<PAGE>
Registration Nos. 333-935
811-7533
As filed with the Securities and Exchange Commission on
March 22, 1996
_______________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. 1 / X /
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Post-Effective Amendment No. / /
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and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
Amendment No. 1 / X /
(Check appropriate box or boxes)
__________________________________
The Lou Holland Trust
(Exact Name of Registrant as Specified in Charter)
Suite 3260, 35 West Wacker Drive, Chicago, Illinois 60601
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code:
(312) 553-1000
______________________
Louis A. Holland
c/o Holland Capital Management
Suite 3260
35 West Wacker Drive
Chicago, Illinois 60601
(Name and Address of Agent for Service)
Copies to:
Joan E. Boros
Katten Muchin & Zavis
1025 Thomas Jefferson Street, N.W.
Suite 700 - East Lobby
Washington, D.C. 20007
<PAGE>
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The Registrant is registering an indefinite number of its shares of beneficial
interest under the Securities Act of 1933 pursuant to Rule 24f-2. The
Registrant intends to file a Rule 24f-2 Notice by February 28, 1997.
<PAGE>
The Lou Holland Trust
CROSS-REFERENCE SHEET
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<CAPTION>
FORM N-1A ITEM NO. CAPTION IN PROSPECTUS
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<S> <C>
1. Cover Cover Page
2. Synopsis Cover Page
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Introduction to The Lou Holland
Trust; The Growth Fund; Risk Factors,
Other Investment Practices, and
Policies of the Growth Fund
5. Management of the Fund How The Trust is Managed
6. Capital Stock and Other Securities Organization of The Trust;
Dividends, Distributions,
and Taxes; How to Purchase Shares
7. Purchase of Securities How to Purchase Shares;
Shareholder Being Offered
Service; How the Growth Fund's
Net Asset Value is Determined
8. Redemption or Repurchase Shareholder Services; How to
Redeem Shares
9. Pending Legal Proceedings Not Applicable
</TABLE>
<TABLE>
<CAPTION>
CAPTION IN STATEMENT OF
FORM N-1A ITEM NO. ADDITIONAL INFORMATION
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<S> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information and History
13. Investment Objective and Investment Policies
Restrictions; Description of Certain
Investments
14. Management of the Fund Management of The Trust
15. Control Persons and Principal Holders of
Principal Holders of Securities
Securities
16. Investment Advisory and Investment Management and
Other Services Other Services
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17. Brokerage Allocation and Other Practices Brokerage Allocation and Other Practices
18. Capital Stock and Other Securities Organization of The Trust
19. Purchase, Redemption and Purchase and Redemption of
Pricing of Securities Securities Being Offered;
Being Offered Determination of Net Asset
Value
20. Tax Status Taxes
21. Underwriters Distribution of Shares
22. Calculation of Performance Information About
Performance Data the Growth Fund
23. Financial Statements Independent Auditors
</TABLE>
<PAGE>
THE LOU HOLLAND TRUST
Suite 3260
35 West Wacker Drive
Chicago, Illinois 60601
INTRODUCTION TO THE LOU HOLLAND TRUST
The Lou Holland Trust (the "Trust") is a Delaware business trust registered with
the Securities and Exchange Commission ("SEC") as a no-load, open-end
diversified management investment company, commonly known as a "mutual fund."
The Trust is organized as a series company and currently consists of one series,
the Growth Fund (the "Growth Fund" or "Fund"). In the future, the Trust may
establish additional series or classes of shares of any series. The Fund is
managed by Holland Capital Management ("Investment Manager"), an investment
adviser registered with the SEC that directs the day-to-day operations of the
Fund and provides certain administrative services to the Trust. HCM
Investments, Inc. (the "Distributor"), a broker-dealer registered with the SEC,
serves as the distributor of the shares of the Trust.
No sales charges or redemption fees or penalties are charged by the Trust with
respect to an investment in the Growth Fund. This means that all of the money
you invest will be credited to your account(s) in the Fund and immediately go to
work for you.
The Growth Fund primarily seeks long-term growth of capital and invests
primarily in common stocks of growth companies, with the receipt of dividend
income as a secondary consideration. There can be no assurance that the
investment objective of the Fund will be realized. For general information,
please call the Trust, toll-free at 1-800-999-9999.
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ABOUT THIS PROSPECTUS
This Prospectus sets forth concisely the information about the Trust and the
Growth Fund that you should know before investing. It should be retained for
future reference. A Statement of Additional Information, dated ____________,
1996, about the Trust has been filed with the Securities and Exchange Commission
and is incorporated herein by reference. You may obtain a copy of the Statement
of Additional Information at no charge by calling the Trust at 1-800-999-9999.
PROSPECTUS
__________, 1996
TABLE OF CONTENTS PAGE
Expense Summary
The Growth Fund
How to Purchase Shares
Shareholder Services
Retirement Plans
How the Growth Fund's Net Asset Value is Determined
Dividends, Distributions, and Taxes
How to Redeem Shares
How The Trust is Managed
Risk Factors, Other Investment Practices, and Policies
of the Growth Fund
Portfolio Transactions and Brokerage Practices
Organization of The Trust
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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EXPENSE SUMMARY
The Expense Summary, including the Examples below, is included to assist in
understanding of the various costs and expenses to which an investment in the
Growth Fund would be subject. Certain fees and expenses of the Fund stated below
are estimated. Actual fees and expenses for the Growth Fund for the current
year may be more or less than those shown below. A more complete description of
all fees and expenses is included in this prospectus under the section "How The
Trust is Managed."
SHAREHOLDER TRANSACTION EXPENSES GROWTH FUND
- - -------------------------------- ------------
Sales Load Imposed on Purchase None
Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load Imposed on Redemptions None
Redemption Fee None
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<CAPTION>
ANNUAL FUND OPERATING EXPENSES
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(as a percentage of average net assets)
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Investment Management Fee .85%(*)
12b-1 Fees -0-
Other Expenses (After Expense
Reimbursements) .50%(**)
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Total Fund Operating Expenses 1.35%
</TABLE>
(*)The Investment Management Fee declines at specified breakpoints as assets
increase.
(**)Other Expenses are based on estimated amounts for the current fiscal year.
The Investment Manager has agreed to reimburse the Growth Fund to the extent
that Other Estimated Expenses actually exceed .50% of the net assets of shares
of the Fund during the first year of the Fund's operations. The Investment
Manager estimates that absent any reimbursements Other Expenses and Total
Operating Expenses would be 1.25% and 2.10%, respectively.
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EXAMPLES: An investor in the Growth Fund would pay the following expenses on a
$1,000 investment, assuming (i) a 5% annual return and (ii) redemption at the
end of each future time period:(***)
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1 YEAR 3 YEARS
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$14 $44
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(***) There are no charges imposed upon redemption.
THESE EXAMPLES SHOULD NOT BE CONSIDERED TO BE A REPRESENTATION OF PAST OR FUTURE
FEES OR EXPENSES FOR THE GROWTH FUND. ACTUAL FEES AND EXPENSES MAY BE GREATER
OR LESS THAN THOSE SHOWN ABOVE. Similarly, the annual rate of return assumed in
the Example is not an estimate or guarantee of future investment performance,
but is included for illustrative purposes.
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<PAGE>
THE GROWTH FUND
INVESTMENT OBJECTIVE: The Growth Fund primarily seeks long-term growth of
capital by investing primarily in common stocks of growth companies, with the
receipt of dividend income as a secondary consideration.
INVESTMENT PROGRAM: The policy of the Growth Fund is to invest substantially
all of its assets in equity securities under normal market conditions. It
invests primarily in the common stocks of a diversified group of companies: (i)
that have demonstrated historical growth of earnings faster than the general
market; (ii) that have earnings growth stability; (iii) whose return on equity
is higher than the general market; and (iv) whereby the dividend growth of the
portfolio is typically greater than that of the market, while dividend yield is
typically less.
Equity securities include common stocks, securities which are convertible into
common stocks and readily marketable securities, such as rights and warrants,
which derive their value from common stock. Investments in rights and warrants
will be for the purpose of participating in particular market sectors.
The Growth Fund also may on occasion invest in various income producing
securities including, but not limited to, dividend-paying equity securities and
investment grade bonds. (SEE "Description of Certain Corporate Bond Ratings" in
the Statement of Additional Information.)
Investments in common stock in general are subject to market risks that may
cause their prices to fluctuate over time. In addition, the amount of income
generated by the Fund will fluctuate depending, among other things, on the
composition of the Fund's holdings and the level of interest and dividend income
paid on those holdings. Therefore, an investment in the Fund may be more
suitable for long-term investors who can bear the risk of these fluctuations.
The Growth Fund may also invest in common stocks of foreign issuers.
Investments in common stocks of foreign issuers will be made primarily through
the use of U.S. dollar-denominated American Depository Receipts ("ADRs"),
although direct market purchases also may be made. ADRs are issued by domestic
banks and evidence ownership of underlying foreign securities.
The Growth Fund may establish and maintain reserves for temporary, defensive
purposes or to enable it to take advantage of buying opportunities. The Fund's
reserves will be invested in high-grade domestic and foreign money market
instruments including, but not limited to, U.S. government obligations,
certificates of deposit, bankers' acceptances, commercial paper, short-term
corporate debt issues and repurchase agreements.
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To facilitate the Growth Fund's investment program, the Fund may lend portfolio
securities and purchase securities on a forward-commitment or when-issued basis.
HOW TO PURCHASE SHARES
The initial minimum investment is $2,000 for the Growth Fund. Such minimum
investment amount may, in certain cases, be waived or lowered by the Trust.
OPENING AN ACCOUNT. Shareholders may make an initial purchase of shares of the
Growth Fund by mail or by wire. Shares of the Fund may be purchased on any day
the Trust is open for business.
A COMPLETED AND SIGNED PURCHASE APPLICATION FORM ("APPLICATION") IS REQUIRED FOR
EACH NEW ACCOUNT OPENED WITH THE GROWTH FUND REGARDLESS OF HOW THE INITIAL
PURCHASE OF SHARES IS MADE.
BY MAIL. Shares of the Growth Fund may be purchased by mailing the completed
Application, with a check made payable to the Trust, c/o Firstar Trust Company
("Firstar"), Post Office Box 701, Milwaukee, Wisconsin 53201-0701.
Correspondence sent by overnight delivery services should be sent to Firstar
Trust Company, 3rd Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202.
BY WIRE. Shares of the Growth Fund also may be purchased by wiring funds to the
wire bank account for the Fund. Before wiring funds, please call the Trust toll
free at 1-800-999-9999 to advise the Trust of the intention to invest in the
Growth Fund and to receive instructions as to how and where to wire the
investment. Please remember to return the completed Application to the Trust as
described in the prior paragraph. The bank that wires the funds may charge a
fee.
SUBSEQUENT INVESTMENTS. The minimum subsequent investment for the Growth Fund
is $250. Subsequent purchases of shares of the Fund may be made by mail or by
wire (see instructions above), or through means of the Telephone Investment
Privilege described below under "Shareholder Services."
SHARE PRICE. To make an initial purchase of shares of the Growth Fund, except
by wire transfer, a completed and signed Application in good order, as described
below, must first be received and accepted. Shares in the Fund will be priced
at the net asset value per share of the Fund next determined after a purchase
order has been received by Firstar as transfer agent in good order, as described
below.
CONDITIONS OF PURCHASE. The Trust and the Distributor each reserve the right to
reject any purchase for any reason and to cancel any purchase due to nonpayment.
Purchases are not binding on the Trust or the Investment Manager or considered
received until such
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purchase orders are received by Firstar in good order. Good order requires that
all purchases must be made in U.S. dollars and, to avoid fees and delays, all
checks must be drawn only on U.S. banks. No cash or third party checks will be
accepted. As a condition of this offering, if a purchase is canceled due to
nonpayment or because a check does not clear (and, therefore, the account is
required to be redeemed), the purchaser will be responsible for any loss the
Fund incurs. The transfer agent charges a $15 fee against a shareholder's
account for any checks that do not clear.
Shares may be purchased by rendering payment in-kind in the form of marketable
securities, including but not limited to shares of common stock and debt
instruments, provided the acquisition of such securities is consistent with the
Growth Fund's investment objective and otherwise acceptable to the Investment
Manager.
SHARE CERTIFICATES. Share certificates will not be issued for shares unless the
shareholder has held them for at least thirty (30) days and has specifically
requested them. Most shareholders elect not to receive share certificates.
Certificates for full shares only will be issued. Shareholders who lose a share
certificate may incur an expense to replace it.
SHAREHOLDER SERVICES
SHAREHOLDER INQUIRIES AND SERVICES OFFERED. If there are any questions about
the following services, please call the Trust at
1-800-999-9999 or write the Trust, c/o Firstar Trust Company, Post Office Box
701, Milwaukee, Wisconsin 53201-0701. The Trust reserves the right to amend the
shareholder services described below or to change their terms or conditions upon
sixty (60) days' notice to shareholders.
SHAREHOLDER STATEMENTS AND REPORTS. Each time a shareholder buys or sells
shares or reinvests a dividend or distribution in the Growth Fund, the
shareholder will receive a statement confirming such transaction and listing the
current share balance with the Fund. The Trust also will send shareholders
annual and semi-annual reports, as well as year-end tax information about the
accounts with the Fund.
TELEPHONE PRIVILEGES. For convenience, the Trust provides telephone privileges
that allow telephone authorization to (i) purchase shares in the Growth Fund,
and (ii) redeem shares in the Fund. Initial purchases of shares may not be made
by telephone. To utilize these telephone privileges, check the appropriate
boxes on the Application and supply the Trust with the information required.
Procedures have been established by the Trust and Firstar that are considered to
be reasonable and are designed to confirm personal identification information
prior to acting on telephone instructions, including tape recording telephone
communications and providing written confirmation of instructions
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<PAGE>
communicated by telephone. If the Investment Manager does not employ reasonable
procedures to confirm that instructions communicated by telephone are genuine,
it may be liable for any losses arising out of any action on its part or any
failure or omission to act as a result of its own negligence, lack of good
faith, or willful misconduct. In light of the procedures established, the Trust
will not be liable for following telephone instructions that it or Firstar, as
transfer agent, believes to be genuine. During periods of extreme economic
conditions or market changes, requests by telephone may be difficult to make due
to heavy volume. During such times, shareholders should consider placing orders
by mail.
The telephone privileges are not available with respect to shares for which
certificates have been issued or with respect to redemptions for accounts
requiring supporting legal documents.
TELEPHONE INVESTMENT PRIVILEGE. After an account with the Trust has been
opened, additional investments in the amount of $1,000 or more may be made by
telephoning the Trust at 1-800-999-9999 between 9:00 a.m. and 4:00 p.m. Eastern
Time on any day the Trust is open. Telephone investment requests made after
4:00 p.m. Eastern Time will be processed as of the close of business on the next
business day. In accordance with a shareholder's instructions, the Trust will
electronically transfer monies from a shareholder's bank account designated on
the Application to the shareholder's account with the Trust. The designated
bank must be a member of the Automated Clearing House ("ACH") network and able
to make electronic transfers in order for a shareholder to use this privilege.
Most electronic fund transfers are completed within two business days after the
call requesting the transfers.
TELEPHONE REDEMPTION PRIVILEGE. The Telephone Redemption Privilege permits a
shareholder to authorize the redemption of some or all of the shares in his or
her account with the Trust by telephoning the Trust at 1-800-999-9999 between
9:00 a.m. and 4:00 p.m. Eastern Time on any day the Trust is open. In
accordance with telephone instructions, we will redeem shares of the Growth Fund
at their net asset value next determined after a telephone redemption request is
received. Telephone redemption requests made after 4:00 p.m. Eastern Time will
be processed as of the close of business on the next business day. Redemption
proceeds will, in accordance with any prior election made by a shareholder, be
mailed to the shareholder's current address, or transmitted by wire to the
shareholder's designated bank account. The bank transmitting the wire may
charge a $10 fee for the service. The designated bank must be a member of the
ACH network and able to receive electronic transfers in order to use this
privilege. Telephone redemption requests will not be processed if the
shareholder has changed his or her address within the preceding fifteen (15)
days.
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<PAGE>
After an account has been opened, a written request must be sent to the transfer
agent in order to arrange for telephone redemptions or to make changes in the
bank or account receiving the proceeds. The request must be signed by each
shareholder of an account and the signature guaranteed.
AUTOMATIC INVESTMENT PLAN (AIP). The Trust offers an AIP whereby a shareholder
may purchase shares on a regular scheduled basis ($50 minimum per transaction up
to four times per month). Under the AIP, the shareholder's designated bank
account is debited a preauthorized amount and applied to purchase shares. The
financial institution must be a member of the ACH network. There is no charge
for this service. A $15 fee will be charged by the transfer agent if there are
insufficient funds in the account at the time of the scheduled transaction. The
program will automatically terminate upon redemption of all shares in an
account.
RETIREMENT PLANS
Trust shares are available in connection with tax benefitted retirement plans
established under Section 401(a) or Section 403(b) of the Internal Revenue Code
of 1986, as amended ("Code"), IRAs and SEP-IRAs under Section 408 of the Code,
corporate sponsored profit-sharing plans, and deferred compensation plans of
state and local governments and tax-exempt organizations that comply with the
provisions of Section 457 of the Code. Various initial, annual maintenance and
participant fees may apply to these retirement plans. Applicable forms and
information regarding plan administration, all fees, and other plan provisions
are available from the Trust or Firstar, as transfer agent.
HOW THE GROWTH FUND'S NET ASSET VALUE IS DETERMINED
The net asset value per share of the Growth Fund is normally calculated as of
the close of regular trading on the New York Stock Exchange ("Exchange"),
currently 4:00 p.m. Eastern Time, every day the Exchange is open for trading.
The per share net asset value, calculated as described below, is effective for
all orders received in good order (as previously described) prior to the close
of trading on the Exchange for that day. Orders received after the close of
trading on the Exchange or on a day when the Exchange is not open for business
will be priced at the per share net asset value next computed.
The net asset value of the Growth Fund's shares is determined by adding the
value of all securities, cash and other assets of the Fund, subtracting the
liabilities (including accrued expenses and dividends payable), and dividing the
result by the total number of outstanding shares in the Fund. Portfolio
securities are valued primarily based on market quotations, or if market
quotations are not available, by a method that the Board of Trustees of the
Trust (the "Board") believes accurately reflects fair value.
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DIVIDENDS, DISTRIBUTIONS, AND TAXES
The Growth Fund intends to elect to be treated and to qualify as a "regulated
investment company" under Subchapter M of the Code in which case it will not be
subject to federal income tax on any income and capital gains distributed to its
shareholders.
As a result, it is the policy of the Growth Fund to declare and distribute to
its shareholders as income dividends or capital gains distributions, at least
annually, substantially all of its ordinary income and capital gains realized
from the sale of its portfolio securities, if any. Distributions will be made
in the form of additional shares unless the shareholder elects to receive them
in cash.
Income dividends for the Growth Fund will be declared and paid annually, and all
distributions of capital gains of the Fund, if any, realized during the fiscal
year, will be declared and distributed annually. Income dividends are derived
from the Fund's net investment income, including any net short-term capital
gains and dividends received by the Fund, and are taxable to shareholders as
ordinary income. Distributions of capital gains by the Fund are derived from
the Fund's long-term capital gains and are taxable to shareholders as long-term
capital gains, regardless of how long the shares are held. Income dividends and
distributions of capital gains declared in October, November or December and
paid in January are taxable in the year they are declared. The Trust will mail
shareholders a Form 1099 by the end of January indicating the federal tax status
of income dividends and capital gains distributions.
BACKUP WITHHOLDING. The Trust is required by federal law to withhold 31% of
reportable payments (which may include income dividends, capital gains
distributions, and share redemption proceeds) paid to shareholders who have not
complied with IRS regulations. In order to avoid this backup withholding
requirement, certification is required on the Application, or on a separate W-9
Form supplied by Firstar, as transfer agent, that the Social Security or
Taxpayer Identification Number is correct (or that the shareholder has applied
for such a number and is waiting for it to be issued), and that the shareholder
is not currently subject to, or exempt from, backup withholding.
REINVESTMENT OF INCOME DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. Unless
elected otherwise, as permitted on the Application, income dividends and
distributions of capital gains income with respect to the Growth Fund will be
reinvested in additional shares of the Fund and will be credited to the
shareholder's account with the Fund at the net asset value per share next
determined as of the ex-dividend date. Both income dividends and distributions
of capital gains income are paid by the Fund to each shareholder on the basis of
the
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shareholder's relative net assets. As a result, at the time of such payment,
the net asset value per share of the Fund will be reduced by the amount of such
payment. Payments from the Fund to shareholders of income dividends and capital
gains distributions are taxable to shareholders of the Fund when such dividends
and distributions are declared, regardless of whether they are taken in cash or
reinvested in shares of the Fund.
HOW TO REDEEM SHARES
Shareholders have the right to redeem (subject to the restrictions outlined
below) all or any part of their shares in the Growth Fund at a price equal to
the net asset value of such shares next computed following receipt and
acceptance of the redemption request by the Trust. Unless a shareholder has
selected the Telephone Redemption Privilege and provided the required
information, in order to redeem shares in the Fund, a written request in "proper
form" (as explained below) must be sent to Firstar Trust Company, Post Office
Box 701, Milwaukee, Wisconsin 53201-0701. Correspondence sent by overnight
delivery services should be sent to Firstar Trust Company, 3rd Floor, 615 East
Michigan Street, Milwaukee, Wisconsin 53202. A shareholder cannot redeem shares
by telephone unless the shareholder is eligible to use the Telephone Redemption
Privilege. In addition, the Trust cannot accept requests which specify a
particular date for redemption or which specify any other special conditions.
PROPER FORM FOR ALL REDEMPTION REQUESTS. A redemption request must be in proper
form. To be in proper form, a redemption request must include: (i) share
certificates, if any, endorsed by all registered shareholders for the account
exactly as the shares are registered and the signature(s) must be guaranteed, as
described below; (ii) for written redemption requests, a "letter of
instruction," which is a letter specifying the Growth Fund by name, the number
of shares to be sold, the name(s) in which the account is registered, and the
account number. The letter of instruction must be signed by all registered
shareholders for the account using the exact names in which the account is
registered; (iii) other supporting legal documents, as may be necessary, for
redemption requests by corporations, trusts, and partnerships; and (iv) any
signature guarantees that are required as described above in (i), or required by
the Trust where the value of the shares being redeemed is $10,000 or greater, or
where the redemption proceeds are to be sent to an address other than the
address of record or to a person other than the registered shareholder(s) for
the account. Signature guarantees are required if the amount being redeemed is
$10,000 or more but generally are not required for redemptions made using the
Telephone Redemption Privilege. If proceeds from a redemption made using the
Telephone Redemption Privilege are to be sent to a person other than the
registered shareholders for the account or to an address or account other than
that of record for
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a period no less than fifteen (15) days prior to the date of the request, then
a signature guarantee would be required.
Signature guarantees, when required, can be obtained from any one of the
following institutions: (i) a bank; (ii) a securities broker or dealer,
including a Government or municipal securities broker or dealer, that is a
member of a clearing corporation or has net capital of at least $100,000; (iii)
a credit union having authority to issue signature guarantees; (iv) a savings
and loan association, a building and loan association, a cooperative bank, a
federal savings bank or association; or (v) a national securities exchange, a
registered securities exchange or a clearing agency. Notaries public are not
acceptable guarantors.
A redemption request will not be processed and will be held until it is in
proper form, as described above.
RECEIVING A REDEMPTION PAYMENT. Except under certain emergency conditions, a
redemption payment will be sent to the shareholder within seven (7) days after
receipt of the corresponding telephone or written redemption request, in proper
form, by the Trust. No charge of any kind is imposed on any redemption request.
If a redemption request is with respect to shares purchased by a personal,
corporate, or government check within ten (10) days of the purchase date, the
redemption payment will be held until the purchase check has cleared (which may
take up to ten (10) days from the purchase date), although the shares redeemed
will be priced for redemption upon receipt of the redemption request. The
inconvenience of this ten (10) day check clearing period can be avoided by
purchasing shares with a certified, treasurer's or cashier's check, or with a
federal Fund or bank wire.
MINIMUM ACCOUNT SIZE. Due to the relatively high cost of maintaining accounts,
the Trust reserves the right to redeem shares in any account if, as the result
of the redemptions, the value of that account drops below $2,000. A shareholder
is allowed at least sixty (60) days, after written notice by the Trust, to make
an additional investment to bring the account value up to at least $2,000 before
the redemption is processed.
HOW THE TRUST IS MANAGED
BOARD OF TRUSTEES. The management of the Trust's business and affairs is the
responsibility of its Board. Although the Board is not involved in the day-to-
day operations of the Trust, the Board has the responsibility for establishing
broad operating policies and supervising the overall performance of the Trust.
INVESTMENT MANAGER. The Trust is managed by Holland Capital Management, a
Delaware limited partnership whose principal place of business is Suite 3260, 35
West Wacker Drive, Chicago, Illinois
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60601. The Investment Manager has not previously served as investment manager
to any other registered investment company. However, the executives and members
of the investment management staff have extensive experience in managing
investments. In addition, Louis A. Holland, the Managing Partner and Chief
Investment Officer of the Investment Manager, has served as an investment
adviser for the past 25 years.
Subject to the authority of the Board, the Investment Manager supervises and
directs the day-to-day investments and operation of the Growth Fund in
accordance with the Fund's investment objective, investment program, policies,
and restrictions. The Investment Manager also supervises the overall
administration of the Trust, which includes, among other activities, preparing
and filing documents required for compliance of the Trust with applicable laws
and regulations, preparing agendas and other supporting documents for the
meetings of the Board, maintaining the corporate records and books of the Trust,
and serving as the Trust's liaison with its independent public accountant and
any service providers such as the custodian, transfer agent, and administrator.
The persons employed by or associated with the Investment Manager who are
primarily responsible for the day-to-day management of the Growth Fund's
portfolio, are Louis A. Holland, Monica L. Walker and Laura J. Janus. Their
business experience for the past five years is as follows: Mr. Holland has
served as Managing Partner and Chief Investment Officer of the Investment
Manager, and President, Treasurer and Director of the Distributor and of Holland
Capital Management, Inc., the General Partner of the Investment Manager; Ms.
Walker has served as portfolio manager with respect to the Investment Manager's
account clients, and as Trust Funds Administration Manager of the retirement and
thrift and savings plans of Texas Utilities Company; and Ms. Janus has served as
portfolio manager with respect to the Investment Manager's account clients, and
as Treasurer/Analyst for Mutual Trust Life Insurance Company.
The Trust pays the Investment Manager, on a monthly basis, an investment
management fee based on the Growth Fund's average daily net assets at the
following annualized rates: with respect to the Fund, .85% of the average daily
net assets up to $500 million, .75% of the average daily net assets up to the
next $500 million, and .65% of the average daily net assets in excess of $1
billion.
The Trust bears all expenses of its operation, other than those assumed by the
Investment Manager. Such expenses include payment for distribution services,
transfer agent services, accounting services, certain administrative services,
legal fees, and payment of taxes. In addition, the expense of organizing the
Trust and registering and qualifying its initial shares under federal and state
securities laws will be charged to the Trust's operations, as an expense, and
amortized over a period not to exceed five years.
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DISTRIBUTOR. HCM Investments, Inc. serves as principal underwriter and the
Distributor of the shares of the Growth Fund pursuant to a Distribution
Agreement between the Distributor and the Trust. The Distributor is a Delaware
corporation whose principal place of business is Suite 3260, 35 West Wacker
Drive, Chicago, Illinois 60601. The Distributor is an affiliate of the
Investment Manager, as both the Distributor and the Investment Manager are
controlled by Louis A. Holland.
The Trust's shares are sold on a no-load basis and, therefore, the Distributor
receives no sales commission or sales load for providing services to the Trust
under the Distribution Agreement. The Trust has not currently entered into any
plan or agreement for the payment of fees pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "1940 Act"), but reserves the right to do so
with respect to any future classes of shares of any series.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Pursuant to written
agreements between it and Firstar Trust Company ("Firstar"), Firstar will serve
as custodian, transfer agent and dividend disbursing agent for the Trust.
Firstar also will provide fund accounting and certain administrative services to
the Trust. The principal business address of Firstar is 615 East Michigan
Street, Post Office Box 701, Milwaukee, Wisconsin 53201-0701.
RISK FACTORS, OTHER INVESTMENT PRACTICES, AND POLICIES OF THE GROWTH FUND
REPURCHASE AGREEMENTS. The Growth Fund may utilize repurchase agreements
through which it may purchase a security (the "underlying security") from a well
established domestic securities dealer or bank that is a member of the Federal
Reserve System and the seller of the repurchase agreement (i.e., the securities
dealer or bank) agrees to repurchase the underlying security at a mutually
agreed upon time and price. In these repurchase transactions, the underlying
security is held in custody for the Fund through the federal book entry system
as collateral and marked-to-market on a daily basis to ensure full
collateralization of the repurchase agreement. The underlying security must be
a high-quality debt security and must be determined to present minimal credit
risks. In the event of bankruptcy or default of certain sellers of repurchase
agreements, the Fund could experience costs and delays in liquidating the
underlying security held as collateral and might incur a loss if such collateral
declines in value during this period.
SECURITIES OF FOREIGN ISSUERS. The Growth Fund may invest up to 20% of its
total assets in securities of foreign issuers. As stated above, investments in
common stocks of foreign issuers will be made primarily through the use of U.S.
dollar-denominated American Depository Receipts ("ADRs"), although direct market
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purchases also may be made. ADRs are U.S. dollar-denominated certificates
issued by a U.S. bank or trust company and represent the right to receive
securities of a foreign issuer deposited in a domestic bank or foreign branch of
a U.S. bank and traded on a U.S. exchange or in an over-the-counter market.
