UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No.
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No.
(Check appropriate box or boxes.)
The Staar System Trust
(Exact Name of Registrant as Specified in Charter)
604 McKnight Park Drive, Pittsburgh, PA 15237
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number(including Area Code)(412) 367-9076
J. Andre Weisbrod, 604 McKnight Park Drive, Pittsburgh, PA, 15237
(Name and Address of Agent for Services)
Copies to Alan Z. Lefkowitz, Esquire, Kabala & Geeseman, 200
First Avenue, Pittsburgh, PA 15222
Approximate Date of Proposed Public Offering As soon as possible
after the Registration Statement becomes effective.
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
X on September 4, 1996 pursuant to paragraph (a) of Rule
485
<TABLE>
<CAPTION>
Calculation of Registration Fee under the Securities Act of 1993
Title of
Securities
Being
Registered
Amount
Being
Registered
Proposed
Maximum
Offering
Price Per
Unit
Proposed
Maximum
Aggregate
Offering
Price
Amount
of
Registrati
on Fee
<S>
Shares of
Beneficial
Interest
<C>
Indefinite*
<C>
$10.40
<C>
<C>
$500
</TABLE>
Registrant hereby elects to register an indefinite number of
shares under the Securities Act of 1933 in accordance with the
provisions of Rule 24f-2 under the Investment Company Act of 1940
[17 CFR 270.24f-2].1<PAGE>
THE STAAR SYSTEM TRUST
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(a)
UNDER THE SECURITIES ACT OF 1933
Form N-1A
<TABLE>
<CAPTION>
Item Registration Statement Prospectus
No. Caption Caption
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis (a)
3. Condensed Financial Information (a)
4. General Description of Registrant Cover Page, The Funds,
The Advisor; General
Investment Objectives and
Policies
5. Management of Fund Management of the Funds
5A. Management Discussion of (a)
Funds Performance
6. Capital Stock and (a)
Other Securities
7. Purchase of Securities How to Buy Shares
being offered
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings (a)
</TABLE>
<TABLE>
<CAPTION>
Additional Information Statement of Additional
Information Caption
<S> <C> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information and
History
13. Investment Objectives and Policies Investment Objective
and Policies, Investment
Restrictions
14. Management of the Fund Board of Trustees
15. Control Persons and Principal Control Persons and
Holders of Securities Principal Holders of
Securities
16. Investment Advisory and Investment Advisory and
Other Services other services
17. Brokerage Allocation and other Brokerage Allocation and
other Practices other Practices
18. Capital Stock and (a)
19. Purchase Redemption and Pricing Purchase, Redemption and
of shares pricing of Shares
20. Tax Status Dividends,Capital Gains,
Distributions & Taxes
21. Underwriter (a)
22. Calculations of Performance Data Performance Data
23. Financial Statements Financial Statements
</TABLE>
(a) Not Applicable<PAGE>
PROSPECTUS
September 4, 1996
THE STAAR SYSTEM TRUST
604 McKnight Park Dr.
Pittsburgh, PA 15237
412-367-9076
New Account Information:
1-800-33ASSET P.I.N.3370
Shareholder Account Services:
1-800-33ASSET P.I.N.3371
Pittsburgh Local: 367-9076
Contents Page
<TABLE>
<CAPTION>
<S> <C>
Expenses. . . . . . . . . . . . . . . . . . 7
Fund Information. . . . . . . . . . . . . . 8
Risks . . . . . . . . . . . . . . . . . . . 12
Management. . . . . . . . . . . . . . . . . 15
How to Purchase Shares. . . . . . . . . . . 16
How to Sell Shares. . . . . . . . . . . . . 19
How to Exchange Shares. . . . . . . . . . . 19
Dividends, Capital Gains,
Distributions & Taxes. . . . . . . . . . . 22
Glossary. . . . . . . . . . . . . . . . . .
</TABLE>
A "Statement of Additional Information" about the Trust, dated
9/4/96, has been filed with the Securities and Exchange
Commission and has been incorporated by reference into this
prospectus. A copy may be obtained without charge by writing to
the Trust or by calling the New Account Information number.
A glossary of terms used in this prospectus is found on Page __.
This prospectus contains concise information important for a
prospective investor to know before investing. This prospectus
should be read thoroughly and retained for future reference.
The STAAR SYSTEM Trust (SST), a Pennsylvania business trust, is
an open-end non-diversified management investment company which
consists of six separate series portfolios. Each is referred to
in this prospectus as a "Fund". Together, they are referred to
as the "Funds".
The Funds are organized in such manner that each Fund corresponds
to a standard asset allocation category, with the exception of
the AltCat Fund which is a flexibly-managed fund that may invest
in assets not included in the other Funds. The Funds are:
The SST Intermediate Bond Fund (IBF)
The SST Long-Term Bond Fund (LTBF)
The SST Larger Company Stock Fund (LCSF)
The SST Smaller Company Stock Fund (SCSF)
The SST International Fund (IF)
The SST Alternative Categories Fund (AltCat)
Each Fund is managed separately and has its own investment
objectives and strategies in keeping with the asset allocation
category for which it is named. Each Fund may invest in other
open-end funds (mutual funds) as well as closed-end funds and
individual securities subject to the limitations outlined herein.
To the extent other open-end funds are employed, this strategy
will result in higher annual expenses incurred than if you
invested directly in those mutual funds.
Shares of the Funds are not deposits or obligations of or insured
or guaranteed by the U.S. Government, any financial institution,
the Federal Deposit Insurance Corporation or any other agency.
The purchase of Fund shares involve investment risks, including
the possible loss of principal.
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.
<PAGE>
Trust Expenses
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
IBF
LTBF
LCSF
SCSF
INTF
ACF
<C>
Maximum Sales Load
Imposed on
Purchases
<C>
1.5%
<C>
1.5%
<C>
1.5%
<C>
1.5%
<C>
1.5%
<C>
1.5%
(as percentage of
offering price)
No load at the $100,000 purchase
level: See details in how to
purchase and sell shares sections
Sales Load Imposed
on Reinvested
Dividends
None on any of the funds
Deferred Sales Load
1% on redemptions of purchases made
at net asset value (no load) if
redeemed during the first 12 mos
from acct inception
Exchange Fee
None on any of the funds
Redemption Fees
None on any of the funds
</TABLE>
ANNUAL FUND OPERATING EXPENSES*
(As a percentage of average net assets)
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> <C>
Management Fees* .63% .72% .90% .90% .90% 1.20%
12B-1 Fees (Maximum) None
Other Expenses* .09% .09% .09% .09% .09% .09%
Total Fund 72% .79% .99% .99% .99% 1.29%
Operating Expenses
</TABLE>
Example
You would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) Redemption at the end of
each time period. (Assumes maximum sales charge)
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> c>
One Year $ 22 $ 23 $ 25 $ 25 $ 25 $ 28
Three Years $ 38 $ 40 $ 46 $ 46 $ 46 $ 56
Five Years $ 55 $ 59 $ 69 $ 69 $ 69 $ 85
Ten Years $103 $112 $135 $135 $135 $169
</TABLE>
The purpose of the above table is to assist the investor in understanding
the various costs and expenses an investor in the funds would bear directly
or indirectly.
Management fees include services in addition to investment
advisory services. The Advisor may also provide, according to
the Advisory Agreement, directly or through sub-contractors
transfer agency, custodial services, accounting, pricing, legal,
general administration, marketing and other services which are
included in the advisory fee. Since these funds are newly
registered, the expenses outlined are estimates. The management
fees listed are maximums agreed to by the adviser and could be
less than those stated. Management fees do not include brokerage
fees, taxes or direct fees and expenses of the trustees, except
as provided in the Advisory Agreement. Nor do they include
expenses of any mutual funds owned by the trust funds. Other
expenses include direct fees and expenses of the trustees.
The Funds
STAAR SYSTEM Trust is a Pennsylvania business trust formed
on 02/28/96. It is registered as an open-end, non-diversified,
management investment company. Each Fund in the Trust's series
of Funds will be treated as a non-diversified investment company
under the Investment Company Act of 1940. Mutual funds in which
any series Fund of the STAAR SYSTEM Trust may invest may
themselves be diversified investment companies.
The series Funds within the trust intend to qualify as
management investment companies for purposes of Subchapter M of
the Internal Revenue Code and expect to be treated as a regulated
investment company for income tax purposes. The funds will be
able to invest in shares of other open-end and closed-end mutual
funds as well as in individual securities.
The Trust consists of six portfolios, each known as a
separate Fund and managed separately from the other Funds.
Together they are referred to as the Funds. Investment in any of
the Funds entails various risks, and there can be no assurance
that the objectives of the Funds can be attained (see Risks, Page
5).
The Fund names and abbreviations are as follows:
The SST Intermediate Bond Fund (IBF)
The SST Long-Term Bond Fund (LTBF)
The SST Larger Company Stock Fund (LCSF)
The SST Smaller Company Stock Fund (SCSF)
The SST International Fund (INTF)
The SST Alternative Categories Fund (AltCat
or ACF)
The Advisor
STAAR SYSTEM Financial Services, Inc. serves as the Trust's
overall investment advisor pursuant to a Master Investment
Advisory Agreement (the "Advisory Agreement").
General Investment Objectives & Policies
Each Fund has its own objectives, policies and strategies
designed to meet different investor goals. The funds may invest
in a variety of securities to achieve their objectives, including
shares of other open-end and closed-end mutual funds as well as
in individual securities. A Fund may invest up to 25% of its
assets in any one mutual fund and up to 15% of its assets in any
one individual security, such as a stock or bond, except for
individual money market instruments (such as U.S. Treasury
securities having maturities of less than 52 weeks), in which the
trustees may invest with no percentage restriction. The IBF and
LTBF Funds, however, may hold up to 25% of their value in a
single U.S. Treasury Note or Bond. The funds may invest in money
market mutual funds, short-term U.S. Government Securities or
other short-term instruments when it is considered prudent by the
trustees and advisors to do so either for liquidity or for risk
management purposes. These types of holdings will be referred to
as "cash" positions in this prospectus. While there are no
restrictions on cash positions within the Funds, the general
policy is to have no more than 50% of a Fund's assets invested in
cash positions.
In general, the non-cash holdings of the Funds will be
selected so as to have a high correlation to the asset class for
which they are named. This will allow the investor to better
utilize asset allocation as a planning and risk-management tool.
In pursuing the objectives of each Fund, the trustees will
seek diversification and may use a multiple manager approach
including use of open-end and closed-end mutual funds, outside
private managers or inside management. No more than 25% of any
Fund may be placed with any single outside manager. The IBF, LTBF
and ACF funds may be fully managed in-house.
Managers, may, from time to time, employ derivatives in
their investment strategies. However, such holdings should
represent a minority of any manager's holdings, and if any
strategies employed are deemed to add undue risk to a Fund, the
Trustees may remove assets from such managers. Managers may also
invest in illiquid securities, but such securities may not make
up more than 15% of the total assets of any Fund.
Specific Fund Objectives
The IBF's objective is to provide current income with
reasonable concern for safety of principal by investing primarily
in U.S. Government obligations and fixed rate corporate debt
instruments of between one and ten years maturity. Growth of
capital is secondary. It must invest at least 65% of its assets
in debt instruments, and, under normal circumstances, the Fund
will invest at least 40% of it's assets in debt securities
issued, guaranteed or otherwise backed by the U.S. government,
either directly or indirectly though other mutual funds. Cash
positions may be increased or decreased depending on risk
management and liquidity considerations.
The LTBF's objective is to provide current income with
reasonable concern for safety of principal by investing primarily
in U.S. Government obligations and fixed rate corporate debt
instruments of generally ten years or greater maturity. Growth
of capital is secondary. It must invest at least 65% of its
assets in debt instruments, and, under normal circumstances, the
Fund will invest at least 40% of it's assets in debt securities
issued, guaranteed or otherwise backed by the U.S. government.
Cash positions may be increased or decreased depending on risk
management and liquidity considerations.
The LCSF's objective is to provide long-term growth of
capital with some income by investing primarily in common stocks
of larger companies that are similar to or that could be found in
the S&P500 Index. "Mid-cap" stocks may also be owned. Any
open-end or closed-end funds purchased by the Fund must undergo a
significant evaluation to assure that the objectives, management
styles and holdings of such funds are consistent with the
objective of the Fund. Any private managers employed will be
similarly evaluated and must agree to purchase only securities
that have a high correlation to the asset class for which the
Fund is named. Cash positions may be increased or decreased
depending on risk management and liquidity considerations.
The SCSF's objective is to provide long-term growth of
capital by investing primarily in common stocks of smaller
companies that are similar to or that could be found in the
Russell 2000 or S&P600 Small Company Indexes. "Mid-cap" and
"Micro-Cap" stocks may also be owned. Any open-end or closed-end
funds purchased by the Fund must undergo a significant evaluation
to assure that the objectives, management styles and holdings of
such funds are consistent with the objective of the Fund. Any
private managers employed will be similarly
evaluated and must agree to purchase only securities that have a
high correlation to the asset class for which the Fund is named.
Cash positions may be increased or decreased depending on risk
management and liquidity considerations.
The INTF's objective is to provide long-term growth of
capital by investing primarily in equity securities in markets
outside the United States. Income is secondary. The Fund will
not attempt to correlate with any one index. However, under
normal conditions, the Fund will be broadly diversified in terms
of objectives, styles and geography. Managers will be monitored
so as to not unduly expose the Fund to any one country or region.
Emerging markets may be included, but may not make up more than
35% of the fund. Occasionally, a global mutual fund that invests
a minority of its assets in the U.S. may be considered if the
holdings, objectives and strategies of such a fund are deemed
desirable. Any open-end or closed-end funds purchased by the
Fund must undergo a significant evaluation to assure that the
objectives, management styles and holdings of such funds are
consistent with the objective of the Fund. Any private managers
employed will be similarly evaluated and must agree to purchase
only securities that have a high correlation to the asset class
for which the Fund is named. Cash positions may be increased or
decreased depending on risk management and liquidity
considerations. Cash positions taken by the trustees will
normally be held in U.S. market instruments, though managers may
take cash positions in other than U.S. market instruments.
Managers may also employ various currency risk management
techniques.
The ACF's objective is to provide growth of capital by
investing in a wide variety of investments that may or may not be
found in the other funds. Income is secondary, could vary from
high to low, and at times may be non-existent. The Fund may
invest in any kind of investment security allowable under
securities law. Under normal conditions, the majority of
holdings will be in assets not found directly or in large amounts
in the holdings of the other Funds. Examples of the types of
assets that may be held in the AltCat Fund: real estate mutual
funds and investment trusts (REITs), precious metals, numismatic
coins, sector funds, foreign currencies, special situation
stocks, or other assets offering timely opportunities. The fund
may also hold, from time to time, assets similar to those
held in one of the other funds if that particular asset class
offers a significant opportunity. Because of the flexible and
broad nature of this Fund's objectives, it should be considered
aggressive and of high risk nature. Cash positions may be
increased or decreased depending on risk management and liquidity
considerations.
Risks
Like any investment program, an investment in any STAAR
SYSTEM Trust Fund entails a certain amount of risk. Among the
risks to which an investor may be exposed are:
Market Risk - values can fluctuate with and can be affected by
the market.
Investment Risk - principal may be at risk regardless of market
conditions.
Liquidity Risk - principal may not be available, or premature
liquidation could result in loss or penalty.
Opportunity Cost - use of your capital in one investment
precludes its use in another investment or for some other
purpose.
Inflation/deflation Risk - Erodes purchase power and/or value
of assets.
Rate Risk - locking in rates of interest can be adverse if
rates rise prior to maturity. Conversely, falling rates
can result in decreased income if the interest-bearing
investments are not locked into long maturities.
Currency & Political Risks - In global markets currency
exchange rates among nations change daily, which can affect
the value of a security in terms of U.S. dollars even if
the value is unchanged in the security's own country.
Also, political changes within other nations present a
variety of risks to securities of those nations.
Manager Risks - Mutual fund and private managers usually have
discretion over moneys they invest. Such managers could
fail to effectively achieve investment objectives.
In general, the higher the return desired, the more risk there
will be.
Any investment has risks. The Trust can neither eliminate or
avoid risks. Investors should anticipate that there will be times
when the value of any Fund could go down. The Trust considers risks
in the selection and monitoring of managers and securities as well as
in the adjustment of cash positions. Each Fund will practice
diversification. Investments will include a variety of securities
within the objectives of each Fund. In addition, a variety of
management styles may be used as appropriate to each Fund. For
instance, Funds investing in stocks may include a mix of growth and
value styles.
In addition, investing in mutual funds through one of the SST
Funds involves the expenses of both SST and the funds in which it
invests. These expenses may be more than you would pay if you
invested directly in the fund in which the SST Fund invests. You may
also be subject to certain tax results which you may not otherwise
have, or to a greater imposition of tax in any given year than you
would have if you invested directly.
Also, investment companies, in certain circumstances, may redeem
shares in whole or in part, by a distribution in kind from its
portfolio. Consequently, an SST Fund may hold for a time specific
securities which it received from an underlying fund in redemption.
Disposition of such shares may result in a loss or additional
expense. The Trustees do not anticipate such a distribution
occurring because they are rare. However, it is possible.
The Trust was founded on February 28, 1996 and has no operating
history. There has been a substantial growth in the number of mutual
funds and fund families in the past several years. There are more
funds vying for the investment dollar. There is no assurance that
any of the SST Funds can reach the size necessary to maintain its
staff and shareholder services in the near future.
The Trust's performance is substantially dependent on the
performance of its advisor, STAAR SYSTEM Financial Services, Inc.
However, to the extent that the Trust Funds invest in other open-end
investment companies, which are separately managed, this risk is
minimized.
How SST Chooses and Monitors Investments
The trustees have entered into an advisory agreement with STAAR
SYSTEM Financial Services, Inc. (SSFS) to provide a number of
services, including research and recommendations regarding the
selection of mutual funds and individual securities, as well as
advice on risk management strategies. The trustees are responsible
for execution of trades and employment of any private managers. SSFS
advice includes:
Mutual Fund Selection
Among the thousands of mutual funds available, the difference
between the performances of the top funds compared to the averages of
all funds in any given category is often significant. (See Table A).
SSFS screens funds and recommends those which it believes have a
higher probability of above average performance within their
categories over longer periods of time. Among the factors considered
are: correlation to asset allocation categories, objectives,
management style and philosophy, management tenure, portfolio
holdings, annual expense ratios, past performance, volatility and
shareholder services. This evaluation process is ongoing, and it is
anticipated that the selection of (and allocation to) mutual funds
owned by the trust will change periodically.
The Funds may invest in mutual funds that are sold with
front-end sales charges (loads) as well as those which are not sold
with such charges. However, the Funds will utilize quantity discount
and any other available programs to avoid or minimize any such
charges.
Private Manager Selection
SSFS will evaluate and assist the Trustees in monitoring any
private managers which may be employed. Private managers will be
evaluated in a similar manner to mutual funds, with special attention
to private managers' willingness to correlate security selection
according to each Fund's stated asset allocation class.
Individual Security Selection
SSFS will also advise the Trustees regarding individual
securities. Regarding stocks and bonds, SSFS and the Trustees may
use a variety of industry research and data services, as well as
research and recommendations provided by broker-dealers with which
the Funds may have accounts. Regarding bonds and any fixed-rate
guaranteed instruments, SSFS will provide advice as to selection and
maturities.
General Analysis Approach
Elements of both Fundamental and Technical Analysis may be
employed. Fundamental Analysis may include, but is not limited to,
analyzing price-earnings and price-book value ratios, dividend
yields, growth in sales, growth in total return, return on equity,
return on capital and, for debt instruments, credit ratings,
maturities, duration, yields to maturity and volatility. Technical
analysis may include, but is not limited to, analyzing moving
averages, chart variations and relative strength.
Regarding mutual funds, analysis may also include analyzing
manager philosophies and tenure, style, cash positions, performance
in different market conditions and allocation of holdings within the
funds.
<PAGE>
TABLE A
TOTAL RETURN PERFORMANCE
<TABLE>
<CAPTION>
MUTUAL FUND TYPE
1995
AVERAGE OF ALL
FUNDS IN
CATEGORY
1995
AVERAGE OF TOP
25% OF FUNDS
IN CATEGORY
<S>
1,661 Large Company
Stock Funds
<C>
26.13%
<C>
36.56%
368 Small Company
Stock Funds
31.32%
42.27%
170 International
Large Co. Stock
Funds
10.09%
15.33%
</TABLE>
Compiled by STAAR SYSTEM Financial Services, Inc. from data
provided by Morningstar's Principii for Mutual Funds.
