareholders fail to approve both the Reorganization and the Interim
Agreement, the Reorganization will not proceed and Turner will be paid only
its costs for managing the Titan Fund's assets under the Interim Agreement.
If shareholders fail to approve the Reorganization, but approve the Interim
Agreement, the Reorganization will not proceed, but Turner will be paid all
advisory fees owed to it under the Agreement. In either case, Turner has
advised the Board that it does not expect to continue as interim adviser to
the Titan Fund if the Titan Fund's shareholders fail to approve the
Reorganization and the Interim Agreement, or if shareholders approve the
Interim Agreement but not the Reorganization. Turner has, however, agreed
that if the Titan Fund's shareholders fail to approve the Reorganization
and the Interim Agreement by the requisite vote, or approve the Interim
Agreement but not the Reorganization, it will continue to serve as interim
adviser to the Titan Fund for a reasonable period of time until the Board
selects a replacement adviser or chooses another course of action (which
may include liquidating the Fund). The Board believes that in such a case
the prospects of finding another replacement adviser will be substantially
diminished considering the amount of assets the Titan Fund likely will have
and the Fund's history of interim advisers. Thus, a failure to approve the
Reorganization may in fact ultimately result in the liquidation of the
Titan Fund. If shareholders approve the Reorganization, but fail to approve
the Interim Agreement, the Reorganization will proceed and Turner will be
paid only its costs for managing the Titan Fund's assets under the Interim
Agreement. If shareholders approve both the Reorganization and the Interim
Agreement, the Reorganization will proceed and Turner will be paid all
advisory fees owed to it under the Agreement.
Q. WHY DO I NEED TO VOTE?
A. Your vote is needed to ensure that the proposal can be acted upon. Your
immediate response on the enclosed Proxy Card will help prevent the need
for any further solicitations for a shareholder vote. We encourage all
shareholders to participate.
Q. HOW DOES THE BOARD OF TRUSTEES SUGGEST THAT I VOTE?
A. After careful consideration, the Board of Trustees of the PMP Trust
recommends that you vote "FOR" the Reorganization and "FOR" the Interim
Agreement.
Q. WHO IS PAYING FOR EXPENSES RELATED TO THE SHAREHOLDERS MEETING?
A. Turner will pay all special costs related to the Reorganization and the
Interim Agreement, including the costs relating to the shareholder meeting
and this prospectus/proxy statement.
Q. HOW DO I VOTE?
A. You may use the enclosed postage-paid envelope to mail your proxy card. You
may also vote by or over the Internet at www.proxyvote.com. Please follow
the enclosed instructions to use these methods of voting.
Q. WHO DO I CALL IF I HAVE QUESTIONS?
A. We will be happy to answer your questions about the proxy solicitation.
Please call us at 1-800-282-2340 between 8:00 a.m. and 5:30 p.m. Eastern
Time, Monday through Friday.
TITAN FINANCIAL SERVICES FUND
A SERIES OF
PROFESSIONALLY MANAGED PORTFOLIOS
915 BROADWAY
NEW YORK, NEW YORK 10010
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF THE
TITAN FINANCIAL SERVICES FUND
TO BE HELD ON SEPTEMBER 21, 2001
Notice is hereby given that a Special Meeting ("Special Meeting") of
Shareholders of the Titan Financial Services Fund (the "Titan Fund") of
Professionally Managed Portfolios (the "PMP Trust") will be held at the offices
of Investments Company Administration, LLC, 4455 E. Camelback Road, Suite 261-E,
Phoenix, AZ 85018, on Friday, September 21, 2001 at 12:00 p.m. (Eastern Time)
for the purpose of considering the proposals set forth below.
At the Special Meeting, Shareholders of the Titan Fund will be asked to consider
and act upon two proposals. The first proposal is to approve a proposed
Agreement and Plan of Reorganization, pursuant to which the Titan Fund will
transfer all of its assets and liabilities to the Turner Future Financial
Services Fund (the "Turner Fund"), a series of Turner Funds (the "Turner Trust")
with an investment objective and investment policies similar to the Titan Funds,
in exchange for shares of the Turner Fund. The second proposal is to approve the
interim advisory agreement between the Titan Fund and Turner Investment
Partners, Inc., which has been in effect since June 17, 2001. The proposals,
which are more fully described in the attached prospectus/proxy statement, are
as follows:
PROPOSAL 1. APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN THE
TURNER FUNDS, ON BEHALF OF THE TURNER FUTURE FINANCIAL SERVICES
FUND, AND PROFESSIONALLY MANAGED PORTFOLIOS, ON BEHALF OF THE
TITAN FINANCIAL SERVICES FUND.
PROPOSAL 2. APPROVAL OF AN INTERIM ADVISORY AGREEMENT BETWEEN TURNER
INVESTMENT PARTNERS, INC. AND PROFESSIONALLY MANAGED PORTFOLIOS,
ON BEHALF OF THE TITAN FINANCIAL SERVICES FUND.
The persons named as proxies are authorized to vote on such other business as
may properly come before the Special Meeting in accordance with their own
discretion.
All shareholders are cordially invited to attend the Special Meeting. However,
if you are unable to attend the Special Meeting, you are requested to mark, sign
and date the enclosed Proxy Card and return it promptly in the enclosed,
postage-paid envelope so that the Special Meeting may be held and a maximum
number of shares may be voted. You may also vote by telephone or over the
Internet. Please follow the enclosed instructions to use these methods of
voting.
Shareholders of record at the close of business on Friday, August 24, 2001 are
entitled to notice of and to vote at the Special Meeting or any adjournment
thereof.
BY ORDER OF THE BOARD OF TRUSTEES,
Robin Berger,
Secretary
_________, 2001
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS
REQUESTED. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED
FOR YOU CONVENIENCE.
PROSPECTUS/PROXY STATEMENT
___________, 2001
RELATING TO THE ACQUISITION OF THE ASSETS AND LIABILITIES OF
TITAN FINANCIAL SERVICES FUND
A SERIES OF
PROFESSIONALLY MANAGED PORTFOLIOS
915 BROADWAY
NEW YORK, NEW YORK 10010
(212) 633-9700
BY AND IN EXCHANGE FOR SHARES OF
TURNER FUTURE FINANCIAL SERVICES FUND
A SERIES OF
TURNER FUNDS
1235 WESTLAKES DRIVE
SUITE 350
BERWYN, PENNSYLVANIA 19312
(800) 224-6312
This prospectus/proxy statement is furnished in connection with the solicitation
of proxies by the Board of Trustees ("Board") of Professionally Managed
Portfolios (the "PMP Trust") in connection with the Special Meeting of
Shareholders (the "Special Meeting") of the PMP Trust's Titan Financial Services
Fund (the "Titan Fund") to be held on September 21, 2001, at 12:00 p.m. (Eastern
Time) at the offices of Investment Company Administration, LLC, 4455 E.
Camelback Road, Suite 261-E, Phoenix, AZ 85018 (the "Proposal"). At the Special
Meeting, shareholders of the Titan Fund will be asked to consider and approve a
proposed Agreement and Plan of Reorganization (the "Reorganization Agreement")
between the PMP Trust, on behalf of the Titan Fund, and the Turner Funds (the
"Turner Trust"), on behalf of its Turner Future Financial Services Fund ("Turner
Fund"), as well as a proposal to approve the interim advisory contract between
the Titan Fund and Turner Investment Partners, Inc. ("Turner") ("Interim
Agreement"). Forms of the Reorganization Agreement and the Interim Agreement are
attached as Exhibit A and Exhibit B, respectively.
The Reorganization Agreement provides that the Titan Fund will transfer all of
its assets and liabilities to the Turner Fund, in return for Class I shares of
the Turner Fund having an equivalent aggregate value (the "Reorganization"). The
assets of the Titan Fund will be transferred at their current value as of the
Reorganization date, and the shares provided in return will have a total value
equal to the transferred net assets, again as of the Reorganization date. The
Titan Fund will distribute the shares received by it to its shareholders.
Shareholders of the Titan Fund will thus effectively be converted into
shareholders of the Turner Fund. No federal or state tax consequences are
expected to result to the Titan Fund or its shareholders. Immediately before the
Reorganization, the Titan Fund expects to distribute ordinary income and capital
gains to shareholders.
The PMP Trust is an open-end management investment company, or mutual fund.
Titan Investment Advisors, LLC ("Titan LLC") formerly provided investment
advisory services to the Titan Fund. On June 29, 2001, Turner acquired all of
the interests in Titan LLC. Turner is the interim adviser to the Titan Fund and
provides day-to-day investment management of the assets of the Titan Fund. If
the Reorganization Agreement is carried out as proposed, shareholders of the
Titan Fund will become shareholders of the Turner Fund, and Turner's interim
advisory agreement with the Titan Fund will automatically terminate when the
Reorganization occurs.
The Turner Trust also is an open-end management investment company, or mutual
fund. The Turner Fund is a series of the Turner Trust. Turner is the investment
adviser to the Turner Fund and provides day-to-day investment management of the
assets of the Turner Fund.
THIS PROSPECTUS/PROXY STATEMENT SETS FORTH CONCISELY THE INFORMATION THAT A
SHAREHOLDER OF THE TITAN FUND SHOULD KNOW BEFORE VOTING ON THE REORGANIZATION
AND THE INTERIM AGREEMENT, AND SHOULD BE RETAINED FOR FUTURE REFERENCE.
The following additional relevant documents have been filed with the Securities
and Exchange Commission ("SEC") and are incorporated by reference in whole or in
part:
(i) A Statement of Additional Information, dated ________, 2001, relating to
this prospectus/proxy statement and the Reorganization is available upon
request and without charge by calling 1-800-224-6312. The SAI includes
financial information calculated as if the Reorganization has occurred.
(ii) A Prospectus for the Turner Trust relating to the Turner Fund, dated
January 31, 2001, as amended May 1, 2001, is incorporated by reference into
this prospectus/proxy statement. A copy of this Prospectus is included
herewith. Additional copies of the Prospectus are available upon request
and without charge by calling 1-800-224-6312.
(iii) A Statement of Additional Information for the Turner Trust relating to the
Turner Fund, dated January 31, 2001, as amended May 1, 2001, is
incorporated by reference into the Statement of Additional Information
relating to the prospectus/proxy statement dated ___________, 2001, as well
as Part C of this filing. A copy of the Turner Fund's Statement of
Additional Information is available upon request and without charge by
calling 1-800-224-6312.
(iv) The Annual Report to shareholders of the Turner Fund for the fiscal year
ended September 30, 2000, and the Semi-Annual Report to shareholders of the
Turner Fund for the period ended March 31, 2001, are incorporated by
reference into this prospectus/proxy statement insofar as each relates to
the Turner Fund, and not to any other series that are a part of the Turner
Trust and described therein. A copy of the Turner Fund's Annual Report and
Semi-Annual Report, which include discussions of the performance of the
Turner Fund, are included herewith. Additional copies may be obtained by
writing the Turner Fund at P.O. Box 219805, Kansas City, Missouri
64121-9805, or by calling 1-800-224-6312.
(v) The Prospectus for the PMP Trust relating to the Titan Fund, dated August
28, 2000 as supplemented on January 31, 2001 and June 20, 2001, contains a
more detailed discussion of the investment objectives, policies and risks
of the Titan Fund. It is incorporated by reference into this
prospectus/proxy statement insofar as it relates to the Titan Fund and not
to any other fund of the PMP Trust described therein. Copies are available
upon request and without charge by calling 1-800-282-2340.
(vi) A Statement of Additional Information for the PMP Trust relating to the
Titan Fund, dated August 28, 2000, is incorporated by reference into this
prospectus/proxy statement insofar as it relates to the Titan Fund and not
to any other fund of the Trust described therein. Copies are available upon
request and without charge by calling 1-800-282-2340.
(vii) The Annual Report to shareholders of the Titan Fund for the fiscal year
ended April 30, 2001, and the Semi-Annual Report to shareholders of the
Titan Fund the period ended October 30, 2000, which include discussions of
the performance of the Titan Fund, are available upon request and without
charge by calling 1-800-282-2340.
Shares represented by duly executed proxies will be voted in accordance with the
instructions given. Proxies may be revoked at any time up until voting results
are announced at the Special Meeting or any subsequent meeting resulting from an
adjournment of the Special Meeting. You can do this by writing to the Titan
Fund's Secretary, c/o Professionally Managed Portfolios, 915 Broadway, New York,
New York, 10010, or by voting in person at the Special Meeting.
This prospectus/proxy statement constitutes the proxy statement of the PMP Trust
for the Special Meeting and is expected to be sent to shareholders on or about
Friday, August 31, 2001. Only shareholders of record as of the close of business
on Friday, August 24, 2001 (the "Record Date") are entitled to notice of, and to
vote at, the Special Meeting or any adjournment thereof.
READ AND KEEP THESE DOCUMENTS. Please read the entire prospectus/proxy
statement, along with the Turner Fund's Prospectus, which follows the
prospectus/proxy statement, before casting your vote. These documents contain
information that is important to your proxy decision, and you should keep them
for future reference.
------------------------------------------------------------
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE EASILY AND QUICKLY. JUST FOLLOW THE SIMPLE
INSTRUCTIONS THAT APPEAR ON YOUR ENCLOSED PROXY CARD.
------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Page
SUMMARY.......................................................................1
THE REORGANIZATION.......................................................1
THE INTERIM ADVISORY AGREEMENT...........................................2
PROPOSAL 1....................................................................2
INFORMATION RELATING TO THE REORGANIZATION....................................2
DESCRIPTION OF THE REORGANIZATION........................................2
FEDERAL INCOME TAXES.....................................................3
CAPITALIZATION...........................................................4
THE REORGANIZATION AGREEMENT..................................................4
REASONS FOR THE REORGANIZATION................................................5
CONSIDERATIONS OF THE TRUSTEES OF PMP TRUST...................................7
COMPARISON OF THE INVESTMENT OBJECTIVES, POLICIES, RISKS AND
FEES OF THE TITAN FUND AND THE TURNER FUND....................................9
INVESTMENT OBJECTIVES....................................................9
STRATEGIES AND RISKS.....................................................9
Investment Strategies....................................................9
Risks...................................................................10
PERFORMANCE.............................................................12
Titan Fund..............................................................12
Turner Fund.............................................................13
FUND MANAGEMENT.........................................................13
FUND TRANSACTIONS.......................................................14
MANAGER OF MANAGERS OPTION..............................................16
COMPARISON OF FEES AND EXPENSES.........................................17
Shareholder Transaction Fees............................................17
Operating Fees and Expenses.............................................17
Example.................................................................18
SHAREHOLDER INFORMATION.................................................20
The Turner Fund.........................................................20
The Titan Fund..........................................................20
i
DIVIDEND POLICIES.......................................................20
DESCRIPTION OF THE PMP TRUST.................................................21
DESCRIPTION OF THE TURNER TRUST..............................................21
ADDITIONAL INFORMATION.......................................................21
THE ADMINISTRATOR.......................................................21
THE CUSTODIAN AND TRANSFER AGENT........................................22
THE DISTRIBUTOR.........................................................22
THE BOARD OF TRUSTEES AND PRINCIPAL EXECUTIVE OFFICERS..................23
ADDITIONAL INFORMATION ABOUT THE TURNER FUND.................................27
PROSPECTUS..............................................................27
STATEMENT OF ADDITIONAL INFORMATION.....................................27
SHAREHOLDER REPORTS.....................................................27
ADDITIONAL INFORMATION ABOUT BOTH FUNDS......................................27
SHAREHOLDER RIGHTS...........................................................28
SHARES..................................................................28
SHAREHOLDER VOTING......................................................28
SHAREHOLDER MEETINGS....................................................28
ELECTION AND TERM OF TRUSTEES...........................................29
SHAREHOLDER LIABILITY...................................................29
LIABILITY OF TRUSTEES...................................................29
LEGAL MATTERS................................................................30
PROPOSAL 2...................................................................30
APPROVAL OF THE INTERIM AGREEMENT.......................................30
VOTING ON THE PROPOSALS......................................................32
GENERAL INFORMATION.....................................................32
VOTE REQUIRED TO APPROVE THE PROPOSALS..................................32
OUTSTANDING SHARES......................................................34
BENEFICIAL OWNERS.......................................................34
OTHER BUSINESS...............................................................35
SHAREHOLDER INQUIRIES........................................................35
EXHIBIT A...................................................................A-1
EXHIBIT B...................................................................B-1
ii
SUMMARY
The following is a summary of certain key information concerning the
Reorganization Agreement and the Interim Agreement. More detailed information
appears throughout this prospectus/proxy statement and is qualified by reference
to the more complete information contained herein and in the attached Exhibits A
and B. You should read this entire prospectus/proxy statement carefully.
THE REORGANIZATION
Shareholders of the Titan Fund will be asked to consider and approve the
Reorganization Agreement between the PMP Trust, on behalf of the Titan Fund, and
the Turner Trust, on behalf of the Turner Fund. In the Reorganization, the Titan
Fund will transfer all of its assets and liabilities to the Turner Fund, in
return for Class I shares of the Turner Fund having an equivalent aggregate
value. The assets of the Titan Fund will be transferred at their current value
as of the Reorganization date, and the shares provided in return will have a
total value equal to the transferred net assets, again as of the Reorganization
date. The Titan Fund will distribute the shares received by it to its
shareholders in a liquidating distribution. Shareholders of the Titan Fund will
thus effectively be converted into Class I shareholders of the Turner Fund. No
federal or state tax consequences are expected to result to the Titan Fund or
its shareholders. Immediately before the Reorganization, the Titan Fund expects
to distribute ordinary income and capital gains to shareholders.
The Titan Fund's primary investment objective is to seek capital appreciation,
and its secondary objective is to provide moderate income. The Turner Fund seeks
long term capital appreciation. The Turner Fund seeks to invest a higher
percentage of its assets than does the Titan Fund in the equity securities of
financial services companies. The Turner Fund is non-diversified, which means
that it may concentrate its investments in fewer issuers than the Titan Fund
does. Both Funds are concentrated in the financial services sector and have
similar risks relating to the securities in that sector. However, as a
non-diversified Fund, the Turner Fund is exposed to the risk that a decline in
the prices of a few companies in its portfolio will have a greater effect on the
Turner Fund's share price than if the Turner Fund were diversified, as the Titan
Fund is.
The minimum initial investment in the Turner Fund is $2,500. The minimum
subsequent investment is $50. Shareholders may exchange shares of the Turner
Fund for another Fund in the Turner Trust of the same class. Redemptions may be
made by telephone or by mail. The Turner Trust Trustees have authorized the
Turner Fund to impose a 2% fee on redemptions within 90 days of purchase if
necessary to control market timing activities that might injure the Fund. To
date the Turner Fund has not implemented this fee.
The minimum initial investment in the Titan Fund is $5,000. The minimum
subsequent investment is $100. Titan Fund shareholders may exchange their shares
only for shares of the Start Treasury Fund, a money market fund affiliated with
the Titan Fund's custodian. Exchanges must be in amounts of $1,000 or more.
Redemptions may be made by telephone or by mail.
1
The Titan Fund imposes a fee of 1% on the redemption of Fund shares within one
year of their initial purchase.
Both Funds offer systematic investment and withdrawal plans.
THE INTERIM ADVISORY AGREEMENT
Shareholders of the Titan Fund will be asked to consider and approve the interim
advisory contract between the PMP Trust, on behalf of the Titan Fund, and Turner
Investment Partners, Inc. ("Turner") ("Interim Agreement"). On June 14, 2001,
the Board appointed Turner as interim adviser under a written contract that
became effective on June 17, 2001, after the termination of the advisory
agreement between the Titan Fund and Titan Investment Advisors, LLC and the
termination of the interim subadvisory agreement between the Titan Fund and
Harris Bretall Sullivan & Smith. The Interim Agreement will automatically
terminate on the date of the Reorganization. Securities and Exchange Commission
rules provide that the Titan Fund may operate under an advisory contract that
shareholders have not approved for a period not to exceed 150 days. That period
of time expired on June 16, 2001. Turner and the PMP Trust applied for an
exemptive order to allow Turner to serve past this 150 day period so long as it
escrows its fees. However, under the Investment Company Act of 1940, as amended
(the "1940 Act"), shareholders of the Titan Fund still are required to approve
the Interim Agreement in order for Turner to receive its advisory fees. If
shareholders do not approve the Interim Advisory Agreement, Turner may receive
only its costs for providing advisory services to the Titan Fund.
.
PROPOSAL 1
INFORMATION RELATING TO THE REORGANIZATION
DESCRIPTION OF THE REORGANIZATION
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
REORGANIZATION AGREEMENT FOUND IN EXHIBIT A.
The Reorganization Agreement provides that all of the assets and liabilities of
the Titan Fund will be transferred to the Turner Fund, a separate series of the
Turner Trust, at the close of business on Monday, September 24, 2001, or such
later date as is agreed to by the parties (the "Effective Time"). The
Reorganization is subject to a number of conditions, including the receipt of
certain legal opinions of counsel.
In exchange for the transfer of the assets and liabilities of the Titan Fund,
the Turner Fund will simultaneously issue to the Titan Fund, at the Effective
Time, a number of full and fractional Class I shares equal in value to the net
asset value of the Titan Fund immediately prior to the Effective Time. Following
the transfer of assets and liabilities in exchange for Turner Fund shares, the
Titan Fund will distribute PRO RATA the Turner Fund Class I shares received to
its shareholders. Each shareholder of the Titan Fund owning shares at the
Effective Time will
2
receive Turner Fund Class I shares of equal value. This distribution will be
accomplished by the establishment of accounts in the names of the Titan Fund's
shareholders on the share records of the Turner Fund's transfer agent. Each
account will represent the respective PRO RATA number of full and fractional
shares of the Turner Fund due to the shareholders of the Titan Fund. The Turner
Fund does not issue share certificates to shareholders. Shares of the Turner
Fund do not have preemptive or conversion rights. After the Reorganization, the
Titan Fund will cease operations and terminate.
After the completion of the Reorganization, the Turner Fund may incur capital
gains as a result of portfolio repositioning. Turner does not expect these gains
to be significant.
Turner has acquired all of the interests in Titan LLC. An agreement dated as of
June 29, 2001, pursuant to which Titan LLC and its members agreed to the sale of
all of their interests in Titan LLC to Turner (the "Acquisition") has been
executed by the parties thereto. In consideration for the Acquisition, members
of Titan LLC received payments based on (i) the assets of the Titan Fund held in
shareholder accounts directly with the Titan Fund at June 20, 2001 and as
determined quarterly thereafter, for a period of five years; (ii) the assets of
the Titan Fund held through fund "supermarket" accounts determined as of the
date of the Reorganization; and (iii) purchases, after June 20, 2001, of Fund
shares or shares of other funds managed by Turner by new shareholders associated
with the former members of Titan LLC, where the accounts are held directly with
the Turner Fund or with a fund managed by Turner. The Acquisition occurred on
June 29, 2001 and was subject to various conditions. Robert E. Turner, a Trustee
of the Turner Trust and the Chairman and Chief Executive Officer of Turner had a
material interest in the Acquisition due to his relationship with Turner.
FEDERAL INCOME TAXES
The Reorganization is intended to qualify for federal income tax purposes as a
tax-free reorganization under Section 368(a) of the Internal Revenue Code of
1986, as amended. If it qualifies, shareholders of the Titan Fund will not
recognize gain or loss, for federal income tax purposes, in the transaction; the
tax basis of the Turner Fund shares received will be the same as the tax basis
of the Titan Fund shares surrendered; and the holding period of the Turner Fund
shares received will include the holding period of the Titan Fund's shares
surrendered, provided that the shares surrendered were capital assets in the
hands of the Titan Fund's shareholders at the time of the transaction. As a
condition to the closing of the Reorganization, the Titan Fund will receive an
opinion from counsel to that effect. Turner, on behalf of the Titan Fund, has
not sought a tax ruling from the Internal Revenue Service. The opinion of
counsel is not binding on the Internal Revenue Service and does not preclude the
Internal Revenue Service from adopting a contrary position. Shareholders should
consult their own tax advisers concerning the potential tax consequences of the
Reorganization to them, including state and local tax consequences. Turner does
not anticipate that securities transferred to the Turner Fund will be sold in
significant amounts to carry out its investment policies or strategies.
