Preliminary Proxy Statement
SCHEDULE
14A
(RULE
14A-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(A) of the Securities Exchange Act of 1934
(Amendment
No. )
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the appropriate box:
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Preliminary
Proxy Statement
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Confidential, for Use of the Commission
Only
(as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy
Statement |
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Definitive Additional
Materials |
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Soliciting Material Pursuant
to
§240.14a-12 |
Greenville
Small Cap Growth Fund
(Name
of
Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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Title
of each class of securities to which transaction applies:
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Aggregate
number of securities to which transaction applies:
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Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated and state how it was
determined):
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Proposed
maximum aggregate value of transaction:
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0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or
the Form or Schedule and the date of its filing.
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(1) |
Amount
Previously Paid:
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Form,
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Greenville
Small Cap Growth Fund
c/o
U.S. Bancorp Fund Services, LLC
P.O.
Box 701
Milwaukee,
WI 53201-0701
(888)
334-9075
February
__, 2006
Dear
Greenville Small Cap Growth Fund Shareholder:
We
are
writing to inform you of the upcoming special meeting of shareholders of
the
Greenville Small Cap Growth Fund (the “Fund”) scheduled for March 17, 2006 (the
“Special Meeting”) to vote on an important proposal affecting the Fund: to
approve a new investment advisory agreement among the Fund and Greenville
Capital Management, Inc. (“GCM”).
As
discussed in more detail in the enclosed Proxy Statement, the previous
investment advisory agreement would have terminated on January 17, 2006 due
to a
change in ownership structure of GCM. To avoid disruption of the Fund’s
investment management program, the Board of Trustees of the Fund (the “Board”)
approved an interim advisory agreement on December 1, 2005. The interim advisory
agreement was executed on December 31, 2005, and provides that, until
shareholder approval of a new investment advisory agreement, GCM will continue
to provide investment advisory services on the same terms and with the same
fee
structure under which it currently operates. The Board believes that this
proposal is in the Fund’s and your best interest.
If
you
are a shareholder of record as of the close of business on February 1, 2006,
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. The Board has recommended approval of the proposal and encourages you
to
vote “FOR” approval of the new investment advisory agreement. If you have any
questions regarding the issue to be voted on, please do not hesitate to call
the
Fund’s administrator at (626) 914-7383.
Regardless
of whether you are planning to attend the Special Meeting, we need your vote.
Please mark, sign, and date the enclosed Proxy Card and promptly return it
in
the enclosed, postage-paid envelope so that the maximum number of shares
may be
voted.
Thank
you
for taking the time to consider this important proposal and for your continuing
investment in the Fund.
Sincerely,
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PROFESSIONALLY MANAGED PORTFOLIOS
On behalf of Greenville Small Cap Growth
Fund
/s/ Robert M. Slotky
President
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GREENVILLE CAPITAL MANAGEMENT, INC.
/s/ Charles S. Cruice
President
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Greenville
Small Cap Growth Fund
c/o
U.S. Bancorp Fund Services, LLC
P.O.
Box 701
NOTICE
OF SPECIAL MEETING
TO
BE HELD March 17, 2006
To
the
shareholders of the Greenville Small Cap Growth Fund (the “Fund”), a series of
Professionally Managed Portfolios (the “Trust”), for a Special Meeting (the
“Meeting”) of shareholders of the Fund to be held on March 17,
2006:
Notice
is
hereby given that the Meeting will be held on March 17, 2006, at 11:00 a.m.,
Central time, at the offices of U.S. Bancorp Fund Services, LLC (“USBFS”), 615
East Michigan Street, Milwaukee, WI 53202. At the Meeting, you and the other
shareholders of the Fund will be asked to consider and vote:
| 1.
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To
approve a new investment advisory agreement by and between the
Trust, on
behalf of the Fund, and GCM, the Fund’s investment advisor under which GCM
will continue to act as investment advisor with respect to the
assets of
the Fund -- GCM will serve as investment advisor on substantially
identical terms as the investment advisory agreement currently
in effect
on an interim basis; and
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| 2.
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To
transact such other business as may properly come before the Meeting
or
any adjournments thereof.
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These
proposals are discussed in greater detail in the attached Proxy Statement.
Shareholders of record at the close of business on February 1, 2006 are entitled
to notice of, and to vote at, the Meeting. Please read the accompanying Proxy
Statement. Regardless of whether you plan to attend the Meeting,
please complete, sign and return promptly the enclosed proxy card
so
that a
quorum will be present and a maximum number of shares may be voted. You may
change your vote at any time by notifying the undersigned or by voting at
the
Meeting.
By
Order
of the Board of Trustees
/s/
Angela L. Pingel
Angela
L.
Pingel, Secretary
Professionally
Managed Portfolios
__________
(Date)
GREENVILLE
SMALL CAP GROWTH FUND
QUESTIONS
AND ANSWERS
IMPORTANT
INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE
PROPOSALS
The
Greenville Small Cap Growth Fund (the “Fund”) will be holding a Special Meeting
of Shareholders on March 17, 2006 at 11:00 a.m., Central time, at the offices
of
the Fund’s Administrator, U.S. Bancorp Fund Services, LLC, 615 East Michigan
Avenue, Milwaukee, WI 53202. Shareholders of the Fund are receiving the enclosed
proxy statement (the “Proxy Statement”) and proxy card to consider and to vote
on the proposal set forth in the Proxy Statement.
We
ask
that you give the proposal on which you are being asked to vote careful
consideration. This section of the Proxy Statement is intended to give you
a
quick review of the proposal and the proxy process. Details about the proposal
are set forth in the Proxy Statement. You are urged to read the entire Proxy
Statement, including the appendices, completely and carefully.
| Q: |
WHY
ARE SHAREHOLDERS BEING MAILED THESE PROXY
MATERIALS?
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A:
You
are
receiving these proxy materials because you have the right to vote on an
important proposal concerning your investment in the Fund. The purpose of the
Proxy Statement is to disclose important information about, and to seek
shareholder approval on, the proposal related to the Fund’s investment advisor,
Greenville Capital Management, Inc. (“GCM” or the “Advisor”).
| Q: |
WHAT
ARE SHAREHOLDERS BEING ASKED TO VOTE ON AT THE
MEETING?
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A:
There
is
one proposal for consideration at the Meeting:
| 1.
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To
approve a new investment advisory agreement (“New Advisory Agreement”) by
and between the Trust, on behalf of the Fund, and GCM, the Fund’s
investment advisor under which GCM will continue to act as investment
advisor with respect to the assets of the Fund -- GCM will serve
as
investment advisor on substantially identical terms as the investment
advisory agreement currently in effect on an interim
basis.
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Q:
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WHY
IS THE FUND ASKING FOR APPROVAL OF A NEW ADVISORY
AGREEMENT?
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A:
A
transaction relating to the ownership structure of the Advisor occurred on
January 17, 2006. To avoid disruption of the Fund’s investment management
program, the Board of Trustees of the Fund (the “Board”) approved an interim
advisory agreement on December 1, 2005, and has recommended that shareholders
of
the Fund approve a new investment advisory agreement. The interim agreement
was
executed on December 31, 2005. The interim investment advisory agreement
provides that, until shareholder approval of a new investment advisory
agreement, GCM will continue to provide investment advisory services on the
same
terms and with the same fee structure under which it currently operates. The
Board believes that this proposal is in the Fund’s and your best interest.
Shareholders of the Fund are being requested to approve the New Advisory
Agreement. The New Advisory Agreement is substantially identical to the prior
investment advisory agreement (the “Prior Advisory Agreement”) and would simply
continue the relationship between the Advisor and the Fund. Approval of the
New
Advisory Agreement will not result in any change in the amount of fees you
pay
as a shareholder in the Fund.
| Q: |
HOW
IS THE PROPOSED NEW ADVISORY AGREEMENT DIFFERENT FROM THE PRIOR ADVISORY
AGREEMENT?