Management of The Funds
The Board of Trustees
The Trustees of the Trust are responsible for day-to-day
operations. The trustees determine how the assets of each Fund are
to be invested, set general policies and choose officers. Additional
information about the Trustees and executive officers of the trust
may be found in the Trust's Statement of Additional Information under
"Trustees and Officers".
The Advisor
The Advisor to the Trust is STAAR SYSTEM Financial Services,
Inc. (SSFS), principal offices of which are located at 604 McKnight
Park Dr., Pittsburgh, PA 15237. SSFS provides overall advice
regarding the strategies and make-up of the Funds, including
recommendations regarding specific mutual funds, private managers and
individual securities. SSFS also provides administrative,
accounting, customer service and marketing services to the Trust. In
addition to serving as advisor to the Trust, SSFS provides investment
and financial planning advice on a regular basis to individuals,
qualified plans, corporations, charitable organizations, trusts and
estates. The President of SSFS is J. Andre Weisbrod. Mr. Weisbrod
has over 15 years experience in the financial services industry and
is majority owner of SSFS.
The Transfer Agent
The Trust has employed STAAR SYSTEM Financial Services, Inc.
(SSFS), principal offices of which are located at 604 McKnight Park
Dr., Pittsburgh, PA 15237, to serve as transfer agent, dividend
paying agent and shareholder services agent for the Trust.
The Custodian
The Trust has employed StarBank, the principal offices of which
are located at 425 Walnut Street,m.M/L 6118, P.O. Box 1118,
Cincinnati, Ohio 45201-1118 to serve as Custodian for the Trust
Funds.
Brokerage Allocation
The Trustees may select brokers who execute purchases and sales
of each Fund's securities, may place orders with brokers who provide
brokerage and research services to the Trust and its Advisor, and are
authorized to pay commissions to such brokers in excess of that which
might be obtained with other brokers in recognition of services
provided. The Trustees may also use a broker-dealer that may have a
relationship with officers or employees of the Advisor.
Distribution
SSFS provides certain share distribution services as part of the
Advisory Agreement. The Trust pays no distribution fees other than
the advisory and services fees paid to SSFS.
Net Asset Value
The Net Asset Value (NAV) of a share of each Fund is calculated
based on the 4:00 P.M. closing price of securities on each day that
the New York Stock Exchange is open. The NAV is determined by
dividing the total of each Fund's investments and other assets less
any liabilities by the total number of outstanding shares of each
Fund.
The value of mutual funds held by any of the Funds will be that
value provided by such funds according to the methods used by such
funds. Because of possible delays obtaining final pricing
information regarding other mutual funds, the calculation of the NAV
of each of the Trust's Funds will be performed as soon as possible
after 4 P.M., but no later than the opening of the market on the next
trading day. The Trust can take no responsibility for errors by
other mutual funds in reporting their net asset values.
How to Purchase Shares
Shares may be purchased by individuals, retirement plan
trustees, corporations and fiduciaries using a written application
form (included with this prospectus or obtainable from Shareholder
Services). Legible photocopies of the form are acceptable if you
desire to open more than one account. Additional prospectuses may be
obtained by writing or calling STAAR SYSTEM Financial Services, Inc.
at the address and telephone number listed on the cover of this
prospectus.
Shares of each fund are purchased at the next offering price
after the properly executed forms and money are received by the Fund
or its Transfer Agent. It should be noted that the Funds must delay
pricing until any mutual funds owned by each Fund are priced.
Therefore, should any of the Funds be listed in newspapers, it is
likely that the prices reported in the newspapers will lag the Funds'
actual prices by one day. Sales charges go to defray acquisition,
administrative and value-added service costs incurred by the Advisor
and Trustees.
The minimum initial investment in the Trust is $25,000. The
investment may be divided among the Funds by dollar amount or
percentage allocation, except that the minimum initial deposit to any
single Fund is $5,000. The $25,000 minimum may be satisfied by
multiple accounts held by the same investor or members of his or her
immediate family who reside with him or her. The minimum subsequent
investment to any single Fund is $500. The investor is responsible
for any losses or fees incurred by the trust or its Advisor or
Transfer Agent or Custodian if an order is canceled because a check
does not clear, and such costs may be deducted from your account.
The Trust reserves the right to waive or reduce the minimum
initial amount for certain investors, including tax-deferred
retirement plans. The Trust may also waive or reduce sales charges
for the following: 1) Current or retired trustees, directors,
officers and employees of the Trust or its Advisor(s) and owners of
its Advisor(s). 2) Current or retired marketing representatives and
solicitors engaged by the Trust or its Advisor(s) to acquire assets
for the Trust.
Purchases received after 2:00p.m. on any trading day may be
credited on the following trading day.
Additional Investments
Additional investments to an existing account may be made by
mailing a check payable to STAAR SYSTEM Trust and specifying the
amounts to be allocated to each Fund. Additional investments will be
allocated among Funds according to the most recent allocation
executed if not instructed otherwise in writing by the shareholder.
However, remember that the minimum deposit to any one Fund is $500.
If you do not specify a Fund, and the amount is too small to allocate
according to percentage, the deposit will be held until instructions
can be clarified. To change your allocation percentages, you must
submit an Investment Allocation Change Form (available from
Shareholder Account Services) or indicate a new allocation on your
statement's Additional Investment Form when you send in your next
deposit.
Reducing Your Sales Charge
Aggregation of Accounts
Sales charge discounts are available for certain qualifying
accounts. These may include accounts in the name of yourself, your
spouse and any of your children under the age of twenty-one. They
may also include IRA, Qualified Retirement Plan and Trust accounts
set up for any of these people.
Rights of Accumulation (ROA)
Sales charges on future purchases may be reduced by including
the current value of your aggregated accounts in the Trust at the
time of the purchase. The Trust is not responsible for identifying
when a level qualifying for ROA has been reached. The investor must
notify the Transfer Agent at the time of purchase to assure proper
credit.
Letter of Intent (LOI)
The Letter of Intent is a non-binding commitment to invest a
specified amount into the Funds over a 13 month period. An amount
equivalent to the Sales Charge that would have been paid without the
LOI will be held in escrow to cover additional sales charges which
may be due if your total investments during the LOI period are
insufficient to qualify for the Sales Charge reduction.
<TABLE>
<CAPTION>
Sales Charge Table Sales Charge (Load) as
(all funds)
Percentage of
Net Amt.
Offering
Invested
Price
<C>
<S>
Less than $100,000 1.52%
1.50%
$100,000 or more None
None
</TABLE>
Minimum Investment: $25,000 Total, $5,000 per Fund.
How to Sell Shares
Shares may be redeemed as of any day on which the Trust is open
for business. The share price received will be the Net Asset Value
next determined after receipt of a properly executed request for
redemption. Payment is generally mailed within five business days
after receipt of the request. Payment will be mailed to the name and
address of record unless specified otherwise with a letter
"signature-guaranteed" by a bank, savings association, credit union
or member firm of a domestic stock exchange or the National
Association of Securities Dealers, Inc. Redemption requests of
$5,000 or more must include a signature guarantee. The minimum
non-automatic withdrawal from any single Fund is $500. If the amount
in the Fund is less than $500, the Fund account will be closed.
How to Exchange Shares
A shareholder may exchange shares of a Fund for Shares of
another Fund at Net Asset Value (without a sales charge).
Shareholders are limited to six (6) exchanges among Funds within the
Trust per calendar year. Exchanges are subject to any applicable
minimum initial and subsequent purchase requirements and must be in
amounts of $500 or more to and from any single Fund.
Requests for Exchanges may be made by telephone to the
Shareholder Services line or in writing. If the request is made in
valid form and is received before 3:00 P.M. eastern standard time,
the exchange will be made at the Net Asset Value on the close of that
day. Otherwise, the exchange will be made the next trading day.
Exchanges are allowed only for shares of Funds offered for sale
in your state of residence at the time of the exchange. The Trust
may terminate or modify the Exchange Privilege upon 30 days' prior
notice to Shareholders.
The Trust is not responsible for any taxable capital gains which
may be caused by an exchange. Nor is it responsible for any loss of
account value due to an exchange.
Reasonable Procedures to Verify Transaction Instructions
The Trust employs reasonable procedures to verify that
transaction instructions are genuine. First, all exchange or
redemption requests must include personal identification of the
caller, the name of the account (as recorded), the account number and
the Social Security Number or Tax I.D. Number of the account holder.
The request must be made by the account holder or authorized
person(s) for which written proof of authorization is on file.
Otherwise, the transaction request will not be acted upon. Proceeds
of redemptions will be mailed only to the name and address of record
unless authorized differently with a signature-guaranteed letter or
on the original application. Regardless, any redemption request in
excess of $5,000 must be made with a signature-guaranteed letter.
The trust is not responsible for any written transactions which are
reasonably considered by Trust or Transfer Agent employees to be made
by an authorized person(s).
Telephone Transactions
Telephone exchange and redemption privileges are automatically
extended to shareholders unless they elect not to receive them. A
new application must be submitted to elect the privileges for an
existing account if the shareholder had previously rejected the
privileges. Telephone exchanges will only be performed if the caller
can provide all four of the following: Name of Account, Account
Number, Soc. Security Number (or Tax I.D. Number) and a P.I.N. Number
which will be set at the time your account is opened. Neither the
Trust nor SSFS will be liable for complying with telephone requests
which they reasonably believe to be genuine, and if they do not, then
they may be held liable for losses due to unauthorized or fraudulent
instructions. (See "Reasonable Procedures" above.) Telephone
redemptions of up to $5,000 may be made, but proceeds will only be
mailed to the name and address of record. Telephone requests made
after 3:00 P.M. will be processed at the net asset value determined
on the next trading day.
Shareholder Services
The following valuable services are offered to help make your
investments work for you as conveniently and effectively as possible:
Assistance for New Shareholders
If you need help filling out forms, or if you have questions
regarding this prospectus or any of the Funds, you may call the New
Account Information number listed on the cover of the prospectus.
Shareholder Account Services "Help" Line
You may call the Shareholder Services Line during normal
business hours (9:00 A.M. to 5:00 P.M, Eastern Time) with questions
regarding your account or telephone exchange requests. This number
is listed on the front page of this prospectus.
Investor Education
From time to time the Trust, through SSFS, plans to provide
investors with valuable educational information regarding investments
and financial planning, at no additional charge.
Account Statements
The Trust will provide consolidated statements of each account
(by name, as registered). Statements will be generated quarterly and
Confirmation Statements will be generated when there are transactions
in your account. An Asset Allocation chart will be included in
quarterly statements.
Automatic Reinvestment
Dividends and Capital Gains are automatically reinvested at no
sales charge unless you specify otherwise on the application or by
letter at a later date.
Automatic Withdrawals
You may elect to have automatic withdrawals taken from any Fund.
Payments will be made to the name and address of record unless
specified otherwise with a letter "signature-guaranteed" by a bank,
savings association, credit union or member firm of a domestic stock
exchange or the National Association of Securities Dealers, Inc.
Payments will be generated on the first business day of the month or
quarter if you elect quarterly distributions. The minimum monthly or
quarterly payment from any Fund is $250 (except for Minimum
Distribution Requirements from qualified retirement plans).
Signatures For Any Written Transactions Must Be Exactly As Written On
Original Application
Signature Guarantee Needed for Certain Transactions
For your protection, certain transaction requests may need to be
in writing and be signature guaranteed by a bank or other eligible
guarantor institution (Guarantees by Notary Publics are not
acceptable). Additional documentation may be needed to determine the
authority of any person or persons requesting redemption of shares
held in the name of corporations, trusts, executors, administrators
or other fiduciaries. Requests requiring signature guarantees
include, but are not limited to:
Requesting payment of any distributions or withdrawals to
anyone but the name and address of record.
The gifting or transferring of shares to another person.
Redemption Requests over $5,000
New Application May Be Needed For Certain Changes
A new application may be required for certain changes,
including, but not limited to:
You wish to register an existing account under a different
name.
You wish to transfer shares of an existing account to another
person or entity.
You wish to add telephone redemption to an account.
Dividends, Capital Gains, Distributions & Taxes
Each Trust Fund will distribute substantially all of its taxable
net income to shareholders as required by Subchapter M of the
Internal Revenue Code of 1986, as amended, in order to qualify as a
regulated investment company and avoid a non-deductible excise tax..
Therefore, it is expected that the Funds will not be subject to
Federal income tax. A Fund's net income consists of all income it
earns from its investment activity less expenses, including any
ordinary income such as interest and dividends. A Fund is required
to distribute at least 98% of net earned investment income, 98% of
net capital gains received in the twelve month period preceding
October 31, and any undistributed balances from the preceding year.
It is expected that the Intermediate and Long-term Bond Funds
will distribute dividends on a quarterly basis.(The Trustees may
change to a monthly basis at their discretion.) The other Funds will
generally distribute dividends, if any, on a semi-annual or annual
basis. It is expected that capital gains, if any, will be
distributed once or twice a year. Distribution dates are determined
by the Board of Trustees.
Each Fund is treated as a separate entity for federal income tax
purposes. Any dividends and capital gains distributions to
shareholders are ordinarily taxable to the shareholder in the year of
distribution. However, the Trust is permitted under the Tax Reform
Act of 1986 to make distributions up to February 1 that apply to the
previous tax year. Dividend and capital gain distributions are
taxable to shareholders whether they are received in cash or are
reinvested in additional shares of a Fund. They may also be subject
to various state and local taxes.
Income generated by another mutual fund which is held in a Fund
portfolio will be distributed to that Fund after deductions for
expenses and will be taxable to Shareholders of the Fund in the same
manner as any other similar income. Mutual funds may realize taxable
gains independent of any decision of the Trust to buy or sell shares
of such mutual funds. Therefore, it is possible that investors in a
Trust Fund may have an increased tax liability in any given year. In
general, a Fund will treat income to you that is attributable to
income generated by any mutual funds held by the Fund as having the
same character as reported by those mutual funds. In other words, a
long-term capital gain reported by a mutual fund owned by a Fund will
be passed on to Fund Shareholders as a long-term capital gain.
In addition to taxable income produced by investments held in a
Fund, an investor may cause a taxable gain (or loss) to be realized
by selling shares or by exchanging shares of one Fund for another.
It is recommended that Shareholders consult appropriate tax advisors
regarding their investments.
Other Provisions
Contingent Deferred Sales Charge
Purchases made at Net Asset Value (with no sales charge) will be
assessed a contingent deferred sales charge of 1% on any redemptions
made during the first 12 months from account inception.
Right of Trust to Repurchase Shares If Account Falls Below Certain
Minimums
The Trust also reserves the right to close any account where
total assets in all Trust Funds fall below $20,000. The Trust
reserves the right to close any single Fund account where the assets
in that Fund fall below $2,000. The Trust will mail a notice of such
decision 30 days in advance of taking any action. You will be
informed of your alternatives and given an opportunity to respond.
If the Trust receives no response by the end of the thirty day
period, it may close the specified Fund account or the specified
total Trust account and mail the proceeds to the name and address of
record.
Voting
Shareholders are entitled to one vote per share (with
proportional voting rights for fractional shares), and are able to
vote for the election of Trustees as well as any matters which
require a vote of shareholders, either by law or by the provisions of
the Declaration of Trust. The Trust is not required to hold annual
shareholder meetings. See "description of Trust" in the Statement of
Additional Information.
Auditors: Carson & Co., 201 Village Commons, Sewickley, PA 15143
Legal Counsel: Kabala & Geeseman, 200 First Ave., Pittsburgh, PA
15222
<PAGE>
September 4, 1996
STATEMENT OF ADDITIONAL INFORMATION
THE STAAR SYSTEM TRUST
604 McKnight Park Drive
Pittsburgh, PA 15237
(412) 367-9076
This Statement of Information is not a prospectus. It relates
to the Prospectus of the Staar System Trust (the "Trust") dated
September 4, 1996, as supplemented from time to time.
This Statement of Additional Information should be read in
conjunction with the Prospectus. The Trust's Prospectus can be
obtained by writing to the Trust at the above address or by
telephoning the Trust at 1-800-33ASSET, P.I.N. 3370.
Date: September 4, 1996
<PAGE>
THE STAAR SYSTEM TRUST
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Page
<TABLE>
<S> <C> <C>
General Information And History 26
Investment Objectives and Policies 26
Management of the Funds 28
Control Persons and Principal Holders of Securities 28
Investment Advisory and Other Services 28
Brokerage Allocation and Other Practices 30
Purchase, Redemption and Pricing of
Securities Being Offered 30
Tax Status 31
Calculation of Performance Data 31
Other Information 32
Financial Statements 33
<PAGE>
GENERAL INFORMATION AND HISTORY
The Registrant, STAAR SYSTEM Trust (SST) was formed on
February 28, 1996 for the purposes of commencing business as an
investment company. It had engaged in no prior business activities.
INVESTMENT OBJECTIVES AND POLICIES
As described in the prospectus, the Trust consists of six
series Funds, each of which has its own objectives, policies and
strategies designed to meet different investor goals. The
information below is provided as additional information to that
already provided in the prospectus.
The Trust does not issue different classes of securities.
In general the Trust will not engage in Short Sales
(borrowing stock from someone else and selling it in anticipation of
the price going down, at which time it is repurchased and returned to
the lender). However it is possible that managers of other open end
funds owned by a Trust Fund may employ short sales.
The Trust and any managers it employs may use Derivatives,
which are financial instruments which derive their values from the
performance of another security, assets or index. Derivatives
include options and future contracts.
The writing of Put and Call options are permitted by the
Trust and any managers it may employ. However, the use of such
options is to represent a minority of any managers activity, and
should generally be employed in a conservative manner to protect a
profit or offset losses in the event of significant price reductions.
The Trustees or a manager employed by them may purchase a Put, which
provides the right to sell a security to another party at a
predetermined price within a period of time. Similarly a Call option
may be purchased which provides the right to purchase a security at a
predetermined price within a period of time. A Call option may also
be sold to another party. In general, such options will be
"covered", meaning the Fund owns and equal amount of the underlying
security equal to or greater than the amount of the security
represented in the option. Put options will not be sold because they
expose a Fund to additional risk which The Trustees wish to avoid.
Similarly, options based upon indexes or other assets, such as
commodities, may be purchased to protect a portfolio, but not sold
where a Fund would be required to pay cash to another party based
upon a future price change.
The Trust will not purchase securities with borrowed money
(or margin). The Trustees will attempt to avoid purchasing shares of
any other mutual fund which utilizes margin purchases other than in
very small amounts, i.e. less than five percent of its portfolio.
Any mutual funds owned by a Fund will be screened to
determine if such mutual funds' policies on options, futures, margin
or other strategies differ greatly from that of the Trust. However,
the Trustees will not be able to control the use of such strategies
by mutual funds, and therefore, at any given time a Fund's risk could
be increased to the extent managers of other mutual funds employ
these kinds of strategies in a manner inconsistent with the Trust's
policies.
In general, the policy of the registrant is to avoid debt.
It will not borrow money, except where it would become necessary to
allow the Trust to maintain or improve its day-to-day operations in
the interest of Fund shareholders. For that purpose, the Trust may
obtain a line of credit or obtain specific financing from a bank,
other financial institution or individual(s).
The purchase of real estate is permitted in the AltCat
(ACF) Fund. The majority of any real estate holdings will be in Real
Estate Investment Trust (REITs) and real estate-oriented mutual
funds, thereby preserving a high degree of liquidity that is not
possible with other forms of real estate ownership.
However, if a special situation arises which the Trustee considers to
be advantageous to the Fund, a real estate asset with limited
liquidity may be owned as long as it does not exceed five percent
(5%) of the total value of the Fund at the time of purchase. If
other assets decline in value so as to force such an asset to exceed
five percent (5%), the Trustees will attempt to sell the asset if a
favorable price can be obtained. However, if it is not in the best
interest of the shareholders the Trustee may delay such sale until a
more favorable time.
The purchase of real estate mortgage loans is permitted in
the Bond Funds (IBF and LTBF) and the AltCat Fund (AFC). Such
mortgages will generally be in government-backed loans such a s GNMA
("Ginnie Mac") loans. However, a minority of mortgage securities
owned by a Fund may be in non-government backed loans.
Commodities and Precious Metals or securities and contracts
deriving their value from Commodities and Precious Metals may be
purchased in the AltCat Fund.
Trust Funds may not loan cash or portfolio securities to
any person. However, this does not prevent managers of other mutual
funds owned by a fund from making such loans within their portfolios.
There are no restrictions regarding portfolio turnover.
