As filed with the Securities and Exchange Commission on October 25, 1996
Securities Act Registration No. 333-9355
Investment Company Act Registration No. 811-7743
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. __1__ [X]
Post-Effective Amendment No. ____ [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. _1_ [X]
THE ROCKLAND FUNDS TRUST
(Exact Name of Registrant as Specified in Charter)
100 South Rockland Falls Road
Rockland, Delaware 19732
(Address of Principal (Zip Code)
Executive Offices)
Registrant's Telephone Number, including Area Code: (302) 429-9799
Mr. Charles S. Cruice
The Rockland Funds Trust
100 South Rockland Falls Road
Rockland, Delaware 19732
(Name and Address of Agent for Service)
Copies to:
Carol A. Gehl
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
Approximate date of proposed offering: As soon as
practicable after the Registration Statement becomes
effective.
In accordance with Rule 24f-2 under the Investment
Company Act of 1940, Registrant declares that an
indefinite number of its shares of beneficial interest
are being registered by this Registration Statement.
The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to
delay its effective date until the Registrant shall
file a further amendment which specifically states that
this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may
determine.
CROSS REFERENCE SHEET
(Pursuant to Rule 481 showing the location in the
Prospectus and the Statement of Additional Information
of the responses to the Items of Parts A and B of Form
N-1A)
Caption or Subheading in
Prospectus or Statement
Item No. on Form N-1A of Additional Information
PART A - INFORMATION REQUIRED IN PROSPECTUS - INSTITUTIONAL CLAS
S
1. Cover Page Cover Page
2. Synopsis Summary; Summary of Fund
Expenses
3. Condensed Financial *
Information
4. General Description of Fund Organization; Investment
Registrant Objective and Policies;
Investment Techniques and
Risks
5. Management of the Fund Management; Fund Expenses
5A. Management's Discussion of *
Fund Performance
6. Capital Stock and Other Income Dividends, Capital
Securities Gains Distributions and Tax
Treatment; Fund Organization
7. Purchase of Securities How to Purchase Fund Shares;
Being Offered Determination of Net Asset
Value
8. Redemption or Repurchase How to Redeem Shares;
Calculation of Net Asset Value
9. Pending Legal Proceedings *
Caption or Subheading in
Prospectus or Statement
Item No. on Form N-1A of Additional Information
PART A - INFORMATION REQUIRED IN PROSPECTUS - RETAIL CLASS
1. Cover Page Cover Page
2. Synopsis Summary; Summary of Fund
Expenses
3. Condensed Financial *
Information
4. General Description of Fund Organization; Investment
Registrant Objective and Policies;
Investment Techniques and
Risks
5. Management of the Fund Management; Fund Expenses
5A. Management's Discussion of *
Fund Performance
6. Capital Stock and Other Income Dividends, Capital
Securities Gains Distributions and Tax
Treatment; Fund Organization
7. Purchase of Securities How to Purchase Fund Shares;
Being Offered Determination of Net Asset
Value; Distribution Plan
8. Redemption or Repurchase How to Redeem Shares;
Calculation of Net Asset Value
9. Pending Legal Proceedings *
<PAGE>
PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and Included in Prospectuses under
History the heading Fund Organization
13. Investment Objectives and Investment Restrictions;
Policies Investment Policies and
Techniques
14. Management of the Fund Trustees and Officers of the
Trust
15. Control Persons and Principal Shareholders;
Principal Holders of Trustees and Officers of the
Securities Trust; Investment Advisor
16. Investment Advisory and Investment Advisor;
Other Services Distribution Plan; Management
(in Prospectuses); Custodian;
Transfer Agent and Dividend-
Disbursing Agent; Independent
Accountants
17. Brokerage Allocation and Portfolio Transactions and
Other Practices Brokerage
18. Capital Stock and Other Included in Prospectuses under
Securities the heading Fund Organization
19. Purchase, Redemption and Included in Prospectuses under
Pricing of Securities the headings How to Purchase
Securities Being Offered Fund Shares; Determination of
Net Asset Value; How to Redeem
Shares; and in the Statement
of Additional Information
under the heading Investment
Advisor
20. Tax Status Included in Prospectuses under
the heading Income Dividends,
Capital Gains Distributions
and Tax Treatment
21. Underwriters Underwriter
22. Calculations of Performance Information
Performance Data
23. Financial Statements Financial Statements
____________________________
*Answer negative or inapplicable
<PAGE>
PROSPECTUS
November___, 1996
Greenville Capital Management, Inc.
Presents
The Rockland Growth Fund
a Series of
The Rockland Funds Trust
P. O. Box 701
Milwaukee, Wisconsin 53201-0701
1-800-497-3933
The Rockland Growth Fund (the "Fund") is a series of
The Rockland Funds Trust (the "Trust"), an open-end,
diversified, management investment company commonly
referred to as a mutual fund. The investment objective
of the Fund is to seek capital appreciation. The Fund
will seek, under normal market conditions, to achieve
its investment objective by investing its assets
primarily in equity securities of domestic companies.
The Fund is structured for flexibility and risk
reduction, but centered around investment in high
quality growth stocks with an emphasis on those
companies whose growth potential, in the opinion of the
Fund's investment adviser, Greenville Capital
Management, Inc., has been overlooked by Wall Street
analysts.
This Prospectus sets forth concisely the information
that you should be aware of prior to investing in the
Fund's Institutional shares. Two classes of shares of
the Fund are currently offered to the public:
Institutional shares and Retail shares. This
prospectus relates only to the Institutional shares.
Information about the Retail shares may be obtained by
calling 1-800-497-3933. Please read this Prospectus
carefully and retain it for future reference.
Additional information regarding the Fund is included
in the Statement of Additional Information dated
October__, 1996, which has been filed with the
Securities and Exchange Commission and is incorporated
in this Prospectus by reference. A copy of the Fund's
Statement of Additional Information is available
without charge by writing to the Fund at the address
listed above or by calling 1-800-497-3933.
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>
TABLE OF CONTENTS
Page No.
SUMMARY 4
SUMMARY OF FUND EXPENSES 5
EXAMPLE 5
INVESTMENT OBJECTIVE AND POLICIES 5
INVESTMENT TECHNIQUES AND RISKS 6
IN GENERAL 6
SHORT-TERM FIXED INCOME SECURITIES 6
ILLIQUID SECURITIES 6
ADRS 7
OPTIONS AND FUTURES TRANSACTIONS 7
SHORT SALES 7
REPURCHASE AGREEMENTS 8
CONVERTIBLE SECURITIES 8
TURNOVER 8
MANAGEMENT 8
FUND EXPENSES 9
HOW TO PURCHASE FUND SHARES 9
INITIAL INVESTMENT - MINIMUM $100,000 9
WIRE PURCHASES 9
TELEPHONE PURCHASES 10
SUBSEQUENT INVESTMENTS - MINIMUM $1,000 10
DETERMINATION OF NET ASSET VALUE 10
HOW TO REDEEM SHARES 10
IN GENERAL 10
WRITTEN REDEMPTION 11
TELEPHONE REDEMPTION 11
SIGNATURE GUARANTEES 11
SHAREHOLDER REPORTS 12
INDIVIDUAL RETIREMENT ACCOUNTS 12
INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX
TREATMENT 12
FUND ORGANIZATION 13
ADMINISTRATOR 13
CUSTODIAN, TRANSFER AGENT, AND FUND ACCOUNTANT 14
DISTRIBUTOR 14
<PAGE>
COMPARISON OF INVESTMENT RESULTS 14
No person has been authorized to give any information
or to make any representations other than those
contained in this Prospectus and the Statement of
Additional Information, and if given or made, such
information or representations may not be relied upon
as having been authorized by the Fund. This prospectus
does not constitute an offer to sell securities in any
state to any person to whom it is unlawful to make such
offer in such state.
<PAGE>
SUMMARY
Investment Objective
The investment objective of the Fund is to seek
capital appreciation. The Fund will seek to achieve
its investment objective by investing its assets
primarily in equity securities of domestic companies
that, in the opinion of Greenville Capital Management
("GCM"), have been overlooked by Wall Street analysts.
The Fund's investments are subject to market risk and
the value of its shares will fluctuate with changing
market valuations of its portfolio holdings. See
"INVESTMENT OBJECTIVE AND POLICIES" and "INVESTMENT
TECHNIQUES AND RISKS."
Investment Advisor
GCM is the investment advisor to the Fund. GCM
was organized in 1989 and acts as the investment
advisor to individual and institutional clients with
investment portfolios of approximately $375 million.
See "MANAGEMENT."
Purchase and Redemptions
Institutional shares of the Fund are sold and
redeemed at net asset value, without the imposition of
any sales or redemption charges. The minimum initial
investment required by the Fund is $100,000. The
minimum subsequent investment is $1,000. These
minimums may be changed or waived at any time at the
discretion of the Fund. See "HOW TO PURCHASE SHARES"
AND "HOW TO REDEEM SHARES."
Shareholder Services
Questions regarding the Institutional shares or
the Retail shares may be directed to the Fund at the
address and telephone number on the front page of this
Prospectus.
<PAGE>
SUMMARY OF FUND EXPENSES
Institutional Class
Shareholder Transaction Expenses
Sales Load Imposed on Purchases NONE
Sales Load Imposed on Reinvested Dividends NONE
Deferred Sales Load Imposed on Redemptions NONE
Redemption Fees NONE*
Annual Fund Operating Expenses (after waivers or
reimbursements) (as a percentage of average net
assets)
Management Fee 1.00%
12b-1 Fees NONE
Other Expenses (net of reimbursement) 0.75%(1)
TOTAL FUND OPERATING EXPENSES 1.75%(1)
(after waivers or reimbursements)
_________________________
(1) The Fund's investment advisor, GCM, has
voluntarily agreed to waive its management fee
and/or reimburse the Fund's operating expenses to
the extent necessary to ensure that the Fund's
Total Operating Expenses do not exceed 1.75% of
the Fund's average daily net assets. Since the
Fund did not commence operations until November
__, 1996, other expenses have been estimated and
are presented net of reimbursements. Absent these
reimbursements, Other Expenses and Total Fund
Operating Expenses are estimated to be 3.15% and
4.15%, respectively. The Fund's management fee is
higher than that paid by other similar investment
companies. For additional information concerning
management fees and operating expenses, see
"MANAGEMENT."
*There are certain charges associated with certain
services offered by the Fund, such as a service fee of
$10.00 for redemptions effected via wire transfer.
Example
You would pay the following expenses on a $1,000
investment, assuming (i) 5% annual return, and (ii)
redemption at the end of each time period.
1 Year 3 Years
$18 $55
The Example is based on the Total Operating
Expenses specified in the table above. The amounts in
the Example may increase absent the waivers or
reimbursements. Please remember that the Example
should not be considered representative of past or
future expenses and that actual expenses may be greater
or lesser than those shown. The assumption in the
Example of a 5% annual rate of return is required by
regulations of the Securities and Exchange Commission
("SEC") applicable to all mutual funds. This return is
hypothetical and should not be considered
representative of past or future performance of the
Institutional shares.
INVESTMENT OBJECTIVE AND POLICIES
The Fund is the first and presently, the only
series of the Trust, an open-end, diversified
management company. The Fund's investment objective is
to seek capital appreciation. The generation of
investment income is not an investment objective and,
therefore, any income earned by the Fund will be
incidental to the Fund's objective. The Fund will
seek, under normal market conditions, to achieve its
investment objective by investing its assets primarily
in equity securities of domestic companies, which
include but are not limited to common stocks; preferred
<PAGE>
stocks; warrants to purchase common stocks or preferred
stocks; and securities convertible into common or
preferred stocks, such as convertible bonds and
debentures. The Fund may, when GCM deems a more
conservative approach is warranted, or pending
investment or reinvestment, invest up to 35% of its
total assets in short-term, fixed income securities.
For temporary, defensive purposes the Fund may invest
up to 100% of its total assets in such securities.
Since the Fund's assets will, under normal market
conditions, consist primarily of equity securities, the
net asset value of the Institutional shares may be
subject to greater principal fluctuation than a
portfolio containing a substantial amount of fixed
income securities.
The Fund is designed to take advantage of
investment and trading opportunities that investors
might not otherwise have the time, expertise or
inclination to exploit themselves. The Fund is
structured for flexibility and risk reduction, but
centered around investment in high quality growth
stocks with an emphasis on those companies whose growth
potential, in GCM's opinion, has been overlooked by
Wall Street analysts. In addition, the Fund may sell
short up to 25% of its portfolio. The Fund only
intends to use short positions for brief periods of
time in smaller position sizes to reduce the Fund's
overall risk and to increase the Fund's pool of
potential investment ideas. (See "INVESTMENT
TECHNIQUES AND RISKS - Short Sales").
When making investment decisions, GCM utilizes
information and analyses from numerous sources
regarding a company's sales and earnings growth;
earnings power, trends and predictability; industry,
economic and political trends; relative valuation; and
liquidity, to determine whether the security has the
growth potential suitable for the Fund. The Fund will
generally invest in companies with market
capitalizations ranging from $100 million to $2
billion. The Fund is only intended to be an investment
vehicle for that part of an investor's capital which
can appropriately be exposed to above average risk in
anticipation of greater rewards. The Fund is not
designed to offer a balanced investment program
suitable for all investors.
Except for the Fund's investment objective and the
investment restrictions contained in the Statement of
Additional Information, the Fund's policies may be
changed without a vote of the Institutional class'
shareholders.
INVESTMENT TECHNIQUES AND RISKS
In General
The Fund will not invest more than 5% of its net
assets in any one of the following types of
investments: preferred stocks; warrants; unseasoned
companies; securities purchased on a when-issued or
delayed delivery basis; call and put options; and
futures and options on futures. The ability of the
Fund to effectively use put and call options and
futures transactions is largely dependent upon GCM's
ability to correctly use these instruments, which may
involve different skills than are associated with
securities generally. For a more extensive discussion
of certain of these investments and techniques and the
risks associated therewith, see the Fund's Statement of
Additional Information.
Short-Term Fixed Income Securities
When GCM believes that adverse economic or market
conditions justify such action, up to 100% of the
Fund's assets may be held temporarily in short-term
fixed-income securities, including without limitation:
U.S. government securities, including bills, notes and
bonds, differing as to maturity and rate of interest,
which are either issued or guaranteed by the U.S.
Treasury or by U.S. governmental agencies or
instrumentalities; certificates of deposit issued
against funds deposited in a U.S. bank or savings and
loan association; bank time deposits, which are monies
kept on deposit with U.S. banks or savings and loan
associations for a stated period of time at a fixed
rate of interest; bankers' acceptances which are short-
term credit instruments used to finance commercial
transactions; repurchase agreements entered into only
with respect to obligations of the U.S. government, its
agencies or instrumentalities; or commercial paper and
commercial paper master notes (which are demand
instruments without a fixed maturity bearing interest
at rates which are fixed to known lending rates and
automatically adjusted when such lending rates change)
rated A-1 or better by S&P, Prime-1 or better by
Moody's, Duff 2 or higher by D&P, or Fitch 2 or higher
by Fitch.
Illiquid Securities
The Fund may invest up to 10% of the value of its
net assets in illiquid securities, which include, but
are not limited to, restricted securities (securities
the disposition of which is restricted under the
federal securities laws); securities which may only be
resold pursuant to Rule 144A under the Securities Act
of 1933; and repurchase
<PAGE>
agreements with maturities in
excess of seven days. Risks associated with restricted
securities include the potential obligation to pay all
or part of the registration expenses in order to sell
restricted securities. A considerable period of time
may elapse between the time of the decision to sell a
restricted security and the time the Fund may be
permitted to sell under an effective registration
statement or otherwise. If, during such a period,
adverse conditions were to develop, the Fund might
obtain a less favorable price than that which prevailed
when it decided to sell. The Board of Trustees of the
Trust, or its delegate, has the ultimate authority to
determine, to the extent permissible under the federal
securities laws, which securities are liquid or
illiquid. The Board of Trustees has adopted guidelines
and delegated this determination to GCM.