Investing in securities of foreign issuers involves considerations not typically
associated with investing in securities of companies organized and operated in
the U.S. Foreign securities generally are denominated and pay dividends or
interest in foreign currencies. The Growth Fund may from time to time hold
various foreign currencies pending their investment in foreign securities or
their conversion into U.S. dollars. The value of the assets of the Fund as
measured in U.S. dollars may therefore be affected favorably or unfavorably by
changes in exchange rates. There may be less publicly available information
concerning foreign issuers than is available with respect to U.S. issuers.
Foreign securities may not be registered with the SEC, and generally, reporting
requirements comparable to those applicable to U.S. issuers.
ILLIQUID SECURITIES. The Growth Fund will not invest more than 15% of its net
assets in illiquid securities, including securities that are illiquid by virtue
of the absence of a readily available market or legal or contractual
restrictions on resale. Securities that have legal or contractual restrictions
on resale but have a readily available market are not deemed illiquid for
purposes of this limitation. The Investment Manager will monitor the liquidity
of such restricted securities under the supervision of the Board.
The Growth Fund may invest in commercial paper issued in reliance on the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933 (the "1933 Act"). Commercial paper is restricted as to disposition under
federal securities law, and is generally sold to institutional investors, such
as the Fund, who agree that they are purchasing the paper for investment
purposes and not with a view to public distribution. Any resale by the
purchaser must be in an exempt transaction. Commercial paper is normally resold
to other institutional investors like the Fund through or with the assistance of
the issuer or investment dealers who make a market in commercial paper, thus
providing liquidity. The Fund believes that commercial paper and possible
certain other restricted securities which meet the criteria for liquidity
established by the Board are quite liquid. The Fund intends, therefore, to
treat the restricted securities which meet the criteria for liquidity
established by the Board, including commercial paper, as determined by the
Investment Manager, as liquid and not subject to the investment limitations
applicable to illiquid securities.
Rule 144A adopted by the SEC allows for a broader institutional trading market
for securities otherwise subject to a restriction on resale to the general
public. Rule 144A establishes a "safe
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harbor" from the registration requirements of the 1933 Act for resales of
certain securities to qualified institutional buyers. The Investment Manager
anticipates that the market for certain restricted securities such as
institutional commercial paper may expand further as a result of this regulation
and use of automated systems for the trading, clearance and settlement of
unregistered securities of domestic and foreign issuers, such as the PORTAL
System sponsored by the National Association of Securities Dealers, Inc.
OPTIONS AND FUTURES CONTRACTS. The Growth Fund may write covered call options,
buy put options, buy call options and write put options, without limitation
except as noted in this paragraph and the Statement of Additional Information.
Such options may relate to particular securities or to various indexes and may
or may not be listed on a national securities exchange and issued by the Options
Clearing Corporation. The Fund may also invest in futures contracts and options
on futures contracts (index futures contracts or interest rate futures
contracts, as applicable) for hedging purposes or for other purposes so long as
aggregate initial margins and premiums required for non-hedging positions do not
exceed 5% of its net assets, after taking into account any unrealized profits
and losses on any such contracts it has entered into. However, the Fund may not
write put options or purchase or sell futures contracts or options on futures
contracts to hedge more than its total assets unless immediately after any such
transaction the aggregate amount of premiums paid for put options and the amount
of margin deposits on its existing futures positions do not exceed 5% of its
total assets.
Options trading is highly specialized activity which entails greater than
ordinary investment risks. A call option for a particular security gives the
purchaser of the option the right to buy, and a writer the obligation to sell,
the underlying security at the stated exercise price at any time prior to the
expiration of the option, regardless of the market price of the security. The
premium paid to the writer is in consideration for undertaking the obligations
under the option contract. A put option for a particular security gives the
purchaser the right to sell the underlying security at the stated exercise price
at any time prior to the expiration date of the option, regardless of the market
price of the security. In contrast to an option on a particular security, an
option on an index provides the holder with the right to make or receive a cash
settlement upon exercise of the option. The amount of this settlement will be
equal to the difference between the closing price of the index at the time of
exercise and the exercise price of the option expressed in dollars, times a
specified multiple.
The Growth Fund may invest in unlisted over-the-counter options only with
broker-dealers deemed creditworthy by the Investment Manager. Closing
transactions in certain options are usually
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effected directly with the same broker-dealer that effected the original option
transaction. The Fund bears the risk that the broker-dealer will fail to meet
its obligations. There is no assurance that the Fund will be able to close an
unlisted option position. Furthermore, unlisted options are not subject to the
protections afforded purchasers of listed options by the Options Clearing
Corporation, which performs the obligations of its members who fail to do so in
connection with the purchase or sale of options.
To enter into a futures contract, the Growth Fund must make a deposit of an
initial margin with its custodian in a segregated account in the name of its
futures broker. Subsequent payments to or from the broker, called variation
margin, will be made on a daily basis as the price of the underlying security or
index fluctuates, making the long and short positions in the futures contracts
more or less valuable.
The risks related to the use of options and futures contracts include: (i) the
correlation between movements in the market price of a portfolio's investments
(held or intended for purchase) being hedged and in the price of the futures
contract or option may be imperfect; (ii) possible lack of a liquid secondary
market for closing out options or futures positions; (iii) the need for
additional portfolio management skills and techniques; and (iv) losses due to
unanticipated market movements.
Successful use of options and futures by the Growth Fund is subject to the
Investment Manager's ability to correctly predict movements in the direction of
the market. For example, if the Fund uses future contracts as a hedge against
the possibility of a decline in the market adversely affecting securities held
by it and securities prices increase instead, the Fund will lose part or all of
the benefit of the increased value of its securities which it has hedged because
it will have approximately equal offsetting losses in its futures positions.
The risk of loss in trading futures contracts in some strategies can be
substantial, due both to the low margin deposits required, and the extremely
high degree of leverage involved in future pricing. As a result, a relatively
small price movement in a futures contract may result in immediate and
substantial loss or gain to the investor. Thus, a purchase or sale of a futures
contract may result in losses or gains in excess of the amount invested in the
contract.
WARRANTS. The Growth Fund may invest in warrants, which are certificates that
give the holder the right to buy a specific number of shares of a company's
stock at a stipulated price within a certain time limit (generally, two or more
years). Because a warrant does not carry with it the right to dividends or
voting rights with respect to the securities which it entitles a holder to
purchase, and because it does not represent any rights in the assets of the
issuer, warrants may be considered more speculative
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than certain other types of investments. Also, the value of a warrant does not
necessarily change with the value of the underlying securities, and a warrant
ceases to have value if it is not exercised prior to its expiration date.
LENDING OF PORTFOLIO SECURITIES. In order to generate income, the Growth Fund
may lend portfolio securities on a short-term or a long-term basis, up to one-
third of the value of its total assets to broker-dealers, banks, or other
institutional borrowers of securities. Since this technique may be considered a
form of leverage, the Fund will only enter into loan arrangements with broker-
dealers, banks, or other institutions which the Investment Manager for the Fund
has determined are creditworthy under guidelines established by the Trustees,
and will receive collateral in the form of cash (which may be invested in
accordance with the Fund's investment program) or U.S. Government securities,
equal to at least 100% of the value of the securities loaned at all times. The
Fund will continue to receive the equivalent of the interest or dividends paid
by the issuer of the securities lent. The Fund may also receive interest on the
investment of the collateral or a fee from the borrower as compensation for the
loan. The Fund will retain the right to call, upon notice, the securities lent.
The principal risk is the potential insolvency of the broker-dealer or other
borrower. As a result there may be delays in recovery, or even loss of rights
in the collateral should the borrower fail financially. The Investment Manager
reviews the creditworthiness of the entities to which loans are made to evaluate
those risks.
WHEN-ISSUED SECURITIES. The Growth Fund may utilize up to 5% of its total
assets to purchase securities on a "when-issued" basis, which normally settle
within 30 to 45 days. The Fund will enter into a when-issued transaction for
the purpose of acquiring portfolio securities and not for the purpose of
leverage, but may sell the securities before the settlement date if the
Investment Manager deems it advantageous to do so. The payment obligation and
the interest rate that will be received on when-issued securities are fixed at
the time the buyer enters into the commitment. Due to fluctuations in the value
of securities purchased or sold on a when-issued basis, the yields obtained may
be higher or lower than the yields available in the market on the dates when the
investments are actually delivered to the buyers. When the Fund agrees to
purchase when-issued securities, its custodian will set aside in a segregated
account cash, U.S. government securities or other liquid high-grade debt
obligations or other securities that are acceptable as collateral to the
appropriate regulatory authority equal to the amount of the commitment.
Normally, the custodian will set aside portfolio securities to satisfy a
purchase commitment, and in such a case the Fund may be required subsequently to
place additional assets in the segregated account in order to ensure that the
value of the account remains equal to the amount of the Fund's commitment. It
may be expected that the Fund's net assets will fluctuate to a greater degree
when it sets
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aside portfolio securities to cover such purchase commitments than when it sets
aside cash. When the Fund engages in when-issued transactions, it relies on the
other party to consummate the trade. Failure of the seller to do so may result
in the Fund's incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.
OTHER INVESTMENT COMPANIES. The Growth Fund may also invest up to 10% of its
total assets in the securities of other investment companies, including closed-
end investment companies, in accordance with Section 12(d)(1)(A) of the 1940
Act. Such investment in other investment companies will take into consideration
the operating expenses and fees of these companies, including advisory fees, as
such expenses may reduce investment return.
CERTAIN POLICIES TO REDUCE RISK. The Growth Fund has adopted certain
fundamental investment policies in managing its portfolio that are designed to
maintain the portfolio's diversity and reduce risk. The Fund will (i) not
purchase the securities of any company if, as a result, the Fund's holdings of
that issue would amount to more than 5% of the value of the Fund's total assets,
or more than 25% of the value of total assets would be invested in any one
industry; and (ii) not borrow money except for temporary purposes and then only
in amounts not exceeding 15% of the value of its total assets. The Fund will
not borrow in order to increase income, but only to facilitate redemption
requests that might otherwise require untimely disposition of portfolio
securities. If the Fund borrows money, its share price may be subject to
greater fluctuation until the borrowing is paid off. Limitation (i) does not
apply to obligations issued or guaranteed by the U.S. Government, its agencies,
and instrumentalities. These investment policies are fundamental and may be
changed for the Fund only by approval of the Fund's shareholders.
If the Fund makes additional investments while borrowings are outstanding, this
may be considered a form of leverage. The 1940 Act requires the Fund to
maintain continuous asset coverage (that is, total assets including borrowings,
less liabilities exclusive of borrowings) of 300% of the amount borrowed. If
the 300% asset coverage should decline as a result of market fluctuations or
other reasons, the Fund may be required to sell some of its portfolio holdings
within three days to reduce its borrowings and restore the 300% asset coverage,
even though it may be disadvantageous from an investment standpoint to sell
securities at that time. To avoid the potential leveraging effects of the
Fund's borrowings, additional investments will not be made while borrowings are
in excess of 5% of the Fund's total assets.
In addition, it is a fundamental investment policy that the Growth Fund may
invest only up to 20% of its total assets in securities of foreign issuers.
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These fundamental investment policies may be changed only with the consent of a
"majority of the outstanding voting securities" of the Growth Fund. As used in
this Prospectus and Statement of Additional Information, the term "majority of
the outstanding voting shares" means the lesser of (i) 67% of the shares of the
Fund present at a meeting where the holders if more than 50% of the outstanding
shares of the Fund are present in person or by proxy, or (ii) more than 50% of
the outstanding shares of the Fund.
FURTHER INFORMATION. The Growth Fund's investment program is subject to further
restrictions as described in the Statement of Additional Information. The
Fund's investment program, unless otherwise specified, is not fundamental and
may be changed without shareholder approval by the Board. The Fund's investment
objective is fundamental and may be changed only with approval of the Fund's
shareholders.
INVESTMENT PERFORMANCE. The Growth Fund may illustrate in advertisements its
average annual total return, which is the rate of growth that would be necessary
to achieve the ending value of an investment kept in the Fund for the period
specified and is based on the following assumptions: (i) all dividends and
distributions by the Fund are reinvested in shares of the Fund at net asset
value, and (ii) all recurring fees are included for applicable periods.
The Growth Fund may also illustrate in advertisements its cumulative total
return for several time periods throughout the Fund's life based on an assumed
initial investment of $1,000. Any such cumulative total return will assume the
reinvestment of all income dividends and capital gains distributions for the
indicated periods and will include all recurring fees.
PORTFOLIO TRANSACTIONS AND BROKERAGE PRACTICES
The Distributor may act as a broker for the Growth Fund in conformity with the
securities laws and rules thereunder. Allocations of portfolio transactions for
the Fund, including their frequency, to various brokers is determined by the
Investment Manager in its best judgment and in a manner deemed fair and
reasonable to shareholders. The primary consideration is prompt and efficient
execution of orders in an effective manner at the most favorable price. The
Investment Manager may also consider sales of the Fund's shares as a factor in
the selection of broker-dealers, subject to the policy of obtaining best price
and execution. For further information regarding the allocation of portfolio
transactions and brokerage, see the Statement of Additional Information.
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ORGANIZATION OF THE TRUST
The Trust, a Delaware business trust, organized on December 20, 1995, currently
consists of one portfolio, the Growth Fund. Shareholders having at least two-
thirds of the outstanding shares of the Trust may remove a Trustee from office
by a vote cast in person or by proxy at a meeting of shareholders called for
that purpose at the request of holders of 10% or more of the outstanding shares
of the Trust. The Trust has an obligation to assist in such shareholder
communications. The Trust does not routinely hold annual meetings of
shareholders. Each share of the Fund is entitled to one vote on all matters
submitted to a vote of all shareholders of the Fund. Fractional shares, when
issued, have the same rights, proportionately, as full shares. All shares are
fully paid and nonassessable when issued and have no preemptive, conversion or
cumulative voting rights.
As of the date of this Prospectus, the Investment Manager has provided the
initial seed capital for the Trust and owns 100% of the outstanding voting
shares of the Growth Fund. Furthermore, as ownership of more than 25% of the
outstanding voting securities of the Fund may result in a person being deemed a
controlling entity of the Fund, the Investment Manager may be initially deemed a
controlling person of the Fund. Such control by the Investment Manager will
dilute the effect of the votes of other shareholders.
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THE LOU HOLLAND TRUST
Suite 3260
35 West Wacker Drive
Chicago, Illinois 60601
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a prospectus, but should be read
in conjunction with the Prospectus for the Trust dated ____________, 1996, which
may be obtained by telephoning the Trust at 1-800-999-9999. This Statement of
Additional Information has been incorporated by reference into the Prospectus.
The date of this Statement of Additional Information is _____________, 1996.
TABLE OF CONTENTS
ITEM PAGE
- - ---- ----
General Information and History
Investment Restrictions
Description of Certain Investments
Management of The Trust
Committees of the Board of Trustees
Principal Holders of Securities
Investment Management and Other Services
Brokerage Allocation and Other Practices
Purchase and Redemption of Securities Being Offered
Determination of Net Asset Value
Taxes
Organization of The Trust
Performance Information About the Growth Fund
Independent Auditors
Legal Matters
Financial Statements
Appendix
<PAGE>
GENERAL INFORMATION AND HISTORY
The Trust is a Delaware business trust registered with the SEC as a no-load,
open-end diversified management investment company, commonly known as a "mutual
fund." The Trust is organized as a series company and currently consists of one
series, the Growth Fund. In the future, the Trust may establish additional
series.
The Growth Fund is a separate investment portfolio with a distinct investment
objective, investment programs, policies, and restrictions. The Fund is managed
by Holland Capital Management (the "Investment Manager"), which directs the day-
to-day operations of the Fund. Shares of the Fund will be initially offered
principally to the Investment Manager. The Investment Manager also provides
administrative services to the Trust. HCM Investments, Inc. (the
"Distributor"), an affiliate of the Investment Manager, serves as distributor
for the shares of the Fund.
INVESTMENT RESTRICTIONS
The following fundamental investment restrictions apply to the Growth Fund and
may be changed only by approval of the Fund's shareholders. Except with respect
to borrowing money, as described in (2) below, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in that
percentage amount resulting from any change in value of the portfolio securities
or the Fund's net assets will not result in a violation of such investment
restriction.
The Growth Fund will not:
(1) MARGIN AND SHORT SALES: Purchase securities on margin or sell securities
short, except that the Growth Fund may make margin deposits in connection with
permissible options and futures transactions subject to (5) and (8) below, may
make short sales against the box and may obtain short-term credits as may be
necessary for clearance of transactions.
(2) SENIOR SECURITIES AND BORROWING: Issue any class of securities senior to
any other class of securities, although the Growth Fund may borrow from a bank
for temporary, extraordinary or emergency purposes or through the use of reverse
repurchase agreements. The Fund may borrow up to 15% of the value of its total
assets in order to meet redemption requests. No securities will be purchased
when borrowed money exceeds one-third of the value of the Fund's total assets.
The Fund may enter into futures contracts subject to (5) below;
(3) REAL ESTATE: Purchase or sell real estate, or invest in real estate
limited partnerships, except the Growth Fund may, as appropriate and consistent
with its investment objective, investment program, policies and other investment
restrictions, buy
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securities of issuers that engage in real estate operations and securities that
are secured by interests in real estate (including shares of real estate
mortgage investment conduits, mortgage pass-through securities, mortgage-backed
securities and collateralized mortgage obligations) and may hold and sell real
estate acquired as a result of ownership of such securities;
(4) CONTROL OF PORTFOLIO COMPANIES: Invest in portfolio companies for the
purpose of acquiring or exercising control of such companies;
(5) COMMODITIES: Purchase or sell commodities and invest in commodities
futures contracts, except that the Growth Fund may enter into futures contracts
and options thereon where, as a result thereof, no more than 5% of the total
assets for the Fund (taken at market value at the time of entering into the
futures contracts) would be committed to margin deposits on such futures
contracts and premiums paid for unexpired options on such futures contracts;
provided that, in the case of an option that is "in-the-money" at the time of
purchase, the "in-the-money" amount, as defined under Commodity Futures Trading
Commission regulations, may be excluded in computing such 5% limit.
(6) INVESTMENT COMPANIES: Invest in the securities of other open-end
investment companies, except that the Growth Fund may purchase securities of
other open-end investment companies provided that such investment is in
connection with a merger, consolidation, reorganization, or acquisition or by
purchase in the open market of such securities where no sponsor or dealer
commission or profit, other than a customary brokerage commission, is involved
and only if immediately thereafter the Fund (i) owns no more than 3% of the
total outstanding voting securities of any one investment company and (ii)
invests no more than 10% of its total assets (taken at market value) in the
securities of any one investment company or all other investment companies in
the aggregate;
(7) UNDERWRITING: Underwrite securities issued by other persons, except to the
extent that the Growth Fund may be deemed to be an underwriter, within the
meaning of the 1933 Act, in connection with the purchase of securities directly
from an issuer in accordance with the Fund's investment objective, investment
program, policies, and restrictions;
(8) OPTIONS AND SPREADS: Invest in puts, calls, straddles, spreads or any
combination thereof, except that the Growth Fund may invest in and commit its
assets to writing and purchasing put and call options to the extent permitted by
the Prospectus and this Statement of Additional Information. In order to comply
with the securities laws of several states, the Fund (as a matter of operating
policy) will not write a covered call option if, as a result, the aggregate
market value of all portfolio securities covering call options or subject to put
options for the Fund
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exceeds 25% of the market value of the Fund's net assets. The Fund intends to
invest in options primarily to hedge against sudden fluctuations in the
financial markets.
(9) OIL AND GAS PROGRAMS: Invest in interests in oil, gas, or other mineral
exploration or development programs or oil, gas and mineral leases, although
investments may be made in the securities of issuers engaged in any such
businesses;
(10) OWNERSHIP OF PORTFOLIO SECURITIES BY OFFICERS AND TRUSTEES: Purchase
or retain the securities of any issuer if the officers and Trustees or the
Investment Manager who individually own more than 1/2 of 1% of the securities of
such issuer collectively own more than 5% of the securities of such issuer;
(11) LOANS: Make loans, except that the Growth Fund in accordance with its
investment objective, investment program, policies, and restrictions may: (i)
invest in a portion of an issue of publicly issued or privately placed bonds,
debentures, notes, and other debt securities for investment purposes; (ii)
purchase money market securities and enter into repurchase agreements, provided
such repurchase agreements are fully collateralized and marked to market daily;
and (iii) lend its portfolio securities in an amount not exceeding one-third the
value of the Fund's total assets.
(12) UNSEASONED ISSUERS: Invest more than 5% of its total assets in
securities of issuers, including their predecessors and unconditional
guarantors, which, at the time of purchase, have been in operation for less than
three years, other than obligations issued or guaranteed by the U.S. Government,
its agencies, and instrumentalities;
(13) RESTRICTED SECURITIES, ILLIQUID SECURITIES AND SECURITIES NOT READILY
MARKETABLE: Knowingly purchase or otherwise acquire any security or invest in
a repurchase agreement if, as a result, more than 15% of the net assets of the
Growth Fund would be invested in securities that are illiquid or not readily
marketable, including repurchase agreements maturing in more than seven days and
non-negotiable fixed time deposits with maturities over seven days. The Fund
may invest without limitation in restricted securities provided such securities
are considered to be liquid. As a matter of operating policy, in compliance
with certain state regulations, no more than 15% of any Fund's total assets will
be invested in restricted securities;
(14) MORTGAGING: Mortgage, pledge, or hypothecate in any other manner, or
transfer as security for indebtedness any security owned by the Growth Fund,
except as may be necessary in connection with (i) permissible borrowings (in
which event such mortgaging, pledging, and hypothecating may not exceed 15% of
the Fund's total
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assets in order to secure such borrowings) and (ii) the use of options and
futures contracts.
(15) DIVERSIFICATION: Make an investment unless 75% of the value of the
Growth Fund's total assets is represented by cash, cash items, U.S. Government
securities, securities of other investment companies and other securities. For
purposes of this restriction, the purchase of "other securities" is limited so
that no more than 5% of the value of the Fund's total assets would be invested
in any one issuer. As a matter of operating policy, the Fund will not consider
repurchase agreements to be subject to the above-stated 5% limitation if all the
collateral underlying the repurchase agreements are U.S. Government securities
and such repurchase agreements are fully collateralized.
(16) CONCENTRATION: Invest 25% or more of the value of its total assets in
any one industry, except that the Growth Fund may invest 25% or more of the
value of its total assets in cash or cash items, securities issued or guaranteed
by the U.S. Government, its agencies or instrumentalities or instruments secured
by these money market instruments, such as repurchase agreements.
DESCRIPTION OF CERTAIN INVESTMENTS
The following is a description of certain types of investments which may be made
by the Growth Fund.
MONEY MARKET INSTRUMENTS
The Growth Fund may invest in high-quality money market instruments in order to
enable it to: (i) take advantage of buying opportunities; (ii) meet redemption
requests or ongoing expenses; or (iii) take defensive action as necessary, or
for other temporary purposes. The money market instruments that may be used by
the Fund include:
U.S. GOVERNMENT OBLIGATIONS: These consist of various types of marketable
securities issued by the U.S. Treasury, i.e., bills, notes and bonds. Such
securities are direct obligations of the U.S. Government and differ mainly in
the length of their maturity. Treasury bills, the most frequently issued
marketable Government security, have a maturity of up to one year and are issued
on a discount basis.
U.S. GOVERNMENT AGENCY SECURITIES: These consist of debt securities issued by
agencies and instrumentalities of the U.S. Government, including the various
types of instruments currently outstanding or which may be offered in the
future. Agencies include, among others, the Federal Housing Administration,
Government National Mortgage Association ("GNMA"), Farmer's Home Administration,
Export-Import Bank of the United States, Maritime Administration, and General
Services Administration.
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Instrumentalities include, for example, each of the Federal Home Loan Banks, the
National Bank for Cooperatives, the Federal Home Loan Mortgage Corporation
("FHLMC"), the Farm Credit Banks, the Federal National Mortgage Association
("FNMA"), and the U.S. Postal Service. These securities are either: (i) backed
by the full faith and credit of the U.S. Government (e.g., U.S. Treasury Bills);
(ii) guaranteed by the U.S. Treasury (e.g., GNMA mortgage-backed securities);
(iii) supported by the issuing agency's or instrumentality's right to borrow
from the U.S. Treasury (e.g., FNMA Discount Notes); or (iv) supported only by
the issuing agency's or instrumentality's own credit (e.g., each of the Federal
Home Loan Banks).
BANK AND SAVINGS AND LOAN OBLIGATIONS: These include, among others,
certificates of deposit, bankers' acceptances, and time deposits. Certificates
of deposit generally are short-term, interest-bearing negotiable certificates
issued by commercial banks or savings and loan associations against funds
deposited in the issuing institution. Bankers' acceptances are time drafts
drawn on a commercial bank by a borrower, usually in connection with an
international commercial transaction (e.g., to finance the import, export,
transfer, or storage of goods). With bankers' acceptances, the borrower is
liable for payment as is the bank, which unconditionally guarantees to pay the
draft at its face amount on the maturity date. Most bankers' acceptances have
maturities of six months or less and are traded in secondary markets prior to
maturity. Time deposits are generally short-term, interest-bearing negotiable
obligations issued by commercial banks against funds deposited in the issuing
institutions. In the case of domestic banks, the Growth Fund will not invest in
any security issued by a commercial bank or a savings and loan association
unless the bank or savings and loan association is a member of the Federal
Deposit Insurance Corporation ("FDIC"), or in the case of savings and loan
associations, insured by the FDIC; provided, however, that such limitation will
not prohibit investments in foreign branches of domestic banks which meet the
foregoing requirements. The Fund will not invest in time-deposits maturing in
more than seven days.
COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE DEBT INSTRUMENTS: These include
commercial paper (i.e., short-term, unsecured promissory notes issued by
corporations to finance short-term credit needs). Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Also included are non-convertible corporate debt
securities (e.g., bonds and debentures). Corporate debt securities with a
remaining maturity of less than 13 months are liquid (and tend to become more
liquid as their maturities lessen) and are traded as money market securities.
The Growth Fund may purchase corporate debt securities having no more than 13
months remaining to maturity at the date of settlement.
B-6
<PAGE>
REPURCHASE AGREEMENTS: The Growth Fund may invest in repurchase agreements. A
repurchase agreement is an instrument under which the investor (such as the
Fund) acquires ownership of a security (known as the "underlying security") and
the seller (i.e., a bank or primary dealer) agrees, at the time of the sale, to
repurchase the underlying security at a mutually agreed upon time and price,
thereby determining the yield during the term of the agreement. This results in
a fixed rate of return insulated from market fluctuations during such period,
unless the seller defaults on its repurchase obligations. The underlying
securities will consist of high-quality debt securities and must be determined
to present minimal credit risks. Repurchase agreements are, in effect,
collateralized by such underlying securities, and, during the term of a
repurchase agreement, the seller will be required to mark to market such
securities every business day and to provide such additional collateral as is
necessary to maintain the value of all collateral at a level at least equal to
the repurchase price. Repurchase agreements usually are for short periods,
often under one week, and will not be entered into by the Fund for a duration of
more than seven days if, as a result, more than 15% of the net asset value of
the Fund would be invested in such agreements or other securities which are not
readily marketable.
The Growth Fund will assure that the amount of collateral with respect to any
repurchase agreement is adequate. As with a true extension of credit, however,
these is risk of delay in recovery or the possibility of inadequacy of the
collateral should the seller of the repurchase agreement fail financially. In
addition, the Fund could incur costs in connection with the disposition of the
collateral if the seller were to default. The Fund will enter into repurchase
agreements only with sellers deemed to be creditworthy by the Board and only
when the economic benefit to the Fund is believed to justify the attendant
risks. The Fund has adopted standards for the sellers with whom they will enter
into repurchase agreements. The Board believes these standards are designed to
reasonably assure that such sellers present no serious risk of becoming involved
in bankruptcy proceedings within the time frame contemplated by the repurchase
agreement. The Fund may enter into repurchase agreements only with member banks
of the Federal Reserve System or primary dealers in U.S. Government securities.
SECURITIES OF FOREIGN ISSUERS: As described in the Prospectus, the Growth Fund
also may purchase equity and equity-related securities of foreign issuers. Also
as described in the Prospectus, the Fund may purchase American Depositary
Receipts ("ADRs"). ADRs are U.S. dollar-denominated certificates issued by a
U.S. bank or trust company and represent the right to receive securities of a
foreign issuer deposited in a domestic bank or foreign branch of a U.S. bank and
traded on a U.S. exchange or in an over-the-counter market. Generally, ADRs are
in registered form. There are no fees imposed on the purchase or sale of ADRs
when purchased from the issuing bank or trust company in the initial
underwriting, although
B-7
<PAGE>
the issuing bank or trust company may impose charges for the collection of
dividends and the conversion of ADRs into the underlying securities. Investments
in ADRs have certain advantages over direct investment in the underlying foreign
securities since: (i) ADRs are U.S. dollar-denominated investments that are
registered domestically, easily transferable and for which market quotations are
readily available; and (ii) issuers whose securities are represented by ADRs are
subject to the same auditing, accounting, and financial reporting standards as
domestic issuers.