3
CAPITALIZATION
The following table sets forth as April 30, 2001: (i) the capitalization of each
Fund; and (ii) the combined capitalization of the Turner Fund, assuming the
Reorganization has occurred.
Net Asset Value Shares Outstanding
--------------- ------------------
Net Assets Per Share
---------- ---------
Titan Financial Services Fund $23,341,266 $19.76 1,181,390
Turner Future Financial Services $ 349,866 $11.27 31,037
Fund
Combined- Turner Future Financial $23,691,132 $19.76 1,199,098
Services Fund
THE REORGANIZATION AGREEMENT
The Reorganization Agreement provides that all of the assets and liabilities of
the Titan Fund will be transferred to the Turner Fund, a series of the Turner
Trust, in return for Class I shares of the Turner Fund having an equivalent
aggregate value. The assets of the Titan Fund will be transferred to Turner Fund
at their current value on the date of the transaction, and the Class I shares
provided in return will have a total value equal to the total value of the
transferred net assets, again as of the transaction date. Finally, the Titan
Fund will distribute the Class I shares received by it to its shareholders in a
liquidating distribution.
The Reorganization Agreement provides that the PMP Trust will receive, prior to
the closing, an opinion of counsel to the effect that: (i) the Turner Fund is
duly organized and validly existing under the laws of the Commonwealth of
Massachusetts; (ii) the Turner Trust is an open-end management investment
company registered under the 1940 Act; (iii) the execution, delivery and
performance of the Reorganization Agreement has been duly authorized by all
necessary action of the Turner Trust, and is a valid and binding obligation of
the Turner Fund, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, and similar laws or court decisions regarding enforcement of
creditors' rights generally; (iv) to the best of counsel's knowledge after
reasonable inquiry, no consent, approval, order or other authorization of any
federal or state court or administrative or regulatory agency is required for
the execution or the performance of the Reorganization Agreement by the Turner
Trust, for itself and on behalf of the Turner Fund, other than where the failure
to obtain such consent, approval, order, or authorization would not have a
material adverse affect on the operations of the Turner Trust or the Turner
Fund; and (v) the Turner Fund shares to be issued in the Reorganization have
been duly authorized and upon issuance thereof in accordance with the
Reorganization Agreement, will be validly issued, fully paid and non-assessable.
In addition, the Turner Trust shall have received, prior to the closing, an
opinion of counsel to the effect that: (i) the Titan Fund is duly organized and
validly existing under the laws of the Commonwealth of Massachusetts; (ii) the
PMP Trust is an open-end management investment
4
company registered under the 1940 Act; (iii) the execution, delivery and
performance of the Reorganization Agreement has been duly authorized by all
necessary action of the PMP Trust, and is a valid and binding obligation of the
Titan Fund, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
and similar laws or court decisions regarding enforcement of creditors' rights
generally; and (iv) to the best of counsel's knowledge after reasonable inquiry,
no consent, approval, order or other authorization of any federal or state court
or administrative or regulatory agency is required for the execution or the
performance of the Reorganization Agreement by the PMP Trust, for itself and on
behalf of the Titan Fund, other than where the failure to obtain such consent,
approval, order, or authorization would not have a material adverse affect on
the operations of the PMP Trust or the Titan Fund.
The Reorganization Agreement and the Reorganization may be abandoned without
penalty at any time prior to the Effective Time of the Reorganization by
resolution of the Board of the PMP Trust or of the Board of the Turner Trust (or
at the discretion of the President of either entity) if circumstances should
develop that, in the opinion of either Board (or the President of either
entity), make it inadvisable to proceed with the Reorganization.
REASONS FOR THE REORGANIZATION
The PMP Trust's advisory contract on behalf of the Titan Fund with Titan LLC
terminated on January 17, 2001, upon the death of Mr. Gilbert Giordano, the
President and principal employee of Titan LLC. The Board of the PMP Trust
approved a new agreement with Titan LLC effective January 18, 2001. The Board
also appointed Harris Bretall Sullivan and Smith ("Harris Bretall") on January
25, 2001 to serve as interim subadviser to the Titan Fund. Both of these
agreements were permitted pursuant to Rule 15a-4 under the 1940 Act. Rule 15a-4
allows a fund to retain an interim investment adviser if the agreement between
the fund's former investment adviser and the fund has been unexpectedly
terminated.
Under this rule, the newly-retained investment adviser to a fund is permitted to
serve the fund under an investment advisory agreement that shareholders have not
yet approved if (i) the fund's governing board has approved the agreement as
specified in the 1940 Act, (ii) the compensation the investment adviser will
receive does not exceed the compensation paid to the former investment adviser
and (iii) shareholders approve the agreement within the 150 day period following
the termination of the prior agreement.
The Harris Bretall and the Titan LLC agreements terminated on June 16, 2001
pursuant to the provisions of Rule 15a-4 under the 1940 Act.
Turner currently serves as interim adviser to the Titan Fund pursuant to a
management agreement effective June 17, 2001, by and between the PMP Trust on
behalf of the Titan Fund and Turner (the "Interim Agreement"). The Board
re-approved the Interim Agreement on June 20, 2001 at an in-person meeting.
Turner and the PMP Trust have applied to the SEC for exemptive relief to allow
Turner to serve as the interim adviser beyond the 150 day period pending
shareholder approval. The SEC granted the requested relief on August 20, 2001.
5
The Reorganization has been proposed to enable the Titan Fund's assets to be
merged with and into the Turner Fund. Because of the high degree of similarity
between the Titan Fund and the Turner Fund, it would be more efficient to
combine the Titan Fund with the Turner Fund than for Turner to continue to serve
as interim adviser to the Titan Fund and adviser to the Turner Fund. The
Trustees of the PMP Trust expect that merging the Titan Fund's assets with and
into the Turner Fund should achieve operating efficiencies and realize economies
of scale due to the Turner Trust's combined assets and its ability to negotiate
favorable rates with service providers, and Turner's financial stability. In
addition, the Trustees considered that Morgan, Lewis & Bockius LLP believes that
the Reorganization will be tax-free to the Titan Fund's shareholders, and that
Turner will bear all special costs relating to the Reorganization and the
Interim Agreement, including the costs of expenses associated with preparing,
printing and mailing this proxy statement and other solicitation materials
related to the required approvals by Titan Fund shareholders.
Turner has advised the Board of the PMP Trust that it does not expect to
continue as adviser to the Titan Fund if the Titan Fund's shareholders fail to
approve the Reorganization. Turner has, however, agreed that if the Titan Fund's
shareholders fail to approve the Reorganization by the requisite vote, it will
continue to serve as interim investment adviser to the Titan Fund for a
reasonable period of time until a replacement adviser is selected or the Board
chooses another course of action (including the liquidation of the Fund). In
this regard, however, the Board believes that in such a case the prospects of
finding another replacement adviser will be substantially diminished considering
the amount of assets the Titan Fund likely will have and the Fund's history of
interim advisers. Thus, a failure to approve the Reorganization by the requisite
vote may in fact ultimately result in the liquidation of the Titan Fund.
The obligations of each of the PMP Trust and the Turner Trust to consummate the
Reorganization are conditioned upon several customary conditions having been
satisfied, including without limitation the approval of the Reorganization by
the requisite number of the Titan Fund's shareholders. At the effective time of
the Reorganization as defined in the Reorganization Agreement (the "Effective
Time"), the Titan Fund will be merged with and into the Turner Fund, as a result
of which the Turner Fund, as the surviving entity in the Reorganization, will
acquire and assume all of the Titan Fund's assets and liabilities and issue
shares of the Turner Fund to the former Titan Fund shareholders. The value of
each shareholder's account with the Turner Fund immediately after the
Reorganization will be the same as the value of such shareholder's account with
the Titan Fund immediately prior to the Reorganization.
It will not be necessary for holders of certificates representing shares of the
Titan Fund to exchange their certificates for new certificates representing the
Turner Fund shares following consummation of the Reorganization. The Turner Fund
will not issue new certificates after the Reorganization to the former Titan
Fund shareholders. Titan Fund shareholders who have not been issued certificates
and whose shares are held in an open account will automatically have those
shares transferred to an open account of the Turner Fund and designated as
Turner Fund shares.
6
CONSIDERATIONS OF THE TRUSTEES OF PMP TRUST
At meetings held on June 20, 2001 and July 17, 2001, the Trustees of the PMP
Trust reviewed the Reorganization Agreement and determined that the
Reorganization is in the best interests of the Titan Fund and its shareholders,
and that the interests of the Titan Fund's shareholders will not be diluted as a
result of the Reorganization. The Trustees determined to recommend that the
shareholders of the Titan Fund approve the Reorganization Agreement, as well as
the Interim Agreement.
During its review and deliberations, the Board of Trustees of the PMP Trust
evaluated the potential benefits, detriments and costs to the Titan Fund and its
shareholders of the proposed Reorganization. The Trustees carefully reviewed the
terms and provisions of the Reorganization Agreement, the substantial similarity
of the objectives, policies and restrictions of the Titan Fund and the Turner
Fund, the tax consequences of the Reorganization to the Titan Fund and its
shareholders, and the expense ratios of the Titan Fund and the Turner Fund. In
evaluating Turner and the Reorganization, the Board reviewed materials
furnished, and considered representations made, by Turner regarding its
philosophy of management, history, performance expectations and methods of
operation insofar as they related to the Turner Fund, and its prior performance
as investment adviser to the Turner Fund and the other funds in the Turner
Trust. In this regard, the Board noted the fact that Turner has been in
operation since 1990 and has extensive experience managing investment companies,
with approximately $9.766 billion in assets under management as of May 31, 2001
for investment companies and separate accounts.
In evaluating the proposed Reorganization, the Board determined that Titan Fund
shareholders would likely benefit from affiliation with Turner for several
reasons, including the financial strength of Turner, enhanced access to
research, and Turner's larger technological infrastructure. The Board also
considered the fact that potential benefits from the larger Turner organization
were being obtained, including that the Titan Fund's shareholders, as
shareholders of the Turner Fund following the Reorganization, would gain access
to a broad array of mutual funds through the Turner Fund's exchange privilege.
The Board considered the similarities and differences between the current
investment objectives and policies of the Titan Fund and those of the Turner
Fund, as described below, and concluded that the investment objectives and
policies of the Titan Fund were similar to that of the Turner Fund.
The Board also considered the Titan Fund's current fee and expense structure and
historical expense ratios as compared to those of the Turner Fund. The Board
also reviewed the proposed fees as compared to those of comparable funds. The
Board determined that the Turner's Fund's contractual investment advisory fees
were within the range of rates for comparable funds and in addition, the
combination of Turner's voluntary waivers and expense reimbursements and its use
of directed brokerage to lower the Turner Fund's expenses resulted in total fund
operating expenses that are lower than the Titan Fund's current operating
expenses.
The Board also considered the agreement between Turner and Titan LLC pursuant to
which Turner would bear all special costs relating to the Reorganization and the
Interim Agreement, including the costs and expenses associated with preparing,
printing and mailing this proxy
7
statement and other solicitation materials related to the required approvals by
the Titan Fund shareholders.
Turner and Titan LLC have assured the Board that they intend to comply with
Section 15(f) of the 1940 Act. Section 15(f) provides a non-exclusive safe
harbor for an investment adviser to an investment company or any of its
affiliated persons to receive any amount or benefit in connection with a change
in control of the investment adviser so long as two conditions are met. (The
change in control of Titan LLC occurred upon the death of Mr. Giordano, the
principal employee and owner of Titan LLC). First, for a period of three years
after the transaction, at least 75% of the board members of the Turner Trust
must not be interested persons of Turner or Titan LLC. Second, an "unfair
burden" must not be imposed upon the Turner Fund and the Trustees of the Turner
Fund as a result of such transaction or any express or implied terms, conditions
or understandings applicable thereto. The term "unfair burden" is defined in
Section 15(f) to include any arrangement during the two-year period after the
Reorganization whereby the investment adviser or any interested person of the
adviser receives or is entitled to receive any compensation, directly or
indirectly, from the investment company or its shareholders (other than fees for
bona fide investment advisory or other services) or from any person in
connection with the purchase or sale of securities or other property to, from or
on behalf of the investment company (other than bona fide ordinary compensation
as principal underwriter for such investment company). Turner and Titan LLC are
not aware of any express or implied term, condition, arrangement or
understanding that would impose an "unfair burden" on the Titan Fund as a result
of the Acquisition. Turner has agreed that it and its affiliates will take no
action that would have the effect of imposing an "unfair burden" on the Titan
Fund as a result of the Acquisition.
In addition, the Titan Fund and the Turner Fund are "affiliated persons" of each
other, as that term is defined in the 1940 Act by virtue of having a common
investment adviser, Turner. The Board, including the Trustees who are not
"interested persons" of the PMP Trust within the meaning of Section 2(a)(19) of
the 1940 Act, considered and determined that the Titan Fund's participation in
the Reorganization was in the best interests of the Titan Fund, and the
interests of existing shareholders of the Titan Fund would not be diluted as a
result of the Reorganization.
Based upon its evaluation of the relevant information presented to them, and in
light of their fiduciary duties under federal and state law, the Board,
including all its trustees that are not interested persons of the PMP Trust,
unanimously determined that the transactions contemplated by the Reorganization
are advisable and in the best interests of the Titan Fund and its shareholders,
and that the interests of existing shareholders in the Titan Fund would not be
diluted as a result of the transaction contemplated by the Reorganization, and
recommended the approval of each of the Proposals by the shareholders at the
Meeting. The Trustees of the Turner Trust, including those Trustees who are not
"interested persons" of the Turner Trust within the meaning of the 1940 Act,
also determined that participation in the Reorganization is in the best
interests of the Turner Fund and its shareholders.
THE BOARD OF TRUSTEES OF THE PMP TRUST RECOMMENDS THAT YOU
VOTE FOR APPROVAL OF THE REORGANIZATION AGREEMENT DESCRIBED IN
THIS PROSPECTUS/PROXY STATEMENT.
8
COMPARISON OF THE INVESTMENT OBJECTIVES, POLICIES AND RISKS OF
THE TITAN FUND AND THE TURNER FUND
This section tells you about:
o The Turner Fund's investment objective
o The Turner Fund's investment policies and strategies
o The risks of investing in the Turner Fund
o The fees of the Turner Fund
o The Turner Trust
It compares this information with similar information about the Titan Fund and
the PMP Trust. There is more information about the Turner Fund's investment
practices in the Prospectus, which is enclosed, and in the Statement of
Additional Information ("SAI") which legally is a part of this prospectus/proxy
statement. For details about how to get other reports and information about the
Turner Fund, see the back cover of this prospectus/proxy statement.
INVESTMENT OBJECTIVES
THE TITAN FUND. The Titan Fund's primary investment objective is to seek capital
appreciation, and its secondary objective is to provide moderate income. The
Titan Fund normally invests at least 65% of its total assets in equity
securities of financial service companies. Although the Titan Fund's investment
policies permit it to invest in financial service companies outside the U.S.,
historically the Fund has limited its investments to U.S. companies.
THE TURNER FUND. The Turner Fund seeks long term capital appreciation. It
attempts to achieve this objective by investing substantially all (at least 80%
of the value of its total assets under normal market conditions) in common
stocks and other equity securities of U.S. financial services companies.
SIGNIFICANT DIFFERENCES. The Turner Fund seeks to invest a higher percentage of
its assets than does the Titan Fund in the equity securities of financial
services companies. The Turner Fund does not have the objective of providing
moderate income.
STRATEGIES AND RISKS
INVESTMENT STRATEGIES
THE TITAN FUND. The Titan Fund normally invests at least 65% of its total assets
in equity securities of financial service companies, which include commercial
and consumer banks, savings and loan institutions, insurance companies, finance
companies, mortgage and other lenders, securities brokerage firms, credit card
providers, service providers to the banking and financial services sectors, and
holding companies for each of the foregoing.
9
The Titan Fund has concentrated its investments in equity securities of
companies that, in Titan LLC's opinion, were undervalued from the standpoint of
both book value and earnings. Titan LLC sought to identify companies whose
prospects were deemed attractive on the basis of growth in earnings and assets
and the companies' fundamentals. Titan LLC selected companies on the basis of
book value, earnings, quality of assets, merger potential and franchise value
(particularly in regard to banks and savings and loan institutions). Titan LLC
paid particular attention to smaller banking institutions (with assets of $5
billion or less).
The Titan Fund also invested in mutual savings banks that had converted to
publicly held companies. The Titan Fund endeavored to open deposit accounts with
mutual savings and loan associations with the intention of subscribing to stock
if the associations went public. The Titan Fund could invest up to 35% of its
total assets in the equity securities of non-financial services companies.
THE TURNER FUND. The Turner Fund invests substantially all of its assets in
common stocks and other equity securities of U.S. financial services companies,
including banks, brokerage houses, insurance companies and investment advisory
companies, that Turner believes have above average growth potential or that are
undervalued. These securities may be traded over the counter or listed on an
exchange. The Turner Fund's investments are concentrated in the financial
services industry. The Turner Fund's portfolio manager considers a company to be
within the financial services industry only if it derives a significant portion
(more than 50%) of its revenues from that industry. Turner also invests the
Turner Fund's assets in financial services companies that it believes to be
potential merger or acquisition targets. The Turner Fund is "non-diversified,"
which means that it may invest in the securities of fewer issuers than a
diversified fund. The Turner Fund may buy and sell securities frequently as part
of its investment strategy. This may result in higher transaction costs and
additional tax liabilities.
SIGNIFICANT DIFFERENCES. The Turner Fund is non-diversified, which means that it
may invest in fewer issuers than the Titan Fund does. The Titan Fund may invest
up to 35% of its assets in non-financial services companies, while the Turner
Fund normally would not invest more than 20% of its assets in these companies.
Also, the Titan Fund's former adviser and former interim sub-adviser may have
had a different style in selecting investments than the Turner Fund's adviser
(who recently began managing the Titan Fund's assets). Depending on market,
economic, and other factors, one investment style may lead to better performance
than another. The Turner Fund also invests in technology-oriented financial
services companies, both current and emerging, to a greater degree than the
Titan Fund.
RISKS
THE TITAN FUND. Because the Titan Fund invests in equity securities, it is
subject to market risk - the risk that the market value of a security may move
up and down, sometimes rapidly and unpredictably. These fluctuations may cause a
security to be worth less than the price originally paid for it, or less than it
was worth at an earlier time. Market risk may affect a single issuer, industry,
or sector of the economy or the market as a whole.
10
The Titan Fund invests in small and medium sized-companies. Investing in
securities of small and medium-sized companies may involve greater risk than
investing in larger companies because they can be subject to more abrupt or
erratic share price changes. Small companies may have limited markets or
financial resources and their management may be dependent on a limited number of
key individuals. Securities of these companies may have limited market liquidity
and their prices may be more volatile.
Because the Titan Fund concentrates its investments in a particular sector, the
value of its shares may be subject to greater risks than the shares of a fund
whose portfolio is not so concentrated. The shares of financial services
companies are particularly affected by economic, legislative and regulatory
developments affecting the financial services sector as well as movements in
interest rates. Financial services stocks therefore may decline in value even if
the overall market is doing well. Financial services companies tend to be more
interest rate sensitive than other stocks. As interest rates increase, financial
services stocks tend to decline in value.
The financial services sector may be more subject to government regulation than
many other sectors. Changes in governmental policies and the need for regulatory
approval may have a material effect on the services of this sector. Banks,
savings and loan institutions and financial companies are subject to extensive
governmental and, in some cases, state regulations which may limit both the
financial commitments they can make, including the amounts and types of loans
and the interest rates and fees they can charge.
The Titan Fund also invests in insurance companies, which are also subject to
extensive governmental regulation, including the imposition of maximum rate
levels, which may be inadequate for some lines of business. The performance of
insurance companies will be affected by interest rates, severe competition in
the pricing of services, claims activities, marketing competition and general
economic conditions. Profitability is largely dependent on the availability and
cost of capital funds and can fluctuate significantly when interest rates
change.
THE TURNER FUND. Because the Turner Fund purchases equity securities, the Turner
Fund also is subject to the risk that stock prices will fall over short or
extended periods of time. Historically, the equity markets have moved in cycles,
and the value of the Turner Fund's securities may fluctuate drastically from day
to day. Individual companies may report poor results or be negatively affected
by industry and/or economic trends and developments. The prices of securities
issued by such companies may suffer a decline in response. These factors
contribute to price volatility, which is the principal risk of investing in the
Turner Fund.
The Turner Fund's investments also are concentrated in the financial services
sector. The Turner Fund is subject to the risk that the financial services
sector will underperform the broader market, as well as the risk that issuers in
that sector will be affected by market conditions, legislative or regulatory
changes, or competition. The Turner Fund also may be more susceptible to changes
in interest rates and other market and economic factors that affect financial
services firms, including the effect of interest rate changes on the share
prices of those financial service firms. The Turner Fund may invest in merger
candidates. In addition, if Turner incorrectly predicts that a company will be
involved in a merger or other transaction, the Turner Fund may lose any
11
premium it paid for these stocks, and ultimately may realize a lower return than
if the company is not involved in a merger or acquisition transaction.
The Turner Fund is subject to the further risk that the stocks of
technology-oriented financial services companies, both current and emerging, may
underperform other segments of the equity market or to the equity markets as a
whole. The competitive pressures of advancing technology and the number of
companies and product offerings that continue to expand could cause financial
services companies to become increasingly sensitive to short product cycles and
aggressive pricing.
The Turner Fund is non-diversified, which means that it may invest in the
securities of fewer issuers than a diversified fund. As a result, the Turner
Fund may be more susceptible to a single adverse economic or regulatory
occurrence affecting one or more of these issuers, and may experience increased
volatility due to its investments in those securities.
SIGNIFICANT DIFFERENCES: Both Funds are concentrated in the financial services
sector and have similar risks relating to the securities in that sector.
However, as a nondiversified fund, the Turner Fund is exposed to the risk that a
decline in the prices of a few companies in its portfolio will have a greater
effect on the Turner Fund's share price than if the Turner Fund were
diversified, as the Titan Fund is. The Turner Fund also invests in
technology-oriented financial services companies, both current and emerging, to
a greater degree than the Titan Fund does. These companies' share prices may be
more volatile than more traditional financial services companies, which could
cause the Turner Fund's share price to be more volatile than that of the Titan
Fund.
PERFORMANCE
The table below provides the average annual total return for the Titan Fund and
the Turner Fund for selected time periods. Additional information about the
Titan Fund and the Turner Fund is contained in the Statement of Additional
Information relating to this prospectus/proxy statement, and in the Prospectus
for each Fund. How the Titan Fund and the Turner Fund have performed in the past
does not necessarily indicate how the Turner Fund will perform in the future,
especially because the Turner Fund has different advisory fee arrangements than
the Titan Fund.
TITAN FUND
Average Annual Total Return for Periods Ended December 31, 2000
Titan Financial Services Fund S&P 500 Index**
----------------------------- -------------
1 Year 31.28% 9.10%
Since Inception* 23.19% 13.93%
* The Titan Fund commenced operations on May 22, 1996.
** The S&P 500 Index is an unmanaged index generally representative of the
market for the stocks of large-sized U.S. companies.
12
TURNER FUND
Average Annual Total Return for Periods Ended December 31, 2000
Turner Future Financial Services Fund S&P Financials Index**
------------------------------------- --------------------
1 Year 27.33% 26.08%
Since Inception* 12.43% 15.87%
* The Turner Fund commenced operations on October 20, 1997. The shareholders of
the Penn Capital Select Financial Services Fund (now the Turner Fund) voted to
approve Turner as that Fund's investment adviser on January 12, 2001. Turner
began operations as the Turner Fund's investment adviser on January 16, 2001.