ADRs
The Fund may invest up to 25% of the value of its
net assets in ADRs or other instruments denominated in
U.S. dollars. ADRs are receipts typically issued by a
U.S. bank or trust company evidencing ownership of the
underlying foreign security and denominated in U.S.
dollars. Some institutions issuing ADRs may not be
sponsored by the issuer. A non-sponsored depository
may not provide the same shareholder information that a
sponsored depository is required to provide under its
contractual arrangements with the issuer, including
reliable financial statements.
Investments in securities of foreign issuers
involve risks which are in addition to the usual risks
inherent in domestic investment. In many countries
there is less publicly available information about
issuers than is available in the reports and ratings
published about companies in the U.S. Additionally,
foreign companies are not subject to uniform
accounting, auditing and financial reporting standards.
Other risks inherent in foreign investment include
expropriation; confiscatory taxation; withholding taxes
on dividends and interest; less extensive regulation of
foreign brokers, securities markets and issuers; costs
incurred in conversions between currencies; the
possibility of delays in settlement in foreign
securities markets; limitations on the use or transfer
of assets (including suspension of the ability to
transfer currency from a given country); the difficulty
of enforcing obligations in other countries; diplomatic
developments; and political or social instability.
Foreign economies may differ favorably or unfavorably
from the U.S. economy in various respects, and many
foreign securities are less liquid and their prices are
more volatile than comparable U.S. securities. From
time to time, foreign securities may be difficult to
liquidate rapidly without adverse price effects.
Certain costs attributable to foreign investing, such
as custody charges and brokerage costs, are higher than
those attributable to domestic investing.
Options and Futures Transactions
The Fund may engage in options and futures
transactions which are sometimes referred to as
derivative transactions. The Fund's options and
futures transactions may include instruments such as
stock index options and futures contracts. Such
transactions may be used for several reasons, including
hedging unrealized portfolio gains. The Fund will only
engage in futures and options transactions which must,
pursuant to regulations promulgated by the Commodity
Futures Trading Commission (the "CFTC"), constitute
bona fide hedging or other permissible risk management
transactions and will not enter into such transactions
if the sum of the initial margin deposits and premiums
paid for unexpired options exceeds 5% of the Fund's
total assets. In addition, the Fund will not enter
into options and futures transactions if more than 50%
of the Fund's net assets would be committed to such
instruments. The Fund may hold a futures or options
position until its expiration, or it may close out such
a position before then at current value if a liquid
secondary market is available. If the Fund cannot
close out a position, it may suffer a loss apart from
any loss or gain experienced at the time the Fund
decided to close the position. When required by
guidelines of the SEC or the CFTC, the Fund will set
aside permissible liquid assets in a segregated account
to secure its potential obligations under its futures
or options positions. Such liquid assets may include
cash, U.S. government securities and high-grade liquid
debt securities. The ability of the Fund to
effectively use options and futures is largely
dependent upon GCM's ability to correctly use such
instruments which may involve different skills than are
associated with securities generally. For a further
discussion of options and futures transactions, please
see the Statement of Additional Information.
Short Sales
The Fund may engage in short sale transactions in
securities listed on one or more national securities
exchanges, or in unlisted securities. Short selling
involves the sale of borrowed securities. At the time
a short sale is effected, the Fund incurs an obligation
to replace the borrowed security at whatever its price
may be at the time the Fund purchases it for delivery
to the lender. When a short sale transaction is closed
out, any gain or loss on the transaction is taxable as
a short term capital gain or loss. All short sales
will be fully collateralized, and no short sale will be
effected which would cause the aggregate market value
of all securities sold short to exceed 25% of the value
<PAGE>
of the Fund's net assets. The Fund limits short sales
of any one issuer's securities to 2% of the Fund's
total assets and to 2% of any one class of the issuer's
securities.
Repurchase Agreements
The Fund may invest up to 25% of its net assets in
repurchase agreements entered into with Federal Reserve
Bank member banks and certain non-bank dealers. In a
repurchase agreement, the Fund buys a security at one
price, and at the time of sale, the seller agrees to
repurchase the obligation at a mutually agreed upon
time and price (usually seven days). The repurchase
agreement determines the yield during the purchaser's
holding period, while the seller's obligation to
repurchase is secured by the value of the underlying
security. GCM will monitor, on an ongoing basis, the
value of the underlying securities to ensure that the
value always equals or exceeds the repurchase price
plus accrued interest. Repurchase agreements could
involve certain risks in the event of a default or
insolvency of the other party to the agreement
including possible delays or restrictions upon the
Fund's ability to dispose of the underlying securities.
Although no definitive criteria are used, GCM reviews
the creditworthiness of the banks and non-bank dealers
with which the Fund enters into repurchase agreements
to evaluate those risks.
Convertible Securities
The Fund may invest up to 25% of its net assets in
securities convertible into common stocks. A
convertible security entitles the holder to receive
interest normally paid or accrued on the debt or the
dividend paid on preferred stock until the convertible
security matures or is redeemed, converted, or
exchanged. Convertible securities have unique
investment characteristics in that they generally have
higher yields than common stocks, but lower yields than
comparable non-convertible securities, are less subject
to fluctuation in value than the underlying stock, and
provide the potential for capital appreciation if the
market price of the underlying common stock increases.
A convertible security might be subject to redemption
at the option of the issuer at a price established in
the security's governing instrument. If a convertible
security held by the Fund is called for redemption, the
Fund will be required to permit the issuer to redeem
the security, convert it into the underlying common
stock or sell it to a third party.
Portfolio Turnover
The portfolio turnover rate indicates changes in
the Fund's investments. The turnover rate may vary
from year to year, as well as within a year. Under
normal market conditions, the Fund anticipates that its
portfolio turnover rate is not expected to exceed 110%
and is expected to range between 70 and 110%. A
turnover rate of 100% would occur, for example, if all
of the securities held by the Fund were replaced within
one year. It may be affected by sales of portfolio
securities necessary to meet cash requirements for
redemption of shares. In the event the Fund were to
have a turnover rate of 100% or more in any year, it
would result in the payment by the Fund of above
average transaction costs and could result in the
payment by Institutional shareholders of above average
amounts of taxes on realized investment gains.
MANAGEMENT
Under the laws of the State of Delaware, the Board
of Trustees of the Trust is responsible for managing
its business and affairs. The Trust, on behalf of the
Fund, has entered into an investment advisory agreement
with GCM pursuant to which GCM manages the Fund's
investments and business affairs, subject to the
supervision of the Trust's Board of Trustees (the
"Investment Advisory Agreement"). The Board of
Trustees also oversees duties required by applicable
state and federal law.
GCM, a growth equity capital management firm, is
the investment advisor to the Fund. GCM was founded in
1989 and is located at 100 South Rockland Falls Road
Rockland, Delaware 19732. Under the Investment
Advisory Agreement, the Trust, on behalf of the Fund,
compensates GCM for its investment advisory services at
the annual rate of 1.00% of the Fund's average daily
net assets. GCM has voluntarily agreed to waive its
management fee and/or reimburse the operating expenses
to the extent necessary to ensure that the
Institutional class' total operating expenses do not
exceed 1.75% of the Fund's average daily net assets.
Any such waiver or reimbursement will have the effect
of lowering the overall expense ratio for the
Institutional class and increasing the Institutional
class' overall return to investors at the time any such
amounts were waived and/or reimbursed.
The Fund is currently co-managed by Charles S.
Cruice and Richard H. Gould. Mr. Cruice has been the
President of GCM since 1989. Mr. Cruice began his
career at Dean Witter Reynolds, Inc. in 1974 and joined
Friess Associates Inc., an investment management
company, in 1978. Mr. Cruice holds a BA from the
University of
<PAGE>
Denver. Mr. Gould has been a Vice
President of GCM since 1994. Prior to joining GCM, Mr.
Gould was an equity analyst with PNC Investment
Management and co-managed the PNC Small Cap Growth
Fund, currently called the Compass Small Cap Growth
Fund. Mr. Gould is a Chartered Financial Analyst and a
Chartered Market Technician. Mr. Gould received his BS
in 1982 from The Pennsylvania State University and his
MBA in Finance in 1985.
GCM provides continuous advice and recommendations
concerning the Fund's investments, and is responsible
for selecting the broker-dealers who execute the
portfolio transactions for the Fund. GCM provides
office space for the Trust and pays the salaries, fees
and expenses of all the Trust's officers and Trustees
who are interested persons of GCM. In addition to
providing investment advice to the Fund, GCM serves as
investment advisor to pension and profit-sharing plans,
and other institutional and private investors. As of
October 15, 1996, GCM had approximately $375 million
under management. Mr. Charles S. Cruice owns shares
representing more than 51% of the voting rights of GCM.
FUND EXPENSES
The Trust, on behalf of the Fund, is responsible
for all of its expenses, including: interest charges;
taxes; brokerage commissions; organizational expenses;
expenses of registering or qualifying shares for sale
with the states and the SEC; expenses of issue, sale,
repurchase or redemption of shares; expenses of
printing and distributing prospectuses to existing
shareholders; charges of custodians; expenses for
accounting, administrative, audit, and legal services;
fees for Trustees who are not interested persons of
GCM; expenses of fidelity bond coverage and other
insurance; expenses of indemnification; extraordinary
expenses; and costs of shareholder and Trustee
meetings.
HOW TO PURCHASE FUND SHARES
The minimum initial investment in the Fund's
Institutional class is $100,000. Subsequent
investments in the amount of at least $1,000 may be
made by mail or by wire. For individual retirement
accounts ("IRAs"), the minimum initial investment is
$2,000. Applications will not be accepted unless they
are accompanied by payment in U.S. funds. Payment
should be made by check or money order drawn on a U.S.
bank, savings and loan, or credit union. Minimum
investments are waived for employee benefit plans
qualified under Sections 401, 403(b)(7) or 457 of the
Internal Revenue Code. These minimums can be changed
or waived by the Fund at any time. Shareholders will
be given at least 30 days' notice of any increase in
the minimum dollar amount of subsequent investments.
Initial Investment - Minimum $100,000
You may purchase Institutional class shares by
completing the enclosed application and mailing it
along with a check or money order payable to "The
Rockland Growth Fund Institutional Class," to your
securities dealer, the Distributor or the Transfer
Agent, as the case may be. If mailing to the Transfer
Agent, please use the following address: Firstar Trust
Company, Mutual Fund Services, P. O. Box 701,
Milwaukee, Wisconsin 53201-0701. In addition,
overnight mail should be sent to the following address:
The Rockland Growth Fund, Firstar Trust Company, Mutual
Fund Services, Third Floor, 615 East Michigan Street,
Milwaukee, Wisconsin 53202. The Fund does not consider
the U.S. Postal Service or other independent delivery
services to be its agents. Therefore, deposit in the
mail or with such services, or receipt at the Transfer
Agent's post office box, of purchase applications does
not constitute receipt by the Transfer Agent or the
Fund. Do not mail letters by overnight courier to the
post office box.
If your check does not clear, you will be charged
a $20.00 service fee. You will also be responsible for
any losses suffered by the Institutional class as a
result. Neither cash nor third-party checks will be
accepted. All applications to purchase Institutional
class shares are subject to acceptance by the Fund and
are not binding until so accepted. The Fund reserves
the right to decline or accept a purchase order
application in whole or in part.
Wire Purchases
You may purchase Institutional class shares by
wire. The following instructions should be followed
when wiring funds to the Transfer Agent for the
purchase of Fund shares:
Wire to: Firstar Bank
ABA Number 075000022
Credit: Firstar Trust Company
Account 112-952-137
<PAGE>
Further Credit: The Rockland Growth Fund,
Institutional class
(shareholder account number)
(shareholder name/account
registration)
Please call 1-800-497-3933 prior to wiring any funds to
notify the Transfer Agent that the wire is coming and
to verify the proper wire instructions so that the wire
is properly applied when received. The Fund is not
responsible for the consequences of delays resulting
from the banking or Federal Reserve wire system.
Telephone Purchases
You may purchase Institutional class shares by
moving money from your bank account to your Fund
account. Only bank accounts held at domestic financial
institutions that are Automated Clearing House (ACH)
members can be used for telephone transactions. To
have your Institutional class shares purchased at the
net asset value determined as of the close of regular
trading on a given date, the Transfer Agent must
receive both the purchase order and payment by
Electronic Funds Transfer through the ACH System before
the close of regular trading on such date. Most
transfers are completed within 3 business days.
Telephone transactions may not be used for initial
purchases of Institutional class shares.
Subsequent Investments - Minimum $1,000
Additions to your account may be made by mail or
by wire. When making an additional purchase by mail,
enclose a check payable to "The Rockland Growth Fund
Institutional Class" along with the Additional
Investment Form provided on the lower portion of your
account statement. To make an additional purchase by
wire, please call 1-800-497-3933.
DETERMINATION OF NET ASSET VALUE
The net asset value per share for the
Institutional class is determined as of the close of
trading (currently 4:00 p.m. Eastern Standard Time) on
each day the New York Stock Exchange ("NYSE") is open
for business. Purchase orders received or shares
tendered for redemption on a day the NYSE is open for
trading, prior to the close of trading on that day,
will be valued as of the close of trading on that day.
Applications for purchase of Institutional shares and
requests for redemption of Institutional shares
received after the close of trading on the NYSE will be
valued as of the close of trading on the next day the
NYSE is open. Net asset value is calculated by taking
the fair value of the Institutional class' total
assets, including interest or dividends accrued, but
not yet collected, less all liabilities, and dividing
by the total number of shares outstanding. The result,
rounded to the nearest cent, is the net asset value per
share. In determining net asset value, expenses are
accrued and applied daily and securities and other
assets for which market quotations are available are
valued at market value. Common stocks, other equity-
type securities, and securities sold short are valued
at the last sales price on the national securities
exchange or NASDAQ on which such securities are
primarily traded; provided, however, securities traded
on an exchange or NASDAQ for which there were no
transactions on a given day, any security sold short
for which there were no transactions on a given day and
securities not listed on an exchange or NASDAQ, are
valued at the most recent mean between the bid and
asked price. Options purchased or written by the Fund
are valued at the average of the current bid and asked
prices. Any securities or other assets for which
market quotations are not readily available are valued
at fair value as determined in good faith by the Board
of Trustees. Debt securities having remaining
maturities of 60 days or less when purchased are valued
by the amortized cost method when the Board of Trustees
determines that the fair market value of such
securities is their amortized cost. Under this method
of valuation, a security is initially valued at its
acquisition cost, and thereafter, amortization of any
discount or premium is assumed each day, regardless of
the impact of fluctuating interest rates on the market
value of the security.
HOW TO REDEEM SHARES
In General
Investors may request redemption of part or all of
their Institutional class shares at any time at the
next determined net asset value. See "DETERMINATION OF
NET ASSET VALUE." The Fund normally will mail your
redemption proceeds the next business day and, in any
event, no later than seven business days after receipt
of a
<PAGE>
redemption request in good order. However, when a
purchase has been made by check, the Fund may hold
payment on redemption proceeds until it is reasonably
satisfied that the check has cleared, this may take up
to twelve days.
Redemptions may also be made through brokers or
dealers. Such redemptions will be effected at the net
asset value next determined after receipt by the
Institutional class of the broker or dealer's
instruction to redeem shares. In addition, some
brokers or dealers may charge a fee in connection with
such redemptions.
Written Redemption
For most redemption requests, an investor need
only furnish a written, unconditional request to redeem
his or her Institutional class shares at net asset
value to the Fund's Transfer Agent: Firstar Trust
Company, Mutual Fund Services, P. O. Box 701,
Milwaukee, Wisconsin 53201-0701. Overnight mail should
be sent to The Rockland Growth Fund, Firstar Trust
Company, Mutual Fund Services, Third Floor, 615 East
Michigan Street, Milwaukee, Wisconsin 53202. Requests
for redemption must be signed exactly as the
Institutional class shares are registered, including
the signature of each joint owner. You must also
specify the number of shares or dollar amount to be
redeemed. Redemption proceeds made by written
redemption request may also be wired to a commercial
bank that you have authorized on your account
application. The Transfer Agent charges a $10.00
service fee for wire transactions. Additional
documentation may be requested from corporations,
executors, administrators, trustees, guardians, agents,
or attorneys-in-fact. The Fund does not consider the
U.S. Postal Service or other independent delivery
services to be its agents. Therefore, deposit in the
mail or with such services, or receipt at the Transfer
Agent's post office box, of redemption requests does
not constitute receipt by the Transfer Agent or the
Fund. Do not mail letters by overnight courier to the
post office box. Any written redemption requests
received within 15 days after an address change must be
accompanied by a signature guarantee.