While the trust recognizes that a higher portfolio turnover will, in
most cases, increase expenses, there are times when a high turnover
may be justified, either to protect a portfolio against certain kinds
of risks or to take advantage of opportunities presented by market
conditions. In general, the Trust's objective is to keep expenses,
and, therefore, turnover, as low as possible. This objective will be
considered when screening other mutual funds for possible inclusion
in a Fund's portfolio.
The Declaration of Trust and the By-Laws of the Trust
provide for indemnification by the Trust of its Trustees and Officers
against liabilities and expenses incurred in connection
with litigation in which they may be involved as a result of their
positions with the Trust, unless it is finally adjudicated that they
engaged in willful misconduct, gross negligence or reckless disregard
of the duties involved in their offices, or did not act in good faith
in the reasonable belief that their actions were in the best interest
of the Trust and the Funds.
MANAGEMENT OF THE FUNDS
Board of Trustees
Name Position Held Principal Occupation(s)
& Address With Registrant during Past 5 Years
Jeffrey Dewhirst President of Trustees Investment
Banker, JTR Capital
Mellon Bank,
Sewickley, PA
Ronald Benson Trustee Business Con-
sultant, Regional
Director, Fellow-
ship of Companies
for Christ, Inter-
national
John I. Weisbrod Trustee Retired Presi-
dent of Sea Breeze
Control Persons and Principal Holders of Securities
Since this is an initial offering, there are no Control
Persons or Principal Holders to report.
INVESTMENT ADVISORY AND OTHER SERVICES
The Advisor to the Trust is STAAR SYSTEM Financial
Services, Inc. (SSFS), 604 McKnight Park Dr., Pittsburgh, PA 15237.
The President and principal owner of SSFS is J. Andre Weisbrod. No
other stockholder of the Advisor owns 5% or more of the Advisor.
John H. Weisbrod, member of the Board of Trustees, is a
minority stockholder of the Advisor and father of J. Andre Weisbrod.
Fees to be paid to the Advisor by terms of the Master
Advisory Agreement (including "management-related service contract"
provisions) are as follows: The Trust will pay the Advisor a fee
based on the average daily assets in each Fund monthly as follows:
</TABLE>
<TABLE>
<CAPTION>
Monthly Rate Annualized
<S> <C> <C>
INTF, LCSF & SCSF .0750% .90%
LTBF .0600% .72%
IBF .0525% .63%
ACF .1000% 1.20%
</TABLE>
These are maximum fees and will be calculated and paid at the
closing of the last business day of the month. In addition, the
trust will pay to the Advisor, 2/3 of any sales charges (front or
contingent). These fees are for comprehensive services which
include, but are not limited to:
Design of the structure and organization of the Trust and its Funds
Writing and printing of the Trust's prospectus
Writing, design and production of any consumer materials and
presentations
Obtaining appropriate legal and accounting advice.
Accounting and audits (as required by law)
Maintaining any computer programs and files necessary to the
operations of the Trust
Maintaining adequate records of all transactions and values of the
Trust and its Funds Preparing reports and notices for all shareholder
meetings.
Transfer Agent services
Custodial services
Marketing services
Shareholder services (as described in the prospectus)
Maintaining telephones and mailing address for shareholder services.
Preparation of all necessary documents and forms as required by
various governmental agencies including the federal government and
any state governments in states in which the Trust will do business.
At the time this registration becomes effective, the
Registrant intends to place securities with a custodian, StarBank of
Cincinnati, Ohio.
BROKERAGE ALLOCATION AND OTHER PRACTICES
Transactions in Fund portfolios will generally be made with
regard to volume and other discounts to keep transaction expenses as
low as possible. The Trust may use brokers with which higher
commissions are paid than could be obtained elsewhere in return for
research and other services. There is no restriction as to the
number of broker-dealers the Trust may use.
It is anticipated that the Trust will use Mr. J. Andre
Weisbrod, President of the Advisor, as a broker for a portion of the
Trust's transactions. Since the Trust is new, there is no history of
such transaction to report. It is anticipated that, over time, the
fees paid by the Trust to the Advisor may be less due to Mr.
Weisbrod's ability to receive income from a portion of the Trust's
transactions. While the Advisor will offer advice regarding
securities not purchased through his broker-dealer, Mr. Weisbrod will
not be involved in the execution of any trades not made through his
broker-dealer. All of such orders will be made by the Trustees.
The criteria for selection of broker-dealers will include
convenience, reasonableness of commissions, availability and
selection of securities (i.e mutual fund selling agreements, bond
inventories and access to exchanges), and value-added services
provided (i.e. research and reports). At least once every two years,
commission structures will be compared with at least two
representative firms, including a full-service brokerage and a
discount brokerage not currently used by the Trust. If the Trustees
determine that any broker(s) currently used are not reasonable with
regard to price and service, a change of such brokers will be made
unless more favorable arrangements can be obtained.
PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
Detailed information on Purchase and Redemption of Shares
as well as Pricing is included in the Prospectus. The Trust may
suspend the right to redeem shares or postpone the date of payment
upon redemption for more than seven (7) days for (a) any period
during which the New York Stock Exchange is closed or trading on the
exchange is restricted; (b) for any period during which an emergency
exists which makes it impossible or impractical for the Funds to
dispose of securities owned by them or the Funds cannot determine the
value of their respective net assets or (c) for such other periods as
the Securities and Exchange Commission may permit.
TAX STATUS
Detailed information concerning the tax status of the Trust
is contained in the Prospectus.
CALCULATION OF PERFORMANCE DATA
Each Fund's performance will be calculated on a Total
Return basis, which is the sum of any income paid and any realized or
unrealized gain or loss of principal. From time to time, the Funds
may publish their average total returns for periods of time. The
formula for calculating such returns is as follows:
a
P(1 + T) = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning at the 1, 5 or 10 year periods at the
end of the 1, 5 or 10 year periods (or fractional portions
thereof) Other time periods may be used from time to time.
Dividends and capital gains are assumed to be reinvested.
<PAGE>
Where Yield is calculated, the following formula is used:
YIELD = 2 [(ab/cd + 1)6 - 1]
where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the
period.
OTHER INFORMATION
The Prospectus and this Statement of Additional Information
do not contain all of the information contained in the Trust's
registration Statement. The Registration Statement and its exhibits
may be examined at the offices of the Securities and Exchange
Commission in Washington, D.C.
Statements contained in the Prospectus and this Statement
of Additional Information as to the contents of any agreement or
other document referred to are not necessarily complete and reference
is made to the copy of the agreement or document filed as an exhibit
to the Registration Statement for their complete and unqualified
contents.
<PAGE>
FINANCIAL STATEMENTS
Independent Auditor's Report
To the Shareholders and Trustees
Staar System Trust
We have audited the statement of assets and liabilities, including
the schedule of investments of Staar System Trust (comprising,
respectively, the Intermediate Bond Fund, Long Term Bond Fund, Larger
Company Stock Fund, Smaller Company Stock Fund, International Fund,
and Alternative Categories Fund) as of March 31, 1996, and the
statement of changes in net assets for the period then ended. These
financial statements are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these
financial statements 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 financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of each of
the respective portfolios constituting the Staar System Trust as of
March 31, 1996 and the changes in their net assets for the period
then ended, in conformity with generally accepted accounting
principles.
Sewickley, PA [SIGNATURE]Carson & Co.
June 12, 1996 <PAGE>
STAAR SYSTEM TRUST
STATEMENT OF ASSETS AND LI ABILITIES
MARCH 31, 1996
<TABLE>
<CAPTION>
ASSETS
<S>
Investment in money
market funds, at value
-identified cost $12,000 (Note 2)
Cash
Total Assets
LIABILITIES
Note Payable - Investment Adviser
(Note 5)
Total Liabilities
NET ASSETS
Net assets (equivalent to $10.00 per
share
based on 1200 shares of capital
stock issued and outstanding;
unlimited shares authorized) (Note
3)<PAGE>
<PAGE>
<C>
$ 12,000
1,000
13,000
1,000
1,000
$ 12,000 <PAGE>
</TABLE>
STAAR SYSTEM TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR PERIOD FROM INCEPTION (MARCH 19, 1996) THROUGH MARCH 31, 1996
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTIONS
<C> <S>
Initial Investment of 1,200 shares @$10 per share
Total Increase
NET ASSETS
Beginning of Period
End of Period
/TABLE
<PAGE>
<PAGE>
$ 12,000
12,000
-0-
$ 12,000
<PAGE>
<PAGE>
<PAGE>
<PAGE>
STAAR SYSTEM TRUST
INVESTMENT IN SECURITIES OF UNAFFILIATED ISSUERS
MARCH 31, 1996
<TABLE>
<CAPTION>
INTERMEDIAT
E BOND FUND
LONG TERM
BOND FUND
LARGER
COMPANY
STOCK FUND
SMALLER
COMPANY
STOCK FUND
INTERNATIONA
L FUND
ALTERNATIVE
CATEGORIES
FUND
COMBINED
<S>
<C>
<C>
<C>
<C>
<C>
<C>
<C>
Money Market
funds
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$12,000
/TABLE
<PAGE>
NOTE 1 - ORGANIZATION AND PURPOSE
Staar System Trust (the Trust) was organized as a Pennsylvania business
trust under applicable statutes of the Commonwealth of Pennsylvania
effective March 19, 1996. As of March 31, 1996, operations consisted
of matters relating to its organization and registration and acceptance
of initial investments on March 29, 1996.
The Trust is in the process of applying for registration under the
Investment Company Act of 1940 as a non-diversified, open-end
management investment company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Trust consists of six separate series portfolios (funds). The
funds are organized in such a manner that each fund corresponds to a
standard asset allocation category, with the exception of the
Alternative Categories Fund which is a flexibly managed fund that may
invest in assets not included in the other funds. The Funds are:
The SST Intermediate Bond Fund
The SST Long-Term Bond Fund
The SST Larger Company Stock Fund
The SST Smaller Company Stock Fund
The SST International Fund
The SST Alternative Categories Fund
Each fund is managed separately and has its own investment objectives
and strategies in keeping with the asset allocation category for which
it is named. Each fund may invest in other open-end funds (mutual
funds) as well as closed-end funds and individual securities.
Security Valuation - Investments in securities traded on a national
securities exchange (or reported on the NASDAQ national market) will be
stated at the last reported sales price on the day of valuation; other
securities traded in the over-the-counter market and listed securities
for which no sale was reported on that date will be stated at the last
quoted bid price, except for any short positions and call options
written, for which the last quoted asked price will be used. Short-
term notes will be stated at amortized cost, which is equivalent to
value. Restricted securities and other securities for which quotations
are not readily available will be valued at fair value as determined by
the Trustees.
Federal Income Taxes - The Trust plans to comply with the requirements
of the Internal Revenue Code that are applicable to regulated
investment companies and to distribute all its taxable income to its
shareholders. Therefore, no significant federal or state income tax
provision is expected to be required, after operations commence.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Distributions to shareholders - Dividends to shareholders will be
recorded on the ex-dividend date.
Other - The Trust will follow industry practice and record security
transactions on the trade date. Dividend income will be recognized on
the ex-dividend date, and interest income will be recognized on the
accrual basis. Discounts and premiums on securities purchased will be
amortized over the life of the respective securities.
NOTE 3 - CAPITAL SHARE TRANSACTIONS
As of March 31, 1996, the Trust had authorized an unlimited number of
shares of beneficial ownership. As of that date a total of 1,200
shares (200 per portfolio) had been issued.
NOTE 4 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
Effective April 1, 1996, the Trust entered into a Master Investment
Advisory Agreement with Staar System Financial Services, Inc., a
related party (adviser). This agreement appointed the Adviser to act
as investment adviser to the Trust on behalf of six series portfolios
for a one year period. The adviser will furnish investment management
and advisory services (rate varies for each portfolio in accordance
with a fee schedule ranging from .63% to 1.20% of average daily net
asset value). In addition, the Trust will pay to the adviser 2/3 of
any sales charge, front or contingent, which it charges to customers.
The president of the investment adviser is the organizer of the Trust.
The agreement provides for an expense reimbursement from the investment
adviser if the Trust's total expenses for any series (fund), exclusive
of taxes, interest, costs of portfolio acquisitions and dispositions
and extraordinary expenses, for any fiscal year, exceed the level of
expenses which such series is permitted to bear under the most
restrictive expense limitation imposed on open-end investment companies
by any state in which shares of such series are then qualified. The
agreement also stipulates that all organization expenses of the Trust
are paid by the investment adviser as well as certain marketing, legal
and accounting and transfer and custodial services for the first two
years.
NOTE 5 - NOTE PAYABLE - INVESTMENT ADVISER
On March 29, 1996, the Investment Adviser advanced the Company $1,000
to cover initial operating expenses. The resulting note is payable on
demand, together with interest at 7%.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial statements:
Included in Part A:
None
Included in Part B:
<TABLE>
<CAPTION>
Page Number
in this Report
<S> <C>
Independent Auditor's Report......................33
Statement of Assets and Liabilities...............35
Statement of Changes in Net Assets................36
Investment in Securities of Unaffiliated
Issuers.......................................37
Notes to Financial Statements.....................38
</TABLE>
Included in Part C:
The required Schedules are omitted because the required information is
included in the financial statements included in Part A or Part B, or
because the conditions requiring their filing do not exist.
(b) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
<S> <C>
(1) Declaration of Trust of the Registrant
(2) By-laws of the Registrant
(3) Not Applicable
(4) Action of Trustees Establishing Funds
(5) Form of Investment Advisory Agreement between Registrant and
Staar System Financial Services, Inc. (the "Advisor")
(6) Not Applicable
(7) Not Applicable
X(8) Custodian Agreement between Registrant and StarBank.
(9)(a) Form of Transfer Agency and Shareholder Services Agreement
among Registrant and the Advisor (see 5 above)
(9)(b) Consent to Use of Name contained in (5) above
(10) Opinion of Counsel and Consent of Counsel
(11) Consent of Independent Accountants
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
x To be filed by Amendment.
</TABLE>
Item 25. Persons Controlled by or Under Common Control
with Registrant
The Registrant is not directly or indirectly controlled by or under
common control with any person other than the Trustees. The Registrant
does not have any subsidiaries.
Item 26. Number of Holders of Securities
Set forth below are the number of record holders, as of June 30, 1996
of the shares of beneficial interest of the Registrant:
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
<C> <S>
Shares of Beneficial
Interest, no par value ______
</TABLE>
Item 27. Indemnification
Under the Registrant's Declaration of Trust and By-laws, any past or
present Trustee or Officer of the Registrant is indemnified to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him or her in connect with any action, suit or
proceeding to which he or she may be a party or is otherwise involved
by reason of his or her being or having been a Trustee or Officer of
the Registrant. The Declaration of Trust and By-laws of the Registrant
do not authorize indemnification where it is determined, in the manner
specified in the Declaration of Trust and the By-laws of the
Registrant, that such Trustee or Officer has not acted in good faith in
the reasonable belief that his or her actions were in the best interest
of the Registrant. Moreover, the Declaration of Trust and By-laws of
the Registrant do not authorize indemnification where such Trustee or
Officer is liable to the Registrant or its shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard
of his duties.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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
Securities and Exchange Commission such indemnification is against
public policy as expressed in the 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 questions whether
such indemnification is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
The Registrant, its Trustees and Officers, its investment adviser, and
persons affiliated with them are insured under a policy of insurance
maintained by the Registrant and its investment adviser, within the
limits and subject to the limitations of the policy, against certain
expenses in connection with the defense of actions, suits and
proceedings, and certain liabilities that might be imposed as a result
of such actions, suits and proceedings, to which they are parties by
reason of being or having been such Trustees or Officers. The policy
expressly excludes coverage for any Trustee or Officer whose personal
dishonesty, fraudulent breach of trust, lack of good faith, or
intention to deceive or defraud has been adjudicated or may be
established or who willfully fails to act prudently.
Item 28. Business and Other Connections of Investment Adviser
Staar System Financial Services, Inc. (the "Adviser"), is a registered
investment adviser providing investment advice to individuals, employee
benefit plans, charitable and other nonprofit organizations, and
corporations and other business entities.
Set forth below is a list of the Officers and Directors of the Adviser
together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by such
officers and directors during the past two years.
<TABLE>
<CAPTION>
Position with Other Businesses
Name Position with Advisor Other Business
<S> <C> <C>
J. Andre Weisbrod President, Director Registered Representative
Allegheny Investment
Charles Sweeney Secretary & Director Marketing Consultant-
Graphic Arts Technology
Council;Before 1992-Graphic
Arts Sales-Eastman Kodak
Company
Carl J. Dorsch Director Retired
</TABLE>
Item 29. Principal Underwriter
Inapplicable.
Item 30. Location of Accounts and Records
The Registrant maintains the records required by Section 31(a) of the
Investment Company Act of 1940, as amended and Rules 31a-1 to 31a-3
inclusive thereunder at its Pittsburgh office located at 604 McKnight
Park Drive, Pittsburgh, PA, 15237. Certain records, including the
physical possession of its securities, may be maintained pursuant to
Rule 31a-3 at the main office of the Registrant's custodian located as
to the custodian, at STARBANK, 425 Walnut St., M/L 6118, P.O. Box 1118,
Cincinnati, OH, 45201-1118, and, as to the transfer and dividend
disbursing agent functions, % of the Advisor at 604 McKnight Park
Drive, Pittsburgh, PA, 15237.
Item 31. Management Services
Inapplicable.
Item 32. Undertakings
(a) The Registrant hereby undertakes to file a post-effective
amendment using financial statements which need not be
certified, within four to six months after the effective date
of this Registration Statement under the Securities Act of
1933, as amended.
(b) The Registrant hereby undertakes to furnish each person to whom
a prospectus is delivered with a copy of the Registrant's
annual report (when available) to shareholders upon request
and without charge.
(c) The Registrant hereby undertakes that, if requested to do so by
holders of at least 10% of the Funds outstanding shares, it
will call a meeting of shareholders for the purpose of voting
upon the question of removal of a trustee or trustees and will
assist in communications between shareholders for such
purpose as provided in Section 16(c) of the Investment
Company Act of 1940, as amended.
<PAGE>
NOTICE
"The SST Intermediate Bond Fund (IBF)," "The SST Long-Term Bond Fund
(LTBF)," The SST Larger Company Stock Fund (LCSF)," "The SST Smaller
Company Stock Fund (SCSF)," "The SST International Fund (IF)," and
"The SST Alternative Categories Fund (AltCat)" are the designations of
the Trustees under the Declaration of Trust of the Trust dated February
28, 1996 as amended from time to time. The Declaration of Trust has
been filed with the Secretary of State of the Commonwealth of
Pennsylvania. The obligations of the Registrant are not personally
binding upon, nor shall resort be had to the private property of, any
of the Trustees, shareholders, officers, employees or agents of the
Registrant, but only the Registrant's property shall be bound.
SIGNATURES
Pursuant to the requirements of (the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant (certifies that it meets
all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Pittsburgh,
and the State of Pennsylvania on the 3rd day of July, 1996.
The Staar System Trust
Registrant
By: Jeffrey A. Dewhirst, Trustee
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.