The performance shown reflects the performance of Penn Capital Management
Company, Inc., the Turner Fund's former adviser, prior to that date and
represents some indication of the risks and volatility of an investment in the
Turner Fund. As a result, you should review performance information within the
overall context of the investment adviser change. Turner has been managing the
Turner Fund since January 16, 2001 and is not responsible for the Fund's
performance before that date.
**The calculation date for the S&P Financials Index is October 31, 1997.
FUND MANAGEMENT
Turner serves as investment adviser to the Turner Fund and 19 other funds in the
Turner Trust family. Turner is a professional investment management firm founded
in 1990. As of May 31, 2001, Turner had approximately $9.766 billion in assets
under management. Robert E. Turner is Chairman, Chief Investment Officer and
controlling shareholder of Turner. He has held this position since the founding
of Turner Investment Partners and has been in the investment business since
1982. Turner's principal business address is 1235 Westlakes Drive, Suite 350,
Berwyn, Pennsylvania 19312, phone (800) 224-6312.
Listed below are the names and principal occupations of each of the directors
and the principal executive officers of Turner. The principal business address
of each director and the principal executive officers, as it relates to their
duties at Turner, is 1235 Westlakes Drive, Suite 350, Berwyn, PA, 19312.
NAME TITLE
---- -----
Robert E. Turner Chairman and Chief Investment Officer
Stephen J. Kneeley President and Chief Operating Officer
John H. Grady, Jr. General Counsel - Chief Legal Office and
Chief Operating Officer
Thomas R. Trala Treasurer
Mark D. Turner Vice Chairman, Senior Portfolio Manager
Turner serves as the investment adviser for the Turner Fund under an investment
advisory agreement with the Turner Trust (the "Advisory Agreement"). Under the
Advisory Agreement,
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Turner continuously reviews, supervises and administers the Turner Fund's
investment program, subject to the supervision of, and policies established by,
the Turner Trust's Board. For its services, Turner is entitled to a fee, which
is calculated daily and paid monthly, at an annual rate of 1.00% of the average
daily net assets of the Turner Fund, subject to the performance fee arrangement
described below.
The advisory fees the Turner Fund pays to Turner provide for performance-based
fees. The Turner Fund will pay Turner an advisory fee that increases if the
Turner Fund outperforms its benchmark index by a certain percentage, and
decreases if the Turner Fund under performs its benchmark index by an equal
percentage. This fee will not exceed 1.25% or be lower than 0.75%, depending on
whether the Turner Fund outperforms its benchmark by 3% or more, or
underperforms its benchmark by 3% or more, respectively. The Titan Fund, in
contrast, does not have a performance fee arrangement.
A team consisting of Chris Perry, the lead manager, and Frank Susternic, the
co-manager manages the Turner Fund. Mr. Perry also is a co-manager of the Turner
Healthcare & Biotechnology Fund. Mr. Perry, CFA, is a Senior Security Analyst at
Turner and joined Turner in 1998. Before that, he was a Research Analyst with
Pennsylvania Merchant Group. Mr. Perry has 11 years of investment experience.
Mr. Susternic, CFA, is a Senior Equity Portfolio manager at Turner. He also
serves as lead manager of the Turner Micro Cap Growth Fund and the Turner
Healthcare & Biotechnology Fund, and is a co-manager of the Turner Small Cap
Growth Fund. Mr. Susternic joined Turner in 1994. Before that, he was an
Investment Officer and fund manager with First Fidelity Bank Corporation. Mr.
Susternic has 12 years of investment experience.
Turner started managing the Turner Fund's assets on January 12, 2001. The Turner
Fund's performance since that time is set forth below, as well as the
performance of the S&P Financials Index for the same time periods. Past
performance is not indicative of future results.
TOTAL RETURN FOR PERIODS ENDING JUNE 30, 2001
TURNER FUND S&P FINANCIALS INDEX(1)
One Month 3.48% -0.04%
Three Months 12.87% 7.86%
Six Months 29.41% -2.52%
(1) The S&P Financials Index is a capitalization-weighted index designed to
measure the performance of the stocks in the financial sector of the Standard &
Poor's 500 Index. An index is not managed and, unlike all mutual funds, they do
not have fees. You cannot invest directly in an index.
FUND TRANSACTIONS
THE FOLLOWING DESCRIPTION RELATES TO TURNER'S RESPONSIBILITIES AS THE INTERIM
INVESTMENT ADVISER FOR THE TITAN FUND AND THE INVESTMENT ADVISER FOR THE TURNER
FUND.
Turner determines which securities the Funds purchase and sell, and which
broker-dealers are eligible to execute each Fund's portfolio transactions.
Purchases and sales of securities in the
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over-the-counter market will generally be executed directly with a
"market-maker" unless, in Turner's opinion, a better price and execution can
otherwise be obtained by using a broker for the transaction.
Turner also may buy securities directly from issuers or from underwriters for
the Funds. Where possible, purchase and sale transactions will be effected
through dealers (including banks) that specialize in the types of securities the
Funds hold, unless better executions are available elsewhere. Dealers and
underwriters usually act as principal for their own accounts. Purchases from
underwriters will include a concession the issuer pays to the underwriter and
purchases from dealers will include the spread between the bid and the asked
price. If the execution and price offered by more than one dealer or underwriter
are comparable, the order may be allocated to a dealer or underwriter that has
provided research or other services as discussed below.
In placing portfolio transactions, Turner uses its reasonable efforts to choose
broker-dealers capable of providing the services necessary to obtain the most
favorable price and execution available. The full range and quality of services
available will be considered in making these determinations, such as the size of
the order, the difficulty of execution, the operational facilities of the firm
involved, the firm's risk in positioning a block of securities, and other
factors. In those instances when it is reasonably determined that more than one
broker-dealer can offer the services needed to obtain the most favorable price
and execution available, the adviser may consider those broker-dealers that
furnish or supply research and statistical information to the adviser that it
may lawfully and appropriately use in its investment advisory capacities, as
well as provide other services in addition to execution services. Turner
considers such information, which is in addition to and not in lieu of the
services it must perform under the advisory agreement with each Fund, to be
useful in varying degrees, but of indeterminable value. Portfolio transactions
may be placed with broker-dealers who sell shares of the Funds, subject to rules
adopted by the National Association of Securities Dealers, Inc.
While it is Turner's general policy to seek first to obtain the most favorable
price and execution available in selecting a broker-dealer to execute portfolio
transactions for the Funds, Turner also gives weight to the ability of a
broker-dealer to furnish brokerage and research services to the Funds or to
Turner, even if the specific services are not directly useful to the Funds and
may be useful to Turner in advising other clients. In negotiating commissions
with a broker or evaluating the spread to be paid to a dealer, Turner may cause
the Funds therefore to pay a higher commission or spread than would be the case
if Turner gave no weight to the furnishing of these supplemental services,
provided that Turner has determined in good faith the amount of the commission
or spread is reasonable in relation to the value of the brokerage and/or
research services the broker-dealer provides. The standard of reasonableness is
to be measured in light of Turner's overall responsibilities to the Funds.
Investment decisions for each Fund are made independently from those of other
client accounts or mutual funds that Turner manages or advises. Nevertheless, it
is possible that at times identical securities will be acceptable for both a
Fund and one or more of such client accounts or mutual funds. In that event, the
position of a Fund and the client account(s) or mutual funds in the same issuer
may vary and the length of time that each may choose to hold its investment in
the same issuer may likewise vary. However, to the extent any of these client
accounts or mutual
15
funds seeks to acquire the same security as a Fund at the same time, the Fund
may not be able to acquire as large a portion of such security as it desires, or
it may have to pay a higher price or obtain a lower yield for such security.
Similarly, a Fund may not be able to obtain as high a price for, or as large an
execution of, an order to sell any particular security at the same time. If one
or more of such client accounts or mutual funds simultaneously purchases or
sells the same security that a Fund is purchasing or selling, each day's
transactions in that security will be allocated between the Fund and all such
client accounts or mutual funds in a manner that Turner deems equitable, taking
into account the respective sizes of the accounts and the amount being purchased
or sold. In some cases this system could have a detrimental effect on the price
or value of the security insofar as a Fund is concerned. In other cases,
however, it is believed that the ability of a Fund to participate in volume
transactions may produce better executions for the Fund.
Turner does not effect securities transactions for the Funds through brokers in
accordance with any formula, nor does it effect securities transactions through
brokers solely for selling shares of the Funds, although Turner may consider the
sale of shares as a factor in allocating brokerage. However, as stated above,
broker-dealers who execute brokerage transactions may effect purchase of shares
of the Funds for their customers.
With respect to the Turner Fund, Turner also selects brokers based on their
willingness to agree to pay certain Turner Fund expenses in return for the
direction of a portion of the Turner Fund's brokerage business. As a result of
these arrangements, the Turner Fund's expenses should be reduced, which in turn
will reduce the cost to Turner of its voluntary expense ceiling.
MANAGER OF MANAGERS OPTION
In the future, the Turner Trust and Turner may seek to achieve the Turner Fund's
investment objective by using a "manager of managers" structure. Under a manager
of managers structure, Turner would act as investment adviser in much the same
way as it currently does. However, as a manager of managers, Turner would be
permitted, subject to direction from and oversight by the Turner Trust's Board,
to allocate and reallocate assets to one or more sub-advisers, and to recommend
that the Turner Trust's Board hire, terminate or replace sub-advisers without
shareholder approval. By reducing the number of shareholder meetings that may
have to be held to approve new or additional sub-advisers, Turner anticipates
that there will be substantial potential cost savings, as well as the
opportunity to achieve certain management efficiencies.
Before it can operate using a manager of managers structure, the Turner Trust
will have to obtain exemptive relief from the SEC to permit such an arrangement.
An application has been submitted to the SEC to obtain such an order. Turner has
no assurance, however, that it will be granted. The initial shareholder of the
Turner Fund voted to vest authority to implement a manager of managers structure
with the Turner Trust's Board and this structure may be adopted without
shareholder approval. However, shareholders of the Turner Fund will be given at
least 30 days' prior written notice of any such change, and any such change
would only be made if the Turner Trust's Board determines that it would be in
the best interests of the Turner Fund and its shareholders. In making that
determination, the Trustees will consider, among other factors, the
16
benefits to shareholders and/or the opportunity to reduce costs and achieve
operational efficiencies.
The Titan Fund does not operate under a manager of managers structure.
COMPARISON OF FEES AND EXPENSES
The following tables compare the shareholder transaction fees and the annual
operating expenses, including advisory fees, of the Titan Fund to those of the
Turner Fund. The tables also show annual operating expenses assuming the
Reorganization has occurred.
SHAREHOLDER TRANSACTION FEES
(Fees paid directly from your investment)
Titan Financial Services Fund Turner Future Financial Services Fund
----------------------------- -------------------------------------
Redemption Fee
(as a percentage of amount 1.00%* 2.00%**
redeemed, if applicable)
* Applies to redemptions within one year of purchase.
** Applies to redemptions within 90 days of purchase. At this time, purchases of
shares of the Turner Fund, including shares received in the Reorganization, will
not be subject to the redemption fee described above.
OPERATING FEES AND EXPENSES
ANNUAL OPERATING EXPENSES
(Expenses deducted from Fund assets)
Titan Financial Services Fund Turner Fund Combined - Turner Fund
----------------------------- ----------- ----------------------
Investment Advisory Fees 1.00% 1.00%* 1.00%*
12b-1 Fees 0.25% None None
Other Expenses 0.86% 37.26% 0.88%
----- ------ -----
Total Annual Fund 2.11% 38.26%** 1.88%
Operating Expenses
*The advisory fee is subject to a performance adjustment based on the Turner
Fund's performance relative to the performance of the S&P Financials Index, the
Fund's benchmark. An index measures the market price of a specific group of
securities in a market sector. The S&P Financials Index is a
capitalization-weighted index designed to measure the performance of the stocks
in the financial sector of the Standard & Poor's 500 Index.
If the Turner Fund outperforms its benchmark by a set amount, Turner will
receive higher advisory fees. Conversely, if the Turner Fund underperforms its
benchmark by the same amount, Turner will receive lower advisory fees.
Accordingly, the overall fee may range from 0.75% to 1.25% depending on the
17
Turner Fund's performance. The Turner Fund's SAI contains detailed information
about its benchmark, as well as any possible performance-based adjustments to
advisory fees.
** TURNER HAS VOLUNTARILY COMMITTED TO WAIVE ADVISORY FEES AND REIMBURSE
EXPENSES TO KEEP THE TURNER FUND'S "TOTAL ANNUAL OPERATING EXPENSES" FROM
EXCEEDING 1.40%. Effective January 31, 2002, the adviser has voluntarily
committed to waive advisory fees and reimburse expenses to keep the Fund's
"other expenses" from exceeding 0.40%; Turner may discontinue this arrangement
at any time but has no present intent to do so.
Turner has arrangements with certain broker-dealers who have agreed to pay
certain Turner Fund expenses in return for the direction of a portion of the
Turner Fund's brokerage business. As a result of these arrangements, the Turner
Fund's expenses should be reduced, which in turn will reduce the cost to Turner
of its voluntary expense ceiling. The use of directed brokerage arrangements may
result in the Turner Fund's total annual operating expenses being reduced below
the level Turner voluntarily has committed to maintain. In the Turner Fund's
last fiscal year, these arrangements together with Turner's waivers ultimately
reduced the Turner Fund's total annual operating expenses to 1.40%.
The Total Annual Fund Operating Expenses of the Turner Fund, both before and
after waivers, are expected to decrease as a result of the Reorganization. Thus,
after the Reorganization former Titan Fund shareholders should pay lower fees on
their investment in the Turner Fund as compared to their investment in the Titan
Fund, even if Turner outperforms its benchmark and earns a higher advisory fee,
assuming Turner does not reduce or eliminate its waivers of fees and expenses.
Turner expects that the need to waive fees and reimburse expenses should be
greatly reduced as a result of the Reorganization.
EXAMPLE
This example is intended to help you compare the cost of investing in the Titan
Fund with the cost of investing in the Turner Fund. The example assumes that you
invest $10,000 in each Fund for the time periods indicated. The example assumes
that your investment has a 5% return each year and that each Fund's operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
Assuming Redemption at the End of Period 1 Year 3 Years 5 Years 10 Years
TITAN FINANCIAL SERVICES FUND $314 $661 $1,134 $2,441
TURNER FUTURE FINANCIAL SERVICES FUND* $3,190 $6,739 $8,320 $9,422
COMBINED - TURNER FUTURE FINANCIAL SERVICES FUND $191 $591 $1,016 $2,201
* Based on the Turner Fund's operating expenses after reflecting Turner's
voluntary commitment to limit the Fund's expenses, your costs would be: 1 Year -
$143; 3 Years - $443; 5 Years - $766; and 10 Years - $1,680.
Assuming No Redemption at the End of Period 1 Year 3 Years 5 Years 10 Years
TITAN FINANCIAL SERVICES FUND $214 $661 $1,134 $2,441
TURNER FUTURE FINANCIAL SERVICES FUND* $3,190 $6,739 $8,320 $9,422
COMBINED - TURNER FUTURE FINANCIAL SERVICES FUND $191 $591 $1,016 $2,201
18
* Based on the Turner Fund's operating expenses after reflecting Turner's
voluntary commitment to limit the Fund's expenses, your costs would be: 1 Year -
$143; 3 Years - $443; 5 Years - $766; and 10 Years - $1,680.
19
SHAREHOLDER INFORMATION
THE TURNER FUND
PURCHASING SHARES: The minimum initial investment in the Turner Fund, and
in the other 18 Funds in the Turner Trust, is $2,500. The minimum subsequent
investment is $50. The Turner Trust also offers a systematic investment plan:
investors may buy Class I shares of any Fund in the Turner Trust through an
automatic deduction from a bank account. The minimum monthly investment in this
plan is $100.
EXCHANGING SHARES: Shareholders may exchange shares of the Turner Fund for
another Fund in the Turner Trust of the same class. Currently there are 20 Funds
in the Turner Trust.
REDEEMING SHARES: Redemptions may be made by telephone or by mail. The
Turner Trust also offers a systematic withdrawal plan: shareholders with at
least $2,500 in their account may arrange for monthly, quarterly, semi-annual,
or annual withdrawals of at least $50 from any fund. The proceeds may be mailed
or electronically transferred to a bank account. The Turner Fund may redeem the
shares in an account if the value of the account is less than $1,000.
Shareholders will receive at least 60 days notice, to allow them to add to their
account.
The Trustees of the Turner Trust have authorized the Turner Fund to impose a 2%
fee on redemptions within 90 days of purchase if necessary to control market
timing activities that might injure the Fund. To date the Turner Fund has not
implemented this fee.
THE TITAN FUND
PURCHASING SHARES: The minimum initial investment in the Titan Fund is
$5,000. The minimum subsequent investment is $100. The Titan Fund also offers a
systematic investment plan: investors may buy shares of the Titan Fund through
an automatic deduction from a bank account. The minimum monthly investment in
this plan is $100.
EXCHANGING SHARES: Titan Fund shareholders may exchange their shares only
for shares of the Start Treasury Fund, a money market fund affiliated with the
Titan Fund's custodian. Exchanges must be in amounts of $1,000 or more.
REDEEMING SHARES: Redemptions may be made by telephone or by mail. The
Titan Fund also offers a systematic withdrawal plan: shareholders with at least
$10,000 in their account may arrange for monthly, quarterly, semi-annual, or
annual withdrawals of at least $50 from any fund. The proceeds may be mailed or
electronically transferred to a bank account. The Titan Fund may redeem the
shares in an account if the value of the account is less than $2,000 because of
redemptions. Shareholders receive at least 30 days notice, to allow them to add
to their account.
The Titan Fund imposes a fee of 1% on the redemption of Fund shares within one
year of their initial purchase.
20
DIVIDEND POLICIES
THE TITAN FUND. The Titan Fund distributes dividends and capital gains, if any,
at least annually, typically after year end. The Titan Fund makes another
distribution of any additional undistributed capital gains earned during the
12-month period ended October 31 on or about December 31.
THE TURNER FUND. The Turner Fund also distributes its investment income and
capital gains, if any, annually as a dividend to shareholders. The Turner Fund's
fiscal year end is September 30, and shareholders can expect distributions to be
declared during the first week of December.
DESCRIPTION OF THE PMP TRUST
The PMP Trust was organized under Massachusetts law as a business trust on
February 17, 1987 pursuant to a Declaration of Trust dated February 17, 1987, as
amended and restated on May 20, 1988 and April 12, 1991. The PMP Trust also is
governed by its By-Laws and applicable Massachusetts law. The PMP Trust is an
open-end management investment company registered under the 1940 Act, and has
authorized capital consisting of an unlimited number of units of beneficial
interest without par value. The Titan Fund has one class of shares. The Titan
Fund is a duly organized and validly existing separate series of the PMP Trust.
DESCRIPTION OF THE TURNER TRUST
The Turner Trust was organized under Massachusetts law as a business trust
pursuant to an Agreement and Declaration of Trust dated January 26, 1996, as
amended on February 21, 1997. The Turner Trust is an open-end management
investment company registered under the 1940 Act and has authorized capital
consisting of an unlimited number of units of beneficial interest, each with a
par value of $.00001. The Turner Fund currently has only one class of shares -
Class I shares, although certain other funds in the Turner Trust offer two
classes of shares - Class I shares and Class II shares. The Turner Fund is a
duly organized and validly existing series of the Turner Trust.
ADDITIONAL INFORMATION
The Turner Trust and the PMP Trust each have a different administrator, transfer
agent, custodian, distributor, Board of Trustees, and principal executive
officers.
THE ADMINISTRATOR
THE PMP TRUST. The Titan Fund has an Administration Agreement with Investment
Company Administration, LLC (the "PMP Administrator") with offices at 4455 E.
Camelback Rd., Suite 261-E, Phoenix, AZ 85018. The PMP Administrator prepares
reports and filings for the Fund, oversees the activities of the Fund's
servicing agents and performs additional services as needed. For its services,
the PMP Administrator receives a fee from the Titan Fund, which is paid monthly,
at the following annual rate:
21
Average Net Assets Fee or Fee Rate
------------------ ---------------
Under $15 million $30,000
$15 to $50 million 0.20% of average net assets
$50 to $100 million 0.15% of average net assets
$100 million to $150 million 0.10% of average net assets
Over $150 million 0.05% of average net assets
THE TURNER TRUST. SEI Investments Mutual Funds Services (the "Turner
Administrator") provides the Turner Fund with administrative services similar to
those that the PMP Administrator provides to the Titan Fund. These services
include preparing regulatory reports and providing all necessary office space,
equipment, personnel, and facilities.
For these administrative services, the Turner Administrator is entitled to a fee
from the Turner Trust, which is calculated daily and paid monthly, at the annual
rates set forth below. The Turner Fund is subject to a minimum annual
administration fee of $65,000.
Average Net Assets Fee Rate
------------------ ---------------
Up to $250 million 0.09% of average net assets
Next $250 million 0.07% of average net assets
Next $250 million 0.06% of average net assets
Nest $1.25 million 0.05% of average net assets
Over $2 billion 0.04% of average net assets
The Turner Administrator also serves as shareholder servicing agent for the
Funds in the Turner Trust under a shareholder servicing agreement.
THE CUSTODIAN AND TRANSFER AGENT
THE PMP TRUST. First Institutional Custody Services, located at 425 Walnut St.,
Cincinnati, Ohio 45201 acts as custodian of the securities and other assets of
the Titan Fund. American Data Services, Inc., P.O. Box 5536, Hauppauge, NY
11788-0132 acts as the Titan Fund's transfer and shareholder service agent.
THE TURNER TRUST. First Union National Bank, P.O. Box 7618, Philadelphia,
Pennsylvania 19101 acts as the custodian of the Turner Fund. DST Systems, Inc.,
330 W. 9th Street, Kansas City, Missouri 64105, serves as the transfer agent and
dividend disbursing agent for the Turner Fund.
THE DISTRIBUTOR
THE PMP TRUST. First Fund Distributors, Inc. (the "PMP Distributor") 4455 E.
Camelback Rd., Suite 261E, Phoenix, AZ 85018 acts as the Titan Fund's
distributor.
22
The Titan Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under
the Act, under which the Titan Fund pays its adviser as Distribution Coordinator
a fee, which is accrued daily and paid monthly, at the annual rate of up to
0.25% of the Titan Fund's average daily assets.
THE TURNER TRUST. SEI Investments Distribution Co. (the "Turner Distributor"),
Oaks, Pennsylvania 19456, a wholly-owned subsidiary of SEI Investments Company
and an affiliate of the Turner Administrator, acts as distributor for the Turner
Fund. The Turner Distributor receives no compensation for distribution of shares
of the Turner Fund.
The Turner Fund has not adopted a Plan of Distribution pursuant to Rule 12b-1
under the 1940 Act.
THE BOARD OF TRUSTEES AND PRINCIPAL EXECUTIVE OFFICERS
THE TITAN FUND.
The Trustees of the PMP Trust, who were elected for an indefinite term by the
initial shareholders of the Trust, are responsible for the overall management of
the Trust, including general supervision and review of the investment activities
of the Titan Fund. The Trustees, in turn, elect the officers of the Trust, who
are responsible for administering the day-to-day operations of the Trust and its
separate series. The current Trustees and principal executive officers, their
affiliations, dates of birth and principal occupations for the past five years
are set forth below. Unless noted otherwise, each person has held the position
listed for a minimum of five years.
Steven J. Paggioli* (04/03/50) - President and Trustee, 915 Broadway, New York,
New York 10010. Executive Vice President, Investment Company Administration, LLC
(mutual fund administrator and the Titan Fund's administrator); Vice President
and Secretary, First Fund Distributors, Inc. (a registered broker-dealer and the
Titan Fund's Distributor); Vice President, Advisors Series Trust; Trustee,
Managers Funds; Secretary, Investec Funds.