Telephone Redemption
Institutional class shares may also be redeemed by
calling the Transfer Agent at 1-800-497-3933. In order
to utilize this procedure, a shareholder must have
previously elected this option in writing, which
election will be reflected in the records of the
Transfer Agent, and the redemption proceeds must be
mailed directly to the shareholder or transmitted to
the shareholder's predesignated account. To change the
designated account, send a written request with
signature(s) guaranteed to the Transfer Agent. To
change the address, call the Transfer Agent or send a
written request with signature(s) guaranteed to the
Transfer Agent. No telephone redemptions will be
allowed within 15 days of any address change. The Fund
reserves the right to limit the number of telephone
redemptions by an investor. Once made, telephone
redemption requests may not be modified or canceled.
The Transfer Agent will employ reasonable
procedures to confirm that instructions communicated by
telephone are genuine. Such procedures may include
requiring some form of personal identification prior to
acting upon telephone instructions, providing written
confirmations of all such transactions, and/or tape
recording all telephone instructions. Assuming
procedures such as the above have been followed, the
Fund will not be liable for any loss, cost or expense
for acting upon an investor's telephone instructions or
for any unauthorized telephone redemption. The Fund
reserves the right to refuse a telephone redemption
request if so advised.
Signature Guarantees
Signature guarantees are required for: (i)
redemption requests to be mailed or wired to a person
other than the registered owner(s) of the shares; (ii)
redemption requests to be mailed or wired to other than
the address of record and (iii) any redemption request
if a change of address request has been received by the
Fund or Transfer Agent within the preceding 15 days. A
signature guarantee may be obtained from any eligible
guarantor institution, as defined by the SEC. These
institutions include banks, savings associations,
credit unions, brokerage firms and others.
Your account may be terminated by the Fund on not
less than 30 days' written notice if, at the time of
any redemption of shares in your account, the value of
the remaining shares in the account falls below
$10,000. Upon any such termination, a check for the
redemption proceeds will be sent to the account of
record within seven days of the redemption.
<PAGE>
SHAREHOLDER REPORTS
You will be provided at least semi-annually with a
report showing the Fund's holdings and annually after
the close of the Trust's fiscal year, which ends
September 30, with an annual report containing audited
financial statements. An individual account statement
will be sent to you by the Transfer Agent after each
purchase or redemption of Institutional class shares as
well as on a quarterly basis. You will also receive an
annual statement after the end of the calendar year
listing all of your transactions in Institutional class
shares during such year.
If you have questions about your account, you
should call the Transfer Agent at 1-800-497-3933.
Investors who have general questions about the Fund or
the Trust or desire additional information should write
to The Rockland Funds Trust, P.O. Box 701, Milwaukee,
WI 53201-0701.
INDIVIDUAL RETIREMENT ACCOUNTS
The Fund offers through Firstar Trust Company, in its
capacity as custodian of Fund assets (the "Custodian"),
an Individual Retirement Account ("IRA") for adoption
by individuals. Individuals under age 70 1/2 with
earned income, may contribute money to an IRA. You are
allowed to contribute up to the lesser of $2,000 or
100% of your earned income each year to an IRA.
Individuals who are covered by existing retirement
plans, or have spouses covered by such plans, and whose
income exceed certain amounts, are not permitted to
deduct their IRA contributions for income tax purposes.
However, whether or not an individual's contributions
are deductible, the earnings in his or her IRA are not
taxed until the account is distributed.
A complete description of the IRA, as well as the
applicable service fee is available from the Fund and
may be obtained by calling 1-800-497-3933 or writing to
the Fund at P. O. Box 701, Milwaukee, Wisconsin 53201-
0701.
Please note that early withdrawals from an IRA may
result in adverse tax consequences.
INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX TREATMENT
The Trust intends to qualify for treatment as a
"Regulated Investment Company" under Subchapter M of
the Internal Revenue Code, and, if so qualified, will
not be liable for federal income taxes to the extent
earnings are distributed on a timely basis.
For federal income tax purposes, all dividends
paid by the Trust, on behalf of the Fund's
Institutional class, and net realized short-term
capital gains are taxable as ordinary income whether
reinvested or received in cash unless you are exempt
from taxation or entitled to a tax deferral. Dividends
and other distributions on both classes of Fund shares
are calculated at the same time and in the same manner.
Dividends on Institutional class shares are expected to
be higher than those on the Retail class because of the
higher expenses resulting from the distribution and
sales charges borne by the Retail class shares.
Distributions paid by the Trust, on behalf of the
Fund's Institutional class, from net realized long-term
capital gains, whether received in cash or reinvested
in additional shares, are taxable as such. The capital
gain holding period is determined by the length of time
the Institutional class has held the security and not
the length of time you have held shares in the
Institutional class. Investors are informed annually
as to the amount and nature of all dividends and
capital gains paid during the prior year. Such gains
and dividends may also be subject to state or local
taxes. If you are not required to pay taxes on your
income, you will not be required to pay federal income
taxes on the amounts distributed to you.
Dividends are usually paid, and capital gains, if
any, are usually distributed annually in December.
When a dividend or capital gain is distributed, the
Institutional class' net asset value will decrease by
the amount of the payment. A dividend paid shortly
after the purchase of Institutional shares will reduce
the net asset value of the shares purchased by the
amount of the dividend. All dividends or capital gains
distributions paid on the Institutional class shares
will automatically be reinvested in additional shares
of the Institutional class at the then prevailing net
asset value unless an investor specifically requests
that either dividends or capital gains or both be paid
in cash. The election to receive dividends or reinvest
them may be changed by writing to the Fund at P. O. Box
701, Milwaukee, Wisconsin 53201-0701. Such notice must
be received at least 10 days prior to the record date
of any dividend or capital gain distribution.
<PAGE>
If you do not furnish the Fund with your correct
social security number or employer identification
number, the Fund is required by federal law to withhold
federal income tax at a rate of 31% from your
distributions and redemption proceeds. If you do not
have a social security number, you should indicate on
the purchase application that an application to obtain
a number is pending. The Fund is required to withhold
taxes if a number is not delivered to the Fund within 7
days.
This section is not intended to be a full
discussion of federal income tax laws and the effect of
such laws on you. There may be other federal, state,
or local tax considerations applicable to a particular
investor. You are urged to consult your own tax
advisor.
FUND ORGANIZATION
The Trust was organized as a Delaware business
trust under Delaware law by Certificate of Trust on
July 31, 1996. The Board of Trustees is authorized to
issue an unlimited number of shares of beneficial
interest in separate series, par value $0.001 per
share, and to create classes of shares within each
series. Currently the Fund is the only series of the
Trust. Shares of the Retail class are offered to
investors through the Fund's underwriter, subject to a
$10,000 minimum initial investment and certain sales
charges. Each class of shares represent interests in
the assets of the Fund and have identical voting,
dividend, liquidation and other rights on the same
terms and conditions, except that the distribution fees
related to the Retail class shares are borne solely by
that class. If the Trust issues additional series, the
assets belonging to each series of shares will be held
separately by the Custodian, and in effect each series
will be a separate fund.
Each share, irrespective of series or class, is
entitled to one vote on all questions, except that
certain matters must be voted on separately by the
series or class of shares affected, and matters
affecting only one series or class are voted upon only
by that series or class. All shares have non-
cumulative voting rights, which means that the holders
of more than 50% of the shares voting for the election
of Trustees can elect all of the Trustees if they
choose to do so, and in such event, the holders of the
remaining shares will not be able to elect any person
or persons to the Board of Trustees.
The Trust will not hold annual shareholders'
meetings except when required by the Investment Company
Act. There will normally be no meetings of
shareholders for the purpose of electing Trustees
unless and until such time as less than a majority of
the Trustees holding office have been elected by the
shareholders, at which time the Trustees then in office
will call a shareholders' meeting for the election of
Trustees. The Trust has adopted procedures in its
Bylaws for the removal of Trustees by the shareholders.
As of October 21, 1996, Mr. Cruice and Mr. Gould each
owned controlling interests in the Fund.
ADMINISTRATOR
Pursuant to the Fund Administration Servicing
Agreement, Firstar Trust Company (the "Administrator"),
Mutual Fund Services, Third Floor, 615 East Michigan
Street, Milwaukee, Wisconsin 53202, prepares and files
all federal and state tax returns, oversees the Fund's
insurance relationships, participates in the
preparation of the registration statement, proxy
statements and reports, prepares compliance filings
relating to the registration of the securities of the
Institutional class pursuant to state securities laws,
compiles data for and prepares notices to the SEC,
prepares the financial statements for the annual and
semi-annual reports to the SEC and current investors,
monitors the Institutional class' expense accruals and
performs securities valuations, monitors the Trust's
status as a registered investment company under
Subchapter M of the Internal Revenue Code and monitors
compliance with the Fund's investment policies and
restrictions, from time to time, and generally assists
in the Fund's administrative operations. The
Administrator, at its own expense and without
reimbursement from the Fund, furnishes office space and
all necessary office facilities, equipment, supplies
and clerical and executive personnel for performing the
services required to be performed by it under the Fund
Administration Servicing Agreement. For the foregoing
services, the Administrator receives from the Fund a
fee, computed daily and payable monthly based on the
Fund's average net assets at the annual rate of .06 of
1% on the Fund's average net assets, subject to an
annual minimum of $30,000, plus out-of-pocket expenses.
<PAGE>
CUSTODIAN, TRANSFER AGENT, AND FUND ACCOUNTANT
Firstar Trust Company, Mutual Fund Services, Third
Floor, 615 East Michigan Street, Milwaukee, Wisconsin
53202, acts as custodian of the Fund's assets and as
dividend-disbursing, transfer agent and fund accountant
for the Fund.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc. (the
"Distributor"), 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, serves as the principal
underwriter to distribute the Fund's shares. Pursuant
to an Underwriting Agreement with the Fund, the
Distributor will be paid an annual fee of $18,000.
COMPARISON OF INVESTMENT RESULTS
The Institutional class may from time to time
compare its investment results to various passive
indices or other mutual funds and cite such comparisons
in reports to shareholders, sales literature, and
advertisements. The results may be calculated on the
basis of average annual total return, total return, or
cumulative total return.
Average annual total return and total return
figures assume the reinvestment of all dividends and
measure the net investment income generated by, and the
effect of, any realized and unrealized appreciation or
depreciation of the underlying investments in the
Institutional class over a specified period of time.
Average annual total return figures are annualized and
therefore represent the average annual percentage
change over the specified period. Total return figures
are not annualized and represent the aggregate
percentage or dollar value change over the period.
Cumulative total return simply reflects the
Institutional class' performance over a stated period
of time.
Average annual total return, total return and
cumulative total return are based upon the historical
results of the Institutional class and are not
necessarily representative of the future performance of
the Institutional class. Additional information
concerning the Institutional class' performance appears
in the Statement of Additional Information.
____________________________
The Fund reserves the right to change any of
its policies, practices and procedures
described in this Prospectus, including the
Statement of Additional Information, without
shareholder approval except in those
instances where shareholder approval is
expressly required.
<PAGE>
TRUSTEES
Mr. Charles S. Cruice
Mr. Richard Gould
Dr. Peter Utsinger
Mr. Robert Harrison
Mr. Richard Vague
OFFICERS
Mr. Charles S. Cruice, President
Mr. Richard H. Gould, Treasurer
Mr. Jeffrey Rugen, Secretary
INVESTMENT ADVISOR
Greenville Capital Management, Inc.
100 South Rockland Falls Road
Rockland, DE 19732
CUSTODIAN, ADMINISTRATOR, TRANSFER AGENT
AND DIVIDEND-DISBURSING AGENT
Firstar Trust Company
Mutual Fund Services
Third Floor
615 East Michigan Street
Milwaukee, WI 53202
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP
777 E. Wisconsin Avenue
Milwaukee, WI 53202
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 N. Water Street
Milwaukee, WI 53202
<PAGE>
PROSPECTUS
November___, 1996
Greenville Capital Management, Inc.
Presents
The Rockland Growth Fund
a Series of
The Rockland Funds Trust
P. O. Box 701
Milwaukee, Wisconsin 53201-0701
1-800-497-3933
The Rockland Growth Fund (the "Fund") is a series of
The Rockland Funds Trust (the "Trust"), an open-end,
diversified, management investment company commonly
referred to as a mutual fund. The investment objective
of the Fund is to seek capital appreciation. The Fund
will seek, under normal market conditions, to achieve
its investment objective by investing its assets
primarily in equity securities of domestic companies.
The Fund is structured for flexibility and risk
reduction, but centered around investment in high
quality growth stocks with an emphasis on those
companies whose growth potential, in the opinion of the
Fund's investment adviser, Greenville Capital
Management, Inc., has been overlooked by Wall Street
analysts.
This Prospectus sets forth concisely the information
that you should be aware of prior to investing in the
Fund's Retail shares. Two classes of shares of the
Fund are currently offered to the public:
Institutional shares and Retail shares. This
prospectus relates only to the Retail shares.
Information about the Institutional shares may be
obtained by calling 1-800-497-3933. Please read this
Prospectus carefully and retain it for future
reference. Additional information regarding the Fund
is included in the Statement of Additional Information
dated October__, 1996, which has been filed with the
Securities and Exchange Commission and is incorporated
in this Prospectus by reference. A copy of the Fund's
Statement of Additional Information is available
without charge by writing to the Fund at the address
listed above or by calling 1-800-497-3933.
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>
TABLE OF CONTENTS
Page No.
SUMMARY 4
SUMMARY OF FUND EXPENSES 5
EXAMPLE 5
INVESTMENT OBJECTIVE AND POLICIES 6
INVESTMENT TECHNIQUES AND RISKS 6
GENERAL 6
SHORT-TERM FIXED INCOME SECURITIES 7
ILLIQUID SECURITIES 7
ADRS 7
OPTIONS AND FUTURES TRANSACTIONS 7
SHORT SALES 8
REPURCHASE AGREEMENTS 8
CONVERTIBLE SECURITIES 8
PORTFOLIO TURNOVER 8
MANAGEMENT 9
FUND EXPENSE 9
HOW TO PURCHASE FUND SHARES 9
OFFERING PRICE 10
PURCHASES AT NET ASSET VALUE 10
QUANTITY DISCOUNT IN THE SALES CHARGE 11
INITIAL INVESTMENT - MINIMUM $10,000 11
WIRE PURCHASE 12
TELEPHONE PURCHASES 12
AUTOMATIC INVESTMENT PLAN - MINIMUM $250 12
SUBSEQUENT INVESTMENTS - MINIMUM $250 13
DETERMINATION OF NET ASSET VALUE 13
HOW TO REDEEM SHARES 13
GENERAL 13
WRITTEN REDEMPTION 13
TELEPHONE REDEMPTION 14
SIGNATURE GUARANTEES 14
DISTRIBUTION PLAN 14
SHAREHOLDER REPORTS 15
INDIVIDUAL RETIREMENT ACCOUNTS 15
INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX
TREATMENT 15
FUND ORGANIZATION 16
<PAGE>
ADMINISTRATOR 17
CUSTODIAN, TRANSFER AGENT, AND FUND ACCOUNTANT 17
DISTRIBUTOR 17
COMPARISON OF INVESTMENT RESULTS 17
_______________________
No person has been authorized to give any information
or to make any representations other than those
contained in this Prospectus and the Statement of
Additional Information, and if given or made, such
information or representations may not be relied upon
as having been authorized by the Fund. This prospectus
does not constitute an offer to sell securities in any
state to any person to whom it is unlawful to make such
offer in such state.