Investments in foreign securities involve certain risks that are not typically
associated with investing in domestic issuers, including: (i) less publicly
available information about the securities and about the foreign company or
government issuing them; (ii) less comprehensive accounting, auditing, and
financial reporting standards, practices, and requirements; (iii) stock markets
outside the U.S. may be less developed or efficient than those in the U.S. and
government supervision and regulation of those stock markets and brokers and the
issuers in those markets is less comprehensive than that in the U.S.; (iv) the
securities of some foreign issuers may be less liquid and more volatile than
securities of comparable domestic issuers; (v) settlement of transactions with
respect to foreign securities may sometimes be delayed beyond periods customary
in the U.S.; (vi) fixed brokerage commissions on certain foreign stock exchanges
and custodial costs with respect to securities of foreign issuers generally
exceed domestic costs; (vii) with respect to some countries, there is the
possibility of unfavorable changes in investment or exchange control
regulations, expropriation, or confiscatory taxation, taxation at the source of
the income payment or dividend distribution, limitations on the removal of funds
or other assets of the Fund, political or social instability, or diplomatic
developments that could adversely affect U.S. investments in those countries;
and (viii) foreign securities denominated in foreign currencies may be affected
favorably or unfavorably by changes in currency exchange rates and exchange
control regulations and the Fund may incur costs in connection with conversions
between various currencies. Specifically, to facilitate its purchase of
securities denominated in foreign currencies, the Fund may engage in currency
exchange transactions to convert currencies to or from U.S. dollars. The Fund
does not intend to hedge its foreign currency risks and will engage in currency
exchange transactions on a spot (i.e., cash) basis only at the spot rate
prevailing in the foreign exchange market.
EQUITY SECURITIES. As stated in the Prospectus, the Growth Fund invests
primarily in the common stocks of a diversified group of companies that have (i)
demonstrated historical growth of earnings faster than the general market, (ii)
earnings growth stability, (iii) a return on equity higher than the general
market, and (iv) dividend growth of the portfolio is typically greater than that
of the market, while dividend yield is typically less.
B-8
<PAGE>
MANAGEMENT OF THE TRUST
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust, together with information as to their
principal business occupations during the last five years, are shown below. Any
Trustee who is considered an "interested person" of the Trust (as defined in
Section 2(a)(19) of the 1940 Act) is indicated by an asterisk next to his or her
name. The address for all interested persons, unless otherwise indicated, is
Suite 3260, 35 West Wacker Drive, Chicago, Illinois 60601:
<TABLE>
<CAPTION>
POSITION WITH THE TRUST AND
PRINCIPAL OCCUPATION WITH THE
NAME AGE PAST FIVE YEARS
<S> <C> <C>
*Louis A. Holland 54 President, Trustee and Chairman of the Board of
Trustees. Managing Partner and Chief Investment
Officer of Holland Capital Management, L.P.
President, Treasurer and Director, HCM
Investments, Inc.
*Monica L. Walker 37 SECRETARY AND TRUSTEE. Portfolio Manager, Holland
Capital Management, L.P.; Vice President, HCM
Investments, Inc.
*Laura J. Janus 48 TREASURER. Portfolio Manager, Holland Capital
Management, L.P.; Vice President, HCM Investments,
Inc.
Lester H. McKeever, Jr. 61 TRUSTEE. Managing Partner, Washington, Pittman &
McKeever, Certified Public Accountants &
Management Consultants.
Elzie L. Higginbottom 54 TRUSTEE. Chairman and Chief Executive Officer,
East Lake Management and Development Corporation.
Kenneth R. Meyer 51 TRUSTEE. Executive Vice President and Managing
Director, Lincoln Capital Management Co.
</TABLE>
B-9
<PAGE>
Of the persons listed in the table above, the following describes any position
held with any affiliated persons or principal underwriters of registrant: Louis
A. Holland is Managing Partner and Chief Investment Officer of the Investment
Manager and President, Treasurer and Director of the Distributor; Monica L.
Walker and Laura J. Janus each is a Vice President of the Distributor and a
partner of, and member of the Investment Policy Committee of, the Investment
Manager.
The following table describes the compensation provided by the Trust:
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------- (1) (2)
(3) (4) (5)
NAME OF PERSON, POSITION AGGREGATE COMPENSATION PENSION OR RETIREMENT ESTIMATED BENEFITS TOTAL COMPENSATION
FROM THE TRUST(*) BENEFITS ACCRUED AS PART UPON RETIREMENT FROM THE TRUST PAID
OF TRUST EXPENSES TO TRUSTEES
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lester H. McKeever,
Trustee and Member of $2,100/year 0 0 $2,100/year
Audit Committee
- - --------------------------------------------------------------------------------------------------------------------------------
Elzie L. Higginbottom,
Trustee and Member of $2,100/year 0 0 $2,100/year
Audit Committee
- - --------------------------------------------------------------------------------------------------------------------------------
Kenneth R. Meyer,
Trustee and Member of $2,100/year 0 0 $2,100/year
Audit Committee
- - --------------------------------------------------------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(*)Estimated future payments
COMMITTEES OF THE BOARD OF TRUSTEES
The Board has an Audit Committee and an Executive Committee. The duties of
these two committees and their present membership are as follows:
AUDIT COMMITTEE: The members of the Audit Committee will consult with the
Trust's independent public accountants if the accountants deem it desirable, and
will meet with the Trust's independent public accountants at least once annually
to discuss the scope and results of the annual audit of the Growth Fund and such
other
B-10
<PAGE>
matters as the Audit Committee members may deem appropriate or desirable.
Lester H. McKeever, Jr., Elzie L. Higginbottom and Kenneth R. Meyer are the
members of the Audit Committee.
EXECUTIVE COMMITTEE: During intervals between meetings of the Board, the
Executive Committee possesses and may exercise all of the powers of the Board in
the management of the Trust except as to matters where action of the full Board
is specifically required. Included within the scope of such powers are matters
relating to valuation of securities held in the Growth Fund's portfolio and the
pricing of the Fund's shares for purchase and redemption. Louis A. Holland and
Monica L. Walker are the members of the Executive Committee.
PRINCIPAL HOLDERS OF SECURITIES
The Investment Manager held all of the outstanding voting securities of the
Trust as of the date of this Statement of Additional Information. The address
of the Investment Manager is Suite 3260, 35 West Wacker Drive, Chicago, Illinois
60601. Trustees and officers of the Trust, as a group, owned less than 1% of
the Growth Fund's outstanding voting securities as of the date of this Statement
of Additional Information.
INVESTMENT MANAGEMENT AND OTHER SERVICES
THE INVESTMENT MANAGER
Holland Capital Management, Suite 3260, 35 West Wacker Drive, Chicago, Illinois
60601, serves as Investment Manager of the Trust pursuant to an Investment
Management and Administration Agreement that has been approved by the Board,
including a majority of independent Trustees.
The controlling persons of the Investment Manager are: Holland Capital
Management, Inc., the General Partner of the Investment Manager; Louis A.
Holland, Managing Partner and Chief Investment Officer of the Investment
Manager; and Catherine E. Lavery, Chief Accounting Officer, Secretary and
Director of Holland Capital Management, Inc.
Investment management fees are paid to the Investment Manager monthly at the
following annualized rates based on a percentage of the average daily net asset
value of the Growth Fund: .85% of average daily net assets up to $500 million,
.75% of average daily net assets up to the next $500 million, and .65% of
average daily net assets in excess of $1 billion.
In addition to the duties set forth in the Prospectus, The Investment Manager,
in furtherance of such duties and responsibilities, is authorized in its
discretion to engage in the following activities: (i) buy, sell, exchange,
convert, lend, or
B-11
<PAGE>
otherwise trade in portfolio securities and other assets; (ii) place orders and
negotiate the commissions (if any) for the execution of transactions in
securities with or through broker-dealers, underwriters, or issuers; (iii)
prepare and supervise the preparation of shareholder reports and other
shareholder communications; and (iv) obtain and evaluate business and financial
information in connection with the exercise of its duties.
The Investment Manager will also furnish to or place at the disposal of the
Trust such information and reports as requested by or as the Investment Manager
believes would be helpful to the Trust. The Investment Manager has agreed to
permit individuals who are among its officers or employees to serve as Trustees,
officers, and members of any committee or advisory board of the Trust without
cost to the Trust. The Investment Manager has agreed to pay all salaries,
expenses, and fees of any Trustees or officers of the Trust who are affiliated
with the Investment Manager.
In its administration of the Trust, the Investment Manager is responsible for:
(i) maintaining the Trust's books and records; (ii) overseeing the Trust's
insurance relationships; (iii) preparing or assisting in the preparation of all
required tax returns, proxy statements and reports to the Trust's shareholders
and Trustees and reports to and filings with the SEC and any other governmental
agency; (iv) preparing such applications and reports as may be necessary to
register or maintain the registration of the Trust's shares under applicable
state securities laws; (v) responding to all inquiries or other communications
of shareholders which are directed to the Investment Manager; and (vi)
overseeing all relationships between the Trust and its agents.
In addition to the administrative services provided by the Investment Manager,
Firstar Trust Company, pursuant to agreements between it and the Trust, performs
certain accounting, administrative, recordkeeping, tax related and other
reporting services for the Trust.
THE DISTRIBUTOR AND DISTRIBUTION SERVICES
The Distributor serves as the distributor of the shares of the Growth Fund
pursuant to a Distribution Agreement between the Distributor and the Trust. The
Fund's shares are sold on a no-load basis and, therefore, the Distributor
receives no sales commission or sales load for providing such services. The
Trust has not currently entered into any plan or agreement for the payment of
fees pursuant to Rule 12b-1 under the 1940 Act, but reserves the right to do so
with respect to any future classes of shares of any series.
CUSTODIAN. Firstar Trust Company serves as custodian of the assets of the
Trust. Pursuant to separate agreements with the Trust, Firstar also provides
certain
B-12
<PAGE>
administrative, accounting and transfer agent services.
BROKERAGE ALLOCATION AND OTHER PRACTICES
Subject to the general supervision of the Board, the Investment Manager is
responsible for making decisions with respect to the purchase and sale of
portfolio securities on behalf of the Trust, including the selection of broker-
dealers to effect portfolio transactions, the negotiation of commissions, and
the allocation of principal business and portfolio brokerage.
The purchase of any money market instruments and any other debt securities
traded in the over-the-counter market usually will be on a principal basis
directly from issuers or dealers serving as primary market makers. The price of
such money market instruments and debt securities is usually negotiated, on a
net basis, and no brokerage commissions are paid. Although no stated
commissions are paid for securities traded in the over-the-counter market,
transactions in such securities with dealers usually include the dealer's "mark-
up" or "mark-down." Money market instruments and other debt securities may also
be purchased in underwritten offerings, which include a fixed amount of
compensation to the underwriter, generally referred to as the underwriting
discount or concession.
In selecting brokers and dealers to execute transactions for the Growth Fund,
the primary consideration is to seek to obtain the best execution of the
transactions, at the most favorable overall price, and in the most effective
manner possible, considering all the circumstances. Such circumstances include:
the price of the security; the rate of the commission or broker-dealer's
"spread;" the size and difficulty of the order; the reliability, integrity,
financial condition, general execution and operational capabilities of competing
broker-dealers; and the value of research and other services provided by the
broker-dealer. The Investment Manager may also rank broker-dealers based on the
value of their research services and may use this ranking as one factor in its
selection of broker-dealers. Consistent with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. and subject to the policy of
seeking the best price and execution as stated above, sales of shares of the
Fund by a broker-dealer may be considered by the Investment Manager in the
selection of broker-dealers to execute portfolio transactions for the Fund.
Under no circumstances will the Trust deal with the Investment Manager or its
affiliates in any transaction in which the Investment Manager or its affiliates
act as a principal.
In placing orders for the Trust, the Investment Manager, subject to seeking best
execution, is authorized to cause the Trust to pay broker-dealers that furnish
brokerage and research services (as
B-13
<PAGE>
such services are defined under Section 28(e) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) a higher commission than that which might be
charged by another broker-dealer that does not furnish such brokerage and
research services or who furnishes services of lesser value. However, such
higher commissions must be deemed by the Investment Manager as reasonable in
relation to the brokerage and research services provided by the broker-dealer,
viewed in terms of either that particular transaction or the overall decision-
making responsibilities of the Investment Manager with respect to the Trust or
other accounts, as to which it exercises investment discretion (as such term is
defined under Section 3(a)(35) of the 1934 Act).
The Investment Manager currently provides investment advice to other entities
and advisory accounts that have investment programs and an investment objective
similar to the Growth Fund. Accordingly, occasions may arise when the
Investment Manager may engage in simultaneous purchase and sale transactions of
securities that are consistent with the investment objective and programs of the
Fund, and other accounts. On those occasions, the Investment Manager will
allocate purchase and sale transactions in an equitable manner according to
written procedures approved by the Board. Specifically, such written procedures
provide that, in allocating purchase and sale transactions made on a combined
basis, the Investment Manager will seek to achieve the same average unit price
of securities for each entity and will seek to allocate, as nearly as
practicable, such transactions on a pro-rata basis substantially in proportion
to the amounts ordered to be purchased or sold by each entity. Such procedures
may, in certain instances, be either advantageous or disadvantageous to the
Fund.
It is expected that the Distributor, a registered broker-dealer, may act as
broker for the Growth Fund, in conformity with the securities laws and rules
thereunder. The Distributor is an affiliated person of the Investment Manager.
In order for the Distributor to effect any portfolio transactions for the Fund
on an exchange or board of trade, the commissions received by the Distributor
must be reasonable and fair compared to the commission paid to other brokers in
connection with comparable transactions involving similar securities or futures
being purchased or sold on an exchange of board of trade during a comparable
period of time. This standard would allow the Distributor to receive no more
than the remuneration which would be expected to be received by an unaffiliated
broker in a commensurate arm's-length transaction. The Board will approve
procedures for evaluating the reasonableness of commissions paid to the
Distributor and periodically will review these procedures. The Distributor will
not act as principal in effecting any portfolio transactions for the Fund.
B-14
<PAGE>
PURCHASE AND REDEMPTION OF SECURITIES BEING OFFERED
The shares of the Growth Fund are offered to the public for purchase directly
through the Distributor. The offering and redemption price of the shares of the
Fund is based upon the Fund's net asset value per share next determined after a
purchase order or redemption request has been received in good order by the
Fund. See "Determination of Net Asset Value" below. The Trust intends to pay
all redemptions of the shares of the Fund in cash. However, the Trust may make
full or partial payment of any redemption request by the payment to shareholders
of portfolio securities (i.e., by redemption-in-kind), at the value of such
securities used in determining the redemption price. The Trust, nevertheless,
pursuant to Rule 18f-1 under the 1940 Act, will file a notification of election
under which the Fund will be committed to pay in cash to any shareholder of
record of the Fund, all such shareholder's requests for redemption made during
any 90-day period, up to the lesser of $250,000 or 1% of the Fund's net asset
value at the beginning of such period. The securities to be paid in-kind to any
shareholders will be readily marketable securities selected in such manner as
the Board deems fair and equitable. If shareholders were to receive
redemptions-in-kind, they would incur brokerage costs should they wish to
liquidate the portfolio securities received in such payment of their redemption
request. The Trust does not anticipate making redemptions-in-kind.
The right to redeem shares or to receive payment with respect to any redemption
of shares of the Growth Fund may only be suspended (i) for any period during
which trading on the New York Stock Exchange ("Exchange") is restricted or such
Exchange is closed, other than customary weekend and holiday closings, (ii) for
any period during which an emergency exists as a result of which disposal of
securities or determination of the net asset value of the Fund is not reasonably
practicable, or (iii) for such other periods as the SEC may by order permit for
protection of shareholders of the Fund.
DETERMINATION OF NET ASSET VALUE
The net asset value of shares of the Growth Fund is normally calculated as of
the close of trading on the Exchange on every day the Exchange is open for
trading, except (i) on days where the degree of trading in the Fund's portfolio
securities would not materially affect the net asset value of the Fund's shares
and (ii) on days during which no shares of the Fund were tendered for redemption
and no purchase orders were received. The Exchange is open Monday through
Friday except on the following national holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
The assets of the Growth Fund are valued as follows:
B-15
<PAGE>
Equity assets are valued based on market quotations, or if market quotations are
not available, by a method that the Board believes accurately reflects fair
value.
All money market instruments held by the Growth Fund are valued on an amortized
cost basis. Amortized cost valuation involves initially valuing a security at
its cost, and thereafter, assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the security. While this method provides certainty in
valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Fund would receive if it
sold the security.
Short-term debt instruments with a remaining maturity of more than 60 days,
intermediate and long-term bonds, convertible bonds, and other debt securities
are generally valued at prices obtained from an independent pricing service.
Where such prices are not available, valuations will be obtained from brokers
who are market makers for such securities. However, in circumstances where the
Investment Manager deems it appropriate to do so, the mean of the bid and asked
prices for over-the-counter securities or the last available sale price for
exchange-traded debt securities may be used. Where no last sale price for
exchange traded debt securities is available, the mean of the bid and asked
prices may be used.
Other securities and assets for which market quotations are not readily
available or for which valuation cannot be provided, as described above, are
valued in good faith by the Board using its best judgment.
TAXES
The Trust intends to continue to qualify as a "regulated investment company"
("RIC") under Subchapter M of the Code, and as such must satisfy certain
requirements regarding the character of investments in the Trust, investment
diversification, and distribution.
In general, to qualify as a RIC, at least 90% of the gross income of the Trust
for the taxable year must be derived from dividends, interest, and gains from
the sale or other disposition of securities, and less than 30% of its gross
income for the taxable year can be attributable to gains (without deductions for
losses) from the sale or other disposition of securities held for less than
three months.
A RIC must distribute to its shareholders 90% of its ordinary income and net
short-term capital gains. Moreover, undistributed net income may be subject to
tax at the RIC level.
In addition, the Trust must declare and distribute dividends equal to at least
98% of its ordinary income (as of the twelve months
B-16
<PAGE>
ended December 31) and distributions of at least 98% of its capital gains net
income (as of the twelve months ended October 31), in order to avoid a federal
excise tax. The Trust intends to make the required distributions, but cannot
guarantee that it will do so. Dividends attributable to the Trust's ordinary
income are taxable as such to shareholders in the year in which they are
received.
A corporate shareholder may be entitled to take a deduction for income dividends
received by it that are attributable to dividends received from a domestic
corporation, provided that both the corporate shareholder retains its shares in
the Growth Fund for more than 45 days and the Trust retains its shares in the
issuer from whom it received the income dividends for more than 45 days. A
distribution of capital gains net income reflects the Trust's excess of net
long-term gains over its net short-term losses. The Trust must designate income
dividends and distributions of capital gains net income and must notify
shareholders of these designations within sixty days after the close of the
Trust's taxable year. A corporate shareholder of the Trust cannot use a
dividends-received deduction for distributions of capital gains net income.
If, in any taxable year, the Trust should not qualify as a RIC under the Code:
(i) the Trust would be taxed at normal corporate rates on the entire amount of
its taxable income without deduction for dividends or other distributions to its
shareholders, and (ii) the Trust's distributions to the extent made out of the
Trust's current or accumulated earnings and profits would be taxable to its
shareholders (other than shareholders in tax deferred accounts) as ordinary
dividends (regardless of whether they would otherwise have been considered
capital gains dividends), and may qualify for the deduction for dividends
received by corporations.
If the Trust purchases shares in certain foreign investment entities, called
"passive foreign investment companies" ("PFICs"), the Trust may be subject to
U.S. federal income tax on a portion of any "excess distribution" or gain from
the disposition of the shares even if the income is distributed as a taxable
dividend by the Trust to its shareholders. Additional charges in the nature of
interest may be imposed on either the Trust or its shareholders with respect to
deferred taxes arising from the distributions or gains. If the Trust were to
purchase shares in a PFIC and (if the PFIC made the necessary information
available) elected to treat the PFIC as a "qualified electing fund" under the
Code, in lieu of the foregoing requirements, the Trust might be required to
include in income each year a portion of the ordinary earnings and net capital
gains of the PFIC, even if not distributed to the Trust, and the amounts would
be subject to the 90% and calendar year distribution requirements described
above.
B-17
<PAGE>
ORGANIZATION OF THE TRUST
As a Delaware business trust entity, the Trust need not hold regular annual
shareholder meetings and, in the normal course, does not expect to hold such
meetings. The Trust, however, must hold shareholder meetings for such purposes
as, for example: (i) electing the initial Board; (ii) approving certain
agreements as required by the 1940 Act; (iii) changing the fundamental
investment objective, policies, and restrictions of the Growth Fund; and (iv)
filling vacancies on the Board in the event that less than a majority of the
Trustees were elected by shareholders. The Trust expects that there will be no
meetings of shareholders for the purpose of electing Trustees unless and until
such time as less than a majority of the Trustees holding office have been
elected by shareholders. At such time, the Trustees then in office will call a
shareholders meeting for the election of Trustees. In addition, holders of
record of not less than two-thirds of the outstanding shares of the Trust may
remove a Trustee from office by a vote cast in person or by proxy at a
shareholder meeting called for that purpose at the request of holders of 10% or
more of the outstanding shares of the Trust. The Trust has the obligation to
assist in such shareholder communications. Except as set forth above, Trustees
will continue in office and may appoint successor Trustees.
PERFORMANCE INFORMATION ABOUT THE GROWTH FUND
TOTAL RETURN CALCULATIONS
The Growth Fund may provide average annual total return information calculated
according to a formula prescribed by the SEC. According to that formula,
average annual total return figures represent the average annual compounded rate
of return for the stated period. Average annual total return quotations reflect
the percentage change between the beginning value of a static account in the
Fund and the ending value of that account measured by then current net asset
value of the Fund, and assuming that all dividends and capital gains
distributions during the stated period were reinvested in shares of the Fund
when paid. Total return is calculated by finding the average annual compounded
rates of return of a hypothetical investment that would equate the initial
amount invested to the ending redeemable value of such investment, according to
the following formula:
B-18
<PAGE>
1/n
T = (ERV/P) - 1
where T equals average annual total return; where ERV, the ending redeemable
value, is the value at the end of the applicable period of a hypothetical $1,000
payment made at the beginning of the applicable period; where P equals a
hypothetical initial payment of $1,000; and where n equals the number of years.
The Growth Fund, from time to time, also may advertise its cumulative total
return figures. Cumulative total return is the compound rate of return on a
hypothetical initial investment of $1,000 for a specified period. Cumulative
total return quotations reflect changes in the price of the Fund's shares and
assume that all dividends and capital gains distributions during the period were
reinvested in shares of the Fund. Cumulative total return is calculated by
finding the compound rates of a hypothetical investment over such period,
according to the following formula (cumulative total return is then expressed as
a percentage):
C = (ERV/P) - 1
Where:
C = Cumulative Total Return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value; ERV is the value, at the end of the
applicable period, of a hypothetical $1,000 investment made
at the beginning of the applicable period.
From time to time, in reports and promotional literature, the performance of the
Growth Fund may be compared to: (i) other mutual funds or groups of mutual
funds tracked by: (A) Lipper Analytical Services, a widely-used independent
research firm which ranks mutual funds by overall performance, investment
objectives, and asset size; (B) Forbes Magazine's Annual Mutual Fund Survey and
Mutual Fund Honor Roll; or (C) other financial or business publications, such as
Business Week, Money Magazine, and Barron's, which provide similar information;
(ii) the Consumer Price Index (measure for inflation), which may be used to
assess the real rate of return from an investment in the Fund; (iii) other
Government statistics such as GNP, and net import and export figures derived
from Governmental publications, e.g., The Survey of Current Business, which may
be used to illustrate investment attributes of the Fund or the general economic,
business, investment, or financial environment in which the Fund operates; (iv)
Alexander Steele's Mutual Fund Expert, a tracking service which ranks various
mutual funds according to their performance; and (v) Morningstar, Inc. which
ranks mutual funds on the basis of historical risk and total return.
Morningstar's rankings are calculated using the mutual fund's average annual
returns for a certain period and a
B-19
<PAGE>
risk factor that reflects the mutual fund's performance relative to three-month
Treasury bill monthly returns. Morningstar's rankings range from five star
(highest) to one star (lowest) and represent Morningstar's assessment of the
historical risk level and total return of a mutual fund as a weighted average
for 3, 5, and 10-year periods. In each category, Morningstar limits its five
star rankings to 10% of the mutual funds it follows and its four star rankings
to 22.5% of the mutual funds it follows. Rankings are not absolute or
necessarily predictive of future performance.
The Trust may also illustrate the investment returns of the Growth Fund or
returns in general by graphs and charts that compare, at various points in time,
the return from an investment in the Fund (or returns in general) on a tax-
deferred basis (assuming reinvestment of capital gains and dividends and
assuming one or more tax rates) with the same return on a taxable basis.
INDEPENDENT AUDITORS
The Trust's independent auditors are Deloitte & Touche LLP, 2 Prudential Plaza,
Chicago, Illinois 60601.
LEGAL MATTERS
Legal advice regarding certain matters relating to the federal securities law
applicable to the offer and sale of the shares described in the Prospectus has
been provided by Katten Muchin & Zavis, 1025 Thomas Jefferson Street, N.W.,
Washington, DC 20007, which serves as Special Counsel to the Trust.
B-20
<PAGE>
APPENDIX
DESCRIPTION OF RATINGS OF CERTAIN MONEY MARKET SECURITIES
Description of Moody's Investors Service, Inc.'s commercial paper ratings:
Prime-1 (or related institutions) have a superior capacity for repayment of
short-term promissory obligations. Prime-1 repayment capacity will normally be
evidenced by the following characteristics:
1. Leading market positions in well established industries.
High rates of return on funds employed.
2. Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
3. Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
4. Well established access to a range of financial market and assured sources
of alternate liquidity.
Prime-2 (or related supporting institutions) have a strong capacity for
repayment of short term promissory obligations. This will normally be evidenced
by many of the characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, will be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
Description of Standard & Poor's Corporation's commercial paper ratings:
A-1--This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+) sign
designation.
A-2--Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1.
Description of Fitch Investor's Service, Inc.'s commercial paper ratings:
Fitch-1--(Highest Grade) Commercial paper assigned this rating is regarded as
having the strongest degree of assurance for timely payment.
B-21
<PAGE>
Fitch-2--(Very Good Grade) Issues assigned this rating reflect an assurance of
timely payment only slightly less in degree than the strongest issues.
Description of Duff & Phelps Inc.'s commercial paper ratings:
Duff 1--High certainty of timely payment. Liquidity factors are excellent and
supported by strong fundamental protection factors. Risk factors are minor.
Duff 2--Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing internal funds needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.
B-22
<PAGE>
DESCRIPTION OF CERTAIN CORPORATE BOND RATINGS
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S BOND RATINGS
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are not likely to impair
the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities, fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S BOND RATINGS
AAA--Debt rated "AAA" has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA-Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest-rated issues only in small degree.
B-23
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholder of The Lou Holland Trust:
We have audited the accompanying statement of assets and liabilities of The
Lou Holland Trust (the "Trust") as of March 19, 1996. This financial statement
is the responsibility of the Trust's management. Our responsibility is to
express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of assets and liabilities is
free of material misstatement. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used
and significant estimates made by the Trust's management, as well as evaluating
the overall statement of assets and liabilities presentation. We believe that
our audit of the statement of assets and liabilities provides a reasonable basis
for our opinion.
In our opinion, such statement of assets and liabilities presents fairly,
in all material respects, the financial position of the Trust as of March 19,
1996 in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Chicago, Illinois
March 20, 1996
<PAGE>
THE LOU HOLLAND TRUST
STATEMENT OF ASSETS AND LIABILITIES
MARCH 19, 1996
ASSETS
Cash $100,000
Deferred organizational expenses (Note 1) 50,000
--------
Total assets $150,000
--------
LIABILITIES
Organizational expenses payable (Note 1) $50,000
SHAREHOLDER'S EQUITY
10,000 shares issued and outstanding, no par value 100,000
Total liabilities and shareholder's equity $150,000
--------
--------
NET ASSETS $100,000
--------
--------
NET ASSET VALUE PER SHARE $10.00
------
------
NOTE 1 - ORGANIZATION
The Lou Holland Trust (the "Trust"), established on December 20, 1995, is a
Delaware business trust registered with the Securities and Exchange Commission
as a no-load, open-end diversified management investment company, commonly
known as a "mutual fund". The Trust is organized as a series company and
currently consists of one series, the Growth Fund. Costs incurred by the
Trust in connection with its organization are deferred and amortized on a
straight-line basis over five years beginning at the commencement of
operations of the Trust. As of March 19, 1996, organization costs incurred
were estimated at $50,000. In the event that the current shareholder (or any
subsequent holder) redeems any of its original shares prior to the end of
the five-year period, the proceeds of the redemption payable in respect of
such shares shall be reduced by the pro rata share (based on the proportionate
share of the original shares redeemed to the total number of original shares
outstanding at the time of redemption) of the unamortized deferred organization
expenses as of the date of such redemption. In the event that the Trust is
liquidated prior to the end of the five-year period, the current shareholder
(or any subsequent holder) shall bear the unamortized deferred organization
expenses.
The Trust proposes to sell shares to the public pursuant to a Registration
Statement on Form N-1A, under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, as filed on February 13, 1996.
The Trust intends to use the proceeds to operate and carry on the business of
a management investment company through one or more series, investing
primarily in securities, and to carry on such other business as the Trustees
may from time to time determine pursuant to their authority.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The preparation of the financial statement in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liablities at the
date of the financial statement. Actual results could differ from those
estimates.