Dorothy A. Berry (08/12/43) - Chairman and Trustee, 4455 E. Camelback Rd., Suite
261-E, Phoenix, AZ 85018. President, Talon Industries (venture capital and
business consulting); formerly Chief Operating Officer, Integrated Asset
Management (investment advisor and manager) and formerly President, Value Line,
Inc., (investment advisory and financial publishing firm).
Wallace L. Cook (09/10/39) - Trustee, 4455 E. Camelback Rd., Suite 261-E,
Phoenix, AZ 85018. Retired. Formerly Senior Vice President, Rockefeller Trust
Co. Financial Counselor, Rockefeller & Co. (investment management firm).
Carl A. Froebel (05/23 /38) - Trustee, 4455 E. Camelback Rd., Suite 261-E,
Phoenix, AZ 85018. Private Investor. Formerly Managing Director, Premier
Solutions, Ltd. Formerly President and Founder, National Investor Data Services,
Inc. (investment related computer software).
23
Rowley W.P. Redington (06/01/44) - Trustee, 4455 E. Camelback Rd., Suite 261-E,
Phoenix, AZ 85018. President; Intertech (consumer electronics and computer
service and marketing); formerly Vice President, PRS of New Jersey, Inc.
(management consulting), and Chief Executive Officer, Rowley Associates
(consultants).
Robert M. Slotky* (6/17/47) - Treasurer, 2020 E. Financial Way, Suite 100,
Glendora, California 91741. Senior Vice President, Investment Company
Administration, LLC (mutual fund administrator and the Titan Fund's
administrator) since May 1997; former instructor of accounting at California
State University-Northridge (1997); Chief Financial Officer, Wanger Asset
Management L.P. (asset management firm) and Treasurer of Acorn Investment Trust
(1992-1996).
Robin Berger* (11/17/56) - Secretary, 915 Broadway, New York, New York 10010.
Vice President, The Wadsworth Group since June 1993. The Wadsworth Group is an
affiliate of Investment Company Administration, LLC, the Titan Fund's
administrator.
Robert H. Wadsworth* (01/25/40) - Vice President, 4455 E. Camelback Road, Suite
261E, Phoenix, Arizona 85018. President, Robert H. Wadsworth & Associates, Inc.
(an affiliate of Investment Company Administration, LLC, the Titan Fund's
administrator), Investment Company Administration, LLC (mutual fund
administrator and the Titan Fund's administrator) and First Fund Distributors,
Inc. (a registered broker-dealer and the Titan Fund's Distributor); Vice
President, Advisors Series Trust; President and Trustee, Trust for Investment
Managers; Director, Germany Fund, Inc., New Germany Fund, Inc., Central European
Equity Fund, Inc. and Deutsche Funds, Inc.
- ------------
* Indicates an "interested person" of the PMP Trust as defined in the 1940 Act.
THE TURNER FUND.
The Trustees of the Turner Trust, who were elected for an indefinite term by the
initial shareholders of the Trust, are responsible for the overall management of
the Trust, including general supervision and review of the investment activities
of the Turner Fund. The Trustees, in turn, elect the officers of the Trust, who
are responsible for administering the day-to-day operations of the Trust and its
separate series. The Trustees and Executive Officers of the Turner Trust, their
respective dates of birth, and their principal occupations for the last five
years are set forth below. Each may have held other positions with the named
companies during that period. Unless otherwise noted, the business address of
each Trustee and each Executive Officer is SEI Investments Company, Oaks,
Pennsylvania 19456. Certain officers of the Trust also serve as officers to one
or more mutual funds for which SEI Investments Company or its affiliates act as
investment manager, administrator or distributor. Unless noted otherwise, each
person has held the position listed for a minimum of five years.
Robert E. Turner (11/26/56) - Trustee*(+) - Chairman and Chief Investment
Officer of Turner Investment Partners, Inc. since 1990.
24
Alfred C. Salvato (01/09/58) - Trustee - Treasurer, Thomas Jefferson University
Health Care Pension Fund, since 1995, and Assistant Treasurer, 1988-1995.
Janet F. Sansone (08/11/45) - Trustee - Self-employed, Consultant since 1999.
Senior Vice President of Human Resources of Frontier Corporation
(telecommunications company), (1993-1999).
John T. Wholihan (12/12/37) - Trustee - Professor, Loyola Marymount University,
since 1984.
Stephen J. Kneeley (02/09/63)(+) - President and Chief Executive Officer - Chief
Operating Officer of Turner Investment Partners, Inc. since 1990.
John H. Grady, Jr. (06/01/61)(+) - Vice President & Assistant Secretary -
General Counsel and Chief Legal Officer for Turner Investment Partners, Inc.
since February 2001. Partner, Morgan, Lewis & Bockius LLP (law firm) (October
1995 -January 2001).
Janet Rader Rote (08/24/60)(+) - Vice President and Assistant Secretary -
Director of Compliance of Turner Investment Partners, Inc. since 1992.
Brian M. Ferko (05/6/71) - Vice President & Assistant Secretary - Product
Manager for the Turner Funds since 1997. Relationship Manager, SEI Investments
Mutual Funds Services (mutual fund administrator and the Turner Fund's
administrator) (1995-1997). Registered Representative for SEI Investments
Distribution Co. (a registered broker-dealer and the Turner Fund's distributor)
since 1995.
James W. Jennings (01/15/37) - Secretary - Partner, Morgan, Lewis & Bockius LLP,
counsel to the Turner Trust, Turner Investment Partners, Inc., SEI Investments
Mutual Funds Services and SEI Investments Distribution Co.
Todd B. Cipperman (02/14/66) - Vice President and Assistant Secretary - Vice
President and Assistant Secretary of SEI Investments Mutual Funds Services and
SEI Investments Distribution Co. since 1995. Associate, Dewey Ballantine (law
firm), 1994-1995. Associate, Winston and Strawn (law firm), 1991-1994.
John Leven (1/2/57) - Controller and Chief Accounting Officer - Vice President
and Secretary, Director of Funds Accounting of SEI Investments Mutual Funds
Services since March 1999; Division Controller, First Data Corp. (payment and
merchant services company), February 1998 to March 1999; Corporate Controller,
FPS Services (mutual funds servicing company), February 1993 to February 1998;
Treasurer, FPS Broker Services, Inc. from March 1993 to December 1998.
Lydia A. Gavalis (06/05/64) - Vice President and Assistant Secretary - Vice
President and Assistant Secretary of SEI Investments Company since 1998 (an
affiliate of SEI Investments Mutual Funds Services and SEI Investments
Distribution Co.). Assistant General Counsel and Director of Arbitration,
Philadelphia Stock Exchange, 1989-1998.
25
William E. Zitelli, Jr. (6/14/68) - Vice President and Assistant Secretary -
Vice President and Assistant Secretary of SEI Investments Mutual Funds Services
and SEI Investments Distribution Co. since August 2000. Vice President, Merrill
Lynch & Co. Asset Management Group (1998 - 2000). Associate at Pepper Hamilton
LLP (law firm) (1997-1998). Associate at Reboul, MacMurray, Hewitt, Maynard &
Kristol (law firm) (1994-1997).
Timothy D. Barto (3/28/68) - Vice President and Assistant Secretary - Employed
by SEI Investments Company since October 1999 (an affiliate of SEI Investments
Mutual Funds Services and SEI Investments Distribution Co.). Vice President and
Assistant Secretary of SEI Investments Mutual Funds Services and SEI Investments
Distribution Co. since December 1999. Associate at Dechert Price & Rhoads (law
firm) (1997-1999). Associate at Richter, Miller & Finn (law firm) (1994-1997).
Christine M. McCullough (12/2/60) - Vice President and Assistant Secretary-
Employed by SEI Investments Company since November 1, 1999 (an affiliate of SEI
Investments Mutual Funds Services and SEI Investments Distribution Co.). Vice
President and Assistant Secretary of SEI Investments Mutual Funds Services and
SEI Investments Distribution Co. since December 1999. Associate at White and
Williams LLP (law firm) (1991-1999). Associate at Montgomery, McCracken, Walker
& Rhoads (law firm) (1990-1991).
Toni C. Neff (04/15/68) - Vice President and Assistant Secretary- Compliance
Officer for Turner Investment Partners, Inc. since March 2000. Analyst for the
Penn Mutual Life Insurance Co. (October 1999-January 2000). Compliance Officer
for Capital Analysts Inc. (broker-dealer) (February 1999-October 1999).
Securities Industry Examiner, NASD Regulation (September 1997-February 1999).
Law Clerk at Bealsy, Casey & Erbstein (law firm) (October 1996-September 1997).
- ------------
* Indicates an "interested person" of the Turner Trust as defined in the 1940
Act.
+ Indicates an officer or Trustee of the Turner Trust who also is an officer,
employee or director of Turner Investment Partners, Inc.
26
ADDITIONAL INFORMATION ABOUT THE TURNER FUND
You may obtain additional information about the Turner Fund in the following
ways:
PROSPECTUS
The Turner Fund has a Prospectus that contains information about its operation
and management. The Prospectus dated January 31, 2001, as amended May 1, 2001,
is on file with the Securities and Exchange Commission, and is incorporated
herein by reference. A copy is enclosed with this prospectus/proxy statement.
STATEMENT OF ADDITIONAL INFORMATION
In addition to the Prospectus, the Turner Fund has a Statement of Additional
Information ("SAI") that contains additional, more detailed information about
the Turner Fund. The SAI dated January 31, 2001, as amended May 1, 2001, is on
file with the Securities and Exchange Commission and is incorporated by
reference into this prospectus/ proxy statement.
SHAREHOLDER REPORTS
The financial statements of the Turner Fund contained in the Turner Fund's
Annual Report to shareholders for the fiscal year ended September 30, 2000, has
been audited by Ernst & Young LLP, its independent auditors. Also, unaudited
financial statements of the Turner Fund are contained in the Turner Fund's most
recent Semi-Annual Report to shareholders for the period ended March 31, 2001.
These financial statements are incorporated by reference into this
prospectus/proxy statement insofar as they relate to the Turner Fund, and not to
any other series that are a part of the Turner Trust and described therein. A
copy of the Turner Fund's Annual Report, which includes discussions of the
performance of the Turner Fund, and the most recent Semi-Annual Report, may be
obtained by writing the Turner Fund at P.O. Box 219805, Kansas City, Missouri
64121-9805, or by calling 1-800-224-6312. The Turner Fund is subject to the
informational requirements of the Securities Exchange Act of 1934 and in
accordance herewith files reports and other information with the SEC.
ADDITIONAL INFORMATION ABOUT BOTH FUNDS
Information about the Turner Fund and the Titan Fund, including their respective
Prospectuses, SAIs, and shareholder reports, may be obtained from the SEC in any
of the following ways: (1) in person: you may review and copy documents in the
SEC's Public Reference Room in Washington D.C. (for information call
1-202-942-8090); or at 7 World Trade Center, Suite 1300, New York, NY, 10048;
(2) online: you may retrieve information from the SEC's web site at
"http://www.sec.gov"; (3) mail: you may request documents, upon payment of a
duplicating fee, by writing to SEC, Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549; or (4) e-mail: you may also obtain this information,
upon payment of a duplicating fee, by e-mailing the SEC at the following
address: publicinfo@sec.gov. To aid you in obtaining this information, the
Turner
27
Trust's 1940 Act registration number is 811-8104 and the PMP Trust's 1940 Act
registration number is 811-5037.
The Annual Report to shareholders of the Titan Fund for the fiscal year ended
April 30, 2001, and the Semi-Annual Report to shareholders of the Titan Fund the
period ended October 30, 2000, which include discussions of the performance of
the Titan Fund, are available upon request and without charge by calling
1-800-282-2340.
SHAREHOLDER RIGHTS
SHARES
The PMP Trust is authorized to issue an unlimited number shares of beneficial
interest, with no par value, from an unlimited number of series (portfolios) of
shares. The shares of each Fund in the Trust have no preference as to
conversion, exchange, dividends, retirement or other features, and have no
preemptive rights.
The Turner Trust is authorized to issue an unlimited number shares of beneficial
interest, with a par value of $.00001, from an unlimited number of series
(portfolios) of shares. The shares of each Turner Fund in the Turner Trust have
no preference as to conversion, exchange, dividends, retirement or other
features, and have no preemptive rights.
SHAREHOLDER VOTING
Shareholders of the Turner Fund have identical voting rights. Shareholders are
entitled to one vote for each full share held and fractional votes for
fractional shares. The shares of each Fund have non-cumulative voting rights,
which means the holders of more than 50% of the shares voting for the election
of Trustees can elect 100% of the Trustees if the holders choose to do so. At
shareholder meetings, the holders of 40% of a series' shares entitled to vote at
the meeting generally constitute a quorum. Shareholders of a class, where
multiple share classes are issued and outstanding, have exclusive voting rights
regarding any matter submitted to shareholders that relates solely to that class
of shares, and separate voting rights on any other matter submitted to
shareholders in which the interests of the shareholders of that class differ
from the interests of holders of any other class.
Shareholders of the Titan Fund have the same voting rights as shareholder of the
Turner Fund described above.
SHAREHOLDER MEETINGS
Annual meetings of shareholders of the Titan Fund have not been held, but
special meetings of shareholders may be held under certain circumstances. Ten
percent or more of the Titan Fund's shareholders have the right to call a
meeting to vote on the election or removal of Trustee(s) of the Titan Fund. The
Titan Fund will assist in shareholder communications in these matters to the
extent required by law.
28
Annual meetings of shareholders of the Turner Fund will not be held, but special
meetings of shareholders may be held under certain circumstances. A meeting will
be held to vote on the removal of a Trustee(s) of the Turner Fund if requested
in writing by the holders of not less than 10% of the outstanding shares of the
Turner Fund. The Turner Fund will assist in shareholder communications in these
matters to the extent required by law.
ELECTION AND TERM OF TRUSTEES
The PMP Trust's Board of Trustees supervises the Titan Fund's affairs under the
laws governing business trusts in the Commonwealth of Massachusetts. Trustees of
the PMP Trust are elected by a majority vote of a quorum cast by written ballot
at the regular meeting of shareholders, if any, or at a special meeting held for
that purpose. Trustees hold office until their successors are duly elected and
qualified or until their death, removal or resignation. Consistent with the 1940
Act, shareholders have the power to remove Trustees and have the power under the
PMP Trust's governing documents to elect successor Trustees. Ten percent or more
of the Titan Fund's shareholders have the right to call a meeting to vote on the
election or removal of Trustee(s) of the Titan Fund.
The Turner Trust's Board of Trustees supervises the Turner Fund's affairs under
the laws governing business trusts in the Commonwealth of Massachusetts.
Trustees of the Turner Trust are elected by a majority vote of a quorum cast by
written ballot at the regular meeting of shareholders, if any, or at a special
meeting held for that purpose. Trustees hold office until their successors are
duly elected and qualified or until their death, removal or resignation.
Shareholders may remove a Trustee by vote of a majority of the votes entitled to
be cast for the election of directors and may elect a successor to fill a
resulting vacancy. A Trustee elected thereby serves for the balance of the term
of the removed Trustee.
SHAREHOLDER LIABILITY
Shareholders of the Titan Fund generally are not personally liable for the acts,
omissions or obligations of the PMP Trust's Trustees or of the Trust.
Shareholders of the Turner Fund generally are not personally liable for acts,
omissions or obligations of the Turner Trust's Trustees or of the Turner Trust.
LIABILITY OF TRUSTEES
The PMP Trust's Declaration of Trust states that the Trustees shall not be
personally liable for any obligation of the Titan Fund. The Titan Fund will
indemnify its Trustees and officers out of Titan Fund assets against all
liabilities and expenses except for liabilities arising from such person's
self-dealing, willful misconduct or recklessness.
The Turner Trust's Declaration of Trust states that the Trustees shall not be
responsible or liable for any neglect or wrongdoing of any officer, agent,
employee, investment adviser, administrator, principal underwriter, or
custodian, nor will any Trustee be responsible for the act or omission of
another Trustee. The Turner Fund will indemnify its Trustees and officers
against
29
all liabilities and expenses except for liabilities arising from such person's
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his or her office.
LEGAL MATTERS
Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, PA 19103, serves
as counsel to the Turner Trust and Turner. Paul, Hastings, Janofsky & Walker
LLP, 345 California Street, San Francisco, CA 94104, serves as counsel to the
PMP Trust and the Titan Fund.
THE BOARD OF TRUSTEES OF THE PMP TRUST RECOMMENDS THAT YOU VOTE FOR APPROVAL OF
THE REORGANIZATION AGREEMENT DESCRIBED IN THIS PROSPECTUS/PROXY STATEMENT.
PROPOSAL 2
APPROVAL OF THE INTERIM AGREEMENT
Turner currently serves as interim adviser to the Titan Fund pursuant to a
management agreement that became effective June 17, 2001, by and between the PMP
Trust on behalf of the Titan Fund and Turner (the "Interim Agreement"). The
Board is recommending that you approve the Interim agreement. The PMP Trust's
advisory contract on behalf of the Titan Fund with Titan LLC terminated on
January 17, 2001 upon the death of Mr. Gilbert Giordano, the President and
principal employee of Titan LLC. The Board of the PMP Trust approved a new
agreement with Titan LLC effective January 18, 2001. The Board also appointed
Harris Bretall Sullivan and Smith ("Harris Bretall") on January 25, 2001 to
serve as interim subadviser to the Titan Fund. Harris Bretall's agreement and
Titan's agreement were permitted pursuant to Rule 15a-4 under the 1940 Act. Rule
15a-4 allows a fund to retain an investment adviser for up to 150 days without
shareholder approval, if the agreement between the fund's former investment
adviser and the fund has been terminated under certain conditions, including
unexpected events like Mr. Giordano's death. The Harris Bretall and Titan LLC
agreements terminated pursuant to the provisions of Rule 15a-4 on June 16, 2001.
The Board approved the Interim Agreement on June 13, 2001 at a telephone meeting
and re-approved the Interim Agreement June 20, 2001 at an in-person meeting. The
Interim Agreement provides that the Interim Agreement will automatically
terminate on the date of the Reorganization. Turner and the PMP Trust have
applied to the SEC for exemptive relief to allow it to serve as the interim
adviser beyond the 150 day period pending shareholder approval, so long as it
escrows its fees. The SEC granted the requested relief on August 20, 2001.
However, under the 1940 Act, shareholders of the Titan Fund still are required
to approve the Interim Agreement. If shareholders approve the Interim Agreement,
Turner will receive the advisory fees held in escrow pursuant to the Agreement.
If the Titan Fund's shareholders fail to approve the Interim Agreement, Turner
will be paid only its costs for managing the Titan Fund's assets under the
Interim Agreement.
30
The fees and terms of the Interim Agreement are the same as the agreement
formerly in place until June 16, 2001 between the PMP Trust on behalf of the
Titan Fund and Titan LLC. Under the terms of the Interim Agreement, Turner
decides what securities the Titan Fund shall purchase or sell, and arranges for
the purchase and the sale of securities held in the portfolio of the Fund by
placing purchase and sale orders with respect to the Fund. Turner furnishes the
Titan Fund, at Turner's expense, with office space and facilities, equipment and
clerical personnel necessary for carrying out its duties under the Interim
Agreement. The PMP Trust will pay Turner, as full compensation for all services
Turner renders to the Titan Fund, an annual management fee, payable monthly and
computed on the value of the net assets of the Titan Fund as the close of
business each business day at the annual rate of 1.00% of the Titan Fund's net
assets.
During its last fiscal year, the Titan Fund did not pay any advisory fees to
Turner, although as of August 31, 2001 approximately $21,000 in advisory fees
had been escrowed and will be paid to Turner if shareholders approve the Interim
Agreement.
The following are the names, addresses, and principal occupations of Turner's
principal executive officer and each director of Turner:
- ---------------------------------------- -------------------------------------- --------------------------------------
Name Address Principal Occupation
- ---------------------------------------- -------------------------------------- --------------------------------------
Robert E. Turner* 350 Westlakes Drive, Suite 350, Chairman, Chief Investment Officer
Berwyn, PA 19312 of Turner Investment Partners, Inc.
- ---------------------------------------- -------------------------------------- --------------------------------------
Mark D. Turner 350 Westlakes Drive, Suite 350, Vice Chairman, Senior Portfolio
Berwyn, PA 19312 Manager of Turner Investment
Partners, Inc.
- ---------------------------------------- -------------------------------------- --------------------------------------
The following persons own of record or beneficially ten percent or more of the
outstanding voting securities of Turner: Robert E. Turner and Mark D. Turner,
both of 350 Westlakes Drive, Suite 350, Berwyn, PA 19312.
Turner derives some benefits from its ability to direct commissions to brokers
that have agreed to pay fund expenses, as well as to include commissions on
trades involving the Titan and Turner Funds in calculations of soft dollar
commitments to broker-dealers.
The following table describes the Turner Fund, whose investment objective is
similar to that of the Titan Fund:
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
FUND NAME NET ASSETS AS OF JULY 31, TURNER'S COMPENSATION WAIVERS
2001
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Turner Future Financial $447,772 An annual rate of 1.00% of Turner has voluntarily
Services Fund the average daily net committed to waive
assets of the Turner Fund, advisory fees and
subject to a performance reimburse expenses to keep
fee arrangement* the Turner Fund's "total
annual operating expenses"
from exceeding 1.40%.**
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
31
*Turner Fund will pay Turner an advisory fee that increases if the Turner Fund
outperforms its benchmark index by a certain percentage, and decreases if the
Turner Fund under performs its benchmark index by an equal percentage. This fee
will not exceed 1.25% or be lower than 0.75%, depending on whether the Turner
Fund outperforms its benchmark by 3% or more, or underperforms its benchmark by
3% or more, respectively.
**Effective January 31, 2002, the Adviser has voluntarily committed to waive
advisory fees and reimburse expenses to keep the Fund's "other expenses" from
exceeding 0.40%; Turner may discontinue this arrangement at any time but has no
present intent to do so.
In evaluating Turner's proposal to act as the Titan Fund's interim adviser, the
Board reviewed materials furnished, and considered representations made, by
Turner regarding its philosophy of management, history, performance expectations
and methods of operation insofar as they related to the Turner Fund, and its
prior performance as investment adviser to the Turner Fund and the other funds
in the Turner Trust. In this regard, the Board noted the fact that Turner has
been in operation since 1990 and has extensive experience managing investment
companies, with approximately $9.766 billion in assets under management as of
May 31, 2001 for investment companies and separate accounts. The Board also
considered the performance since inception of the Turner Fund, whose investment
objective is similar to that of the Titan Fund.
THE BOARD OF TRUSTEES OF THE PMP TRUST RECOMMENDS THAT YOU VOTE FOR APPROVAL OF
THE INTERIM AGREEMENT DESCRIBED IN THIS PROSPECTUS/PROXY STATEMENT.
VOTING ON THE PROPOSALS
GENERAL INFORMATION
This prospectus/proxy statement is furnished in connection with the solicitation
of proxies by the Board of Trustees of the PMP Trust in connection with the
Special Meeting. It is expected that the solicitation of proxies will be
primarily by mail. Officers of the Titan LLC or the PMP Trust may also solicit
proxies by telephone, telegraph, facsimile or in person. Turner will bear costs
associated with the solicitation and the Special Meeting for purposes of voting
on the Reorganization. Persons holding shares as nominees will, upon request, be
reimbursed for their reasonable expenses in sending soliciting material to their
principals. You may vote by mail. You may also vote by telephone or over the
Internet. Please follow the enclosed instructions to use these methods of
voting.
VOTE REQUIRED TO APPROVE THE PROPOSALS
Shareholders of the Titan Fund on the Record Date will be entitled to one vote
per share then held and a fractional vote for each fractional share then held.
Forty percent (40%) of the Titan Fund shares entitled to vote will constitute a
quorum at the Special Meeting. Approval of
32
Proposal 1 requires the affirmative vote of a majority of the Titan Fund shares
voted. Approval of Proposal 2 requires the affirmative vote of a majority of the
outstanding voting securities of the Titan Fund. A "majority of the outstanding
voting securities" means the vote of (i) 67% or more of the Fund's outstanding
voting securities present in person or represented by proxy at the Special
Meeting, if the holders of more than 50% of the outstanding voting securities of
the Fund are present at the Meeting, or (ii) more than 50% of the Fund's
outstanding voting securities, whichever is less.