_______________________
<PAGE>
SUMMARY
Investment Objective
The investment objective of the Fund is to seek
capital appreciation. The Fund will seek to achieve
its investment objective by investing its assets
primarily in equity securities of domestic companies
that, in the opinion of Greenville Capital Management,
Inc. ("GCM"), have been overlooked by Wall Street
analysts. The Fund's investments are subject to market
risk and the value of its shares will fluctuate with
changing market valuations of its portfolio holdings.
See "INVESTMENT OBJECTIVE AND POLICIES" and "INVESTMENT
TECHNIQUES AND RISKS."
Investment Advisor
GCM is the investment advisor to the Fund. GCM
was organized in 1989 and acts as the investment
advisor to individual and institutional clients with
investment portfolios of approximately $375 million.
See "MANAGEMENT."
Purchase and Redemptions
Retail class shares of the Fund are offered at net
asset value per share plus a maximum initial sales
charge of 3.00% of the offering price. See "HOW TO
PURCHASE SHARES." In addition, the Retail class
adopted a distribution plan under Rule 12b-1 of the
Investment Company Act of 1940, as amended (the
"Investment Company Act"), which authorizes the Retail
class to pay a distribution fee of up to 0.25% per
annum of the Retail class' average daily net assets.
See "DISTRIBUTION PLAN." The minimum initial
investment required by the Retail class is $10,000.
The minimum subsequent investment is $250. The minimum
initial investment for individual retirement accounts
is $2,000, and for investors using the Automatic
Investment Plan, the minimum initial investment is
$250. These minimums may be changed or waived at any
time at the discretion of the Fund. Retail class
shares may be redeemed using either written or
telephone redemption procedures at net asset value
without the imposition of any redemption charges. See
"HOW TO REDEEM SHARES."
Shareholder Services
Questions regarding the Institutional shares or
the Retail shares may be directed to the Fund at the
address and telephone number on the front page of this
Prospectus.
<PAGE>
SUMMARY OF FUND EXPENSES
The purpose of the following table is to assist
you in understanding the various costs and expenses
that an investor in the Retail class will bear directly
(shareholder transaction expenses) and indirectly
(annual fund operating expenses).
Fee Table
Retail
Class
Shareholder Transaction Expenses
Sales Load Imposed on Purchases 3.00%(1),(2)
Sales Load Imposed on Reinvested Dividends NONE
Deferred Sales Load Imposed on Redemptions NONE
Redemption Fees NONE*
Annual Fund Operating Expenses (after waivers or
reimbursements) (as a percentage of average net
assets)
Management Fee 1.00%
12b-1 (Distribution Plan) Fees 0.25%(2),(3)
Other Expenses (net of reimbursement) 0.75%(4)
TOTAL FUND OPERATING EXPENSES 2.00%(4)
(after waivers or reimbursements)
_________________________
(1) Certain investors may be exempt from paying some
or all of this load. See "HOW TO PURCHASE
SHARES."
(2) Consistent with the National Association of
Securities Dealers, Inc.'s (the "NASD") rules, it
is possible that the combination of the front-end
sales load and Rule 12b-1 fees could cause long-
term investors of the Retail class to pay more
than the economic equivalent of the maximum front-
end sales charges permitted under those rules.
(3) See "DISTRIBUTION PLAN" for more details.
(4) The Fund's investment advisor, GCM, has
voluntarily agreed to waive its management fee
and/or reimburse the Fund's operating expenses to
the extent necessary to ensure that the Fund's
Total Operating Expenses do not exceed 2.00% of
the Fund's average daily net assets. Since the
Fund did not commence operations until November
__, 1996, other expenses have been estimated and
are presented net of reimbursements. Absent these
reimbursements, Other Expenses and Total Fund
Operating Expenses are estimated to be 3.16% and
4.41%, respectively. The Fund's management fee is
higher than that paid by other similar investment
companies. For additional information concerning
management fees and operating expenses, see
"MANAGEMENT."
*There are certain charges associated with certain
services offered by the Fund, such as a service fee of
$10.00 for redemptions effected via wire transfer.
Example
You would pay the following expenses on a $1,000
investment, assuming (i) 5% annual return, and (ii)
redemption at the end of each time period.
1 Year 3 Years
$50 $91
<PAGE>
The Example is based on the Total Operating
Expenses specified in the table above. The amounts in
the Example may increase absent the waivers or
reimbursements. Please remember that the Example
should not be considered representative of past or
future expenses and that actual expenses may be greater
or lesser than those shown. The assumption in the
Example of a 5% annual rate of return is required by
regulations of the Securities and Exchange Commission
("SEC") applicable to all mutual funds. This return is
hypothetical and should not be considered
representative of past or future performance of the
Retail shares.
INVESTMENT OBJECTIVE AND POLICIES
The Fund is the first and presently, the only
series of Trust, an open-end, diversified management
company. The Fund's investment objective is to seek
capital appreciation. The generation of investment
income is not an investment objective and, therefore,
any income earned by the Fund will be incidental to the
Fund's objective. The Fund will seek, under normal
market conditions, to achieve its investment objective
by investing its assets primarily in equity securities
of domestic companies, which include but are not
limited to common stocks; preferred stocks; warrants to
purchase common stocks or preferred stocks; and
securities convertible into common or preferred stocks,
such as convertible bonds and debentures. The Fund
may, when GCM deems a more conservative approach is
warranted, or pending investment or reinvestment,
invest up to 35% of its total assets in short-term,
fixed income securities. For temporary, defensive
purposes the Fund may invest up to 100% of its total
assets in such securities. Since the Fund's assets
will, under normal market conditions, consist primarily
of equity securities, the net asset value of the Retail
shares may be subject to greater principal fluctuation
than a portfolio containing a substantial amount of
fixed income securities.
The Fund is designed to take advantage of
investment and trading opportunities that investors
might not otherwise have the time, expertise or
inclination to exploit themselves. The Fund is
structured for flexibility and risk reduction, but
centered around investment in high quality growth
stocks with an emphasis on those companies whose growth
potential, in GCM's opinion, has been overlooked by
Wall Street analysts. In addition, the Fund may sell
short up to 25% of its portfolio. The Fund only
intends to use short positions for brief periods of
time in smaller position sizes to reduce the Fund's
overall risk and to increase the Fund's pool of
potential investment ideas. (See "INVESTMENT
TECHNIQUES AND RISKS - Short Sales").
When making investment decisions, GCM utilizes
information and analyses from numerous sources
regarding a company's sales and earnings growth;
earnings power, trends and predictability; industry,
economic and political trends; relative valuation; and
liquidity, to determine whether the security has the
growth potential suitable for the Fund. The Fund will
generally invest in companies with market
capitalizations ranging from $100 million to $2
billion. The Fund is only intended to be an investment
vehicle for that part of an investor's capital which
can appropriately be exposed to above average risk in
anticipation of greater rewards. The Fund is not
designed to offer a balanced investment program
suitable for all investors.
Except for the Fund's investment objective and the
investment restrictions contained in the Statement of
Additional Information, the Fund's policies may be
changed without a vote of the Retail class'
shareholders.
INVESTMENT TECHNIQUES AND RISKS
In General
The Fund will not invest more than 5% of its net
assets in any one of the following types of
investments: preferred stocks; warrants; unseasoned
companies; securities purchased on a when-issued or
delayed delivery basis; call and put options; and
futures and options on futures. The ability of the
Fund to effectively use put and call options and
futures transactions is largely dependent upon GCM's
ability to correctly use these instruments, which may
involve different skills than are associated with
securities generally. For a more extensive discussion
of certain of these investments and techniques and
risks associated therewith, see the Fund's Statement of
Additional Information.
<PAGE>
Short-Term Fixed Income Securities
When GCM believes that adverse economic or market
conditions justify such action, up to 100% of the
Fund's assets may be held temporarily in short-term
fixed-income securities, including without limitation:
U.S. government securities, including bills, notes and
bonds, differing as to maturity and rate of interest,
which are either issued or guaranteed by the U.S.
Treasury or by U.S. governmental agencies or
instrumentalities; certificates of deposit issued
against funds deposited in a U.S. bank or savings and
loan association; bank time deposits, which are monies
kept on deposit with U.S. banks or savings and loan
associations for a stated period of time at a fixed
rate of interest; bankers' acceptances which are short-
term credit instruments used to finance commercial
transactions; repurchase agreements entered into only
with respect to obligations of the U.S. government, its
agencies or instrumentalities; or commercial paper and
commercial paper master notes (which are demand
instruments without a fixed maturity bearing interest
at rates which are fixed to known lending rates and
automatically adjusted when such lending rates change)
rated A-1 or better by S&P, Prime-1 or better by
Moody's, Duff 2 or higher by D&P, or Fitch 2 or higher
by Fitch.
Illiquid Securities
The Fund may invest up to 10% of the value of its
net assets in illiquid securities, which include, but
are not limited to, restricted securities (securities
the disposition of which is restricted under the
federal securities laws); securities which may only be
resold pursuant to Rule 144A under the Securities Act
of 1933; and repurchase agreements with maturities in
excess of seven days. Risks associated with restricted
securities include the potential obligation to pay all
or part of the registration expenses in order to sell
restricted securities. A considerable period of time
may elapse between the time of the decision to sell a
restricted security and the time the Fund may be
permitted to sell under an effective registration
statement or otherwise. If, during such a period,
adverse conditions were to develop, the Fund might
obtain a less favorable price than that which prevailed
when it decided to sell. The Board of Trustees of the
Trust, or its delegate, has the ultimate authority to
determine, to the extent permissible under the federal
securities laws, which securities are liquid or
illiquid. The Board of Trustees has adopted guidelines
and delegated this determination to GCM.
ADRs
The Fund may invest up to 25% of the value of its
net assets in ADRs or other instruments denominated in
U.S. dollars. ADRs are receipts typically issued by a
U.S. bank or trust company evidencing ownership of the
underlying foreign security and denominated in U.S.
dollars. Some institutions issuing ADRs may not be
sponsored by the issuer. A non-sponsored depository
may not provide the same shareholder information that a
sponsored depository is required to provide under its
contractual arrangements with the issuer, including
reliable financial statements.
Investments in securities of foreign issuers
involve risks which are in addition to the usual risks
inherent in domestic investment. In many countries
there is less publicly available information about
issuers than is available in the reports and ratings
published about companies in the U.S. Additionally,
foreign companies are not subject to uniform
accounting, auditing and financial reporting standards.
Other risks inherent in foreign investment include
expropriation; confiscatory taxation; withholding taxes
on dividends and interest; less extensive regulation of
foreign brokers, securities markets and issuers; costs
incurred in conversions between currencies; the
possibility of delays in settlement in foreign
securities markets; limitations on the use or transfer
of assets (including suspension of the ability to
transfer currency from a given country); the difficulty
of enforcing obligations in other countries; diplomatic
developments; and political or social instability.
Foreign economies may differ favorably or unfavorably
from the U.S. economy in various respects, and many
foreign securities are less liquid and their prices are
more volatile than comparable U.S. securities. From
time to time, foreign securities may be difficult to
liquidate rapidly without adverse price effects.
Certain costs attributable to foreign investing, such
as custody charges and brokerage costs, are higher than
those attributable to domestic investing.
Options and Futures Transactions
The Fund may engage in options and futures
transactions which are sometimes referred to as
derivative transactions. The Fund's options and
futures transactions may include instruments such as
stock index options and futures contracts. Such
transactions may be used for several reasons, including
hedging unrealized portfolio gains. The Fund will only
engage in futures and options transactions which must,
pursuant to regulations promulgated by the Commodity
Futures Trading Commission (the "CFTC"), constitute
bona fide hedging or other
<PAGE>
permissible risk management
transactions and will not enter into such transactions
if the sum of the initial margin deposits and premiums
paid for unexpired options exceeds 5% of the Fund's
total assets. In addition, the Fund will not enter
into options and futures transactions if more than 50%
of the Fund's net assets would be committed to such
instruments. The Fund may hold a futures or options
position until its expiration, or it can close out such
a position before then at current value if a liquid
secondary market is available. If the Fund cannot
close out a position, it may suffer a loss apart from
any loss or gain experienced at the time the Fund
decided to close the position. When required by
guidelines of the SEC or the CFTC, the Fund will set
aside permissible liquid assets in a segregated account
to secure its potential obligations under its futures
or options positions. Such liquid assets may include
cash, U.S. government securities and high-grade liquid
debt securities. The ability of the Fund to
effectively use options and futures is largely
dependent upon GCM's ability to correctly use such
instruments which may involve different skills than are
associated with securities generally. For a further
discussion of options and futures transactions, please
see the Statement of Additional Information.
Short Sales
The Fund may engage in short sale transactions in
securities listed on one or more national securities
exchanges, or in unlisted securities. Short selling
involves the sale of borrowed securities. At the time
a short sale is effected, the Fund incurs an obligation
to replace the borrowed security at whatever its price
may be at the time the Fund purchases it for delivery
to the lender. When a short sale transaction is closed
out, any gain or loss on the transaction is taxable as
a short term capital gain or loss. All short sales
will be fully collateralized, and no short sale will be
effected which would cause the aggregate market value
of all securities sold short to exceed 25% of the value
of the Fund's net assets. The Fund limits short sales
of any one issuer's securities to 2% of the Fund's
total assets and to 2% of any one class of the issuer's
securities.
Repurchase Agreements
The Fund may invest up to 25% of its net assets in
repurchase agreements entered into with Federal Reserve
Bank member banks and certain non-bank dealers. In a
repurchase agreement, the Fund buys a security at one
price, and at the time of sale, the seller agrees to
repurchase the obligation at a mutually agreed upon
time and price (usually seven days). The repurchase
agreement determines the yield during the purchaser's
holding period, while the seller's obligation to
repurchase is secured by the value of the underlying
security. GCM will monitor, on an ongoing basis, the
value of the underlying securities to ensure that the
value always equals or exceeds the repurchase price
plus accrued interest. Repurchase agreements could
involve certain risks in the event of a default or
insolvency of the other party to the agreement
including possible delays or restrictions upon the
Fund's ability to dispose of the underlying securities.
Although no definitive criteria are used, GCM reviews
the creditworthiness of the banks and non-bank dealers
with which the Fund enters into repurchase agreements
to evaluate those risks.
Convertible Securities
The Fund may invest up to 25% of its net assets in
securities convertible into common stocks. A
convertible security entitles the holder to receive
interest normally paid or accrued on the debt or the
dividend paid on preferred stock until the convertible
security matures or is redeemed, converted, or
exchanged. Convertible securities have unique
investment characteristics in that they generally have
higher yields than common stocks, but lower yields than
comparable non-convertible securities, are less subject
to fluctuation in value than the underlying stock, and
provide the potential for capital appreciation if the
market price of the underlying common stock increases.
A convertible security might be subject to redemption
at the option of the issuer at a price established in
the security's governing instrument. If a convertible
security held by the Fund is called for redemption, the
Fund will be required to permit the issuer to redeem
the security, convert it into the underlying common
stock or sell it to a third party.
Portfolio Turnover
The portfolio turnover rate indicates changes in
the Fund's investments. The turnover rate may vary
from year to year, as well as within a year. Under
normal market conditions, the Fund anticipates that its
portfolio turnover rate is not expected to exceed 110%
and is expected to range between 70 and 110%. A
turnover rate of 100% would occur, for example, if all
of the securities held by the Fund were replaced within
one year. It may be affected by sales of portfolio
securities necessary to meet cash requirements for
redemption of shares. In the event the Fund were to
have a turnover rate of 100% or more in any year, it
would result in the
<PAGE>
payment by the Fund of above
average transaction costs and could result in the
payment by Retail shareholders of above average amounts
of taxes on realized investment gains.
MANAGEMENT
Under the laws of the State of Delaware, the Board
of Trustees of the Trust is responsible for managing
its business and affairs. The Trust, on behalf of the
Fund, has entered into an investment advisory agreement
with GCM pursuant to which GCM manages the Fund's
investments and business affairs, subject to the
supervision of the Trust's Board of Trustees (the
"Investment Advisory Agreement"). The Board of
Trustees also oversees duties required by applicable
state and federal law.
