SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Filed by the Registrant
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[X]
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Filed by a Party other than the Registrant
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Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
PROFESSIONALLY MANAGED PORTFOLIOS
(Name of Registrant as Specified In Its Charter)
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:
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Proxy Materials
PLEASE CAST YOUR VOTE NOW!
PORTFOLIO 21 GLOBAL EQUITY FUND
A Series of Professionally Managed Portfolios
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
1-877-351-4115
We have some exciting news to share with you, and we need your help in the form of your vote as discussed in the enclosed proxy materials. Portfolio 21 Investments, Inc. (the “Adviser” or the “Firm”) was founded over thirty years ago and for many years, Carsten Henningsen, Chairman, has owned the great majority of the Firm. One other founding employee, Rob Baird, also has an ownership interest in the Firm. Many of the other current employees would like to have personal ownership in the Firm; consequently, we plan to set up an ownership structure that allows the Adviser to remain an independent, employee-owned Firm. Mr. Henningsen will be selling the majority of his ownership in the Firm to other current employees of the Adviser. Once this transition is complete, all senior members of the investment team will have personal ownership in the Firm, and in relatively equal shares.
In case you are wondering, no one is leaving, preparing to retire, or changing their responsibilities due to this broadening of the Firm’s ownership. As you know, the investment work performed by the Adviser on behalf of shareholders is distinctive in its quest for global companies that demonstrate excellence in environmental, social and governance performance, among other things, and also in its goal of delivering competitive risk-adjusted investment results to you. We are confident that an independent, employee-owned firm is the best structure for the Firm, and we have been thoughtful in designing a broad and balanced ownership base across the key employees of the Firm.
The Firm has served as the investment adviser to the Portfolio 21 Global Equity Fund (the “Fund”), a series of Professionally Managed Portfolios (the “Trust”), since the Fund’s inception in 1999. Carsten Henningsen, a Director of the Adviser, controls the ownership of the Adviser through his ownership of 71% of the shares. Mr. Henningsen plans to sell over 75% of his shares to other employees of the Adviser, so that his ownership percentage of the Adviser will decrease from 71% to 15%, by November 29, 2013. Following this series of transactions, all members of the Adviser’s Investment Team will have ownership in the Adviser, ranging from 10% to 15%.
Mr. Henningsen’s sale of a significant portion of his shares to current employees of the Adviser constitutes a change in control of the Adviser that triggers an automatic termination of the present investment advisory agreement between the Adviser and the Trust with respect to the Fund. Under current law, we must solicit shareholders to ask for their approval of a new (substantially identical) advisory agreement in order for us to continue to manage the Fund after this change in control. Therefore, I am writing to ask you for your prompt vote for the approval of a new investment advisory agreement between the Trust, on behalf of the Fund, and the Adviser. The new investment advisory agreement will not result in any increase in fees charged to the Fund or in any change in the Fund’s investment strategies. This package contains information about the proposal to approve the new investment advisory agreement.
The proposal has been carefully reviewed by the Trust’s Board of Trustees. The Board of Trustees unanimously recommends that you vote FOR the proposal.
It is very important that we receive your vote before November 20, 2013. Voting is quick and easy. Everything you need is enclosed. To cast your vote:
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PHONE: Call the toll-free number on your proxy card. Enter the control number on your proxy card and follow the instructions.
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INTERNET: Visit the website indicated on your proxy card. Enter the control number on your proxy card and follow the instructions.
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MAIL: Complete the proxy card(s) enclosed in this package. BE SURE TO SIGN EACH CARD before mailing it in the postage-paid envelope.
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Should you have any questions or wish to discuss any aspect of this, please feel free to call me directly at 503-953-8334 or send me an email at john@portfolio21.com.
On behalf of each employee of Portfolio 21 Investments, Inc., thank you for your participation and prompt response in this matter, as we need your vote.
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Sincerely,
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John Streur, President
Portfolio 21 Investments, Inc.
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Important information to help you understand and vote on the proposal:
Please read the full text of the proxy statement. Below is a brief overview of the proposal to be voted upon. Your vote is important.
What is this document and why did you send it to me?
We are sending this document to you for your use in deciding whether to approve the new investment advisory agreement with Portfolio 21 Investments, Inc. (the “Adviser” or “Portfolio 21”) to enable Portfolio 21 to continue to serve as the investment adviser for the Portfolio 21 Global Equity Fund (the “Fund”), a series of Professionally Managed Portfolios (the “Trust”). This document includes a Notice of Special Meeting of Shareholders, a Proxy Statement, and a Proxy Card.
At a meeting of the Trust’s Board of Trustees (the “Board”) held on August 12, 2013, the Board approved Portfolio 21 as the investment adviser to the Fund under the new investment advisory agreement.
What am I being asked to vote on?
You are being asked to vote to approve the new investment advisory agreement between the Adviser and the Trust on behalf of the Fund.
Effective as of November 29, 2013, Carsten Henningsen will sell approximately 75% of his ownership share in the Adviser to existing employee shareholders of the Adviser, reducing his percentage share of ownership from 71% to 15%. The sale of ownership from Mr. Henningsen to current employees over the course of several transactions will constitute a change in control of the Adviser that triggers an automatic termination of the present investment advisory agreement between the Adviser and the Trust on behalf of the Fund.
Accordingly, the Fund needs shareholder approval to approve a new investment advisory agreement in order to continue to engage the Adviser as the Fund’s investment adviser on a permanent basis. If Fund shareholders do not approve a new investment advisory agreement with Portfolio 21 as the investment adviser for the Fund, the Board will have to consider other alternatives for the Fund, including seeking shareholder approval of the new investment advisory agreement again, retaining a new investment adviser, which must also be approved by Fund shareholders, and the possible liquidation of the Fund.
How will my approval of the proposal affect the management and operation of the Fund?
The Fund’s investment strategies will not change as a result of the new investment advisory agreement with the Adviser. The same management team will continue to manage the Fund’s portfolio.
How will my approval of the proposal affect the expenses of the Fund?
The proposed approval of the new investment advisory agreement with the Adviser will not result in an increase of the investment advisory fee paid by the Fund to the Adviser or in the Fund’s total expenses.
What are the primary reasons for the selection of Portfolio 21 as the investment adviser of the Fund?
The Board weighed a number of factors in reaching its decision to approve Portfolio 21 as the investment adviser for the Fund, including the history, reputation, qualifications and resources of Portfolio 21 and the fact that Portfolio 21’s current portfolio managers would continue to provide the day-to-day management of the Fund. The Board also considered that, as a result of the proposal, the Fund’s advisory fee would not increase. In addition, the Adviser has contractually agreed to waive its advisory fee and/or reimburse expenses of the Fund to the extent necessary to ensure that the Fund’s total annual operating expenses do not exceed the Fund’s current expense limitation. The agreement by Portfolio 21 to waive advisory fees and/or reimburse expenses of the Fund will continue under the new investment advisory agreement until at least November 29, 2015. Other expected benefits include providing continuity in the portfolio management of the Fund, including retaining the current personnel, maintaining the current relationships with third-party vendors, and avoiding the costs of finding a new investment adviser.
Has the Board approved the proposal?