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A:
The
New
Advisory Agreement is substantially identical to the Prior Advisory Agreement
in
content and fee structure and is simply a continuation of the relationship
between the Advisor and the Fund. The Advisor will continue to perform the
same
investment advisory services under the New Advisory Agreement that it performed
under the Prior Advisory Agreement. Although Mr. Charles Cruice will no longer
be acting as a portfolio manager for the Fund, Mr. Robert Strauss is expected
to
continue management of the Fund in the same manner as under the Prior Advisory
Agreement, and there will be no change in investment objectives or strategies
of
the Fund.
| Q: |
WILL
THE NEW ADVISORY AGREEMENT CHANGE THE MANAGEMENT FEES CHARGED TO
THE
FUND?
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A:
No.
The
overall amount of fees that the Fund pays will remain the same.
| Q: |
HOW
DOES THE BOARD OF TRUSTEES RECOMMEND I VOTE ON THIS
MATTER?
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A:
The
Board
of Trustees of the Trust recommends that shareholders vote in favor of the
proposal.
| Q: |
WHO
IS ELIGIBLE TO VOTE AT THE MEETING?
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A:
Shareholders
as of February 1, 2006 (the “Record Date”) are entitled to vote at the Special
Meeting or any adjournment of the Special Meeting. Shareholders may cast one
vote for each share they own on the matter.
| Q: |
HOW
DO SHAREHOLDERS VOTE THEIR PROXIES?
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A:
To
vote,
please complete the enclosed proxy card and return the card in the enclosed
self-addressed, postage-paid envelope.
| Q: |
WILL
THE FUND BE REQUIRED TO PAY FOR THIS PROXY
SOLICITATION?
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A:
No.
The
Fund will not bear these costs. The Advisor has agreed to bear all of the costs
and expenses associated with the Special Meeting.
| Q: |
WHERE
CAN I GET MORE INFORMATION ABOUT THESE
PROPOSALS?
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A:
Please
contact Robert Slotky at 626-914-7383 between the hours of 9:00 a.m. to 4:00
p.m., Pacific Time. Representatives will be happy to answer any questions you
may have.
Greenville
Small Cap Growth Fund
c/o
U.S. Bancorp Fund Services, LLC
P.O.
Box 701
Milwaukee,
WI 53201-0701
(888)
334-9075
PROXY
STATEMENT
February
__, 2006
General.
This
Proxy Statement is being furnished by the Board of Trustees (at times, the
“Board”) of Professionally Managed Portfolios (the “Trust”), to the shareholders
of its series, the Greenville Small Cap Growth Fund (the “Fund”), in connection
with the Fund’s solicitation of shareholders’ proxies for use at a Special
Meeting (the “Meeting”) to be held March 17, 2006 at 11:00 a.m., Central time,
at the offices of U.S. Bancorp Fund Services, LLC, (“USBFS”) the Fund’s
administrator, for the purposes set forth below and in the accompanying Notice
of Special Meeting. The approximate mailing date of this Proxy Statement to
shareholders is February 24, 2006. At the Meeting, the shareholders of the
Fund
will be asked:
| 1.
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To
approve a new investment advisory agreement (the “Advisory Agreement”) by
and between the Trust, on behalf of the Fund, and Greenville Capital
Management, Inc. (“GCM” or the “Advisor”), the Fund’s investment advisor,
under which GCM will continue to act as investment advisor with respect
to
the assets of the Fund. GCM will serve as investment advisor on
substantially identical terms as the investment advisory agreement
currently in effect on an interim basis;
and
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| 2.
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To
transact such other business as may properly come before the Meeting
or
any adjournments thereof.
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Record
Date/Shareholders Entitled to Vote. The
Fund
is a separate investment series, or portfolio, of the Trust, a Massachusetts
business trust and registered investment company under the 1940 Act. The record
holders of outstanding shares of the Fund are entitled to vote one vote per
share (and a fractional vote per fractional share) on all matters presented
at
the Meeting. Shareholders of the Fund at the close of business on February
1,
2006 will be entitled to be present and vote at the Meeting. As of that date,
there were ___________ shares of the Fund outstanding and entitled to vote,
representing total net assets of approximately $__________.
Voting
Proxies.
Regardless of whether you expect to be personally present at the Meeting, we
encourage you to vote by proxy. You can do this by completing, dating, signing
and returning the enclosed proxy card. Properly executed proxies will be voted
as you instruct by the persons named in the accompanying proxy statement. In
the
absence of such direction, however, the persons named in the accompanying proxy
statement intend to vote FOR each proposal and may vote in their discretion
with
respect to other matters not now known to the Board that may be presented at
the
Meeting. Shareholders who execute proxies may revoke them at any time before
they are voted, either by writing to the Secretary of the Trust, Angela L.
Pingel, c/o U.S. Bancorp Fund Services, LLC, 615 East Michigan Avenue,
Milwaukee, Wisconsin 53202, or in person at the time of the Meeting. If not
so
revoked, the shares represented by the proxy will be voted at the Meeting,
and
any adjournments thereof, as instructed. Attendance by a shareholder at the
Meeting does not, in itself, revoke a proxy.
The
affirmative vote of the holders of a majority of the outstanding shares of
the
Fund is required for the Advisory Agreement to become effective. “Majority” for
this purpose, as permitted under the 1940 Act, means the lesser of (1) 67%
of
the voting securities present at the meeting if more than 50% of the outstanding
voting securities are present; or (2) shares representing more than 50% of
the
outstanding shares. All properly executed proxies received prior to the Meeting
will be voted at the Meeting in accordance with the instructions marked thereon.
Proxies received prior to the Meeting on which no vote is indicated will be
voted “for” each proposal as to which it is entitled to vote.
Quorum
Required to Hold Meeting. In
order
to transact business at the Meeting, a “quorum” must be present. Under the
Trust’s By-Laws and Massachusetts law, a quorum is constituted by the presence
in person or by proxy of 40% of the outstanding shares of the Fund entitled
to
vote at the Meeting.
Abstentions
and broker non-votes (i.e.,
proxies from brokers or nominees indicating that they have not received
instructions from the beneficial owners on an item for which the brokers or
nominees do not have discretionary power to vote) will be treated as present
for
determining whether a quorum is present with respect to a particular matter.
Abstentions and broker non-votes will not, however, be counted as voting on
any
matter at the Meeting when the voting requirement is based on achieving a
percentage of the “voting securities present.” If any proposal requires the
affirmative vote of the Fund’s outstanding shares for approval, a broker
non-vote or abstention will have the effect of a vote against the
proposal.
If
a
quorum of shareholders of the Fund is not present at the Meeting, or if a quorum
is present but sufficient votes to approve a proposal are not received, the
persons named as proxies may, but are under no obligation to, propose one or
more adjournments of the Meeting for a period or periods not more than sixty
(60) days in the aggregate to permit further solicitation of proxies. Any
business that might have been transacted at the Meeting may be transacted at
any
such adjourned session(s) at which a quorum is present. The
Meeting may also be adjourned from time to time by a majority of the votes
of
the Fund properly cast upon the question of adjourning the Meeting to another
date and time, whether a quorum is present. With respect to each proposal,
the
persons named as proxies will vote all proxies in favor of adjournment that
voted in favor of a particular proposal (including abstentions and broker
non-votes), and vote against adjournment all proxies that voted against such
proposal. Abstentions and broker non-votes will have the same effect at any
adjourned meeting as noted above.
Method
and Cost of Proxy Solicitation.