GCM, a growth equity capital management firm, is
the investment advisor to the Fund. GCM was founded in
1989 and is located at 100 South Rockland Falls Road,
Rockland, Delaware 19732. Under the Investment
Advisory Agreement, the Trust, on behalf of the Fund,
compensates GCM for its investment advisory services at
the annual rate of 1.00% of the Fund's average daily
net assets. GCM has voluntarily agreed to waive its
management fee and/or reimburse the operating expenses
to the extent necessary to ensure that the Retail
class' total operating expenses do not exceed 2.00% of
the Fund's average daily net assets. Any such waiver
or reimbursement will have the effect of lowering the
overall expense ratio for the Retail class and
increasing the Retail class' overall return to
investors at the time any such amounts were waived
and/or reimbursed.
The Fund is currently co-managed by Charles S.
Cruice and Richard H. Gould. Mr. Cruice has been the
President of GCM since 1989. Mr. Cruice began his
career at Dean Witter Reynolds, Inc. in 1974 and joined
Friess Associates Inc., an investment management
company, in 1978. Mr. Cruice holds a BA from the
University of Denver. Mr. Gould has been a Vice
President of GCM since 1994. Prior to joining GCM, Mr.
Gould was an equity analyst with PNC Investment
Management and co-managed the PNC Small Cap Growth
Fund, currently called the Compass Small Cap Growth
Fund. Mr. Gould is a Chartered Financial Analyst and a
Chartered Market Technician. Mr. Gould received his BS
in 1982 from The Pennsylvania State University and his
MBA in Finance in 1985.
GCM provides continuous advice and recommendations
concerning the Fund's investments, and is responsible
for selecting the broker-dealers who execute the
portfolio transactions for the Fund. GCM provides
office space for the Trust and pays the salaries, fees
and expenses of all the Trust's officers and Trustees
who are interested persons of GCM. In addition to
providing investment advice to the Fund, GCM serves as
investment advisor to pension and profit-sharing plans,
and other institutional and private investors. As of
October 15, 1996, GCM had approximately $375 million
under management. Mr. Charles S. Cruice owns shares
representing more than 51% of the voting rights of GCM.
FUND EXPENSES
The Trust, on behalf of the Fund, is responsible
for all of its expenses, including: interest charges;
taxes; brokerage commissions; organizational expenses;
expenses of registering or qualifying shares for sale
with the states and the SEC; expenses of issue, sale,
repurchase or redemption of shares; expenses of
printing and distributing prospectuses to existing
shareholders; charges of custodians; expenses for
accounting, administrative, audit, and legal services;
fees for Trustees who are not interested persons of
GCM; expenses of fidelity bond coverage and other
insurance; expenses of indemnification; extraordinary
expenses; and costs of shareholder and Trustee
meetings.
HOW TO PURCHASE FUND SHARES
Retail class shares of the Fund may be purchased
at the Offering Price (as defined below) through any
dealer which has entered into a sales agreement with
AmeriPrime Financial Securities, Inc., in its capacity
as principal underwriter of the Fund's shares (the
"Distributor"), or through the Distributor directly.
Firstar Trust Company, the Fund's transfer agent (the
"Transfer Agent"), may also accept purchase
applications.
The minimum initial investment in the Fund's
Retail class is $10,000. Subsequent investments in the
amount of at least $250 may be made by mail or by wire.
For individual retirement accounts, the minimum initial
investment is $2,000. For investors using the
Automatic Investment Plan, the minimum investment is
$250.
<PAGE>
Applications will not be accepted unless they
are accompanied by payment in U.S. funds. Payment
should be made by check or money order drawn on a U.S.
bank, savings and loan, or credit union. Minimum
investments are waived for employee benefit plans
qualified under Sections 401, 403(b)(7) or 457 of the
Internal Revenue Code. These minimums can be changed
or waived by the Fund at any time. Shareholders will
be given at least 30 days' notice of any increase in
the minimum dollar amount of subsequent investments.
Offering Price
Retail class shares are sold on a continual basis
at the next Offering Price, which is the sum of the net
asset value per share (next computed following (i)
receipt of an order in proper form by a dealer, the
Distributor or the Transfer Agent, as the case may be,
and (ii) acceptance of such order by the Fund) and the
sales charge as set forth below. Net asset value per
share is calculated once daily as of the close of
trading (currently 4:00 p.m., Eastern Standard Time) on
each day the New York Stock Exchange is open. See
"DETERMINATION OF NET ASSET VALUE." The sales charge
imposed on purchases of Fund shares is as follows:
<TABLE>
<CAPTION>
Total Sales Charge
As a Percentage of As a Percentage of Portion of Total Offering
Amount of Sale at Offering Price of Net Asset Value of Price Retained by
Offering Price the Shares Purchased the Shares Purchased Dealers*
<S> <C> <C> <C>
Less than $100,000 3.00% 3.09% 3.00%
$100,000 but less than $250,000 2.00% 2.04% 2.00%
$250,000 but less than $500,000 1.00% 1.01% 1.00%
$500,000 and above No sales charge No sales charge No sales charge
</TABLE>
______________________________
* At the discretion of the Distributor, all sales
charges may at times be paid to the securities dealer,
if any, involved in the trade. A securities dealer
which is paid all or substantially all of the sales
charges may be deemed an "underwriter" under the
Securities Act of 1933, as amended.
Investors described under "Purchases at Net Asset
Value," below, may purchase shares of the Retail class
without the imposition of a sales charge. In addition,
no sales charge is imposed on the reinvestment of
dividends or capital gains. A confirmation indicating
the details of each purchase transaction will be sent
to you promptly following each transaction. If a
purchase order is placed through a dealer, the dealer
must promptly forward the order, together with payment,
to the Transfer Agent. In addition, investors
described under "Quantity Discounts in the Sales
Charge," below, may purchase shares of the Retail class
with reduced or waived sales charges.
Purchases at Net Asset Value
Retail class shares may be purchased at net asset
value without the imposition of a sales charge, upon
the written assurance that the purchase is made for
investment purposes and that the shares will not be
transferred or resold except through redemption or
repurchase by or on behalf of the Fund, by any of the
following: (i) employee benefit plans qualified under
Section 401(k) of the Internal Revenue Code of 1986, as
amended, subject to minimum requirements with respect
to the number of employees or amount of purchase, which
may be established by the Fund (currently, those
criteria require that the employer establishing the
plan have 1,000 or more eligible employees); (ii)
trustees, officers, and full-time employees of the
Trust, the Fund, GCM and the Distributor, and to
employees and principals of related organizations and
their families and certain parties related thereto,
including clients and related accounts of GCM; (iii)
registered securities brokers and dealers which have
entered into a sales agreement with the Distributor,
and their affiliates, for their investment account
only; (iv) registered personnel and employees of such
securities brokers and dealers referred to in (iii)
above, and their spouses and family members, in
accordance with the internal policies and procedures of
the employing securities dealer; (v) investment
advisers, financial planners and their clients who are
charged a management, consulting or other fee for their
services and clients of such investment advisers or
financial planners who place trades for their own
accounts if the accounts are linked to the master
account of such investment adviser or financial planner
on the books and records of the broker or agent; and
(vi) in connection with acquisition of the assets of or
merger or consolidation with a personal holding company
or a public or private investment company. Please call
1-800-497-3933 for more information on purchases at net
asset value.
<PAGE>
Quantity Discount in the Sales Charge
Right of Accumulation
The Fund permits sales charges on Retail class
shares to be reduced through rights of accumulation.
The reduced sales charges will be applicable once the
accumulated value of the account has reached $100,000.
For this purpose, the dollar amount of the qualifying
concurrent or subsequent purchase is added to the net
asset value of any other Retail class shares owned at
the time. The sales charge imposed on the Retail class
shares being purchased will then be at the rate
applicable to the aggregate of Retail class shares
purchased. For example, if the investor held Retail
class shares valued at $99,999 and purchased an
additional $20,000 of shares, the sales charge for the
$20,000 purchase would be at the next lower sales
charge on the schedule. There can be no assurance that
an investor will receive the cumulative discounts to
which the investor may be entitled unless the investor
or the investor's dealer makes a written request for
the discount at the time of placing the purchase order.
The right of accumulation may be amended or terminated
at any time. This particular privilege does not
entitle an investor to any adjustment in the sales
charge paid previously on purchases or shares of the
Fund. If the investor knows that additional purchases
will be made in the future, the investor may wish to
consider executing a Letter of Intent.
Letter of Intent
The reduced sales charges are also available to
Retail class investors who enter into a written Letter
of Intent providing for the purchase of Retail class
shares within a 13 month period. Retail class shares
purchased within a 90 day period prior the date of
receipt of the Letter of Intent by the Fund which are
still owned by the investor may also be included in
determining the applicable reduction in sales charge,
provided the investor or the investor's dealer notifies
the Fund of the prior purchases.
A Letter of Intent permits a Retail class investor
to establish an aggregate investment goal over a 13
month period. Each investment made during the period
will receive the reduced sales charge applicable to the
amount represented by the goal as a single investment.
A number of shares equaling 5% of the dollar amount of
the goal stated in the Letter of Intent will be held in
escrow by the Fund in the name of the investor. The
initial purchase under a Letter of Intent must be equal
to at least 5% of the investment goal.
The Letter of Intent does not obligate the
investor to purchase, or the Fund to sell, the
indicated amount of the investment goal. In the event
the Letter of Intent goal is not achieved within the 13
month period, the investor is required to pay the
difference between the sales charge otherwise
applicable to the purchases made during the period and
sales charges actually paid. The Fund is authorized by
the investor to liquidate a sufficient number of
escrowed shares to obtain such difference. If the goal
is exceeded and purchases pass the next sales charge
level, the sales charge on the entire amount of the
purchase that results in passing that level and on
subsequent purchases will be subject to further reduced
sales charges in the same manner as set forth under
"Right of Accumulation," but there will be no
retroactive reduction of sales charges on previous
purchases. At any time while a Letter of Intent is in
effect, an investor may increase the amount of the goal
by written notice to the Fund. In that event, shares
purchased during the previous 90 day period and still
owned by the investor will be included in determining
the applicable sales charge reduction. The 5% escrow
and minimum purchase requirements will be applicable to
the new stated goal. Investors electing to purchase
Retail class shares pursuant to a Letter of Intent
should carefully read the application for Letter of
Intent which is available from the Fund.
Initial Investment - Minimum $10,000
You may purchase Retail class shares by completing
the enclosed application and mailing it along with a
check or money order payable to "The Rockland Growth
Fund Retail Class," to your securities dealer, the
Distributor or the Transfer Agent, as the case may be.
If mailing to the Transfer Agent, please use the
following address: Firstar Trust Company, Mutual Fund
Services, P. O. Box 701, Milwaukee, Wisconsin 53201-
0701. In addition, overnight mail should be sent to
the following address: The Rockland Growth Fund,
Firstar Trust Company, Mutual Fund Services, Third
Floor, 615 East Michigan Street, Milwaukee, Wisconsin
53202. The Fund does not consider the U.S. Postal
service or other independent delivery services to be
its agents. Therefore, deposit in the mail or with
such services, or receipt at the Transfer Agent's post
office box, of purchase applications does not
constitute receipt by the Transfer Agent or the Fund.
Do not mail letters by overnight courier to the post
office box.
<PAGE>
If the securities dealer you have chosen to
purchase Retail class shares through has not entered
into a sales agreement with the Distributor, such
dealer may, nevertheless, offer to place your order for
the purchase of Fund shares. Purchases made through
such dealers will be affected at the Offering Price.
Such dealers may also charge a transaction fee, as
determined by the dealer. That fee will be in addition
to the sales charge payable by you upon purchase, and
may be avoided if shares are purchased through a dealer
who has entered into a sales agreement with the
Distributor or through the Transfer Agent.
If your check does not clear, you will be charged
a $20.00 service fee. You will also be responsible for
any losses suffered by the Retail class as a result.
Neither cash nor third-party checks will be accepted.
All applications to purchase Retail class shares are
subject to acceptance by the Fund and are not binding
until so accepted. The Fund reserves the right to
decline or accept a purchase order application in whole
or in part.
Wire Purchases
You may purchase Retail class shares by wire. The
following instructions should be followed when wiring
funds to the Transfer Agent for the purchase of Retail
class shares:
Wire to: Firstar Bank
ABA Number 075000022
Credit: Firstar Trust Company
Account 112-952-137
Further Credit: The Rockland Growth Fund,
Retail Class
(shareholder account number)
(shareholder name/account
registration)
Please call 1-800-497-3933 prior to wiring any funds to
notify the Transfer Agent that the wire is coming and
to verify the proper wire instructions so that the wire
is properly applied when received. The Fund is not
responsible for the consequences of delays resulting
from the banking or Federal Reserve wire system.
Telephone Purchases
You may purchase Retail class shares by moving
money from your bank account to your Fund account.
Only bank accounts held at domestic financial
institutions that are Automated Clearing House (ACH)
members can be used for telephone transactions. To
have your Retail class shares purchased at the net
asset value determined as of the close of regular
trading on a given date, the Transfer Agent must
receive both the purchase order and payment by
Electronic Funds Transfer through the ACH System before
the close of regular trading on such date. Most
transfers are completed within 3 business days.
Telephone transactions may not be used for initial
purchases of Retail class shares.
Automatic Investment Plan - Minimum $250
The Automatic Investment Plan ("AIP") allows you
to make regular, systematic investments in the Fund
from your bank checking or NOW account. The Fund will
reduce the minimum initial investment to $250 for
investors using the AIP. To establish the AIP,
complete the appropriate section in the Fund's
application. Under certain circumstances (such as
discontinuation of the AIP before the Retail class
minimum initial investment is reached, or, after
reaching the minimum initial investment, the account
balance is reduced to less than $500), the Fund
reserves the right to close the investor's account.
Prior to closing any account for failure to reach the
minimum initial investment, the Fund will give the
investor written notice and 60 days in which to
reinstate the AIP or otherwise reach the minimum
initial investment. You should consider your financial
ability to continue in the AIP until the minimum
initial investment amount is met because the Fund has
the right to close an investor's account for failure to
reach the minimum initial investment. Such closing may
occur in periods of declining share prices.
Under the AIP, you may choose to make investments
on the day of your choosing (or the next business day
thereafter) from your financial institution in amounts
of $250 or more. There is no service fee for
participating in the AIP. However, a service fee of
$20 will be deducted from your Fund account for any AIP
purchase that does not clear due to insufficient funds
or, if prior to notifying the Fund in writing or by
telephone to terminate the plan, you close your bank
account or in any manner prevent withdrawal of funds
from the
<PAGE>
designated checking or NOW account. You can
set up the AIP with any financial institution that is a
member of the Automated Clearing House.
The AIP is a method of using dollar cost averaging
which is an investment strategy that involves investing
a fixed amount of money at a regular time interval.
However, a program of regular investment cannot ensure
a profit or protect against a loss from declining
markets. By always investing the same amount, you will
be purchasing more shares when the price is low and
fewer shares when the price is high. Since such a
program involves continuous investment regardless of
fluctuating share values, you should consider your
financial ability to continue the program through
periods of low share price levels.
Subsequent Investments - Minimum $250
Additions to your account may be made by mail or
by wire. When making an additional purchase by mail,
enclose a check payable to "The Rockland Growth Fund
Retail Class" along with the Additional Investment Form
provided on the lower portion of your account
statement. To make an additional purchase by wire,
please call 1-800-497-3933 for complete wiring
instructions.
DETERMINATION OF NET ASSET VALUE
The net asset value per share for the Retail class
is determined as of the close of trading (currently
4:00 p.m. Eastern Standard Time) on each day the New
York Stock Exchange ("NYSE") is open for business.
Purchase orders received or shares tendered for
redemption on a day the NYSE is open for trading, prior
to the close of trading on that day, will be valued as
of the close of trading on that day. Applications for
purchase of Retail shares and requests for redemption
of Retail shares received after the close of trading on
the NYSE will be valued as of the close of trading on
the next day the NYSE is open. Net asset value is
calculated by taking the fair value of the Retail
class' total assets, including interest or dividends
accrued, but not yet collected, less all liabilities,
and dividing by the total number of shares outstanding.