<PAGE>
PART C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Filed as part of the Prospectus: None.
Filed as part of the Statement of Additional Information:
Audited Financial Statements as of March 19, 1996:
Independent Auditors' Report
Statement of Assets and Liabilities as of March 19, 1996.
(b) Exhibits:
1(a). Certificate of Trust and Agreement and Declaration of
Trust of The Holland Trust.
1(b). Certificate of Amendment of the Certificate of Trust
and Revised Agreement and Declaration of Trust of The
Lou Holland Trust.
2(a). By-Laws of The Holland Trust.
2(b). Revised By-Laws of The Lou Holland Trust.
3. Not applicable.
4. Specimen Certificate of Share of the Growth Fund.
5. Form of Investment Management and Administration
Agreement by and between The Holland Trust and Holland
Capital Management.
6. Form of Distribution Agreement between the Holland
Trust and HCM Investments, Inc.
7. Not applicable.
8. Form of Custodian Agreement between The Lou Holland
Trust and Firstar Trust Company.
9(a). Form of Transfer Agent Agreement by and between The Lou
Holland Trust and Firstar Trust Company.
9(b). Form of Fund Administration Servicing Agreement by and
between The Lou Holland Trust and Firstar Trust
Company.
<PAGE>
9(c). Form of Fund Accounting Servicing Agreement between The
Lou Holland Trust and Firstar Trust Company.
9(d). Form of Expense Limitation Agreement by and between The
Lou Holland Trust and Holland Capital Management.
10. Opinion and Consent of Katten Muchin & Zavis regarding
the legality of the securities being registered.
11. Consent of Independent Auditors.
12. Not applicable.
13. Form of Share Subscription Agreement by and between
Holland Capital Management and The Holland Trust.
14. Not applicable.
15. Not applicable.
16. Not applicable.
17. Not required for initial capitalization.
18. None.
19. Specimen Price-Make-Up Sheet of the Growth Fund.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE TRUST.
Pursuant to a Share Subscription Agreement by and between the
Investment Manager and the Trust, on behalf of the Growth Fund, the
Investment Manager has agreed to provide the initial capitalization
for the Trust and will initially own 100% of the shares of beneficial
interest of the Fund.
Item 26. NUMBER OF HOLDERS OF SECURITIES, AS OF THE EFFECTIVE DATE OF THIS
REGISTRATION STATEMENT.
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
-------------- ------------------------
<S> <C>
Growth Fund 1
</TABLE>
C-2
<PAGE>
Item 27. INDEMNIFICATION
Reference is made to the Registrant's By-Laws (Article VI) filed
herein as Exhibit 2 to this Registration Statement. The Trust's By-
Laws provide that the Registrant will indemnify its Trustees and
officers, employees, and other agents to the extent permitted or
required by Delaware law. The By-Laws require that either a majority
of the Trustees who are neither "interested persons" of the Trust
(within the meaning of the 1940 Act) nor parties to the proceeding, or
independent legal counsel in a written opinion, shall have determined,
based upon a review of the readily available facts (as opposed to a
trial-type inquiry or full investigation), that there is reason to
believe that such agent will be found entitled to indemnification.
Indemnification may not be made if the Trustee or officer has incurred
liability by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of duties in the conduct of his or
her office ("Disabling Conduct"). The means of determining whether
indemnification shall be made are (i) a final decision by a court or
other body before whom the proceeding is brought that the Trustee or
officer was not liable by reason of Disabling Conduct, or (ii) in the
absence of such a decision, a reasonable determination, based on a
review of the facts, that the Trustee or officer was not liable by
reason of Disabling Conduct. Such latter determination may be made
either by (a) vote of a majority of Trustees who are neither
interested persons (as defined in the 1940 Act) nor parties to the
proceeding or (b) independent legal counsel in a written opinion. The
advancement of legal expenses may not occur unless the Trustee or
officer agrees to repay the advance (if it is determined that the
Trustee or officer is not entitled to the indemnification) and one of
three other conditions is satisfied: (i) the Trustee or officer
provides security for his of her agreement to repay; (ii) the
Registrant is insured against loss by reason of lawful advances; or
(iii) the Trustees who are not interested persons and are not parties
to the proceedings, or independent counsel in a written opinion,
determine that there is reason to believe that the Trustee or officer
will be found entitled to indemnification.
Insofar as indemnification for liability arising under the 1933 Act
may be permitted to Trustees, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in
C-3
<PAGE>
the 1933 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a Trustee,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT MANAGER.
Certain information pertaining to business and other connections of
the Investment Manager is hereby incorporated by reference to the
section of the Prospectus captioned "How the Trust is Managed" and to
the section of the Statement of Additional Information captioned
"Investment Management and Other Services." Set forth below is a list
of each director and officer of the Investment Manager indicating each
business, profession, vocation, or employment of a substantial nature
in which each such person has been, at any time during the past two
fiscal years, engaged for his or her own account or in the capacity of
director, officer, partner, or trustee. The principal business
address of each individual listed in the table below is Suite 3260, 35
West Wacker Drive, Chicago, Illinois 60601.
<TABLE>
<CAPTION>
POSITION WITH THE
NAME INVESTMENT MANAGER
<S> <C>
Louis A. Holland MANAGING PARTNER AND CHIEF INVESTMENT
OFFICER. President, Treasurer and
Director of Holland Capital Management,
Inc. (the General Partner of the
Investment Manager). President,
Treasurer and Director, HCM Investments,
Inc.
Monica L. Walker PARTNER AND PORTFOLIO MANAGER. Vice
President, HCM Investments, Inc.
</TABLE>
C-4
<PAGE>
<TABLE>
<S> <C>
Laura J. Janus PARTNER AND PORTFOLIO MANAGER. Vice
President, HCM Investments, Inc.
Maurice L. Haywood VICE PRESIDENT AND INVESTMENT ANALYST.
Vice President, HCM Investments, Inc.
Catherine E. Lavery VICE PRESIDENT. Vice President, HCM
Investments, Inc.; Chief Accounting
Officer, Secretary and Director, Holland
Capital Management, Inc.
</TABLE>
Item 29. PRINCIPAL UNDERWRITERS.
(a) There is no investment company other than the Trust for which the
principal underwriter of the Trust also acts as principal underwriter,
depositor or investment adviser.
(b) Set forth below is information concerning each director and
officer of the Distributor, as of the date of this filing.
<TABLE>
<CAPTION>
NAME POSITIONS AND OFFICES POSITIONS AND
WITH THE TRUST OFFICES WITH
UNDERWRITER
<S> <C> <C>
Louis A. Holland President,Trustee and President,
Chairman of the Board Treasurer, and
of Trustees Director
Catherine E. None Chief Accounting
Lavery Officer,
Vice President,
Secretary and
Director
Monica L. Walker Secretary and Trustee Vice President
Laura J. Janus Treasurer Vice President
</TABLE>
The principal business address of each person listed above is Suite 3260,
35 West Wacker Drive, Chicago, Illinois 60601.
C-5
<PAGE>
Item 30. LOCATION OF ACCOUNTS AND RECORDS.
The following entities prepare, maintain and preserve the records
required by Section 31(a) of the 1940 Act for the Registrant. These
services are provided to the Registrant through written agreements
between the parties to the effect that such services will be provided
to the Registrant for such periods prescribed by the rules and
regulations of the SEC under the 1940 Act and such records are the
property of the entity required to maintain and preserve such records
and will be surrendered promptly on request.
Firstar will serve as the Trust's custodian, transfer agent, dividend
paying agent, and provides certain administrative services pursuant to
written agreements between Firstar and the Trust. In these capacities,
Firstar provides pricing for the Growth Fund's portfolio securities,
keeps records regarding securities and other assets in custody and in
transfer, bank statements, canceled checks, financial books and
records, and keeps records of each shareholder's account and all
disbursements made to shareholders. The Investment Manager, pursuant
to its Investment Management and Administration Agreement with respect
to the Fund, maintains all records required pursuant to such
agreement, and Firstar, pursuant to it Fund Administration Servicing
Agreement with the Trust provides certain other recordkeeping
services. Further, the Distributor maintains all records required to
be kept pursuant to the Distribution Agreement with the Trust.
Item 31. MANAGEMENT SERVICES.
The Investment Manager, pursuant to its Investment Management and
Administration Agreement with the Trust, and Firstar, pursuant to its
Fund Administration Servicing Agreement, each will perform certain
administrative services for the Trust, as described more fully in the
Prospectus and Statement of Additional Information.
Item 32. UNDERTAKINGS.
Registrant undertakes to file a post-effective amendment, using
financial statements which need not by certified, within four to six
months after the effective date of its Registration Statement under
the 1933 Act or the commencement of operations of the Growth Fund.
Registrant undertakes to call a meeting of shareholders, if requested
to do so by holders of at least 10 percent
C-6
<PAGE>
of the Fund's outstanding shares, for the purpose of voting upon the
question of removal of a trustee or trustees and to assist in
communications with other shareholders as required by Section 16(c) of
the 1940 Act.
C-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized in
Chicago, Illinois on the 18th day of March, 1996.
THE LOU HOLLAND TRUST
By: /s/ Louis A. Holland
---------------------------
Louis A. Holland
Chairman of the
Board of Trustees
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- - --------- ----- -----
<S> <C> <C>
s/ Louis A. Holland President & Chairman of March 18, 1996
- - -------------------------- the Board of Trustees
s/ Monica L. Walker Secretary & Trustee March 18, 1996
- - --------------------------
s/ Laura J. Janus Treasurer March 18, 1996
- - --------------------------
s/ Lester H. McKeever, Jr. Trustee March 18, 1996
- - --------------------------
s/ Elzie L. Higginbottom Trustee March 18, 1996
- - --------------------------
s/ Kenneth R. Meyer Trustee March 18, 1996
- - --------------------------
</TABLE>
C-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION NUMBERED PAGE
- - ------ ------------ -------------
<S> <C> <C>
1(b). Certificate of Amendment of the
Certificate of Trust and Revised
Agreement and Declaration of Trust
of The Lou Holland Trust.
2(b). Revised By-Laws of The Lou Holland
Trust.
4. Specimen Certificate of Share of
the Growth Fund.
8. Form of Custodian Agreement between
The Lou Holland Trust and Firstar
Trust Company.
9(a). Form of Transfer Agent Agreement by
and between The Lou Holland Trust
and Firstar Trust Company.
9(b). Form of Fund Administration
Servicing Agreement by and between
The Lou Holland Trust and Firstar
Trust Company.
9(c). Form of Fund Accounting Servicing
Agreement between The Lou Holland
Trust and Firstar Trust Company.
9(d). Form of Expense Limitation
Agreement by and between The Lou
Holland Trust and Holland Capital
Management.
10. Opinion and Consent of Katten
Muchin & Zavis regarding the
legality of the securities being
registered.
11. Consent of Independent Auditors.
19. Specimen Price-Make-Up Sheet of the
Growth Fund.
</TABLE>
C-9
<PAGE>
EXHIBIT 1(b)
CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF
TRUST AND REVISED AGREEMENT AND DECLARATION OF TRUST
OF THE LOU HOLLAND TRUST
<PAGE>
CERTIFICATE OF AMENDMENT OF THE
CERTIFICATE OF TRUST OF
THE HOLLAND TRUST
TO BE KNOWN NOW AS THE LOU HOLLAND TRUST
This Certificate of Amendment of the Certificate of Trust of The Holland
Trust is being executed as of March 15, 1996 for the purpose of changing the
name of The Holland Trust, a business trust pursuant to the Delaware Business
Trust Act, 12 DEL. C. Secs. 3801 ET SEQ.
The undersigned hereby certifies as follows:
FIRST. That Section 1. of the Certificate of Trust is hereby amended by
striking out Section 1. and inserting the following in lieu thereof:
1. NAME. The name of the business trust is The Lou Holland
Trust (the "Trust").
SECOND. That Section 3. of the Certificate of Trust is hereby amended by
striking out the last sentence thereof and inserting the following in lieu
thereof:
The business address of the Trustees of the Trust is Suite 3260,
35 West Wacker Drive, Chicago, Illinois 60601.
THIRD. The foregoing was approved by unanimous adoption of a resolution of
the Board of Trustees of the Trust approving the filing of this Certificate of
Amendment.
FOURTH. This Certificate of Amendment shall become effective immediately
upon filing with the Office of the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being a Trustee of the Trust, has duly
executed this Certificate of Amendment as of the day and year first above
written.
/S/ Louis A. Holland
---------------------
Louis A. Holland
President, Trustee, and Chairman of the
Board of Trustees
<PAGE>
REVISED AGREEMENT AND DECLARATION OF TRUST
of
The Lou Holland Trust
a Delaware Business Trust
Principal Place of Business:
Suite 3260
35 West Wacker Drive
Chicago, Illinois 60601
<PAGE>
TABLE OF CONTENTS
REVISED AGREEMENT AND DECLARATION OF TRUST
Page
ARTICLE I Name and Definitions. . . . . . . . . . . . . . . . . . . . . 1
1. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(b) Certificate of Trust. . . . . . . . . . . . . . . . . . . . . 1
(c) Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(d) Commission . . . . . . . . . . . . . . . . . . . . . . . . . 2
(e) Declaration of Trust. . . . . . . . . . . . . . . . . . . . . 2
(f) Delaware Act. . . . . . . . . . . . . . . . . . . . . . . . . 2
(g) Interested Person . . . . . . . . . . . . . . . . . . . . . . 2
(h) Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(i) 1940 Act. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(j) Person . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(k) Principal Underwriter . . . . . . . . . . . . . . . . . . . . 2
(l) Series. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(m) Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . 2
(n) Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(o) Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(p) Trust Property. . . . . . . . . . . . . . . . . . . . . . . . 2
(q) Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II Purpose of Trust. . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1. Division of Beneficial Interest. . . . . . . . . . . . . . . . . . 3
2. Ownership of Shares. . . . . . . . . . . . . . . . . . . . . . . . 4
3. Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Investments in the Trust . . . . . . . . . . . . . . . . . . . . . 5
5. Status of Shares and Limitation of
Personal Liability . . . . . . . . . . . . . . . . . . . . . 5
<PAGE>
6. Establishment and Designation of Series. . . . . . . . . . . . . . 5
(a) Assets Held with Respect to a
Particular Series . . . . . . . . . . . . . . . . . . . . . . 5
(b) Liabilities Held with Respect to a
Particular Series . . . . . . . . . . . . . . . . . . . . . . 6
(c) Dividends, Distributions, Redemptions,
and Repurchases . . . . . . . . . . . . . . . . . . . . . . . 6
(d) Equality . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Fractions . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(f) Exchange Privilege. . . . . . . . . . . . . . . . . . . . . . 7
(g) Combination of Series . . . . . . . . . . . . . . . . . . . . 7
(h) Elimination of Series . . . . . . . . . . . . . . . . . . . . 7
7. Indemnification of Shareholders. . . . . . . . . . . . . . . . . . 7
ARTICLE IV Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1. Number, Election, and Tenure . . . . . . . . . . . . . . . . . . . 7
2. Effect of Death, Resignation, etc.
of a Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 8
3. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. Payment of Expenses by the Trust . . . . . . . . . . . . . . . . .11
5. Payment of Expenses by Shareholders. . . . . . . . . . . . . . . .12
6. Ownership of Assets of the Trust . . . . . . . . . . . . . . . . .12
7. Service Contracts. . . . . . . . . . . . . . . . . . . . . . . . .13
8. Trustees and Officers as Shareholders. . . . . . . . . . . . . . .14
ARTICLE V Shareholders' Voting Powers and Meetings. . . . . . . . . . .14
1. Voting Powers, Meetings, Notice and Record Dates . . . . . . . . .14
2. Quorum and Required Vote . . . . . . . . . . . . . . . . . . . . .14
3. Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . .15
4. Additional Provisions. . . . . . . . . . . . . . . . . . . . . . .15
ARTICLE VI Net Asset Value, Distributions and
Redemptions . . . . . . . . . . . . . . . . . . . . . . . . .15
1. Determination of Net Asset Value,
Net Income and Distributions. . . . . . . . . . . . . . . . .15
2. Redemptions and Repurchases. . . . . . . . . . . . . . . . . . . .15
<PAGE>
ARTICLE VII Compensation and Limitation of
Liability of Trustees . . . . . . . . . . . . . . . . . . . .17
1. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . .17
2. Indemnification and Limitation of Liability . . . . . . . . . . .17
3. Trustees' Good Faith Act, Expert Advice,
No Bond or Surety . . . . . . . . . . . . . . . . . . . . . .17
4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
ARTICLE VIII Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . .18
1. Liability of Third Persons Dealing with Trustees . . . . . . . . .18
2. Termination of Trust or Series . . . . . . . . . . . . . . . . . .18
3. Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . .19
4. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
5. Filing of Copies, References, Headings . . . . . . . . . . . . . .20
6. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . .20
7. Provisions in Conflict with Law or Regulations . . . . . . . . . .21
8. Business Trust Only . . . . . . . . . . . . . . . . . . . . . . .22
<PAGE>
REVISED AGREEMENT AND DECLARATION OF TRUST
OF
The Lou Holland Trust
THIS REVISED AGREEMENT AND DECLARATION OF TRUST is made and entered into as
of date set forth below by the Trustee named hereunder for the purpose of
forming a Delaware business trust in accordance with the provisions hereinafter
set forth.
NOW, THEREFORE, the Trustees hereby direct that the Certificate of
Amendment of the Certificate of Trust be filed with the Office of the Secretary
of State of the State of Delaware and does hereby declare that the Trustees will
hold IN TRUST all case, securities, and other assets which the Trust now
possesses or may hereafter acquire from time to time in any manner and manage
and dispose of the same upon the following terms and conditions for the benefit
of the holders of Shares of this Trust.
ARTICLE I
Name and Definitions
SECTION 1. NAME. This Trust shall be known as The Lou Holland Trust and
the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.
SECTION 2. DEFINITIONS. Whenever used herein, unless otherwise required
by the context or specifically provided:
(a) "By-Laws" shall mean the By-Laws of the Trust as amended from time to
time, which By-Laws are expressly herein incorporated by reference as part of
the "governing instrument" within the meaning of the Delaware Act;
(b) "Certificate of Trust" means the certificate of trust, as amended or
restated from time to time, filed by the Trustees in the Office of the Secretary
of State of the State of Delaware in accordance with the Delaware Act;
<PAGE>
(c) "Class" means a class of Shares of a Series of the Trust established
in accordance with the provisions of Article III hereof;
(d) "Commission" means the Securities and Exchange Commission;
(e) "Declaration of Trust" means this Agreement and Declaration of Trust,
as amended or restated from time to time;
(f) "Delaware Act" means the Delaware Business Trust Act 12 DEL. C.
Sections 3801 ET SEQ., as amended from time to time;
(g) "Interested Person" shall have the meaning given it in Section
2(a)(19) of the 1940 Act, as defined below;
(h) "Manager" means a party furnishing services to the Trust pursuant to
any contract described in Article IV, Section 7(a) hereof;
(i) "1940 Act" means the Investment Company Act of 1940 and the rules and
regulations thereunder, all as amended from time to time;
(j) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures, estates, and other entities, whether or
not legal entities, and governments and agencies and political subdivisions
thereof, whether domestic or foreign;
(k) "Principal Underwriter" shall have the meaning given such term in the
1940 Act;
(l) "Series" means each Series of Shares established and designated under
or in accordance with the provisions of Article III hereof;
(m) "Shareholder" means a record owner of outstanding Shares;
(n) "Shares" means the shares of beneficial interest into which the
beneficial interest in the Trust shall be divided from time to time and includes
fractions of Shares as well as whole Shares;
(o) "Trust" means the Delaware Business Trust established under the
Delaware Act by this Declaration of Trust and the filing of the Certificate of
Trust in the Office of the Secretary of State of the State of Delaware;
(p) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is from time to time owned or held by or for the
account of the Trust; and
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(q) "Trustees" means the persons who have signed this Revised Declaration
of Trust and all other Persons who may from time to time be duly elected or
appointed to serve as Trustees in accordance with the provisions hereof, in each
case so long as such Person shall continue in office in accordance with the
terms of this Declaration of Trust, and reference herein to a Trustee or the
Trustees shall refer to such Person or Persons in his or her or their capacity
as Trustees hereunder.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the business
of a management investment company registered under the 1940 Act through one or
more Series investing primarily in securities, and to carry on such other
business as the Trustees may from time to time determine pursuant to their
authority under this Declaration of Trust.
ARTICLE III
Shares
SECTION 1. DIVISION OF BENEFICIAL INTEREST. The beneficial interest in
the Trust shall be divided into one or more Series. Each Series may be divided
into two or more Classes. Subject to the further provisions of this Article III
and any applicable requirements of the 1940 Act, the Trustees shall have full
power and authority, in their sole discretion, and without obtaining any
authorization or vote of the Shareholders of any Series or Class thereof, to (i)
divide the beneficial interest in each Series of Class thereof into Shares, with
or without par value as the Trustees shall determine, (ii) issue Shares without
limitation as to number (including fractional Shares) to such Persons and for
such amount and type of consideration, subject to any restriction set forth in
the By-Laws, including cash or securities, at such time or times and on such
terms as the Trustees may deem appropriate, (iii) establish and designate and to
change in any manner any Series or Class thereof and to fix such preferences,
voting powers, rights, duties and privileges and business purpose of each Series
or Class thereof as the Trustees may from time to time determine, which
preferences, voting powers, rights, duties and privileges may be senior or
subordinate to (or in the case of business purpose, different from) any existing
Series or Class thereof and may be limited to specified property or obligations
of the Trust or profits and losses associated with specified property or
obligations of the Trust, (iv) divide or combine the Shares of any Series or
Class thereof into a greater or lesser number without thereby materially
changing the proportionate beneficial interest of the Shares of such Series or
Class in the assets held with respect to that Series, (v) classify or reclassify
any issued Shares of any Series or Class thereof into shares of one or more
Series or Classes thereof and (vi) take such other action with respect to the
Shares as the Trustees may deem desirable.
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Subject to the distinctions permitted among Classes of the same Series as
established by the Trustees, consistent with the requirements of the 1940 Act,
each Share of a Series of the Trust shall represent an equal beneficial interest
in the net assets of such Series, and each holder of Shares of a Series shall be
entitled to receive such holder's pro rata share of distributions of income and
capital gains, if any, made with respect to such Series. Upon redemption of the
Shares of any Series, the applicable Shareholder shall be paid solely out of the
funds and property of such Series of the Trust.
All references to Shares in this Declaration of Trust shall be deemed to be
Shares of any or all Series or Classes thereof, as the context may require. All
provisions herein relating to the Trust shall apply equally to each Series of
the Trust and each Class thereof, except as the context otherwise requires.
All Shares issued hereunder, including, without limitation, Shares issued
in connection with a dividend in Shares or a split or reverse split of Shares,
shall be fully paid and non-assessable. Except as otherwise provided by the
Trustees, Shareholders shall have no preemptive or other right to subscribe to
any additional Shares or other securities issued by the Trust.
SECTION 2. OWNERSHIP OF SHARES. The Ownership of Shares shall be recorded
on the books of the Trust or those of a transfer or similar agent for the Trust,
which books shall be maintained separately for the Shares of each Series (or
Class) of the Trust. No certificates certifying the ownership of Shares shall
be issued except as the Trustees may otherwise determine from time to time. The
Trustees may make such rules as they consider appropriate for the issuance of
Share certificates, the transfer of Shares of each Series (or Class) of the
Trust and similar matters. The record books of the Trust as kept by the Trust
or any transfer or similar agent, as the case may be, shall be conclusive as to
the identity of the Shareholders of each Series (or Class) of the Trust and as
to the number of Shares of each Series (or Class) of the Trust held from time to
time by each Shareholder.
SECTION 3. TRANSFER OF SHARES. Except as otherwise provided by the
Trustees, Shares shall be transferable on the books of the Trust only by the
record holder thereof or by his duly authorized agent upon delivery to the
Trustees or the Trust's transfer agent of a duly executed instrument of
transfer, together with a Share certificate if one is outstanding, and such
evidence of the genuineness of each such execution and authorization and of such
other matters as may be required by the Trustees. Upon such delivery, and
subject to any further requirements specified by the Trustees or contained in
the By-Laws, the transfer shall be recorded on the books of the Trust. Until a
transfer is so recorded, the Shareholder of record of Shares shall be deemed to
be the holder of such Shares for all purposes hereunder and neither the Trustees
nor the Trust, nor any transfer agent or registrar or any officer, employee, or
agent of the Trust, shall be affected by any notice of a proposed transfer.
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SECTION 4. INVESTMENTS IN THE TRUST. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such
consideration as the Trustees from time to time may authorize.
SECTION 5. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. Shares
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof. The death,
incapacity, dissolution, termination, or bankruptcy of a Shareholder during the
existence of the Trust shall not operate to terminate the Trust, nor entitle the
representative of any such Shareholder to an accounting or to take any action
in court or elsewhere against the Trust or the Trustees, but entitles such
representative only to the rights of such Shareholder under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust Property or right to call for a participation or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders as partners. Neither the Trust nor the Trustees,
nor any officer, employee, or agent of the Trust shall have any power to bind
personally any Shareholders, nor, except as specifically provided herein, to
call upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
SECTION 6. ESTABLISHMENT AND DESIGNATION OF SERIES. The establishment and
designation of any Series (or Class) of Shares of the Trust shall be effective
upon the adoption by a majority of the then Trustees of a resolution that sets
forth such establishment and designation and the relative rights and preferences
of such Series (or Class) of the Trust, whether directly in such resolution or
by reference to another document including, without limitation, any registration
statement of Trust, or as otherwise provided in such resolution.
Shares of each Series (or Class) of the Trust established pursuant to this
Article III, unless otherwise provided in the resolution establishing such
Series, shall have the following relative rights and preferences:
(a) ASSETS HELD WITH RESPECT TO A PARTICULAR SERIES. All consideration
received by the Trust for the issue or sale of Shares of a particular Series,
together with all assets in which such consideration is invested or reinvested,
all income, earnings, profits, and proceeds thereof from whatever source
derived, including, without limitation, any proceeds derived from the sale,
exchange or liquidation of such assets and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably be held with respect to that Series for all purposes, subject only
to the rights of creditors of such Series, and shall be so recorded upon the
books of account of the Trust. Such consideration, assets, income, earnings,
profits and proceeds thereof, from whatever source derived, including, without
limitation, any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as "assets
held with respect to" that Series. In the event that
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<PAGE>
there are any assets, income, earnings, profits and proceeds thereof, funds or
payments which are not readily identifiable as assets held with respect to any
particular Series (collectively, "General Assets"), the Trustees shall allocate
such General Assets to, between or among any one or more of the Series in such
manner and on such basis as the Trustees, in their sole discretion, deem fair
and equitable, and any General Assets so allocated to a particular Series shall
be held with respect to that Series. Each such allocation by the Trustees shall
be conclusive and binding upon the Shareholders of all Series for all purposes.
Separate and distinct records shall be maintained for each Series and the assets
held with respect to each Series shall be held and accounted for separately from
the assets held with respect to all other Series and the General Assets of the
Trust not allocated to such Series.
(b) LIABILITIES HELD WITH RESPECT TO A PARTICULAR SERIES. The assets of
the Trust held with respect to each particular Series shall be charged against
the liabilities of the Trust held with respect to that Series and all expenses,
costs, charges, and reserves attributable to that Series. Any general
liabilities of the Trust which are not readily identifiable as being held with
respect to any particular Series shall be allocated and charged by the Trustees
to and among any one or more of the Series in such manner and on such basis as
the Trustees in their sole discretion deem fair and equitable. All liabilities,
expenses, costs, charges, and reserves so charged to a Series are herein
referred to as "liabilities held with respect to" that Series. Each allocation
of liabilities, expenses, costs, charges, and reserves by the Trustees shall be
conclusive and binding upon the holders of all Series for all purposes. All
liabilities held with respect to a particular Series shall be enforceable
against the assets held with respect to such Series only and not against the
assets of the Trust generally or against the assets held with respect to any
other Series. Notice of this contractual limitation on the liability of each
Series shall be set forth in the Certificate of Trust or in an amendment thereto
prior to the issuance of any Shares of a Series.
(c) DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS, AND REPURCHASES.
Notwithstanding any other provisions of this Declaration of Trust, including,
without limitation, Article VI, no dividend or distribution, including, without
limitation, any distribution paid upon termination of the Trust or of any Series
(or Class) with respect to, nor any redemption or repurchase of, the Shares of
any Series (or Class), shall be effected by the Trust other than from the assets
held with respect to such Series, nor shall any Shareholder or any particular
Series otherwise have any right or claim against the assets held with respect to
any other Series except to the extent that such Shareholder has such a right or
claim hereunder as a Shareholder of such other Series. The Trustees shall have
full discretion, to the extent not inconsistent with the 1940 Act, to determine
which items shall be treated as income and which items as capital, and each such
determination and allocation shall be conclusive and binding upon the
Shareholders.
(d) EQUALITY. All the Shares of each particular Series shall represent an
equal proportionate interest in the assets held with respect to that Series
(subject to the liabilities held with respect to that Series and such rights and
references as may have been established and
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designated with respect to Classes of Shares within such Series), and each Share
of any particular Series shall be equal to each other Share of that Series.
(e) FRACTIONS. Any fractional Share of a Series shall carry
proportionately all the rights and obligations of a whole Share of that Series,
including rights with respect to voting, receipt of dividends and distributions,
redemption of Shares and termination of the Trust.