Jeffrey A. Dewhirst
CEO, CFO And
Trustee July 3, 1996
(Signature) (date)
DECLARATION OF TRUST
OF
THE STAAR SYSTEM TRUST
604 McKnight Park Drive
Pittsburgh, Pennsylvania 15237
February 28, 1996<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I NAME AND DEFINITION. . . . . . . . . . . . . .1
Section 1.1 Name . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.2 Definitions. . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II TRUSTEES. . . . . . . . . . . . . . . . .4
Section 2.1 Number of Trustees . . . . . . . . . . . . . . . . . .4
Section 2.2 Election or Appointment and Term . . . . . . . . . . .4
Section 2.3 Resignation and Removal. . . . . . . . . . . . . . . .4
Section 2.4 Vacancies. . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE III POWERS OF TRUSTEES . . . . . . . . . . . . . .5
Section 3.1 General. . . . . . . . . . . . . . . . . . . . . . . .5
Section 3.2 Business and Investments . . . . . . . . . . . . . . .6
Section 3.3 Legal Title. . . . . . . . . . . . . . . . . . . . . .7
Section 3.4 Issuance and Repurchase of Securities. . . . . . . . .7
Section 3.5 Borrowing Money; Lending Trust Assets. . . . . . . . .8
Section 3.6 Delegation; Committees . . . . . . . . . . . . . . . .8
Section 3.7 Collection and Payment . . . . . . . . . . . . . . . .8
Section 3.8 Expenses . . . . . . . . . . . . . . . . . . . . . . .8
Section 3.9 Litigation . . . . . . . . . . . . . . . . . . . . . .8
Section 3.10 Miscellaneous Powers . . . . . . . . . . . . . . . . .9
Section 3.11 Manner of Acting; Bylaws . . . . . . . . . . . . . . .9
ARTICLE IVINVESTMENT ADVISER, DISTRIBUTOR, CUSTODIANAND SHAREHOLDER
SERVICING AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.1
Investment Adviser . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.2 Distributor. . . . . . . . . . . . . . . . . . . . . 10
Section 4.3 Shareholder Servicing Agent. . . . . . . . . . . . . 11
Section 4.4 Custodian. . . . . . . . . . . . . . . . . . . . . . 11
Section 4.5 Parties to Agreements. . . . . . . . . . . . . . . . 11
ARTICLE VLIMITATIONS OF LIABILITY OF SHAREHOLDERS,TRUSTEES AND OTHERS. . 11
Section 5.1 No Personal Liability of Shareholders,
Trustees, etc. . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.2 Non-Liability of Trustees, etc.. . . . . . . . . . . 12
Section 5.3 Indemnification. . . . . . . . . . . . . . . . . . . 12
Section 5.4 No Protection Against Certain Liabilities. . . . . . 13
Section 5.5 No Bond Required of Trustees . . . . . . . . . . . . 13
Section 5.6 No Duty of Investigation; Notice in Trust
Instruments, etc.. . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.7 Reliance on Experts, etc.. . . . . . . . . . . . . . 14
ARTICLE VI SHARES OF BENEFICIAL INTEREST . . . . . . . . . . 14
Section 6.1 Beneficial Interest. . . . . . . . . . . . . . . . . 14
Section 6.2 Rights of Shareholders . . . . . . . . . . . . . . . 15
Section 6.3 Trust Only . . . . . . . . . . . . . . . . . . . . . 15
Section 6.4 Issuance of Shares . . . . . . . . . . . . . . . . . 15
Section 6.5 Voting Powers. . . . . . . . . . . . . . . . . . . . 16
Section 6.6 Series of Shares . . . . . . . . . . . . . . . . . . 16
ARTICLE VII REDEMPTIONS. . . . . . . . . . . . . . . 18
Section 7.1 Redemptions. . . . . . . . . . . . . . . . . . . . . 18
Section 7.2 Redemption of Shares for Tax Purposes;
Disclosure of Holding. . . . . . . . . . . . . . . . . . . . . 19
Section 7.3 Redemptions to Reimburse Trust for Loss
Nonpayment for Shares or for Other Charges . . . . . . . . . . 19
Section 7.4 Redemptions Pursuant to Constant Net Asset
Value Policy . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.5 Payment for Redeemed Shares in Kind. . . . . . . . . 20
Section 7.6 Repurchase of Shares by Agreement with
Shareholder. . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIIIDETERMINATION OF NET ASSET VALUE, NET INCOME AND DIVIDENDS AND
DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.1 Net Asset Value. . . . . . . . . . . . . . . . . . . 21
Section 8.2 Net Income . . . . . . . . . . . . . . . . . . . . . 21
Section 8.3 Dividends and Distributions. . . . . . . . . . . . . 21
Section 8.4 Power to Modify Foregoing Procedures . . . . . . . . 22
ARTICLE IXDURATION; TERMINATION OFTRUST; AMENDMENT; MERGERS, ETC.. . . . 22
Section 9.1 Duration . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.2 Termination of Trust . . . . . . . . . . . . . . . . 22
Section 9.3 Amendment Procedure. . . . . . . . . . . . . . . . . 23
Section 9.4 Merger, Consolidation and Sale of Assets . . . . . . 24
Section 9.5 Incorporation. . . . . . . . . . . . . . . . . . . . 24
ARTICLE X FINANCIAL REPORTS; BOOKS AND RECORDS. . . . . . . . . 24
ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . 24
Section 11.1 Filing . . . . . . . . . . . . . . . . . . . . . . . 24
Section 11.2 Resident Agent . . . . . . . . . . . . . . . . . . . 25
Section 11.3 Governing Law. . . . . . . . . . . . . . . . . . . . 25
Section 11.4 Counterparts . . . . . . . . . . . . . . . . . . . . 25
Section 11.5 Reliance by Third Parties25
Section 11.6 Provisions in Conflict with Law or
Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 11.7 Use of the Names "STAAR" and "STAAR SYSTEM". . . . . 26
<PAGE>
DECLARATION OF TRUST
OF
THE STAAR SYSTEM TRUST
a MULTIFUND TRUST
DECLARATION OF TRUST of The Staar System Trust made the
28th day of February, 1996, by the persons named on the signature
page of this Declaration of Trust, as trustees (such individuals,
so long as they shall continue in office in accordance with the
provisions of this Declaration of Trust, and all other
individuals who may be duly serving as trustees in accordance
with the provisions hereof, being hereinafter called "Trustees"):
THE TRUSTEES hereby declare that all money and property
contributed to the trust established hereby shall be held and
managed in trust for the benefit of the holders from time to time
of the shares of beneficial interest issued hereunder and subject
to the provisions hereof, to wit:
ARTICLE I
NAME AND DEFINITION
Section 1.1 Name. The name of the trust established
hereby (the "Trust") is "The Staar System Trust" and so far as
may be practicable the Trustees shall conduct the Trust's
activities and, execute all documents under that name, which name
(and the word "Trust" wherever herein used) shall refer to the
Trustees as trustees, and not as individuals, or personally, and
shall not refer to the officers, agents, employees or
Shareholders of the Trust. If the Trustees determine that the
Trust's use of such name is not advisable or if the Trust is
required to discontinue the use of such name pursuant to Section
11.7 hereof, then subject to that section the Trustees may adopt
such other name for the Trust as they deem proper and the Trust
may hold its property and conduct its activities under such other
name.
Section 1.2 Definitions. Wherever they are used
herein, the following terms have the respective meanings assigned
to them below:
(a) "Affiliated Person" and "Commission" have the
meanings assigned to them in the 1940 Act, as hereinafter
defined.
(b) "Bylaws" means the Bylaws referred to in Section
3.11 hereof, as amended and in effect from time to time.
(c) "Declaration" means this Declaration of Trust, as
amended and in effect from time to time. Reference in this
Declaration of Trust to "Declaration," "hereof," "herein,"
"hereby" and "hereunder" shall be deemed to refer to this
Declaration rather than the article or section in which such
words appear.
(d) "Distributor" means a party, other than the Trust,
to an agreement described in Section 4.2 hereof.
(e) "Fundamental Policies" as used with respect to any
Series or Class of Shares of the Trust, means the investment
policies and restrictions applicable to such Series or Class
which are set forth in the Prospectus or the Statement of
Additional Information relating to such Series or Class and are
designated therein as fundamental policies.
(f) "Investment Advisor" means a party, other than the
Trust, to an agreement described in Section 4.1 hereof.
(g) "Majority Shareholder Vote," means the action,
written consent or vote of a plurality of all outstanding Shares
of the Trust and/or as required, of such Series and Class of
Shares of the Trust entitled to vote thereof, provided that, if
such action is at a meeting of Shareholders, such plurality shall
be of such Shares represented in person or by proxy, if a quorum
(as determined in accordance with the Bylaws) is present.
However, as used with respect to any action requiring the
affirmative vote of "a majority of the outstanding voting
securities" of the Trust, as the quoted phrase is defined in the
1940 Act, "Majority Shareholder Vote" means the vote for such
action at a meeting of Shareholders of the smallest percentage of
all outstanding Shares (or of Shares of any particular Series or
Class) of the Trust entitled to vote on such action which
satisfies such 1940 Act voting requirement.
(h) "1940 Act" means the provisions of the Investment
Company Act of 1940 and the rules and regulations thereunder as
amended from time to time, and any order or orders thereunder
which may from time to time be applicable to the Trust.
(i) "Person" means and includes individuals,
corporations, partnerships, trusts, associations, joint ventures
and other entities, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
(j) "Prospectus" as used with respect to any Shares of
the Trust, means the prospectus relating to such Shares, which
constitutes part of the currently effective Registration
Statement of the Trust under the Securities Act of 1933, as such
prospectus may be amended or supplemented from time to time.
(k) "Shareholder" means a record holder of outstanding
Shares.
(l) "Shareholder Servicing Agent" means the party,
other than the Trust, to an agreement as described in Section 4.3
hereof.
(m) "Shares" means the units of interest into which
the beneficial interest in the Trust shall be divided from time
to time, including the Shares of any and all Series and Classes
which may be established and designated hereby or by the Trustee
hereunder, and includes fractions of Shares as well as whole
Shares. "Series" or "Class" means the Shares representing the
beneficial interest in one of the separate Series or Classes of
Shares of the Trust which are established and designated in
Section 6.1 hereof or which may be established and designated
from time to time by the Trustees pursuant to that Section. All
references to Shares in this Declaration which are not
accompanied by a reference to any particular Series or Class of
Shares shall be deemed to apply to all outstanding Shares of any
or all Series and Classes.
(n) "Single Class Voting," as used with respect to any
matter to be acted upon at a meeting or by written consent of
Shareholders, means that on such matter each holder of one or
more Shares shall be entitled to one vote for each Share standing
in his or her name on the records of the trust, irrespective of
Series or Class, as applicable, and all outstanding Shares of all
Series or Classes, as applicable, vote as a single Class.
(o) "Statement of Additional Information," as used
with respect to any Shares of the Trust, means the Statement of
Additional Information relating to such Shares, which constitutes
part of the currently effective Registration Statement of the
Trust under the Securities Act of 1933, as such Statement of
Additional Information may be amended or supplemented from time
to time.
(p) "Trust" means the trust established hereby by
whatever name it may then be known.
(q) "Trust Property" means any and all assets and
property, real or personal, tangible or intangible, which is
owned or held by or for the account of the Trust or the Trustee.
(r) "Trustees" means the individuals who have signed
this Declaration, so long as they shall continue in office in
accordance with the provisions hereof, and all other individuals
who may from time to time be duly elected or appointed, qualified
and serving as Trustees in accordance with the provisions hereof,
and reference herein to Trustee or the Trustees shall refer to
such individual or individuals in their capacity as trustees
hereunder.
ARTICLE II
TRUSTEES
Section 2.1 Number of Trustees. The number of
Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by a majority of the Trustees,
provided, however, that the number of Trustees shall not be less
than three (3).
Section 2.2 Election or Appointment and Term. The
initial Trustees shall be the individuals signing this
Declaration in that capacity. Thereafter, subject to Section
16(a) of the 1940 Act, the Trustees may elect or appoint
themselves or their successors at such regular intervals, if any,
as they deem proper, and may appoint Trustees to fill vacancies
as provided in Section 2.4 hereof; provided, that Trustees shall
be elected by a Majority Shareholder Vote and at such time or
times as the Trustees shall determine that such action is
required under Section 16(a) of the 1940 Act or, if not so
required, that such action is advisable. Subject to Section 2.3
hereof, the Trustees shall have the power to set and alter the
terms of office of the Trustees, and they may at any time
lengthen or shorten their own terms or make their terms of
unlimited duration; provided, that the term of office of any
incumbent Trustee shall continue until terminated as provided in
Section 2.4 hereof or, if not so terminated, until the election
of such Trustee's successor in office has become effective in
accordance with this Section 2.2.
Section 2.3 Resignation and Removal. Any Trustee
may resign (without need for prior or subsequent accounting) by
an instrument in writing signed by him and delivered to the other
Trustees, and such resignation shall be effective upon such
delivery or at any later date according to the terms of the
instrument. Any of the Trustees may be removed by the action of
two-thirds of the remaining Trustees; provided, that if the
removal of one or more Trustees would have the effect of reducing
the number of remaining Trustees below the minimum number
prescribed by Section 2.1 hereof, then subject to Section 16(a)
of the 1940 Act, at the time of the removal of such Trustee or
Trustees, the remaining Trustees shall elect or appoint a number
of additional Trustees at least sufficient to increase the number
of Trustees holding office to the minimum number prescribed by
Section 2.1 hereof. Upon the resignation or removal of a
Trustee, or his otherwise ceasing to be a Trustee, he shall
execute and deliver such documents as the remaining Trustees
shall require for the purpose of conveying to the Trust or the
remaining Trustees any Trust Property held in his name. Upon the
incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the
remaining Trustees shall require as provided in the preceding
sentence. However, the execution and delivery of such documents
by a former Trustee or his legal representative shall not be
requisite to the vesting of title to the Trust Property in the
remaining Trustees as provided in Section 3.3 hereof.
Section 2.4 Vacancies. The term of office of a
Trustee shall terminate and a vacancy shall occur in the event of
such Trustee's death, resignation, removal, bankruptcy,
adjudicated incompetence or other incapacity to perform the
duties of the office of Trustee. No such vacancy shall operate
to annul this Declaration or to revoke any existing agency
created pursuant to the terms of this Declaration. In the case
of an existing vacancy, including a vacancy existing by reason of
any increase in the number of Trustees, subject to the provisions
of Section 16(a) of the 1940 Act, the remaining Trustees, or, if
only one Trustee shall then remain in office, the sole remaining
Trustee, shall appoint such individual to fill such vacancy as
they or he, in their or his discretion, shall see fit. An
appointment of a Trustee may be made in anticipation of a vacancy
to occur at a later date by reason of retirement or resignation
of a Trustee or an increase in the number of Trustees; provided,
such appointment shall not become effective prior to such
retirement or resignation or such increase in the number of
Trustees. Whenever a vacancy is filled as provided in this
Section 2.4, 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. A written instrument certifying the existence of
such vacancy signed by a majority of the Trustees shall be
conclusive evidence of the existence of such vacancy.
ARTICLE III
POWERS OF TRUSTEES
Section 3.1 General. The Trustees shall have
exclusive and absolute control over the Trust Property and over
the business of the Trust to the same extent as if the Trustees
were the sole owners of the Trust Property and business in their
own right, but with such power of delegation as may be permitted
by this Declaration. The Trustees shall have power to conduct
the business of the Trust and carry on its operations in any and
all of its branches and maintain office both within and without
The Commonwealth of Pennsylvania, in any and all states of the
United States of America, in the District of Columbia, and in any
and all commonwealths, territories, dependencies, possessions,
agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and
execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although
such things are not herein specifically mentioned. 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, the presumption shall be in
favor of a grant of power to the Trustees.
The enumeration of any specific power herein shall not
be construed as limiting the aforesaid power. Such powers of the
Trustees may be exercised without order of or resort to any
court.
Section 3.2 Business and Investments. The Trustees
shall have the power with respect to the Trust and its assets and
Shares:
(a) to conduct, operate and carry on the business of
an investment company, either directly or through one or more
wholly-owned subsidiaries, and in connection therewith:
(i) to subscribe for, purchase or otherwise
acquire and invest and reinvest in, to hold for
investment or otherwise, to sell, transfer, assign,
negotiate, exchange, lend or otherwise dispose of, and
to generally deal in and with (a) securities (which
term, "securities," shall include without limitation
any and all bills, notes, bonds, debentures or other
obligations or evidences of indebtedness, certificates
of deposit, bankers' acceptances, commercial paper,
repurchase agreements or other money market
instruments, stocks, shares or other equity ownership
interests; and warrants, options or other instruments
representing rights to subscribe for, purchase, receive
or otherwise acquire or to sell, transfer, assign or
otherwise dispose of, and scrip, certificates, receipts
or other instruments evidencing any ownership rights or
interests in, any of the foregoing or in indices of any
of the foregoing), "when issued" and "delayed delivery"
contracts for securities, issued, guaranteed or
sponsored by any governments, political subdivisions or
governmental authorities, agencies or
instrumentalities, by any individuals, firms,
companies, corporations, syndicates, associations or
trusts, or by any other organizations or entities
whatsoever irrespective of their forms or the names by
which they may be described, whether or not they be
organized and operated for profit, and whether they be
domestic or foreign with respect to the Commonwealth of
Pennsylvania or the United States of America, and
options or other instruments entered into on a national
securities exchange relating to foreign currencies; (b)
futures contracts and forward contracts with respect to
instruments described in 3.2(a)(i)(a), futures
contracts on indices of such instruments, and options
on all contracts described in this subsection
3.2(a)(i)(b); (c) precious metals and other minerals,
contracts to purchase and sell, and other interests of
every nature and kind in, such metals of minerals and
(d) rare coins and other numismatic items; and
(ii) to acquire and become the owner of or
interested in any securities by delivering or issuing
in exchange or payment therefor, in any lawful manner,
any of the Trust Property; and
(iii) to exercise all rights, powers and
privileges relating to, and to do all acts and things
to protect or enhance the value of securities or
interests held.
The Trustees shall not be limited by any law limiting the
investments which may be made by fiduciaries; and
(b) to conduct, operate, carry on and engage in any
other lawful business and activity which to such extent and
manner as the Trustees, in their sole and absolute discretion,
may determine.
Section 3.3 Legal Title. Legal title to all the
Trust Property shall be vested in the Trustees as trustees,
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, provided that the interest of the Trust therein is
appropriately protected. 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 termination
of the term of office of a Trustee as provided in Section 2.2 or
2.4 hereof, such Trustee 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
conveying documents have been executed and delivered as provided
in Section 2.3 hereof.
Section 3.4 Issuance and Repurchase of Securities.
The Trustees shall have the power to issue, sell, repurchase,
redeem, retire, cancel, acquire, hold, resell, reissue, dispose
of, transfer, and otherwise deal in Shares of the Trust, and
subject to Articles VII, VIII and IX hereof, to apply to any such
repurchase, redemption, retirement, cancellation or acquisition
of Shares any funds or other assets of the Trust, whether
constituting capital or surplus or otherwise, to the full extent
now or hereafter permitted by applicable law.
Section 3.5 Borrowing Money; Lending Trust Assets.
Subject to any applicable Fundamental Policies of the Trust or
any applicable provision of the Bylaws, the Trustees shall have
power to borrow money or otherwise obtain credit and to secure
the same by mortgaging, pledging or otherwise subjecting as
security the assets of the Trust, to endorse, guarantee, or
undertake the performance of any obligation, contract or
engagement of any other Person and to lend Trust Property.
Section 3.6 Delegation; Committees. The Trustees
shall have power, consistent with their continuing exclusive
authority over the management of the Trust and the Trust
Property, to delegate from time to time to such committee or
committees as they may from time to time appoint from among their
own number or to such officers, employees or agents of the Trust
as they may from time to time designate the doing of such things
and the execution of such instruments either in the name of the
Trust or the names of the Trustees or otherwise as the Trustees
may deem expedient.
Section 3.7 Collection and Payment. The Trustees
shall have power to collect all property due to the Trust; to pay
all claims, including taxes, against the Trust Property; to
prosecute, defend, compromise or abandon any claims relating to
the Trust Property; to foreclose any security interest securing
any obligations by virtue of which any property is owed to the
Trust; and to enter into releases, agreements and other
instruments.
Section 3.8 Expenses. The Trustees shall have the
power to incur and pay any expenses which, in the opinion of the
Trustees, are necessary or incidental to carry out any of the
purposes of this Declaration, and to pay reasonable compensation
from the funds of the Trust to themselves as Trustees. The
Trustees shall fix the compensation of all officers, employees
and Trustees of the Trust.
Section 3.9 Litigation. The Trustees shall have the
power to engage in and to prosecute, defend, compromise, abandon,
or adjust, by arbitration or otherwise, any actions, suits,
proceedings, disputes, claims, and demands relating to the Trust
of the Trust Property, and, out of the Trust Property, to pay or
to satisfy and debts, claims or expenses incurred in connection
therewith, including those of litigation, and such power shall
include without limitation the power of the Trustees or any
appropriate committee thereof, in the exercise of their or its
good faith business judgment, to consent to the dismissal of any
action, suit, proceeding, dispute, claim, or demand, derivative
or otherwise, brought by any person, including a Shareholder in
such Shareholder's own name or in the name of the Trust, whether
or not the Trust or any of the Trustees may be named individually
therein or the subject matter arises by reason of business for or
on behalf of the Trust.