Yes. The Board has unanimously approved the proposal set forth herein, and recommends that shareholders also vote to approve the proposal.
Who is ___________?
___________ is a third party proxy vendor that the Fund has engaged to contact shareholders and record proxy votes. In order to hold a shareholder meeting, a quorum must be reached. If a quorum is not attained, the meeting must adjourn to a future date. Voting your shares immediately will help minimize additional solicitation expenses and prevent the need to call you to solicit your vote.
Who is paying for this proxy mailing and for the other expenses and solicitation costs associated with this shareholder meeting?
The expenses incurred in connection with preparing the proxy statement and its enclosures and all related legal and solicitation expenses will be paid by the Adviser.
Who is eligible to vote?
Shareholders of record of the Fund as of the close of business on August 30, 2013 (the “Record Date”) are entitled to be present and to vote at the special meeting of shareholders (the “Special Meeting”) or any adjournment thereof. Shareholders of record of the Fund at the close of business on the Record Date will be entitled to cast one vote for each full share and a fractional vote for each fractional share they hold on the proposal presented at the Special Meeting.
How is a quorum for the Special Meeting established?
The presence of 40% of the outstanding shares entitled to vote of the Fund constitutes a quorum for the Special Meeting. Proxies returned for shares that represent broker non-votes, and shares whose proxies reflect an abstention on any item, are all counted as shares present and entitled to vote for purposes of determining whether the required quorum of shares exists. However, since such shares are not voted in favor of the proposal, they have the effect of counting as a vote AGAINST the proposal. If a quorum is not present for the Fund at the Special Meeting, or if a quorum is present at the Special Meeting but sufficient votes to approve the proposal are not received on behalf of the Fund, or if other matters arise requiring shareholder attention, persons named as proxy agents may propose one or more adjournments of the Special Meeting to permit further solicitation of proxies with respect to the Fund.
What vote is required to approve the proposal?
Approval of the new investment advisory agreement with Adviser requires the vote of the “majority of the outstanding voting securities” of the Fund. Under the Investment Company Act of 1940, as amended, a “majority of the outstanding voting securities” is defined as the lesser of: (1) 67% or more of the voting securities of the Fund entitled to vote present in person or by proxy at the Special Meeting, if the holders of more than 50% of the outstanding voting securities entitled to vote thereon are present in person or represented by proxy; or (2) more than 50% of the outstanding voting securities of the Fund entitled to vote thereon.
Although you may attend the Special Meeting and vote in person, you do not have to. You can vote your shares by completing and signing the enclosed proxy card and mailing it in the enclosed postage-paid envelope. You may also vote by touch-tone telephone by calling the toll-free number printed on your proxy card and following the recorded instructions.
In addition, you may vote through the Internet by visiting www.proxyvote.com and following the on-line instructions. If you need any assistance, or have any questions regarding the proposal or how to vote your shares, please call ________ at 1-(800) _________.
If you simply sign and date the proxy card but do not indicate a specific vote, your shares will be voted FOR the proposal and to grant discretionary authority to the persons named in the card as to any other matters that properly come before the Special Meeting. Abstentions will be treated as votes AGAINST the proposal.
Shareholders who execute proxies may revoke them at any time before they are voted by (1) filing with the Fund a written notice of revocation, (2) timely voting a proxy bearing a later date or (3) by attending the Special Meeting and voting in person.
Please complete, sign and return the enclosed proxy card in the enclosed envelope. You may vote your proxy by Internet or telephone in accordance with the instructions set forth on the enclosed proxy card. No postage is required if mailed in the United States.
PORTFOLIO 21 GLOBAL EQUITY FUND
A Series of Professionally Managed Portfolios
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
1-877-351-4115
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
A special meeting of shareholders (the “Special Meeting”) of the Portfolio 21 Global Equity Fund (the “Fund”), a series of Professionally Managed Portfolios (the “Trust”), will be held at the offices of the Fund’s administrator, U.S. Bancorp Fund Services, LLC, 777 East Wisconsin Ave., Milwaukee, Wisconsin 53202, on Wednesday, November 20, 2013, at 11:00 a.m., Central Time.
The purpose of the Special Meeting is to consider and act upon the following proposal and to transact such other business as may properly come before the Special Meeting or any adjournments thereof:
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to approve an Investment Advisory Agreement between Portfolio 21 Investments, Inc. and the Trust on behalf of the Fund.
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to transact such other business as may properly come before the Special Meeting or any adjournments thereof.
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The Trust’s Board of Trustees has fixed the close of business on August 30, 2013, as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Special Meeting and any adjournments thereof.
By order of the Board of Trustees,
___________________________
Elaine E. Richards, President
September 6, 2013
Your vote is important – please vote your shares promptly.
Shareholders are invited to attend the Special Meeting in person. Any shareholder who does not expect to attend the Special Meeting is urged to vote using the touch-tone telephone or Internet voting instructions found on the enclosed proxy card or indicate voting instructions on the enclosed proxy card, date and sign it, and return it in the envelope provided, which needs no postage if mailed in the United States. In order to avoid unnecessary expense, we ask your cooperation in responding promptly, no matter how large or small your holdings may be.
SPECIAL MEETING OF SHAREHOLDERS OF THE
PORTFOLIO 21 GLOBAL EQUITY FUND
A Series of Professionally Managed Portfolios
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
1-877-351-4115
TO BE HELD ON NOVEMBER 20, 2013
This Proxy Statement is furnished in connection with a solicitation of proxies made by, and on behalf of, the Board of Trustees (the “Board”) of Professionally Managed Portfolios (the “Trust) and its series, Portfolio 21 Global Equity Fund (the “Fund”), and at any adjournments thereof (the “Special Meeting”), to be held on Wednesday, November 20, 2013 at 11:00 a.m., Central Time, at the offices of the Fund’s administrator, U.S. Bancorp Fund Services, LLC, 777 East Wisconsin Ave., Milwaukee, Wisconsin 53202.
Shareholders of record at the close of business on the record date, established as August 30, 2013 (the “Record Date”), are entitled to notice of, and to vote at, the Special Meeting. This proxy statement is expected to be mailed to shareholders on or about September 6, 2013. The Special Meeting is being held to vote on the following proposal and to transact such other business as may properly come before the Special Meeting or any adjournments thereof:
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To Approve an Investment Advisory Agreement Between Portfolio 21 Investments, Inc. and the Trust on behalf of the Fund.
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Shareholders of the Fund are being asked to approve a new investment advisory agreement between Portfolio 21 Investments, Inc. (“Portfolio 21,” the “Adviser,” or the “Firm”) and the Trust on behalf of the Fund.
Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to be Held on November 20, 2013:
The Notice of Special Meeting, Proxy Statement and Proxy Card are available at www.proxyvote.com. Enter the control number provided on your Proxy Card and follow the instructions. To obtain directions to attend the Special Meeting, please call 1-877-351-4115. For a free copy of the Fund’s latest annual and/or semi-annual report, call 1-877-351-4115 or visit the Fund’s website at www.portfolio21.com or write to the Fund, c/o U.S. Bancorp Fund Services, LLC, P.O. Box 701, Milwaukee, Wisconsin 53201-0701.