Any shareholder submitting a proxy may revoke it at any time before it is
exercised by submitting to the Secretary of the Titan Fund a written notice of
revocation or a subsequently executed proxy, or by attending the Special Meeting
and voting in person.
Shares represented by a properly executed proxy will be voted in accordance with
the instructions thereon, or if no specification is made, the shares will be
voted "FOR" the approval of the Reorganization Agreement and the Interim
Agreement. For purposes of determining the presence of a quorum for transacting
business at the Special Meeting, abstentions and broker "non-votes" (that is,
proxies from brokers or nominees indicating that these persons have not received
instructions from the beneficial owners or other persons entitled to vote shares
on a particular matter) will be treated as shares that are present at the
Special Meeting but which will be disregarded in calculating the percentage of
votes cast in favor of or against a proposal by those "shares voted."
If sufficient votes in favor of the proposals are not received by the time
scheduled for the Special Meeting, the persons named as proxies may propose one
or more adjournments of the Special Meeting for a reasonable period of time to
permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of the votes cast in person or by proxy at the
session of the Special Meeting (or any subsequent meeting as a result of any
adjournments) to be adjourned. The persons named as proxies will vote for an
adjournment any proxies that they are entitled to vote in favor of the proposal.
They will vote as against any proxies required to be voted against the proposal.
Turner will bear the costs of any additional solicitation and of any adjourned
session.
RESULTS OF FAILURE TO APPROVE A PROPOSAL
If shareholders fail to approve both the Reorganization and the Interim
Agreement, the Reorganization will not proceed and Turner will be paid only its
costs for managing the Titan Fund's assets under the Interim Agreement. If
shareholders fail to approve the Reorganization, but approve the Interim
Agreement, the Reorganization will not proceed, but Turner will be paid all
advisory fees owed to it under the Agreement. In either case, Turner has advised
the Board that it does not expect to continue as interim adviser to the Titan
Fund if the Titan Fund's shareholders fail to approve the Reorganization and the
Interim Agreement, or if shareholders approve the Interim Agreement but not the
Reorganization. Turner has, however, agreed that if the Titan Fund's
shareholders fail to approve the Reorganization and the Interim Agreement by the
requisite vote, or approve the Interim Agreement but not the Reorganization, it
will continue to serve as interim adviser to the Titan Fund for a reasonable
period of time until the Board selects a replacement adviser or chooses another
course of action (which may include liquidating the Fund). The Board believes
that in such a case the prospects of finding another replacement
33
adviser will be substantially diminished considering the amount of assets the
Titan Fund likely will have and the Fund's history of interim advisers. Thus, a
failure to approve the Reorganization may in fact ultimately result in the
liquidation of the Titan Fund. If shareholders approve the Reorganization, but
fail to approve the Interim Agreement, the Reorganization will proceed and
Turner will be paid only its costs for managing the Titan Fund's assets under
the Interim Agreement. If shareholders approve both the Reorganization and the
Interim Agreement, the Reorganization will proceed and Turner will be paid all
advisory fees owed to it under the Agreement.
OUTSTANDING SHARES
Only shareholders of record on the Record Date are entitled to notice of and to
vote at the Special Meeting and any adjournment thereof. At the close of
business on the Record Date, there were __________ shares of the Titan Financial
Services Fund outstanding and entitled to vote at the Meeting.
BENEFICIAL OWNERS
The following tables set forth certain information as of the Record Date
concerning each person who owned, of record or beneficially, 5% or more of the
shares of the Titan Fund or the Turner Fund.
Titan Financial Services Fund
-----------------------------
Name and Address Percentage of Shares Owned Before
Reorganization
-------%
-------%
-------%
* Record and Beneficial Ownership
As of the Record Date, the Trustees and officers of the PMP Trust as a group
owned less than 1% of the total outstanding shares of the Titan Fund.
Turner Future Financial Services Fund
-------------------------------------
Name and Address Percentage of Shares Owned
Before Reorganization
Charles Schwab & Co., Inc. 44.26%
Attn: Mutual Funds/Team S
4500 Cherry Creek Drive S FL 3
Denver, CO 80209*
34
Rafik Gabriel 14.51%
6423 Deep Dell Pl.
Los Angeles, CA 90068-2845**8
Frank Mirabello & John C. Weber, Jr. Trust 14.26%
FBO John C. Weber, Jr. Trust
DTD U/A 09-15-1989
9275 SW 9th Street Rd.
Ocala, FL 34481-1410***
Wendel & Co. 11.74%
FBO #725000
PO Box 1066
Wall Street Station
New York, NY 10268-1066*
* Record Ownership
** Beneficial Ownership
*** Record and Beneficial Ownership
As of the Record Date, the Trustees and officers of the Turner Trust as a group
owned less than 1% of the total outstanding shares of the Turner Fund.
OTHER BUSINESS
The Trustees know of no other business to be brought before the Special Meeting.
However, if any other matters properly come before the Special Meeting, proxies
that do not contain specific restrictions to the contrary will be voted on such
matters in accordance with the judgment of the persons named as proxy.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to the PMP Trust in writing at the
address on the cover page of this Prospectus/Proxy Statement or by telephoning
1-800-282-2340.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING ARE
REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. YOU MAY ALSO
VOTE OVER BY TELEPHONE OR THE INTERNET. PLEASE FOLLOW THE ENCLOSED INSTRUCTIONS
TO USE THESE METHODS OF VOTING.
35
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this 15th day of June, 2001, by and between Turner Funds, a Massachusetts
business trust with its principal place of business at 1235 Westlake Drive,
Suite 350, Berwyn, Pennsylvania 19312, (the "Trust"), with respect to its Turner
Future Financial Services Fund, a separate investment series of the Trust (the
"Acquiring Fund"), and Professionally Managed Portfolios, a Massachusetts
business trust, with its principal place of business at 915 Broadway, New York,
New York 10010 (the "PMP Trust"), with respect to its Titan Financial Services
Fund, a separate investment series of the PMP Trust (the "Transferring Fund"
and, collectively with the Acquiring Fund, the "Funds").
This Agreement is intended to be, and is adopted as, a plan of
reorganization and liquidation within the meaning of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization will consist of (i) the transfer of all of the assets of the
Transferring Fund in exchange for shares of the Acquiring Fund ("Acquiring Fund
Shares"); (ii) the assumption by Acquiring Fund of all of the Transferring
Fund's liabilities; and (iii) the distribution, after the Closing Date (defined
below), of the Acquiring Fund Shares to the shareholders of the Transferring
Fund and the liquidation of the Transferring Fund as provided herein, all upon
the terms and conditions set forth in this Agreement (the "Reorganization").
WHEREAS, the Acquiring Fund and the Transferring Fund are separate
investment series of the Trust and the PMP Trust, respectively, and the Trust
and the PMP Trust are open-end, registered management investment companies and
the Transferring Fund owns securities that generally are assets of the character
in which the Acquiring Fund is permitted to invest;
WHEREAS, each Fund is authorized to issue its shares of beneficial
interest;
WHEREAS, the Trustees of the Trust have determined that the Reorganization
in the best interests of the Acquiring Fund's shareholders; and
WHEREAS, the Trustees of the PMP Trust have determined that the
Reorganization with respect to the Transferring Fund is in the best interests of
the Transferring Fund's shareholders and that the interests of the existing
shareholders of the Transferring Fund will not be diluted as a result of the
Reorganization.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows;
A-1
ARTICLE I
TRANSFER OF ASSETS OF THE TRANSFERRING FUND IN EXCHANGE FOR
ACQUIRING FUND SHARES AND THE ASSUMPTION OF TRANSFERRING FUND'S
LIABILITIES AND LIQUIDATION OF TRANSFERRING FUND
1.1 THE EXCHANGE. Subject to the terms and conditions contained herein and
on the basis of the representations and warranties contained herein, the
Transferring Fund agrees to transfer all of its assets, as set forth in
paragraph 1.2, to Acquiring Fund. In exchange, Acquiring Fund agrees: (i) to
deliver to Transferring Fund the number of full and fractional shares of the
Acquiring Fund Shares, determined by (a) multiplying the shares outstanding of
the Transferring Fund by (b) the ratio computed by dividing (x) the net asset
value per share of the Transferring Fund by (y) the net asset value per share of
the Acquiring Fund Shares computed in the manner and as of the time and date set
forth in paragraph 2.2; and (ii) to assume all of the liabilities of the
Transferring Fund, as set forth in paragraph 1.3. Such transactions shall take
place at the Closing provided for in paragraph 3.1.
1.2 ASSETS TO BE ACQUIRED. The assets of the Transferring Fund to be
acquired by Acquiring Fund shall consist of all property, including, without
limitation, all cash, securities, commodities, interests in futures and
dividends or interest receivables, owned by the Transferring Fund and any
deferred or prepaid expenses shown as an asset on the books of the Transferring
Fund on the Closing Date.
The Transferring Fund has provided Acquiring Fund with its most recent
audited financial statements, which contain a list of all of the Transferring
Fund's assets as of the date of such statements. The Transferring Fund hereby
represents that as of the date of the execution of this Agreement, there have
been no changes in its financial position as reflected in said financial
statements other than those occurring in the ordinary course of business in
connection with the purchase and sale of securities and the payment of normal
operating expenses and the payment of dividends, capital gains distributions and
redemption proceeds to its shareholders.
The Transferring Fund will, within a reasonable period of time prior to the
Closing Date, furnish the Acquiring Fund with a list of the Transferring Fund's
portfolio securities and other investments. The Acquiring Fund will, within a
reasonable time prior to the Closing Date, furnish the Transferring Fund with a
list of the securities, if any, on the Transferring Fund's list referred to
above that do not conform to the Acquiring Fund's investment objectives,
policies, and restrictions. The Transferring Fund, if requested by the Acquiring
Fund, will dispose of securities on the Acquiring Fund's list prior to the
Closing Date. In addition, if it is determined that the portfolios of the
Transferring Fund and the Acquiring Fund, when aggregated, would contain
investments exceeding certain percentage limitations imposed upon the Acquiring
Fund with respect to such investments, the Transferring Fund, if requested by
the Acquiring Fund, shall dispose of a sufficient amount of such investments as
may be necessary to avoid violating such limitations as of the Closing Date.
Notwithstanding the foregoing, nothing herein shall require the Transferring
Fund to dispose of any investments or securities if, in the reasonable judgment
of the Transferring Fund's trustees or adviser, such disposition would adversely
affect
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the tax-free nature of the Reorganization or would violate their fiduciary
duties to the Transferring Fund's shareholders.
1.3 LIABILITIES TO BE ASSUMED. The Acquiring Fund shall assume all of the
Transferring Fund's liabilities, expenses, costs, charges and reserves.
1.4 LIQUIDATION AND DISTRIBUTION. On or as soon after the Closing Date as
is conveniently practicable (the "Liquidation Date"): (a) the Transferring Fund
will distribute in complete liquidation of the Transferring Fund, PRO RATA to
its shareholders of record, determined as of the close of business on the
Valuation Date (as defined in paragraph 2.1)(the "Transferring Fund
Shareholders"), Acquiring Fund Shares received by the Transferring Fund pursuant
to paragraph 1.1; and (b) the Transferring Fund will thereupon proceed to
dissolve and terminate as set forth in paragraph 1.8 below. Such distribution
will be accomplished by the transfer of Acquiring Fund Shares credited to the
account of the Transferring Fund on the books of the Acquiring Fund to open
accounts on the share records of the Acquiring Fund in the name of the
Transferring Fund Shareholders, and representing the PRO RATA number of
Acquiring Fund Shares due such shareholders. All issued and outstanding shares
of the Transferring Fund will simultaneously be canceled on the books of the
Transferring Fund. The Acquiring Fund shall not issue certificates representing
Acquiring Fund Shares in connection with such transfer. The Transferring Fund
Shareholders shall have the right to receive any unpaid dividends or other
distributions that were declared by the Transferring Fund before the Effective
Time (as defined in paragraph 3.1) with respect to Transferring Fund shares that
are held of record by a Transferring Fund Shareholder at the Effective Time.
1.5 OWNERSHIP OF SHARES. Ownership of Acquiring Fund Shares will be shown
on the books of the Acquiring Fund's transfer agent. Shares of the Acquiring
Fund will be issued simultaneously to the Transferring Fund, in an amount equal
in value to the net asset value of the Transferring Fund's shares, to be
distributed to Transferring Fund Shareholders.
1.6 TRANSFER TAXES. Any transfer taxes payable upon the issuance of
Acquiring Fund Shares in a name other than the registered holder of the
Transferring Fund shares on the books of the Transferring Fund as of that time
shall, as a condition of such issuance and transfer, be paid by the person to
whom such Acquiring Fund Shares are to be issued and transferred.
1.7 REPORTING RESPONSIBILITY. Any reporting responsibility of the
Transferring Fund is and shall remain the responsibility of the Transferring
Fund, up to and including the Closing Date, and such later date on which the
Transferring Fund is terminated.
1.8 TERMINATION. The Transferring Fund shall be terminated promptly
following the Closing Date and the making of all distributions pursuant to
paragraph 1.4.
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ARTICLE II
VALUATION
2.1 VALUATION OF ASSETS. The value of the Transferring Fund's assets to be
acquired by the Acquiring Fund hereunder shall be the value of such assets
computed as of the close of normal trading on the New York Stock Exchange
("NYSE") on the business day immediately prior to the Closing Date (such time
and date being hereinafter called the "Valuation Date"), using the valuation
procedures set forth in the Trust's Declaration of Trust and the Acquiring
Fund's then current prospectuses and statements of additional information or
such other valuation procedures as shall be mutually agreed upon by the parties.
2.2 VALUATION OF SHARES. The net asset value per share of Acquiring Fund
Shares shall be the net asset value per share computed as of the close of normal
trading on the NYSE on the Valuation Date, using the valuation procedures set
forth in the Trust's Declaration of Trust and the Acquiring Fund's then current
prospectuses and statements of additional information.
2.3 SHARES TO BE ISSUED. The number of Acquiring Fund Shares to be issued
(including fractional shares, if any) in exchange for the Transferring Fund's
assets, shall be determined by (a) multiplying the shares outstanding of the
Transferring Fund by (b) the ratio computed by (x) dividing the net asset value
per share of the Transferring Fund by (y) the net asset value per share of the
Acquiring Fund determined in accordance with paragraph 2.2 [(a) x (b), where
(b)=(x)/(y)].
2.4 DETERMINATION OF VALUE. All computations of value shall be made by the
Acquiring Fund's pricing agent in accordance with its regular practice in
pricing the shares and assets of the Acquiring Fund. The Acquiring Fund and
Transferring Fund agree, however, to use all commercially reasonable efforts to
resolve any material pricing differences between the prices of portfolio
securities determined in accordance with the pricing policies and procedures of
the Transferring Fund and those determined in accordance with the pricing
policies and procedures of the Acquiring Fund.
ARTICLE III
CLOSING AND CLOSING DATES
3.1 CLOSING DATE. The closing (the "Closing") shall occur on or about
September 24, 2001, or such other date as the parties may agree to in writing
(the "Closing Date"). All acts taking place at the Closing shall be deemed to
take place immediately prior to the Closing Date unless otherwise provided. The
Closing shall be held as of 9:00 a.m. (the "Effective Time") at the offices of
SEI Investments Company, Oaks, Pennsylvania 19456, or at such other time and/or
place as the parties may agree.
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3.2 CUSTODIAN'S CERTIFICATE. First Institutional Custody Services, as
custodian for the Transferring Fund (the "Custodian"), shall deliver at the
Closing a certificate of an authorized officer stating that: (a) the
Transferring Fund's portfolio securities, cash, and any other assets shall have
been delivered in proper form to the Acquiring Fund on the Closing Date; and (b)
all necessary taxes including all applicable federal and state stock transfer
stamps, if any, shall have been paid, or provision for payment shall have been
made, in conjunction with the delivery of portfolio securities by the
Transferring Fund.
3.3 EFFECT OF SUSPENSION IN TRADING. In the event that on the Valuation
Date, either: (a) the NYSE or another primary exchange on which the portfolio
securities of the Acquiring Fund or the Transferring Fund are purchased or sold,
shall be closed to trading or trading on such exchange shall be restricted; or
(b) trading or the reporting of trading on the NYSE or elsewhere shall be
disrupted so that accurate appraisal of the value of the net assets of the
Acquiring Fund or the Transferring Fund is impracticable, the Valuation Date
shall be postponed until the first business day after the day when trading is
fully resumed and reporting is restored.
3.4 TRANSFER AGENT'S CERTIFICATE. American Data Services, Inc., as transfer
agent for the Transferring Fund as of the Closing Date, shall deliver at the
Closing a certificate of an authorized officer stating that its records contain
the names and addresses of the Transferring Fund Shareholders, and the number
and percentage ownership of outstanding shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and deliver or
cause DST Systems, Inc., its transfer agent, to issue and deliver a confirmation
evidencing Acquiring Fund Shares to be credited on the Closing Date to the
Secretary of the PMP Trust or provide evidence satisfactory to the Transferring
Fund that such Acquiring Fund Shares have been credited to the Transferring
Fund's account on the books of the Acquiring Fund. At the Closing, each party
shall deliver to the other such bills of sale, checks, assignments, share
certificates, receipts and other documents, if any, as such other party or its
counsel may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE TRANSFERRING FUND. The Transferring Fund
represents and warrants to the Acquiring Fund as follows:
(a) The Transferring Fund is a separate investment series of a
Massachusetts business trust duly organized, validly existing, and in good
standing under the laws of the Commonwealth of Massachusetts.
(b) The Transferring Fund is a separate investment series of a
Massachusetts business trust that is registered as an open-end management
investment
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company, and its registration with the Securities and Exchange Commission
(the "Commission") as an investment company under the Investment Company
Act of 1940 (the "1940 Act"), is in full force and effect.
(c) The current prospectuses and statements of additional information
of the Transferring Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933 (the "1933 Act") and the 1940
Act, and the rules and regulations thereunder, and do not include any
untrue statement of a material fact or omit to state any material fact
required to be stated or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to
statements or materials included in current prospectuses and statements of
additional information that were formulated or supplied by Titan Investor
Advisors LLC.
(d) The Transferring Fund is not, and the execution, delivery, and
performance of this Agreement (subject to shareholder approval) will not
result, in violation of any provision of the PMP Trust's Declaration of
Trust or By-Laws or of any material agreement, indenture, instrument,
contract, lease, or other undertaking to which the Transferring Fund is a
party to/or by which it is bound.
(e) The Transferring Fund has no material contracts or other
commitments (other than this Agreement) that will be terminated with
liability to it prior to the Closing Date.
(f) Except as otherwise disclosed in writing to and accepted by the
Acquiring Fund, no litigation, administrative proceeding, or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Transferring Fund or any of its properties
or assets, which, if adversely determined, would materially and adversely
affect its financial condition, the conduct of its business, or the ability
of the Transferring Fund to carry out the transactions contemplated by this
Agreement. The Transferring Fund knows of no facts that might form the
basis for the institution of such proceedings and is not a party to or
subject to the provisions of any order, decree, or judgment of any court or
governmental body that materially and adversely affects the Transferring
Fund's business or its ability to consummate the transactions contemplated
herein.
(g) The financial statements of the Transferring Fund are in
accordance with generally accepted accounting principles, and such
statements (copies of which have been furnished to the Acquiring Funds)
fairly reflect the financial condition of the Transferring Fund as of April
30, 2001, and there are no known contingent liabilities of the Transferring
Fund as of that date not disclosed in such statements.
(h) Since April 30, 2001, there have been no material adverse changes
in the Transferring Fund's financial condition, assets, liabilities for
business (other than changes occurring in the ordinary course of business),
or any incurrence by the Transferring Fund of indebtedness maturing more
than one (1) year from the date such indebtedness was incurred, except as
otherwise disclosed to and accepted by the Acquiring Fund. For the purposes
of this subparagraph (h), a decline in the value of the net assets of the
Transferring Fund shall not constitute a material adverse change.
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(i) At the Closing Date, all federal and other tax returns and reports
of the Transferring Fund required by law to be filed by such date, or
reasonably thereafter, shall have been filed, and all federal and other
taxes shown due on such returns and reports shall have been paid, or
provision shall have been made for the payment thereof. To the best of the
Transferring Fund's knowledge, no such return is currently under audit, and
no assessment has been asserted with respect to such returns.
(j) For each fiscal year of its operation, the Transferring Fund has
met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and has distributed in each
such year all net investment income and realized capital gains.
(k) All issued and outstanding shares of the Transferring Fund are,
and at the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable by the Transferring Fund. All of the issued
and outstanding shares of the Transferring Fund will, at the time of the
Closing Date, be held by the persons and in the amounts set forth in the
records of the Transferring Fund's transfer agent as provided in paragraph
3.4. The Transferring Fund has no outstanding options, warrants, or other
rights to subscribe for or purchase any of the Transferring Fund shares,
and have no outstanding securities convertible into any of the Transferring
Fund shares.
(l) At the Closing Date, the Transferring Fund will have good and
marketable title to the Transferring Fund's assets to be transferred to the
Acquiring Fund pursuant to paragraph 1.2, and full right, power, and
authority to sell, assign, transfer, and deliver such assets hereunder,
and, upon delivery and payment for such assets the Acquiring Fund will
acquire good and marketable title, subject to no restrictions on the full
transfer of such assets, including such restrictions as might arise under
the 1933 Act, other than as disclosed to and accepted by the Acquiring
Fund.
(m) The execution, delivery, and performance of this Agreement have
been duly authorized by all necessary action on the part of the
Transferring Fund. Subject to approval by the Transferring Fund
Shareholders, this Agreement constitutes a valid and binding obligation of
the Transferring Fund, enforceable in accordance with its terms, subject as
to enforcement, to bankruptcy, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights and to general equity
principles.
(n) The information to be furnished by the Transferring Fund for use
in no-action letters, applications for orders, registration statements,
proxy materials, and other documents that may be necessary in connection
with the transactions contemplated herein shall be accurate and complete in
all material respects and shall comply in all material respects with
federal securities and other laws and regulations.
(o) From the effective date of the Registration Statement (as defined
in paragraph 5.7), through the time of the meeting of the Transferring Fund
Shareholders and on the Closing Date, any written information furnished by
the PMP Trust with respect to the Transferring Fund for use in the
Prospectus/Proxy Statement (as defined in paragraph 5.7), the
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Registration Statement or any other materials provided in connection with
the Reorganization does not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated or
necessary to make the statements, in light of the circumstances under which
such statements were made, not misleading.
(p) The Transferring Fund has elected to qualify and has qualified as
a "regulated investment company" under the Code, as of and since its first
taxable year; has been a "regulated investment company" under the Code at
all times since the end of its first taxable year when it so qualified; and
qualifies and shall continue to qualify as a "regulated investment company"
under the Code for its taxable year ending upon its liquidation.
(q) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the Securities Exchange Act of 1934 (the "1934
Act"), the 1940 Act or Massachusetts law for the execution of this
Agreement by the PMP Trust, for itself and on behalf of the Transferring
Fund, except for the effectiveness of the Registration Statement and except
for such other consents, approvals, authorizations and filings as have been
made or received, and such consents, approvals, authorizations and filings
as may be required subsequent to the Closing Date, it being understood,
however, that this Agreement and the transactions contemplated herein must
be approved by the shareholders of the Transferring Fund as described in
paragraph 5.2.
4.2 REPRESENTATIONS OF THE ACQUIRING FUND. The Acquiring Fund represents
and warrants to the Transferring Fund as follows:
(a) The Acquiring Fund is a separate investment series of a
Massachusetts business trust, duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts.