Section 3.10 Miscellaneous Powers. The Trustees
shall have the power to: (a) employ or contract with such
Persons as the Trustees may deem desirable for the transaction of
the business of the Trust; (b) enter into joint ventures, (c)
remove Trustees or fill vacancies in or add to their number,
subject to and in accordance with Section 2.3 and 2.4 hereof;
elect and remove at will such officers and appoint and terminate
such agents or employees as they consider appropriate; and
appoint from their own number and terminate at will any one or
more committees which may exercise some or all of the power and
authority of the Trustees as the Trustees may determine; (d)
purchase, and pay for out of Trust Property, insurance policies
insuring the Trust Property, and, to the extent permitted by law
and not inconsistent with any applicable provision of this
Declaration or the Bylaws, insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers, distributors,
selected dealers or independent contractors of the Trust against
all claims arising by reason of holding any such position or by
reason of any action taken or omitted to be taken by any such
Person in such capacity, whether or not constituting negligence,
or whether or not the Trust would have the power to indemnify
such person against such liability; (e) establish pension, profit
sharing, share purchase, and other retirement, incentive and
benefit plans for any Trustees, officers, employees and agents of
the Trust; (f) indemnify any person with whom the Trust has
dealings, including the Shareholders, Trustees, officers,
employees, agents, investment advisers, distributors, selected
dealers and independent contractors of the Trust, to such extent
permitted by law and not inconsistent with any applicable
provision of the Bylaws as the Trustees shall determine; (g)
guarantee indebtedness or contractual obligations of others; (h)
determine and change the fiscal year of the Trust and the method
by which its accounts shall be dept; and (i) adopt a seal for the
Trust, but the absence of such seal shall not impair the validity
of any instrument executed on behalf of the Trust.
Section 3.11 Manner of Acting; Bylaws. Except as
otherwise provided herein, in the Bylaws or in any applicable
provision of law, any action to be taken by the Trustees may be
taken by a majority of the Trustees present at a meeting of
Trustees (a quorum being present), including any meeting held by
means of a conference telephone circuit or similar communications
equipment by means of which all persons participating in the
meeting can hear each other, or by written consent or consents of
the Trustees. The Trustees shall adopt Bylaws not inconsistent
with this Declaration to provide for the conduct of the business
of the Trust and may amend or repeal such Bylaws to the extent
such power is not reserved to the Shareholders by express
provision of such Bylaws.
ARTICLE IV
INVESTMENT ADVISER, DISTRIBUTOR, CUSTODIAN
AND SHAREHOLDER SERVICING AGENT
Section 4.1 Investment Adviser. The Trustees may in
their discretion from time to time enter into investment advisory
or management agreements whereby an Investment Adviser which is
the other party to any such contract shall undertake to furnish
the Trust or any Class or Series such management, investment
advisory or supervisory, administrative, accounting, legal,
statistical and research facilities and services, and such other
facilities and services, if any, as the Trustees shall from time
to time consider desirable, all upon such terms and conditions as
the Trustees may in their discretion determine to be not
inconsistent with this Declaration, the applicable provisions of
the 1940 Act and any applicable provisions of the Bylaws of the
Trust. To the extent required by the 1940 Act or other
applicable law or regulations, any such advisory or management
agreement and any amendment thereto shall be subject to approval
by a Majority Shareholder Vote at a meeting of the Shareholders
of the Trust. Notwithstanding any provisions of this
Declaration, the Trustees may authorize any Investment Adviser
(subject to such general or specific instructions as the Trustees
may from time to time adopt) to effect purchases, sales, loans or
exchanges of portfolio securities of the Trust on behalf of the
Trustees or may authorize any officer or employee of the Trust or
any Trustee to effect such purchase, sales, loans or exchanges
pursuant to recommendations of any Investment Adviser (and all
without further action by the Trustees). Any such purchase,
sales, loans and exchanges shall be deemed to have been
authorized by all of the Trustees. The Trustees may, in their
sole discretion, call a meeting of Shareholders in order to
submit to a vote of Shareholders at such meeting the approval of
continuance of any such investment advisory or management
agreement. If the Shareholder of any one or more Series or
Classes of Shares should fail to approve any such investment
advisory or management agreement, the Investment Adviser may
nonetheless serve as Investment Adviser with respect to any
Series or Class whose Shareholders approve such contract.
Section 4.2 Distributor. The Trustees may in their
discretion from time to time enter into agreements providing for
the sale of Shares to net the Trust not less than the net asset
value (or such other amount as may be permitted by law) per Share
(as described in Article VIII hereof and pursuant to which the
Trust may appoint the other party to any such agreement as its
sales agent for the distribution of such Shares. Each such
agreement shall contain such terms and conditions as the Trustees
may in their discretion determine to be not inconsistent with
this Declaration, the applicable provisions of the 1940 Act and
any applicable provisions of the Bylaws of the Trust.
Section 4.3 Shareholder Servicing Agent. The
Trustees may in their discretion from time enter into a
shareholder servicing agreement whereby the other party to such
agreement shall undertake to furnish transfer agency, shareholder
and dividend disbursing services to the Trust and conditions as
the Trustees may in their discretion determine to be not
inconsistent with this Declaration and any applicable provisions
of the 1940 Act and the Bylaws of the Trust.
Section 4.4 Custodian. The trustees may appoint a
bank or trust company having an aggregate capital, surplus and
undivided profits (as shown in its last published report) of at
least two million dollars ($2,000,000) as custodian of the
securities and cash of the Trust. The custodian agreement shall
contain such terms and conditions as the Trustees in their
discretion determine to be not inconsistent with this
Declaration, the applicable provisions of the 1940 Act and any
applicable provisions of the Bylaws of the Trust
Section 4.5 Parties to Agreements. The Trustees may
enter into any agreement of the character described in Section
4.1, 4.2, 4.3 or 4.4 of this Article IV and into any other
agreement although one or more of the Trustees or officers of the
Trust may be an officer, director, trustee, shareholder or member
of, or otherwise interested in, any other party to the agreement,
and no such agreement shall be invalidated or rendered voidable
by reason of the existence of any such relationship; nor shall
any Person holding such relationship be liable merely by reason
of such relationship for any loss or expense to the Trust under
or by reason of said agreement or accountable for any profit
realized directly or indirectly therefrom. The same Person or an
Affiliated Person of any Person may be the other party to two or
more of the agreements entered into pursuant to Sections 4.1,
4.2, 4.3 or 4.4 above or otherwise, and any individual may be
financially interested in or otherwise affiliated with any Person
who is a party to any of the agreements mentioned in this
Section 4.5.
ARTICLE V
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 5.1 No Personal Liability of Shareholders,
Trustees, etc. No Shareholder shall be subject to any personal
liability whatsoever to any Person in connection with Trust
Property or the acts, obligations or affairs of the Trust.
Subject to Section 5.4 hereof, no Trustee, officer, employee or
agent of the Trust shall be subject to any personal liability
whatsoever to any Person, other than the Trust or its
Shareholders, in connection with Trust Property or the affairs of
the Trust, and all such personnel shall look solely to the Trust
Property for satisfaction of claims of any nature arising in
connection with the affairs of the Trust. If any Shareholder,
Trustee, officer, employee or agent, as such, of the Trust is
made a party to any suit or proceeding to enforce any such
liability, he shall not, on account thereof, be held to any
personal liability. The Trust shall indemnify and hold each
Shareholder harmless from and against all claims and liabilities
to which such Shareholder may become subject by reason of his
being or having been a Shareholder, and shall reimburse such
Shareholder for all legal and other expenses reasonably incurred
by him in connection with any such claim or liability; provided,
that such indemnity or reimbursement shall be made from assets
(or proceeds thereof or income therefrom) of the one or more
Series or Classes of Shares of the Trust of which such
Shareholder is a holder and in respect of which such claim or
liability arose and not from the assets (or Proceeds or income
therefrom) of any other Series or Classes of Shares of the Trust.
The rights accruing to a Shareholder under this Section 5.1 shall
not exclude any other right to which such Shareholder may be
lawfully entitled, nor shall anything herein contained restrict
the right of the Trust to indemnify or reimburse a Shareholder in
any appropriate situation even though not specifically provided
herein.
Section 5.2 Non-Liability of Trustees, etc..
Subject to Section 5.4 hereof, no Trustee, officer, employee or
agent of the Trust shall be liable to the Trust or to any
Shareholder, Trustee, officer, employee or agent of the Trust for
any action or failure to act (including without limitation the
failure to compel in any way any former or acting Trustee to
redress any breach of trust).
Section 5.3 Indemnification.
(a) Subject to Section 5.4 hereof, the Trustees shall
provide for indemnification by the Trust of every Person who is,
or has been, a Trustee, officer, employee or agent of the Trust,
or of any other entity of the Trust's request, against all
liability and against all expenses reasonably incurred or paid by
him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of
his being or having been a Trustee, officer, employee or agent
and against amounts paid or incurred by him in the settlement
thereof in such manner, to such extent and subject to such
condition and limitations as the Trustees may provide from time
to time in the Bylaws; provided, that, to the extent any claim,
action, suit or proceeding involves any act or omission of such
Person in respect of one or more particular Series or Classes of
shares of the Trust or the assets or operations of such one or
more Series or Classes of Shares, such indemnification shall be
provided only from the assets (or proceeds thereof or income
therefrom) of such one or more Series or Classes of Shares and
not from the assets (or proceeds thereof or income therefrom) of
any other Series or Class of Shares of the Trust.
(b) The words "claim," "action," "suit," or "
proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal, or other, including appeals),
actual or threatened; and the words "liability" and "expenses"
shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties an other
liabilities.
Section 5.4 No Protection Against Certain
Liabilities. Nothing contained in Sections 5.1, 5.2 or 5.3
hereof or in any provision of the Bylaws referred to in Section
5.3 hereof shall protect any Trustee or officer of the Trust from
any liability to the Trust or its Shareholders for which he would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of his office. Nothing contained in Sections 5.1,
5.2, or 5.3 hereof or in any agreement of the character described
in Section 4.1 or 4.2 hereof shall protect any Investment Adviser
to the Trust or Distributor of its Shares against any liability
to the Trust or its Shareholders to which he or it would
otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of his or its duties to
the Trust, or by reason of his or its reckless disregard of his
or its obligations and duties under the agreement pursuant to
which he or it serves as Investment Adviser to the Trust or
Distributor of its Shares.
Section 5.5 No Bond Required of Trustees. No
Trustee shall be obligated to give any bond or other security for
the performance of any of his duties hereunder.
Section 5.6 No Duty of Investigation; Notice in
Trust Instruments, etc.. No purchaser, lender or other Person
dealing with the Trustees or with any officer, employee or agent
of the Trust shall be bound to make an inquiry concerning the
validity of any transaction purporting to be made by the Trustees
or any said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or
on the order of the Trustees or of said officer, employee or
agent. Every contract, undertaking, instrument, certificate,
Share or obligation or other security of the Trust, and every
other act or thing whatsoever executed in connection with the
Trust, shall be conclusively presumed to have been executed or
done by the persons performing such act, solely in their capacity
as Trustees under this Declaration or in their capacity as
officers, employees or agents of the Trust. Every written
agreement, contract, instrument, undertaking, certificate, Share
or other security of the Trust executed, made or issued by them
as Trustees under this Declaration, and that the obligations
created or evidenced thereby are not binding upon any of the
Trustees or Shareholders individually, but bind only the Trust
Property, and may contain any further recital which they or he
may deem appropriate, but the omission of such recital shall not
operate to bind the Trustees or Shareholders individually.
Section 5.7 Reliance on Experts, etc. Each Trustee,
officer or employee of the Trust shall, in the performance of his
duties, be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance
in good faith upon the books of account or other records of the
Trust, upon an opinion of counsel, or upon reports made to the
Trust by any of its officers or employees or by the Investment
Adviser, the Distributor, Shareholder Servicing Agent, selected
dealers, accountants, appraisers or other experts or consultants
selected with reasonable care by the Trustees, officers or
employees of the Trust, regardless of whether such counsel or
expert may also be a Trustee.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 6.1 Beneficial Interest. The interest of
the Trust shall be divided into transferable units to be called
Shares of Beneficial Interest, without par value. The number of
such Shares of Beneficial Interest authorized hereunder is
unlimited. Except as otherwise provided in this Section 6.1 and
in Section 6.6 hereof, each Share shall represent an equal
proportionate share in the net assets of the Trust. Without
limiting the authority of the Trustees set forth herein to
establish and designate any further Series or Classes, there is
hereby established six Series of Shares to be known as "The SST
Intermediate Bond Fund, The SST Long-term Bond Fund, The SST
Larger Company Stock Fund, The SST Smaller Company Stock Fund,
The SST International Fund and The SST Alternative Categories
Fund." Each Share of any Series or Class shall represent an
equal proportionate share in the net assets of that Series or
Class with each other share of any Series or Class. The Trustees
may divide or combine the Shares of that Series or Class into a
greater or lesser number of Shares of that Series or Class
without hereby changing the proportionate interests in the assets
of that Series or Class. Subject to the provisions of Section
6.6 hereof, the Trustees may also authorize the creation of
additional Series or Classes of Shares (the proceeds of which
may, if desired, be invested in separate, independently managed
portfolios of securities. All Shares issued hereunder including,
without limitation, Shares issued in connection with a dividend
or distribution in Shares or a division of Shares, shall be fully
paid and nonassessable.
Section 6.2 Rights of Shareholders. The ownership
of the Trust Property of every description and the right to
conduct any business hereinbefore described shall be vested
exclusively in the Trustees, and the Shareholders shall have no
interest therein other than the beneficial interest conferred by
their Shares, and they shall have no right to call for any
partition or division of any property, profits, rights or
interests of the Trust nor can they be called upon to assume any
losses of the Trust or suffer an assessment of any kind by
virtue of their ownership of Shares. The Shares shall be
personal property giving only the rights specifically set forth
in this Declaration. Shares shall not entitle any holder thereof
to preference, preemptive, appraisal, conversion or exchange
rights, except as the Trustees may determine.
Section 6.3 Trust Only. It is the intention of the
Trustees to create only the relationship of Trustee and
beneficiary between the Trustees and each Shareholder from time
to time. 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. Nothing in this
Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a
joint stock association.
Section 6.4 Issuance of Shares. The Trustees in
their discretion may, from time to time without vote of the
Shareholders, issue Shares of any Series or Class in addition to
the then issued and outstanding Shares and Shares held in the
treasury, to such party or parties and for consideration in such
amount not less than the net asset value (or such other amount as
may be permitted by law) per share (determined as set forth in
Article VIII hereof) and of such type, including cash or
property, at such time or times and on such terms as the Trustees
may deem fitting, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in
connection with, the assumption of liabilities) and businesses.
In connection with any issuance of Shares, the Trustees may issue
fractional Shares. Reductions in the number of outstanding
Shares of any Series or with respect to which the Trustees shall
have established a policy of maintaining a constant net asset
value per Share of such Series or Class may be made pursuant to
the provisions of Section 7.4 hereof in order to maintain the
constant net asset value per share of such Series. Contributions
to the Trust may be accepted for, and Shares shall be redeemed
as, whole Shares and fractions of a Share as described in the
Prospectus or the Statement of Additional Information.
Section 6.5 Voting Powers. The Shareholders shall
have power to vote only (i) for the election of Trustees as
provided in Section 2.2 hereof and the removal of Trustees as
provided in Section 2.3 hereof, to the extent provided in Section
16(c) of the 1940 Act, (ii) with respect to approval or
termination in accordance with the 1940 Act of any investment
advisory or management agreement described in Section 4.1 hereof,
(iii) with respect to termination of the Trust as provided in
Section 9.2 hereof, (iv) with respect to any amendment of this
Declaration to the extent and as provided in Section 9.3 hereof,
(v) to the same extent as the stockholders of a Pennsylvania
business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the
Shareholders, and (vi) with respect to such additional matters
relating to the Trust as may be required by this Declaration, the
Bylaws or any undertaking filed by the Trust with the Commission
(or any successor agency) or with any state, or as to which the
Trustees in their discretion shall determine such Shareholder
vote to be required by law or otherwise to be necessary,
appropriate or advisable. Each whole Share shall be entitled to
one vote as to any matter on which it is entitled to vote and
each fractional Share shall be entitled to a proportionate
fractional vote, except that Shares held in the treasury of the
Trust as of the record date, as determined in accordance with the
Bylaws, shall not be voted. There shall be no cumulative voting
of Shares in any election of Trustees. Until Shares are issued,
the Trustees may exercise all rights of Shareholders and may take
any action required by law, this Declaration or the Bylaws to be
taken by Shareholders. The Bylaws may include further provisions
relating to Shareholders' votes and meetings and related matters.
Section 6.6 Series of Shares. The following
provisions are applicable regarding the Series of Shares of the
Trust established and designated by Section 6.1 hereof and shall
be applicable to the extent the Trustees shall provide in respect
of the establishment and designation of additional Series or
Classes as provided in that section:
(a) The number of authorized Shares and the number of
Shares of each Series or Class that may be issued shall be
unlimited. The Trustees may classify or reclassify any Shares of
any Series or Class whether or not previously issued or
outstanding. The Trustees may hold as treasury Shares and
reissue as Shares (of the same or some other Series or Class),
for such consideration as provided in Article VIII hereof and on
such terms as they may determine, or cancel, any Shares of any
Series or Class reacquired by the Trust in their discretion from
time to time.
(b) All consideration received by the Trust for the
issue or sale of Shares of a particular Series or Class, together
with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived
from reinvestment of such proceeds in whatever from the same may
be, shall irrevocably belong to that Series or Class, for all
purposes, subject only to the rights of creditors and the right
of Trustees to allocate expenses. In the event that there are
any assets, income, earnings, profits, and proceeds thereof,
funds or payments which are not readily identifiable as belonging
to any particular Series or Class, the Trustees shall allocate
them among any one or more of the Series or Class, established
and designated from time to time in such manner and on such basis
as they, in their sole discretion, deem fair and equitable. Each
such allocation by the Trustees shall be conclusive and binding
upon the Shareholders of all Series and Classes for all purposes.
(c) The assets belonging to each particular Series or
Class shall be charged with the liabilities of the Trust in
respect of that Series or Class and all expenses, costs, charges
and reserves attributable to that Series or Class, and any
general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any
particular Series or Class shall be allocated and charged by the
Trustees to and among any one or more of the Series or Class
established and designated from time to time in such manner and
on such basis as the Trustees in their sole discretion deem fair
and equitable. Each allocation of liabilities, expenses, costs,
charges and reserves by the Trustees shall be conclusive and
binding upon the holders of all Series and Classes for all
purposes.
(d) The power of the Trustees to pay dividends and to
make distributions shall be governed by Section 8.3 of this
Declaration with respect to any one or more Series or Classes
which represent the beneficial interests in separately managed
components of the Trust assets. With respect to any other Series
or Class, dividends and distributions on Shares of a particular
Series or Class may be paid with such frequency as the Trustees
may determine, which may be daily or otherwise, pursuant to a
standing resolution or resolutions adopted only once or with such
frequency as the Trustees may determine, to the holders of such
Shares of that Series or Class, from such of the income and
capital gains, accrued or realized, from the assets belonging to
that Series or Class as the Trustees may determine, after
providing for actual and accrued liabilities belonging to that
Series or Class. All dividends and distributions on Shares of a
particular Series or Class shall be distributed pro rata to the
holders of that Series or Class in proportion to the number of
Shares of that Series or Class held by such holders at the date
and time of record established for the payment of such dividends
or distributions.
(e) The Trustees shall have the power to determine the
designations, preferences, privileges, limitations and rights,
including voting and dividend rights, of such Series or Class of
Shares. Subject to the provisions of Section 6.1 and this
Section 6.6, all Shares of all Series or Classes shall have
identical rights and privileges, except insofar as variations
thereof among Series or Classes shall have been determined and
fixed by the Trustees.
(f) Subject to compliance with the requirements of the
1940 Act, the Trustees shall have the authority to provide that
the holders of Shares of any Series or Class shall have the right
to convert or exchange said Shares for or into Shares of one or
more other Series or Class in accordance with such requirements
and procedures as may be established by the Trustees.
(g) The establishment and designation of any Series
or Class of Shares in addition to those established and
designated in Section 6.1 hereof shall be effective upon the
execution by a majority of the then Trustees of an instrument
setting forth such establishment and designation and the relative
rights, preferences, voting powers, restrictions, limitations as
to dividends, qualifications, and terms and conditions of
redemption of such Series or Class or as otherwise provided in
such instrument. At any time that there are no Shares
outstanding of any particular Series or Class previously
established and designated, the Trustees may by an instrument
executed by a majority of their number abolish that Series or
Class and the establishment and designation thereof.
(h) In the event of the liquidation of a particular
Series, or Class the Shareholders of that Series or Class which
has been establishment and designated and which is being
liquidated shall be entitled to receive, when and as declared by
the Trustees, the excess of the assets belonging to that Series
or Class over the liabilities belonging to that Series or Class.