Background
Portfolio 21 has served as the investment adviser to the Fund since its inception. Carsten Henningsen, Director and Principal Owner of the Adviser has decided to sell over 75% of his shares in the Adviser to existing employee shareholders of the Firm as part of an ownership transition process (collectively, the “Transaction”) by November 29, 2013 (the “Transaction Date”).
Under the Investment Company Act of 1940, as amended (the “1940 Act”), an investment advisory agreement automatically terminates when an investment adviser undergoes a change in control. This change of ownership that results from the Transaction constitutes such a change in control of Portfolio 21. With the change in control of Portfolio 21 and the resulting termination of Portfolio 21’s present investment advisory agreement with the Trust on behalf of the Fund, the Board was required to take action to approve the necessary arrangements for the continued management of the Fund by the same portfolio management team.
At a meeting of the Board held on August 12, 2013, the Board voted unanimously to approve the proposed new investment advisory agreement (the “New Investment Advisory Agreement”) between Portfolio 21 and the Trust on behalf of the Fund, retaining Portfolio 21 as the investment adviser for the Fund. The Board also voted unanimously to recommend that shareholders approve the New Investment Advisory Agreement. The terms of the New Investment Advisory Agreement are substantially identical to the terms of the existing investment advisory agreement, except for the commencement date of the agreement.
Accordingly, the Fund needs shareholder approval to continue to engage Portfolio 21 as its investment adviser. If the Fund’s shareholders do not approve Portfolio 21 as the investment adviser for the Fund, then the Board will have to consider other alternatives for the Fund, including seeking Fund shareholder approval of the new investment advisory agreement again, retaining a new investment adviser, which must also be approved by Fund shareholders, and the possible liquidation of the Fund.
Legal Requirements in Approving the New Investment Advisory Agreement
The form of the New Investment Advisory Agreement is attached hereto as Exhibit A. The terms of the New Investment Advisory Agreement are substantially identical to the terms of the prior investment advisory agreement dated March 1, 2007 (the “Prior Investment Advisory Agreement”) and are identical with respect to services to be provided by Portfolio 21 compared to those it previously provided. The Prior Investment Advisory Agreement was last submitted to the shareholders of the Fund for approval on September 30, 1999, and was effective upon the Fund’s commencement of operations as a series of the Trust.
The New Investment Advisory Agreement and the Prior Investment Advisory Agreement have identical fee structures. There are no material differences between the two agreements, other than their effective dates. The material terms of the New Investment Advisory Agreement and the Prior Investment Advisory Agreement are compared below in the “Summary of the New Investment Advisory Agreement and Prior Investment Advisory Agreement” section.
The New Advisory Agreement will take effect on November 29, 2013, the Transaction Date. If shareholders do not approve the New Advisory Agreement with respect to the Fund, Portfolio 21 will not be permitted to serve as the Fund’s investment adviser after the Transaction Date, and the Board will have to consider other alternatives for the Fund, including seeking Fund shareholder approval of the New Advisory Agreement again, retaining a new investment adviser, which must also be approved by Fund shareholders, and the possible liquidation of the Fund.
Compensation Paid to Portfolio 21
Under the Prior Investment Advisory Agreement, Portfolio 21 is entitled to receive a monthly investment advisory fee computed at an annual rate of 0.95% of the Fund’s average daily net assets in return for the services provided by Portfolio 21 as investment adviser to the Fund. The fee structure under the New Investment Advisory Agreement is identical to the fee structure under the Prior Investment Advisory Agreement. The Fund paid Portfolio 21 investment advisory fees in the amounts shown below for the following fiscal periods.
Management Fees Paid to Portfolio 21
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Fiscal Year Ended,
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Fees Accrued
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Fees Waived
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Total Fees Paid to Adviser
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March 31, 2013 (fiscal period)
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$[ ]
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$[ ]
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$[ ]
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June 30, 2012(1)
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$3,754,826
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$0
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$3,754,826
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June 30, 2011(2)
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$3,739,184
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$0
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$3,762,191
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June 30, 2010(3)
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$2,955,224
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$0
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$3,001,576
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The Adviser did not recoup any expenses that were previously waived and/or reimbursed.
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The Adviser recouped $23,007 in expenses that were previously waived and/or reimbursed.
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The Adviser recouped $46,352 in expenses that were previously waived and/or reimbursed.
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In connection with the Prior Investment Advisory Agreement, Portfolio 21 contractually agreed to an operating expense limitation that limited the Fund’s total annual operating expenses to 1.50% and 1.20% of the Class R and Class I shares, respectively, of the Fund’s average annual net assets. The Fund is currently operating below these expense caps. Additionally, in the event the Fund’s operating expenses, as accrued each month, exceeded the Fund’s annual expense limitation, Portfolio 21 agreed to pay to the Fund, on a monthly basis, the excess expenses within 30 days of notification that such payment was due. This expense limitation will continue in effect under the New Investment Advisory Agreement with Portfolio 21 until at least November 29, 2015.
Information about Portfolio 21 Investments, Inc.
Portfolio 21 is registered with the Securities and Exchange Commission (“SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended. Portfolio 21’s principal office is located at 721 N.W. Ninth Avenue, Suite 250, Portland, OR 97209. As of March 31, 2013, Portfolio 21 managed approximately $511 million of investment assets.
The following table sets forth the name, position and principal occupation of each current member and principal officer of Portfolio 21, each of whom is located at Portfolio 21’s principal office location.
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Name
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Position/Principal Occupation
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Carsten Henningsen
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Director
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Robert Baird
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Director and Chief Compliance Officer
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John Streur
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President
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James Madden
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Chief Investment Officer
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The following table sets forth the name of each person who owns of record, or beneficially, 10% of more of the outstanding voting securities of Portfolio 21 as of March 31, 2013, each of whom is located at Portfolio 21’s principal office location.
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Name
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% of Voting Securities Held
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Carsten Henningsen
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71%
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Robert Baird
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15%
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Summary of the New Investment Advisory Agreement and the Prior Investment Advisory Agreement
A copy of the proposed New Investment Advisory Agreement is attached hereto as Exhibit A. The following description is only a summary. However, all material terms of the New Investment Advisory Agreement have been included in this summary. You should refer to Exhibit A for the New Investment Advisory Agreement, as the description set forth in this Proxy Statement of the New Investment Advisory Agreement is qualified in its entirety by reference to Exhibit A. The investment advisory services to be provided by Portfolio 21 under the New Investment Advisory Agreement and the fee structure are identical to the services currently provided by Portfolio 21 and the fee structure under the Prior Investment Advisory Agreement.
Advisory Services. Both the New Investment Advisory Agreement and the Prior Investment Advisory Agreement state that, subject to the supervision and direction of the Board, Portfolio 21 will provide for the overall management of the Fund including: (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; (iii) vote proxies for the Fund, file ownership reports under Section 13 of the Securities Exchange Act of 1934 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 such periodic and special reports with respect to the Fund’s investment activities as the Board may reasonably request, including at least one in-person appearance annually before the Board.
Brokerage. Both the New Investment Advisory Agreement and the Prior Investment Advisory Agreement provide that Portfolio 21 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 Portfolio 21 shall not direct orders to an affiliated person of Portfolio 21 without general prior authorization to use such affiliated broker or dealer from the Board. Portfolio 21’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, Portfolio 21 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.