(b) The Acquiring Fund is a separate investment series of a
Massachusetts business trust that is registered as an open-end management
investment company, and its registration with the Commission as an
investment company under the 1940 Act is in full force and effect.
(c) The current prospectuses and statements of additional information
of the Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations
thereunder, and do not include any untrue statement of a material fact or
omit to state any material fact required to be stated or necessary to make
such statements therein, in light of the circumstances under which they
were made, not misleading.
(d) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not result, in violation of the Trust's
Declaration of Trust or By-Laws or of any material agreement, indenture,
instrument, contract, lease, or other undertaking to which the Acquiring
Fund is a party or by which it is bound.
A-8
(e) Except as otherwise disclosed in writing to the Transferring Fund
and accepted by the Transferring Fund, no litigation, administrative
proceeding or investigation of or before any court or governmental body is
presently pending, or to its knowledge, threatened against the Acquiring
Fund or any of its properties or assets, which, if adversely determined,
would materially and adversely affect its financial condition and the
conduct of its business or the ability of the Acquiring Fund to carry out
the transactions contemplated by this Agreement. The Acquiring Fund knows
of no facts that might form the basis for the institution of such
proceedings and it is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially and adversely affects its business or its ability to consummate
the transactions contemplated herein.
(f) The financial statements of the Acquiring Fund, are in accordance
with generally accepted accounting principles, and such statements (copies
of which have been furnished to the Transferring Fund) fairly reflect the
financial condition of the Acquiring Fund as of September 30, 2000, and
there are no known contingent liabilities of the Acquiring Fund as of such
date which are not disclosed in such statements.
(g) Since September 30, 2000, there have been no material adverse
changes in the Acquiring Fund's financial condition, assets, liabilities,
or business (other than changes occurring in the ordinary course of
business), or any incurrence by the Acquiring Fund of indebtedness maturing
more than one (1) year from the date such indebtedness was incurred, except
as otherwise disclosed to and accepted by the Transferring Fund. For the
purposes of this subparagraph (g), a decline in the value of the net assets
of the Acquiring Fund shall not constitute a material adverse change.
(h) At the Closing Date, all federal and other tax returns and reports
of the Acquiring Fund required by law to be filed by such date shall have
been filed. All federal and other taxes shown due on such returns and
reports shall have been paid or provision shall have been made for their
payment. To the best of the Acquiring Fund's knowledge, no such return is
currently under audit, and no assessment has been asserted with respect to
such returns.
(i) For each fiscal year of their operation, the Acquiring Fund has
met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and has distributed all net
investment income and realized capital gains.
(j) All issued and outstanding Acquiring Fund Shares are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by the Acquiring Fund. The Acquiring Fund has no
outstanding options, warrants, or other rights to subscribe for or purchase
any Acquiring Fund Shares, and there are no outstanding securities
convertible into any Acquiring Fund Shares.
(k) The execution, delivery, and performance of this Agreement have
been duly authorized by all necessary action on the part of the Acquiring
Fund, and this Agreement constitutes a valid and binding obligation of the
Acquiring Fund enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights and to general equity
principles.
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(1) The Acquiring Fund Shares to be issued and delivered to the
Transferring Fund for the account of the Transferring Fund Shareholders
pursuant to the terms of this Agreement will, at the Closing Date, have
been duly authorized. When so issued and delivered, such shares will be
duly and validly issued Acquiring Fund Shares, and will be fully paid and
non-assessable.
(m) The information to be furnished by the Acquiring Fund for use in
no-action letters, applications for orders, registration statements, proxy
materials, and other documents that may be necessary in connection with the
transactions contemplated herein shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations.
(n) From the effective date of the Registration Statement (as defined
in paragraph 5.7), through the time of the meeting of the Transferring Fund
Shareholders and on the Closing Date, any written information furnished by
the Trust with respect to the Acquiring Fund for use in the
Prospectus/Proxy Statement (as defined paragraph 5.7), the Registration
Statement or any other materials provided in connection with the
Reorganization does not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated or
necessary to make the statements, in light of the circumstances under which
such statements were made, not misleading.
(o) The Acquiring Fund agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act,
and any state Blue Sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
(p) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the 1934 Act, the 1940 Act or Massachusetts
law for the execution of this Agreement by the Trust, for itself and on
behalf of the Acquiring Fund, or the performance of the Agreement by the
Trust, for itself and on behalf of the Acquiring Fund, except for the
effectiveness of the Registration Statement and such other consents,
approvals, authorizations and filings as have been made or received, and
except for such consents, approvals, authorizations and filings as may be
required subsequent to the Closing Date.
(q) The Acquiring Fund has elected to qualify and has qualified as a
"regulated investment company" under the Code as of and since its first
taxable year; has been a "regulated investment company" under the Code at
all times since the end of its first taxable year when it so qualified; and
qualifies and shall continue to qualify as a "regulated investment company"
under the Code for its current taxable year.
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ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE TRANSFERRING FUND
5.1 OPERATION IN ORDINARY COURSE. Subject to paragraph 8.5, the Acquiring
Fund and the Transferring Fund will operate their respective businesses in the
ordinary course between the date of this Agreement and the Closing Date, it
being understood that such ordinary course of business will include customary
dividends and distributions and shareholder redemptions.
5.2 APPROVAL OF SHAREHOLDERS. The PMP Trust will call a meeting of the
Transferring Fund Shareholders to consider and act upon this Agreement and to
take all other action necessary to obtain approval of the transactions
contemplated herein.
5.3 INVESTMENT REPRESENTATION. The Transferring Fund covenants that the
Acquiring Fund Shares to be issued pursuant to this Agreement are not being
acquired for the purpose of making any distribution, other than in connection
with the Reorganization and in accordance with the terms of this Agreement.
5.4 ADDITIONAL INFORMATION. The Transferring Fund will assist the Acquiring
Fund in obtaining such information as the Acquiring Fund reasonably requests
concerning the beneficial ownership of the Transferring Fund shares.
5.5 FURTHER ACTION. Subject to the provisions of this Agreement, the
Acquiring Fund and the Transferring Fund will each take or cause to be taken,
all action, and do or cause to be done, all things reasonably necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement, including any actions required to be taken after the Closing
Date.
5.6 STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but in
any case within sixty (60) days after the Closing Date, the Transferring Fund
shall furnish the Acquiring Fund, in such form as is reasonably satisfactory to
the Acquiring Fund, a statement of the earnings and profits of the Transferring
Fund for federal income tax purposes that will be carried over by the Acquiring
Fund as a result of Section 381 of the Code, and which will be reviewed by Ernst
& Young LLP and certified by the PMP Trust's Treasurer.
5.7 PREPARATION OF FORM N-14 REGISTRATION STATEMENT. The Trust will prepare
and file with the Commission a registration statement on Form N-14 under the
1933 Act (the "Registration Statement"), relating to the Acquiring Fund Shares,
which, without limitation, shall include a proxy statement of the Transferring
Fund and the prospectus of the Acquiring Fund relating to the transactions
contemplated by this Agreement (the "Prospectus/Proxy Statement"). The
Registration Statement shall be in compliance with the 1933 Act, the 1934 Act
and the 1940 Act. The Transferring Fund will provide the Acquiring Fund with the
materials and information necessary to prepare the Prospectus/Proxy Statement
for inclusion in the Registration Statement, in connection with the meeting of
the Transferring Funds
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Shareholders to consider the approval of this Agreement and the transactions
contemplated herein.
5.8 INDEMNIFICATION OF THE PMP TRUSTEES. The Trust will assume all
liabilities and obligations of PMP Trust relating to any obligation of the PMP
Trust to indemnify its current and former Trustees and officers, acting in their
capacities as such, to the fullest extent permitted by law and the PMP Trust's
Agreement and Declaration of Trust, as in effect as of the date of this
Agreement. Without limiting the foregoing, the Trust agrees that all rights to
indemnification and all limitations of liability existing in favor of the
current and former Trustees and officers, acting in their capacities as such,
under the PMP Trust's Agreement and Declaration of Trust as in effect as of the
date of this Agreement shall survive the Reorganization and shall continue in
full force and effect, without any amendment thereto, and shall constitute
rights which may be asserted against the Trust, its successors or assigns.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRANSFERRING FUND
The obligations of the Transferring Fund to consummate the transactions
provided for herein shall be subject, at their election, to the performance by
the Acquiring Fund of all the obligations to be performed by it pursuant to this
Agreement on or before the Closing Date, and, in addition subject to the
following conditions:
6.1 All representations, covenants, and warranties of the Acquiring Fund
contained in this Agreement shall be true and correct as of the date hereof and
as of the Closing Date, with the same force and effect as if made on and as of
the Closing Date. The Acquiring Fund shall have delivered to the Transferring
Fund a certificate executed in the Acquiring Fund's name by the Trust's
President or Vice President and its Treasurer or Assistant Treasurer, in form
and substance satisfactory to the Transferring Fund and dated as of the Closing
Date, to such effect and as to such other matters as the Transferring Fund shall
reasonably request.
6.2 The Transferring Fund shall have received on the Closing Date an
opinion from Morgan, Lewis & Bockius LLP, counsel to the Trust, dated as of the
Closing Date, in a form reasonably satisfactory to the Transferring Fund,
covering the following points:
(a) The Acquiring Fund is a separate investment series of a
Massachusetts business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, and has the
power to own all of its properties and assets and to carry on its business
as presently conducted.
(b) The Acquiring Fund is a separate investment series of a
Massachusetts business trust registered as an investment company under the
1940 Act, and, to such counsel's knowledge, such registration with the
Commission is in full force and effect.
(c) This Agreement has been duly authorized, executed, and delivered
by the Trust on behalf of the Acquiring Fund and, assuming due
authorization, execution and delivery
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of this Agreement by the Transferring Fund, is a valid and binding
obligation of the Acquiring Fund enforceable against the Acquiring Fund in
accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium, and other laws relating to or
affecting creditors' rights generally and to general equity principles.
(d) Assuming that a consideration of not less than the net asset value
of Acquiring Fund Shares has been paid, Acquiring Fund Shares to be issued
and delivered to the Transferring Fund on behalf of the Transferring Fund
Shareholders, as provided by this Agreement, are duly authorized and upon
such delivery will be legally issued and outstanding and fully paid and
non-assessable, and no shareholder of Acquiring Fund has any preemptive
rights with respect to Acquiring Fund Shares.
(e) The Registration Statement, has been declared effective by the
Commission and to such counsel's knowledge, no stop order under the 1933
Act pertaining thereto has been issued, and to the knowledge of such
counsel, no consent, approval, authorization or order of any court or
governmental authority of the United States or the Commonwealth of
Massachusetts is required for consummation by the Acquiring Fund of the
transactions contemplated herein, except as have been obtained under the
1933 Act, the 1934 Act and the 1940 Act, and as may be required under state
securities laws or where the failure to obtain such consent, approval,
order, or authorization would not have a material adverse affect on the
operations of the Trust or the Acquiring Fund.
(f) The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated herein will not, result in a
violation of the Trust's Declaration of Trust or By-Laws or any provision
of any material agreement, indenture, instrument, contract, lease or other
undertaking (in each case known to such counsel) to which the Acquiring
Fund is a party or by which the Acquiring Fund or any of its properties may
be bound or, to the knowledge of such counsel, result in the acceleration
of any obligation or the imposition of any penalty, under any agreement,
judgment, or decree to which the Acquiring Fund is a party or by which it
is bound.
(g) The descriptions in the Prospectus/Proxy Statement of statutes,
legal and governmental proceedings and material contracts, if any (only
insofar as they relate to the Acquiring Fund), are accurate and fairly
present the information required to be shown.
(h) Such counsel does not know of any legal or governmental
proceedings (only insofar as they relate to the Acquiring Fund) existing on
or before the effective date of the Registration Statement or the Closing
Date which are required to be described in the Registration Statement or to
be filed as exhibits to the Registration Statement which are not described
or filed as required.
(i) To the knowledge of such counsel, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to the Acquiring Fund or any of its
properties or assets. To the knowledge of such counsel, the Acquiring Fund
is not a party to or subject to the provisions of any order, decree or
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judgment of any court or governmental body, which materially and adversely
affects the Acquiring Fund's business, other than as previously disclosed
in the Registration Statement.
Such counsel shall also state that they have participated in conferences
with officers and other representatives of the Acquiring Fund at which the
contents of the Prospectus/Proxy Statement and related matters were discussed.
Although such counsel are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Prospectus/Proxy Statement (except to the extent indicated in their opinion in
paragraph (g), above), on the basis of the foregoing (relying as to materiality
to a large extent upon the opinions of the Trust's officers and other
representatives of the Acquiring Fund), no facts have come to their attention
that lead them to believe that the Prospectus/Proxy Statement as of its date, as
of the date of the Transferring Fund Shareholders' meeting, and as of the
Closing Date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated regarding the Acquiring Fund or
necessary, in the light of the circumstances under which they were made, to make
the such statements regarding the Acquiring Fund not misleading. Such opinion
may state that such counsel does not express any opinion or belief as to the
financial statements or any financial or statistical data, or as to the
information relating to the Transferring Fund, contained in the Prospectus/Proxy
Statement or the Registration Statement, and that such opinion is solely for the
benefit of the PMP Trust and the Transferring Fund. Such opinion shall contain
such other assumptions and limitations as shall be in the opinion of Morgan,
Lewis & Bockius LLP appropriate to render the opinions expressed therein.
In this paragraph 6.2, references to the Prospectus/Proxy Statement include
and relate to only the text of such Prospectus/Proxy Statement and not to any
exhibits or attachments thereto or to any documents incorporated by reference
therein.
6.3 As of the Closing Date with respect to the Reorganization of the
Transferring Fund, there shall have been no material change in the investment
objective, policies and restrictions nor any material change in the investment
management fees, other fees payable for services provided to the Acquiring Fund,
fee waiver or expense reimbursement undertakings of the Acquiring Fund from
those fee amounts and undertakings of the Acquiring Fund described in the
Prospectus/Proxy Statement.
6.4 For the period beginning at the Closing Date and ending not less than
six (6) years thereafter, the Trust, its successor or assigns shall provide, or
cause to be provided, liability coverage at least as comparable to the liability
coverage currently applicable to both former and current Trustees and officers
of the PMP Trust, covering the actions of such Trustees and officers of the PMP
Trust for the period they served as such.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at their election, to the performance by
the Transferring Fund of all the
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obligations to be performed by the Transferring Fund pursuant to this Agreement,
on or before the Closing Date and, in addition, shall be subject to the
following conditions:
7.1 All representations, covenants, and warranties of the Transferring Fund
contained in this Agreement shall be true and correct as of the date hereof and
as of the Closing Date, with the same force and effect as if made on and as of
the Closing Date. The Transferring Fund shall have delivered to the Acquiring
Fund on the Closing Date a certificate executed in the Transferring Fund's name
by the PMP Trust's President or Vice President and the Treasurer or Assistant
Treasurer, in form and substance satisfactory to the Acquiring Fund and dated as
of the Closing Date, to such effect and as to such other matters as the
Acquiring Fund shall reasonably request.
7.2 The Transferring Fund shall have delivered to the Acquiring Fund a
statement of the Transferring Fund's assets and liabilities, together with a
list of the Transferring Fund's portfolio securities showing the tax costs of
such securities by lot and the holding periods of such securities, as of the
Closing Date, certified by the Treasurer of PMP Trust.
7.3 The Acquiring Fund shall have received on the Closing Date an opinion
of Paul, Hastings, Janofsky & Walker, LLP, counsel to the Transferring Fund,
dated as of the Closing Date in a form satisfactory to the Acquiring Fund
covering the following points:
(a) The Transferring Fund is a separate investment series of a
Massachusetts business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has the
power to own all of its properties and assets and to carry on its business
as presently conducted.
(b) The Transferring Fund is a separate investment series of a
Massachusetts business trust registered as an investment company under the
1940 Act, and, to such counsel's knowledge, such registration with the
Commission is in full force and effect.
(c) This Agreement has been duly authorized, executed and delivered by
the PMP Trust on behalf of the Transferring Fund and, assuming due
authorization, execution and delivery of this Agreement by the Trust on
behalf of the Acquiring Fund is a valid and binding obligation of the
Transferring Fund enforceable against the Transferring Fund in accordance
with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and to general equity principles.
(d) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority of the United
States or the Commonwealth of Massachusetts is required for consummation by
the Transferring Fund of the transactions contemplated herein, except as
have been obtained under the 1933 Act, the 1934 Act and the 1940 Act, and
as may be required under state securities laws or where the failure to
obtain such consent, approval, order, or authorization would not have a
material adverse affect on the operations of the PMP Trust or the
Transferring Fund.
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(e) The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, result in a
violation of the PMP Trust's Declaration of Trust or By-laws, or any
provision of any material agreement, indenture, instrument, contract, lease
or other undertaking (in each case known to such counsel) to which the
Transferring Fund is a party or by which it or any of its properties may be
bound or, to the knowledge of such counsel, result in the acceleration of
any obligation or the imposition of any penalty, under any agreement,
judgment, or decree to which the Transferring Fund is a party or by which
it is bound.
(f) The descriptions in the Prospectus/Proxy Statement of statutes,
legal and government proceedings and material contracts, if any (only
insofar as they relate to the Transferring Fund), are accurate and fairly
present the information required to be shown.
(g) Such counsel does not know of any legal or governmental
proceedings (insofar as they relate to the Transferring Fund) existing on
or before the date of mailing of the Prospectus/Proxy Statement and the
Closing Date, which are required to be described in the Prospectus/Proxy
Statement or to be filed as an exhibit to the Registration Statement which
are not described or filed as required.
(h) To the knowledge of such counsel, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to the Transferring Fund or any of its
respective properties or assets. To the knowledge of such counsel, the
Transferring Fund is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body, which
materially and adversely affects the Transferring Fund's business other
than as previously disclosed in the Prospectus/Proxy Statement.
(i) Assuming that a consideration of not less than the net asset value
of Transferring Fund shares has been paid, and assuming that such shares
were issued in accordance with the terms of the Transferring Fund's
registration statement, or any amendment thereto, in effect at the time of
such issuance, all issued and outstanding shares of the Transferring Fund
are legally issued and fully paid and non-assessable.
Such counsel shall also state that they have participated in conferences
with officers and other representatives of the Transferring Fund at which the
contents of the Prospectus/Proxy Statement and related matters were discussed.
Although such counsel are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Prospectus/Proxy Statement (except to the extent indicated in their opinion at
paragraph (f), above), on the basis of the foregoing (relying as to materiality
to a large extent upon the opinions of the PMP Trust's officers and other
representatives of the Transferring Fund), no facts have come to their attention
that lead them to believe that the Prospectus/Proxy Statement as of its date, as
of the date of the Transferring Fund Shareholders' meeting, and as of the
Closing Date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein regarding the Transferring
Fund or necessary, in the light of the circumstances under which they were made,
to make the statements therein regarding the Transferring Fund not misleading.
Such opinion may state that such counsel do not express any
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opinion or belief as to the financial statements or any financial or statistical
data, or as to the information relating to the Acquiring Fund contained in the
Prospectus/Proxy Statement or Registration Statement, and that such opinion is
solely for the benefit of the Trust and the Acquiring Fund. Such opinion shall
contain such other assumptions and limitations as shall be in the opinion of
Paul, Hastings, Janofsky & Walker LLP appropriate to render the opinions
expressed herein.
In this paragraph 7.3, references to the Prospectus/Proxy Statement include
and relate to only the text of such Prospectus/Proxy Statement and not to any
exhibits or attachments thereto or to any documents incorporated by reference
therein.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
ACQUIRING FUND AND THE TRANSFERRING FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Transferring Fund or the Acquiring Fund, the
other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of the
Transferring Fund in accordance with Massachusetts law and the provisions of the
PMP Trust's Declaration of Trust and By-Laws. Certified copies of the
resolutions evidencing such approval shall have been delivered to the Acquiring
Fund. Notwithstanding anything herein to the contrary, neither the Acquiring
Fund nor the Transferring Fund may waive the conditions set forth in this
paragraph 8.1.
8.2 On the Closing Date, the Commission shall not have issued an
unfavorable report under Section 25(b) of the 1940 Act, or instituted any
proceeding seeking to enjoin the consummation of the transactions contemplated
by this Agreement under Section 25(c) of the 1940 Act. Furthermore, no action,
suit or other proceeding shall be threatened or pending before any court or
governmental agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with this Agreement or the transactions
contemplated herein.
8.3 All required consents of other parties and all other consents, orders,
and permits of federal, state and local regulatory authorities (including those
of the Commission and of State Blue Sky securities authorities, including any
necessary "no-action" positions and exemptive orders from such federal and state
authorities) to permit consummation of the transactions contemplated herein
shall have been obtained, except where failure to obtain any such consent,
order, or permit would not involve a risk of a material adverse effect on the
assets or properties of the Acquiring Fund or the Transferring Fund, provided
that either party hereto may waive any such conditions for itself.
8.4 The Registration Statement shall have become effective under the 1933
Act, and no stop orders suspending the effectiveness thereof shall have been
issued. To the best
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knowledge of the parties to this Agreement, no investigation or proceeding for
that purpose shall have been instituted or be pending, threatened or
contemplated under the 1933 Act.
8.5 The Transferring Fund shall have declared and paid a dividend or
dividends which, together with all previous such dividends, shall have the
effect of distributing to the Transferring Fund Shareholders all of the
Transferring Fund's net investment company taxable income for all taxable
periods ending on or prior to the Closing Dates (computed without regard to any
deduction for dividends paid) and all of its net capital gains realized in all
taxable periods ending on or prior to the Closing Date (after reduction for any
capital loss carry forward).
8.6 The parties shall have received a favorable opinion of Morgan, Lewis &
Bockius LLP addressed to the Acquiring Fund and the Transferring Fund
substantially to the effect that for federal income tax purposes with respect to
the Transferring Fund:
(a) The transfer of all of the Transferring Fund's assets in exchange
for Acquiring Fund Shares and the assumption by the Acquiring Fund of all
of the liabilities of the Transferring Fund (followed by the distribution
of Acquiring Fund Shares to the Transferring Fund Shareholders in
dissolution and liquidation of the Transferring Fund) will constitute a
"reorganization" within the meaning of Section 368(a) of the Code and the
Acquiring Fund and the Transferring Fund will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code.
(b) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Transferring Fund solely in exchange for
Acquiring Fund Shares and the assumption by the Acquiring Fund of all of
the liabilities of the Transferring Fund.
(c) No gain or loss will be recognized by the Transferring Fund upon
the transfer of the Transferring Fund's assets to the Acquiring Fund in
exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund
of all of the liabilities of the Transferring Fund or upon the distribution
(whether actual or constructive) of Acquiring Fund Shares to Transferring
Fund Shareholders in exchange for such shareholders' shares of the
Transferring Fund.
(d) No gain or loss will be recognized by the Transferring Fund
Shareholders upon the exchange of their Transferring Fund shares for
Acquiring Fund Shares in the Reorganization.
(e) The aggregate tax basis for Acquiring Fund Shares received by the
Transferring Fund Shareholder pursuant to the Reorganization will be the
same as the aggregate tax basis of the Transferring Fund shares exchanged
therefor by such shareholder.
(f) The holding period of Acquiring Fund Shares to be received by the
Transferring Fund Shareholder will include the period during which the
Transferring Fund shares exchanged therefore were held by such shareholder
provided the Transferring Fund shares are held as capital assets at the
time of the Reorganization).
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(g) The tax basis of the Transferring Fund's assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the
Transferring Fund immediately prior to the Reorganization.
(h) The holding period of the assets of the Transferring Fund in the
hands of the Acquiring Fund will include the period during which those
assets were held by the Transferring Fund.
Such opinion shall be based on customary assumptions and such
representations as Morgan, Lewis & Bockius LLP may reasonably request, and the
Transferring Fund and Acquiring Fund will cooperate to make and certify the
accuracy of such representations. Notwithstanding anything herein to the
contrary, neither the Acquiring Fund nor the Transferring Fund may waive the
conditions set forth in this paragraph 8.6.