(f) EXCHANGE PRIVILEGE. The Trustees shall have the authority to provide
that the holders of Shares of any Series shall have the right to exchange said
Shares for Shares of one or more other Series of Shares in accordance with such
requirements and procedures as may be established by the Trustees.
(g) COMBINATION OF SERIES. The Trustees shall have the authority, without
the approval of the Shareholders of any Series unless otherwise required by
applicable law, to combine the assets and liabilities held with respect to any
two or more Series into assets and liabilities held with respect to a single
Series.
(h) ELIMINATION OF SERIES. At any time that there are no Shares
outstanding of any particular Series (or Class) previously established and
designated, the Trustees may by resolution of a majority of the Trustees abolish
that Series (or Class) and rescind the establishment and designation thereof.
SECTION 7. INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder or former
Shareholder shall be exposed to liability by reason of a claim or demand
relating to such Person being or having been a Shareholder, and not because of
such Person's acts or omissions, the Shareholder or former Shareholder (or such
Person's heirs, executors, administrators, or other legal representatives, or,
in the case of a corporation or other entity, its corporate or other general
successor) shall be entitled to be held harmless from and indemnified out of the
assets of the Trust against all loss and expense arising from such claim or
demand, but only out of the assets held with respect to the particular Series of
Shares of which such Person is or was a Shareholder and from or in relation to
which such liability arose.
ARTICLE IV
Trustees
SECTION 1. NUMBER, ELECTION AND TENURE. The number of Trustees shall
initially be one. Hereafter, the number of Trustees shall at all times be at
least four and no more than fifteen as determined, from time to time, by the
Trustees pursuant to Section 3 of this Article IV. Each Trustee shall serve
during the lifetime of the Trust until he or she dies, resigns, is declared
bankrupt or incompetent by a court of appropriate jurisdiction, or is removed,
or, if sooner, until the next meeting of Shareholders called for the purpose of
electing Trustees and until the election
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and qualification of his or her successor. In the event that less than the
majority of the Trustees holding office have been elected by the Shareholders,
the Trustees then in office shall call a Shareholders' meeting for the election
of Trustees. Any Trustee may resign at any time by written instrument signed by
him or her and delivered to any office of the Trust or to a meeting of the
Trustees. Such resignation shall be effective upon receipt unless specified to
be effective at some other time. Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such removal. The
Shareholders may elect Trustees at any meeting of Shareholders called by the
Trustees for that purpose. Any Trustee may be removed at any meeting of
Shareholders by a vote of two-thirds or the outstanding Shares of the Trust.
SECTION 2. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The death,
declination to serve, resignation, retirement, removal or incapacity of one or
more Trustees, or all of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration of Trust.
Whenever there shall be fewer than the designated number of Trustees, until
additional Trustees are elected or appointed as provided herein to bring the
total number of Trustees equal to the designated number, the Trustees in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustees by this Declaration
of Trust. As conclusive evidence of such vacancy, a written instrument
certifying the existence of such vacancy may be executed by an officer of the
Trust or by a majority of the Trustees. In the event of the death, declination
to serve, resignation, retirement, removal, or incapacity of all the then
Trustees within a short period of time and without the opportunity for at least
one Trustee being able to appoint additional Trustees to replace those no longer
serving, the Trust's Manager(s) are empowered to appoint new Trustees subject to
the provisions of Section 16(a) of the 1940 Act.
SECTION 3. POWERS. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the Trustees, and the
Trustees shall have all powers necessary or convenient to carry out that
responsibility, including the power to engage in securities transactions of all
kinds on behalf of the Trust. Without limiting the foregoing, the Trustees may:
adopt By-Laws not inconsistent with this management of the affairs of the Trust
and may amend and repeal such By-Laws to the extent that such By-laws do not
reserve that right to the Shareholders; enlarge or reduce the number of
Trustees; remove any Trustee with or without cause at any time by written
instrument signed by a least two-thirds of the number of Trustees prior to such
removal, specifying the date when such removal shall become effective, and fill
vacancies caused by enlargement of their number or by the death, resignation or
removal of a Trustee; elect and remove, with or without cause, such officers and
appoint and terminate such agents as they consider appropriate; appoint from
their own number and establish and terminate one or more committees, consisting
of two or more Trustees, that may exercise the powers and authority of the Board
of Trustees to the extent that the Trustees determine; employ one or more
custodians of the assets of the Trust and may authorize such custodians to
employ subcustodians and to deposit all or any part of such assets in a system
or systems for the central handling of
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securities or with a Federal Reserve Bank, retain a transfer agent or a
shareholder servicing agent, or both; provide for the issuance and distribution
of Shares by the Trust directly or through one or more Principal Underwriters or
otherwise; redeem, repurchase and transfer Shares pursuant to applicable law;
set record dates for the determination of Shareholders with respect to various
matters; declare and pay dividends and distributions to Shareholders of each
Series from the assets of such Series; and in general delegate such authority as
they consider desirable to any officer of the Trust, to any committee of the
Trustees and to any agent or employee of the Trust or to any such custodian,
transfer or shareholder servicing agent, or Principal Underwriter. Any
determination as to what is in the interests of the Trust made by the Trustees
in good faith shall be conclusive. In construing the provisions of this
Declaration of Trust, the presumption shall be in favor of a grant of power to
the Trustees. Unless otherwise specified herein or in the By-Laws or required
by law, any action by the Trustees shall be deemed effective if approved or
taken by a majority of the Trustees present at a meeting of Trustees at which a
quorum of Trustees is present, within or without the State of Delaware.
Without limiting the foregoing, the Trustees shall have the power and
authority to cause the Trust to (or to act on behalf of the Trust to):
(a) Invest and reinvest cash, hold cash uninvested, and subscribe for,
invest in, reinvest in, purchase or otherwise acquire, own, hold, pledge, sell,
assign, transfer, exchange, distribute, write options on, lend or otherwise deal
in or dispose of contracts for the future acquisition or delivery of fixed
income or other securities, and securities of every nature and kind, including,
without limitation, all types of bonds, debentures, stocks, negotiable or non-
negotiable instruments, obligations, evidences of indebtedness, certificates of
deposit or indebtedness, commercial papers, repurchase agreements, bankers'
acceptances, and other securities of any kind, issued, created, guaranteed, or
sponsored by any and all Persons, including without limitation, states,
territories, and possessions of the United States and the District of Columbia
and any political subdivision, agency, or instrumentality thereof, and foreign
government or any political subdivision of the U.S. Government or any foreign
government, or any international instrumentality, or by any bank or savings
institution, or by any corporation or organization organized under the laws of
the United States or of any state, territory, or possession thereof, or by any
corporation or organization organized under any foreign law, or in "when issued"
contracts for any such securities, to change the investments of the assets of
the Trust; and exercise any and all rights, powers, and privileges of ownership
or interest in respect of any and all such investments of every kind and
description, including, without limitation, the right to consent and otherwise
act with respect thereto, with power to designate one or more Persons, to
exercise any of said rights, powers, and privileges in respect of any of said
instruments;
(b) Sell, exchange, lend, pledge, mortgage, hypothecate, lease, or write
options (including options on futures contracts) with respect to or otherwise
deal in any property rights relating to any or all of the assets of the Trust or
any Series;
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(c) Vote or give assent, or exercise any rights of ownership, with respect
to stock or other securities or property; and execute and deliver proxies or
powers of attorney to such Person or Persons as the Trustees shall deem proper,
granting to such Person or Persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(d) Exercise powers and right of subscription or otherwise which in any
manner arise out of ownership or securities;
(e) Hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in its own name or
in the name of a custodian or subcustodian or a nominee or nominees or
otherwise;
(f) Consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; consent to any contract, lease, mortgage, purchase or sale of
property by such corporation or issuer; and pay calls or subscriptions with
respect to any security held in the Trust;
(g) Join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and agree to pay, and pay, such portion of the expenses and compensation
of such committee, depositary or trustee as the Trustees shall deem proper;
(h) Compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including, but not limited to,
claims for taxes;
(i) Enter into joint ventures, general or limited partnerships and any
other combinations or associations;
(j) Borrow funds or other property in the name of the Trust exclusively
for Trust purposes and in connection therewith issue notes or other evidence of
indebtedness; and mortgage and pledge the Trust Property or any part thereof to
secure any or all of such indebtedness;
(k) Endorse or guarantee the payment of any notes or other obligations of
any Person; make contracts of guaranty or suretyship, or otherwise assume
liability for payment thereof; and to mortgage and pledge the Trust Property or
any part thereof to secure any of or all of such obligations;
(l) Purchase and pay for entirely out of Trust Property such insurance as
the Trustees may deem necessary or appropriate for the conduct of the business,
including, without limitation, insurance policies insuring the assets of the
Trust or payment of distributions and principal on
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its portfolio investments, and insurance polices insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, Principal
Underwriters, or independent contractors of the Trust, individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such Person as Trustee, officer, employee,
agent, investment adviser, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify such
Person against liability;
(m) Adopt, establish and carry out pension, profit-sharing, share bonus,
share purchase, savings, thrift and other retirement, incentive and benefit
plans and trusts, including the purchase of life insurance and annuity contracts
as a means of providing such retirement and other benefits, for any or all of
the Trustees, officers, employees and agents of the Trust;
(n) Operate as and carry out the business of an investment company, and
exercise all the powers necessary or appropriate to the conduct of such
operations;
(o) Enter into contracts of any kind and description;
(p) Employ one or more banks, trust companies or companies that are
members of a national securities exchange or such other entities as the
Commission may permit as custodians of any assets of the Trust, subject to any
conditions set forth in this Declaration or Trust or in the By-Laws;
(q) Interpret the investment policies, practices, or limitations of any
Series of Class; and
(r) Engage in any other lawful act or activity in which a business trust
organized under the Delaware Act may engage, subject to the provisions of the
1940 Act.
The Trust shall not be limited to investing in obligations maturing before
the possible termination of the Trust or one or more of its Series. The Trust
shall not in any way be bound or limited by any present or future law or custom
in regard to investment by fiduciaries. The Trust shall not be required to
obtain any court order to deal with any assets of the Trust or take any other
action hereunder.
SECTION 4. PAYMENT OF EXPENSES BY THE TRUST. The Trustees are authorized
to pay or cause to be paid out of the principal or income of the Trust, or
partly out of the principal and partly out of income, as they deem fair, all
expenses, fees, charges, taxes and liabilities incurred or arising in connection
with the Trust, or in connection with the management thereof, including, but not
limited to, the Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, investment adviser or manager,
Principal Underwriter, auditors, counsel, custodian, transfer agent, shareholder
servicing agent, and such other agents
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or independent contractors and such other expenses and charges as the Trustees
may deem necessary or proper to incur, which expenses, fees, charges, taxes and
liabilities shall be allocated in accordance with Article III, Section 6 hereof.
SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any particular Series, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, Shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by reducing the number of Shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such Shareholder.
SECTION 6. OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the assets
of the Trust shall at all times be considered as vested in the Trust, except
that the Trustees shall have power to cause legal title to any Trust Property to
be held by or in the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine. The right, title and interest of the Trustees in the
Trust Property shall vest automatically in each Person who may hereafter become
a Trustee. Upon the resignation, removal or death of a Trustee, he or she shall
automatically cease to have any right, title or interest in any of the Trust
Property, and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
SECTION 7. SERVICE CONTRACTS.
(a) Subject to such requirements and restrictions as may be set forth
under federal and/or state law and in the By-Laws, including, without
limitation, the requirements of Section 15 of the 1940 Act, the Trustees may, at
any time and from time to time, contract for exclusive or nonexclusive advisory,
management and/or administrative services for the Trust or for any Series (or
Class thereof) with any corporation, trust, association, or other organization;
and any such contract may contain such other terms as the Trustees may
determine, including, without limitation, authority for the Manager or
administrator to delegate certain or all of its duties under such contracts to
qualified investment advisers and administrators and to determine from time to
time without prior consultation with the Trustees what investments shall be
purchased, held sold or exchanged and what portion, if any, of the assets of the
Trust shall be held uninvested and to make changes in the Trust's investments,
or such other activities as may specifically be delegated to such party.
(b) The Trustees may also, at any time and from time to time, contract
with any corporation, trust, association, or other organization, appointing it
exclusive or nonexclusive distributor or Principal Underwriter for the Shares of
one or more of the Series (or Classes) or
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other securities to be issued by the Trust. Every such contract shall comply
with such requirements and restrictions as may be set forth under federal and/or
state law and in the By-Laws, including, without limitation, the requirements of
Section 15 of the 1940 Act; and any such contract may contain such other terms
as the Trustees may determine.
(c) The Trustees are also empowered, at any time and from time to time, to
contract with any corporations, trusts, associations or other organizations,
appointing it or them the custodian, transfer agent and/or shareholder servicing
agent for the Trust or one or more of its Series. Every such contract shall
comply with such requirements and restrictions as may be set forth under federal
and/or state law and in the By-Laws or stipulated by resolution of the Trustees.
(d) Subject to applicable law, the Trustees are further empowered, at any
time and from time to time, to contract with any entity to provide such other
services to the Trust or one or more of the Series, as the Trustees determine to
be in the best interests of the Trust and the applicable Series.
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee,
Manager, adviser, Principal Underwriter, distributor, or
affiliate or agent of or for any corporation, trust, association,
or other organization, or for any parent or affiliate of any
organization with which an advisory, management, or
administration contract, or Principal Underwriter's or
distributor's contract, or transfer agent, shareholder servicing
agent or other type of service contract may have been or may
hereafter be made, or that any such organization, or any parent
or affiliate thereof, is a Shareholder or has an interest in the
Trust; or that
(ii) any corporation, trust, association or other organization with
which an advisory, management, or administration contract or
Principal Underwriter's or distributor's contract, or transfer
agent or shareholder servicing agent contract may have been or
may hereafter be made also has an advisory, management, or
administration contract, or Principal Underwriter's or
distributor's or other service contract with one or more other
corporations, trusts, associations, or other organizations, or
has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same, or create any liability or accountability to the Trust or its
Shareholders, provided approval of each such contract is made pursuant to the
requirements of the 1940 Act.
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SECTION 8. TRUSTEES AND OFFICERS AS SHAREHOLDERS. Any Trustee, officer or
agent of the Trust may acquire, own and dispose of Shares to the same extent as
if he or she were not a Trustee, officer or agent; and the Trustees may issue
and sell and cause to be issued and sold Shares to, and redeem such Shares from,
any such Person or any firm or company in which such Person is interested,
subject only to the general limitations contained herein or in the By-Laws
relating to the sale and redemption of such Shares.
ARTICLE V
Shareholders' Voting Powers and Meetings
SECTION 1. VOTING POWERS, MEETINGS, NOTICE, AND RECORD DATES. The
Shareholders shall have power to vote only: (i) for the election or removal of
Trustees as provided in Article IV, Section 1 hereof, and (ii) with respect to
such additional matters relating to the Trust as may be required by applicable
law, this Declaration of Trust, the By-Laws or any registration of the Trust
with the Commission (or any successor agency) or any state, or as the Trustees
may consider necessary or desirable. Each whole Share shall be entitled to one
vote as any matter on which it is entitled to vote and each fractional Share
shall be entitled to a proportionate fractional vote. Notwithstanding any other
provision of this Declaration of Trust, on any matters submitted to a vote of
the Shareholders, all Share of the Trust then entitled to vote shall be voted in
aggregate, except: (i) when required by the 1940 Act, Shares shall be voted by
individual Series; (ii) when the matter involves the termination of a Series or
any other action that the Trustees have determined will affect only the
interests of one or more Series, then only Shareholders of such Series shall be
entitled to vote thereon; and (iii) when the matter involves any action that the
Trustees have determined will affect only the interests of one or more Classes,
then only the Shareholder of such Class or Classes shall be entitled to vote
thereon. There shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy. A proxy may be given in writing.
The By-Laws may provide that proxies may also, or may instead, be given by an
electronic or telecommunications device or in any other manner. Notwithstanding
anything else contained herein or in the By-Laws, in the event a proposal by
anyone other than the officers or Trustees of the Trust is submitted to a vote
of the Shareholders of one or more Series or Classes thereof or of the Trust, or
in the event of any proxy contest or proxy solicitation or proposal in
opposition to any proposal by the officers or Trustees of the Trust, Shares may
be voted only by written proxy or in person at a meeting. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, this Declaration of Trust or the By-Laws to be taken by
the Shareholders. Meetings of the Shareholders shall be called and notice
thereof and record dates therefor shall be given and set as provided in the By-
Laws.
SECTION 2. QUORUM AND REQUIRED VOTE. Except when a larger quorum is
required by applicable law, by the By-Laws or by this Declaration of Trust,
thirty-three and one-third percent (33-1/3%) of the Shares entitled to vote
shall constitute a quorum at a Shareholders'
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meeting. When any one or more Series (or Classes) is to vote as a single Class
separate from any other Shares, thirty-three and one-third percent (33-1/3%) of
the Shares of each such Series (or Classes) entitled to vote shall constitute a
quorum at a Shareholders' meting of that Series (or Class). Except when a
larger vote is required by any provision of this Declaration of Trust or the By-
Laws or by applicable law, when a quorum is present at any meeting, a majority
of the Shares voted shall decide any questions and a plurality of the Shares
voted shall elect a Trustee, provided that where any provision of law or of this
Declaration of Trust requires that the holders of any Series shall vote as a
Series (or that holders of a Class shall vote as a Class), then a majority of
the Shares of that Series (or Class) voted on the matter (or a plurality with
respect to the election of a Trustee) shall decide that matter insofar as that
Series (or Class) is concerned.
SECTION 3. RECORD DATES. For the purpose of determining the Shareholders
of any Series (or Class) who are entitled to receive payment of any dividend or
of any other distribution, the Trustees may from time to time fix a date, which
shall be before the date for the payment of such dividend or such other payment,
as the record date for determining the Shareholders of such Series (or Class)
having the right to receive such dividend or distribution. Without fixing a
record date, the Trustees may for distribution purposes close the register or
transfer books for one or more Series (or Classes) at any time prior to the
payment of a distribution. Nothing in this Section shall be construed as
precluding the Trustees from setting different record dates for different Series
(or Classes).
SECTION 4. ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI
Net Asset Value, Distributions and Redemptions
SECTION 1. DETERMINATION OF NET ASSET VALUE, NET INCOME, AND
DISTRIBUTIONS. Subject to applicable law and Article III, Section 6 hereof, the
Trustees, in their absolute discretion, may prescribe and shall set forth in the
By-Laws or in a duly adopted vote of the Trustees such bases and time for
determining the per Share or net asset value of the Shares of any Series or net
income attributable to the Shares of any Series, or the declaration and payment
of dividends and distributions on the Shares of any Series, as they may deem
necessary or desirable.
SECTION 2. REDEMPTIONS AND REPURCHASES.
(a) The Trust shall purchase such Shares as are offered by any Shareholder
for redemption, upon the presentation of a proper instrument of transfer
together with a request directed to the Trust, or a Person designated by the
Trust, that the Trust purchase such Shares or in accordance with such other
procedures for redemption as the Trustees may from time to
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time authorize; and the Trust will pay the net asset value thereof as determined
by the Trustees (or on their behalf), in accordance with any applicable
provisions of the By-Laws and applicable law. Unless extraordinary
circumstances exist, payment for said Shares shall be made by the Trust to the
Shareholder within seven (7) days after the date on which the request is made in
proper form. The obligation set forth in this Section 2 is subject to the
provision that, in the event that any time the New York Stock Exchange
("Exchange") is closed for other than weekends or holidays, or if permitted by
the rules and regulations or an order of the Commission during periods when
trading on the Exchange is restricted or during any emergency which makes it
impracticable for the Trust to dispose of the investments of the applicable
Series or to determine fairly the value of the net assets held with respect to
such Series or during any other period permitted by order of the Commission for
the protection of investors, such obligation may be suspended or postponed by
the Trustees. In the case of a suspension of the right of redemption as
provided herein, a Shareholder may either withdraw the request for redemption or
receive payment based on the net asset value per share next determined after the
termination of such suspension.
(b) The redemption price may in any case or cases be paid wholly or partly
in kind if the Trustees determine that such payment is advisable in the interest
of the remaining Shareholders of the Series for which the Shares are being
redeemed. Subject to the foregoing, the fair value, selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any Manager or other Person in
transferring securities selected for delivery as all or part of any payment in
kind.
(c) If the Trustees shall, at any time and in good faith, determine that
direct or indirect ownership of Shares of any Series has or may become
concentrated in any Person to an extent that would disqualify any Series as a
regulated investment company under the Internal Revenue Code of 1986, as amended
(or any successor statute thereto), then the Trustees shall have the power (but
not the obligation) by such means as they deem equitable to (i) call for the
redemption by any such Person of a number, or principal amount, of Shares
sufficient to maintain or bring the direct or indirect ownership of Shares into
conformity with the requirements for such qualification and (ii) refuse to
transfer or issue Shares to any Person whose acquisition of the Shares in
question would result in such disqualification. Any such redemption shall be
effected at the redemption price and in the manner provided in this Article VI.
(d) The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership of Shares
as the Trustees deem necessary to comply with the provisions of the Internal
Revenue Code of 1986, as amended (or any successor statute thereto), or to
comply with the requirements of any other taxing authority.
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ARTICLE VII
Compensation and Limitation of Liability of Trustees
SECTION 1. COMPENSATION. The Trustees in such capacity shall be entitled
to reasonable compensation from the Trust and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for such services by the Trust.
SECTION 2. INDEMNIFICATION AND LIMITATION OF LIABILITY. A Trustee, when
acting in such capacity shall not be personally liable to any Person, other than
the Trust or a Shareholder to the extent provided in this Article VII, for any
act, omission or obligation of the Trust, of such Trustee or of any other
Trustee. The Trustees shall not be responsible or liable in any event for any
neglect or wrongdoing of any officer, agent, employee, Manager, or Principal
Underwriter of the Trust. The Trust shall indemnify each Person who is serving
or has served at the Trust's request as a director, officer, trustee, employee,
or agent of another organization in which the Trust has any interest as a
shareholder, creditor, or otherwise to the extent and in the manner provided in
the By-Laws.
All persons extending credit to, contracting with or having any claim
against the Trust of the Trustees shall look only to the assets of the
appropriate Series of the Trust for payment under such credit, contract, or
claim; and neither the Trustees nor the Shareholders, nor any of the Trust's
officers, employees, or agents, whether past, present, or future, shall be
personally liable therefor.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees by any of them in connection with the Trust shall
conclusively be deemed to have been executed or done only in or with respect to
his or her or their capacity as Trustee or Trustees, and such Trustee or
Trustees shall not be personally liable thereon. At the Trustees' discretion,
any note, bond, contract, instrument, certificate or undertaking made or issued
by the Trustees or by any officer or officers may give notice that the
Certificate of Trust is on file in the Office of the Secretary of State of the
State of Delaware and that a limitation on liability of Series exists and such
note, bond, contract, instrument, certificate or undertaking may, if the
Trustees so determine, recite that the same was executed or made on behalf of
the Trust by a Trustee or Trustees in such capacity and not individually and
that the obligations of such instrument are not binding upon any of them or the
Shareholders individually but are binding only on the assets and property of the
Trust or a Series thereof, and may contain such further recital as such Person
or Persons may deem appropriate. The omission of any such notice or recital
shall in no way operate to bind any Trustees, officer, or Shareholders
individually.
SECTION 3. TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY.
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon
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everyone interested. A Trustee shall be liable to the Trust and to any
Shareholder solely for his or her own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice nor
for failing to follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.
SECTION 4. INSURANCE. The Trustees shall be entitled and empowered to the
fullest extent permitted by law to purchase with Trust assets insurance for
liability and for all expenses reasonably incurred or paid or expected to be
paid by a Trustee, officer, employee, or agent of the Trust in connection with
any claim, action, suit, or proceeding in which he or she may become involved by
virtue of his or her capacity or former capacity as a Trustee of the Trust.
ARTICLE VIII
Miscellaneous
SECTION 1. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No Person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
SECTION 2. TERMINATION OF TRUST OR SERIES.
(a) Unless terminated as provided herein, the Trust shall continue without
limitation of time. The Trust may be terminated at any time by vote of a
majority of the Shares of each Series entitled to vote, voting separately by
Series, or by the Trustees by written notice to the Shareholders. Any Series of
Shares or Class thereof may be terminated at any time by vote of a majority of
the Shares of such Series or Class entitled to vote or by the Trustees by
written notice to the Shareholders of such Series or Class.
(b) Upon the requisite Shareholder vote or action by the Trustees to
terminate the Trust or any one or more Series of Shares or any Class thereof,
after paying or otherwise providing for all charges, taxes, expenses, and
liabilities, whether due or accrued or anticipated, of the Trust or of the
particular Series or any Class thereof as may be determined by the Trustees, the
Trust shall in accordance with such procedures as the Trustees may consider
appropriate reduce the remaining assets of the Trust or of the affected Series
or Class to distributable form in cash or Shares (if any Series remain) or other
securities, or any combination thereof, and distribute the proceeds to the
Shareholders of the Series or Classes involved, ratably according to the number
of Shares of such Series or Class held by the
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Shareholders of such Series or Class on the date of distribution. Thereupon,
the Trust or any affected Series or Class shall terminate and the Trustees and
the Trust shall be discharged of any and all further liabilities and duties
relating thereto or arising therefrom, and the right, title, and interest of all
parties with respect to the Trust or such Series or Class shall be canceled and
discharged.
(c) Upon termination of the Trust, following completion of winding up of
its business, the Trustees shall cause a certificate of cancellation of the
Trust's Certificate of Trust to be filed in accordance with the Delaware Act,
which certificate of cancellation may be signed by any one Trustee.
SECTION 3. REORGANIZATION.
(a) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval unless such approval is required by applicable law, (i)
cause the Trust to merge or consolidate with or into one or more trusts (or
series thereof to the extent permitted by law), partnerships, associations,
corporations or other business entities (including trusts, partnerships,
associations, corporations or other business entities created by the Trustees to
accomplish such merger or consolidation) so long as the surviving or resulting
entity is a management investment company under the 1940 Act, or is a series
thereof, that will succeed to or assume the Trust's registration under the 1940
Act and that is formed, organized, or existing under the laws of the United
States or of a state, commonwealth, possession or colony of the United States,
(ii) cause any one or more Series (or Classes) of the Trust to merge or
consolidate with or into any one or more other Series (or Classes) of the Trust,
one or more trusts (or series or classes thereof to the extent permitted by
law), partnerships, associations, corporations, (iii) cause the Shares to be
exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iv) cause the Trust to incorporate under the laws of
Delaware or any other state or jurisdiction. Any agreement of merger or
consolidation or exchange or certificate or merger may be signed by a majority
of the Trustees and facsimile signatures conveyed by electronic or
telecommunication means shall be valid.
(b) Pursuant to and in accordance with the provisions of Section 3815(f)
of the Delaware Act, and notwithstanding anything to the contrary contained in
this Declaration of Trust, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 3 may (i) effect any amendment to
the governing instrument of the Trust or (ii) effect the adoption of a new
governing instrument of the Trust if the Trust is the surviving or resulting
trust in the merger or consolidation.
(c) The Trustees may create one or more business trusts to which all or
any part of the assets, liabilities, profits, or losses of the Trust or any
Series of Class thereof may be transferred and may provide for the conversion of
Shares in the Trust or any Series of Class thereof into beneficial interests in
any such newly created Trust or Trusts or any Series of Classes thereof.
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SECTION 4. AMENDMENTS. Except as specifically provided in this Section,
the Trustees may, without Shareholder vote, restate, amend, or otherwise
supplement this Declaration of Trust. Shareholders shall have the right to vote
on any amendment (i) that would affect their right to vote granted in Article V,
Section 1 hereof, (ii) to this Section 4 of Article VIII, (iii) that may be
required by applicable law or by the Trust's registration statement, as filed
with the Commission, and (iv) submitted to them by the Trustees. Any amendment
required or permitted to be submitted to the Shareholders that, as the Trustees
determine, shall affect the Shareholders of one or more Series shall be
authorized by a vote of the Shareholders of each Series affected and no vote of
Shareholders of a Series not affected shall be required. Notwithstanding
anything else herein, no amendment hereof shall limit the rights to insurance
provided by Article VII, Section 4 with respect to any acts or omissions of
Persons covered thereby prior to such amendment nor shall any such amendment
limit the rights to indemnification referenced in Article VII, Section 2 hereof
as provided in the By-Laws with respect to any actions or omissions of Persons
covered thereby prior to such amendment. The Trustees may, without Shareholder
vote, restate, amend, or otherwise supplement the Certificate of Trust as they
deem necessary or desirable.
SECTION 5. FILING OF COPIES, REFERENCES, HEADINGS. The original or a copy
of this instrument and of each restatement and/or amendment hereto shall be kept
at the office of the Trust where it may be inspected by any Shareholder. Anyone
dealing with the Trust may rely on a certificate by an officer of the Trust as
to whether or not any such restatements and/or amendments have been made and as
to any matters in connection with the Trust hereunder; and, with the same effect
as if it were the original, may rely on a copy certified by an officer of the
Trust to be a copy of this instrument or of any such restatements and/or
amendments. In this instrument and in any such restatements and/or amendments,
references to this instrument, and all expressions such as "herein," "hereof,"
and "hereunder," shall be deemed to refer to this instrument as amended or
affected by any such restatements and/or amendments. Headings are placed herein
for convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument.
Whenever the singular number is used herein, the same shall include the plural;
and the neuter, masculine and feminine genders shall include each other, as
applicable. This instrument may be executed in any number of counterparts each
of which shall be deemed an original.