Payment of Expenses. Under both the New Investment Advisory Agreement and the Prior Investment Advisory Agreement, Portfolio 21 is responsible for providing the personnel, office space and equipment reasonably necessary for the operation of the Fund, the expenses of printing and distributing copies of the Fund’s prospectus, SAI, and sales and advertising materials to prospective investors, the costs of any special Board meetings or shareholder meetings convened for the primary benefit of the Adviser, and any costs of liquidating or reorganizing the Fund.
The Fund is responsible for all of its own expenses, except for those specifically assigned to the Adviser under the investment advisory agreement, including but not limited to: fees and expenses incurred in connection with the issuance, registration and transfer of its shares; brokerage and commission expenses; all fees and expenses related to Fund custody, shareholder services and Fund accounting; interest charges on any borrowings; costs and expenses of pricing and calculating its daily net asset value and of maintaining its books; insurance premiums on property or personnel of the Fund which inure to its benefit; the cost of preparing and printing regulatory documents and other communications for distribution to existing shareholders; legal, auditing and accounting fees; fees and expenses (including legal fees) of registering and maintaining registration of its shares for sale; all expenses of maintaining and servicing shareholder accounts, and all other charges and costs of its operation plus any extraordinary and non-recurring expenses.
Management Fees. Both the New Investment Advisory Agreement and Prior Investment Advisory Agreement contain an identical fee structure based on the Fund’s average daily net assets.
Duration and Termination. The Prior Investment Advisory Agreement provided that the agreement would become effective at the time the Fund commenced operations. The New Investment Advisory Agreement provides that the agreement will become effective at the time the Fund receives an affirmative vote of a majority of the outstanding voting securities of the Fund. Both the Prior Investment Advisory Agreement and the New Investment Advisory Agreement provide that the agreements will continue in effect for a period of two years, unless sooner terminated, and that they shall continue in effect for successive annual periods, with such continuation to be approved at least annually by the Board or by the vote of a majority of the outstanding securities of the Fund. Both the Prior Investment Advisory Agreement and the New Investment Advisory Agreement may be terminated at any time, on 60 days’ prior written notice, by the Fund (by vote of the Board or by the vote of a majority of the outstanding voting securities of the Fund) without the payment of a penalty, or by the Adviser at any time, without the payment of a penalty, upon 60 days’ prior written notice.
Limitation on Liability and Indemnification. Both the New Investment Advisory Agreement and the Prior Investment Advisory Agreement provide that, in the absence of willful misfeasance, bad faith, negligence, or reckless disregard of the duties imposed on the Adviser by the agreement. Portfolio 21 will not be subject to liability to the Trust or the Fund for any act or omission in the course of, or connected with, rendering services under the agreement or for any losses sustained in the purchase, holding or sale of any security of the Fund.
Board Recommendation of Approval
In reaching its decision to recommend the approval of the New Investment Advisory Agreement, the Board, including each of the Trustees of the Trust who are not “interested persons” of the Trust as defined under the 1940 Act (“Independent Trustees”), met in person at a meeting held on August 12, 2013, during which the Board reviewed materials related to Portfolio 21. In the course of their review, the Trustees considered their fiduciary responsibilities with regard to all factors deemed to be relevant to the Fund. The Board also considered other matters, including, but not limited to the following: (1) the quality of services provided to the Fund in the past by the Adviser since the Fund’s inception; (2) the performance of the Fund while managed by the Adviser; (3) the fact that there are no material differences between the terms of the New Investment Advisory Agreement and the terms of the Prior Investment Advisory Agreement; (4) the fact that the Adviser is continuing to manage the Fund with the same portfolio managers; (5) the fact that the fee structure under the New Investment Advisory Agreement will be identical to the fee structure under the Prior Investment Advisory Agreement and that the Adviser has agreed to maintain the Fund’s current expense limitation agreement; and (6) other factors deemed relevant.
The Board also evaluated the New Investment Advisory Agreement in light of information they had requested and received from Portfolio 21 prior to the August 12, 2013 meeting. The Board reviewed these materials with the management of the Adviser. Below is a summary of the material factors considered by the Board in its deliberations as to whether to approve the New Investment Advisory Agreement, and the Board’s conclusions. In their deliberations, the Trustees did not rank the importance of any particular piece of information or factor considered, but considered these matters in their totality.
Nature, Extent and Quality of Services Provided to the Fund. The Trustees considered the nature, extent and quality of services provided by Portfolio 21 to the Fund and the amount of time devoted to the Fund’s affairs by Portfolio 21’s staff. The Trustees considered Portfolio 21’s specific responsibilities in all aspects of day-to-day investment management of the Fund, including the investment strategies implemented by Portfolio 21, as well as the qualifications, experience and responsibilities of James Madden, CFA, Anthony Tursich, CFA, the Fund’s portfolio managers, and the responsibilities of other key personnel at Portfolio 21 involved in the day-to-day activities of the Fund. In this regard, the Board considered the Adviser’s experience and expertise investing in companies with a commitment to environmental sustainability. The Board also considered the resources and compliance structure of the Adviser, including information regarding its compliance program, its chief compliance officer and the Adviser’s compliance record, and the Adviser’s business continuity plan. The Trustees also considered the prior relationship between the Adviser and the Trust, as well as the Board’s knowledge of the Adviser’s operations, and noted that during the course of the prior year they had met with representatives of Portfolio 21 in person to discuss the Fund’s performance, investment outlook as well as various marketing and compliance topics, including the Adviser’s risk management process. [The Trustees also noted any services that extended beyond portfolio management, and they considered the trading capability of Portfolio 21.] The Trustees concluded that Portfolio 21 had sufficient quality and depth of personnel, resources, investment methods and compliance policies and procedures essential to performing its duties under the New Investment Advisory Agreement and that the nature, overall quality and extent of the management services provided to the Fund, as well as Portfolio 21’s compliance policies and procedures, were satisfactory.
Investment Performance of Portfolio 21 and the Fund. The Trustees discussed the Fund’s recent performance and the overall performance by Portfolio 21 since the inception of the Fund on September 30, 1999.
In assessing the quality of the portfolio management services delivered by Portfolio 21, the Trustees also compared the short-term and long-term performance of the Fund on both an absolute basis and in comparison to a benchmark index, the MSCI World Equity Index. While the Board considered both short-term and long-term performance, it placed greater emphasis on longer term performance. The Trustees also reviewed information on the historical performance of other accounts managed by Portfolio 21 that were similar to the Fund in terms of investment strategy, as well as other separately-managed accounts of Portfolio 21 with different investment strategies. The Board noted that the Fund had outperformed its peer group median for the one-year, five-year and ten-year time periods and underperformed its peer group median for the three-year time period. The Board also noted that the Fund was subject to social investment criteria, which may limit its investment opportunities relative to its peer group. After considering all of the information, the Trustees concluded that the performance obtained by Portfolio 21 for the Fund was satisfactory under current market conditions. Although past performance is not a guarantee or indication of future results, the Trustees determined that the Fund and its shareholders were likely to benefit from Portfolio 21’s continued management.