ARTICLE IX
EXPENSES
9.1 Except as otherwise provided for herein, Turner Investment Partners,
Inc. will pay all special costs relating to the Acquiring Fund's and the
Transferring Fund's participation in the Reorganization and all related expenses
that are not appropriately assigned to the Transferring Fund. Such expenses
include, without limitation, (a) expenses associated with the preparation and
filing of the Registration Statement/Proxy Statement on Form N-14 under the 1933
Act covering Acquiring Fund Shares to be issued pursuant to the provisions of
this Agreement; (b) postage; (c) printing; (d) accounting fees, and (e)
solicitation costs associated with the Reorganization transaction.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Trust on behalf of the Acquiring Fund and the PMP Trust on behalf
of the Transferring Fund agree that neither party has made to the other party
any representation, warranty and/or covenant not set forth herein, and that this
Agreement constitutes the entire agreement between the parties.
10.2 Except as specified in the next sentence set forth in this section
10.2, the representations, warranties, and covenants contained in this Agreement
or in any document delivered pursuant to or in connection with this Agreement,
shall not survive the consummation of the transactions contemplated hereunder.
The covenants to be performed after the Closing and the obligations of the
Acquiring Funds in sections 5.8 and 6.4, shall continue in effect beyond the
consummation of the transactions contemplated hereunder.
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ARTICLE XI
TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the Trust
and the PMP Trust. In addition, either the Trust or the PMP Trust may at their
option terminate this Agreement at or prior to the Closing Date due to:
(a) a breach by the other of any representation, warranty, or
agreement contained herein to be performed at or prior to the Closing Date,
if not cured within 30 days; or
(b) a condition herein expressed to be precedent to the obligations of
the terminating party that has not been met and it reasonably appears that
it will not or cannot be met.
11.2 In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of the Acquiring
Fund, the Transferring Fund, the Trust, the PMP Trust, the respective Trustees
or officers, to the other party or its Trustees or officers.
ARTICLE XII
AMENDMENTS
12.1 This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the authorized officers of
the Transferring Fund and the Acquiring Fund; provided, however, that following
the meeting of the Transferring Fund Shareholders called by the Transferring
Fund pursuant to paragraph 5.2 of this Agreement, no such amendment may have the
effect of changing the provisions for determining the number of Acquiring Fund
Shares to be issued to the Transferring Fund Shareholders under this Agreement
to the detriment of such shareholders without their further approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
13.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
13.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, without giving effect to the
conflicts of laws provisions thereof.
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13.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but, except as provided in
this paragraph, no assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent of the other
party. Nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation, other than the parties
hereto and their respective successors and assigns, any rights or remedies under
or by reason of this Agreement.
13.5 It is expressly agreed that the obligations of the Acquiring Fund and
the Transferring Fund hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents, or employees of the Trust or the PMP
Trust personally, as the case may be, but shall bind only the trust property of
the Acquiring Fund or the Transferring Fund, as the case may be, as provided in
the respective Declarations of Trust of the PMP Trust and the Trust. The
execution and delivery of this Agreement have been authorized by the Trustees of
the Trust and the PMP Trust, on behalf of the Acquiring Fund and Transferring
Fund, respectively, and signed by authorized officers of each Trust, acting as
such. Neither the authorization by such Trustees nor the execution and delivery
by such officers shall be deemed to have been made by any of them individually
or to impose any liability on any of them personally, but shall bind only the
trust property of the Acquiring Fund and the Transferring Fund as provided in
the Declarations of Trust of the PMP Trust and the Trust, respectively.
IN WITNESS WHEREOF, the parties have duly executed this Agreement, all as
of the date first written above.
TURNER FUNDS
By: /s/ Brian M. Ferko
Name: Brian M. Ferko
Title: Vice President & Assistant Secretary
PROFESSIONALLY MANAGED PORTFOLIOS
By: /s/ Stephen J. Paggioli
Name: Stephen J. Paggioli
Title: President and Trustee
For purposes of Article IX, Section 9.1, the
undersigned executes this agreement on behalf
of Turner Investment Partners, Inc.
TURNER INVESTMENT PARTNERS, INC.
By: /s/ John H. Grady, Jr.
Name: John H. Grady, Jr.
Title: General Counsel
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EXHIBIT B
INTERIM ADVISORY AGREEMENT BETWEEN PMP TRUST ON BEHALF
OF THE TITAN FINANCIAL SERVICES FUND AND TURNER INVESTMENT PARTNERS, INC.
PROFESSIONALLY MANAGED PORTFOLIOS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 17th day of June, 2001 by and between PROFESSIONALLY
MANAGED PORTFOLIOS (the "Trust"), a Massachusetts business trust and TURNER
INVESTMENT PARTNERS, INC., a Pennsylvania corporation (the "Adviser").
WHEREAS, a series of the Trust, the TITAN FINANCIAL SERVICES FUND (the
"Fund"), having separate assets and liabilities has been assigned to the
Adviser; and
WHEREAS, it is therefore desirable to have an investment advisory agreement
(i.e. this Agreement) relating to the Fund, which agreement will apply only to
this Fund;
NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is hereby agreed by and among the parties hereto as
follows:
1. IN GENERAL
The Adviser agrees, all as more fully set forth herein, to act as investment
adviser to the Trust with respect to the investment of the assets of the Fund
and to supervise and arrange the purchase and sale of securities held in the
portfolio of the Fund.
2. DUTIES AND OBLIGATIONS OF THE ADVISER WITH RESPECT TO THE INVESTMENT OF THE
ASSETS OF THE FUND.
(a) Subject to the succeeding provisions of this section and subject to
the direction and control of the Board of Trustees of the Trust, the
Adviser shall:
(i) decide what securities shall be purchased or sold by the Trust
with respect to the Fund and when; and
(ii) arrange for the purchase and the sale of securities held in the
portfolio of the Fund by placing purchase and sale orders for the
Trust with respect to the Fund.
(b) Any investment purchases or sales made by the Adviser shall at all
times conform to, and be in accordance with, any requirements imposed
by:
B-1
(i) the provisions of the Investment Company Act of 1940 (the
"Investment Company Act"), as amended, and any of the rules and
regulations promulgated thereunder;
(ii) any other applicable provisions of law;
(iii) the provisions of the Declaration of Trust and the By-Laws of
the Trust as amended from time to time;
(iv) any policies and determinations of the Board of Trustees of the
Trust; and
(v) the fundamental policies of the Trust relating to the Fund, as
reflected in the Trust's registration statement under the
Investment Company Act (including by reference to the Fund's
Prospectus and Statement of Additional Information) as such
registration statement is amended from time to time, or as
amended by the shareholders of the Fund.
(c) The Adviser shall give the Trust the benefit of its best judgment and
effort in rendering services hereunder, but the Adviser shall not be
liable for any loss sustained by reason of the purchase, sale or
retention of any security whether or not such purchase, sale or
retention shall have been based on its own investigation and research
or upon investigation and research made by any other individual, firm
or corporation, if such purchase, sale or retention shall have been
made and such other individual, firm or corporation shall have been
selected in good faith. Nothing herein contained shall, however, be
construed to protect the Adviser against any liability to the Trust or
its security holders by reason of willful misfeasance, bad faith, or
gross negligence in the performance of its duties, or by reason of its
reckless disregard of obligations and duties under this Agreement.
(d) Nothing in this Agreement shall prevent the Adviser or any affiliated
person (as defined in the Investment Company Act) of the Adviser from
acting as investment adviser or manager and/or principal underwriter
for any other person, firm or corporation and shall not in any way
limit or restrict the Adviser or any such affiliated person from
buying, selling or trading any securities for its or their own
accounts or the accounts of others for whom it or they may be acting,
provided, however, that the Adviser expressly represents that it will
undertake no activities which, in its judgment, will adversely affect
the performance of its obligations to the Trust under this Agreement.
(e) It is agreed that the Adviser shall have no responsibility or
liability for the accuracy or completeness of the Trust's Registration
Statement under the Investment Company Act or the Securities Act of
1933, as amended, except for information supplied by the Adviser for
inclusion therein. The Trust may indemnify the Adviser to the full
extent permitted by the Trust's Declaration of Trust.
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3. BROKER-DEALER RELATIONSHIPS
The Adviser is responsible for decisions to buy and sell securities for the
Fund, broker-dealer selection, and negotiation of brokerage commission rates.
The Adviser's primary consideration in effecting a securities transaction will
be execution at the most favorable price. In selecting a broker-dealer to
execute each particular transaction, the Adviser will take the following into
consideration: the best net price available; the reliability, integrity and
financial condition of the broker-dealer; the size of and difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Fund on a continuing basis.
Accordingly, the price to the Fund in any transaction may be less favorable that
that available from another broker-dealer if the difference is reasonably
justified by other aspects of the portfolio execution services offered. Subject
to such policies as the Board of Trustees of the Trust may determine, the
Adviser shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides brokerage or research
services to the Adviser an amount of commission for effecting a portfolio
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Adviser determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Trust. The Adviser is further authorized to
allocate the orders placed by it on behalf of the Fund to such brokers or
dealers who also provide research or statistical material, or other services, to
the Trust, the Adviser, or any affiliate of either. Such allocation shall be in
such amounts and proportions as the Adviser shall determine, and the Adviser
shall report on such allocations regularly to the Trust, indicating the
broker-dealers to whom such allocations have been made and the basis therefor.
The Adviser is also authorized to consider sales of shares as a factor in the
selection of brokers or dealers to execute portfolio transactions, subject to
the requirements of best execution, i.e., that such brokers or dealers are able
to execute the order promptly and at the best obtainable securities price.
4. ALLOCATION OF EXPENSES
The Adviser agrees that it will furnish the Trust, at the adviser's expense,
with office space and facilities, equipment and clerical personnel necessary for
carrying out its duties under this agreement. The Adviser will also pay all
compensation of any Trustees, officers and employees of the Trust who are
affiliated persons of the Adviser. All operating costs and expenses relating to
the Fund not expressly assumed by the Adviser under this Agreement shall be paid
by the Trust from the assets of the Fund, including, but not limited to:
(i) interest and taxes;
(ii) brokerage commissions;
(iii) insurance premiums;
(iv) compensation and expenses of the Trust's Trustees other than
those affiliated with the Adviser;
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(v) legal and audit expenses;
(vi) fees and expenses of the Trust's custodian, shareholder servicing
or transfer agent and accounting services agent;
(vii) expenses incident to the issuance of the Fund's shares,
including issuance on the payment of, or reinvestment of,
dividends;
(viii) fees and expenses incident to the registration under Federal or
state securities laws of the Trust or the shares of the Fund;
(ix) expenses of preparing, printing and mailing reports and notices
and proxy material to shareholders of the Trust;
(x) all other expenses incidental to holding meetings of the Trust's
shareholders;
(xi) dues or assessments of or contributions to the Investment Company
Institute or any successor;
(xii) such non-recurring expenses as may arise, including litigation
affecting the Trust and the legal obligations which the Trust may
have to indemnify its officers and Trustees with respect thereto;
and
(xiii) all expenses which the Trust or the Fund agrees to bear in any
distribution agreement or in any plan adopted by the Trust and/or
a Fund pursuant to Rule 12b-1 under the Investment Company Act.
5. COMPENSATION OF THE ADVISER
(a) The Trust agrees to pay the Adviser and the Adviser agrees to accept
as full compensation for all services rendered by the Adviser
hereunder, an annual management fee, payable monthly and computed on
the value of the net assets of the fund as the close of business each
business day at the annual rate of 1.0% of such net assets.
(b) This Agreement shall go into effect with respect to the annual
management fee as of the date that the Agreement is re-approved by the
Board of Trustees, including a majority of the Trustees who are not
"interested persons" (as defined in the Investment Company Act) of the
Fund, at an in-person meeting, expected to be held on June 20, 2001;
provided however, that such annual management fee shall be escrowed in
an interest-bearing escrow account in accordance with Rule
15a-4(b)(2)(vi) under the Investment Company Act with the Fund's
custodian or a bank until there is a vote of the Fund's outstanding
voting securities regarding this Agreement within a 150-day period
from the effective date of the Agreement. If a "majority" (as defined
in the Investment Company Act) of the Fund's outstanding voting
securities approve a contract with Adviser by the end of the 150-day
period, the amount in the escrow account (including interest earned)
will be paid
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to Adviser. However, if a "majority" of the Fund's outstanding voting
securities do not approve a contract with Adviser, Adviser will be
paid out of the escrow account the lesser of (i) any costs incurred in
performing this Agreement (plus interest earned on that amount while
in escrow) or (ii) the total amount in the escrow account (plus the
interest earned).
(c) In the event the expenses of the Fund (including the fees of the
Adviser and amortization of organization expenses but excluding
interest, taxes, brokerage commissions, extraordinary expenses and
sales charges and any distribution fees) for any fiscal year exceed
the limits set by applicable regulations of state securities
commissions where the Fund is registered or qualified for sale, the
Adviser will reduce its fees by the amount of such excess. Any such
reductions are subject to the readjustment during the year. The
payment of the advisory fee at the end of any month will be reduced or
postponed or, if necessary, a refund will be made to the Fund so that
at no time will there be any accrued but unpaid liability under this
expense limitation. The Adviser may reduce any portion of the
compensation or reimbursement of expenses due to it under this
Agreement, or may agree to make payments to limit the expenses which
are the responsibility of the Fund. Any such reduction or payment
shall be applicable only to such specific reduction or payment and
shall not constitute an agreement to reduce any future compensation or
reimbursement due to the Adviser hereunder or to continue future
payments. Any fee withheld from the Adviser under this paragraph shall
be reimbursed by the Fund to the Adviser to the extent permitted by
the applicable state law if the aggregate expenses for the next
succeeding fiscal year do not exceed the applicable state limitation
or any more restrictive limitation to which the Adviser has agreed.
6. DURATION AND TERMINATION
(a) This Agreement shall go into effect on the date set forth above, the
date upon which the Board of Trustees approved such Agreement at
telephonic meeting. This Agreement is an "interim agreement" as
defined in Rule 15a-4 and it shall continue in effect for a 150-day
period from June 17, 2001. The Agreement shall terminate at the end of
the 150-day period unless approved by a "majority" of the outstanding
voting securities of the Fund, unless terminated as hereinafter
provided.
(b) If this Agreement is approved by a "majority" of the outstanding
voting securities of the Fund, the Agreement shall, unless terminated
as hereinafter provided, continue in effect for a period of two years
from the effective date, and thereafter from year to year, but only so
long as such continuance is specifically approved at least annually by
the Trust's Board of Trustees, including the vote of a majority of the
Trustees who are not parties to this Agreement or "interested persons"
of any such party cast in person at a meeting called for the purpose
of voting on such approval, or by the vote of the holders of a
"majority" of the outstanding voting securities of the Fund and by
such a vote of the Trustees.
(c) This Agreement may be terminated by the Adviser at any time without
penalty upon giving the Trust sixty (60) days' written notice (which
notice may be waived by
B-5
the Trust) and may be terminated by the Trust at any time without
penalty upon giving the Adviser ten (10) days' written notice (which
notice may be waived by the Advisor), provided that such termination
by the Trust shall be directed or approved by the vote of a majority
of all of its Trustees in office at the time or by the vote of the
holders of a "majority" of the voting securities of the Trust at the
time outstanding and entitled to vote. This Agreement shall
automatically terminate in the event of its assignment (as so
defined).
7. AGREEMENT BINDING ONLY ON FUND PROPERTY
The Adviser understands that the obligations of this Agreement are not binding
upon any shareholder of the Trust personally, but bind only the Trust's
property; the Adviser represents that it has notice of the provisions of the
Trust's Declaration of Trust disclaiming shareholder liability for acts or
obligations of the Trust. This Agreement has been executed by or with reference
to any Trustee in such person's capacity as a Trustee, and the Trustees shall
not be personally liable hereon.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument
to be executed by a duly authorized person, as of the date first written above.
PROFESSIONALLY MANAGED PORTFOLIOS
/s/ Robert M. Slotky
By: Robert M. Slotky
Title: Treasuer
TURNER INVESTMENT PARTNERS, INC.
/s/ Stephen J. Kneeley
By: Stephen J. Kneeley
Title: President
B-6
STATEMENT OF ADDITIONAL INFORMATION
________________ , 2001
TITAN FINANCIAL SERVICES FUND
A SERIES OF
PROFESSIONALLY MANAGED PORTFOLIOS
915 BROADWAY
NEW YORK, NEW YORK 10010
This Statement of Additional Information is not a prospectus but should be read
in conjunction with the Proxy Statement/Prospectus dated ______, 2001 for the
Special Meeting of Shareholders of Titan Financial Services Fund (the "Titan
Fund") to be held on Friday, September 21, 2001. Copies of the Proxy
Statement/Prospectus may be obtained at no charge by writing to the Titan Fund
at American Data Services, Inc., P.O. Box 5536, Hauppauge, NY, 11788-0132 or by
calling toll-free at 1-800-282-2340. Unless otherwise indicated, capitalized
terms used herein and not otherwise defined have the same meanings as are given
to them in the Proxy Statement/Prospectus.
Unaudited PRO FORMA combined financial statements, attached hereto, are intended
to present the financial condition and related results of operations of the
Turner Fund as if the Reorganization had been consummated on April 30, 2001.
Further information about the Turner Future Financial Services Fund (the "Turner
Fund") is contained in and incorporated herein by reference to the Turner Fund's
Statement of Additional Information dated January 31, 2001 as amended May 1,
2001. The audited financial statements and related independent auditor's
report(s) for the Turner Fund contained in the Annual Report for the fiscal year
ended September 30, 2000 are hereby incorporated herein by reference insofar as
they relate to the Turner Fund. No other parts of the Annual Report are
incorporated by reference herein.
Further information about the Titan Fund is contained in and incorporated herein
by reference to the Titan Fund's Statement of Additional Information dated
August 28, 2000. The audited financial statements and related independent
accountant's report for the Titan Fund contained in the Annual Report for the
fiscal year ended April 30, 2001, are incorporated herein by reference. No other
parts of the Annual Report are incorporated by reference herein.
Unaudited financial statements for the Turner Fund contained in the Semi-Annual
Report for the six month period ended March 31, 2001 are hereby incorporated
herein by reference insofar as they related to the Turner Fund. No other parts
of the Semi-Annual Report are incorporated by reference herein.
The date of this Statement of Additional Information is __________, 2001.
PRO FORMA SCHEDULE OF INVESTMENTS (UNAUDITED)
TITAN FINANCIAL SERVICES FUND AND TURNER FUTURE FINANCIAL SERVICES FUND
APRIL 30, 2001
TITAN TURNER
FINANCIAL SERVICES FUTURE FINANCIAL
FUND SERVICES FUND COMBINED*
SECURITY SHARES VALUE SHARES VALUE SHARES VALUE
--------------------------- ------------------- -----------------------
Aflac -- -- 460 14,628 460 14,628
Advent Software -- -- 310 17,354 310 17,354
AMBAC Financial Group -- -- 110 5,919 110 5,919
American Express 20,000 848,800 -- -- 20,000 848,800
American General -- -- 120 5,233 120 5,233
American International 17,200 1,406,960 304 24,867 17,504 1,431,827
Applied Materials 8,200 447,720 -- -- 8,200 447,720
Astoria Financial 4,000 231,440 -- -- 4,000 231,440
Automatic Data Processing 1,800 97,650 -- -- 1,800 97,650
BISYS Group -- -- 210 10,122 210 10,122
Banco Bilbao Vizcaya ADR 1 14 -- -- 1 14
Bank of America -- -- 280 15,680 280 15,680
Bank of New York 4,500 225,900 -- -- 4,500 225,900
BB&T 11,000 389,620 -- -- 11,000 389,620
BJ's Wholesale Club 6,000 271,800 -- -- 6,000 271,800
Cathay Bancorp 2,200 125,840 -- -- 2,200 125,840
Charles Schwab 52,500 1,039,500 -- -- 52,500 1,039,500
CISCO Systems 24,000 407,520 -- -- 24,000 407,520
Citigroup 26,601 1,307,439 340 16,711 26,941 1,324,150
Comerica 12,720 654,190 -- -- 12,720 654,190
Commerce Bancorp -- -- 160 11,040 160 11,040
Concord EFS -- -- 250 11,638 250 11,638
Cullen/Frost Bankers 8,500 272,000 -- -- 8,500 272,000
Dime Bancorp 15,500 516,925 -- -- 15,500 516,925
Dime Bancorp (Cost $0) 15,000 3,450 -- -- 15,000 3,450
EMC 3,500 138,600 -- -- 3,500 138,600
Freddie Mac -- -- 140 9,212 140 9,212
Fannie Mae 7,500 601,950 140 11,236 7,640 613,186
Fifth Third Bancorp 3,500 188,160 -- -- 3,500 188,160
First Data 4,500 303,480 -- -- 4,500 303,480
General Electric 4,500 218,385 -- -- 4,500 218,385
Golden State Bancorp 10,000 298,000 -- -- 10,000 298,000
Goldman Sachs 11,500 1,047,650 190 17,309 11,690 1,064,959
Heller Financial 3,000 95,730 -- -- 3,000 95,730
Hibernia, Class A 14,000 228,480 -- -- 14,000 228,480
Home Depot 3,000 141,300 -- -- 3,000 141,300
Illinois Tool Works 2,300 145,774 -- -- 2,300 145,774
Intel 12,700 392,557 -- -- 12,700 392,557
Intuit 2,500 80,100 -- -- 2,500 80,100
JDS Uniphase 15,000 320,925 -- -- 15,000 320,925
John Hancock Financial Services 10,500 390,075 -- -- 10,500 390,075
JP Morgan Chase 6,000 287,880 360 17,273 6,360 305,153
Knight Trading Group -- -- 870 16,095 870 16,095
Legg Mason 7,966 381,332 -- -- 7,966 381,332
Lehman Brothers 16,200 1,178,550 210 15,278 16,410 1,193,828
Lincoln National Group 4,000 184,640 -- -- 4,000 184,640
Marsh & Mclennan 7,500 723,300 160 15,430 7,660 738,730
Mellon Bank 12,300 503,439 -- -- 12,300 503,439
Merrill Lynch 12,400 765,080 -- -- 12,400 765,080
Microsoft 3,500 237,125 -- -- 3,500 237,125
Morgan Stanley, Dean Witter & Discover 15,100 948,129 280 17,581 15,380 965,710
Nationwide Financial Services 6,000 245,760 -- -- 6,000 245,760
New York Community Bancorp 11,640 392,850 -- -- 11,640 392,850
Northern Trust 2,800 182,084 -- -- 2,800 182,084
Pfizer 2,100 90,930 -- -- 2,100 90,930
PNC Bank 7,000 455,490 170 11,062 7,170 466,552
Providian Financial -- -- 350 18,655 350 18,655
Qwest Communications 2,500 102,250 -- -- 2,500 102,250
Renaissance Re Holdings 2,000 127,800 -- -- 2,000 127,800
Schering-Plough 2,000 77,080 -- -- 2,000 77,080
Southtrust 12,000 570,600 -- -- 12,000 570,600
Sovereign Bancorp -- -- 780 8,276 780 8,276
State Street 6,000 622,680 -- -- 6,000 622,680
SunGard Data Systems -- -- 190 10,501 190 10,501
TCF Financial -- -- 400 15,212 400 15,212
Texas Regional Bankshares 8,700 313,200 -- -- 8,700 313,200
US Bancorp 23,812 504,338 -- -- 23,812 504,338
Wal-Mart Stores 2,000 103,480 -- -- 2,000 103,480
Washington Mutual 13,500 674,055 180 8,987 13,680 683,042
Wells Fargo 19,905 934,938 450 21,137 20,355 956,075
Zions Bancorp 3,500 186,515 270 14,388 3,770 200,903
Repurchase Agreement 377,000 377,000 38,813 38,813 415,813 415,813
---------------------- ------------------ -----------------------
925,145 24,008,459 46,497 399,637 971,642 24,408,096
====================== ================== =======================
* Turner Investment Partners does not expect to dispose of a substantial portion
of the Titan Financial Services Fund's portfolio securities in order to conform
the Fund's portfolio to the Turner Future Financial Services Fund's investment
objective, policies or restrictions.