SECTION 6. APPLICABLE LAW.
(a) The Trust is created under, and this Declaration of Trust is to be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware. The Trust shall be of the type commonly called a business
trust, and without limiting the provisions hereof, the Trust specifically
reserves the right to exercise any of the powers or privileges afforded to
business trusts or actions that may be engaged in by business trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege, or action shall not imply that the Trust may not exercise such power
or privilege or take such actions.
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(b) Notwithstanding the first sentence of Section 6(a) of this Article
VIII, there shall not be applicable to the Trust, the Trustees, or this
Declaration of Trust either the provisions of Section 3540 of Title 12 of the
Delaware Code or any provisions of the laws (statutory or common) of the State
of Delaware (other than the Delaware Act) pertaining to trusts that relate to or
regulate: (i) the filing with any court or governmental body or agency of
trustee accounts or schedules of trustee fees and charges, (ii) affirmative
requirements to post bonds for trustees, officers, agents, or employees of a
trust, (iii) the necessity for obtaining a court or other governmental approval
concerning the acquisition, holding, or disposition of real or personal
property, (iv) fees or other sums applicable to trustees, officers, agents or
employees of a trust, (v) the allocation of receipts and expenditures to income
or principal, (vi) restrictions or limitations on the permissible nature,
amount, or concentration of trust investments or requirements relating to the
titling, storage, or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards or responsibilities or limitations
on the acts or powers or liabilities or authorities and powers of Trustees that
are inconsistent with the limitations or liabilities or authorities and powers
of the Trustees set forth or referenced in this Declaration of Trust.
SECTION 7. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
(a) The provisions of the Declaration of Trust are severable, and if the
Trustees shall determine, with the advice of counsel, that any such provision is
in conflict with the 1940 Act, the regulated investment company provisions of
the Internal Revenue Code of 1986, as amended (or any successor statute
thereto), and the regulations thereunder, the Delaware Act or with other
applicable laws and regulations, the conflicting provision shall be deemed never
to have constituted a part of the Declaration of Trust; provided, however, that
such determination shall not affect any of the remaining provisions of the
Declaration of Trust or render invalid or improper any action taken or omitted
prior to such determination.
(b) If any provision of the Declaration of Trust shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration of Trust in any jurisdiction.
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SECTION 8. BUSINESS TRUST ONLY. It is the intention of the Trustees to
create a business trust pursuant to the Delaware Act. It is not the intention
of the Trustees to create a general partnership, limited partnership, joint
stock association, corporation, bailment, or any form of legal relationship
other than a business trust pursuant to the Delaware Act. Nothing in this
Declaration of Trust shall be construed to make the Shareholders, either by
themselves or with the Trustees, partners, or members of a joint stock
association.
IN WITNESS WHEREOF, the Trustees named below do hereby make and enter into
this Revised Declaration of Trust as of the date indicated.
Signature Name Date
- - --------- ----- -----
Louis A. Holland
- - ----------------------- -----------
Monica L. Walker
- - ----------------------- -----------
Lester H. McKeever, Jr.
- - ----------------------- -----------
Elzie Higginbottom
- - ----------------------- -----------
Kenneth R. Meyer
- - ----------------------- -----------
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS:
Suite 3260
35 West Wacker Drive
Chicago, Illinois 60601
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EXHIBIT 2(b)
REVISED BY-LAWS OF THE LOU HOLLAND TRUST
<PAGE>
REVISED BY-LAWS
The Lou Holland Trust
a Delaware Business Trust
<PAGE>
TABLE OF CONTENTS
BY-LAWS
Page
Article I Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1. Principal Office . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Delaware Office. . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. Other Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Article II Meetings of Shareholders. . . . . . . . . . . . . . . . . . . 6
1. Place of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . 6
2. Call of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . 6
4. Manner of Giving Notice; Affidavit of Notice . . . . . . . . . . . 6
5. Adjourned Meetings; Notice . . . . . . . . . . . . . . . . . . . . 7
6. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7. Waiver of Notice by Consent of Absent Shareholders . . . . . . . . 7
8. Shareholder Action by Written Consent Without a Meeting. . . . . . 8
9. Record Date for Shareholder Notice, Voting and Giving Consents . . 8
10. Proxies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
11. Inspectors of Election . . . . . . . . . . . . . . . . . . . . . . 9
Article III Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . .10
1. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
2. Number of Trustees . . . . . . . . . . . . . . . . . . . . . . . .10
3. Vacancies. . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
4. Place of Meetings and Meetings by Telephone. . . . . . . . . . . .10
5. Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . .11
6. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . .11
7. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
8. Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . .11
9. Adjournment. . . . . . . . . . . . . . . . . . . . . . . . . . . .12
10. Notice of Adjournment. . . . . . . . . . . . . . . . . . . . . . .12
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11. Action Without a Meeting . . . . . . . . . . . . . . . . . . . . .12
12. Fees and Compensation of Trustees. . . . . . . . . . . . . . . . .12
13. Delegation of Power to Other Trustees. . . . . . . . . . . . . . .12
Article IV Committees. . . . . . . . . . . . . . . . . . . . . . . . . .13
1. Committees of Trustees . . . . . . . . . . . . . . . . . . . . . .13
2. Meetings and Action of Committees. . . . . . . . . . . . . . . . .13
Article V Officers. . . . . . . . . . . . . . . . . . . . . . . . . . .14
1. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
2. Election of Officers . . . . . . . . . . . . . . . . . . . . . . .14
3. Subordinate Officers . . . . . . . . . . . . . . . . . . . . . . .14
4. Removal and Resignation of Officers. . . . . . . . . . . . . . . .14
5. Vacancies in Offices . . . . . . . . . . . . . . . . . . . . . . .14
6. Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
7. President. . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
8. Vice Presidents. . . . . . . . . . . . . . . . . . . . . . . . . .15
9. Secretary. . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
10. Treasurer. . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Article VI Indemnification of Trustees, Officers
Employees and Other Agents . . . . . . . . . . . . . . . . .16
1. Agents, Proceedings, and Expenses. . . . . . . . . . . . . . . . .16
2. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . .16
3. Limitations and Settlements. . . . . . . . . . . . . . . . . . . .16
4. Insurance; Rights Not Exclusive. . . . . . . . . . . . . . . . . .17
5. Advance of Expenses. . . . . . . . . . . . . . . . . . . . . . . .17
6. Fiduciaries of Employee Benefit Plan . . . . . . . . . . . . . . .17
Article VII Inspection of Records and Reports . . . . . . . . . . . . . .18
1. Inspection by Shareholders . . . . . . . . . . . . . . . . . . . .18
2. Inspection by Trustees . . . . . . . . . . . . . . . . . . . . . .18
3. Financial Statements . . . . . . . . . . . . . . . . . . . . . . .18
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Article VIII General Matters . . . . . . . . . . . . . . . . . . . . . . .18
1. Checks, Drafts, Evidence of Indebtedness . . . . . . . . . . . . .18
2. Contracts and Instruments; How Executed. . . . . . . . . . . . . .18
3. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . .19
4. Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Article IX Amendments. . . . . . . . . . . . . . . . . . . . . . . . . .19
1. Amendment
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BY-LAWS
OF
The Lou Holland Trust
A Delaware Business Trust
INTRODUCTION
A. REVISED AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be
subject to the Revised Agreement and Declaration of Trust, as from time to time
in effect (the "Declaration of Trust"), of The Lou Holland Trust, a Delaware
business trust (the "Trust"). In the event of any inconsistency between the
terms hereof and the terms of the Declaration of Trust, the terms of the
Declaration of Trust shall control.
B. DEFINITIONS. Capitalized terms used herein and not herein defined are
used as defined in the Declaration of Trust.
Article I
OFFICES
Section 1. PRINCIPAL OFFICE. The Trustees shall fix and, from time to
time, may change the location of the principal executive office of the Trust at
any place within or outside the State of Delaware.
Section 2. DELAWARE OFFICE. The Trustees shall establish a registered
office in the State of Delaware and shall appoint as the Trust's registered
agent for service of process in the State of Delaware an individual who is a
resident of the State of Delaware or a Delaware corporation or a corporation
authorized to transact business in the State of Delaware; in each case the
business office of such registered agent for service of process shall be
identical with the registered Delaware office of the Trust.
Section 3. OTHER OFFICES. The Trustees may at any time establish branch
or subordinate offices at any place or places within or outside the State of
Delaware where the Trust intends to do business.
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Article II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of Shareholders shall be held at
any place designated by the Trustees. In the absence of any such designation,
Shareholders' meetings shall be held at the principal executive office of the
Trust.
Section 2. CALL OF MEETINGS. Meetings of the Shareholders may be called
at any time by the Trustees or by the President for the purpose of taking action
upon any matter requiring the vote or authority of the Shareholders as herein
provided or provided in the Declaration of Trust or upon any other matter as to
which such vote or authority is deemed by the Trustees or the President to be
necessary or desirable. Meetings of the Shareholders may be called for any
purpose deemed necessary or desirable upon the written request of the
Shareholders holding at least ten percent (10%) of the outstanding Shares of the
Trust entitled to vote. To the extent required by the 1940 Act, meetings of the
Shareholders for the purpose of voting on the removal of any Trustee shall be
called promptly by the Trustees upon the written request of Shareholders holding
at least ten percent (10%) of the outstanding Shares of the Trust entitled to
vote.
Section 3. NOTICE OF MEETINGS OF SHAREHOLDERS. All notices of meetings of
Shareholders shall be sent or otherwise given to Shareholders in accordance with
Section 4 of this Article II not less than ten (10) nor more than ninety (90)
days before the date of the meeting. The notice shall specify (i) the place,
date and hour of the meeting, and (ii) the general nature of the business to be
transacted. The notice of any meeting at which Trustees are to be elected also
shall include the name of any nominee or nominees whom at the time of the notice
are intended to be presented for election.
If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a Trustee has a direct or indirect financial
interest, (ii) an amendment of the Agreement and Declaration of Trust of the
Trust, (iii) a reorganization of the Trust, or (iv) a voluntary dissolution of
the Trust, the notice shall also state the general nature of that
proposed action.
Section 4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any
meeting of Shareholders shall be (i) given either by hand delivery, first-class
mail, telegraphic or other written communication, charges prepaid, and (ii)
addressed to the Shareholder at the address of that Shareholder appearing on the
books of the Trust or its transfer agent or given by the Shareholder to the
Trust for the purpose of notice. If no such address appears on the Trust's
books or is not given to the Trust, notice shall be deemed to have been given if
sent to that Shareholder by first-class mail or telegraphic or other written
communication to the Trust's principal executive office, or if published at
least once in a newspaper of general circulation in the county where that office
is located. Notice shall be deemed to have been given at the time
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when delivered personally or deposited in the mail or sent by telegram or other
means of written communication or, where notice is given by publication, on the
date of publication.
If any notice addressed to a Shareholder at the address of that Shareholder
appearing on the books of the Trust is returned to the Trust by the United
States Postal Service marked to indicate that the Postal Service is unable to
deliver the notice to the Shareholder at that address, all future notices or
reports shall be deemed to have been duly given without further mailing if
such future notices or reports shall be kept available to the Shareholder, upon
written demand of the Shareholder, at the principal executive office of the
Trust for a period of one year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
meeting of Shareholders shall be filed and maintained in the minute book of the
Trust.
Section 5. ADJOURNED MEETING; NOTICE. Any meeting of Shareholders,
whether or not a quorum is present, may be adjourned from time to time by the
vote of the majority of the Shares represented at that meeting, either in person
or by proxy.
When any meeting of Shareholders is adjourned to another time or place,
notice need not be given of the adjourned meeting at which the adjournment is
taken, unless a new record date of the adjourned meeting is fixed or unless the
adjournment is for more than sixty (60) days from the date set for the original
meeting, in which case the Trustees shall set a new record date. Notice of any
such adjourned meeting shall be given to each Shareholder of record entitled to
vote at the adjourned meeting in accordance with the provisions of Sections 3
and 4 of this Article II. At any adjourned meeting, the Trust may transact any
business which might have been transacted at the original meeting.
Section 6. VOTING. The Shareholders entitled to vote at any meeting of
Shareholders shall be determined in accordance with the provisions of the
Declaration of Trust of the Trust, as in effect at such time. The Shareholders'
vote may be by voice vote or by ballot, provided, however, that any election for
Trustees must be by ballot if demanded by any Shareholder before the voting has
begun. On any matter other than elections of Trustees, any Shareholder may vote
part of the Shares in favor of the proposal and refrain from voting the
remaining Shares or vote them against the proposal, but if the Shareholder fails
to specify the number of Shares which the Shareholder is voting affirmatively,
it will be conclusively presumed that the Shareholder's approving vote is with
respect to the total Shares that such Shareholder is entitled to vote on such
proposal.
Section 7. WAIVER OF NOTICE OF CONSENT OF ABSENT SHAREHOLDERS. The
transaction of business and any actions taken at a meeting of Shareholders,
however called and noticed and wherever held, shall be as valid as though taken
at a meeting duly held after regular call and notice provided a quorum is
present either in person or by proxy at the meeting of Shareholders and if
either before or after the meeting, each Shareholder entitled to vote who was
not present
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in person or by proxy at the meeting of the Shareholders signs a written waiver
of notice or a consent to a holding of the meeting or an approval of the
minutes. The waiver of notice or consent need not specify either the business
to be transacted or the purpose of any meeting of Shareholders.
Attendance by a Shareholder at a meeting of Shareholders shall also
constitute a waiver of notice of that meeting, except if the Shareholder objects
at the beginning of the meeting to the transaction of any business because the
meeting is not lawfully called or convened and except that attendance at a
meeting of Shareholders is not a waiver of any right to object to the
consideration of matters not included in the notice of the meeting of
Shareholders if that objection is expressly made at the beginning of the
meeting.
Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.
Except as provided in the Declaration of Trust, any action that may be taken at
any meeting of Shareholders may be taken without a meeting and without prior
notice if a consent in writing setting forth the action to be taken is signed by
the holders of outstanding Shares having not less than the minimum number of
votes that would be necessary to authorize or take that action at a meeting at
which all Shares entitled to vote on that action were present and voted. All
such consents shall be filed with the Secretary of the Trust and shall be
maintained in the Trust's records. Any Shareholder giving a written consent or
the Shareholder's proxy holders or a transferee of the Shares or a personal
representative of the Shareholder or their respective proxy holders may revoke
the Shareholder's written consent by a writing received by the Secretary of the
Trust before written consents of the number of Shares required to authorize the
proposed action have been filed with the Secretary.
If the consents of all Shareholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
Shareholders shall not have been received, the Secretary shall give prompt
notice of the action approved by the Shareholders without a meeting. This
notice shall be given in the manner specified in Section 4 of this Article II.
Section 9. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING CONSENTS.
(a) For purposes of determining the Shareholders entitled to vote or act
at any meeting or adjournment thereof, the Trustees may fix in advance a record
date which shall not be more than ninety (90) days nor less than ten (10) days
before the date of any such meeting. Without fixing a record date for a
meeting, the Trustees may for voting and notice purposes close the register or
transfer books for one or more Series (or Classes) for all or any part of the
period between the earliest date on which a record date for such meeting could
be set in accordance herewith and the date of such meeting.
If the Trustees do not so fix a record date or close the register or
transfer books of the affected Series (or Classes): the record date for
determining Shareholders entitled to notice of or to vote at a meeting of
Shareholders shall be the close of business on the business day next
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preceding the day on which notice is given or if notice is waived, at the close
of business on the business day next preceding the day on which the meeting is
held.
(b) The record date for determining Shareholders entitled to give consent
to action in writing without a meeting, (i) when no prior action of the Trustees
has been taken, shall be the day on which the first written consent is given, or
(ii) when prior action of the Trustees has been taken, shall be (a) such date as
determined for that purpose by the Trustees, which record date shall not precede
the date upon which the resolution fixing it is adopted by the Trustees and
shall not be more than 20 days after the date of such resolution, or (b) if no
record date is fixed by the Trustees, the record date shall be the close of
business on the day on which the Trustees adopt the resolution relating to that
action. Nothing in this Section shall be construed as precluding the Trustees
from setting different record dates for different Series (or Classes). Only
Shareholders of record on the record date as herein determined shall have any
right to vote or to act at any meeting or give consent to any action relating to
such record date, notwithstanding any transfer of Shares on the books of the
Trust after such record date.
Section 10. PROXIES. Subject to the provisions of the Declaration of
Trust, every Person entitled to vote for Trustees or on any other matter shall
have the right to do so either in person or by proxy, provided that either (i)
an instrument authorizing such a proxy to act is executed by the Shareholder in
writing and dated not more than eleven (11) months before the meeting, unless
the instrument specifically provides for a longer period or (ii) the Trustees
adopt an electronic, telephonic, computerized or other alternative to execution
of a written instrument authorizing the proxy to act, and such which
authorization is received not more than eleven (11) months before the meeting.
A proxy shall be deemed executed by a Shareholder if the Shareholder's name is
placed on the proxy (whether by manual signature, typewriting, telegraphic
transmission or otherwise) by the Shareholder or the Shareholder's attorney-in-
fact. A valid proxy which does not state that it is irrevocable shall continue
in full force and effect unless (i) revoked by the Person executing it before
the vote pursuant to that proxy is taken, (a) by a writing delivered to the
Trust stating that the proxy is revoked, or (b) by a subsequent proxy executed
by such Person, or (c) attendance at the meeting and voting in person by the
Person executing that proxy, or (d) revocation by such Person using any
electronic, telephonic, computerized or other alternative means authorized by
the Trustees for authorizing the proxy to act; or (ii) written notice of the
death or incapacity of the maker of that proxy is received by the Trust before
the vote pursuant to that proxy is counted. A proxy with respect to Shares held
in the name of two or more Persons shall be valid if executed by any one of them
unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of the two or more Persons. A proxy
purporting to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger.
Section 11. INSPECTORS OF ELECTION. Before any meeting of Shareholders,
the Trustees may appoint any persons other than nominees for office to act as
inspectors of election at the meeting or its adjournment. If no inspectors of
election are so appointed, the Chairman of the
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meeting may appoint inspectors of election at the meeting. The number of
inspectors shall be two (2). If any person appointed as inspector fails to
appear or fails or refuses to act, the Chairman of the meeting may appoint a
person to fill the vacancy.
These inspectors shall:
(a) Determine the number of Shares outstanding and the voting power of
each, the Shares represented at the meeting, the existence of a quorum
and the authenticity, validity and effect of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way arising in
connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or vote
with fairness to all Shareholders.
ARTICLE III
TRUSTEES
Section 1. POWERS. Subject to the applicable provisions of the 1940 Act,
the Declaration of Trust and these By-Laws relating to action required to be
approved by the Shareholders, the business and affairs of the Trust shall be
managed and all powers shall be exercised by or under the direction of the
Trustees.
Section 2. NUMBER OF TRUSTEES. The exact number of Trustees within the
limits specified in the Declaration of Trust shall be fixed from time to time by
a resolution of the Trustees.
Section 3. VACANCIES. Vacancies in the authorized number of Trustees may
be filled as provided in the Declaration of Trust.
Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. All meetings of
the Trustees may be held at any place that has been designated from time to time
by resolution of the
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Trustees. In the absence of such a designation, regular meetings shall be held
at the principal executive office of the Trust. Subject to any applicable
requirements of the 1940 Act, any meeting, regular or special, may be held by
conference telephone or similar communication equipment, so long as all Trustees
participating in the meeting can hear one another and all such Trustees shall be
deemed to be present in person at the meeting.
Section 5. REGULAR MEETINGS. Regular meetings of the Trustees shall be
held without call at such time as shall from time to time be fixed by the
Trustees. Such regular meetings may be held without notice.
Section 6. SPECIAL MEETINGS. Special meetings of the Trustees for any
purpose or purposes may be called at any time by the President or any Vice
President or the Secretary or any two (2) Trustees.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each Trustee or sent by first-class mail, by
telegram or telecopy (or similar electronic means) or by nationally recognized
overnight courier, charges prepaid, addressed to each Trustee at that Trustee's
address as it is shown on the records of the Trust. If the notice is mailed, it
shall be deposited in the United States mail at least seven (7) calendar days
before the time of the holding of the meeting. If the notice is delivered
personally or by telephone or by telegram, telecopy, (or similar electronic
means) or overnight courier, it shall be given at least forty-eight (48) hours
before the time of the holding of the meeting. Any oral notice given personally
or by telephone may be communicated either to the Trustee or to a person at the
office of the Trustee who the person giving the notice has reason to believe
will promptly communicate it to the Trustee. The notice need not specify the
purpose of the meeting or the place of the meeting, if the meeting is to be held
at the principal executive office of the Trust. Notice of a meeting need not be
given to any Trustee if a written waiver of notice, executed by such Trustee
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to such Trustee.
Section 7. QUORUM. A third of the authorized number of Trustees shall
constitute a quorum for the transaction of business, except to adjourn as
provided in Section 9 of this Article III. Every act or decision done or made
by a majority of the Trustees present at a meeting duly held at which a quorum
is present shall be regarded as the act of the Trustees, subject to the
provisions of the Declaration of Trust. A meeting at which a quorum is
initially present may continue to transact business notwithstanding the
withdrawal of Trustees if any action taken is approved by at least a majority of
the required quorum for that meeting.
Section 8. WAIVER OF NOTICE. Notice of any meeting need not be given to
any Trustee who either before or after the meeting signs a written waiver of
notice, a consent to holding the meeting, or an approval of the minutes. The
waiver of notice or consent need not specify the purpose of the meeting. All
such waivers, consents, and approvals shall be filed with the
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records of the Trust or made a part of the minutes of the meeting. Notice of a
meeting shall also be deemed given to any Trustee who attends the meeting
without protesting, prior to or at its commencement, the lack of notice to that
Trustee.
Section 9. ADJOURNMENT. A majority of the Trustees present, whether or
not constituting a quorum, may adjourn any meeting to another time and place.
Section 10. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given unless the meeting is adjourned
for more than forty-eight (48) hours, in which case notice of the time and place
shall be given before the time of the adjourned meeting in the manner specified
in Section 6 of this Article III to the Trustees who were present at the time of
the adjournment.
Section 11. ACTION WITHOUT A MEETING. Unless the 1940 Act requires that a
particular action be taken only at a meeting at which the Trustees are present
in person, any action to be taken by the Trustees at a meeting may be taken
without such meeting by the written consent of a majority of the Trustees then
in office. Any such written consent may be executed and given by telecopy or
similar electronic means. Such written consents shall be filed with the minutes
of the proceedings of the Trustees. If any action is so taken by the Trustees
by the written consent of less than all of the Trustees, prompt notice of the
taking of such action shall be furnished to each Trustee who did not execute
such written consent, provided that the effectiveness of such action shall not
be impaired by any delay or failure to furnish such notice.
Section 12. FEES AND COMPENSATION OF TRUSTEES. Trustees and members of
committees may receive such compensation, if any, for their services and such
reimbursement of expenses as may be fixed or determined by resolution of the
Trustees. This Section 12 shall not be construed to preclude any Trustee from
serving the Trust in any other capacity as an officer, agent, employee, or
otherwise and receiving compensation for those services.
Section 13. DELEGATION OF POWER TO OTHER TRUSTEES. Any Trustee may, by
power of attorney, delegate his or her power for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees; provided that in no
case shall fewer than two (2) Trustees personally exercise the powers granted to
the Trustees, except as otherwise expressly provided herein or by resolution of
the Trustees. Except where applicable law may require a Trustee to be present
in person, a Trustee represented by another Trustee pursuant to such power of
attorney shall be deemed to be present for purpose of establishing a quorum and
satisfying the required majority vote.
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ARTICLE IV
COMMITTEES
Section 1. COMMITTEES OF TRUSTEES. The Trustees may by resolution
designate one or more committees, each consisting of two (2) or more Trustees,
to serve at the pleasure of the Trustees. The Trustees may designate one or
more Trustees as alternate members of any committee who may replace any absent
member at any meeting of the committee. Any committee to the extent provided
for by resolution of the Trustee, shall have the authority of the Trustees,
except with respect to:
(a) the approval of any action which under applicable law requires
approval by a majority of the entire authorized number of Trustees or
certain Trustees;
(b) the filling of vacancies of Trustees;
(c) the fixing of compensation of the Trustees for services generally or
as a member of any committee;
(d) the amendment or termination of the Declaration of Trust or any Series
or Class or the amendment of the By-Laws or the adoption of new By-
Laws;
(e) the amendment or repeal of any resolution of the Trustees which by its
express terms is not so amendable or repealable;
(f) a distribution to the Shareholders of the Trust, except at a rate or
in a periodic amount or within a designated range determined by the
Trustees; or
(g) the appointment of any other committees of the Trustees or the members
of such new committees.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
committees shall be governed by, held and taken in accordance with the
provisions of Article III of these By-Laws, with such changes in the context
thereof as are necessary to substitute the committee and its members for the
Trustees generally, except that the time of regular meetings of committees may
be determined either by resolution of the Trustees or by resolution of the
committee. Special meetings of committees may also be called by resolution of
the Trustees. Alternate members shall be given notice of meetings of committees
and shall have the right to attend all meetings of committees. The Trustees may
adopt rules for the governance of any committee not inconsistent with the
provisions of these By-Laws.
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ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the Trust shall be a President, a
Secretary, and a Treasurer. The Trust may also have, at the discretion of the
Trustees, a Chairman of the Board (Chairman), one or more Vice Presidents, one
or more Assistant Secretaries, one or more Assistant Treasurers, and such other
officers as may be appointed in accordance with the provisions of Section 3 of
this Article V. Any number of offices may be held by the same person. The
Chairman, if there be one, and the President shall each be a Trustee and may be,
but need not be, a Shareholder; and any other officer may be, but need not be, a
Trustee or Shareholder.
Section 2. ELECTION OF OFFICERS. The officers of the Trust, except such
officers as may be appointed in accordance with the provisions of Section 3 or
Section 5 of this Article V, shall be chosen by the Trustees, and each shall
serve at the pleasure of the Trustees, subject to the rights, if any, of an
officer under any contract of employment.
Section 3. SUBORDINATE OFFICERS. The Trustees may appoint and may empower
the President to appoint such other officers as the business of the Trust may
require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in these By-Laws or as the Trustees may from
time to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if
any, of an officer under any contract of employment, any officer may be removed,
either with or without cause, by the Trustees at any regular or special meeting
of the Trustees or by the principal executive officer or by such other officer
upon whom such power of removal may be conferred by the Trustees.
Any officer may resign at any time by giving written notice to the Trust.
Any resignation shall take effect at the date of the receipt of that notice or
at any later time specified in that notice; and unless otherwise specified in
that notice, the acceptance of the resignation shall not be necessary to make it
effective. Any resignation is without prejudice to the rights, if any, of the
Trust under any contract to which the officer is a party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office because of
death, resignation, removal, disqualification or other cause shall be filled in
the manner prescribed in these By-Laws for regular appointment to that office.
The President may make temporary appointments to a vacant office pending action
by the Trustees.
Section 6. CHAIRMAN. The Chairman, if such an officer is elected, shall
if present, preside at meetings of the Trustees, shall be the chief executive
officer of the Trust and shall, subject to the control of the Trustees, have
general supervision, direction and control of the
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business and the officers of the Trust and exercise and perform such other
powers and duties as may be from time to time assigned to him by the Trustees or
prescribed by the Declaration of Trust or these By-Laws.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as may
be given by the Trustees to the Chairman, if there be such an officer, the
President shall be the chief operating officer of the Trust and shall, subject
to the control of the Trustees and the Chairman, have general supervision,
direction and control of the business and the officers of the Trust. He or she
shall preside at all meetings of the Shareholders and, in the absence of the
Chairman or if there be none, at all meetings of the Trustees. He or she shall
have the general powers and duties of a president of a corporation and shall
have such other powers and duties as may be prescribed by the Trustees, the
Declaration of Trust or these By-Laws.
Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents, if any, in order of their rank as fixed by the
Trustees or if not ranked, the Executive Vice President (who shall be considered
first ranked) and such other Vice Presidents as shall be designated by the
Trustees, shall perform all the duties of the President and when so acting shall
have all powers of and be subject to all the restrictions upon the President.
The Vice Presidents shall have such other powers and perform such other duties
as from time to time may be prescribed for them respectively by the Trustees or
the President or the Chairman or by these By-Laws.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept at the
principal executive office of the Trust, or such other place as the Trustees may
direct, a book of minutes of all meetings and actions of Trustees, committees of
Trustees and Shareholders with the time and place of holding, whether regular or
special, and if special, how authorized, the notice given, the names of those
present at Trustees' meetings or committee meetings, the number of Shares
present or represented at meetings of Shareholders and the proceedings of the
meetings.
The Secretary shall keep or cause to be kept at the principal executive
office of the Trust or at the office of the Trust's transfer agent or registrar,
a share register or a duplicate share register showing the names of all
Shareholders and their addresses, the number and classes of Shares held by each,
the number and date of certificates issued for the same and the number and date
of cancellation of every certificate surrendered for cancellation.
The Secretary shall give or cause to be given notice of all meetings of the
Shareholders and of the Trustees (or committees thereof) required to be given by
these By-Laws or by applicable law and shall have such other powers and perform
such other duties as may be prescribed by the Trustees or by these By-Laws.
Section 10. TREASURER. The Treasurer shall be the chief financial officer
and chief accounting officer of the Trust and shall keep and maintain or cause
to be kept and maintained adequate and correct books and records of accounts of
the properties and business transactions
15
<PAGE>
of the Trust and each Series, including accounts of the assets, liabilities,
receipts, disbursements, gains, losses, capital and retained earnings of all
Series. The books of account shall at all reasonable times be open to
inspection by any Trustee.