Section 15(f) of the 1940 Act. In considering whether the arrangements between Portfolio 21 and the Fund comply with the conditions of Section 15(f) of the 1940 Act, the Trustees reviewed the conditions of the Section 15(f). Section 15(f) provides a non-exclusive safe harbor for an investment advisor 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 advisor so long as two conditions are met. First, for a period of three years after closing of the transaction, at least 75% of the board members of the Trust cannot be “interested persons” (as defined in the 1940 Act) of the investment adviser or predecessor adviser. Second, an “unfair burden” must not be imposed upon the Fund as a result of the transaction or any express or implied terms, conditions or understandings applicable thereto.
The Trustees considered that, consistent with the first condition of Section 15(f), neither Portfolio 21 nor the Board was aware of any plans to reconstitute the Board following the change in investment adviser. Thus, at least 75% of the Trustees would not be “interested persons” of Portfolio 21 for a period of three years after the change in investment adviser. With respect to the second condition of Section 15(f), Portfolio 21 has undertaken to maintain the Fund’s current expense cap for the required 2-year period.]
Costs of Service to be provided by Portfolio 21 and the Structure of the Adviser’s Fees. The Trustees considered the cost of services and the structure of Portfolio 21’s fees, including a review of the expense analyses and other pertinent material with respect to the Fund. The Trustees reviewed the related statistical information and other materials provided, including the comparative expenses, expense components and peer group selections. The Trustees considered data relating to the cost structure of the Fund relative to the US OE World Stock Category funds, as compiled by Morningstar, Inc., and Portfolio 21’s separately-managed accounts, as well as the fee waivers and expense reimbursements by Portfolio 21.
The Trustees noted that the Fund’s contractual management fee of 0.95% was higher than the peer group median. The Trustees also noted that the Fund’s total expenses (net of fee waivers and expense reimbursements) of 1.47% for the Class R shares and 1.17% for the Class I shares were below the Fund’s expense caps of 1.50% and 1.20% of average daily net assets for the Class R and Class I shares, respectively. The Trustees then compared the fees paid by the Fund to the fees paid by Portfolio 21’s separately-managed accounts, noting that the management fee was in line with the fees paid by the Fund.
The Trustees concluded that the Fund’s expenses and advisory fees payable to Portfolio 21 were not unreasonable in light of the comparative performance and advisory fee information.
Extent of Economies of Scale as the Fund Grows. The Trustees compared the Fund’s expenses relative to its peer group and discussed realized and potential economies of scale. The Trustees also reviewed the structures of the Fund’s advisory fee and whether the Fund was large enough to generate economies of scale for shareholders or whether economies of scale would be expected to be realized as Fund assets grow (and if so, how whose economies of scale were being or would be shared with shareholders). The Trustees reviewed all fee waivers and expense reimbursements by Portfolio 21 with respect to the Fund. The Trustees noted that the Fund’s advisory fee structure did not contain any breakpoint reductions as the Fund’s assets grow in size, but that Portfolio 21 was open to consider breakpoints in its fee structure when the asset level of the Fund increases. The Trustees concluded that Portfolio 21’s advisory fee structure and any applicable expense waivers were reasonable and reflect a sharing of economies of scale between Portfolio 21 and the Fund at the Fund’s current asset level.
Profits to be Realized from the Relationship with the Fund. The Trustees considered the direct and indirect benefits that could be realized by Portfolio 21 from its association with the Fund, including Portfolio 21’s summary of “fall-out” benefits. The Trustees examined the brokerage practices of Portfolio 21 with respect to the Fund. The Trustees concluded that the benefits Portfolio 21 may receive, such as continuity in the portfolio management of the Fund, including retaining the current personnel, maintaining the current relationships with third-party vendors, and avoiding the costs of finding a new investment adviser appear to be reasonable, and in many cases may benefit the Fund through growth in assets.
The Trustees also considered the overall profitability of Portfolio 21, reviewing Portfolio 21’s financial information and noting that Portfolio 21 had recouped all advisory fee waivers. The Trustees also examined the level of profits that could be expected to accrue to Portfolio 21 from the fees payable under the New Investment Advisory Agreement and the expense subsidization undertaken by Portfolio 21, as well as the Fund’s brokerage practices and use of soft dollars by Portfolio 21. These considerations were based on materials requested by the Trustees and the Fund’s administrator specifically for the August 12, 2013 meeting at which the New Investment Advisory Agreement was formally considered. The Trustees concluded that Portfolio 21’s profit from sponsoring the Fund had not been, and currently was not, excessive and that Portfolio 21 had maintained adequate profit levels to support the services to the Fund.
No single factor was determinative in the Board’s decision to approve the New Investment Advisory Agreement for the Fund, but rather, the Board based its determination on the total mix of information available to the Trustees. Based on a consideration of all the factors in their totality, the Board determined that the New Investment Advisory Agreement with Portfolio 21, including the advisory fees, was fair and reasonable. The Board therefore determined that the approval of the New Investment Advisory Agreement would be in the best interest of the Fund and its shareholders.
Vote Required
Approval of the proposal to approve the New Investment Advisory Agreement in order to re-engage Portfolio 21 as the investment adviser for the Fund requires the vote of the “majority of the outstanding voting securities” of the Fund. Under the 1940 Act, a “majority of the outstanding voting securities” is defined as the lesser of: (1) 67% or more of the voting securities of the Fund entitled to vote present in person or by proxy at the Special Meeting, if the holders of more than 50% of the outstanding voting securities entitled to vote thereon are present in person or represented by proxy; or (2) more than 50% of the outstanding voting securities of the Fund entitled to vote thereon.
Based on all of the foregoing, the Trustees recommend that shareholders of the Fund vote FOR the approval of the New Investment Advisory Agreement.
The Board knows 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 instructions to the contrary will be voted on such matters in accordance with the judgment of the persons designated therein.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Fund does not hold annual shareholder meetings. Shareholders wishing to submit proposals for inclusion in a proxy statement for a shareholder meeting should send their written proposals to the Secretary of the Trust, c/o U.S. Bancorp Fund Services, LLC, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. Proposals must be received a reasonable time prior to the date of a meeting of shareholders to be considered for inclusion in the proxy materials for the meeting. Timely submission of a proposal does not, however, necessarily mean the proposal will be included.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Banks, broker-dealers, voting trustees and their nominees should advise the Fund, in care of U.S. Bancorp Fund Services, LLC, 777 East Wisconsin Ave., Milwaukee, Wisconsin 53202, whether other persons are beneficial owners of shares held in their names for which proxies are being solicited and, if so, the number of copies of the Proxy Statement they wish to receive in order to supply copies to the beneficial owners of the respective shares.
Any Purchases or Sales of Securities of Portfolio 21
Since the beginning of the most recently completed fiscal year, no Trustee has made any purchases or sales of securities of Portfolio 21 or any of its affiliated companies.