TITAN FINANCIAL SERVICES FUND AND TURNER FUTURE FINANCIAL SERVICES FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 2001
TITAN TURNER
FINANCIAL SERVICES FUTURE FINANCIAL PROFORMA PRO FORMA
FUND SERVICES FUND ADJUSTMENTS COMBINED
ASSETS
Investments in securities, at cost 20,461,666 381,053 20,842,719
---------- ---------- ----------
Investments in securities, at value 24,008,459 399,637 24,408,096
Cash 641 -- 641
Receivables: --
Dividends and interest 22,559 -- 22,559
Prepaid expenses 8,783 -- 8,783
Accrued Income -- 196 196
Investment Securities Sold -- 4,493 4,493
---------- ---------- ----------
Total assets 24,040,442 404,326 24,444,768
---------- ---------- ----------
LIABILITIES
Payables:
Fund shares redeemed 632,544 -- 632,544
Accrued expenses 66,632 12,876 79,508
Investment Securities purchased -- 41,584 41,584
---------- ---------- ----------
Total liabilities 699,176 54,460 753,636
---------- ---------- ----------
23,341,266 349,866 23,691,132
========== ========== ==========
NET ASSETS
Paid-in capital 15,150,134 315,545 15,465,679
Undistributed net investment income -- 385 385
Accumulated net realized gain on investments 4,644,339 15,352 4,659,691
Net unrealized appreciation on investments 3,546,793 18,584 3,565,377
---------- ---------- ----------
TOTAL NET ASSETS 23,341,266 349,866 23,691,132
========== ========== ==========
Outstanding shares of beneficial interest 1,181,390 31,037 (13,329) 1,199,098
Net Asset Value, Offering and
Redemption Price Per Share 19.76 11.27 19.76
========== ========== ==========
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 2001
TITAN TURNER
FINANCIAL FUTURE FINANCIAL PRO FORMA PRO FORMA
SERVICES FUND SERVICES FUND COMBINED ADJUSTMENTS COMBINED
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend income 409,859 7,131 416,990 -- 416,990
Interest income 10,552 1,929 12,481 -- 12,481
- -----------------------------------------------------------------------------------------------------------------------------------
Total investment income 420,411 9,060 429,471 -- 429,471
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 277,546 3,636 281,182 281,182
Distribution fees 69,387 -- 69,387 (69,387)(a) --
Administration fees 55,509 65,000 120,509 (55,509)(b) 65,000
Custody fees 51,505 1,348 52,853 (4,000)(c) 48,853
Transfer agent fees 28,002 21,500 49,502 (14,000)(d) 35,502
Fund accounting fees 26,533 -- 26,533 (26,533)(e) --
Reports to shareholders 21,243 5,721 26,964 26,964
Audit fees 14,500 13,500 28,000 (14,500)(f) 13,500
Registration fees 14,110 20,714 34,824 (9,800)(g) 25,024
Legal fees 10,458 4,377 14,835 14,835
Trustee fees 7,083 1,769 8,852 8,852
Miscellaneous 6,612 1,659 8,271 8,271
Insurance expense 2,902 175 3,077 (2,900)(h) 177
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses 585,390 139,399 724,789 (196,629) 528,160
- -----------------------------------------------------------------------------------------------------------------------------------
Less: --
Investment Advisory Fee Waiver -- (3,636) (3,636) (130,670) (134,306)
Reimbursements by Advisor -- (130,670) (130,670) 130,670 (0)
- -----------------------------------------------------------------------------------------------------------------------------------
NET EXPENSES 585,390 5,093 590,483 (196,629) 393,854
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (164,979) 3,967 (161,012) 196,629 35,617
- -----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments: -- --
Net realized gain on investments 5,626,571 46,781 5,673,352 5,673,352
Net unrealized depreciation on investments (663,358) 31,371 (631,987) (631,987)
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 4,963,213 78,152 5,041,365 5,041,365
- -----------------------------------------------------------------------------------------------------------------------------------
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 4,798,234 82,119 4,880,353 196,629 5,076,982
===================================================================================================================================
Notes to Pro Forma Combining Financial Statements
(Unaudited)
The accompanying unaudited Pro Forma Combining Schedule of Investments and
Statement of Assets and Liabilities as of April 30, 2001 and the unaudited Pro
Forma Combining Statement of Operations for the year ended April 30, 2001 are
intended to present the financial condition and related results of operations if
the Titan Financial Services Fund merged with the Turner Future Financial
Services Fund.
The pro forma adjustments to these pro forma financial statements are comprised
of:
(a) Adjustment to eliminate 12b-1 distribution fees
(b) Adjustment to reduce administration fees to the terms under the TIP Funds
Administrative Services Agreement
(c) Reflects decreased custodian fees
(d) Reflects decrease in transfer agency fees, in line with TIP Funds
contractual agreement
(e) Adjustment to eliminate funds accounting fees, which are covered under TIP
Funds Administration Agreement
(f) Adjustment of audit fees to reflect expenses incurred for the audit of one
combined Fund
(g) Adjustment to eliminate duplicate blue sky registration fees
(h) Reflects decrease in overall insurance costs based upon shared policy
PROFESSIONALLY MANAGED PORTFOLIOS
915 BROADWAY
NEW YORK, NY 10010
SPECIAL MEETING OF THE SHAREHOLDERS OF THE
TITAN FINANCIAL SERVICES FUND
PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR
THE SPECIAL MEETING OF SHAREHOLDERS, TO BE HELD ON FRIDAY, SEPTEMBER 21, 2001
The undersigned, hereby appoints Steven J. Paggioli, Robert H. Wadsworth and
Robert M. Slotky, as proxies and each of them, each with full power of
substitution, to vote at the Special Meeting of Shareholders of the Titan
Financial Services Fund (the "Fund"), of Professionally Managed Portfolios (the
"Trust"), to be held in the offices of Investment Company Administration, LLC
(the "Administrator"), at 4445 E. Camelback Road, Suite 261-E, Phoenix, AZ 85018
on Friday, September 21, 2001, at 12:00 p.m., and any adjournments or
postponements thereof (the "Meeting") all shares of beneficial interest of said
Trust that the undersigned would be entitled to vote if personally present at
the Meeting ("Shares") on the proposals set forth below, and in accordance with
their own discretion, any other matters properly brought before the Meeting.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE FOLLOWING
PROPOSALS:
PROPOSAL 1. APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN TURNER
FUNDS, ON BEHALF OF THE TURNER FUTURE FINANCIAL SERVICES FUND, AND
PROFESSIONALLY MANAGED PORTFOLIOS, ON BEHALF OF THE TITAN FINANCIAL
SERVICES FUND.
____FOR ____AGAINST ____ABSTAIN
PROPOSAL 2. APPROVAL OF AN INTERIM ADVISORY AGREEMENT BETWEEN TURNER
INVESTMENT PARTNERS, INC. AND PROFESSIONALLY MANAGED PORTFOLIOS,
ON BEHALF OF THE TITAN FINANCIAL SERVICES FUND.
____FOR ____AGAINST ____ABSTAIN
THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED AS DIRECTED HEREIN BY THE
SIGNING SHAREHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS
RETURNED, THIS PROXY WILL BE VOTED FOR THE FOREGOING PROPOSALS AND WILL BE VOTED
IN THE APPOINTED PROXIES' DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
The undersigned acknowledges receipt with this Proxy of a copy of the Notice of
Special Meeting and the Combined Proxy Statement/Prospectus. Your signature(s)
on this Proxy should be exactly as your name(s) appear on this Proxy. If the
shares are held jointly, each holder
2
should sign this Proxy. Attorneys-in-fact, executors, administrators, trustees
or guardians should indicate the full title and capacity in which they are
signing.
Dated: , 2001
-----------------
--------------------------------
Signature of Shareholder
--------------------------------
Signature (Joint owners)
PLEASE DATE, SIGN AND RETURN PROMPTLY USING THE ENCLOSED, POSTAGE-PAID ENVELOPE
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING; YOU MAY, NEVERTHELESS, VOTE IN
PERSON IF YOU DO ATTEND.
TELEPHONE AND INTERNET VOTING INSTRUCTIONS:
To vote by Telephone:
1) Read the Combined Proxy Statement/Prospectus and have this Proxy card at
hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth below and follow the simple
instructions.
To vote by Internet:
1) Read the Proxy Statement and have this Proxy card at hand.
2) Go to Website www.proxyvote.com
3) Enter the 12-digit control number set forth below and follow the simple
instructions.
Control Number: xxxxxxxxxxxx
3
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
Article VIII of the Agreement of Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liability arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the Declaration of Trust or otherwise, the Registrant is aware that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Act and, therefore, is
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by trustees, directors, officers or controlling persons of the Registrant
in connection with the successful defense of any act, suit or proceeding) is
asserted by such trustees, directors, officers or controlling persons in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issues.
ITEM 16. EXHIBITS
(1)(a) Agreement and Declaration of Trust of the Registrant, dated
January 26, 1996 is incorporated herein by reference to
Exhibit 1 of the Registrant's Registration Statement on Form
N-1A as filed on February 1, 1996.
(1)(b) Certificate of Amendment of Agreement and Declaration of Trust
dated March 28, 1997, is incorporated herein by reference to
Exhibit 1(a) of Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form N-1A as filed on
April 10, 1997.
(2) By-Laws are incorporated herein by reference to Exhibit 2 of
the Registrant's Registration Statement on Form N-1A as filed
on February 1, 1996.
(3) Inapplicable.
(4) Reorganization Agreement is filed herewith.
(5) Inapplicable.
(6)(a) Investment Advisory Agreement between the Registrant and
Turner Investment Partners, Inc., is incorporated herein by
reference to Exhibit 5(a) of Post-Effective Amendment No. 4 to
the Registrant's Registration Statement on Form N-1A as filed
on January 28, 1997.
(6)(b) Investment Advisory Agreement between the Registrant and
Clover Capital Management, Inc., is incorporated herein by
reference to Exhibit 5(b) of Post-Effective Amendment No. 10
to the Registrant's Registration Statement on Form N-1A as
filed on October 15, 1997.
(6)(c) Investment Advisory Agreement between the Registrant and Penn
Capital Management Company, Inc., is incorporated herein by
reference to Exhibit d(3) of Post-Effective Amendment No. 12
to the Registrant's Registration Statement on Form N-1A as
filed on November 17, 1998.
(6)(d) Investment Advisory Agreement between Registrant and Turner
Investment Partners, Inc., is incorporated herein by reference
to Exhibit d(4) of Post-Effective Amendment No. 12 to the
Registrant's Registration Statement on Form N-1A as filed on
November 17, 1998.
(6)(e) Investment Sub-Advisory Agreement between Turner Investment
Partners, Inc., and Clover Capital Management, Inc., is
incorporated herein by reference to Exhibit d(5) of
Post-Effective Amendment No. 12 to the Registrant's
Registration Statement on Form N-1A as filed on November 17,
1998.
(6)(f) Investment Sub-Advisory Agreement between Turner Investment
Partners, Inc. and Penn Capital Management, Inc., is
incorporated herein by reference to Exhibit d(6) of
Post-Effective Amendment No. 12 to the Registrant's
Registration Statement on Form N-1A as filed on November 17,
1998.
(6)(g) Form of Investment Sub-Advisory Agreement between Turner
Investment Partners, Inc. and Chartwell Investment Partners,
is incorporated herein by reference to Exhibit d(7) of
Post-Effective Amendment No. 14 to the Registrant's
Registration Statement on Form N-1A as filed on March 31,
1999.
(6)(h) Amended Schedule to the Investment Advisory Agreement between
the Registrant and Turner Investment Partners, is incorporated
herein by reference to exhibit d(8) of Post-Effective
Amendment No. 14 to the Registrant's Registration Statement on
Form N-1A as filed on July 11, 2001.
(7)(a) Distribution Agreement between the Registrant and SEI
Investments Distribution Co. (formerly, SEI Financial Services
Company), is incorporated herein by reference to Exhibit 6(a)
of Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form N-1A as filed on January 28,
1997.
(7)(b) Distribution Agreement between the Registrant and CCM
Securities Inc., is incorporated herein by reference to
Exhibit 6(b) of the Registrant's Registration Statement on
Form N-1A as filed on January 23, 1998.
(8) Inapplicable.
(9) Custodian Agreement between the Registrant and CoreStates
Bank, N.A., is incorporated herein by reference to Exhibit
8(a) of Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form N-1A as filed on January 28,
1997.
(10)(a) Registrant's Rule 12b-1 Plan, is incorporated herein by
reference to Exhibit (m) of Post-Effective Amendment No. 19 to
the Registrant's Registration Statement on Form N-1A as filed
on July 11, 2001.
(10)(b) Registrant's Rule 18f-3 Plan, is incorporated herein by
reference to Exhibit (n) of Post-Effective Amendment No. 19 to
the Registrant's Registration Statement on Form N-1A as filed
on July 11, 2001.
(11) Opinion and Consent of Morgan, Lewis & Bockius LLP that shares
will be validly issued, fully paid and non-assessable is filed
herewith.
(12) Form of Opinion and Consent of Morgan, Lewis & Bockius LLP as
to tax matters and consequences is to be filed by later
amendment.
(13)(a) Administration Agreement between the Registrant and SEI
Investments Management Corporation (formerly, SEI Financial
Management Corporation), is incorporated herein by reference
to Exhibit 9(a) of Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form N-1A as filed on
January 28, 1997.
(13)(b) Administration Agreement between the Registrant and SEI
Investments Management Corporation (formerly, SEI Financial
Management Corporation), is incorporated herein by reference
to Exhibit 9(a) of Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form N-1A as filed on
January 28, 1997.
(13)(c) Transfer Agency Agreement between the Registrant and DST
Systems, Inc. is incorporated herein by reference to Exhibit
9(b) of the Registrants Registration Statement on Form N-1A as
filed on January 23, 1998.
(13)(d) Amended Schedule to the Administration Agreement between the
Registrant and SEI Investment Management Corporation (formerly
SEI Financial Management Corporation), is incorporated herein
by reference to Exhibit h(3) of Post-Effective Amendment No.
14 to the Registrant's Registration Statement on Form N-1A as
filed on March 31, 1999.
(14)(a) Consent of Independent Auditors, Tait, Weller & Baker is filed
herewith.
(14)(b) Consent of Independent Auditors, Ernst & Young LLP is filed
herewith.
(15) Inapplicable.
(16) Inapplicable.
(17)(a) Prospectus for Turner Funds Turner Future Financial Services
Fund dated January 31, 2001 as revised May 1, 2001 is
incorporated herein by reference to the Turner Funds 497(e)
filed on June 1, 2001 [SEC Accession Number
0001135428-01-500054].
(17)(b) Statement of Additional Information for Turner Funds Turner
Future Financial Services Fund dated May 1, 2001 is
incorporated herein by reference to the Turner Funds 497(e)
filed on June 1, 2001 [SEC Accession Number
0001135428-01-500054].
(17)(c) Audited Financial Statements dated September 30, 2000 for the
Turner Future Financial Services Fund, formerly the Penn
Capital Select Financial Services Fund, are incorporated
herein by reference to the Form N-30D filed on November 28,
2000 [SEC Accession Number 0000935609-00-000626].
(17)(d) Semi-Annual Unaudited Financial Statements dated March 31,
2001 for the Turner Funds Turner Future Financial Services
Fund are incorporated herein by reference to the Form N-30D
filed on June 1, 2001 [SEC Accession Number
0001135428-01-500053].
ITEM 17. UNDERTAKINGS.
The undersigned registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part of
this registration statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act, the
reoffering prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
The undersigned registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the registration
statement and will not be used until the amendment is effective, and that, in
determining any liability under the 1933 Act, each post-effective amendment
shall be deemed to be a new registration statement for the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
Pursuant to the requirements of Form N-14, the undersigned registrant
undertakes to file, by post-effective amendment to the Registration Statement,
an opinion of counsel supporting the tax matters and consequences to
shareholders discussed in the prospectus that is part of the Registration
Statement within a reasonable time after receipt of such opinion.
SIGNATURES
As required by the Securities Act of 1933 this Registration Statement has
been signed on behalf of the Registrant in the city of Oaks, Commonwealth of
Pennsylvania on the 7th of September, 2001.
TURNER FUNDS
Registrant
By: /s/ Stephen J. Kneeley
--------------------------
Stephen J. Kneeley
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
has been signed below by the following persons in the capacity on the dates
indicated.
* Trustee September 7, 2001
- ----------------------------------------
Robert E. Turner
* Trustee September 7, 2001
- ----------------------------------------
Janet F. Sansone
* Trustee September 7, 2001
- ----------------------------------------
Alfred C. Salvato
* Trustee September 7, 2001
- ----------------------------------------
John T. Wholihan
/s/Stephen J. Kneeley President and Chief September 7, 2001
- ---------------------------------------- Executive Officer
Stephen J. Kneeley
/s/ Peter Golden Controller and Chief September 7, 2001
- ---------------------------------------- Financial Officer
Peter Golden
By: /s/ Stephen J. Kneeley September 7, 2001
---------------------------
Stephen J. Kneeley
Attorney-in-Fact
Exhibit Index
(1)(a) Agreement and Declaration of Trust of the Registrant, dated
January 26, 1996 is incorporated herein by reference to
Exhibit 1 of the Registrant's Registration Statement on Form
N-1A as filed on February 1, 1996.
(1)(b) Certificate of Amendment of Agreement and Declaration of Trust
dated March 28, 1997, is incorporated herein by reference to
Exhibit 1(a) of Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on Form N-1A as filed on
April 10, 1997.
(2) By-Laws are incorporated herein by reference to Exhibit 2 of
the Registrant's Registration Statement on Form N-1A as filed
on February 1, 1996.
(3) Inapplicable.
(4) Reorganization Agreement is filed herewith
(5) Inapplicable.
(6)(a) Investment Advisory Agreement between the Registrant and
Turner Investment Partners, Inc., is incorporated herein by
reference to Exhibit 5(a) of Post-Effective Amendment No. 4 to
the Registrant's Registration Statement on Form N-1A as filed
on January 28, 1997.
(6)(b) Investment Advisory Agreement between the Registrant and
Clover Capital Management, Inc., is incorporated herein by
reference to Exhibit 5(b) of Post-Effective Amendment No. 10
to the Registrant's Registration Statement on Form N-1A as
filed on October 15, 1997.
(6)(c) Investment Advisory Agreement between the Registrant and Penn
Capital Management Company, Inc., is incorporated herein by
reference to Exhibit d(3) of Post-Effective Amendment No. 12
to the Registrant's Registration Statement on Form N-1A as
filed on November 17, 1998.
(6)(d) Investment Advisory Agreement between Registrant and Turner
Investment Partners, Inc., is incorporated herein by reference
to Exhibit d(4) of Post-Effective Amendment No. 12
to the Registrant's Registration Statement on Form N-1A as
filed on November 17, 1998.
(6)(e) Investment Sub-Advisory Agreement between Turner Investment
Partners, Inc., and Clover Capital Management, Inc., is
incorporated herein by reference to Exhibit d(5) of
Post-Effective Amendment No. 12 to the Registrant's
Registration Statement on Form N-1A as filed on November 17,
1998.
(6)(f) Investment Sub-Advisory Agreement between Turner Investment
Partners, Inc. and Penn Capital Management, Inc., is
incorporated herein by reference to Exhibit d(6) of
Post-Effective Amendment No. 12 to the Registrant's
Registration Statement on Form N-1A as filed on November 17,
1998.
(6)(g) Form of Investment Sub-Advisory Agreement between Turner
Investment Partners, Inc. and Chartwell Investment Partners,
is incorporated herein by reference to Exhibit d(7) of
Post-Effective Amendment No. 14 to the Registrant's
Registration Statement on Form N-1A as filed on March 31,
1999.
(6)(h) Amended Schedule to the Investment Advisory Agreement between
the Registrant and Turner Investment Partners, is incorporated
herein by reference to exhibit d(8) of Post-Effective
Amendment No. 14 to the Registrant's Registration Statement on
Form N-1A as filed on July 11, 2001.
(7)(a) Distribution Agreement between the Registrant and SEI
Investments Distribution Co. (formerly, SEI Financial Services
Company), is incorporated herein by reference to Exhibit 6(a)
of Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form N-1A as filed on January 28,
1997.
(7)(b) Distribution Agreement between the Registrant and CCM
Securities Inc., is incorporated herein by reference to
Exhibit 6(b) of the Registrant's Registration Statement on
Form N-1A as filed on January 23, 1998.
(8) Inapplicable.
(9) Custodian Agreement between the Registrant and CoreStates
Bank, N.A., is incorporated herein by reference to Exhibit
8(a) of Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form N-1A as filed on January 28,
1997.
(10)(a) Registrant's Rule 12b-1 Plan, is incorporated herein by
reference to Exhibit (m) of Post-Effective Amendment No. 19 to
the Registrant's Registration Statement on Form N-1A as filed
on July 11, 2001.
(10)(b) Registrant's Rule 18f-3 Plan, is incorporated herein by
reference to Exhibit (n) of Post-Effective Amendment No. 19 to
the Registrant's Registration Statement on Form N-1A as filed
on July 11, 2001.
(11) Opinion and Consent of Morgan, Lewis & Bockius LLP that shares
will be validly issued, fully paid and non-assessable is filed
herewith
(12) Form of Opinion and Consent of Morgan, Lewis & Bockius LLP as
to tax matters and consequences is to be filed by later
amendment
(13)(a) Administration Agreement between the Registrant and SEI
Investments Management Corporation (formerly, SEI Financial
Management Corporation), is incorporated herein by reference
to Exhibit 9(a) of Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form N-1A as filed on
January 28, 1997.
(13)(b) Administration Agreement between the Registrant and SEI
Investments Management Corporation (formerly, SEI Financial
Management Corporation), is incorporated herein by reference
to Exhibit 9(a) of Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form N-1A as filed on
January 28, 1997.
(13)(c) Transfer Agency Agreement between the Registrant and DST
Systems, Inc. is incorporated herein by reference to
Exhibit 9(b) of the Registrants Registration Statement on Form
N-1A as filed on January 23, 1998.
(13)(d) Amended Schedule to the Administration Agreement between the
Registrant and SEI Investment Management Corporation (formerly
SEI Financial Management Corporation), is incorporated herein
by reference to Exhibit h(3) of Post-Effective Amendment No.
14 to the Registrant's Registration Statement on Form N-1A as
filed on March 31, 1999.
(14)(a) Consent of Independent Auditors, Tait, Weller & Baker, is
filed herewith.
(14)(b) Consent of Independent Auditors, Ernst & Young LLP, is filed
herewith.
(15) Inapplicable.
(16) Inapplicable.
(17)(a) Prospectus for Turner Funds Turner Future Financial Services
Fund dated January 31, 2001 as revised May 1, 2001 is
incorporated herein by reference to the Turner Funds 497(e)
filed on June 1, 2001 [SEC Accession Number
0001135428-01-500054].
(17)(b) Statement of Additional Information for Turner Funds Turner
Future Financial Services Fund dated May 1, 2001 is
incorporated herein by reference to the Turner Funds 497(e)
filed on June 1, 2001 [SEC Accession Number
0001135428-01-500054].
(17)(c) Audited Financial Statements dated September 30, 2000 for the
Turner Future Financial Services Fund, formerly the Penn
Capital Select Financial Services Fund, are incorporated
herein by reference to the Form N-30D filed on November 28,
2000 [SEC Accession Number 0000935609-00-000626].
(17)(d) Semi-Annual Unaudited Financial Statements dated March 31,
2001 for the Turner Funds Turner Future Financial Services
Fund are incorporated herein by reference to the
Form N-30D filed on June 1, 2001 [SEC Accession Number
0001135428-01-500053].