The result, rounded to the nearest cent, is the net
asset value per share. In determining net asset value,
expenses are accrued and applied daily and securities
and other assets for which market quotations are
available are valued at market value. Common stocks,
other equity-type securities, and securities sold short
are valued at the last sales price on the national
securities exchange or NASDAQ on which such securities
are primarily traded; provided, however, securities
traded on an exchange or NASDAQ for which there were no
transactions on a given day, any security sold short
for which there were no transactions on a given day and
securities not listed on an exchange or NASDAQ, are
valued at the most recent mean between the bid and
asked price. Options purchased or written by the Fund
are valued at the average of the current bid and asked
prices. Any securities or other assets for which
market quotations are not readily available are valued
at fair value as determined in good faith by the Board
of Trustees. Debt securities having remaining
maturities of 60 days or less when purchased are valued
by the amortized cost method when the Board of Trustees
determines that the fair market value of such
securities is their amortized cost. Under this method
of valuation, a security is initially valued at its
acquisition cost, and thereafter, amortization of any
discount or premium is assumed each day, regardless of
the impact of fluctuating interest rates on the market
value of the security.
HOW TO REDEEM SHARES
In General
Investors may request redemption of part or all of
their Retail class shares at any time at the next
determined net asset value. See "DETERMINATION OF NET
ASSET VALUE." The Fund normally will mail your
redemption proceeds the next business day and, in any
event, no later than seven business days after receipt
of a redemption request in good order. However, when a
purchase has been made by check, the Fund may hold
payment on redemption proceeds until it is reasonably
satisfied that the check has cleared, this may take up
to twelve days.
Redemptions may also be made through brokers or
dealers. Such redemptions will be effected at the net
asset value next determined after receipt by the Retail
class of the broker or dealer's instruction to redeem
shares. In addition, some brokers or dealers may
charge a fee in connection with such redemptions.
<PAGE>
Written Redemption
For most redemption requests, an investor need
only furnish a written, unconditional request to redeem
his or her Retail class shares at net asset value to
the Fund's Transfer Agent: Firstar Trust Company,
Mutual Fund Services, P. O. Box 701, Milwaukee,
Wisconsin 53201-0701. Overnight mail should be sent to
The Rockland Growth Fund, Firstar Trust Company, Mutual
Fund Services, Third Floor, 615 East Michigan Street,
Milwaukee, Wisconsin 53202. Requests for redemption
must be signed exactly as the Retail class shares are
registered, including the signature of each joint
owner. You must also specify the number of shares or
dollar amount to be redeemed. Redemption proceeds made
by written redemption request may also be wired to a
commercial bank that you have authorized on your
account application. The Transfer Agent charges a
$10.00 service fee for wire transactions. Additional
documentation may be requested from corporations,
executors, administrators, trustees, guardians, agents,
or attorneys-in-fact. The Fund does not consider the
U.S. Postal Service or other independent delivery
services to be its agents. Therefore, deposit in the
mail or with such services, or receipt at the Transfer
Agent's post office box, of redemption requests does
not constitute receipt by the Transfer Agent or the
Fund. Do not mail letters by overnight courier to the
post office box. Any written redemption requests
received within 15 days after an address change must be
accompanied by a signature guarantee.
Telephone Redemption
Retail class shares may also be redeemed by
calling the Transfer Agent at 1-800-497-3933. In order
to utilize this procedure, a shareholder must have
previously elected this option in writing, which
election will be reflected in the records of the
Transfer Agent, and the redemption proceeds must be
mailed directly to the shareholder or transmitted to
the shareholder's predesignated account. To change the
designated account, send a written request with
signature(s) guaranteed to the Transfer Agent. To
change the address, call the Transfer Agent or send a
written request with signature(s) guaranteed to the
Transfer Agent. No telephone redemptions will be
allowed within 15 days of such a change. The Fund
reserves the right to limit the number of telephone
redemptions by an investor. Once made, telephone
redemption requests may not be modified or canceled.
The Transfer Agent will employ reasonable
procedures to confirm that instructions communicated by
telephone are genuine. Such procedures may include
requiring some form of personal identification prior to
acting upon telephone instructions, providing written
confirmations of all such transactions, and/or tape
recording all telephone instructions. Assuming
procedures such as the above have been followed, the
Fund will not be liable for any loss, cost, or expense
for acting upon an investor's telephone instructions or
for any unauthorized telephone redemption. The Fund
reserves the right to refuse a telephone redemption
request if so advised.
Signature Guarantees
Signature guarantees are required for: (i)
redemption requests to be mailed or wired to a person
other than the registered owner(s) of the shares; (ii)
redemption requests to be mailed or wired to other than
the address of record and (iii) any redemption request
if a change of address request has been received by the
Fund or Transfer Agent within the last 15 days. A
signature guarantee may be obtained from any eligible
guarantor institution, as defined by the SEC. These
institutions include banks, savings associations,
credit unions, brokerage firms and others.
Your account may be terminated by the Fund on not
less than 30 days' notice if, at the time of any
redemption of shares in your account, the value of the
remaining shares in the account falls below $10,000.
Upon any such termination, a check for the redemption
proceeds will be sent to the account of record within
seven days of the redemption.
DISTRIBUTION PLAN
The Fund has adopted a plan pursuant to Rule 12b-1
under the Investment Company Act (the "Plan"), which
requires the Retail class to pay the Distributor a
distribution fee of up to 0.25% of its average daily
net assets computed on an annual basis. Under the
terms of the Plan, the Distributor is authorized to, in
turn, pay all or a portion of this fee to any
securities dealer, financial institution or any other
person (the "Recipient") who renders assistance in
distributing or promoting the sale of Retail class
shares pursuant to a written agreement (the "Rule 12b-1
Related Agreement"). To the extent such fee is not
paid to such persons, the Distributor may use the fee
for its own distribution expenses incurred in
connection with the sale of the shares, although it is
the
<PAGE>
Distributor's current intention to pay out all or
most of the fee. A form of the 12b-1 Related Agreement
referred to above has been approved by a majority of
the Board of Trustees of the Trust, and of the members
of the Board who are not "interested persons" of the
Trust as defined in the Investment Company Act and who
have no direct or indirect financial interest in the
operation of the Plan or any related agreements (the
"Disinterested Trustees") voting separately.
Accordingly, the Distributor may enter into 12b-1
Related Agreements with securities dealers, financial
institutions or other persons without further Board
approval.
Payment of the distribution fee is to be made
quarterly, within 30 days after the close of the
quarter for which the fee is payable, upon the
Distributor forwarding to the Board of Trustees a
written report of all amounts expended pursuant to the
Plan; provided, however, that the aggregate payments by
the Retail class under the Plan in any month to the
Distributor and all Recipients may not exceed 0.25% of
the Retail class' average net assets for that quarter;
and provided further that no fee may be paid in excess
of the distribution expenses as set forth in the
quarterly written report. Thus, the Plan does not
provide for the payment of distribution fees in
subsequent periods that relate to expenses incurred in
prior periods.
The Plan, and any Rule 12b-1 Related Agreement
which is entered into, will continue in effect for a
period of more than one year only so long as its
continuance is specifically approved at least annually
by a vote of a majority of the Trust's Board of
Trustees, and of the Disinterested Trustees, cast in
person at a meeting called for the purpose of voting on
the Plan, or the Rule 12b-1 Related Agreement, as
applicable. In addition, the Plan, and any Rule 12b-1
Related Agreement, may be terminated at any time,
without penalty, by vote of a majority of the
outstanding voting securities of the Retail class, or
by vote of a majority of Disinterested Trustees, on not
more than sixty (60) days' written notice.
SHAREHOLDER REPORTS
You will be provided at least semi-annually with a
report showing the Fund's holdings and annually after
the close of the Trust's fiscal year, which ends
September 30, with an annual report containing audited
financial statements. An individual account statement
will be sent to you by the Transfer Agent after each
purchase or redemption of Retail class shares as well
as on a quarterly basis. You will also receive an
annual statement after the end of the calendar year
listing all of your transactions in Retail class shares
during such year.
If you have questions about your account, you
should call the Transfer Agent at 1-800-497-3933.
Investors who have general questions about the Fund or
the Trust or desire additional information should write
to The Rockland Funds Trust, P.O. Box 701, Milwaukee,
WI 53201-0701.
INDIVIDUAL RETIREMENT ACCOUNTS
The Fund offers through Firstar Trust Company, in its
capacity as custodian of Fund assets (the "Custodian"),
an Individual Retirement Account ("IRA") for adoption
by individuals. Individuals under age 70 1/2 with
earned income, may contribute money to an IRA. You are
allowed to contribute up to the lesser of $2,000 or
100% of your earned income each year to an IRA.
Individuals who are covered by existing retirement
plans, or have spouses covered by such plans, and whose
income exceed certain amounts, are not permitted to
deduct their IRA contributions for income tax purposes.
However, whether or not an individual's contributions
are deductible, the earnings in his or her IRA are not
taxed until the account is distributed.
A complete description of the IRA, as well as the
applicable service fee is available from the Fund and
may be obtained by calling 1-800-497-3933 or writing to
the Fund at P. O. Box 701, Milwaukee, Wisconsin 53201-
0701.
Please note that early withdrawals from an IRA may
result in adverse tax consequences.
INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX TREATMENT
The Trust intends to qualify for treatment as a
"Regulated Investment Company" under Subchapter M of
the Internal Revenue Code, and, if so qualified, will
not be liable for federal income taxes to the extent
earnings are distributed on a timely basis.
<PAGE>
For federal income tax purposes, all dividends
paid by the Trust, on behalf of the Fund's Retail
class, and net realized short-term capital gains are
taxable as ordinary income whether reinvested or
received in cash unless you are exempt from taxation or
entitled to a tax deferral. Dividends and other
distributions on both classes of Fund shares are
calculated at the same time and in the same manner.
Dividends on Institutional class shares are expected to
be higher than those on the Retail class because of the
higher expenses resulting from the distribution and
sales charges borne by the Retail class shares.
Distributions paid by the Trust, on behalf of the
Fund's Retail class, from net realized long-term
capital gains, whether received in cash or reinvested
in additional shares, are taxable as such. The capital
gain holding period is determined by the length of time
the Fund has held the security and not the length of
time you have held shares in the Retail class.
Investors are informed annually as to the amount and
nature of all dividends and capital gains paid during
the prior year. Such gains and dividends may also be
subject to state or local taxes. If you are not
required to pay taxes on your income, you will not be
required to pay federal income taxes on the amounts
distributed to you.
Dividends are usually paid, and capital gains, if
any, are usually distributed annually in December.
When a dividend or capital gain is distributed, the
Retail class' net asset value will decrease by the
amount of the payment. A dividend paid shortly after
the purchase of Retail shares will reduce the net asset
value of the shares purchased by the amount of the
dividend. All dividends or capital gains distributions
paid on the Retail class shares will automatically be
reinvested in additional shares of the Retail class at
the then prevailing net asset value unless an investor
specifically requests that either dividends or capital
gains or both be paid in cash. The election to receive
dividends or reinvest them may be changed by writing to
the Fund at P.O. Box 701, Milwaukee, Wisconsin 53201-
0701. Such notice must be received at least 10 days
prior to the record date of any dividend or capital
gain distribution.
If you do not furnish the Fund with your correct
social security number or employer identification
number, the Fund is required by federal law to withhold
federal income tax at a rate of 31% from your
distributions and redemption proceeds. If you do not
have a social security number, you should indicate on
the purchase application that an application to obtain
a number is pending. The Fund is required to withhold
taxes if a number is not delivered to the Fund within 7
days.
This section is not intended to be a full
discussion of federal income tax laws and the effect of
such laws on you. There may be other federal, state,
or local tax considerations applicable to a particular
investor. You are urged to consult your own tax
advisor.
FUND ORGANIZATION
The Trust was organized as a Delaware business
trust under Delaware law by Certificate of Trust on
July 31, 1996. The Board of Trustees is authorized to
issue an unlimited number of shares of beneficial
interest in separate series, par value $0.001 per
share, and to create classes of shares within each
series. Currently the Fund is the only series of the
Trust. Shares of the Retail class are offered to
investors through the Fund's underwriter, subject to a
$10,000 minimum initial investment and certain sales
charges. Each class of shares represent interests in
the assets of the Fund and have identical voting,
dividend, liquidation and other rights on the same
terms and conditions, except that the distribution fees
related to the Retail class shares are borne solely by
that class. If the Trust issues additional series, the
assets belonging to each series of shares will be held
separately by the Custodian, and in effect each series
will be a separate fund.
Each share, irrespective of series or class, is
entitled to one vote on all questions, except that
certain matters must be voted on separately by the
series or class of shares affected, and matters
affecting only one series or class are voted upon only
by that series or class. All shares have non-
cumulative voting rights, which means that the holders
of more than 50% of the shares voting for the election
of Trustees can elect all of the Trustees if they
choose to do so, and in such event, the holders of the
remaining shares will not be able to elect any person
or persons to the Board of Trustees.
The Trust will not hold annual shareholders'
meetings except when required by the Investment Company
Act of 1940. There will normally be no meetings of
shareholders for the purpose of electing Trustees
unless and until such time as less than a majority of
the Trustees holding office have been elected by the
shareholders, at which time the Trustees then in office
will call a shareholders' meeting for the election of
Trustees. The Trust has adopted procedures in its
Bylaws for the removal of Trustees by the shareholders.
As of October 21, 1996, Mr. Cruice and Mr. Gould each
owned controlling interests in the Fund.
<PAGE>
ADMINISTRATOR
Pursuant to the Fund Administration and Servicing
Agreement, Firstar Trust Company (the "Administrator"),
Mutual Fund Services, Third Floor, 615 East Michigan
Street, Milwaukee, Wisconsin 53202, prepares and files
all federal and state tax returns, oversees the Fund's
insurance relationships, participates in the
preparation of the registration statement, proxy
statements and reports, prepares compliance filings
relating to the registration of the securities of the
Retail class pursuant to state securities laws,
compiles data for and prepares notices to the SEC,
prepares the financial statements for the annual and
semi-annual reports to the SEC and current investors,
monitors the Retail class' expense accruals and
performs securities valuations, monitors the Trust's
status as a registered investment company under
Subchapter M of the Internal Revenue Code and monitors
compliance with the Fund's investment policies and
restrictions, from time to time, and generally assists
in the Fund's administrative operations. The
Administrator, at its own expense and without
reimbursement from the Fund, furnishes office space and
all necessary office facilities, equipment, supplies
and clerical and executive personnel for performing the
services required to be performed by it under the Fund
Administration and Servicing Agreement. For the
foregoing services, the Administrator receives from the
Fund a fee, computed daily and payable monthly based on
the Fund's average net assets at the annual rate of .06
of 1% on the Fund's average net assets, subject to an
annual minimum of $30,000, plus out-of-pocket expenses.
CUSTODIAN, TRANSFER AGENT, AND FUND ACCOUNTANT
Firstar Trust Company, Mutual Fund Services, Third
Floor, 615 East Michigan Street, Milwaukee, Wisconsin
53202, acts as custodian of the Fund's assets and as
dividend-disbursing, transfer agent, and fund
accountant for the Fund.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc. (the
"Distributor"), 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, serves as the principal
underwriter to distribute the Fund's shares. Pursuant
to an Underwriting Agreement with the Fund, the
Distributor will be paid an annual fee of $18,000.
Pursuant to the Distribution Plan adopted by the Retail
class pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "Plan"), the Retail class is
authorized to expend up to 0.25% annually of the Retail
class' average daily net assets to cover expenses
incurred in connection with the distribution of the
Retail class' shares, including the Distributor's fee.
Rule 12b-1 regulates the manner in which a mutual fund
may assume the costs of distributing and promoting the
sale of its shares. Under the Plan, the Distributor is
appointed the Retail class' agent to distribute shares
and provides office space and equipment, personnel,
literature distribution and advertising to promote the
sale of the Retail class' shares. Payments under the
Plan are made to compensate the Distributor for its
services, to reimburse the Distributor for its expenses
and for the fees it pays to dealers and other firms for
selling Retail class shares, servicing shareholders and
maintaining shareholder accounts. The 12b-1 fee may
also be used to defray the costs of advertising, sales
literature and sales meetings. In addition, the Plan
also provides that GCM, in its sole discretion, may
utilize its own resources, including profits from its
advisory fees, for distributing and promoting sales of
Retail class shares.