The Treasurer shall deposit all monies and other valuables in the name and
to the credit of the Trust with such depositaries as may be designated by the
Board of Trustees. He or she shall disburse the funds of the Trust as may be
ordered by the Trustees, shall render to the President and Trustees, whenever
they request it, an account of all of his or her transactions as chief financial
officer and of the financial condition of the Trust and shall have other powers
and perform such other duties as may be prescribed by the Trustees or these By-
Laws.
ARTICLE VI
INDEMNIFICATION OF TRUSTEES, OFFICERS,
EMPLOYEES AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS, EXPENSES. For the purpose of this
Article, "agent" means any Person who is or was a Trustee, officer, employee or
other agent of the Trust or is or was serving at the request of the Trust as a
trustee, director, officer, employee or agent of another organization in which
the Trust has any interest as a shareholder, creditor or otherwise:
"proceeding" means any threatened, pending or completed claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
appeals); and "expenses" includes, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and all other
liabilities whatsoever.
Section 2. INDEMNIFICATION. Subject to the exceptions and limitations
contained in Section 3 below, every agent shall be indemnified by the Trust to
the fullest extent permitted by law against all liabilities and against all
expenses reasonably incurred or paid by him or her in connection with any
proceeding in which he or she becomes involved as a party or otherwise by virtue
of his or her being or having been an agent.
Section 3. LIMITATIONS, SETTLEMENTS. No indemnification shall be provided
hereunder to an agent:
(a) who shall have been adjudicated, by the court or other body before
which the proceeding was brought, to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his or her office (collectively, "disabling conduct"); or
(b) with respect to any proceeding disposed of (whether by settlement,
pursuant to a consent decree or otherwise) without an adjudication by
the court or other body
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<PAGE>
before which the proceeding was brought that such agent was liable to
the Trust or its Shareholders by reason of disabling conduct, unless
there has been a determination that such agent did not engage in
disabling conduct;
(i) by the court or other body before which the proceeding was
brought;
(ii) by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the
proceeding based upon a review of readily available facts (as
opposed to a full trial-type inquiry); or
(iii) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-
type inquiry);
PROVIDED, HOWEVER, that indemnification shall be provided hereunder to an agent
with respect to any proceeding in the event of (1) a final decision on the
merits by the court or other body before which the proceeding was brought that
the agent was not liable by reason of disabling conduct, or (2) the dismissal of
the proceeding by the court or other body before which it was brought for
insufficiency of evidence of any disabling conduct with which such agent has
been charged.
Section 4. INSURANCE; RIGHTS NOT EXCLUSIVE. The rights of indemnification
herein provided (i) may be insured against by policies maintained by the Trust
on behalf of any agent, (ii) shall be severable, (iii) shall not be exclusive of
or affect any other rights to which any agent may now or hereafter be entitled
and (iv) shall inure to the benefit of the agent's heirs, executors and
administrators.
Section 5. ADVANCE OF EXPENSES. Expenses incurred by an agent in
connection with the preparation and presentation of a defense to any proceeding
may be paid by the Trust from time to time prior to final disposition thereof
upon receipt of an undertaking by, or on behalf of, such agent that such amount
will be paid over by him or her to the Trust if it is ultimately determined that
he or she is not entitled to indemnification under this Article VI; provided,
however, that (a) such agent shall have provided appropriate security for such
undertaking, (b) the Trust is insured against losses arising out of any such
advance payments, or (c) either a majority of the Trustees who are neither
Interested Persons of the Trust nor parties to the proceeding, or independent
legal counsel in a written opinion, shall have determined, based upon a review
of the readily available facts (as opposed to a trial-type inquiry or full
investigation), that there is reason to believe that such agent will be found
entitled to indemnification under this Article VI.
Section 6. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does not
apply to any proceeding against any Trustee, investment manager or other
fiduciary of an employee benefit plan in that person's capacity as such, even
though that person may also be an agent of this Trust as defined in Section 1 of
this Article. Nothing contained in this Article shall limit any right to
indemnification to which such a Trustee, investment manager, or other fiduciary
may
17
<PAGE>
be entitled by contract or otherwise, which shall be enforceable to the extent
permitted by applicable law other than this Article VI.
ARTICLE VII
INSPECTION OF RECORDS AND REPORTS
Section 1. INSPECTION BY SHAREHOLDERS. The Trustees shall from time to
time determine whether and to what extent, and at what times and places, and
under what conditions and regulations the accounts and books of the Trust or any
of them shall be open to the inspection of the Shareholders; and no Shareholder
shall have any right to inspect any account or book or document of the Trust
except as conferred by law or otherwise by the Trustees or by resolution of the
Shareholders.
Section 2. INSPECTION BY TRUSTEES. Every Trustee shall have the absolute
right at any reasonable time to inspect all books, records, and documents of
every kind and the physical properties of the Trust. This inspection by a
Trustee may be made in person or by an agent or attorney and the right of
inspection includes the right to copy and make extracts of documents.
Section 3. FINANCIAL STATEMENTS. A copy of any financial statements and
any income statement of the Trust for each semi-annual period of each fiscal
year and accompanying balance sheet of the Trust as of the end of each such
period that has been prepared by the Trust shall be kept on file in the
principal executive office of the Trust for at least twelve (12) months and each
such statement shall be exhibited at all reasonable times to any Shareholder
demanding an examination of any such statement or a copy shall be mailed to any
such Shareholder.
The semi-annual income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of any independent
accountants engaged by the Trust or the certificate of an authorized officer of
the Trust that the financial statements were prepared without audit from the
books and records of the Trust.
ARTICLE VIII
GENERAL MATTERS
Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All checks, drafts,
or other orders for payment of money, notes or other evidences of indebtedness
issued in the name of or payable to the Trust shall be signed or endorsed in
such manner and by such person or persons as shall be designated from time to
time in accordance with the resolution of the Board of Trustees.
Section 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Trustees, except
as otherwise provided in these By-Laws, may authorize any officer or officers,
agent or agents, to enter into
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any contract or execute any instrument in the name of and on behalf of the Trust
and this authority may be general or confined to specific instances; and unless
so authorized or ratified by the Trustees or within the agency power of an
officer, no officer, agent, or employee shall have any power or authority to
bind the Trust by any contract or engagement or to pledge its credit or to
render it liable for any purpose or for any amount.
Section 3. FISCAL YEAR. The fiscal year of the Trust shall be fixed and
refixed or changed from time to time by the Trustees. The fiscal year of the
Trust shall be the taxable year of each Series of the Trust.
Section 4. SEAL. The seal of the Trust shall consist of a flat-faced dye
with the words "The Lou Holland Trust, Delaware, Trust, 1995" cut or engraved
thereon. However, unless otherwise required by the Trustees, the seal shall not
be necessary to be placed on, and its absence shall not impair the validity of,
any document, instrument or other paper executed and delivered by or on behalf
of the Trust.
ARTICLE IX
AMENDMENTS
Section 1. AMENDMENT. Except as otherwise provided by applicable law or
by the Declaration of Trust, these By-Laws may be restated, amended,
supplemented or repealed by the Trustees, provided that no restatement,
amendment, supplement or repeal hereof shall limit the rights to indemnification
or insurance provided in Article VI hereof with respect to any acts or omissions
of agents (as defined in Article VI) of the Trust prior to such amendment.
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EXHIBIT 4
SPECIMEN CERTIFICATE OF SHARE OF
THE GROWTH FUND
<PAGE>
[FRONT OF CERTIFICATE]
ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE
NUMBER SHARES
-------------- ------------
THE LOU HOLLAND TRUST
A DELAWARE BUSINESS TRUST
THIS CERTIFIES THAT
IS THE REGISTERED HOLDER OF SHARES OF BENEFICIAL INTEREST OF
-------------------
THE GROWTH FUND
TRANSFERABLE ON THE BOOKS OF THE TRUST BY THE HOLDER HEREOF IN PERSON OR BY
ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED. THIS
CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE ISSUED AND SHALL BE HELD
SUBJECT TO ALL THE PROVISIONS OF THE DECLARATION OF TRUST AND ANY AMENDMENTS
THERETO.
IN WITNESS WHEREOF, THE SAID TRUST HAS CAUSED THIS CERTIFICATE TO BE SIGNED
BY ITS DULY AUTHORIZED OFFICERS AND ITS SEAL TO BE HEREUNTO AFFIXED THIS
DAY OF , A.D. .
- - -------- ------- -----------
- - ------------------------------ [SEAL] -------------------------
PRESIDENT SECRETARY
<PAGE>
[BACK OF CERTIFICATE]
FOR VALUE RECEIVED HEREBY SELL, ASSIGN AND TRANSFER UNTO
--------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OR ASSIGNEE
- - -----------------------------------
- - ------------------------------------
- - -------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE)
- - -------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SHARES OF THE BENEFICIAL INTEREST REPRESENTED BY THE WITHIN CERTIFICATE AND DO
HEREBY IRREVOCABLY CONSTITUTE AND APPOINT
______________________________________________________________ ATTORNEY
TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN-NAMED ASSOCIATION WITH
FULL POWER OF SUBSTITUTION IN THE PREMISES.
DATED _________________________________
---------------------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT, OR ANY
CHANGE WHATEVER.
<PAGE>
EXHIBIT 8
FORM OF CUSTODIAN AGREEMENT BETWEEN
THE LOU HOLLAND TRUST AND FIRSTAR TRUST COMPANY
<PAGE>
FORM OF
CUSTODIAN AGREEMENT
THIS AGREEMENT made on , 1996, between The
Holland Trust, a Delaware business trust organized as a series company
currently consisting of one series, the Growth Fund (hereinafter called the
("Trust"),and FIRSTAR TRUST COMPANY, a corporation organized under the laws of
the State of Wisconsin (hereinafter called "Custodian").
WHEREAS, the Trust desires that its securities and cash shall be
hereafter held and administered by Custodian pursuant to the terms of this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and Custodian agree as follows:
1. DEFINITIONS
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive,
purchase or subscribe for the same, or evidencing or representing any other
rights or interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Trust by any two of the
President, a Vice President, the Secretary and the Treasurer of the Trust, or
any other persons duly authorized to sign by the Board of Trustees.
The word "Board" shall mean Board of Trustees of The Holland Trust.
2. NAMES, TITLES, AND SIGNATURES OF THE TRUST'S OFFICERS
An officer of the Trust will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board of
Trustees, together with any changes which may occur from time to time.
ADDITIONAL SERIES. The Holland Investment Trust is authorized to issue
separate classes of shares of beneficial interest representing interests in
separate investment portfolios. The parties intend that each portfolio
established by the trust, now or in the future, be covered by the terms and
conditions of this agreement.
3. RECEIPT AND DISTRIBUTION OF MONEY
A. Custodian shall open and maintain a separate account or accounts
in the name of the Trust, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement. Custodian shall hold in such accounts,
subject to the provisions hereof,
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all cash received by it from or for the account of the Trust. Custodian shall
make payments of cash to, or for the account of, the Trust from such cash only:
(a) for the purchase of securities for the portfolio of the
Trust upon the delivery of such securities to Custodian,
registered in the name of the Trust or of the nominee of
Custodian referred to in Section 7 or in proper form for
transfer;
(b) for the purchase or redemption of shares of the common stock
of the Trust upon delivery thereof to Custodian, or upon
proper instructions from the Holland Trust;
(c) for the payment of interest, dividends, taxes, investment
adviser's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing and
custodian services and expenses for printing and postage);
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Trust
held by or to be delivered to Custodian; or
(e) for other proper corporate purposes certified by resolution
of the Board of Trustees of the Trust.
Before making any such payment, Custodian shall receive (and may rely
upon) an officers' certificate requesting such payment and stating that it is
for a purpose permitted under the terms of items (a), (b), (c), or (d) of this
Subsection A, and also, in respect of item (e), upon receipt of an officers"
certificate specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made, provided, however, that in officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a money market instrument, or
any other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Trust issues appropriate oral
or facsimile instructions to Custodian and an appropriate officers' certificate
is received by Custodian within two business days thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for the
account of the Trust.
C. Custodian shall, upon receipt of proper instructions, make
federal funds available to the Trust as of specified times agreed upon from time
to time by the Trust and the custodian in the amount of checks received in
payment for shares of the Trust which are deposited into the Trust's account.
- 2 -
<PAGE>
4. SEGREGATED ACCOUNTS
Upon receipt of proper instructions, the Custodian shall
establish and maintain a segregated account(s) for and on behalf of the
portfolio, into which account(s) may be transferred cash and/or securities.
5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
Custodian shall have sole power to release or deliver any
securities of the Trust held by it pursuant to this Agreement. Custodian agrees
to transfer, exchange or deliver securities held by it hereon only:
(a) for sales of such securities for the account of the Trust
upon receipt by Custodian of payment therefore;
(b) when such securities are called, redeemed or retired or
otherwise become payable;
(c) for examination by any broker selling any such securities in
accordance with of "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities
alone or other securities and cash whether pursuant to any
plan of merger, consolidation reorganization,
recapitalization or readjustment, or otherwise;
(e) upon conversion of such securities pursuant to their terms
into other securities;
(f) upon exercise of subscription, purchase or other similar
rights represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
(h) for the purpose of redeeming in kind shares of common stock
of the Trust upon delivery thereof to Custodian; or
(i) for other proper corporate purposes.
As to any deliveries made by Custodian pursuant to items (a),
(b), (d), (e), (f),and (g), securities or cash receivable in exchange therefore
shall be deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian
shall receive (and may rely upon) an officers' certificate requesting such
transfer, exchange or delivery, and stating that it is for a purpose permitted
under the terms of items (a), (b), (c), (d), (e), (f), (g), or (h)
- 3 -
<PAGE>
of this Section 5 and also, in respect of item (i), upon receipt of an officers'
certificate specifying the securities to be delivered, setting forth the purpose
for which such delivery is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom delivery of such
securities shall be made, provided, however, that an officers' certificate need
not precede any such transfer, exchange or delivery of a money market
instrument, or any other security with same or next-day settlement, if the
President, a Vice President, the Secretary or the Treasurer of the Trust issues
appropriate oral or facsimile instructions to Custodian and an appropriate
officers' certificate is received by Custodian within two business days
thereafter.
6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until Custodian receives an officers' certificate to
the contrary, Custodian shall: (a) present for payment all coupons and other
income items held by it for the account of the Trust, which call for payment
upon presentation and hold the cash received by it upon such payment for the
account of the Trust; (b) collect interest and cash dividends received, with
notice to the Trust, for the account of the Trust; (c) hold for the account of
the Trust hereunder all stock dividends, rights and similar securities issued
with respect to any securities held by it hereunder; and (d) execute, as agent
on behalf of the Trust, all necessary ownership certificates required by the
Internal Revenue Code or the Income Tax Regulations of the United States
Treasury Department or under the laws of any state now or hereafter in effect,
inserting the Trust's name on such certificates as the owner of securities
covered thereby, to the extent it may lawfully do so.
7. REGISTRATION OF SECURITIES
Except as otherwise directed by an officers' certificate, Custodian
shall register all securities, except such as are in bearer form, in the name
of a registered nominee of Custodian as defined in the Internal Revenue Code
and any Regulations of the Treasury Department issued hereunder or in any
provision of any subsequent federal tax law exempting such transaction from
liability for stock transfer taxes, and shall execute and deliver all such
certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state. Custodian shall use its best
efforts to the end that the specific securities held by it hereunder shall be
at all times identifiable in its records.
The Trust shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities which it
may hold for the account of the Trust and which may from time to time be
registered in the name of the Trust.
8. VOTING AND OTHER ACTION
Neither Custodian nor any nominee of Custodian shall vote any of
the securities held hereunder by or for the account of the Trust, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall deliver, or cause to be executed and
-4-
<PAGE>
delivered, to the Corporation all notices, proxies and proxy soliciting
materials with relation to such securities, such proxies to be executed by the
registered holder of such securities (if registered otherwise than in the name
of the Trust), but without indicating the manner in which such proxies are to be
voted.
9. TRANSFER TAX AND OTHER DISBURSEMENTS
The Trust shall pay or reimburse Custodian from time to time for
any transfer taxes payable upon transfers of securities made hereunder, and
for all other necessary and proper disbursements and expenses made or
incurred by Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be
required under the provisions of the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder, or under the laws
of any state, to exempt from taxation any exemptable transfers and/or
deliveries of any such securities.
10. CONCERNING CUSTODIAN
Custodian shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed upon
in writing between the two parties. Until modified in writing, such
compensation shall be as set forth in Exhibit A attached hereto. If the
Trust terminates this Agreement prior to the second anniversary of this
Agreement, the Trust agrees to reimburse Custodian for the difference between
the standard fee schedule and the discounted fee schedule agreed to between
the parties.
Custodian shall not be liable for any action taken in good faith
upon any certificate herein described or certified copy of any resolution of
the Board, and may rely on the genuineness of any such document which it may
in good faith believe to have been validly executed.
The Trust agrees to indemnify and hold harmless Custodian and its
nominee from all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) incurred or assessed against it or by
its nominee in connection with the performance of this Agreement, except such
as may arise from its or by its nominee's own negligent action, negligent
failure to act or willful misconduct. Custodian is authorized to charge any
account of the Trust for such items.
In the event of any advance of cash for any purpose made by Custodian
resulting from orders or instructions of the Trust, or in the event that
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Trust shall
be security therefore.
-5-
<PAGE>
Custodian agrees to indemnify and hold harmless Trust from all charges,
expenses, assessments, and claims/liabilities (including counsel fees)
incurred or assessed against it in connection with the performance of this
agreement, except such as may arise from the Trust's own negligent action,
negligent failure to act, or willful misconduct.
11. SUBCUSTODIANS
Custodian is hereby authorized to engage another bank or trust
company as a Subcustodian for all or any part of the Trust's assets, so long
as any such bank or trust company is a bank or trust company organized under
the laws of any state of the United States, having an aggregate capital,
surplus and undivided profit, as shown by its last published report, of not
less than Two Million Dollars ($2,000,000) and provided further that, if the
Custodian utilizes the services of a Subcustodian, the Custodian shall remain
fully liable and responsible for any losses caused to the Trust by the
Subcustodian as fully as if the Custodian was directly responsible for any
such losses under the terms of the Custodian Agreement.
Nothwithstanding anything contained herein, if the Trust requires the
Custodian to engage specific Subcustodians for the safekeeping and/or
clearing of assets, the Trust agrees to indemnify and hold harmless Custodian
from all claims, expenses and liabilities incurred or assessed against it in
connection with the use of such Subcustodian in regard to the Trust's assets,
except as may arise from its own negligent action, negligent failure to act
or willful misconduct.
12. REPORTS BY CUSTODIAN
Custodian shall furnish the Trust periodically as agreed upon with
a statement summarizing all transactions and entries for the account of
Trust. Custodian shall furnish to the Trust, at the end of every month, a
list of the portfolio securities showing the aggregate cost of each issue.
The books and records of Custodian pertaining to its actions under this
Agreement shall be open to inspection and audit at reasonable times by
officers of, and of auditors employed by, the Trust.
13. TERMINATION OR ASSIGNMENT
This Agreement may be terminated by the Trust, or by
Custodian, on ninety (90) days notice, given in writing and sent by
registered mail to Custodian at P.O. Box 2054, Milwaukee, Wisconsin 53201, or
to the Trust at Suite 3260, 35 West Wacker Drive, Chicago, Illinois 60601,
as the case may be. Upon any termination of this Agreement, pending
appointment of a successor to Custodian or a vote of the shareholders of the
Trust to dissolve or to function without a custodian of its cash, securities
and other property, Custodian shall not deliver cash, securities or other
property of the Trust to the Trust, but may deliver them to a bank or trust
company of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report of not less than Two
Million Dollars ($2,000,000) as a Custodian for the Trust to be held under
terms similar to those of this Agreement, provided, however, that Custodian
shall not be required to make any such delivery or payment until full
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<PAGE>
payment shall have been made by the Trust of all liabilities constituting a
charge on or against the properties then held by Custodian or on or against
Custodian, and until full payment shall have been made to Custodian of all its
fees, compensation, costs and expenses, subject to the provisions of Section 10
of this Agreement.
This Agreement may not be assigned by Custodian without the consent of
the Trust, authorized or approved by a resolution of its Board of Trustees.
14. DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
No provision of this Agreement shall be deemed to prevent the use by
Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and
regulations, and the Board of Trustees of the Trust approves by resolution the
use of such central securities clearing agency or securities depository.
15. RECORDS
To the extent that Custodian in any capacity prepares or maintains
any records required to be maintained and preserved by the Trust pursuant to
the provisions of the Investment Company Act of 1940, as amended, or the
rules and regulations promulgated thereunder, Custodian agrees to make any
such records available to the Trust upon request and to preserve such records
for the periods prescribed in Rule 31a-2 under the Investment Company Act of
1940, as amended.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and their respective corporate seals to be affixed hereto as
of the date first above-written by their respective officers thereunto duly
authorized.
Executed in several counterparts, each of which is an original.
Attest: FIRSTAR TRUST COMPANY
By
- - ---------------------------- ----------------------------
Assistant Secretary Vice President
Attest: The Holland Trust
By
- - --------------------------- ----------------------------
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<PAGE>
EXHIBIT 9(a)
FORM OF TRANSFER AGENT AGREEMENT BETWEEN
THE LOU HOLLAND TRUST AND FIRSTAR TRUST COMPANY
<PAGE>
FORM OF
TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into on this ____ day of _____________,
1996, by and between The Holland Trust (hereinafter referred to as the
"Trust") and Firstar Trust Company, a corporation organized under the laws
of the State of Wisconsin (hereinafter referred to as the "Agent").
WHEREAS, the Trust is a Delaware business trust organized as a series
company currently consisting of one series, the Growth Fund.
WHEREAS, the Agent is a trust company and, among other things, is in the
business of administering transfer and dividend disbursing agent functions
for the benefit of its customers;
NOW, THEREFORE, the Trust and the Agent do mutually promise and agree as
follows:
1. TERMS OF APPOINTMENT; DUTIES OF THE AGENT
Subject to the terms and conditions set forth in this Agreement, the
Trust hereby employs and appoints the Agent to act as transfer agent and
dividend disbursing agent.
The Agent shall perform all of the customary services of a transfer
agent and dividend disbursing agent, and as relevant, agent in connection
with accumulation, open account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal program),
including but not limited to:
A. Receive orders for the purchase of shares;
B. Process purchase orders and issue the appropriate number of
certificated or uncertificated shares with such uncertificated
shares being held in the appropriate shareholder account;
C. Process redemption requests received in good order;
D. Pay monies in accordance with the instructions of redeeming
shareholders;
E. Process transfers of shares in accordance with the shareowner's
instructions;
F. Process exchanges between funds within the same family of funds;
G. Issue and/or cancel certificates as instructed; replace lost,
stolen or destroyed certificates upon receipt of satisfactory
indemnification or surety bond;
H. Prepare and transmit payments for dividends and distributions
declared by the Trust;
<PAGE>
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (i.e., systematic withdrawal, automatic
investment, dividend reinvestment, etc.);
J. Record the issuance of shares of the Trust and maintain, pursuant
to Section Rule 17ad-10(e), a record of the total number of shares
of the Trust which are authorized, issued and outstanding;
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies;
L. Mail shareholder reports and prospectuses to current shareholders;
M. Prepare and file U.S. Treasury Department forms 1099 and other
appropriate information returns required with respect to dividends
and distributions for all shareholders;
N. Provide shareholder account information upon request and prepare
and mail confirmations and statements of account to shareholders
for all purchases, redemptions and other confirmable transactions
as agreed upon with the Trust; and
O. Provide a Blue Sky System which will enable the Trust to monitor
the total number of shares sold in each state. In addition, the
Trust shall identify to the Agent in writing those transactions and
assets to be treated as exempt from the Blue Sky reporting to the
Trust for each state. The responsibility of the Agent for the
Trust's Blue Sky state registration status is solely limited to the
initial compliance by the Trust and the reporting of such
transactions to the Trust.
2. COMPENSATION
The Trust agrees to pay the Agent for performance of the duties listed
in this Agreement; the fees and out-of-pocket expenses include, but are not
limited to the following: printing, postage, forms, stationery, record
retention, mailing, insertion, programming, labels, shareholder lists and
proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Trust and the Agent.
Notwithstanding the foregoing, if the Trust terminates this Agreement prior
to the second anniversary of this Agreement, the Trust agrees to reimburse
Firstar Trust Company for the difference between the standard fee schedule
and the discounted fee schedule agreed to between the parties.
The Trust agrees to pay all fees and reimbursable expenses within ten
(10) business days following the mailing of the billing notice.
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<PAGE>
3. REPRESENTATIONS OF AGENT
The Agent represents and warrants to the Trust that:
A. It is a trust company duly organized, existing and in good standing
under the laws of Wisconsin;
B. It is a registered transfer agent under the Securities Exchange Act
of 1934 as amended.
C. It is duly qualified to carry on its business in the state of
Wisconsin;
D. It is empowered under applicable laws and by its charter and bylaws
to enter into and perform this Agreement;
E. All requisite corporate proceedings have been taken to authorize it
to enter and perform this Agreement; and
F. It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
G. It will comply with all applicable requirements of the Securities
and Exchange Acts of 1933 and 1934, as amended, the Investment
Company Act of 1940, as amended, and any laws, rules and
regulations of governmental authorities having jurisdiction.
4. REPRESENTATIONS OF THE TRUST
The Trust represents and warrants to the Agent that:
A. The Trust is an open-ended diversified investment company under the
Investment Company Act of 1940;
B. The Trust is a corporation or business trust organized, existing,
and in good standing under the laws of Delaware;
C. The Trust is empowered under applicable laws and by its Declaration
of Trust and bylaws to enter into and perform this Agreement;
D. All necessary proceedings required by the Declaration of Trust have
been taken to authorize them to enter into and perform this
Agreement;
E. The Trust will comply with all applicable requirements of the
Securities and Exchange Acts of 1933 and 1934, as amended, the
Investment Company Act of 1940, as amended, and any laws, rules and
regulations of governmental authorities having jurisdiction; and
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<PAGE>
F. A registration statement under the Securities Act of 1933 is
currently effective and will remain effective, and appropriate
state securities law filings have been made and will continue to be
made, with respect to all shares of the Trust being offered for sale.
5. COVENANTS OF TRUST AND AGENT
The Trust shall furnish the Agent a certified copy of the resolution of
the Board of Trustees of the Trust authorizing the appointment of the Agent
and the execution of this Agreement. The Trust shall provide to the Agent a
copy of the Declaration of Trust, bylaws of the Trust, and all amendments.
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the rules thereunder, the Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
hereunder are the property of the Trust and will be preserved, maintained and
made available in accordance with such section and rules and will be
surrendered to the Trust on and in accordance with its request.
6. INDEMNIFICATION; REMEDIES UPON BREACH
The Agent shall exercise reasonable care in the performance of its
duties under this Agreement. The Agent shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in
connection with matters to which this Agreement relates, including losses
resulting from mechanical breakdowns or the failure of communication or power
supplies beyond the Agent's control, except a loss resulting from the Agent's
refusal or failure to comply with the terms of this Agreement or from bad
faith, negligence, or willfull misconduct on its part in the performance of
its duties under this Agreement. Notwithstanding any other provision of this
Agreement, the Trust shall indemnify and hold harmless the Agent from and
against any and all claims, demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which the Agent may sustain or incur
or which may be asserted against the Agent by any person arising out of any
action taken or omitted to be taken by it in performing the services
hereunder (i) in accordance with the foregoing standards, or (ii) in reliance
upon any written or oral instruction provided to the Agent by any duly
authorized officer of the Trust, such duly authorized officer to be included
in a list of authorized officers furnished to the Agent and as amended from
time to time in writing by resolution of the Board of Trustees of the Trust.
Further, the Trust will indemnify and hold the Agent harmless against
any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from any claim, demand,
action, or suit as a result of the negligence of the Trust or the principal
underwriter (unless contributed to by the Agent's breach of this Agreement or
other Agreements between the Trust and the Agent, or the Agent's own
negligence or bad faith); or as a result of the Agent acting upon telephone
instructions relating to the exchange or redemption
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<PAGE>
of shares received by the Agent and reasonably believed by the Agent under a
standard of care customarily used in the industry to have originated from the
record owner of the subject shares; or as a result of acting in reliance upon
any genuine instrument or stock certificate signed, countersigned, or
executed by any person or persons authorized to sign, countersign, or execute
the same.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, the Agent shall take all reasonable steps
to minimize service interruptions for any period that such interruption
continues beyond the Agent's control. The Agent will make every reasonable
effort to restore any lost or damaged data and correct any errors resulting
from such a breakdown at the expense of the Agent. The Agent agrees that it
shall, at all times, have reasonable contingency plans with appropriate
parties, making reasonable provision for emergency use of electrical data
processing equipment to the extent appropriate equipment is available.
Representatives of the Trust shall be entitled to inspect the Agent's
premises and operating capabilities at any time during regular business hours
of the Agent, upon reasonable notice to the Agent.
Regardless of the above, the Agent reserves the right to reprocess and
correct administrative errors at its own expense.