The holders of Shares of any Series or Class shall not be
entitled thereby to any distribution upon liquidation of any
other Series or Class. The assets so distributable to the
Shareholders of any Series or Class shall be distributed among
such Shareholders in proportion to the number of Shares of that
Series or Class held by them and recorded on the books of the
Trust. The liquidation of any particular Series or Class in
which there are Shares then outstanding may be authorized by vote
or written consent of a majority of the Trustees then in office.
ARTICLE VII
REDEMPTIONS
Section 7.1 Redemptions. Each Shareholder of a
particular Series or Class shall have the right, if any, at such
times as may be permitted by the Trust, to require the Trust to
redeem all or any part of his Shares of that Series or Class,
upon and subject to the terms and conditions provided in this
Article VII. The Trust shall, upon application of or pursuant to
authorization from any Shareholder, redeem from such Shareholder
outstanding Shares for an amount per Share determined by the
Trustees in accordance with the 1940 Act; provided, that (i) such
amount per Share shall not exceed the cash equivalent of the
proportionate interest of each Share of that Series or Class in
the Trust Property at the time of the redemption, and (ii) if so
authorized by the Trustees, the Trust may, at any time and from
time to time charge fees for effecting such redemption, at such
rates as the Trustees may establish, if and to the extent
permitted under the 1940 Act, and may, at any time and from time
to time, pursuant to the 1940 Act suspend such right of
redemption. Redemption and suspension and resumption of
redemption of Shares shall be effected in accordance with the
procedures, and payment for Shares redeemed shall be made in the
manner, set forth in the Prospectus or the Statement of
Additional Information relating to such Shares.
Section 7.2 Redemption of Shares for Tax Purposes;
Disclosure of Holding. If the Trustees shall, at any time and in
good faith, be of the opinion that direct or indirect ownership
of Shares of the Trust (or of any Series of Shares of the Trust)
has or may become concentrated in any Person to an extent which
would disqualify the Trust (or such Series) as a regulated
investment company under the Internal Revenue Code, then the
Trustees shall have the power by lot or other means deemed
equitable by them (i) to call for redemption from any such Person
a number, or principal amount, of Shares of the Trust (or of such
Series) sufficient in the opinion of the Trustees, to maintain or
bring the direct or indirect ownership of Shares of the Trust (or
of such Series) into conformity with the requirements for such
qualification, and (ii) to refuse to transfer or issue Shares of
the Trust (or of such Series) to any Person whose acquisition of
the Shares of the Trust (or of such Series) would, in the opinion
of the Trustees, result in such disqualification. The redemption
shall be effected at a redemption price determined in accordance
with Section 7.1 hereof.
The holders of Shares of the Trust shall upon demand
disclose to the Trustees in writing such information with respect
to direct and indirect ownership of Shares of the Trust as the
Trustees deem necessary to comply with the provisions of the
Internal Revenue Code of 1986, as amended or any successor
statute, or to comply with the requirements of any other
authority.
Section 7.3 Redemptions to Reimburse Trust for Loss
Nonpayment for Shares or for Other Charges. The Trustees shall
have the power to redeem Shares owned by any Shareholder to the
extent necessary (i) to reimburse the Trust for any loss it has
sustained by reason of the failure of such Shareholder to make
full payment for Shares purchased by such Shareholder, or (ii) to
collect any charge relating to a transaction effected for the
benefit of such Shareholder which is applicable to Shares as
provided in the Prospectus. Any such redemption shall be
effected at the redemption price determined in accordance with
Section 7.1 hereof.
Section 7.4 Redemptions Pursuant to Constant Net
Asset Value Policy. The following provisions shall apply to any
Series of the Trust during any period that the Trustees, in their
discretion, establish a policy of maintaining a constant net
asset value per Share. If for any reason the net income of the
Trust attributable to such Series or Class shall, at the time of
any determination thereof in accordance with Section 8.2 hereof,
be a negative amount, then the Trustees shall have power to cause
the number of outstanding Shares of such Series or Class to be
reduced by requiring each Shareholder to contribute to the
capital of the Trust such Shareholder's proportionate part of the
total number of Shares of such Series or Class which have an
aggregate current net asset value equal as nearly as may be
practicable to the negative amount of the Trust's net income.
Each Shareholder, by becoming a registered holder of Shares,
agrees to make any such contribution which may be required.
Section 7.5 Payment for Redeemed Shares in Kind.
Subject to any applicable provisions of the 1940 Act, payment for
any Shares redeemed pursuant to Section 7.1 or 7.2 hereof may,
at the option of the Trustees or such officer or officers of the
Trust as they may authorize for the purpose, be made in cash or
in kind, or partially in cash and partially in kind, and, in case
of full or partial payment in kind, the Trustees or such
authorized officer or officers shall have absolute discretion to
determine the securities or other assets of the Trust and the
amount thereof to be distributed in kind. For such purpose, the
value of any securities or other noncash assets delivered in
payment for Shares redeemed shall be determined in the same
manner as the value of such securities or other noncash assets
are determined in accordance with Section 8.1 hereof for purposes
of determining the net asset value per Share applicable to such
Shares, as of the same time that the net asset value per Share
applicable to such Shares is determined.
Section 7.6 Repurchase of Shares by Agreement with
Shareholder. The Trust may repurchase its Shares from any
Shareholder directly or through an agent designated by it for the
purpose, by agreement with such Shareholder, at a price not
exceeding the redemption price of such Shares determined pursuant
to Section 7.1 hereof.
<PAGE>
ARTICLE VIII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DIVIDENDS AND DISTRIBUTIONS
Section 8.1 Net Asset Value. Subject to the
applicable provisions of the 1940 Act, the Trustees shall have
the power and duty to cause the net asset value per Share of each
Series or Class of outstanding Shares of the Trust to be
determined in such manner, with such frequency and at such
specific time of day as shall be set forth in or prescribed by
the Trustees in accordance with the Bylaws. The Trustees may
delegate the power and duty to determine the net asset value per
Share of any Series or Class of outstanding Shares to one or more
of their number, or to one or more officers of the Trust, or to
any Investment Adviser, custodian, Shareholder Servicing Agent,
or other agent appointed for the purpose by the Trust.
Section 8.2 Net Income. Subject to any applicable
provisions of the 1940 Act, the Trustees shall have the power and
duty to cause the net income attributable to each Series or Class
of the Trust to be determined on an accrual basis with the same
frequency and at the same time of day as the net asset value per
Share of such Series or Class of the Trust is determined in
accordance with Section 8.1 hereof. The Trustees shall have full
discretion, to the extent not inconsistent with the 1940 Act, to
determine whether any cash or property of the Trust shall be
treated as income or as principal and whether any item of expense
shall be charged to the income or the principal account, and
their determination shall be conclusive upon the Shareholders.
In the case of stock dividends received, the Trustees shall have
full discretion to determine, in the light of the particular
circumstance, how much, if any (the value thereof shall be
treated as income, and the balance, if any, shall be treated as
principal.)
Section 8.3 Dividends and Distributions. The
Trustees shall have the power to declare and pay ratably to the
Shareholders of any Series or Class as dividends or distributions
on their Shares, such proportion of the net income, capital
gains, surplus (including paid-in surplus), capital or assets of
such Series or Class as the Trustees may deem proper. Dividends
and distributions on any Series or Class of Shares may be paid
with such frequency (which may be daily or at such other
intervals as shall be specified in a standing resolution or
resolution adopted by the Trustees) and may be paid in cash or
other property, or in additional Shares, in such manner, at such
times, and on such terms as the Trustees shall determine.
Dividends and distributions may be paid to the Shareholders of
record at the time of declaring the dividend or distribution or
to the Shareholders of record at such other date as the Trustees
shall determine. The Trustees may always retain from the net
income of the Trust such amount as they may deem necessary to pay
debts or expenses or to meet obligations of the Trust or as they
may deem desirable to use in the conduct of the affairs or to
retain for future requirements of the business of the Trust.
Inasmuch as the computation of net income and gains for
Federal income tax purposes may vary from the computation thereof
on the books of the Trust, the foregoing provisions of this
Section 8.3 shall be interpreted to give the Trustees the power
in their discretion to distribute for any fiscal year as income
dividends and as capital gains distributions, respectively,
additional amounts sufficient to enable the Trust to avoid or
reduce liability for taxes.
Section 8.4 Power to Modify Foregoing Procedures.
Notwithstanding any of the foregoing provisions of this Article
VIII, the Trustees may prescribe, in their absolute discretion,
such other bases and times for determining the net asset value
per Share of outstanding Shares, the net income of the Trust, or
for the declaration and payment of dividends and distributions,
as they may deem necessary or desirable to enable the Trust to
comply with any provision of the 1940 Act, including without
limitation any rule or regulation adopted pursuant to Section 22
of the 1940 Act by the Commission.
ARTICLE IX
DURATION; TERMINATION OF
TRUST; AMENDMENT; MERGERS, ETC.
Section 9.1 Duration. The Trust shall continue
without limitation of time but subject to the provisions of this
Article IX.
Section 9.2 Termination of Trust. (a) The Trust or
any Series or Class may be terminated by the vote or written
consent of majority of the Trustees. Upon any such termination:
(i) The Trust, Series or Class terminated shall carry
on no business except for the purpose of winding up its
affairs.
(ii) The Trustees shall proceed to wind up the affairs
of the Trust, Series or Class terminated and all of the
powers of the Trustees under this Declaration shall continue
until the affairs of the Trust, Series or Class terminated
shall have been wound up, including the power to fulfill or
discharge the contract of the Trust, Series or Class,
collect its assets, sell, convey, assign, exchange, transfer
or otherwise dispose of all or any part of its remaining
Trust Property to one or more persons at public or private
sale for consideration which may consist in whole or in part
of cash, securities or other property of any kind and
discharge or pay its liabilities, and to do all other acts
appropriate to liquidate its business.
(iii) After paying or adequately providing for the
payment of all liabilities, and upon receipt of such
releases, indemnities and refunding agreements, as they deem
necessary for their protection, the Trustees may distribute
the remaining Trust Property of the Trust, Series or Class
terminated in cash or in kind or partly each, among its
Shareholders according to their respective rights and
interests.
(b) After termination of the Trust and distribution to
the Shareholders as herein provided, a majority of the Trustees
shall execute and lodge among the records of the Trust an
instrument in writing setting from the fact of such termination,
and the Trustees shall thereupon be discharged from all further
liabilities and duties hereunder, and the rights and interest of
all Shareholders of the Trust, Series or Class terminated shall
thereupon cease.
Section 9.3 Amendment Procedure. (a) This
Declaration or any provisions establishing any Series or Class
may be amended by a vote or written consent of a majority of the
Trustees. However, if any such amendment materially adversely
affects the rights of any Shares of any Series or Class with
respect to matters which such amendment is applicable, such
amendment shall be subject to approval by holders of a majority
of the Shares of such Series or Class. An amendment or other
action which provides for an additional Series of Shares (and/or
Class thereof), which Series may vote together with Shares of
other Series (and/or Classes thereof) and makes other provisions
with respect to such Series (and/or Class thereof) and its
relation to existing Series (and/or Class thereof), shall not be
deemed to adversely affect the right of any other Series or
Shares or Class thereof. The Trustees may also amend this Trust
Agreement without any Shareholder approval to change the name of
the Trust, or any Series or Class thereof, to supply any
omission, to cure, correct or supplement any ambiguous, defective
or inconsistent provision thereof, or, if they deem it necessary
to conform this Trust Agreement to the requirements of applicable
federal laws or regulations or the requirements of the Internal
Revenue Code, or to eliminate or reduce any federal, state or
local taxes which are or may be payable by the Trust or the
Shareholders or to amend the investment restrictions set forth in
Article III, Section 3.2 of this Trust Agreement.
(b) A certificate signed by a majority of the Trustees
or by the Secretary or any Assistant Secretary of the Trust,
setting forth an amendment and reciting that it was duly adopted
as herein provided, or a copy of this Declaration or provisions,
as amended, and executed by a majority of the Trustees or
certified by the Secretary or any Assistant Secretary of the
Trust, shall be conclusive evidence of such amendment.
Section 9.4 Merger, Consolidation and Sale of
Assets. The Trust or any Series or Class may merge into or
consolidate with any other corporation, association, trust or
other organization or may sell, lease or exchange any or all or
substantially all of its Trust Property, including its good will,
upon such terms, conditions and consideration as may be
authorized by a majority of the Trustees.
Section 9.5 Incorporation. The Trustees may cause
to be organized or assist in organizing a corporation or
corporations under the laws of any jurisdiction or any other
trust, partnership, association or other organization to take
over all or any part of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer all or any part of the
Trust Property to any such corporation, trust, partnership,
association or organization in exchange for the shares or
securities thereof or otherwise, and to lend money to, subscribe
for the shares or securities of, and enter into any contracts
with any such corporation, trust, partnership, association or
organization in which the Trust holds or is about to acquire
shares or any other interest. The Trustees may also cause a
merger or consolidation between the Trust or any Series or Class
or any successor thereto and any such corporation, trust,
partnership, association or other organization if and to the
extend permitted by law, as provided under the law then in
effect. Nothing contained herein shall be construed as requiring
approval of Shareholders for the Trustees to organize or assist
in organizing one or more corporations, trusts, partnerships,
association or other organizations and selling, conveying or
transferring a portion of the Trust Property to such
organizations or entities.
ARTICLE X
FINANCIAL REPORTS; BOOKS AND RECORDS
The Trustees shall make required financial reports.
Shareholders may inspect the books and records of the Trust only
at the discretion of the Trustees.
ARTICLE XII
MISCELLANEOUS
Section 11.1 Filing. This Declaration and any
amendment hereto, or other document required to be so filed,
shall be filed in the office of the Secretary of The Commonwealth
of Pennsylvania and in such other places as may be required under
the laws of The Commonwealth of Pennsylvania and may also be
filed or recorded in such other places as the Trustees deem
appropriate. Such amendment or document shall become effective
as provided by applicable law. A restated Declaration, amending
and integrating into a single instrument all of the provisions of
this Declaration which are then in effect and operative, may be
executed from time to time by a majority of the Trustees and
shall be conclusive evidence of all amendments contained therein
and may thereafter be referred to in lieu of the original
Declaration and the various amendments thereto.
Section 11.2 Resident Agent. To the extent required,
the Trustees shall have power to appoint a resident agent for the
Trust in The Commonwealth of Pennsylvania, and from time to time
to replace the resident agent so appointed.
Section 11.3 Governing Law. This Declaration is
executed by the Trustees with reference to the laws of The
Commonwealth of Pennsylvania, and the rights of all parties and
the validity and construction of every provision hereof shall be
subject to and construed according to the laws of said
Commonwealth.
Section 11.4 Counterparts. The Declaration may be
simultaneously executed in several counterparts, each of which
shall be deemed to be an original, and such counterparts,
together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
Section 11.5 Reliance by Third Parties. Any
certificate executed by an individual who, according to the
records of the Trust, appears to be a Trustee hereunder, or
Secretary or Assistant Secretary of the Trust, certifying to:
(i) the number or identity of Trustees or Shareholders, (ii) the
due authorization of the execution of any instrument or writing,
(iii) the form of any vote passed at a meeting of Trustees or
Shareholders, (iv) the fact that the number of Trustees or
Shareholders present at any meeting or executing any written
instrument satisfies the requirements of this Declaration, (v)
the form of any Bylaws adopted by or the identity of any officers
elected by the Trustees or (vi) the existence of any fact or
facts which in any manner relate to the affairs of the Trust,
shall be conclusive evidence as to the matters so certified in
favor of any Person dealing with the Trustees and their
successors.
Section 11.6 Provisions in Conflict with Law or
Regulations. (a) The provisions of this Declaration are
severable, and if the Trustees shall determine, with the advice
of counsel that any of such provisions 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 or with other applicable laws and regulations, the
conflicting provisions shall be deemed superseded by such law or
regulation to the extent required to eliminate such conflict, if
required by law; provided, however, that such determination shall
not affect any of the remaining provisions of this Declaration or
render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall pertain 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 this Declaration
in any jurisdiction.
Section 11.7 Use of the Names "STAAR" and "STAAR
SYSTEM". STAAR System Financial Services, Inc. ("SSFS") has
consented to the use by the Trust of the identifying names
"STAAR" and "STAAR SYSTEM", each of which is a property right of
SSFS. The Trust will only use the said names "STAAR" or "STAAR
SYSTEM" as a component of its name and for no other purpose, and
will not purport to grant to any third party the right to use the
said names "STAAR" or "STAAR SYSTEM" for any purpose. SSFS or
any corporate affiliate of SSFS may use or grant to others the
right to use the said names "STAAR" or "STAAR SYSTEM", as all or
a portion of a corporate or business name or for any commercial
purpose, including a grant of such right to any other investment
company. At the request of SSFS the Trust will take such action
as may be required to provide its consent to the use of the said
names "STAAR" or "STAAR SYSTEM" by SSFS or any corporate
affiliate of SSFS or by any person to whom SSFS or an affiliate
of SSFS shall have granted the right to the use of the said names
"STAAR" or "STAAR SYSTEM". Upon the termination of any
investment advisory or management agreement or underwriting
agreement into which SSFS or any affiliate of SSFS and the Trust
may enter, the Trust shall, upon request by SSFS, cease to use
the names "STAAR" and "STAAR SYSTEM" as a component of its name,
and shall not use such names or initials as a part of its name or
for any other commercial purpose, and shall cause its officers
and Trustees to take any and all actions which SSFS may request
to effect the foregoing and to reconvey to SSFS or such corporate
affiliated any and all rights to such names.
IN WITNESS WHEREOF, the undersigned have hereunto set
their hands, all as of the day and year first above written.
[SIGNATURE]
__________________________________
Jeffrey A. Dewhurst, as Trustee and
not individually
[SIGNATURE]
__________________________________
Ronald G. Benson, as Trustee and
not individually
[SIGNATURE]
__________________________________
John H. Weisbrod, as Trustee and
not individually
February 28, 1996
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
Before me, a notary public in and for said county and state,
personally appeared the above-named Trustees, JEFFREY A.
DEWHURST, RONALD G. BENSON and JOHN H. WEISBROD, who severally
acknowledged the foregoing instrument to be their free act and
deed.
Before me
_________________________
Notary Public
My commission expires
BYLAWS AND
RULES OF GOVERNANCE OF
THE STAAR SYSTEM TRUST
(A PENNSYLVANIA BUSINESS TRUST)
<PAGE>
INDEX
of
BYLAWS AND RULES OF GOVERNANCE OF
THE STAAR SYSTEM TRUST
Page
<PAGE>
BYLAWS AND RULES OF GOVERNANCE
OF
THE STAAR SYSTEM TRUST
ARTICLE I
General
Section 1. Name.
The name of the Business Trust shall be THE STAAR SYSTEM
TRUST (hereafter, the "Trust").
Section 2. Organization.
The Trust shall at all times be a business trust
established under and in accordance with Chapter 95 of Title 15
of the Pennsylvania Consolidated Statutes.
Section 3. Office.
The principal office of the Trust shall be at such place or
places as the trustees of the Trust (hereafter, the "Trustees")
may from time to time determine.
Section 4. Seal.
The Trust may have a seal, if adopted by the Trustees, which
shall be circular in form and which shall bear such inscription
as the Trustees may from time to time may determine.
Section 5. Fiscal Year.
The fiscal year of the Trust shall be the calendar year
ending December 31st of each year, or such other fiscal year as
shall be fixed by resolution of the Trustees.
Section 6. Definitions.
The terms "Administrator", "By-Laws", "Commission",
"Custodian", "Declaration", "Distributor", "Fund or Funds",
"His", "Interested Person", "Investment Adviser", "1940 Act",
"Person", "Series", "Shareholder", "Shares", "Transfer Agent",
"Trust", "Trust Property", "Trustees", and "vote of a majority of
the Shares outstanding and entitled to vote", have the respective
meanings given them in the Declaration of Trust of the Trust
dated February 28, 1996 as amended from time to time. Other
terms defined in the Investment Company Act of 1940, as amended
shall have the meaning set forth in such Act.
ARTICLE II
Owners of Beneficial Interest
Section 1. Place of Meetings.
Each meeting of the shareholders shall be held at the
principal office of the Trust or at such other place, within or
without the Commonwealth of Pennsylvania, as shall be designated
by resolution of the Trustees.
Section 2. Special Meetings.
Special meetings of the Shareholders may be called at any
time by the Trustees or any officer elected pursuant hereto, or,
unless provided to the contrary in the Declaration of Trust and
any amendments thereof (the "Declaration of Trust"), Shareholders
entitled to cast at least 50% of the votes that all Shareholders
are entitled to cast at the particular meeting. At any time,
upon the written request of any person who has called a special
meeting, it shall be the duty of the Trustee to fix the time of
the meeting which shall be held not more than 60 days after the
receipt of such request.