Voting Securities, Principal Shareholders and Management Ownership
Shareholders of the Fund at the close of business on the Record Date will be entitled to be present and vote at the Special Meeting. As of that date, each class of the Fund had the following number of shares outstanding:
|
Class R Shares
|
Class I Shares
|
|
[ ]
|
[ ]
|
Management Ownership. As of the Record Date, to the best of the knowledge of the Trust, no trustee of the Trust beneficially owned 1% or more of the outstanding shares of the Fund, and the Trustees and the officers of the Trust, as a group, beneficially owned less than 1% of the outstanding shares of the Fund. The Board is aware of no arrangements, the operation of which at a subsequent date may result in a change in control of the Fund. As of the Record Date, the Independent Trustees, and their respective immediate family members, did not own any securities beneficially or of record in the Adviser, U.S. Bancorp, the parent company of the distributor, or any of their respective affiliates.
Control Persons and Principal Shareholders. A principal shareholder is any person who owns of record or beneficially 5% or more of the outstanding shares of the Fund. A control person is one who owns beneficially or through controlled companies more than 25% of the voting securities of the Fund or acknowledges the existence of control. As of the Record Date, the following shareholders are known by the Fund to be a control person of the Fund:
Class R:
|
Name and Address
|
% Ownership
|
Type of Ownership
|
|
Charles Schwab & Co., Inc.
101 Montgomery St.
San Francisco, CA 94104
|
[ ]%
|
Record
|
|
National Financial Services, LLC
200 Liberty St.
One World Financial Center
New York, NY 10281
|
[ ]%
|
Record
|
|
First Clearing, LLC
2801 Market Street
St. Louis, MO 63103
|
[ ]%
|
Record
|
Class I:
|
Name and Address
|
% Ownership
|
Type of Ownership
|
|
Charles Schwab & Co., Inc.
Special Custody Account
Attn Mutual Funds Dept
211 Main Street
San Francisco, CA 94105-1905
|
%
|
Record
|
|
Name and Address
|
% Ownership
|
Type of Ownership
|
|
MMATCO LLP
Nominee for MMATrust Company
Mennonite Foundation
P.O. Box 483
1110 N. Main St.
Goshen, IN 46527-0483
|
%
|
Record
|
Portfolio Transactions
The Fund does not allocate portfolio brokerage on the basis of the sales of Fund shares. Brokerage firms whose customers purchase shares of the Fund may participate in brokerage commissions, but only pursuant to the Fund’s “Policy with Respect to Allocation of Brokerage to Compensate for Distribution of Fund Shares.” The Fund does not execute portfolio transactions through affiliated brokers.
Solicitation of Proxies and Voting
This solicitation is being made primarily by the mailing of this Proxy Statement, along with a notice of the Special Meeting and proxy card, on or about September 6, 2013. Supplementary solicitations may be made by mail, telephone, telegraph, facsimile, electronic means or personal interview by representatives of the Fund. In addition, ____________ may be paid on a per-call basis to solicit shareholders by telephone on behalf of the Fund. The Fund may also arrange to have votes recorded by telephone.
Voting instructions may be revoked at any time prior to the final vote at the Special Meeting by: (1) written instruction addressed to Elaine E. Richards, President, Professionally Managed Portfolios, c/o U.S. Bancorp Fund Services, LLC, P.O. Box 701, Milwaukee, Wisconsin 53201-0701; (2) attendance at the Special Meeting and voting in person; or (3) by proper execution and return of a new proxy card (if received in time to be voted). Mere attendance at the Special Meeting will not revoke voting instructions.
If the Fund records votes by telephone or through the Internet, it will use procedures designed to authenticate shareholders’ identities, to allow shareholders to authorize the voting of their shares in accordance with their instructions and to confirm that their instructions have been properly recorded. Proxies voted by telephone or through the Internet may be revoked at any time before they are voted in the same manner that proxies voted by mail may be revoked.
The Fund expects that, before the Special Meeting, broker-dealer firms holding shares of the Fund in “street name” for their customers will request voting instructions from their customers and beneficial owners. If these instructions are not received by the date specified in the broker-dealer firms’ proxy solicitation materials, these shares will be considered “broker non-votes.” Broker non-votes will be counted as present for purposes of determining quorum, but will not count towards the number of votes in favor of the approval of the New Investment Advisory Agreement, which means they will have the effect of a vote against the proposal. With respect to any other business that may properly come before the Special Meeting, the effect of broker non-votes will be dependent upon the vote that is required to approve such proposal.
All proxies solicited by the Board that are properly executed and received by the Fund’s Secretary prior to the Special Meeting, and are not revoked, will be voted at the Special Meeting. Shares represented by such proxies will be voted in accordance with the instructions on the proxies. If no instruction is made on a properly executed proxy, it will be voted FOR the proposal. All shares that are voted and all votes to ABSTAIN will be counted towards establishing a quorum, but abstentions will not count toward the number of votes in favor of approval of the New Investment Advisory Agreement, which means they will have the effect of a vote against the proposal.
With respect to shares held in individual retirement accounts (including Traditional, Rollover, SEP, SARSEP, Roth and SIMPLE IRAs), the IRA Custodian will vote those shares for which it has received instructions from shareholders in accordance with such instructions. If IRA shareholders do not vote their shares, the IRA Custodian will vote their shares for them in the same proportion as other IRA shareholders have voted.
A quorum is 40% of outstanding shares entitled to vote in person or by proxy at the Special Meeting. If a quorum is not present at the Special Meeting, or if a quorum is present at the Special Meeting but sufficient votes to approve the proposal are not received, or if other matters arise requiring shareholder attention, the persons named as proxy agents may propose one or more adjournments of the Special Meeting to permit further solicitation of proxies. Any such adjournment will require the affirmative vote of a majority of those shares present at the Special Meeting or represented by proxy. When voting on a proposed adjournment, the persons named as proxy agents will vote FOR the proposed adjournment all shares that they are entitled to vote with respect to the proposal, unless directed to vote AGAINST the proposed adjournment.
Shareholders of record of the Fund at the close of business on August 30, 2013 will be entitled to vote at the Special Meeting Other than any principal shareholders disclosed above, to the knowledge of the Fund no other shareholder owned of record or beneficially more than 5% of the outstanding shares of the Fund as of August 30, 2013. Each whole share you hold as of the close of business on the Record Date is entitled to one vote, and each fractional share is entitled to a proportionate fractional vote.
The Fund expects that the solicitation will be primarily by mail, but also may include telephone solicitations. If the Fund does not receive your proxy by a certain time, you may receive a telephone call from _____________, Trust officers, employees or agents asking you to vote. The Fund does not reimburse officers of the Trust, or regular employees and agents involved in the solicitation of proxies.
The expenses in connection with preparing this Proxy Statement and its enclosures and all related legal expenses and all solicitations will be paid by Portfolio 21.
Service Providers
The Fund’s investment adviser is Portfolio 21 Investments, Inc., located at 721 N.W. Ninth Ave., Suite 250 Portland, OR 97209. The Fund’s administrator, fund accountant, and transfer agent is U.S. Bancorp Fund Services, LLC, located at 615 East Michigan Street, Milwaukee, Wisconsin 53202. U.S. Bank, N.A., 1555 North RiverCenter Drive, Suite 302, Milwaukee, Wisconsin 53212, serves as the Fund’s Custodian. Quasar Distributors, LLC located at 615 East Michigan Street, Milwaukee, Wisconsin 53202, serves as the Fund’s principal underwriter.