Proxies
will be solicited by the Trust primarily by mail. Although it is not
anticipated, the solicitation may also include telephone, facsimile, electronic
or oral communications by certain officers or employees of the Fund, GCM, or
U.S. Bancorp Fund Services, LLC (“USBFS”), the Fund’s administrator, who will
not be paid for these services. GCM will pay the costs of the Meeting and the
expenses incurred in connection with the solicitation of proxies. The Fund
anticipates that such fees will amount to approximately $7,000. The
Fund,
GCM, or USBFS may also request broker-dealer firms, custodians, nominees and
fiduciaries to forward proxy materials to the beneficial owners of the shares
of
the Fund held of record by such persons. If requested, GCM shall reimburse
such
broker-dealer firms, custodians, nominees and fiduciaries for their reasonable
expenses incurred in connection with such proxy solicitation, including
reasonable expenses
in communicating with persons for whom they hold shares of the
Fund.
Other
Information.
As
noted above, the Fund’s current investment advisor is Greenville Capital
Management, Inc., 100 South Rockland Road, Rockland, Delaware 19732. The Fund’s
distributor and principal underwriter is Quasar Distributors, LLC (“Quasar”),
615 East Michigan Street, Milwaukee, Wisconsin, 53202. In addition to serving
as
the Fund’s administrator, USBFS also serves as the Fund’s transfer and dividend
disbursing agent, and is an affiliate of Quasar. USBFS is located at 615 East
Michigan Street, Milwaukee, Wisconsin, 53202. U.S. Bank, National Association,
425 Walnut Street, Cincinnati, Ohio 45202, serves as Custodian for the Fund’s
securities and cash.
Independent
Registered Public Accounting Firm. Tait,
Weller & Baker (“Tait Weller”), Philadelphia, Pennsylvania, currently
serves as the independent registered public accounting firm for the Trust.
Representatives
of Tait Weller are not expected to attend the Meeting but have been given the
opportunity to make a statement if they so desire and will be available should
any matter arise requiring their presence.
The
Trust
has engaged Tait Weller to perform audit services, audit-related services,
tax
services and other services. “Audit services” refer to performing an audit of
the Trust’s annual financial statements or services that are normally provided
by the independent registered public accounting firm in connection with
statutory and regulatory filings or engagements for those fiscal years.
“Audit-related services” refer to the assurance and related services by the
independent registered public accounting firm that are reasonably related to
the
performance of the audit. “Tax services” refer to professional services rendered
by the independent registered public accounting firm for tax compliance, tax
advice, and tax planning. The following table details the aggregate fees billed
for audit fees, audit-related fees, tax fees and other fees by Tait
Weller:
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Aggregate
total for fiscal
period
ending April 30, 2004*
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Audit
Fees
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$10,500
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Audit-Related
Fees
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$0
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Tax
Fees
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$2,000
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All
Other Fees
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$0
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*The Fund commenced operations on May 3, 2004
The
Trust’s Audit Committee has adopted pre-approval policies and procedures that
require the Audit Committee to pre-approve all audit and non-audit services
of
the Trust, including services provided to any entity affiliated with the Trust.
All of Tait Weller’s hours spent on auditing the Trust’s financial statements
were attributed to work performed by full-time permanent employees of Tait
Weller.
Tait
Weller has not billed the Trust, GCM (or any entity controlling, controlled
by
or under common control with GCM) for, nor accrued for on behalf of the Trust,
GCM, any non-audit fees other than certain tax fees. The Audit Committee of
the
Board of Trustees has considered whether the provision of non-audit services
that were rendered to GCM or any entity controlling, controlled by or under
common control with GCM, is compatible with maintaining Tait Weller’s
independence, and has concluded that the provision of such non-audit services
by
Tait Weller has not compromised their independence.
Share
Ownership. To
the
knowledge of the Fund’s management, before the close of business on ___________,
persons owning of record more than 5% of the outstanding shares of the Fund
were
as follows:
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Name
and Address
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Number
of Shares
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%
Ownership
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Type
of Ownership
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Information
about the Fund.
The
Trust, on behalf of the Fund, is required by Federal law to file reports, proxy
statements and other information with the Securities and Exchange Commission
(“SEC”). The SEC maintains a web-site that contains information about the Fund
(www.sec.gov.).
Any
such proxy material, reports and other information can be inspected and copied
at the public reference facilities of the SEC, 450 Fifth Street, N.W.,
Washington D.C. 20549. Copies of such materials can be obtained, after paying
a
duplicating fee, from the Public Reference Section, Securities and Exchange
Commission, Washington, D.C. 20549-0112.
Reports
to Shareholders.
COPIES
OF THE FUND’S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE AVAILABLE WITHOUT
CHARGE UPON WRITING TO THE FUND, C/O U.S. BANCORP FUND SERVICES, LLC, P.O.
BOX
701, MILWAUKEE, WISCONSIN, 53201-0701 OR BY CALLING, TOLL-FREE, 1 -888-334-9075.
THESE REPORTS ARE ALSO AVAILABLE ON THE SEC’S WEBSITE, WWW.SEC.GOV.
The
annual report is also available on the Fund’s website:
www.greenvillecap.com
PROPOSAL
NO. 1:
APPROVAL
OF ADVISORY AGREEMENT
BY
AND BETWEEN THE TRUST, ON BEHALF OF THE FUND,
AND
GREENVILLE CAPITAL MANGEMENT, INC.
Background.
Pursuant
to an interim investment advisory agreement dated December 31, 2005 (the
“Interim Advisory Agreement”), GCM currently provides investment advisory
services to the Fund and manages the portfolio assets of the Fund. The Interim
Advisory Agreement was approved in person by the Board of Trustees on December
1, 2005 at a regular meeting of the Board. The Interim Advisory Agreement became
effective upon changes in the ownership structure of GCM as described below.
Prior to December 31, 2005, GCM provided investment advisory services to the
Fund under a prior investment advisory agreement (the “Prior Advisory
Agreement”). The Prior Advisory Agreement was approved by the Board of Trustees,
including all Trustees who are not interested persons within the meaning of
the
1940 Act, most recently on August 16, 2005 as part of its regular annual renewal
process, and by the Fund’s shareholders on May 3, 2004.
Section
15(a) of the 1940 Act prohibits any person from serving as an investment advisor
(or advisor) to a registered investment company except pursuant to a written
contract that has been approved by the shareholders. Section 15(a) also provides
that any such advisory contract must terminate on its “assignment.” Section
2(a)(4) provides that a change of control of an investment advisor, such as
the
change in GCM’s ownership structure, constitutes an assignment. Consequently,
the change in ownership structure of GCM caused the Prior Advisory Agreement
for
GCM to terminate. Rule 15a-4 under the 1940 Act permits a mutual fund to be
advised under a short-term contract until shareholders can vote on a new
contract. In accordance with Rule 15a-4, the Board of Trustees, including all
Trustees who are not interested persons within the meaning of the 1940 Act,
approved the Interim Advisory Agreement on December 1, 2005.
The
Interim Advisory Agreement allows GCM to manage the Fund under substantially
identical terms as the Prior Advisory Agreement until May 30, 2006 and is
substantially identical to the Prior Advisory Agreement except for the dates
of
execution, provisions relating to effectiveness and termination, and other
immaterial changes. For example, the Interim Advisory Agreement provides that
it
may be terminated by the Board of Trustees upon ten days’ written notice to GCM,
whereas the Prior Advisory Agreement requires sixty days’ written notice to GCM.
In order for GCM to continue to serve as investment advisor to the Fund,
shareholders of the Fund must approve a new investment advisory agreement (the
“New Advisory Agreement”).
On
the
same date that the Board approved the Interim Advisory Agreement, the Board
recommended that a New Advisory Agreement be submitted to Fund shareholders
for
approval. Prior to the date of the shareholder meeting, the Board will formally
approve the New Advisory Agreement at the next regular in-person meeting, prior
to the effective date of the New Advisory Agreement. If approved by the
shareholders of the Fund, the New Advisory Agreement will be executed and become
effective upon the date of the shareholder meeting (currently scheduled for
March 17, 2006).