In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the Trust may be asked to
indemnify or hold the Agent harmless, the Trust shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it
is further understood that the Agent will use all reasonable care to notify
the Trust promptly concerning any situation which presents or appears likely
to present the probability of such a claim for indemnification against the
Trust. The Trust shall have the option to defend the Agent against any claim
which may be the subject of this indemnification. In the event that the Trust
so elects, it will so notify the Agent and thereupon the Trust shall take
over complete defense of the claim, and the Agent shall in such situation
initiate no further legal or other expenses for which it shall seek
indemnification under this section. The Agent shall in no case confess any
claim or make any compromise in any case in which the Trust will be asked to
indemnify the Agent except with the Trust's prior written consent.
The Agent shall indemnify and hold the Trust harmless from and against
any and all claims, demands, losses, expenses, and liabilities (whether with
or without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which may be asserted against the Trust by any person
arising out of any action taken or omitted to be taken by the Agent as a
result of the Agent's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
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<PAGE>
7. CONFIDENTIALITY
The Agent agrees on behalf of itself and its employees to treat
confidentially all records and other information relative to the Trust and
its shareholders and shall not be disclosed to any other party, except after
prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where the Agent
may be exposed to civil or criminal contempt proceedings for failure to
comply after being requested to divulge such information by duly constituted
authorities.
ADDITIONAL SERIES. The Holland Trust is authorized to issue separate
classes of shares of beneficial interest representing interests in separate
investment portfolios. The parties intend that each portfolio established by
the trust, now or in the future, be covered by the terms and conditions of
this agreement.
8. RECORDS
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Trust but not inconsistent with the rules
and regulations of appropriate government authorities, in particular, Section
31 of The Investment Company Act of 1940 as amended (the "Investment Company
Act"), and the rules thereunder. The Agent agrees that all such records
prepared or maintained by The Agent relating to the services to be performed
by The Agent hereunder are the property of the Trust and will be preserved,
maintained, and made available with such section and rules of the Investment
Company Act and will be promptly surrendered to the Trust on and in
accordance with its request.
9. WISCONSIN LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the state of Wisconsin.
10. AMENDMENT, ASSIGNMENT, TERMINATION AND NOTICE
A. This Agreement may be amended by the mutual written consent of the
parties.
B. This Agreement may be terminated upon ninety (90) day's written
notice given by one party to the other.
C. This Agreement and any right or obligation hereunder may not be
assigned by either party without the signed, written consent of the
other party.
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<PAGE>
D. Any notice required to be given by the parties to each other under
the terms of this Agreement shall be in writing, addressed and
delivered, or mailed to the principal place of business of the
other party. If to the agent, such notice should to be sent to
Firstar Trust Company, Mutual Fund Services, P.O. box 701,
Milwaukee, Wisconsin 53202. If to the Trust, such notice should be
sent to ___________________________.
E. In the event that the Trust gives to the Agent its written
intention to terminate and appoint a successor transfer agent, the
Agent agrees to cooperate in the transfer of its duties and
responsibilities to the successor, including any and all relevant
books, records and other data established or maintained by the
Agent under this Agreement.
F. Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will
be paid by the Trust.
THE HOLLAND TRUST FIRSTAR TRUST COMPANY
By: By:
-------------------------------- ----------------------------
Attest: Attest:
-------------------------------- ------------------------
Assistant Secretary
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<PAGE>
EXHIBIT 9(b)
FORM OF FUND ADMINISTRATION SERVICING AGREEMENT BETWEEN
THE LOU HOLLAND TRUST AND FIRSTART TRUST COMPANY
<PAGE>
FORM OF
FUND ADMINISTRATION SERVICING AGREEMENT
This Agreement is made and entered into on this _______ day of _______, 1996, by
and between The Holland Trust, a Delaware Business Trust organized as series
company currently consisting of one series, the Growth Fund (hereinafter
referred to as the "Trust") and Firstar Trust Company, a corporation organized
under the laws of the State of Wisconsin (hereinafter referred to as "FTC").
WHEREAS, The Trust is an opened-ended management investment company which is
registered under the Investment Company Act of 1940;
WHEREAS, FTC is a trust company and, among other things, is in the business of
providing fund administration services for the benefit of its customers;
NOW, THEREFORE, the Trust and FTC do mutually promise and agree as follows:
I. APPOINTMENT OF ADMINISTRATOR
The Trust hereby appoints FTC as Administrator of the Trust on the terms
and conditions set froth in this Agreement, and FTC hereby accepts such
appointment and agrees to perform the services and duties set forth in
this Agreement in consideration of the compensation provided for herein.
II. DUTIES AND RESPONSIBILITIES OF FTC
A. General Trust Management
1. Act as liaison among all fund service providers.
2. Coordinate board communications by:
a. Assisting fund counsel in establishing meeting agendas
b. Preparing board reports based on financial and administrative
data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director and
officers liability coverage, and making the necessary SEC
filings relating thereto
3. Audits
a. Prepare appropriate schedules and assist independent
auditors
b. Provide information to SEC and facilitate audit process
c. Provide office facilities
4. Assist in overall operations of the Trust.
<PAGE>
B. Compliance
1. Regulatory Compliance
a. Periodically monitor compliance with Investment Company Act
of 1940 requirements
1) Asset diversification test
2) Total return and SEC yield calculations
3) Maintenance of books and records under Rule 31a-3
4) Code of ethics
b. Periodically monitor Trust's compliance with the policies
and investment limitations of the Trust as set forth in its
prospectus and statement of additional information.
2. Blue Sky Compliance
a. Prepare and file with the appropriate state securities
authorities any and all required compliance filings relating
to the registration of the securities of the Trust so as to
enable the Trust to make a continuous offering of its
shares
b. Monitor status and maintain registrations in each state
3. SEC Registration and Reporting
a. Assisting Trust's counsel in updating prospectus and
statement of additional information; and in preparing proxy
statements, and Rule 24-f-2 notice,
b. Annual and semiannual reports
4. IRS Compliance
a. Periodically monitor Trust's status as a regulated
investment company under Subchapter M through review of the
following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Monitor short short testing
c. Calculate required distributions (including excise tax
distributions)
5. Financial Reporting
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<PAGE>
6. Provide financial data required by fund prospectus and statement
of additional information
7. Prepare financial reports for shareholders, the board, the SEC,
and independent auditors
8. Supervisor the Trust's Custodian and Fund Accountants in the
maintenance of the Trust's general ledger and in the preparation
of the Trust's financial statements including oversight of
expense accruals and payments, of the determination of net asset
value of the Trust's net assets and of the Trust's shares, and
of the declaration and payment of dividends and other
distributions to shareholders.
C. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and state
tax returns including forms 1120/8610 with any necessary
schedules
2. Prepare state income breakdowns where relevant
3. File 1099 Miscellaneous for payments to directors and other
service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate shareholders
III. COMPENSATION
Trust agrees to pay FTC for performance of the duties listed in this
Agreement and the fees and out-of-pocket expenses as set forth in the
attached Schedule A. If the Trust terminates this Agreement prior to the
second anniversary of this Agreement, the Trust agrees to reimburse FTC
for the difference between the standard fee schedule and the discounted
fee schedule agreed to between the parties.
These fees may be changed form time to time, subject to mutual written
Agreement between the Trust and FTC.
The Trust agrees to pay all fees and reimbursable expenses within ten
(10) business days following the mailing of the billing notice.
VI. ADDITIONAL SERIES
In the event that The Holland Trust, a Delaware Business Trust organized
as a series company currently consisting of one series, the Growth Fund
establishes one or more
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<PAGE>
series of shares with respect to which it desires to have FTC render
funds administration services, under the terms hereof, it shall so notify
FTC in writing, and if FTC agrees in writing to provide such services,
such series will be subject to the terms and conditions of this
Agreement, and shall be maintained and accounted for by FTC on a discrete
basis. The funds currently covered by this Agreement are: The Growth
Fund.
V. PERFORMANCE OF SERVICE; LIMITATIONS OF LIABILITY
A. FTC shall exercise reasonable care in the performance of its
duties under this Agreement. FTC shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in
connection with matters to which this Agreement relates, including losses
resulting form mechanical breakdowns or the failure of communication or
power supplies beyond FTC's controls, except a loss resulting from FTC's
refusal or failure to comply with the terms of this Agreement or from bad
faith, negligence, or willful misconduct on its part on its the
performance of its duties under this Agreement. Notwithstanding any
other provision of this Agreement, the Trust shall indemnify and hold
harmless FTC from and against any and all claims, demands, losses,
expenses, and liabilities (whether with or without basis in fact or law)
of any and every nature (including reasonable attorney's fees) which FTC
may sustain or incur or which may be asserted against FTC by any person
arising out of any action taken or omitted to be taken by it in
performing the services hereunder (i) in accordance with the foregoing
standards, or (ii) in reliance upon any written or oral instruction
provided to FTC by any duly authorized officer of the Trust, such duly
authorized officer to be included in a list of authorized officer
furnished to FTC and as amended from time to time in writing by
resolution of the Board of Directors of the Trust.
In the event of a mechanical breakdown or failure of communication
or power supplies beyond its control, FTC shall take all reasonable steps
to minimize service interruptions for any period that such interruption
continues beyond FTC's control. FTC will make every reasonable effort
to restore any lost or damaged data and correct any errors resulting from
such a breakdown at the expense of FTC. FTC agrees that it shall, at all
times, have reasonable contingency plans with appropriate parties, making
reasonable provision for emergency use of electrical data processing
equipment to the extent appropriate equipment is available.
Representatives of the Trust shall be entitled to inspect FTC's premises
and operating capabilities at any time during regular business hours of
FTC, upon reasonable notice to FTC.
Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the Trust may
be asked to indemnify or hold FTC harmless, the Trust shall be fully and
promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that FTC will use all
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<PAGE>
reasonable care to notify the Trust promptly concerning any situation
which presents or appears likely to present the probability of such a
claim for indemnification against the Trust. The Trust shall have the
option to defend FTC against any claim which may be the subject of this
indemnification. In the event that the Trust so elects, it will so
notify FTC and thereupon the Trust shall take over complete defense of
the claim's and FTC shall in such situation initiate no further legal or
other expenses for which it shall seek indemnification under this
section. FTC shall in no case confess any claim or make any compromise
in any case in which the Trust will be asked to indemnify FTC except with
the Trust's prior written consent.
C. FTC shall indemnify and hold the Trust harmless form and against
any and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature (including
reasonable attorneys' fees) which may be asserted against the Trust by
any person arising out of any action taken or omitted to be taken by FTC
as a result of FTC's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
VI. CONFIDENTIALITY
FTC shall handle, in confidence, all information relating to the Trust's
business which is received by FTC during the course of rendering any
service hereunder.
VII. DATA NECESSARY TO PERFORM SERVICE
The Trust or its agent, which may be FTC, shall furnish to FTC the data
necessary to perform the services described herein at times and in such
form as mutually agreed upon.
VIII. TERMS OF AGREEMENT
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue automatically in
effect for successive annual periods. The Agreement may be terminated by
either party upon giving ninety (90) days prior written notice to the
other party or such shorter period as is mutually agreed upon by the
parties.
IX. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor or any
FTC's duties or responsibilities hereunder is designated by the Trust by
written notice FTC, FTC will promptly, upon such termination and at the
expense of the Trust, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by FTC
under this Agreement in a form reasonably accepted to the Trust (if such
form differs from the from in which FTC has maintained, the Trust shall
pay any expenses associated with transferring the data to such form), and
will cooperate in
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<PAGE>
the transfer of such duties and responsibilities, including provision for
assistance form FTC's personnel in the establishment of books, records,
and other data by such successor.
X. CHOICE OF LAW
This Agreement shall be construed in accordance with the laws of the
State of Wisconsin.
XI. NOTICES
Notices of any kind to be given by either party to the other party shall
be in writing and shall be duly given if mailed or delivered as follows:
Notice to FTC shall be sent to Joe Nueberger, 615 East Michigan Street,
Milwaukee, Wisconsin 53202, and notice to Trust shall be sent to The
Holland Trust, Suite 3260, 35 West Wacker Drive, Chicago, Illinois 60801.
XII. RECORDS
FTC shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Trust but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the Investment Company Act of 1940 as amended
(the "Investment Company Act"), and the rules thereunder. FTC agrees
that all such records prepared or maintained by FTC relating to the
services to be performed by FTC hereunder are the property of the Trust
and will be preserved, maintained, and made available with such section
and rules of the Investment Company Act and will be promptly surrendered
to the Trust on an in accordance with its request.
THE HOLLAND TRUST FIRSTAR TRUST COMPANY
By: By:
------------------------------- -------------------------
Attest: Attest:
--------------------------- -----------------------
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<PAGE>
EXHIBIT 9(c)
FORM OF FUND ACCOUNTING SERVICING AGREEMENT BETWEEN
THE LOU HOLLAND TRUST AND FIRSTAR TRUST COMPANY
<PAGE>
FUND ACCOUNTING SERVICING AGREEMENT
This contract between The Holland Trust, A Delaware business trust organized
as a series company currently consisting of one series, the Growth Fund,
hereinafter called the "Trust," and Firstar Trust Company, a Wisconsin
corporation, hereinafter called "FTC," is entered into on this
day of , 1996.
WHEREAS, The Holland Trust, is an open-ended management investment
company registered under the Investment Company Act of 1940; and
WHEREAS, Firstar Trust Company ("FTC") is in the business of providing,
among other things, mutual fund accounting services to investment companies;
NOW, THEREFORE, the parties do mutually promise and agree as follows:
1. SERVICES. FTC agrees to provide the following mutual fund accounting
services to the Trust:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date +1 basis using
security trade information communicated from the investment manager on
a timely basis.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Trustees and apply those prices to the
portfolio positions. For those securities where market quotations
are not readily available, the Board of Trustees shall approve, in good
faith, the method for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of each
valuation date and calculate gross earnings on investments for the
accounting period.
(4) Determine gain/loss on security sales and identify them as
to short-short, short- or long-term status; account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Trust as to methodology, rate or dollar
amount.
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<PAGE>
(2) Record payments for Trust expenses upon receipt of written
authorization from the Trust.
(3) Account for trust expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by FTC and
the Trust.
(4) Provide expense accrual and payment reporting.
C. Trust Valuation and Financial Reporting Services:
(1) Account for trust share purchases, sales, exchanges,
transfers, dividend reinvestments, and other trust share activity as
reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the Trust.
(3) Determine net investment income (earnings) for the Trust as
of each valuation date. Account for periodic distributions of earnings
to shareholders and maintain undistributed net investment income
balances as of each valuation date.
(4) Maintain a general ledger for the Trust in the form as agreed
upon.
(5) For each day the Trust is open as defined in the prospectus,
determine the net asset value of the according to the accounting
policies and procedures set forth in the prospectus.
(6) Calculate per share net asset value, per share net earnings,
and other per share amounts reflective of trust operation at such time
as required by the nature and characteristics of the Trust.
(7) Communicate, at an agreed upon time, the per share price for
each valuation date to parties as agreed upon from time to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment portfolio of
the Trust to support the tax reporting required for IRS-defined
regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
- 2 -
<PAGE>
(3) Calculate taxable gain/loss on security sales using the tax
lot relief method designated by the Trust.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to the
transfer agent to support tax reporting to the shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making the trust accounting records available
to The Holland Trust, the Securities and Exchange Commission, and the
outside auditors.
(2) Maintain accounting records according to the Investment
Company Act of 1940 and regulations provided thereunder.
2. PRICING OF SECURITIES. For each valuation date, obtain prices from a
pricing source selected by FTC but approved by the Trust's Board and apply
those prices to the portfolio positions. For those securities where market
quotations are not readily available, the Trust's Board shall approve, in good
faith, the method for determining the fair value for such securities.
If the Trust desires to provide a price which varies from the pricing
source, the Trust shall promptly notify and supply FTC with the valuation of
any such security on each valuation date. All pricing changes made by the
Trust will be in writing and must specifically identify the securities to be
change by CUSIP, name of security, new price or rate to be applied, and, if
applicable, the time period for which the new prices is effective.
3. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by the Board of
Trustees that affects accounting practices and procedures under this
agreement shall be effective upon written receipt and acceptance by the FTC.
4. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC. FTC reserves the right to
make changes from time to time, as it deems advisable, relating to its
services, systems, programs, rules, operating schedules and equipment, so
long as such changes do not adversely affect the service provided to the
Trust under this Agreement.
5. COMPENSATION. FTC shall be compensated for providing the services
set forth in this Agreement in accordance with the Fee Schedule attached
hereto as Exhibit A and as mutually agreed upon and amended form time to
time. Notwithstanding the foregoing, if the Trust terminates this Agreement
prior to the second anniversary of this Agreement, the Trust agrees to
reimburse FTC for the difference between the standard fee schedule and the
discounted fee schedule agreed to between the parties.
- 3 -
<PAGE>
6. PERFORMANCE OF SERVICE.
A. FTC shall exercise reasonable care in the performance of its duties
under this Agreement. FTC shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in connection with
matters to which this Agreement relates, including losses resulting from
mechanical breakdowns or the failure of communication or power supplies
beyond FTC's control, except a loss resulting from FTC's refusal or
failure to comply with the terms of this Agreement or from bad faith,
negligence, or willful misconduct on its part in the performance of its
duties under this Agreement. Notwithstanding any other provision of this
Agreement, the Trust shall indemnify and hold harmless FTC from and against
any and all claims, demands, losses, expenses, and liabilities (whether with
or without basis in fact or law) of any and every nature (including
reasonable attorneys' fees) which FTC may sustain or incur or which may be
asserted against FTC by any person arising out of any action taken or
omitted to be taken by it in performing the services hereunder (i) in
accordance with the foregoing standards, or (ii) in reliance upon any
written or oral instruction provided to FTC by any duly authorized officer
of the Trust, such duly authorized officer to be included in a list of
authorized officers furnished to FTC and as amended from time to time in
writing by resolution of the Board of Directors of the Trust.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, FTC shall take all reasonable steps to
minimize service interruptions for any period that such interruption
continues beyond FTC's control. FTC will make every reasonable effort to
restore any lost or damaged data and correct any errors resulting from such
a breakdown at the expense of FTC. FTC agrees that it shall, at all times,
have reasonable contingency plans with appropriate parties, making
reasonable provision for emergency use of electrical data processing
equipment to the extent appropriate equipment is available. Representatives
of the Trust shall be entitled to inspect FTC's premises and operating
capabilities at any time during regular business hours of FTC, upon
reasonable notice to FTC.
Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the trust may be
asked to indemnify or hold FTC harmless, the Trust shall be fully and
promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that FTC will use all reasonable
care to notify the Trust promptly concerning any situation which presents
or appears likely to present the probability of such a claim for
indemnification against the Trust. The Trust shall have the option to
defend FTC against any claim which may be the subject of this
indemnification. In the event that the Trust so elects, it will so notify
FTC and thereupon the Trust shall take
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<PAGE>
over complete defense of the claim, and FTC shall in such situation
initiate no further legal or other expenses for which it shall seek
indemnification under this section. FTC shall in no case confess any claim
or make any compromise in any case in which the Trust will be asked to
indemnify FTC except with the Trust's prior written consent.
C. FTC shall indemnify and hold the Trust harmless from and against
any and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature (including
reasonable attorneys' fees) which may be asserted against the Trust by any
person arising out of any action taken or omitted to be taken by FTC as a
result of FTC's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
7. RECORDS. FTC shall keep records relating to the services to be
performed hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Trust but not inconsistent with the rules
and regulations of appropriate government authorities, in particular,
Section 31 of The Investment Company Act of 1940 as amended (the "Investment
Company Act"), and the rules thereunder. FTC agrees that all such records
prepared or maintained by FTC relating to the services to be performed by FTC
hereunder are the property of the Trust and will be preserved, maintained,
and made available with such section and rules of the Investment Company Act
and will be promptly surrendered to the Trust on and in accordance with its
request.
8. CONFIDENTIALITY. FTC shall handle in confidence all information
relating to the Trust's business, which is received by FTC during the course
of rendering any service hereunder.
9. DATA NECESSARY TO PERFORM SERVICES. The Trust or its agent, which may
be FTC, shall furnish to FTC the data necessary to perform the services
described herein at times and in such form as mutually agreed upon.
10. NOTIFICATION OF ERROR. The Trust will notify FTC of any balancing or
control error caused by FTC within three (3) business days after receipt of
any reports rendered by FTC to the Trust, or within three (3) business days
after discovery of any error or omission not covered in the balancing or
control procedure, or within three (3) business days of receiving notice
from any shareholder.
11. ADDITIONAL SERIES. In the event that The Holland Trust establishes
one or more series of shares with respect to which it desires to have FTC
render accounting services, under the terms hereof, it shall so notify FTC in
writing, and if FTC agrees in writing to provide such services, such series
will be subject to the terms and conditions of this Agreement, and shall be
maintained and accounted for by FTC on a discrete basis. The portfolios
currently covered by this Agreement are: the Growth Fund.
- 5 -
<PAGE>
12. TERM OF AGREEMENT. This Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties. However, this
Agreement may be replaced or modified by a subsequent agreement between the
parties.
13. DUTIES IN THE EVENT OF TERMINATION. In the event that in connection
with terminating a Successor to any of FTC's duties or responsibilities
hereunder is designated by The Holland Trust by written notice to FTC, FTC
will promptly, upon such termination and at the expense of The Holland Trust,
transfer to such Successor any relevant books, records, correspondence and
other data established or maintained by FTC under this Agreement in a form
reasonably acceptable to The Holland Trust (if such form differs from the
form in which FTC has maintained the same, the Holland Trust shall pay any
expenses associated with transferring the same to such form), and will
cooperate in the transfer of such duties and responsibilities, including
provision for assistance from FTC's personnel in the establishment of books,
records and other data by such successor.
14. NOTICES. Notices of any kind to be given by either party to the
other party shall be in writing and shall be duly given if mailed or
delivered as follows: Notice to FTC shall be sent to , and
notice to Trust shall be sent to .
15. CHOICE OF LAW. This Agreement shall be construed in accordance with
the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
ATTEST: Firstar Trust Company
___________________________________ By________________________________
ATTEST: The Holland Trust
___________________________________ By________________________________
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<PAGE>
EXHIBIT 9(d)
FORM OF EXPENSE LIMITATION AGREEMENT BY AND
BETWEEN THE LOU HOLLAND TRUST AND
HOLLAND CAPITAL MANAGEMENT
<PAGE>
FORM OF
EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT made as of the ____ day of ____________, 1996,
by and between The Lou Holland Trust, a Delaware business trust (the "Trust"),
on behalf of its sole series, the Growth Fund (the "Fund"), and Holland Capital
Management, L.P., a Delaware limited partnership (the "Investment Manager").
W I T N E S S E T H
WHEREAS, the Trust, on behalf of the Fund, and the Investment Manager have
entered into an Investment Management and Administration Agreement, dated
______________, 1996, (the "Management Agreement") pursuant to which the
Investment Manager will render investment management and administration services
to the Fund for compensation based on the value of the average daily net assets
of the Fund; and
WHEREAS, the Trust and the Investment Manager have determined that it is
appropriate and in the best interests of the Fund and its shareholders to
maintain Fund expenses at a level below that to which the Fund would normally be
subject during the first year of its operation.
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMIT.
1.1. LIMITATION. To the extent that the aggregate expense of every
character incurred by the Fund during the first year of its operation, including
but not limited to investment management and administration fees of the
Investment Manager (but excluding interest, taxes, brokerage commissions, and
other expenditures which are capitalized in accordance with generally accepted
accounting principles, and other extraordinary expenses not incurred in the
ordinary course of the Fund's business) ("Fund Operating Expenses"), exceeds the
"Expense Limit," which is the lower of (i) the lowest applicable limit actually
enforced by any state in which the Fund's shares are qualified for sale or (ii)
1.35% of the average daily net assets of the Fund, such excess amount ("Excess
Amount") shall be the liability of the Investment Manager.
1.2. METHOD OF COMPUTATION. To determine the Investment Manager's
liability for the Excess Amount, the Fund Operating Expenses shall be annualized
monthly as of the last day of the month. If the annualized Fund Operating
Expenses for any month exceed 1/12th of the Expense Limit, the Investment
Manager shall first waive or reduce its investment management and administration
fee for such month, as appropriate, to the extent necessary to pay such Excess
Amount. In the event the Excess Amount exceeds the amount of the investment
management and administration fee for such month, the Investment Manager, in
addition to waiving its entire investment management and administration fee for
such month, shall also remit
<PAGE>
to the Fund the difference between the Excess Amount and the amount due as the
investment management and administration fee.
2. TERMINATION OF AGREEMENT. This Agreement shall continue in effect for
a period of one year from the date of execution and may be terminated thereafter
by either party hereto, without payment of any penalty, upon 90 days' prior
notice in writing to the other party at its principal place of business;
provided that, in the case of termination by the Trust, such action shall be
authorized by resolution of the Board of Trustees of the Trust.
3. MISCELLANEOUS.
3.1. NOTICES. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, (a) if to the Investment
Manager, to Holland Capital Management, L.P., Suite 3260, 35 West Wacker Drive,
Chicago, Illinois 60601, and (b) if to the Trust, at the foregoing office of
the Investment Manager.
3.2. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no other way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
3.3. INTERPRETATION. Nothing herein contained shall be deemed to
require the Trust to take any action contrary to its Declaration of Trust or By-
Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Trustees
of its responsibility for and control of the conduct of the affairs of the
Trust.
3.4. DEFINITIONS. Any question of interpretation of any term or
provision of this Agreement, including but not limited to the investment
management and administration fee, the computations of net asset values, and the
allocation of expenses, having a counterpart in or otherwise derived from the
terms and provisions of the Management Agreement, shall have the same meaning as
and be resolved by reference to such Agreement.
<PAGE>
3.5. GOVERNING LAW. Except insofar as the 1940 Act or other federal
laws and regulations may be controlling, this Agreement shall be governed by,
and construed and enforced in accordance with the laws of the State of Illinois.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized, as of the day and year
first above written.
ATTEST: THE LOU HOLLAND TRUST
ON BEHALF OF THE GROWTH FUND
By:
- - ----------------------- ---------------------------
ATTEST: HOLLAND CAPITAL MANAGEMENT, L.P.
By:
- - ----------------------- ---------------------------
<PAGE>
EXHIBIT 10
OPINION AND CONSENT OF KATTEN MUCHIN & ZAVIS
REGARDING THE LEGALITY OF THE SECURITIES
BEING REGISTERED
[KATTEN MUCHIN & ZAVIS LETTERHEAD]
Katten Muchin & Zavis
1025 Thomas Jefferson Street, N.W.
East Lobby, Suite 700
Washington, D.C. 20007-5201
(202) 625-3500
March 21, 1996
OPINION AND CONSENT OF COUNSEL
The Lou Holland Trust
Suite 3260
35 West Wacker Drive
Chicago, IL 60601
Trustees:
This opinion is given in connection with the filing by The Lou Holland
Trust, a Delaware business trust ("Trust") of Pre-Effective Amendment No. 1 to
its Registration Statement on Form N-1A (File Nos. 333-935 and 811-7533) (the
"Registration Statement") under the Securities Act of 1933 ("1933 Act") and the
Investment Company Act of 1940 ("1940 Act") relating to an indefinite amount of
authorized shares of beneficial interest of a single series of the Trust, the
Growth Fund ("Fund"). The authorized shares of beneficial interest of the Fund
are hereinafter referred to as the "Shares."
We have examined the following: the Trust's Certificate of Trust, dated
December 15, 1995, and the Certificate of Amendment to the Certificate of Trust,
dated March 15, 1996; its By-Laws, as amended and restated; the Registration
Statement, as originally filed with the Securities and Exchange Commission on
February 12, 1996; the form of Pre-Effective Amendment No. 1 to the Registration
Statement substantially in the form in which it is to become effective; a
Certificate of Good Standing issued by the State of Delaware; pertinent
provisions of the laws of the State of Delaware; and such other corporate and
organizational records, certificates, documents and statutes that we have deemed
relevant in order to render the opinion expressed herein.
Based on such examination, we are of the opinion that:
1. The Trust is a Delaware business trust duly organized, validly
existing, and in good standing under the laws of the State of
Delaware; and
<PAGE>
Trustees
March 21, 1996
2. The Shares to be offered for sale by the Trust, when issued
in the manner contemplated by the Registration Statement
will be legally issued, fully-paid and non-assessable.
This letter expresses our opinion as to the Delaware Code governing matters
such as Delaware business trusts, the due organization of the Trust and the
authorization and issuance of shares of beneficial interest, but does not extend
to the securities or "Blue Sky" laws of the State of Delaware or to the federal
securities or other laws.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to Katten Muchin & Zavis under the caption "Legal
Matters" in the Statement of Additional Information, which is incorporated by
reference into the Prospectus comprising a part of the Registration Statement.
Very truly yours,
/s/ KATTEN MUCHIN & ZAVIS
KATTEN MUCHIN & ZAVIS
<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITORS
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Pre-Effective Amendment No. 1 to Registration
Statement (No. 333-935) of The Lou Holland Trust on Form N-1A of our report
dated March 20, 1996, appearing in the Prospectus, which is part of this
Registration Statement and to the reference to us under the heading "Independent
Auditors" in such Prospectus.
/s/ Deloitte & Touche LLP
Chicago, Illinois
March 20, 1996
<PAGE>
EXHIBIT 19
SPECIMEN PRICE-MAKE-UP SHEET
OF THE GROWTH FUND
<PAGE>
PRICE-MAKE-UP SHEET
THE GROWTH FUND
March 18, 1996
Value of Registrant's
Portfolio Securities Outstanding Total Offering
and Other Assets Securities Price Per Share
-------------------- ----------- ---------------
$100,000 10,000 $10.00