COMPARISON OF INVESTMENT RESULTS
The Retail class may from time to time compare its
investment results to various passive indices or other
mutual funds and cite such comparisons in reports to
shareholders, sales literature, and advertisements.
The results may be calculated on the basis of average
annual total return, total return, or cumulative total
return.
Average annual total return and total return
figures assume the reinvestment of all dividends and
measure the net investment income generated by, and the
effect of, any realized and unrealized appreciation or
depreciation of the underlying investments in the
Retail class over a specified period of time. Average
annual total return figures are annualized and
therefore represent the average annual percentage
change over the specified period. Total return figures
are not annualized and represent the aggregate
percentage or dollar value change over the period.
Cumulative total return simply reflects the Retail
class' performance over a stated period of time.
<PAGE>
Average annual total return, total return and
cumulative total return are based upon the historical
results of the Retail class and are not necessarily
representative of the future performance of the Retail
class. Additional information concerning the Retail
class' performance appears in the Statement of
Additional Information.
- ---------------------------------
The Fund reserves the right to change any of
its policies, practices and procedures
described in this Prospectus, including the
Statement of Additional Information, without
shareholder approval except in those
instances where shareholder approval is
expressly required.
<PAGE>
TRUSTEES
Mr. Charles Cruice
Mr. Richard Gould
Dr. Peter Utsinger
Mr. Richard Vague
Mr. Robert Harrison
OFFICERS
Mr. Charles S. Cruice, President
Mr. Richard H. Gould, Treasurer
Mr. Jeffrey Rugen, Secretary
INVESTMENT ADVISOR
Greenville Capital Management, Inc.
100 South Rockland Falls Road
Rockland, DE 19732
CUSTODIAN, ADMINISTRATOR, TRANSFER AGENT
AND DIVIDEND-DISBURSING AGENT
Firstar Trust Company
Mutual Fund Services
Third Floor
615 East Michigan Street
Milwaukee, WI 53202
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP
777 E. Wisconsin Avenue
Milwaukee, WI 53202
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 N. Water Street
Milwaukee, WI 53202
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
The Rockland Growth Fund
a series of
The Rockland Funds Trust
sponsored by
Greenville Capital Management, Inc.
P. O. Box 701
Milwaukee, Wisconsin 53201-0701
1-800-497-3933
This Statement of Additional Information is not a
prospectus and should be read in conjunction with the
Prospectus of The Rockland Growth Fund (the "Fund"), a
series of The Rockland Funds Trust (the "Trust") dated
November __, 1996. Requests for copies of the
Prospectus should be made by writing to the Fund at the
address listed above or by calling 1-800-497-3933.
This Statement of Additional Information is dated November __, 1996.
<PAGE>
THE ROCKLAND GROWTH FUND
TABLE OF CONTENTS
Page No.
INVESTMENT RESTRICTIONS 4
INVESTMENT POLICIES AND TECHNIQUES 5
ILLIQUID SECURITIE 5
SHORT-TERM FIXED INCOME SECURITIES 6
HEDGING STRATEGIES 7
GENERAL DESCRIPTION OF HEDGING STRATEGIES 7
GENERAL LIMITATIONS ON FUTURES AND OPTIONS
TRANSACTIONS 7
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS 7
PURCHASING PUT AND CALL OPTIONS 8
STOCK INDEX OPTIONS 8
SHORT SALES, SHORT SALES AGAINST THE BOX AND
WRITING COVERED CALL AND PUT OPTIONS 10
CERTAIN CONSIDERATIONS REGARDING OPTIONS 12
FEDERAL TAX TREATMENT OF OPTIONS 12
FUTURES CONTRACTS 12
OPTIONS ON FUTURE 14
FEDERAL TAX TREATMENT OF FUTURES CONTRACTS 15
WARRANTS 16
WHEN-ISSUED SECURITIES 16
REPURCHASE OBLIGATIONS 16
UNSEASONED COMPANIES 16
TRUSTEES AND OFFICERS OF THE TRUST 17
PRINCIPAL SHAREHOLDERS 18
INVESTMENT ADVISOR 18
UNDERWRITER 19
DISTRIBUTION PLAN 19
DESCRIPTION OF PLAN 19
ANTICIPATED BENEFITS TO THE RETAIL CLASS 20
PORTFOLIO TRANSACTIONS AND BROKERAGE 20
CUSTODIAN 21
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT 21
TAXES 21
DETERMINATION OF NET ASSET VALUE 22
<PAGE>
SHAREHOLDER MEETINGS 22
PERFORMANCE INFORMATION 23
INDEPENDENT ACCOUNTANTS 24
FINANCIAL STATEMENTS 24
- ---------------------
No person has been authorized to give any
information or to make any representations other than
those contained in this Statement of Additional
Information and the Prospectus dated November ____,
1996, and if given or made, such information or
representations may not be relied upon as having been
authorized by the Fund.
- ----------------------
This Statement of Additional Information does
not constitute an offer to sell securities.
- ---------------------
<PAGE>
INVESTMENT RESTRICTIONS
The investment objective of The Rockland Growth
Fund (the "Fund") is to seek capital appreciation. The
Fund's investment objective and policies are described
in detail in the Prospectuses for its two classes of
shares under the caption "INVESTMENT OBJECTIVE AND
POLICIES." The following is a complete list of the
Fund's fundamental investment limitations which cannot
be changed without shareholder approval.
The Fund may not:
1. With respect to 75% of its total assets,
purchase securities of any issuer (except
securities of the U.S. government or any agency or
instrumentality thereof) if, as a result, (i) more
than 5% of the Fund's total assets would be
invested in the securities of that issuer, or (ii)
the Fund would hold more than 10% of the
outstanding voting securities of that issuer.
2. Borrow money, except that the Fund may
(i) borrow money from banks for temporary or
emergency purposes (but not for leverage or the
purchase of investments) and (ii) make other
investments or engage in other transactions
permissible under the Investment Company Act of
1940 which may involve a borrowing, provided that
the combination of (i) and (ii) shall not exceed
33 1/3% of the value of the Fund's total assets
(including the amount borrowed), less the Fund's
liabilities (other than borrowings).
3. Act as an underwriter of another issuer's
securities, except to the extent that the Fund may
be deemed to be an underwriter within the meaning
of the Securities Act of 1933 in connection with
the purchase and sale of portfolio securities.
4. Make loans to other persons, except
through (i) the purchase of investments
permissible under the Fund's investment policies,
(ii) repurchase agreements, or (iii) the lending
of portfolio securities, provided that no such
loan of portfolio securities may be made by the
Fund if, as a result, the aggregate of such loans
would exceed 33 1/3% of the value of the Fund's
total assets.
5. Purchase or sell physical commodities
unless acquired as a result of ownership of
securities or other instruments (but this shall
not prevent the Fund from purchasing or selling
options, futures contracts, or other derivative
instruments, or from investing in securities or
other instruments backed by physical commodities).
6. Purchase or sell real estate unless
acquired as a result of ownership of securities or
other instruments (but this shall not prohibit the
Fund from purchasing or selling securities or
other instruments backed by real estate or of
issuers engaged in real estate activities).
7. Issue senior securities, except as
permitted under the Investment Company Act of
1940.
8. Purchase the securities of any issuer if,
as a result, more than 25% of the Fund's total
assets would be invested in the securities of
issuers whose principal business activities are in
the same industry.
With the exception of the investment restriction
set out in item 2 above, if a percentage restriction is
adhered to at the time of investment, a later increase
in percentage resulting from a change in market value
of the investment or the total assets will not
constitute a violation of that restriction.
The following investment limitations may be
changed by the Trust's Board of Trustees without
shareholder approval.
The Fund may not:
1. Sell more than 25% of the Fund's assets
short, unless the Fund owns or has the right to
obtain securities equivalent in kind and amount to
the securities sold short, and provided that
transactions in options, futures contracts,
options on futures contracts, or other derivative
instruments are not deemed to constitute selling
securities short.
2. Purchase securities on margin, except
that the Fund may obtain such short-term credits
as are necessary for the clearance of
transactions; and provided that margin deposits in
connection with futures
<PAGE>
contracts, options on
futures contracts, or other derivative instruments
shall not constitute purchasing securities on
margin.
3. Pledge, mortgage or hypothecate any
assets owned by the Fund except as may be
necessary in connection with permissible
borrowings or investments and then such pledging,
mortgaging, or hypothecating may not exceed 33
1/3% of the Fund's total assets at the time of the
borrowing or investment.
4. Purchase the securities of any issuer
(other than securities issued or guaranteed by
domestic or foreign governments or political
subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the
securities of issuers that, including predecessors
or unconditional guarantors, have a record of less
than three years of continuous operation. This
policy does not apply to securities of pooled
investment vehicles or mortgage or asset-backed
securities.
5. Invest in illiquid securities if, as a
result of such investment, more than 10% of the
Fund's net assets would be invested in illiquid
securities.
6. Purchase securities of open-end or closed-
end investment companies except in compliance with
the Investment Company Act of 1940 and applicable
state law.
7. Enter into futures contracts or related
options if more than 50% of the Fund's net assets
would be represented by futures contracts or more
than 5% of the Fund's net assets would be
committed to initial margin deposits and premiums
on futures contracts and related options.
8. Invest in direct interests in oil, gas or
other mineral exploration programs or leases;
however, the Fund may invest in the securities of
issuers that engage in these activities.
9. Purchase securities when borrowings
exceed 5% of its total assets.
INVESTMENT POLICIES AND TECHNIQUES
The following information supplements the
discussion of the Fund's investment objective,
policies, and techniques that are described in the
Prospectuses under the captions "INVESTMENT OBJECTIVE
AND POLICIES" and "INVESTMENT TECHNIQUES AND RISKS."
Illiquid Securities
The Fund may invest up to 10% of its net assets in
illiquid securities (i.e., securities that are not
readily marketable). For purposes of this restriction,
illiquid securities include restricted securities
(securities the disposition of which is restricted
under the federal securities laws). The Board of
Trustees or its delegate has the ultimate authority to
determine, to the extent permissible under the federal
securities laws, which securities are liquid or
illiquid for purposes of this 10% limitation. Certain
securities exempt from registration or issued in
transactions exempt from registration under the
Securities Act of 1933, as amended (the "Securities
Act"), including securities that may be resold pursuant
to Rule 144A under the Securities Act, may be
considered liquid. The Board of Trustees of the Trust
has delegated to Greenville Capital Management, Inc.
("GCM") the day-to-day determination of the liquidity
of any Rule 144A security, although it has retained
oversight and ultimate responsibility for such
determinations. Although no definitive liquidity
criteria are used, the Board of Trustees has directed
GCM to look to such factors as (i) the nature of the
market for a security (including the institutional
private resale market), (ii) the terms of certain
securities or other instruments allowing for the
disposition to a third party or the issuer thereof
(e.g., certain repurchase obligations and demand
instruments), (iii) the availability of market
quotations (e.g., for securities quoted in the PORTAL
system), and (iv) other permissible relevant factors.
Restricted securities may be sold only in
privately negotiated transactions or in a public
offering with respect to which a registration statement
is in effect under the Securities Act. Where
registration is required, the Fund may be obligated to
pay all or part of the registration expenses and a
considerable period may elapse between the time of the
decision to sell and the time the Fund may be permitted
to sell a security under an effective registration
statement. If, during such a period, adverse market
conditions were to develop, the Fund might obtain a
less favorable price than prevailed when it decided to
sell. Restricted securities will be priced at fair
value as determined in good faith by the Board of
Trustees of the Trust. If through the appreciation of
restricted securities or the depreciation of
unrestricted securities, the Fund should be in a
position where more than 10% of the value of its net
assets are
<PAGE>
invested in illiquid securities, including
restricted securities which are not readily marketable,
the Fund will take such steps as is deemed advisable,
if any, to protect liquidity.
Short-Term Fixed Income Securities
The Fund may invest up to 100% of its assets in
short-term fixed income securities, including without
limitation, the following:
1. U.S. government securities, including
bills, notes and bonds differing as to maturity
and rates of interest, which are either issued or
guaranteed by the U.S. Treasury or by U.S.
government agencies or instrumentalities. U.S.
government agency securities include securities
issued by (a) the Federal Housing Administration,
Farmers Home Administration, Export-Import Bank of
the United States, Small Business Administration,
and the Government National Mortgage Association,
whose securities are supported by the full faith
and credit of the United States; (b) the Federal
Home Loan Banks, Federal Intermediate Credit
Banks, and the Tennessee Valley Authority, whose
securities are supported by the right of the
agency to borrow from the U.S. Treasury; (c) the
Federal National Mortgage Association, whose
securities are supported by the discretionary
authority of the U.S. government to purchase
certain obligations of the agency or
instrumentality; and (d) the Student Loan
Marketing Association, the Inter-American
Development Bank, and the International Bank for
Reconstruction and Development, whose securities
are supported only by the credit of such agencies.
While the U.S. government provides financial
support to such U.S. government-sponsored agencies
or instrumentalities, no assurance can be given
that it always will do so since it is not so
obligated by law. The U.S. government, its
agencies, and instrumentalities do not guarantee
the market value of their securities, and
consequently, the value of such securities may
fluctuate.
2. Certificates of Deposit issued against
funds deposited in a bank or savings and loan
association. Such certificates are for a definite
period of time, earn a specified rate of return,
and are normally negotiable. If such certificates
of deposit are non-negotiable, they will be
considered illiquid securities and be subject to
the Fund's 10% restriction on investments in
illiquid securities. Pursuant to the certificate
of deposit, the issuer agrees to pay the amount
deposited plus interest to the bearer of the
certificate on the date specified thereon. Under
current FDIC regulations, the maximum insurance
payable as to any one certificate of deposit is
$100,000; therefore, certificates of deposit
purchased by the Fund will not generally be fully
insured.
3. Bankers' acceptances which are short-term
credit instruments used to finance commercial
transactions. Generally, an acceptance is a time
draft drawn on a bank by an exporter or an
importer to obtain a stated amount of funds to pay
for specific merchandise. The draft is then
"accepted" by a bank that, in effect,
unconditionally guarantees to pay the face value
of the instrument on its maturity date. The
acceptance may then be held by the accepting bank
as an asset or it may be sold in the secondary
market at the going rate of interest for a
specific maturity.
4. Repurchase agreements which involve
purchases of debt securities. In such a
transaction, at the time the Fund purchases the
security, it simultaneously agrees to resell and
redeliver the security to the seller, who also
simultaneously agrees to buy back the security at
a fixed price and time. This assures a
predetermined yield for the Fund during its
holding period since the resale price is always
greater than the purchase price and reflects an
agreed-upon market rate. Such transactions afford
an opportunity for the Fund to invest temporarily
available cash. The Fund may enter into
repurchase agreements only with respect to
obligations of the U.S. government, its agencies
or instrumentalities; certificates of deposit; or
bankers acceptances in which the Fund may invest.
Repurchase agreements may be considered loans to
the seller, collateralized by the underlying
securities. The risk to the Fund is limited to
the ability of the seller to pay the agreed-upon
sum on the repurchase date; in the event of
default, the repurchase agreement provides that
the Fund is entitled to sell the underlying
collateral. If the value of the collateral
declines after the agreement is entered into,
however, and if the seller defaults under a
repurchase agreement when the value of the
underlying collateral is less than the repurchase
price, the Fund could incur a loss of both
principal and interest. GCM monitors the value of
the collateral at the time the transaction is
entered into and at all times during the term of
the repurchase agreement. GCM does so in an
effort to determine that the value of the
collateral always equals or exceeds the agreed-
upon repurchase price to be paid to the Fund. If
the seller were to be subject to a federal
bankruptcy proceeding, the ability of the Fund to
liquidate the collateral could be delayed or
impaired because of certain provisions of the
bankruptcy laws.
<PAGE>
5. Bank time deposits, which are monies kept
on deposit with banks or savings and loan
associations for a stated period of time at a
fixed rate of interest. There may be penalties
for the early withdrawal of such time deposits, in
which case the yields of these investments will be
reduced.