The
Transaction.
Prior to
the recent change of ownership, 59.84% of GCM was owned by Mr. Charles Cruice,
and 32.13% of GCM was owned by Mrs. Kathryn Cruice. The remainder of the voting
stock of GCM was owned in small amounts by various individual employees of
GCM.
After a decision to change the structure of GCM in order to allow for greater
employee
ownership, a transaction resulting in a change in ownership occurred on January
17, 2006.
As a
result of this transaction, Mr.
Cruice owns 19.52% and Ms. Cruice owns 10.48%, Mr. Jeff Rugen owns 10.00%,
Mr.
Michael Berry owns 24.00%, Mr. Robert Strauss owns 28.50%, and Mr. Doug Jordan
owns 7.50% of
the
voting stock of GCM. This transaction has resulted in a “change in control” of
GCM as defined under the 1940 Act.
The
change of control did not result in any changes to GCM’s investment process,
operations or to its investment advisory services to the Fund. In general,
the
Fund’s daily operations or management activities have not been affected in any
way, with the exception that Mr. Cruice, who will continue to act as an analyst
for GCM, will no longer act as co-portfolio manager of the Fund. However, Mr.
Strauss will continue to act as portfolio manger for the Fund. Since the Fund’s
inception, the Advisor has continued to provide the Fund with uninterrupted
investment advisory services called for under the Prior Advisory Agreement
that
includes, but is not limited to, regularly providing investment advice to the
Fund and continuously supervising the investment and reinvestment of cash,
securities and other assets for the Fund.
Summary
of the Prior Advisory Agreement and the New Advisory
Agreement.
A copy
of the New Advisory Agreement is attached to this Proxy Statement as Exhibit
A.
The following description of the Agreement is only a summary; however, all
material terms of the New Advisory Agreement have been included in this summary.
You should refer to Exhibit A for the New Advisory Agreement, and the
description set forth in this Proxy Statement of the New Advisory Agreement
is
qualified in its entirety by reference to Exhibit A.
Advisory
Services.
Both
the Prior Advisory Agreement and New Advisory Agreement provide that the Advisor
will provide certain investment advisory services to the Fund, including
investment research and management, subject to the supervision of the Board
of
Trustees.
Management
Fees.
Both
the Prior Advisory Agreement and the New Advisory Agreement provide that the
Fund will pay the Advisor a fee with respect to the Fund based on the Fund’s
average daily net assets. Under both the Prior Advisory Agreement and New
Advisory Agreement, the Advisor is compensated for its investment advisory
services at the annual rate of 1.00% of the Fund’s average daily net assets.
Brokerage
Policies.
The
Prior Advisory Agreement and New Advisory Agreement both authorize the Advisor
to select the brokers or dealers that will execute the purchases and sales
of
securities of the Fund and direct the Advisor to use its best efforts to obtain
the best available price and most favorable execution. The Advisor may pay
a
broker a commission in excess of that which another broker might have charged
for effecting the same transaction, in recognition of the value of the research,
or other services provided by the broker to the Advisor. However, both the
Prior
Advisory Agreement and New Advisory Agreement provide that such higher
commissions will not be paid by the Fund unless the Advisor determines the
commissions are reasonable in relation to the value of services provided and
satisfies other requirements.
Payment
of Expenses.
Both
the Prior Advisory Agreement and New Advisory Agreement provide that the Advisor
will pay all of the costs and expenses incurred by it in connection with its
advisory services provided for the Fund. The Advisor will not be required to
pay
the costs and expenses associated with purchasing securities, commodities and
other investments for the Fund (including brokerage commissions and other
transaction or custodial charges).
Duration
and Termination.
Both
the Prior Advisory Agreement and New Advisory Agreement provide that it shall
continue in effect for two year from the respective effective date, and
thereafter for successive periods of one year, subject to annual approval by
the
Board of Trustees or Fund shareholders. Both the Prior Advisory Agreement and
New Advisory Agreements may be terminated by the Board of Trustees or a vote
of
a majority of the shareholders of the Fund, without payment or penalty, upon
not
more than 60 days’ notice, or by the Advisor upon 60 days’ notice.
Other
Provisions.
The
Prior Advisory Agreement and New Advisory Agreement provides that the Advisor
shall not be liable for any loss sustained by reason of the purchase, sale
or
retention of any security whether the purchase, sale or retention has been
based
on its own investigation and research or upon investigation and research made
by
any other individual, firm or corporation, if the purchase, sale or retention
has been made and the other individual, firm or corporation has been selected
in
good faith. The Prior Advisory Agreement and New Advisory Agreement provide
that
nothing contained in the Prior Advisory Agreement and New Advisory Agreement
shall be construed to protect the Advisor 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 the Prior Advisory Agreement and
New
Advisory Agreement. Additionally, the Prior Advisory Agreement and New Advisory
Agreement provide that the federal securities laws impose liabilities under
certain circumstances on persons who act in good faith, and therefore nothing
in
the Prior Advisory Agreement and New Advisory Agreement shall in any way
constitute a waiver or limitation of any rights which the Fund’s shareholders
may have under any federal securities laws. The Prior Advisory Agreement and
New
Advisory Agreement provide that the Advisor shall follow the principles set
forth in any investment advisory agreement in effect between the Trust and
the
Advisor in connection with its duties to invest the Fund’s assets. The Prior
Advisory Agreement and New Advisory Agreement provide that the Trust may
indemnify the Advisor to the full extent permitted by the Trust’s Declaration of
Trust and applicable law.
Executive
Officers and Directors of GCM.
Information regarding the principal executive officers and directors of GCM
is
set forth below. The address of GCM is 100 South Rockland Falls Road, Rockland,
Delaware 19732. The address for the person listed below, as it relates to his
duties with GCM, is the same as that of GCM.
| |
|
|
Name
|
Position
with
GCM
|
|
Robert
D. Strauss
|
Director,
Senior Vice President, Portfolio Manager/CIO
|
|
Charles
S. Cruice
|
Director,
President, Analyst
|
|
Jeffrey
C. Rugen
|
Director,
Vice President, Head Trader
|
|
William
R. Powell
|
Independent
Director
|
| |
|
Required
Vote.
Approval
of the New Advisory Agreement requires the affirmative vote of a “majority of
the outstanding voting securities” of the Fund. Under the 1940 Act, a “majority
of the outstanding voting securities” means the affirmative vote of the lesser
of (1) 67% or more of the shares of the Fund present at the Meeting or
represented by proxy if the holders of more than 50% of the outstanding shares
are present at the Meeting or represented by proxy; or (2) more than 50% of
the
outstanding shares. If the New Advisory Agreement is approved by the Fund’s
shareholders, it will be executed and become effective upon the date of the
shareholder meeting upon such approval.
If
the
shareholders of the Fund do not approve the New Advisory Agreement, the Interim
Advisory Agreement will terminate on May 30, 2006 and GCM will cease to serve
as
the investment advisor for the Fund. In that event, the Board will consider
its
options regarding an investment advisor for the Fund. The Interim Advisory
Agreement provides that any compensation earned by GCM under the contract will
be held in an interest bearing escrow account, and if the shareholders approve
the New Advisory Agreement, GCM will receive the escrow amount plus any interest
earned. Further, the Interim Advisory Agreement provides that if the
shareholders do not approve the New Advisory Agreement, GCM will be entitled
to
receive the lesser of: (1) any advisory fees held in escrow plus any interest
earned since December 31, 2005; or (2) the amount of expenses actually incurred
by GCM while performing services under the Interim Advisory Agreement, plus
any
interest earned on that amount in escrow.