Portfolio Transactions
The Fund does not allocate portfolio brokerage on the basis of the sales of shares. Brokerage firms whose customers purchase shares of the Fund may participate in brokerage commissions, but only pursuant to the Trust’s Policy with Respect to Allocation of Brokerage to Compensate for Distribution of Fund Shares. The Fund does not have any affiliated brokers and accordingly make portfolio transactions through affiliated brokers.
Principal Executive Officers and Trustees of the Trust
The following table provides the name, address and principal occupation of the principal executive officers and trustees of the Trust. The Board is responsible for the overall management of the Trust, including general supervision and review of the investment activities of the Funds. The Board, in turn, elects 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 officers of the Trust, their dates of birth, positions with the Trust, terms of office with the Trust and length of time served, their principal occupations for the past five years and other directorships are set forth in the table below.
|
Name, Address
And Age
|
Position with
the Trust
|
Term of Office and
Length of Time
Served
|
Principal Occupation
During Past Five Years
|
Number of
Portfolios
in Fund
Complex(2)
Overseen by
Trustees
|
Other
Directorships
Held
|
|
Independent Trustees of the Trust(1)
|
|
Dorothy A. Berry
(born 1943)
c/o U.S. Bancorp Fund
Services, LLC
2020 E. Financial Way
Suite 100
Glendora, CA 91741
|
Chairman and
Trustee
|
Indefinite Term
Since May 1991.
|
Formerly, President, Talon Industries, Inc. (business consulting); formerly, Executive Vice President and Chief Operating Officer, Integrated Asset Management (investment adviser and manager) and formerly, President, Value Line, Inc. (investment advisory and financial publishing firm).
|
1
|
Director,
PNC Funds, Inc.
|
|
Wallace L. Cook
(born 1939)
c/o U.S. Bancorp Fund
Services, LLC
2020 E. Financial Way
Suite 100
Glendora, CA 91741
|
Trustee
|
Indefinite Term
Since May 1991.
|
Investment Consultant; formerly, Chief Executive Officer, Rockefeller Trust Co., (prior thereto Senior Vice President), and Managing Director, Rockefeller & Co. (Investment Manager and Financial Advisor); formerly, Senior Vice President, Norton Simon, Inc.
|
1
|
The Dana
Foundation;
The
University of
Virginia Law
School
Foundation.
|
|
Eric W. Falkeis(3)
(born 1973)
c/o U.S. Bancorp Fund
Services, LLC
2020 E. Financial Way
Suite 100
Glendora, CA 91741
|
Trustee
|
Indefinite Term;
Since September 2011.
|
President and Chief Operating Officer, Direxion Funds since 2013; formerly, Senior Vice President and Chief Financial Officer (and other positions), U.S. Bancorp Fund Services, LLC (1997 – 2013).
|
1
|
None.
|
|
Carl A. Froebel
(born 1938)
c/o U.S. Bancorp Fund
Services, LLC
2020 E. Financial Way
Suite 100
Glendora, CA 91741
|
Trustee
|
Indefinite Term
Since May 1991.
|
Formerly, President and Founder, National Investor Data Services, Inc. (investment related computer software).
|
1
|
None.
|
| |
|
|
|
|
|
|
Name, Address
And Age
|
Position with
the Trust
|
Term of Office and
Length of Time
Served
|
Principal Occupation
During Past Five Years
|
Number of
Portfolios
in Fund
Complex(2)
Overseen by
Trustees
|
Other
Directorships
Held
|
|
Steven J. Paggioli
(born 1950)
c/o U.S. Bancorp Fund
Services, LLC
2020 E. Financial Way
Suite 100
Glendora, CA 91741
|
Trustee
|
Indefinite Term
Since May 1991.
|
Consultant, since July 2001; formerly, Executive Vice President, Investment Company Administration, LLC (mutual fund administrator).
|
1
|
Independent Trustee, The Managers Funds, Managers AMG Funds, Aston Funds; Advisory Board Member, Sustainable Growth Advisers, LP; Independent Director, Chase Investment Counsel.
|
|
Officers of the Trust
|
|
Elaine E. Richards
(born 1968)
c/o U.S. Bancorp Fund
Services, LLC
2020 E. Financial Way
Suite 100
Glendora, CA 91741
|
President
Secretary
|
Indefinite Term,
Since March 2013.
Indefinite Term;
Since February 2008.
|
Vice President and Legal Compliance Officer, U.S. Bancorp Fund Services, LLC, since July 2007.
|
Not
Applicable.
|
Not
Applicable.
|
|
Eric C. VanAndel (born 1975)
c/o U.S. Bancorp Fund
Services, LLC
615 E. Michigan St.
Milwaukee, WI 53202
|
Treasurer
|
Indefinite Term;
Since April 2013.
|
Vice President, U.S. Bancorp Fund Services, LLC, since April 2005.
|
Not Applicable.
|
Not
Applicable.
|
|
Donna Barrette
(born 1966)
c/o U.S. Bancorp Fund
Services, LLC
615 E. Michigan St.
Milwaukee, WI 53202
|
Chief
Compliance
Officer
Anti-Money
Laundering
Officer
Vice President
|
Indefinite Term:
Since July 2011.
Indefinite Term:
Since July 2011.
Indefinite Term:
Since July 2011
|
Senior Vice President and Compliance Officer, U.S. Bancorp Fund Services, LLC since August 2004.
|
Not
Applicable.
|
Not
Applicable.
|
|
(1)
|
The Trustees of the Trust are not “interested persons” of the Trust as defined under the 1940 Act (“Independent Trustees”).
|
|
(2)
|
The Trust is comprised of numerous series managed by unaffiliated investment advisers. The term “Fund Complex” applies only to the Fund. The Fund does not hold itself out as related to any other series within the Trust for purposes of investment and investor services, nor does it share the same investment adviser with any other series.
|
|
(3)
|
Prior to March 8, 2013, Mr. Falkeis was an “interested person” of the Trust as defined by the 1940 Act by virtue of the fact that he was an interested person of Quasar Distributors, LLC who acts as principal underwriter to the series of the Trust.
|
Householding
If possible, depending on shareholder registration and address information, and unless you have otherwise opted out, only one copy of this Proxy Statement will be sent to shareholders at the same address. However, each shareholder will receive separate proxy cards. If you would like to receive a separate copy of the Proxy Statement, please call 1-800-________ or write to the Fund c/o U.S. Bancorp Fund Services, LLC, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. If you currently receive multiple copies of Proxy Statements or shareholder reports and would like to request to receive a single copy of documents in the future, please call the toll-free number or write to the address above.
Exhibit A
PROFESSIONALLY MANAGED PORTFOLIOS
INVESTMENT ADVISORY AGREEMENT
With
Portfolio 21 Investments, Inc.
THIS INVESTMENT ADVISORY AGREEMENT is made as of the ___ of ______, 2013, by and between Professionally Managed Portfolios, a Massachusetts business trust (the “Trust”), on behalf of the series listed on Schedule A, which may be amended from time to time (each a “Fund”), and Portfolio 21 Investments, Inc. (the “Advisor”).