Section 3. Notice of Meetings.
Written notice of every meeting of the Shareholders shall be
given by, or at the direction of, the Secretary or other person
as may be designated from time to time by the Trustees, to each
Shareholder of record entitled to vote at the meeting at least
five days prior to the day named for the meeting or such other
prior notice as may be required to be given by law. Such notice
shall be given either personally or by sending a copy thereof by
first class or express mail, postage prepaid, or by telegram
(with messenger service specified), telex or TWX (with answer
back received) or courier service, charges prepaid, or by
telecopier or E-mail, to the Shareholder's address (or to
his telex, TWX, telecopier or E-mail or telephone number)
appearing on the books of the Trust. If the notice is sent by
mail, telegraph or courier service, it shall be deemed to have
been given to the person entitled thereto when deposited in the
United States mail or with a telegraph office or courier service
for delivery to that person or, in the case of a telex or TWX,
when dispatched. Such notice shall specify the place, day and
hour of the meeting and, in the case of a special meeting of
Shareholders, the general nature of the business to be
transacted. If the Trustee or other person as may be designated
from time to time by the Trustees neglects or refuses to give
notice of a meeting, the person or persons calling the meeting
may do so.
Section 4. Record Date for Meetings and Other Purposes.
For the purpose of determine the Shareholders who are
entitled to notice of and to vote at any meeting, or to
participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time close the transfer
books for such period, not exceeding thirty (30) days, as the
Trustees may determine; or without closing the transfer books the
Trustees may fix a date not more than sixty (60) days prior to
the date of any meeting of Shareholders or distribution or other
action as a record date for the determination of the persons to
be treated as Shareholders of record for such purposes, except
for dividend payments which shall be governed by the Declaration.
Section 5. Quorum.
The presence of Shareholders entitled to cast at least a
majority of the votes that all Shareholders are entitled to cast
on a particular matter to be acted upon at the meeting shall
constitute a quorum for the purposes of consideration and action
on the matter.
Section 6. Adjournments of Meetings.
Adjournments of any regular or special meeting of the
Shareholders may be taken, but any meeting at which Trustees are
to be elected shall be adjourned only from day to day, or for
such longer periods not exceeding 15 days each as the
Shareholders present and entitled to vote shall direct, until the
Trustees have been elected.
Section 7. Notice of Adjourned Meetings.
When a meeting of Shareholders is adjourned, it shall not be
necessary to give any notice of the adjourned meeting or of the
business to be transacted at an adjourned meeting, other than by
announcement at the meeting at which the adjournment is taken,
unless the Trustees fix a new record date for the adjourned
meeting.
<PAGE>
Section 8. Voting Power.
Every Shareholder of record shall be entitled to one vote
for every share of beneficial interest in the Trust standing in
his name on the books of the Trust. The majority and to a
proportional fractional vote for each fractional share of the
votes cast at a duly organized meeting of Shareholders by the
holders of shares entitled to vote thereon shall be required for
the taking of any Trust action to be taken by a vote of the
Shareholders.
Section 9. Presiding Officer.
All meetings of the Shareholders shall be called to order
and presided over by the Trustee, or in the absence of a Trustee
by one of 10 of the Officers designated herein.
Section 10. Proxies.
Every Shareholder entitled to vote at a meeting of
Shareholders or to express consent or dissent to action in
writing without a meeting may authorize another person to act for
him by proxy. Every proxy shall be executed in writing by the
Shareholder or by his duly authorized attorney-in-fact and filed
with the Trustee of the Trust.
ARTICLE III
Trustees
Section 1. Number and Qualification.
All powers vested in the trust by Chapter 95 of Title 15 of
the Pennsylvania Consolidated Statutes shall be exercised by, or
under the authority of, and the business and affairs of the Trust
shall be managed by, or under the direction of, Trustees named in
the Declaration of Trust and their successors, who need not be
residents of the Commonwealth of Pennsylvania, Shareholders or
natural persons.
Section 2. Additional or Successor Trustees. Additional or
successor Trustees or Trustees filing vacancies shall be
designated by the Trustees or Shareholders in accordance with the
Declaration of Trust.
<PAGE>
Section 3. Trustee's Duties and Obligations.
(a) Standard of Care. A Trustee shall stand in a fiduciary
relation to the Trust and shall perform his, her or its duties as
a Trustee, in good faith, in a manner reasonably believed to be
in the best interests of the Trust, and with such care, including
reasonable inquiry, skill and diligence, as a person of ordinary
prudence would use under similar circumstances. In performing
his, her or its duties, a Trustee shall be entitled to rely in
good faith on information, opinions, reports or statements,
including financial statements and other financial data, in each
case prepared or presented by any of the following:
(i) One or more officers or employees of the
Trust whom the Trustee reasonably believes to be
reliable and competent in the matters presented.
(ii) Counsel, public accountants or other persons
as to matters which the Trustee reasonably believes
to be within the professional or expert competence
of such person.
(iii) A Trust committee upon which the Trustee
does not serve, duly designated in accordance with
law, as to matters within its designated authority,
which committee the Trustee reasonably believes to
merit confidence.
A Trustee shall not be considered to be acting in
good faith if he, she or it has knowledge concern-
ing the matter in question that would cause such
reliance to be unwarranted.
(b) Consideration of Factors. In discharging the duties of
their positions, the Trustees may, in considering the best
interests of the Trust, consider the effects of any action upon
employees, suppliers and customers of the Trust and upon
communities in which offices or other establishments of the Trust
are located, and all other pertinent factors. The consideration
of those factors shall not constitute a violation of the standard
set forth in Subsection (a) above.
(c) Presumption. Absent breach of fiduciary duty, lack of
good faith or self-dealing, actions taken as a Trustee or any
failure to take any action shall be presumed to be in the best
interests of the Trust.
<PAGE>
Section 4. Notation of Dissent.
A Trustee who is present at a meeting of the Trustees or a
committee of the Trustees at which action on any trust matter is
taken shall be presumed to have assented to the action taken
unless his, her or its dissent is entered in the minutes of the
meeting or unless the Trustee files a written dissent to the
action with the secretary of the meeting before the adjournment
thereof or transmits such dissent in writing to the Secretary of
the Trust immediately after the adjournment of the meeting. The
right to dissent shall not be available to a Trustee who has
voted in favor of such action.
Section 5. Compensation of Trustees.
Trustees may not receive a stated salary or meeting fee or
both for their services as such. Each Trustee may also be paid
reimbursement for all or some of the expenses incurred, for
attendance at each regular or special meeting of the Trustees, in
such amounts, if any, as may be approved, from time to time, by
resolution of the Trustees. Nothing herein contained shall be
construed to preclude any Trustee from serving the Trust in any
other capacity and receiving compensation therefor.
Section 6. Meetings of Trustees.
The Trustees may in their discretion provide for regular or
stated meetings of the Trustees. Notice of regular or stated
meetings need not be given. Meetings of the Trustees other than
regular or stated meetings shall be held whenever called by the
President, or by any one of the Trustees, at the time being in
office. Notice of the time and place of each meeting other than
regular or stated meetings shall be given by the Secretary or an
Assistant Secretary or by the officer or Trustee calling the
meeting and shall be mailed to each Trustee at least two days
before the meetings, or shall be telegraphed, called or
wirelessed to each Trustee at his business address, or personally
delivered to him at least one day before the meeting. Such
notice may, however, be waived by any Trustee. Notice of a
meeting need not be given to any Trustee if a written waiver of
notice, executed by him 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 him. A notice of waiver of
notice need not specify the purpose of any meeting.
<PAGE>
Section 7. Informal Action by the Trustees or Any Committee
Thereof.
Any action required or permitted to be taken at a meeting of
the Trustees may be taken without a meeting if, prior or
subsequent to the action, a consent or consents thereto by all of
the Trustees in office is filed with the Secretary of the Trust.
Section 8. Telephonic Meetings.
One or more Trustees may participate in a meeting of the
Trustees by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other. Participation
in a meeting pursuant to this Section 8 shall constitute presence
in person at the meeting.
Section 9. Quorum and Voting Requirements at Meetings of
Trustees.
A majority of the Trustees in office shall be necessary to
constitute a quorum for the transaction of business, and the acts
of a majority of the Trustees present and voting at a meeting at
which a quorum is present shall be the acts of the Trustees.
Section 10 Interested Trustee or Officer Contracts.
A contract or transaction between the Trust and any one or
more of its Trustees or between the Trust and another domestic or
foreign corporation for profit or not-for-profit, partnership,
joint venture, trust or other enterprise in which one or more of
the Trustees or officers of the Trust are directors or officers
or have a financial or other interest, shall not be void or
voidable solely because (a) of such reason or interest, (b) the
Trustee or officer is present at or participates in the meeting
of the Trustees that authorizes the contract or transaction, or
(c) the vote of such Trustee or officer is counted in authorizing
the contract or transaction; provided, however, that with respect
to each of the foregoing, one or more of the following three
conditions are satisfied:
(i) The material facts as to the relationship or
interest and as to the contract or transaction are
disclosed or are known to the Trustees and the
Trustees authorize the contract or transaction by
the affirmative votes of a majority of the disin-
terested Trustees even though the disinterested
Trustees are less than a quorum; or
(ii) The material facts as to the relationship or
interest and as to the contract or transaction are
disclosed or are known to the Shareholders entitled
to vote thereon and the contract or transaction is
specifically approved in good faith by vote of
those Shareholders: or
(iii) The contract or transaction is fair as to
the Trust as of the time it is authorized, approved
or ratified by the Trustees or the Shareholders.
Common or interested Trustees may be counted in determining
the presence of a quorum at a meeting of the Trustees which
authorizes a contract or transaction specified above.
Section 11. Limitation of Personal Liability of Trustees.
To the fullest extent that the laws of the Commonwealth of
Pennsylvania, as in effect on the date of the adoption of this
Section 11, or as such laws are thereafter amended, permit
elimination or limitation of the liability of trustees, no
Trustee of the Trust shall be personally liable as such for
monetary damages for any action taken, or any failure to take any
action, as a Trustee. Any amendment or repeal of this Section 11
or adoption of any other provision of these Rules or the
Declaration of Trust which has the effect of increasing Trustee
liability shall operate prospectively only and shall not have any
effect with respect to any action taken, or failure to act, prior
to the adoption of such amendment, repeal or other provision.
ARTICLE IV
Officers
Section 1. Number and Election.
The Trustees may elect a President, one or more Vice
Presidents, a Secretary, and/or an Assistant Secretary, a
Treasurer and/or an Assistant Treasurer, and may elect or appoint
such other officers and assistant officers and appoint such
agents as the Trustees may deem appropriate.
Section 2. Qualifications.
The Trustees may, but need not, be officers or assistant
officers of the Trust. All officers of the Trust as between
themselves and the Trust, shall have such authority and perform
such duties in the management of the Trust as may be determined
by or pursuant to these Rules and any resolutions or orders of
the Trustees. The Officers of the Trust shall be natural persons
of 18 years of age or older.
Section 3. Term of Office.
All officers of the Trust shall be elected for annual terms
and until their successors have been selected and qualified, or
until their earlier death, resignation or removal. Any officer
of the Trust may be removed by the Trustees with or without
cause, and such removal shall be without prejudice to the
contract rights, if any, of any person so removed. Election or
appointment of an officer shall not of itself create contract
rights.
Section 4. President.
The President shall serve as chief operating officer of the
business of the Trust and shall preside at meetings of the
Trustees and of the Shareholders, unless some other person shall
have been designated to serve in those capacities by the Trustees
or by the Shareholders. The President shall have the authority
and duty generally to supervise and manage the affairs of the
business of the Trust, all in accordance with and subject to the
policies and decisions of the Trustees.
Section 5. Vice Presidents.
Each Vice President shall have such powers and shall perform
such duties as the President may from time to time delegate to
him. At the request of the President, any Vice President may, in
the case of the absence or inability to act of the President,
temporarily act in his place. In the case of the death of the
President, or in the case of his absence or inability to act
without having designated a Vice President to act temporarily in
his place, the Vice President longest in service as Vice
President shall perform the duties of the President except as
shall be otherwise designated by the Trustees.
Section 6. Secretary.
The Secretary shall attend the meetings of the Shareholders
and of the Trustees and keep minutes thereof. Unless some other
person is delegated to give such notice, the Secretary shall send
out notices of all meetings of Shareholders and of the Trustees.
<PAGE>
Section 7. Treasurer.
The Treasurer shall have the care and custody of all the
funds and securities of the Trust, and shall deposit the same in
he name of the Trust in such bank or banks as the Trustees may
elect. The Treasurer shall perform such other duties as may be
assigned by the President or the Trustees; and shall give such
bonds, if any, for the faithful performance of his duties, as the
Trustees may, from time to time, determine.
Section 8. Standard of Care.
Subject to any contrary provision contained in the
Declaration of Trust, an officer of the Trust shall perform his
duties as an officer in good faith, in a manner he reasonably
believes to be in the best interest of the Trust and with such
care, including reasonable inquiry, skill and diligence, as a
person of ordinary prudence would use under similar
circumstances. A Person who so performs his duties shall not be
liable by reason or having been an officer of the Trust.
ARTICLE V
Execution of Documents
Section 1. Checks, Notes, Etc.
The Trustees shall from time to time designate the officers
or agents of the Trust who shall have the power, in its name, to
sign and endorse checks and other instruments and to borrow money
for the Trust, and in its name, to make notes or other evidences
of indebtedness.
Section 2. Other Documents.
Any note, mortgage, evidence of indebtedness, contract or
other document, or any assignment or endorsement thereof,
executed and entered into between the Trust and any other person,
when signed by one or more Trustees or by officers or agents
having actual or apparent authority to sign it, or by the
President or Vice President and Secretary or Assistant Secretary
or Treasurer or Assistant Treasurer of the Trust, shall be held
to have been properly executed for and on behalf of the Trust.
<PAGE>
ARTICLE VI
Books of Account, Records and Reports
Section 1. Books and Records. Proper and complete records and
books of account shall be kept by the Trust. The Trust books and
records shall be kept on an acceptable method as the Trustees
shall determine. The books and records shall at all times be
maintained at the principal office of the Trust.
Section 2. Tax Information. As soon as available after the end
of each fiscal year of the Trust, the Trustees shall send or
cause to be sent to each Beneficial Owner such tax information as
shall be necessary for the preparation by such Beneficial Owner
of his, her or its Federal income tax return, state income tax
return and other tax returns. The Beneficial Owners acknowledge
that because of the nature of the Trust, it may be difficult or
impossible accurately to set forth on Form 1099 and other tax
forms which the Trust may file and/or provide to the Beneficial
Owners the actual interests of the Beneficial Owners in the
Trust's income, losses and capital. The Beneficial Owners agree
among themselves that no information on any such form will be
evidence of the true interest in the Trust of any Beneficial
Owner.
Section 3. Annual Reports. As soon as available after the end
of each fiscal year, the Trustees shall transmit to each
Beneficial Owner a report showing the financial condition of the
Trust at the close of such year; a statement of income of the
Trust showing the results of operations during such year; and
such other financial information as the Trustees deem
appropriate.
ARTICLE VII
Indemnification of Trustees, Officers and Employees
Section 1. Right to Indemnification.
Except as prohibited by law, every Trustee and officer of
the Trust shall be entitled as of right to be indemnified by the
Trust against all expenses, liability and loss (including,
without limitation, attorney's fees, judgments, fines, taxes,
penalties and amounts paid in settlement) paid or incurred by
such person in connection with any actual or threatened claim,
action, suit or proceeding, civil, criminal, administrative,
investigative or other, whether brought by or in the right of the
Trust or otherwise, in which he, she or it may be involved, as a
party or otherwise, by reason of such person being or having been
a Trustee or officer of the Trust or by reason of the fact such
person is or was serving at the request of the Trust as a
trustee, officer, employee, fiduciary or other representative of
another domestic or foreign corporation for profit or not-for-
profit, partnership, joint venture, trust, employee benefit plan
or other entity or enterprise (such claim, action, suit or
proceeding hereinafter being referred to as an "Action");
provided that no such right of indemnification shall exist with
respect to an Action brought by an Indemnitee (as hereinafter
defined) against the Trust except as provided in the last
sentence of this Section 1. Persons who are not Trustees or
officers of the Trust may be similarly indemnified in respect of
service to the Trust or to another such entity at the request of
the Trust to the extent the Trustees at any time denominate any
of such persons as entitled to the benefits of this Article VII.
As used in this Article VII, "Indemnitee" shall include each
Trustee and officer of the Trust and each other person
denominated by the Trustees entitled to the benefits of this
Article VII. An Indemnitee shall be entitled to be indemnified
pursuant to this Section for expenses incurred in connection with
any Action brought by such Indemnitee against the Trust only if
the Action is a claim for indemnity or expenses under Section 3
of this Article VII or otherwise and either (i) the Indemnitee is
successful in whole or in part in the Action for which expenses
are claimed or (ii) the indemnification for expenses is included
in a settlement of the Action or is awarded by a court.
Section 2. Right to Advancement of Expenses.
Every Indemnitee shall be entitled as of right to have his,
her or its expenses in any Action (other than an Action brought
by such Indemnitee against the Trust) paid in advance by the
Trust prior to final disposition of such Action, subject to any
obligation which may be imposed by law or by provision of the
Deed of Trust, these By-laws, an agreement or otherwise to
reimburse the Trust in certain events.
Section 3. Right of Indemnitee to Initiate Action.
If a written claim under Section 1 or Section 2 of this
Article VII is not paid in full by the Trust within thirty days
after such claim has been received by the Trust, the Indemnitee
may at any time thereafter initiate an Action against the Trust
to recover the unpaid amount of the claim and, if successful in
whole or in part, the Indemnitee shall also be entitled to be
paid the expenses of prosecuting such Action. It shall be a
defense to any Action to recover a claim under Section 1 of this
Article VII that the Indemnitee's conduct was such that under
Pennsylvania law the Trust is prohibited from indemnifying the
Indemnitee for the amount claimed, but the burden of proving such
defense shall be on the Trust. Neither the failure of the Trust
(including its Trustees, independent legal counsel and its
Shareholders) to have made a determination prior to the
commencement of such Action that indemnification of the
Indemnitee is proper in the circumstances, nor an actual
determination by the Trust (including its Trustees, independent
legal counsel or its Shareholders) that the Indemnitee's conduct
was such that indemnification is prohibited by law, shall be a
defense to such Action or create a presumption that the
Indemnitee's conduct was such that indemnification is prohibited
by law. The only defense to any such Action to receive payment
of expenses in advance under Section 2 of this Article VII shall
be failure to make an undertaking to reimburse if such an
undertaking is required by law or by provision of the Declaration
of Trust, these Rules, an agreement or otherwise.
Section 4. Insurance and Funding.
The Trust may purchase and maintain insurance to protect
itself and any person eligible to be indemnified hereunder
against any expense, liability or loss asserted or incurred by
such person in connection with any Action, whether or not the
Trust would have the power to indemnify such person against such
expense, liability or loss by law or under the provisions of this
Article VII. The Trust may create a trust fund, grant a security
interest, cause a letter of credit to be issued or use other
means (whether or not similar to the foregoing) to ensure the
payment of such sums as may become necessary to effect
indemnification as provided herein.
Section 5. Non-Exclusivity; Nature and Extent of Rights.
The rights of indemnification and advancement of expenses
provided for in this Article VII (i) shall not be deemed
exclusive of any other rights, whether now existing or hereafter
created, to which any Indemnitee may be entitled under the Deed
of Trust or these By-laws, any agreement, any vote of
Shareholders or Trustees or otherwise, (ii) shall be deemed to
create contractual rights in favor of each Indemnitee, (iii)
shall continue as to each person who has ceased to have the
status pursuant to which he, she or it was entitled or was
denominated as entitled to indemnification hereunder and shall
inure to the benefit of the heirs, legal representatives,
successors and assigns of each Indemnitee, and (iv) shall be
applicable to Actions commenced after the adoption hereof,
whether arising from acts or omissions occurring before or after
the adoption hereof. The rights of indemnification provided in
this Article VII may not be amended or repealed so as to limit in
any way the indemnification or the right to advancement of
expenses provided for herein with respect to any acts or
omissions occurring prior to the adoption of any such amendment
or repeal.
ARTICLE VIII
Amendments
Section 1. Amendments to Rules of Governance.
Except with respect to those matters that are by statute
reserved exclusively to the Shareholders, the Trustees may adopt,
amend or repeal these Rules of Governance by a vote of a majority
of all votes cast on the adoption, amendment or repeal at any
meeting. Any change in these Rules of Governance shall take
effect when adopted unless otherwise provided in the resolution
effecting the change.