Recommendation
of the Board of Trustees.
Since
the New Advisory Agreement is substantially identical to the Prior Advisory
Agreement, except for immaterial corrections and dates of execution, termination
and effectiveness, the Board of Trustees believes that the terms and conditions
of the New Advisory Agreement are fair to, and in the best interests of, the
Fund and its shareholders. The Board of Trustees also believes that there will
be no change in the services provided by GCM to the Fund. The Board considered
that there would be no change in GCM’s investment process, operations or to its
investment advisory services to the Fund. In general, the Board determined
that
there would be no diminution in the scope and quality of advisory services
provided to the Fund as a result of the change in control and that the terms
of
the New Advisory Agreement are fair to, and in the best interests of, the Trust,
the Fund and the shareholders of the Fund.
In
considering whether to recommend the New Advisory Agreement for approval by
the
Fund’s shareholders, the Trustees evaluated, at a meeting of the Board on
December 1, 2005, the quality of services GCM was expected to continue to
provide to the Fund and the compensation proposed to be paid to GCM. The
Trustees gave equal consideration to all factors deemed to be relevant to the
Fund, including, but not limited to the following: (a) the quality of services
provided to the Fund since GCM first became investment advisor to the Fund;
(b)
the performance of the Fund since commencement of operations; (c) the fact
that
the proposed transaction is not expected to affect the manner in which the
Fund
is advised; (d) that Mr. Strauss, a current portfolio manager, will continue
to
be involved in the management of the Fund; (e) the compensation payable to
the
advisor under the proposed New Advisory Agreement, which would be at the same
rate as the compensation under the existing investment Advisory Agreement;
(f)
the terms of the Prior Advisory Agreement, which would be unchanged under the
New Advisory Agreement except for different effective and termination dates
and
minor updating changes; (g) GCM’s overall investment performance record; and (h)
other factors deemed relevant.
The
Board
also considered the Fund’s fees and expenses in relation to various industry
averages and determined that the fees paid to GCM under the Agreements were
reasonable. In
reviewing the transaction, the Board was also comfortable that: (a) the
executives and directors of GCM would not change and the principals of GCM
would
remain the same following the change in control transaction; (b) GCM would
be
sufficiently capitalized following the transaction to continue its operations;
(c) the assets under GCM’s management would continue to remain at GCM for a
period of several years; (d) GCM would obtain adequate liability insurance
coverage for its management operations; and (e) there would be no changes to
the
investment approach and process in the portfolio management of the Fund.
In
addition, the Board also considered that GCM may receive certain benefits from
its relationship with the Fund, such as research and other services in exchange
for brokerage allocation, and determined that such benefits have been of a
de
minimis nature. Accordingly, the Board of Trustees recommends that the
shareholders of the Fund vote to approve the New Advisory
Agreement.
Other
Legal Requirements under the 1940 Act.
Section
15(f) of the 1940 Act provides that, when a change in control of an investment
advisor (or advisor) occurs, the investment advisor or any of its affiliated
persons may receive any amount or benefit in connection with the change in
control as long as two conditions are satisfied. The first condition specifies
that no “unfair burden” may be imposed on the fund as a result of the
transaction relating to the change of control, or any express or implied terms,
conditions or understandings. The term “unfair burden,” as defined in the 1940
Act, includes any arrangement during the two-year period after the change in
control whereby the investment advisor (or predecessor or successor advisor),
or
any interested person of any such advisor, receives or is entitled to receive
any compensation, directly or indirectly, from the fund or its security holders
(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 fund (other than fees for bona fide
principal underwriting services). GCM has represented to the Fund that the
change in control transaction will not cause the imposition of an unfair burden,
as that term is defined in Section 15(f) of the 1940 Act, on the
Fund.
The
second condition specifies that, during the three-year period immediately
following consummation of the transaction, at least 75% of the Fund’s Board must
be Independent Trustees. Currently, the Board of Trustees of the Trust meets
this 75% requirement as 100% of the Board is Independent.
Additional
Information about the Trust and GCM. The
following is a list of the executive officers and Trustees of the Trust, their
positions with the Trust, and their positions with GCM, if any:
| |
|
|
|
Name
|
Position
with the Trust
|
Position
with GCM
|
|
Dorothy
A. Berry
|
Independent
Trustee & Chairman
|
None
|
|
Wallace
L. Cook
|
Independent
Trustee
|
None
|
|
Carl
A. Froebel
|
Independent
Trustee
|
None
|
|
Rowley
W. P. Redington
|
Independent
Trustee
|
None
|
|
Steven
J. Paggioli
|
Independent
Trustee
|
None
|
|
Robert
M. Slotky
|
President
|
None
|
|
Eric
W. Falkeis
|
Treasurer
|
None
|
|
Angela
L. Pingel
|
Secretary
|
None
|
GENERAL
INFORMATION
Other
Matters to come Before the Meeting. The
Trust’s management does not know of any matters to be presented at the Meeting
other than those described in this Proxy Statement. If other business should
properly come before the Meeting, the proxy holders will vote thereon in
accordance with their best judgment.
Shareholder
Proposals. The
Meeting is a special meeting of shareholders. The Trust is not required to,
nor
does it intend to, hold regular annual meetings of its shareholders. If such
an
annual meeting is called, any shareholder who wishes to submit a proposal for
consideration at the meeting should submit the proposal or notice of the
proposal, if the shareholder chooses to include the proposal in the Trust’s
proxy materials, to the Trust within a reasonable time prior to the Trust
printing and mailing its proxy materials in accordance with, respectively,
Rule
14a-8 or Rule 14a-4(c) under the Securities Exchange Act of 1934.
IN
ORDER
THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED, PROMPT EXECUTION
AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A SELF-ADDRESSED, POSTAGE-PAID
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
Professionally
Managed Portfolios
/s/
Angela L. Pingel
Angela
L.
Pingel
Secretary
Milwaukee,
WI
________________
(DATE)
APPENDIX
A
PROFESSIONALLY
MANAGED PORTFOLIOS
INVESTMENT
ADVISORY AGREEMENT
Greenville
Small Cap Growth Fund
THIS
INVESTMENT ADVISORY AGREEMENT
is made
as of the __ day of ______, by and between Professionally Managed Portfolios,
a
Massachusetts business trust (the “Trust”), on behalf of the the Trust’s
Greenville Small Cap Growth Fund series (the “Fund”) and Greenville Capital
Management, Inc. (the “Advisor”).
WITNESSETH:
WHEREAS,
the
Trust is an open-end management investment company, registered as such under
the
Investment Company Act of 1940, as amended, (the “Investment Company Act”); and
WHEREAS,
the
Fund is a series of the Trust having separate assets and liabilities; and
WHEREAS,
the
Advisor is registered as an investment adviser under the Investment Advisers
Act
of 1940, as amended, (the “Advisers Act”) and is engaged in the business of
supplying investment advice as an independent contractor; and
WHEREAS,
the
Trust desires to retain the Advisor to render advice and services to the Fund
pursuant to the terms and provisions of this Agreement, and the Advisor desires
to furnish said advice and services;
NOW,
THEREFORE,
in
consideration of the covenants and the mutual promises hereinafter set forth,
the parties to this Agreement, intending to be legally bound hereby, mutually
agree as follows:
1.
APPOINTMENT OF ADVISOR.
The
Trust hereby employs the Advisor and the Advisor hereby accepts such employment,
to render investment advice and related services with respect to the assets
of
the Fund for the period and on the terms set forth in this Agreement, subject
to
the supervision and direction of the Trust’s Board of Trustees (the “Board of
Trustees”).
2.
DUTIES OF ADVISOR.
(a)
GENERAL
DUTIES.