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company, registered as such under the Investment Company Act of 1940 (the “Investment Company Act”); and
WHEREAS, each Fund listed on Schedule A 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 (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 and provide 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.
|
|
A-1 |
Investment Advisory Agreement
|
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 and other investments 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 Trust’s Board of Trustees; (iii) vote proxies for the Fund and file beneficial ownership reports required by Section 13(d) of the Securities Exchange Act of 1934 (the “1934 Act”) for the Fund; (iv) maintain records relating to the advisory services provided by the Advisor hereunder required to be prepared and maintained by the Advisor or the Fund pursuant to applicable law; (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 officers of the Trust may reasonably request; and (vi) render to the Trust’s Board of Trustees such periodic and special reports with respect to the Fund’s investment activities as the Board may reasonably request, including at least one in-person appearance annually before the Board of Trustees. It is understood and agreed that the Advisor shall have no obligation to initiate litigation on behalf of the Fund.
(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 from the Trust’s Board of Trustees. In selecting a broker-dealer to execute each particular transaction, the Advisor may take the following factors, among others, 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 of the Trust may determine and consistent 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 to clients for which it exercises investment discretion. 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.
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 orders of the Fund and those other clients for the purchase or sale of the security. 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.
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A-2 |
Investment Advisory Agreement
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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 that the Advisor may give advice and take action with respect to other clients, including affiliates of the Adviser, that may be similar or different from that given to the Fund.
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 any compliance staff and personnel required by the Advisor and reasonably requested by the Board of Trustees.
6. EXPENSES.
(a) With respect to the operation of the Fund, the Advisor shall be responsible for (i) the Fund’s organizational expenses; (ii) providing the personnel, office space and equipment reasonably necessary to perform its obligations hereunder; (iii) 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) to the extent such expenses are not covered by any applicable plan adopted pursuant to Rule 12b-1 under the Investment Company Act (each, a “12b-1 Plan”); (iv) the costs of any special Board of Trustees meetings or shareholder meetings convened for the primary benefit of the Advisor; and (v) 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 also shall be responsible on a monthly basis for any operating expenses that exceed the agreed upon expense limit, subject to the terms of such agreement.
(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: 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 Board of Trustees that are properly payable by the Fund; salaries and expenses of officers of the 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 the 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.
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A-3 |
Investment Advisory Agreement
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(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 the 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) To the extent that the Advisor pays 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, the Advisor shall report such payments 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 the 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 the 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.
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A-4 |
Investment Advisory Agreement
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(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 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; APPROVAL.
(a) 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.
(b) The Trust agrees to provide the Advisor such information about the Trust and the Fund as is necessary and appropriate for the Advisor to perform its services hereunder. Such information includes, but is not limited to, the Trust’s Trust Agreement and Declaration of Trust and By-Laws and all compliance policies and procedures of the Trust. The Trust agrees to provide to the Advisor promptly any amendment to the foregoing and, if any such amendment would materially affect the services to be provided by the Advisor hereunder, the Trust agrees to provide the amendment to the Advisor prior to its adoption by the Board of Trustees.
(c) The Trust represents and warrants that this Agreement has been authorized by the Board of Trustees and by shareholders in accordance with applicable law.
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) relating to (i) the Advisor and its affiliates, (ii) the Fund’s investment strategies and related risks, or (iii) other information, in each case only if supplied by the Advisor for inclusion therein..
(b) Except as otherwise provided herein, 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, other than losses or damages relating to lost profits.
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A-5 |
Investment Advisory Agreement
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(c) In the absence of willful misfeasance, bad faith, gross 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, members, managers, agents, 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) (collectively, “Losses”) arising out of the Indemnifying Party’s willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations or duties hereunder; provided, however, that nothing herein shall be deemed to protect any Indemnified Party against any Loss to which such Indemnified Party would otherwise be subject by reason of such party’s 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, in its judgment, will adversely affect the performance of its obligations to the Fund under this Agreement; and provided further that the Advisor will adopt 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. TRANSACTIONS WITH OTHER INVESTMENT ADVISERS. The Advisor is not an affiliated person of any investment adviser responsible for providing advice with respect to any other series of the Trust, or of any promoter, underwriter, officer, director, member of an advisory board or employee of any other series of the Trust. The Advisor shall not consult with the investment adviser of any other series of the Trust concerning transactions for the Fund or any other series of the Trust.
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A-6 |
Investment Advisory Agreement
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14. TERM.
(a) This Agreement shall become effective upon receiving approval from the majority of the outstanding securities of the Fund 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 at least annually by (i) the Board of Trustees or by the vote of a majority of the outstanding voting securities of the 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 set forth in the Investment Company Act.
(b) For so long as this Agreement remains effective, the Trust and the Fund shall have a non-transferable, non-exclusive license to use the names “Portfolio 21 Investments”, “Portfolio 21 Global Equity Fund”, and “www.portfolio21.com” (collectively, the “Advisor Names”) solely in connection with the Trust and the Fund. The Trust and the Fund acknowledge that the Advisor Names and any derivatives or combinations thereof are the sole and exclusive property of the Advisor (or the Advisor’s related entities), and the Trust and the Fund agree that they will not contest ownership or validity of the Advisor Names. The Trust and the Fund will use the Advisor Names according to the Advisor’s trademark standards. The Advisor makes no representations or warranties in respect of the relative superiority of its rights in the Advisor Names to the rights of any third party in the Advisor Names. Notwithstanding anything herein to the contrary, the Advisor shall have no liability to the Trust or the Fund for or in respect of any claim by any third party that the Trust or the Fund’s use of the Advisor names infringes upon or otherwise violates any proprietary or other rights of such third party. Within sixty (60) days from such time as this Agreement shall no longer be in effect, the Trust and Fund shall cease to use the Advisor Names and any other name connected with the Advisor.
15. 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 the 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, at the Fund’s expense, 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.
16. NONPUBLIC PERSONAL INFORMATION. Notwithstanding any provision herein to the contrary, the Advisor agrees on behalf of itself and its managers, members, officers, 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.
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A-7 |
Investment Advisory Agreement
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17. 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; provided, however, that the Advisor shall not be liable in respect of any failure by it to comply with changes to the Trust’s Anti-Money Laundering Policy of which it has not been notified in writing by the Trust a reasonable time in advance of the effectiveness of such changes. 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.
18. 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.
19. 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.
20. 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.
21. 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.
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PROFESSIONALLY MANAGED PORTFOLIOS
on behalf of the series listed on Schedule A
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PORTFOLIO 21 INVESTMENTS, INC.
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By: __________________________________
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By: __________________________________
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Name: Elaine E. Richards
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Name: John H. Streur
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Title: President
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Title: President
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A-8 |
Investment Advisory Agreement
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SCHEDULE A
to the
PROFESSIONALLY MANAGED PORTFOLIOS
INVESTMENT ADVISORY AGREEMENT
With
Portfolio 21 Investments, Inc.
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Series of Professionally Managed Portfolios
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Annual Fee Rate as a
Percentage of Average Daily
Net Assets
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Portfolio 21 Global Equity Fund
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0.95%
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A-9 |
Investment Advisory Agreement
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PROXY CARD TO BE INSERTED
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Investment Advisory Agreement
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