ARTICLE IX
Miscellaneous
Section 1. Restrictions on Purchase of Sale. Except as
hereinafter proved, no officer or Trustee of the Trust and no
partner, officer, director or shareholder of the Investment
Adviser of the Trust (as the term is defined in the Investment
Company Act of 1940) or of the underwriter of the Trust, shall
take long or short positions in the securities issued by the
Trust.
(1) The foregoing provisions shall not prevent the
underwriter from purchasing Shares from the Trust if such
purchases are Limited (except for reasonable allowances for
clerical errors, delays and errors of transmission and
cancellation of orders) to purchase for the purpose of
filling orders to purchase from the Trust are entered with
the Trust or the Custodian promptly upon receipt by the
underwriter of purchase orders for such shares, unless the
underwriter is otherwise instructed by its customer.
(2) The foregoing provision shall not prevent the
underwriter from purchasing Shares of the Trust as agent for
the account of the Trust.
(3) The foregoing provisions shall not prevent the
purchase from the Trust or from the underwriter of Shares
issued by the Trust, by any officer, or Trustee of the Trust
or by any partner, officer, director or shareholder of the
Investment Adviser of the Trust or of the underwriter of the
Trust at the price available to the public generally at the
moment of such purchase, or as described in the then
currently effective Prospectus of the Trust.
(4) The foregoing shall not prevent the Investment
Adviser, or any affiliate thereof, of the Trust from
purchasing Shares prior to the effectiveness of the first
registration statement relating to the Shares under the
Securities Act of 1933.
Section 2. Restrictions on Loans.
The Trust shall not lend assets of the Trust to any officer
or Trustee of the Trust, or to any partner, officer, director or
shareholder of, or person financially interested in, the
Investment Adviser of the Trust, or the underwriter of the Trust,
or to the Investment Adviser of the Trust or to the underwriter
of the Trust.
Section 3. Restrictions on Transfer.
The Trust shall not impose any restrictions upon the
transfer of the Shares of the Trust except as provided in the
Declaration or as may be required to comply with federal or state
securities laws, but this requirement shall not prevent the
charging of customary transfer agent fees.
Section 4. Restrictions on dealing with Certain Standards.
The Trust shall not permit any officer or Trustee of the
Trust, or any partner, officer or director of the Investment
Adviser, Administrator or underwriter of the Trust to deal for or
on behalf of the Trust with himself as principal or agent, or
with any partnership, association or corporation in which he has
financial interest; provided that the foregoing provisions shall
not prevent (a) officers and Trustees of the Trust or partners,
officers or directors of the Investment Adviser, Administrator or
underwriter of the Trust from buying, holding or selling shares
in the trust, or from being partners, officers or directors or
otherwise financially interested in the Investment Adviser,
Administrator or underwriter of the Trust; (b) purchases or sales
of securities or other property by the Trust from or to an
affiliated person or to the Investment Adviser, Administrator or
underwriter of the Trust if such transaction is not prohibited by
or is exempt from the applicable provisions of the 1940 Act; (c)
purchases of investments for the series of the Trust or sales of
investments owned by the Trust through a security dealer who is,
or one or more of whose partners, shareholders, officers, or
directors is, an officer or Trustee of the Trust, or a partner,
officer or director of the Investment Adviser, Administrator or
underwriter of the Trust, if such transactions are handled in the
capacity of broker only and commissions charged do not exceed
customary brokerage charges for such services; (d) employment of
legal counsel, registrar, Transfer Agent, dividend disbursing
agent or Custodian who is, or has a partner, shareholder,
officer, or director who is, an officer or Trustee of the Trust,
or a partner, officer or director of the Investment Adviser,
Administrator or underwriter of the Trust, if only customary fees
are charged for services to the Trust; (e) sharing statistical
research, legal and management expenses and office hire and
expenses with any other investment company in which an officer or
Trustee of the Trust, or a partner, officer or director of the
Investment Advisor, Administrator or underwriter of the Trust, is
an officer or director or otherwise financially interested.
ESTABLISHING RIGHTS AND PRIVILEGES
OF SHARES OF THE MUTUAL SERIES OF SHARES
WHEREAS, the Trustees are authorized to divide the Shares of
the Trust into two or more series pursuant to Section 6.1 of the
Declaration of Trust; and
WHEREAS, the Shares of beneficial interest in this Trust
were initially established and designated in six Series
denominated as follows:
The SST Intermediate Term Bank Fund
The SST Long Term Bank Fund
The SST Larger Company Stock Fund
The SST Smaller Company Stock Fund
The SST International Fund; and
The SST Alternative Categories Fund; and
WHEREAS, the Trustees desire to provide for such Funds, the
purchase price, right of redemption, right to dividends and
distributions and voting rights as more fully set forth herein;
NOW, THEREFORE, the Trustees hereby declare that the
aforesaid initial Funds shall have the following rights,
privileges, terms and conditions:
1. Consideration for Shares. Shares of all Series shall
be issued at the Net Asset Value ("NAV") per share calculated on
the date of issuance at the close of business on the New York
Stock Exchange and on such other days, if the exchange shall not
be open, as there are transactions in the shares of such Series.
2. Investment Objective. The investment objective of the
Funds shall be as:
3. Right of Redemption. Shares of all Series will be
redeemed, subject to the provisions of the Declaration of Trust,
at the Net Asset Value on any day that Net Asset Value is
calculated. Notice of redemption shall be in writing and signed
by the shareholders with signatures guaranteed by a commercial
bank or a member firm of the New York Stock Exchange or by
telephone notice of redemption. If share certificates were
issued, then redemption can only be completed by depositing the
certificate with the required notice of redemption document.
Payment shall be within three (3) business days of the receipt of
notice of redemption by the Trust. The Trust shall have the
right to redeem from any shareholder, not having the status of an
Individual Retirement Account ("IRA"), such stock if the shares
held by such shareholder drop below $3,000 in Net Asset Value.
Notice of such redemption and the terms thereof shall be given to
such shareholder at least sixty (60) days prior to such
redemption.
4. Rights to Dividends and Distributions. All shares of
any Series shall have equal rights to receive dividends, capital
gains, distributions or liquidating distributions on the payment
dates set by the Trustees of the Trust in the declaration of any
such dividends or distributions for such Series. Such dividends
or distributions may only be declared from the earnings and
assets of the specified Series and not from any other assets,
funds, or classes of Shares of the Trust.
5. Certificates. The Share Certificates of each of the
Series shall be in the form attached hereto.
In all other respects, the shares shall conform to the
provisions of the Declaration of Trust.
[SIGNATURE]
____________________________
Trustees
[SIGNATURE]
_____________________________
Trustees
[SIGNATURE]
______________________________
Trustees
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 13th day of March, 1996, by and
between the STAAR SYSTEM TRUST (the "Trust"), a Pennsylvania
business trust authorized to issue shares of beneficial interest
in separate series, and STAAR SYSTEM FINANCIAL SERVICES, INC.
(the "Adviser"), a Pennsylvania corporation.
WITNESSETH THAT:
1. The Trust hereby appoints the Adviser to act as
investment adviser to the Trust on behalf of six series of the
Trust established and designated by the Trustees on or before the
date hereof, namely the SST Intermediate Bond Fund, the SST Long
Term Bond Fund, the SST Large Company Stock Fund, the SST Smaller
Company Stock Fund, the SST International Fund and the SST
Alternative Categories Fund (the "Existing Series"), for the
period and on the terms set forth herein. The Adviser accepts
such appointment and agrees to render the services described in
this Agreement for the compensation herein provided. The Adviser
shall, for all purposes herein, be deemed to be an independent
contractor.
2. In the event that the Trustees desire to retain the
Adviser to render investment advisory services hereunder with
respect to one or more additional series ("Additional Series"),
the Trust shall notify the Adviser in writing. If the Adviser is
willing to render such services, it shall notify the Trust in
writing, whereupon such Additional Series shall be subject to the
terms and conditions of this Agreement.
3. The Adviser shall furnish continuously an investment
program for each of the Existing Series and any Additional Series
which may become subject to the terms and conditions set forth
herein (collectively, "Series") and shall manage, or cause to be
managed, the investment and reinvestment of the assets of each
Series, subject at all times to the supervision of the Trustees.
4. With respect to managing the investment and
reinvestment of the Trust's assets, the Adviser shall provide, or
cause to be provided, at its own expense:
(a) Investment research, advise and supervision;
(b) An investment program for each Series consistent with
its investment objectives;
(c) Advice regarding the investment program for each Series
including the purchase and sale of sale of securities;
provided, however, that the Trustees of the Trust shall
be responsible for execution of the transactions
through broker/dealers of their choice.
(d) Advice and assistance of the general operations of the
Trust;
(e) Regular reports to the Trustees on the implementation
of each Series' investment program; and
(f) Continuous monitoring and evaluation of the performance
and investment style of any Subadviser recommended by
Adviser and appointed to act on behalf of the Trust.
In addition to the management of the investment and
reinvestment of the Trust Assets, the Adviser shall provide, or
cause to be provided, and at its own expense for the first two
years of the Trusts after registration, the following services,
some of which are usually paid by the investment company itself:
(a) Writing and printing of the Trust's Prospectus
Statement of Additional Information and other
documents;
(b) Writing, design and production of any consumer material
and presentations;
(c) Obtaining appropriate legal and accounting services;
(d) Maintaining any computer programs and files necessary
to the operations of the Trust; and
(e) Maintaining adequate records of all transactions and
value of the Trust and its Funds, obtaining or
supervising Transfer Agent Services, custodial or
marketing services. Shareholders services as provided
in the Prospectus and preparation and filing of all
documents and forms required by federal and state
governments in state in which the Trust will do
business.
6. The Adviser shall furnish at its own expense, or pay
the expenses of the Trust for the following:
(a) Office facilities, including office space, furniture
and equipment;
(b) Personnel necessary to perform the functions required
to manage the investment and reinvestment of the
Trust's assets (including those required for research,
statistical and investment work and services provided
for herein;
(c) Personnel to serve without salaries from the Trust as
officers or agents of the Trust. The Adviser need not
provide personnel to perform, or pay the expenses of
the Trust for, services customarily performed for an
open-end management investment company by its national
distributor, custodian, financial agent, transfer
agent, auditors and legal counsel;
(d) Compensation and expenses, if any, of the Trustees who
are also full-time employees of the Adviser or any of
its affiliates; and
(e) Any Subadviser recommended by Adviser and appointed to
act on behalf of the Trust.
7. All costs and expenses not specifically enumerated
herein as payable by the Adviser shall be paid by the Trust.
Such expenses shall include, but shall not be limited to, all
expenses incurred in the operation of the Trust distribution of
its shares, including, among others, interest, taxes and
brokerage fees. Expenses of Trustees' and shareholders' meetings
including the cost of printing and mailing proxies, expenses of
insurance premiums for fidelity and other coverage.
Additionally, if authorized by the Trustees, the Trust shall pay
for extraordinary expenses and expenses of a non-recurring nature
which may include, but not be limited to the reasonable and
proportionate cost of any reorganization or acquisition of assets
and the cost of legal proceedings to which the Trust is a party.
8. For providing the services and assuming the expenses
outlined herein, the Trust agrees that the Adviser shall be
compensated as follows:
(a) Not later than the first business day after the Closing
of the last business day of each month, the Trust shall
pay the Adviser with respect to each Series a fee based
on the following rates as a percentage of the average
aggregate daily net asset values of the Series:
<TABLE>
<CAPTION>
Series
Monthly Rate
Annualized
<S>
SST International Fund
<C>
.0750%
<C>
.90%
SST Larger Company Stock Fund
.0750%
.90%
SST Smaller Company Stock Fund
.0750%
.90%
SST Long Term Bond Fund
.0600%
.72%
SST Intermediate Bond Fund
.0525%
.63%
SST Alternative Categories
Fund
.1000%
1.20%
</TABLE>
The amounts payable to the Adviser with respect to each
Series shall be based upon the average of the values of
the net assets of such Series as of the close of
business each day, computed in accordance with the
Declaration of Trust.
(b) In addition, the Trust will pay to the Adviser, 2/3 of
any Sales Charge, front or contingent, which it charges
its customers.
(c) If there is termination of this Agreement during a
month, each Series' fee for that month shall be
proportionately computed upon the average of the
aggregate daily net asset values of such Series for
such partial period in such month.
(d) The Adviser agrees to reimburse the Trust for the
amount, if any, by which the total operating and
management expenses for any Series (including the
Adviser's compensation, pursuant to this paragraph, but
excluding taxes, interest, costs of portfolio
acquisitions and dispositions and extraordinary
expenses), for any "fiscal year" exceed the level of
expenses which such Series is permitted to bear under
the most restrictive expense limitation (which is not
waived by the State) imposed on open-end investment
companies by any state in which shares of such Series
are then qualified. Such reimbursement, if any, will
be made by the Adviser to the Trust within five days
after the end of each month. For the purpose of this
subparagraph (d), the term "fiscal year" shall include
the portion of the then current fiscal year which shall
have elapsed at the date of termination of this
Agreement.
9. The services of the Adviser to the Trust are not to be
deemed exclusive, the Adviser being free to render services to
others and to engage in other activities. Without relieving the
Adviser of its duties hereunder and subject to the prior approval
of the Trustees and subject further to compliance with the
applicable provisions of the Investment Company Act of 1940, as
amended, the Adviser may appoint one or more agents to perform
any of the functions and services which are to be provided under
the terms of this Agreement upon such terms and conditions as may
be mutually agreed upon among the Trust, the Adviser and any such
agent.
10. The Adviser shall not be liable to the Trust or to any
shareholder of the Trust for any error of judgment or mistake of
law or for any loss suffered by the Trust or by any shareholder
of the Trust in conjunction with the matters to which this
Agreement or any Subadvisory Agreement relates, except a loss
resulting from willful misfeasance, bad faith, gross negligence
or reckless disregard on the part of the Adviser in the
performance of its duties hereunder.
11. It is understood that:
(a) Trustees, officers, employees, agents and shareholders
of the Trust are or may be "interested persons" of the
Adviser of any Subadviser as directors, officers,
stockholders or otherwise;
(b) Directors, officers, employees, agents and stockholders
of the Adviser or any Subadviser are or may be
"interested persons" of the Trust as Trustees,
officers, shareholders or otherwise; and
(c) The existence of any such dual interest shall not
affect the validity hereof or of any transactions
hereunder.
12. This Agreement shall become effective with respect to
the Existing Series as of the date hereof ("Contract Date"), and,
with respect to any Additional Series, on the date specified in
the notice from the Adviser in accordance with Paragraph 2 hereof
that the Adviser is willing to serve as Adviser with respect to
such Additional Series. Unless terminated as herein provided,
this Agreement shall remain in full force and effect for a period
of one year following the Contract Date, and, with respect to
each Additional Series, until the next anniversary of the
Contract Date following the date on which such Additional Series
became subject to the terms and conditions of this Agreement and
shall continue in full force and effect for periods of one year
thereafter with respect to each of the series so long as (a) such
continuance with respect to any such Series is approved at least
annually by either the Trustees or by a "vote of the majority of
the outstanding voting securities" of such Series and (b) the
terms and any renewal of this Agreement with respect to any such
Series have been approved by a vote of a majority of the Trustees
who are not parties to this Agreement or "interested persons" of
any such party cast in person at a meeting called for the purpose
of voting such approval; provided, however, that the continuance
of this Agreement with respect to each Additional Series is
subject to its approval by a "vote of a majority of the
outstanding voting securities" of any such Additional Series on
or before the next anniversary of the Contract Date following the
date on which such Additional Series became a Series hereunder.
Any approval of this Agreement by a vote of the holders of a
"majority of the outstanding voting securities" of any Series
shall be effective to continue this Agreement with respect to any
such Series notwithstanding (a) that this Agreement has not been
approved by a "vote of a majority of the outstanding voting
securities" of any other Series affected thereby and (b) that
this Agreement has not been approved by the holders of a "vote of
a majority of the outstanding voting securities" of the Trust,
unless either such additional approval shall be required by any
other applicable law or otherwise.
13. The Trust may terminate this Agreement with respect to
the Trust or to any Series upon 60 days' written notice to the
Adviser at any time, without the payment of any penalty, by vote
of the Trustees or, as to each Series, by a "vote of a majority
of the outstanding voting securities" of such Series. The
Adviser may terminate this Agreement with respect to any Series
upon 60 days' written notice to the Trust, without the payment of
any penalty. This Agreement shall immediately terminate in the
event of its "assignment."
14. The terms "majority of the outstanding voting
securities," "Interested persons" and "assignment," when used
herein, shall have the respective meanings specified in the
Investment Company Act of 1940, as amended.
15. The Adviser grants the Trust a license to use STAAR
SYSTEM , its registered trademark, and the use of the phrase "The
Best of Most Words" so long as the Trust employs the Adviser
under this Agreement or renewals or replacement thereof. The
Adviser shall own all copyrights to all consumer materials
developed by the Adviser hereunder.
In the event of termination of this Agreement, or at the
request of the Adviser, the Trust will eliminate all reference to
"Staar" from its name, and will not thereafter transact business
in a name using the word "Staar" in any form or combination
whatsoever, or otherwise use the word "Staar" as a part of its
name. The Trust will thereafter in all prospectuses, advertising
materials, letterheads, and other material designed to be read by
investors and prospective investors delete from its name the word
"Staar" and the mark "The Best of Most Worlds" or any
approximation thereof. If the Adviser chooses to withdraw the
Trust's right to use the word "Staar," it agrees to submit the
question of continuing this Agreement to a vote of the Trust's
shareholders at the time of such withdrawal.
16. It is expressly agreed that the obligations of the
Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the
Trust personally, but bind only the trust property of the Trust,
as provided in the Declaration of Trust. The execution and
delivery of this Agreement have been authorized by the Trustees
and shareholders of the Trust and signed by the President of the
Trust, acting as such, and neither such authorization by such
Trustees and shareholders nor such execution and delivery by such
officer shall be deemed to have been made by any of them
individually or be binding upon or impose any liability on any of
them personally, but shall bind only the trust property of the
Trust as provided in its Declaration of Trust. The Declaration
of Trust is on file with the Secret of the Commonwealth of
Pennsylvania.
17. This Agreement shall be construed and the rights and
obligations of the parties hereunder forced in accordance with
the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of
the day and year first written above.
THE STAAR SYSTEM TRUST
Trustees
By: [SIGNATURE]_______________________
By: [SIGNATURE]_______________________
By: [SIGNATURE]________________________
STAAR SYSTEM FINANCIAL SERVICES, INC.
By: [SIGNATURE]________________________
J. Andre Weisbrod, President
<PAGE> 1
KABALA & GEESEMAN
200 First Avenue
Pittsburgh, PA 15222
July 8, 1996
The Securities and
Exchange Commission
Washington, D.C. 20549
RE: THE STAAR SYSTEM TRUST-REGISTRATION STATEMENT ON FORM
N-1A UNDER THE SECURITIES ACT OF 1933 AND THE
INVESTMENT COMPANY ACT OF 1940
Gentlemen:
We have acted as counsel for the Staar System Trust
(the "Trust"), a Pennsylvania business trust in connection with
registration statement filed by the Trust on N-1A covering an
indefinite number of beneficial interests in the Trust designated
as funds established by the Trust. We have examined a
declaration of trust, the by-laws and the actions of the trustees
in connection with the establishment of the funds. Based on such
examination, we are of the opinion that:
(1) The beneficial interest of the Trust has been
provided and the respective funds of the Trust are
duly authorized and when issued will be validly
issued beneficial interests in the Trust and the
Trust represented by the respective funds in which
such interests are invested.
(2) When sold and issued, the said beneficial interest
of the Trust will be legally issued, fully paid
and non-assessable interest in the Trust in
accordance with their respective fund
designations.
Yours very truly,
KABALA & GEESEMAN
By: [SIGNATURE]<PAGE>
<PAGE> 2
Kabala & Geeseman
The Waterfront, 200 First Aven ue
Pittsburgh, PA 15222
Consent of Legal Counsel
We consent to the use of our name and the reference in the
Registration Statement on Form N-1A of the Staar System Trust of
our opinion dated June 12, 1996.
Pittsburgh, PA [SIGNATURE] Kabala & Geeseman
July 3, 1996
<PAGE> 1
CONSENT
We hereby consent to the use of our name by the Staar System
Trust, in the Prospectus dated September 4, 1996, as auditors and
accountants.
Date: July 8, 1996 CARSON & CO.
By: [SIGNATURE] Terrance Carson