The
Advisor shall act as investment adviser to the Fund and shall supervise
investments of the Fund on behalf of the Fund in accordance with the investment
objectives, policies and restrictions of the Fund as set forth in the Fund’s and
Trust’s governing documents, including, without limitation, the Trust’s
Agreement and Declaration of Trust and By-Laws; the Fund’s prospectus, statement
of additional information and undertakings; and such other limitations, policies
and procedures as the Trustees may impose from time to time in writing to the
Advisor (collectively, the “Investment Policies”). In providing such services,
the Advisor shall at all times adhere to the provisions and restrictions
contained in the federal securities laws, applicable state securities laws,
the
Internal Revenue Code of 1986, the Uniform Commercial Code and other applicable
law.
Without
limiting the generality of the foregoing, the Advisor shall: (i) furnish the
Fund with advice and recommendations with respect to the investment of the
Fund’s assets and the purchase and sale of portfolio securities for the Fund,
including the taking of such steps as may be necessary to implement such advice
and recommendations (i.e.,
placing the orders); (ii) manage and oversee the investments of the Fund,
subject to the ultimate supervision and direction of the Board of Trustees;
(iii) vote proxies for the Fund, file ownership reports under Section 13 of
the
Securities Exchange Act of 1934, as amended, (the “1934 Act”) for the Fund, and
take other actions on behalf of the Fund; (iv) maintain the books and records
required to be maintained by the Fund except to the extent arrangements have
been made for such books and records to be maintained by the administrator
or
another agent of the Fund; (v) furnish reports, statements and other data on
securities, economic conditions and other matters related to the investment
of
the Fund’s assets which the Fund’s administrator or distributor or the officers
of the Trust may reasonably request; and (vi) render to the Board of Trustees
such periodic and special reports with respect to each Fund’s investment
activities as the Board may reasonably request, including at least one in-person
appearance annually before the Board of Trustees.
(b)
BROKERAGE.
The
Advisor shall be responsible for decisions to buy and sell securities for the
Fund, for broker-dealer selection, and for negotiation of brokerage commission
rates, provided that the Advisor shall not direct orders to an affiliated person
of the Advisor without general prior authorization to use such affiliated broker
or dealer for the Board of Trustees. The Advisor’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
Advisor may 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. The price to the Fund in any transaction may be less favorable
than 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 may determine and constituted with
Section 28(e) of the 1934 Act, the Advisor 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 (directly or indirectly) brokerage or research services to the Advisor
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 Advisor 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 Advisor’s overall responsibilities with respect to
the Trust. Subject to the same policies and legal provisions, the Advisor 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 Advisor, or any affiliate of either. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine, and the Advisor shall report on such allocations regularly to the
Trust, indicating the broker-dealers to whom such allocations have been made
and
the basis therefor.
On
occasions when the Advisor deems the purchase or sale of a security to be in
the
best interest of the Fund as well as of other clients, the Advisor, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be so purchased or sold in order to obtain the most favorable
price or lower brokerage commissions and the most efficient execution. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Advisor in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other clients.
3.
REPRESENTATIONS OF THE ADVISOR.
(a)
The
Advisor shall use its best judgment and efforts in rendering the advice and
services to the Fund as contemplated by this Agreement.
(b)
The
Advisor shall maintain all licenses and registrations necessary to perform
its
duties hereunder in good order.
(c)
The
Advisor shall conduct its operations at all times in conformance with the
Advisers Act, the Investment Company Act, and any other applicable state and/or
self-regulatory organization regulations.
(d)
The
Advisor shall maintain errors and omissions insurance in an amount at least
equal to that disclosed to the Board of Trustees in connection with their
approval of this Agreement.
4.
INDEPENDENT CONTRACTOR.
The
Advisor shall, for all purposes herein, be deemed to be an independent
contractor, and shall, unless otherwise expressly provided and authorized to
do
so, have no authority to act for or represent the Trust or the Fund in any
way,
or in any way be deemed an agent for the Trust or for the Fund. It is expressly
understood and agreed that the services to be rendered by the Advisor to the
Fund under the provisions of this Agreement are not to be deemed exclusive,
and
the Advisor shall be free to render similar or different services to others
so
long as its ability to render the services provided for in this Agreement shall
not be impaired thereby.
5.
ADVISOR’S PERSONNEL.
The
Advisor shall, at its own expense, maintain such staff and employ or retain
such
personnel and consult with such other persons as it shall from time to time
determine to be necessary to the performance of its obligations under this
Agreement. Without limiting the generality of the foregoing, the staff and
personnel of the Advisor shall be deemed to include persons employed or retained
by the Advisor to furnish statistical information, research, and other factual
information, advice regarding economic factors and trends, information with
respect to technical and scientific developments, and such other information,
advice and assistance as the Advisor or the Trust’s Board of Trustees may desire
and reasonably request and any compliance staff and personnel required by the
Advisor.
6.
EXPENSES.
(a)
With
respect to the operation of the Fund, the Advisor shall be responsible for
(i)
providing the personnel, office space and equipment reasonably necessary for
the
operation of the Fund, (ii) the expenses of printing and distributing extra
copies of the Fund’s prospectus, statement of additional information, and sales
and advertising materials (but not the legal, auditing or accounting fees
attendant thereto) to prospective investors (but not to existing shareholders),
(iii) the costs of any special Board of Trustees meetings or shareholder
meetings convened for the primary benefit of the Advisor, and (iv) any costs
of
liquidating or reorganizing the Fund (unless such cost is otherwise allocated
by
the Board of Trustees). If the Advisor has agreed to limit the operating
expenses of the Fund, the Advisor shall also be responsible on a monthly basis
for any operating expenses that exceed the agreed upon expense limit.
(b)
The
Fund is responsible for and has assumed the obligation for payment of all of
its
expenses, other than as stated in Subparagraph 6(a) above, including but not
limited to: the Fund’s organizational expenses, fees and expenses incurred in
connection with the issuance, registration and transfer of its shares; brokerage
and commission expenses; all expenses of transfer, receipt, safekeeping,
servicing and accounting for the cash, securities and other property of the
Trust for the benefit of the Fund including all fees and expenses of its
custodian, shareholder services agent and accounting services agent; interest
charges on any borrowings; costs and expenses of pricing and calculating its
daily net asset value and of maintaining its books of account required under
the
Investment Company Act; taxes, if any; a pro rata portion of expenditures in
connection with meetings of the Fund’s shareholders and the Trust’s Board of
Trustees that are properly payable by the Fund; salaries and expenses of
officers of Trust, including without limitation the Trust’s Chief Compliance
Officer, and fees and expenses of members of the Board of Trustees or members
of
any advisory board or committee who are not members of, affiliated with or
interested persons of the Advisor; insurance premiums on property or personnel
of each Fund which inure to its benefit, including liability and fidelity bond
insurance; the cost of preparing and printing reports, proxy statements,
prospectuses and statements of additional information of the Fund or other
communications for distribution to existing shareholders which are covered
by
any 12b-1 Plan; legal, auditing and accounting fees; all or any portion of
trade
association dues or educational program expenses determined appropriate by
the
Board of Trustees; fees and expenses (including legal fees) of registering
and
maintaining registration of its shares for sale under applicable securities
laws; all expenses of maintaining and servicing shareholder accounts, including
all charges for transfer, shareholder recordkeeping, dividend disbursing,
redemption, and other agents for the benefit of the Fund, if any; and all other
charges and costs of its operation plus any extraordinary and non-recurring
expenses, except as herein otherwise prescribed.
(c)
The
Advisor may voluntarily or contractually absorb certain Fund expenses.
(d)
To
the extent the Advisor incurs any costs by assuming expenses which are an
obligation of the Fund as set forth herein, the Fund shall promptly reimburse
the Advisor for such costs and expenses, except to the extent the Advisor has
otherwise agreed to bear such expenses. To the extent the services for which
a
Fund is obligated to pay are performed by the Advisor, the Advisor shall be
entitled to recover from such Fund to the extent of the Advisor’s actual costs
for providing such services. In determining the Advisor’s actual costs, the
Advisor may take into account an allocated portion of the salaries and overhead
of personnel performing such services.
(e)
The
Advisor may not pay fees in addition to any Fund distribution or servicing
fees
to financial intermediaries, including without limitation banks, broker-dealers,
financial advisors, or pension administrators, for sub-administration,
sub-transfer agency or any other shareholder servicing or distribution services
associated with shareholders whose shares are held in omnibus or other group
accounts, except with the prior authorization of the Board of Trustees. Where
such arrangements are authorized by the Board of Trustees, the Advisor shall
report regularly to the Trust on the amounts paid and the relevant financial
institutions.
7.
INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a)
The
Fund shall pay to the Advisor, and the Advisor agrees to accept, as full
compensation for all services furnished or provided to such Fund pursuant to
this Agreement, an annual management fee at the rate set forth in Schedule
A to
this Agreement.
(b)
The
management fee shall be accrued daily by the Fund and paid to the Advisor on
the
first business day of the succeeding month.
(c)
The
initial fee under this Agreement shall be payable on the first business day
of
the first month following the effective date of this Agreement and shall be
prorated as set forth below. If this Agreement is terminated prior to the end
of
any month, the fee to the Advisor shall be prorated for the portion of any
month
in which this Agreement is in effect which is not a complete month according
to
the proportion which the number of calendar days in the month during which
the
Agreement is in effect bears to the number of calendar days in the month, and
shall be payable within ten (10) days after the date of termination.
(d)
The
fee payable to the Advisor under this Agreement will be reduced to the extent
of
any receivable owed by the Advisor to the Fund and as required under any expense
limitation applicable to a Fund.
(e)
The
Advisor voluntarily may reduce any portion of the compensation or reimbursement
of expenses due to it pursuant to this Agreement and may agree to make payments
to limit the expenses which are the responsibility of a Fund under this
Agreement. 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 Advisor hereunder or to
continue future payments. Any such reduction will be agreed to prior to accrual
of the related expense or fee and will be estimated daily and reconciled and
paid on a monthly basis.
(f)
Any
such reductions made by the Advisor in its fees or payment of expenses which
are
the Fund’s obligation are subject to reimbursement by the Fund to the Advisor,
if so requested by the Advisor, in subsequent fiscal years if the aggregate
amount actually paid by the Fund toward the operating expenses for such fiscal
year (taking into account the reimbursement) does not exceed the applicable
limitation on Fund expenses. Under the expense limitation agreement, the Advisor
may recoup reimbursements made in any fiscal year of the Fund over the following
three fiscal years. Any such reimbursement is also contingent upon the Board
of
Trustees review and approval at time the reimbursement is made. Such
reimbursement may not be paid prior to the Fund’s payment of current ordinary
operating expenses.
(g)
The
Advisor may agree not to require payment of any portion of the compensation
or
reimbursement of expenses otherwise due to it pursuant to this Agreement. Any
such agreement shall be applicable only with respect to the specific items
covered thereby and shall not constitute an agreement not to require payment
of
any future compensation or reimbursement due to the Advisor hereunder.
8.
NO SHORTING; NO BORROWING.
The
Advisor agrees that neither it nor any of its officers or employees shall take
any short position in the shares of the Fund. This prohibition shall not prevent
the purchase of such shares by any of the officers or employees of the Advisor
or any trust, pension, profit-sharing or other benefit plan for such persons
or
affiliates thereof, at a price not less than the net asset value thereof at
the
time of purchase, as allowed pursuant to rules promulgated under the Investment
Company Act. The Advisor agrees that neither it nor any of its officers or
employees shall borrow from the Fund or pledge or use the Fund’s assets in
connection with any borrowing not directly for the Fund’s benefit. For this
purpose, failure to pay any amount due and payable to the Fund for a period
of
more than thirty (30) days shall constitute a borrowing.
9.
CONFLICTS WITH TRUST’S GOVERNING DOCUMENTS AND APPLICABLE
LAWS.
Nothing
herein contained shall be deemed to require the Trust or the Fund to take any
action contrary to the Trust’s Agreement and Declaration of Trust, By-Laws, or
any applicable statute or regulation, or to relieve or deprive the Board of
Trustees of its responsibility for and control of the conduct of the affairs
of
the Trust and Fund. In this connection, the Advisor acknowledges that the
Trustees retain ultimate plenary authority over the Fund and may take any and
all actions necessary and reasonable to protect the interests of shareholders.
10.
REPORTS AND ACCESS.
The
Advisor agrees to supply such information to the Fund’s administrator and to
permit such compliance inspections by the Fund’s administrator as shall be
reasonably necessary to permit the administrator to satisfy its obligations
and
respond to the reasonable requests of the Board of Trustees.
11.
ADVISOR’S LIABILITIES AND INDEMNIFICATION.
(a)
The
Advisor shall have responsibility for the accuracy and completeness (and
liability for the lack thereof) of the statements in the Fund’s offering
materials (including the prospectus, the statement of additional information,
advertising and sales materials), except for information supplied by the
administrator or the Trust or another third party for inclusion therein.
(b)
The
Advisor shall be liable to the Fund for any loss (including brokerage charges)
incurred by the Fund as a result of any improper investment made by the Advisor
in contradiction of the Investment Policies.
(c)
In
the absence of willful misfeasance, bad faith, negligence, or reckless disregard
of the obligations or duties hereunder on the part of the Advisor, the Advisor
shall not be subject to liability to the Trust or the Fund or to any shareholder
of the Fund for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security by the Fund. Notwithstanding the
foregoing, federal securities laws and certain state laws impose liabilities
under certain circumstances on persons who have acted in good faith, and
therefore nothing herein shall in any way constitute a waiver or limitation
of
any rights which the Trust, the Fund or any shareholder of the Fund may have
under any federal securities law or state law.
(d)
Each
party to this Agreement shall indemnify and hold harmless the other party and
the shareholders, directors, officers and employees of the other party (any
such
person, an “Indemnified Party”) against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating and defending any
alleged loss, liability, claim, damage or expenses and reasonable counsel fees
incurred in connection therewith) arising out of the Indemnifying Party’s
performance or non-performance of any duties under this Agreement provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith or negligence in the performance
of
duties hereunder or by reason of reckless disregard of obligations and duties
under this Agreement.
(e)
No
provision of this Agreement shall be construed to protect any Trustee or officer
of the Trust, or officer of the Advisor, from liability in violation of Sections
17(h) and (i) of the Investment Company Act.
12.
NON-EXCLUSIVITY; TRADING FOR ADVISOR’S OWN ACCOUNT.
The
Trust’s employment of the Advisor is not an exclusive arrangement. The Trust may
from time to time employ other individuals or entities to furnish it with the
services provided for herein. Likewise, the Advisor may act as investment
adviser for any other person, and shall not in any way be limited or restricted
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 Advisor expressly represents that it will undertake no activities
which
will adversely affect the performance of its obligations to the Fund under
this
Agreement; and provided further that the Advisor will adhere to a code of ethics
governing employee trading and trading for proprietary accounts that conforms
to
the requirements of the Investment Company Act and the Advisers Act and has
been
approved by the Board of Trustees.
13.
TERM.
(a)
This
Agreement shall become effective at the time the Fund commences operations
pursuant to an effective amendment to the Trust’s Registration Statement under
the Securities Act of 1933 and shall remain in effect for a period of two (2)
years, unless sooner terminated as hereinafter provided. This Agreement shall
continue in effect thereafter for additional periods not exceeding one (l)
year
so long as such continuation is approved for the Fund at least annually by
(i)
the Board of Trustees or by the vote of a majority of the outstanding voting
securities of each Fund and (ii) the vote of a majority of the Trustees of
the
Trust who are not parties to this Agreement nor interested persons thereof,
cast
in person at a meeting called for the purpose of voting on such approval. The
terms “majority of the outstanding voting securities” and “interested persons”
shall have the meanings as set forth in the Investment Company Act.
(b)
The
Fund may use the name Greenville Small Cap Growth Fund or any name derived
from
or using the name Greenville only for so long as this Agreement or any
extension, renewal or amendment hereof remains in effect. Within sixty (60)
days
from such time as this Agreement shall no longer be in effect, the Fund shall
cease to use such a name or any other name connected with the Advisor.
14.
TERMINATION; NO ASSIGNMENT.
(a)
This
Agreement may be terminated by the Trust on behalf of the Fund at any time
without payment of any penalty, by the Board of Trustees or by vote of a
majority of the outstanding voting securities of a Fund, upon sixty (60) days’
written notice to the Advisor, and by the Advisor upon sixty (60) days’ written
notice to the Fund. In the event of a termination, the Advisor shall cooperate
in the orderly transfer of the Fund’s affairs and, at the request of the Board
of Trustees, transfer any and all books and records of the Fund maintained
by
the Advisor on behalf of the Fund.
(b)
This
Agreement shall terminate automatically in the event of any transfer or
assignment thereof, as defined in the Investment Company Act.
15.
NONPUBLIC
PERSONAL INFORMATION.
Notwithstanding
any provision herein to the contrary, the Advisor agrees on behalf of itself
and
employees (1) to treat confidentially and as proprietary information of the
Trust (a) all records and other information relative to the Fund’s prior,
present, or potential shareholders (and clients of said shareholders) and (b)
any Nonpublic Personal Information, as defined under Section 248.3(t) of
Regulation S-P (“Regulation S-P”), promulgated under the Gramm-Leach-Bliley Act
(the “G-L-B Act”), and (2) except after prior notification to and approval in
writing by the Trust, not to use such records and information for any purpose
other than the performance of its responsibilities and duties hereunder, or
as
otherwise permitted by Regulation S-P or the G-L-B Act, and if in compliance
therewith, the privacy policies adopted by the Trust and communicated in writing
to the Advisor. Such written approval shall not be unreasonably withheld by
the
Trust and may not be withheld where the Advisor may be exposed to civil or
criminal contempt or other proceedings for failure to comply after being
requested to divulge such information by duly constituted
authorities.
16.
ANTI-MONEY LAUNDERING COMPLIANCE. The
Advisor acknowledges that, in compliance with the Bank Secrecy Act, as amended,
the USA PATRIOT Act, and any implementing regulations thereunder (together,
“AML
Laws”), the Trust has adopted an Anti-Money Laundering Policy. The Advisor
agrees to comply with the Trust’s Anti-Money Laundering Policy and the AML Laws,
as the same may apply to the Advisor, now and in the future. The Advisor further
agrees to provide to the Trust and/or the administrator such reports,
certifications and contractual assurances as may be reasonably requested by
the
Trust. The Trust may disclose information regarding the Advisor to governmental
and/or regulatory or self-regulatory authorities to the extent required by
applicable law or regulation and may file reports with such authorities as
may
be required by applicable law or regulation.
17.
CERTIFICATIONS; DISCLOSURE CONTROLS AND PROCEDURES. The
Advisor acknowledges that, in compliance with the Sarbanes-Oxley Act of 2002
(the “Sarbanes-Oxley Act”), and the implementing regulations promulgated
thereunder, the Trust and the Fund are required to make certain certifications
and have adopted disclosure controls and procedures. To the extent reasonably
requested by the Trust, the Advisor agrees to use its best efforts to assist
the
Trust and the Fund in complying with the Sarbanes-Oxley Act and implementing
the
Trust’s disclosure controls and procedures. The Advisor agrees to inform the
Trust of any material development related to the Fund that the Advisor
reasonably believes is relevant to the Fund’s certification obligations under
the Sarbanes-Oxley Act.
18.
SEVERABILITY.
If any
provision of this Agreement shall be held or made invalid by a court decision,
statute or rule, or shall be otherwise rendered invalid, the remainder of this
Agreement shall not be affected thereby.
19.
CAPTIONS.
The
captions in this Agreement are included for convenience of reference only and
in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
20.
GOVERNING LAW.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Delaware without giving effect to the conflict of laws principles
of Delaware or any other jurisdiction; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation
or
rule, including the Investment Company Act and the Advisers Act and any rules
and regulations promulgated thereunder.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed by their duly
authorized officers, all on the day and year first above written.
|
PROFESSIONALLY MANAGED
PORTFOLIOS
on behalf of the
Greenville Small Cap Growth Fund
By:
Name: Robert
M.
Slotky
Title: President
|
GREENVILLE CAPITAL
MANAGEMENT, INC.
By:
Name: Charles
S.
Cruice
Title: President
|
SCHEDULE
A
Series
or
Fund of Professionally Managed Portfolios Annual
Fee rate
---------------------------------------------------
--------------- -------------------
Greenville
Small Cap Growth Fund 1.00%
of
average daily net assets
PROXY
GREENVILLE
SMALL CAP GROWTH FUND
SPECIAL
MEETING OF SHAREHOLDERS
March
17, 2006
SOLICITED
ON BEHALF OF THE BOARD OF TRUSTEES
OF
PROFESSIONALLY MANAGED PORTFOLIOS
The
undersigned hereby appoints Angela L. Pingel and Rachel A. Lohrey, and each
of
them, as proxies of the undersigned, each with the power to appoint his
substitute, for the Special Meeting of Shareholders of the Greenville Small
Cap
Growth Fund (the “Fund”), a series of Professionally Managed Portfolios (the
“Trust”), to be held on March 17, 2006 at 11:00 a.m. Central Time at the offices
of U.S. Bancorp Fund Services, LLC, 615 E. Michigan Street, Milwaukee, WI 53202
(the “Meeting”), to vote, as designated below, all shares of the Fund, held by
the undersigned at the close of business February 1, 2006. Capitalized terms
used without definition have the meanings given to them in the accompanying
Proxy Statement.
| |
DATE:
__________________________________________________
NOTE:
Please sign exactly as your name appears on this Proxy. If joint
owners,
EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please give
your
full title.
________________________________________________________
Signature(s) (Title(s),
if applicable)
|
This
proxy will be voted as specified below. IF THE PROXY IS EXECUTED, BUT NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND
IN
THE DISCRETION OF THE ABOVE-NAMED PROXIES AS TO ANY OTHER MATTER THAT MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Please
indicate by filling in the appropriate box below.
| |
1. |
To approve the new investment
agreement
FOR AGAINST ABSTAIN |
| |
|
Between Professionally Managed Portfolios, on
behalf
of,
¨ ¨
¨ |
| |
|
the
Greenville Small Cap Growth Fund, and
Greenville
|
In
their
discretion, the named proxies may vote
upon
any
other matters which may legally come
before
the meeting, or any adjournment thereof.
WE
NEED YOUR VOTE BEFORE MARCH 17, 2006
Your
vote
is important. If you are unable to attend the meeting in person, we urge you
to
complete, sign, date and return this proxy card using the enclosed postage
prepaid envelope. Your prompt return of the proxy will help assure a quorum
at
the meeting and avoid additional expenses associated with further solicitation.
Sending in your proxy will not prevent you from personally voting your shares
at
the meeting. You may revoke your proxy before it is voted at the meeting by
submitting to the Secretary of the Fund a written notice of revocation or a
subsequently signed proxy card, or by attending the meeting and voting in
person.
THANK
YOU FOR YOUR TIME