6. Commercial paper, which are short-term
unsecured promissory notes, including variable
rate master demand notes issued by corporations to
finance their current operations. Master demand
notes are direct lending arrangements between the
Fund and the corporation. There is no secondary
market for the notes. However, they are
redeemable by the Fund at any time. GCM will
consider the financial condition of the
corporation (e.g., earning power, cash flow, and
other liquidity ratios) and will continuously
monitor the corporation's ability to meet all of
its financial obligations, because the Fund's
liquidity might be impaired if the corporation
were unable to pay principal and interest on
demand. Investments in commercial paper will be
limited to commercial paper rated in the two
highest categories by a major rating agency or
unrated commercial paper which is, in the opinion
of GCM, of comparable quality.
Hedging Strategies
General Description of Hedging Strategies
The Fund may engage in hedging activities in the
future without obtaining shareholder approval. GCM may
cause the Fund to utilize a variety of financial
instruments, including options, futures contracts
(sometimes referred to as "futures") and options on
futures contracts to attempt to hedge the Fund's
portfolio.
Hedging instruments on securities generally are
used to hedge against price movements in one or more
particular securities positions that the Fund owns or
intends to acquire. Hedging instruments on stock
indices, in contrast, generally are used to hedge
against price movements in broad equity market sectors
in which the Fund has invested or expects to invest.
The use of hedging instruments is subject to applicable
regulations of the Securities and Exchange Commission
(the "SEC"), the several options and futures exchanges
upon which they are traded, the Commodity Futures
Trading Commission (the "CFTC") and various state
regulatory authorities. In addition, the Fund's
ability to use hedging instruments will be limited by
tax considerations.
General Limitations on Futures and Options
Transactions
The Fund has filed a notice of eligibility for
exclusion from the definition of the term "commodity
pool operator" with the CFTC and the National Futures
Association, which regulate trading in the futures
markets. Pursuant to Section 4.5 of the regulations
under the Commodity Exchange Act (the "CEA"), the
notice of eligibility for the Fund includes the
following representation that the Fund will use futures
contracts and related options solely for bona fide
hedging purposes within the meaning of CFTC
regulations, provided that the Fund may hold other
positions in futures contracts and related options that
do not fall within the definition of bona fide hedging
transactions if aggregate initial margins and premiums
paid do not exceed 5% of the net asset value of the
Fund. In addition, the Fund will not: (i) enter into
futures contracts and futures options transactions if
more than 5% of its net assets would be committed to
such instruments, (ii) write covered put or call
options if the value of the Fund's assets covering such
options exceeds 5% of the Fund's net assets, or (iii)
purchase put or call options if the amount of all
premiums paid for such options exceeds 5% of the Fund's
net assets. The Fund will limit its option premiums
and assets covering open option positions to 5% of the
Fund's net assets. These limitations do not apply to
options attached to or acquired or traded together with
an underlying security and do not apply to securities
that incorporate features similar to options. The Fund
will not purchase or write over-the-counter options.
The foregoing limitations are not fundamental
policies of the Fund and may be changed without
shareholder approval as regulatory agencies permit.
Various exchanges and regulatory authorities have
undertaken reviews of options and futures trading in
light of market volatility. Among the possible
transactions that have been presented are proposals to
adopt new or more stringent daily price fluctuation
limits for futures and options transactions and
proposals to increase the margin requirements for
various types of futures transactions.
Asset Coverage for Futures and Options Positions
The Fund will comply with regulatory requirements
of the SEC and the CFTC with respect to coverage of
options and futures positions by registered investment
companies and, if the guidelines so require, will set
aside cash and/or liquid assets permitted by the SEC
and CFTC in a segregated custodial account in the
amount prescribed. Securities held in a segregated
account cannot be sold while the futures or options
position is outstanding, unless replaced with other
permissible assets and will be market-to-market daily.
<PAGE>
Purchasing Put and Call Options
Put Options. The Fund may purchase put options.
As the holder of a put option, the Fund would have the
right to sell the underlying security at the exercise
price at any time during the option period. The Fund
may enter into closing sale transactions with respect
to such options, exercise them or permit them to
expire. The Fund may purchase put options for
defensive purposes in order to protect against an
anticipated decline in the value of its securities or
to profit from a decline in the value of securities it
does not own. This protection is provided only during
the exercise period. For example, the Fund may
purchase a put option to protect unrealized
appreciation of a security where GCM deems it desirable
to continue to hold the security because of tax
considerations. The premium paid for the put option
and any transaction costs would reduce any capital gain
otherwise available for distribution when the security
is eventually sold.
The Fund may also purchase put options at a time
when the Fund does not own the underlying security. By
purchasing put options on a security it does not own,
the Fund seeks to benefit from a decline in the market
price of the underlying security. If the put option is
not sold when it has remaining value, and if the market
price of the underlying security remains equal to or
greater than the exercise price during the life of the
put option, the Fund will lose its entire investment in
the put option. In order for the purchase of a put
option to be profitable, the market price of the
underlying security must decline sufficiently below the
exercise price to cover the premium and transaction
costs, unless the put option is sold in a closing sale
transaction.
The premium paid by the Fund when purchasing a put
option will be recorded as an asset of the Fund and
will be adjusted daily to the option's current market
value, which will be the latest sale price at the time
at which the net asset value per share of the Fund is
computed (close of the New York Stock Exchange), or, in
the absence of such sale, the latest bid price. This
asset will be terminated upon exercise, the selling
(writing) of an identical option in a closing action,
or the delivery of the underlying security upon the
exercise of the option.
Call Options. The Fund may purchase call options.
As the holder of a call option, the Fund would have the
right to purchase the underlying security at the
exercise price at any time during the exercise period.
The Fund may enter into closing sale transactions with
respect to such options, exercise them or permit them
to expire. The Fund may purchase call options for the
purpose of hedging against a possible increase in the
price of securities at a time when the Fund has a
significant cash position. The Fund may also purchase
call options in order to acquire the underlying
securities.
The Fund may purchase call options on underlying
securities owned by it. A call option may be purchased
when tax considerations make it inadvisable to realize
gains through a closing purchase transaction. Call
options may also be purchased at times to avoid
realizing losses that would result in a reduction of
the Fund's current return. For example, where the Fund
has written a call option on an underlying security
having a current market value below the price at which
such security was purchased by the Fund, an increase in
the market price would result in the exercise of the
call option written by the Fund and the realization of
a loss on the underlying security with the same
exercise price and expiration date as the option
previously written.
Call options may also be purchased by the Fund for
the purpose of acquiring the underlying securities for
its portfolio. Utilized in this fashion, the purchase
of call options enables the Fund to acquire the
securities at the exercise price of the call option
plus the premium paid. At times the net cost of
acquiring securities in this manner may be less than
the cost of acquiring securities directly; the net cost
may also exceed the cost of acquiring securities
directly. This technique may also be useful to the
Fund in purchasing a large block of securities that
would be more difficult to acquire by direct market
purchases. So long as the Fund holds such a call
option rather than the underlying security itself the
Fund is partially protected from any unexpected decline
in the market price of the underlying security and in
such event could allow the call option to expire,
incurring a loss only to the extent of the premium paid
for the option.
Stock Index Options
The Fund may (i) purchase stock index options for
any purpose, (ii) sell stock index options in order to
close out existing positions, and/or (iii) write
covered options on stock indexes for hedging purposes.
Stock index options are put options and call options on
various stock indexes. In most respects, they are
identical to listed options on common stocks. The
primary difference between stock options and index
options occurs when index options are exercised. In
the case of stock options, the underlying security,
common stock, is delivered. However, upon the
<PAGE>
exercise
of an index option, settlement does not occur by
delivery of the securities comprising the index. The
option holder who exercises the index option receives
an amount of cash if the closing level of the stock
index upon which the option is based is greater than,
in the case of a call, or less than, in the case of a
put, the exercise price of the option. This amount of
cash is equal to the difference between the closing
price of the stock index and the exercise price of the
option expressed in dollars times a specified multiple.
A stock index fluctuates with changes in the
market values of the stocks included in the index. For
example, some stock index options are based on a broad
market index, such as the Standard & Poor's 500 or the
Value Line Composite Index or a narrower market index,
such as the Standard & Poor's 100. Indexes may also be
based on an industry or market segment, such as the
AMEX Oil and Gas Index or the Computer and Business
Equipment Index. Options on stock indexes are
currently traded on the following exchanges: the
Chicago Board Options Exchange, the New York Stock
Exchange, the American Stock Exchange, the Pacific
Stock Exchange, and the Philadelphia Stock Exchange.
The Fund may purchase call and put options in an
attempt to either hedge against the risk of unfavorable
price movements adversely affecting the value of the
Fund's securities, or securities the Fund intends to
buy or otherwise in furtherance of the Fund's
investment objective. The Fund will sell (write) stock
index options for hedging purposes or in order to close
out positions in stock index options which the Fund has
purchased. The Fund may only write covered options.
The Fund may cover a call option on a stock index it
writes by, for example, having a portfolio of
securities which approximately correlates with the
stock index.
Put options may be purchased in order to hedge
against an anticipated decline in stock market prices
that might adversely affect the value of the Fund's
portfolio securities or in an attempt to capitalize on
an anticipated decline in stock market prices. If the
Fund purchases a put option on a stock index, the
amount of the payment it receives upon exercising the
option depends on the extent of any decline in the
level of the stock index below the exercise price.
Such payments would tend to offset a decline in the
value of the Fund's portfolio securities. If, however,
the level of the stock index increases and remains
above the exercise price while the put option is
outstanding, the Fund will not be able to profitably
exercise the option and will lose the amount of the
premium and any transaction costs. Such loss may be
offset by an increase in the value of the Fund's
portfolio securities.
Call options on stock indexes may be purchased in
order to participate in an anticipated increase in
stock market prices or to hedge against higher prices
for securities that the Fund intends to buy in the
future. If the Fund purchases a call option on a stock
index, the amount of the payment it receives upon
exercising the option depends on the extent of any
increase in the level of the stock index above the
exercise price. Such payments would in effect allow
the Fund to benefit from stock market appreciation even
though it may not have had sufficient cash to purchase
the underlying stocks. Such payments may also offset
increases in the price of stocks that the Fund intends
to purchase. If, however, the level of the stock index
declines and remains below the exercise price while the
call option is outstanding, the Fund will not be able
to exercise the option profitably and will lose the
amount of the premium and transaction costs. Such loss
may be offset by a reduction in the price the Fund pays
to buy additional securities for its portfolio.
The Fund's use of stock index options is subject
to certain risks. Successful use by the Fund of
options on stock indexes will be subject to the ability
of the Fund's investment advisor to correctly predict
movements in the directions of the stock market. This
requires different skills and techniques than
predicting changes in the prices of individual
securities. In addition, the Fund's ability to
effectively hedge all or a portion of the securities in
its portfolio, in anticipation of or during a market
decline through transactions in put options on stock
indexes, depends on the degree to which price movements
in the underlying index correlate with the price
movements in the Fund's portfolio securities. Inasmuch
as the Fund's portfolio securities will not duplicate
the components of an index, the correlation will not be
perfect. Consequently, the Fund will bear the risk
that the prices of its portfolio securities being
hedged will not move in the same amount as the prices
of the Fund's put options on the stock indexes. It is
also possible that there may be a negative correlation
between the index and the Fund's portfolio securities
which would result in a loss on both such portfolio
securities and the options on stock indexes acquired by
the Fund.
The hours of trading for options may not conform
to the hours during which the underlying securities are
traded. To the extent that the options markets close
before the markets for the underlying securities,
significant price and rate movements can take place in
the underlying markets that cannot be reflected in the
options markets. The purchase of options is a highly
specialized activity which involves investment
techniques and risks different from those associated
with ordinary portfolio securities transactions. The
purchase of stock index options involves the risk that
the premium and transaction costs paid by the Fund in
purchasing an option will be lost as a result of
unanticipated movements in prices of the securities
comprising the stock index on which the option is
based.
<PAGE>
Short Sales, Short Sales Against the Box and
Writing Covered Call and Put Options
Short Sales. The Fund may seek to realize gains
through short sale transactions in securities listed on
one or more national securities exchanges or on NASDAQ.
Short selling involves the sale of borrowed securities.
At the time a short sale is effected the Fund incurs an
obligation to replace the security borrowed at whatever
its price may be at the time that the Fund purchases it
for delivery to the lender. When a short sale
transaction is closed out by delivery of the
securities, any gain or loss on the transaction is
taxable as a short term capital gain or loss. Since
short selling can result in profits when stock prices
generally decline, the Fund in this manner, can, to a
certain extent, hedge the market risk to the value of
its other investments and protect its equity in a
declining market. However, the Fund could, at any
given time, suffer both a loss on the purchase or
retention of one security, if that security should
decline in value, and a loss on a short sale of another
security, if the security sold short should increase in
value. Moreover, to the extent that in a generally
rising market the Fund maintains short positions in
securities rising with the market, the net asset value
of the Fund would be expected to increase to a lesser
extent than the net asset value of an investment
company that does not engage in short sales.
Short Sales Against the Box. When GCM believes
that the price of a particular security in the Fund's
portfolio may decline, it may sell the security short
against the box which involves selling the security for
delivery at a specified date in the future. If, for
example, the Fund bought 100 shares of ABC at $40 per
share in January and the price appreciates to $50 in
March, the Fund might "sell short" the 100 shares at
$50 for delivery the following July. Thereafter, if
the price of the stock declines to $45, it will realize
the full $1,000 gain rather than the $500 gain it would
have received had it sold the stock in the market. On
the other hand, if the price appreciates to $55 per
share, the Fund would be required to sell at $50 and
thus receive a $1,000 gain rather than the $1,500 gain
it would have received had it sold the stock in the
market. The Fund may also be required to pay a premium
for short sales which would partially offset its gain.
Covered Call Options. The Fund may write (sell)
covered call options and purchase options to close out
options previously written by the Fund. The purpose of
writing covered call options is to reduce the effect of
price fluctuations of the securities owned by the Fund
(and involved in the options) on the Fund's net asset
value per share. Although premiums may be generated
through the use of covered call options, GCM does not
consider the premiums which may be generated as the
primary reason for writing covered call options.
A call option gives the holder (buyer) the right
to purchase a security at a specified price (the
exercise price) at any time until a certain date (the
expiration date). So long as the obligation of the
writer of a call option continues, such writer may be
assigned an exercise notice by the broker-dealer
through whom such option was sold, requiring the writer
to deliver the underlying security against payment of
the exercise price. This obligation terminates upon
the expiration of the call option, or such earlier time
at which the writer effects a closing purchase
transaction by repurchasing the option the writer
previously sold. To secure the writer's obligation to
deliver the underlying security in the case of a call
option, the writer is required to deposit in escrow the
underlying security or other assets in accordance with
the rules of the clearing corporations and of the
exchanges.
Covered call options may also be used to hedge an
unrealized gain. For example, if the Fund wrote an
option at $50 on the same 100 shares of ABC bought at
$40 per share and now selling for $50 per share, it
might receive a premium of approximately $600. If the
market price of the underlying security declined to
$45, the option would not be exercised and the Fund
could offset the unrealized loss of $500 by the $600
premium. On the other hand, if the market price of the
underlying security increased to $55, the option would
be exercised and the Fund will have foregone the
unrealized $1,500 gain for a $1,000 gain plus the $600
premium. The Fund can also close out its position in
the call option by repurchasing the option contract
separately and independent of any transaction in the
underlying security and, therefore, realize capital
gain or loss. If the Fund could not enter into such a
closing purchase transaction, it may be required to
hold a security that it may otherwise have sold to
protect against depreciation.
Portfolio securities on which call options may be
written will be purchased solely on the basis of
investment considerations consistent with the Fund's
investment objective. The writing of covered call
options is a conservative investment technique believed
to involve relatively little risk (in contrast to the
writing of naked or uncovered options, which the Fund
will not do), but capable of enhancing the Fund's total
return. When writing a covered call option, the Fund,
in return for the premium, gives up the opportunity for
profit from a price increase in the underlying security
or other liquid assets above the exercise price, but
conversely retains the risk of loss should the price of
the security decline. If a call option which the Fund
has written expires, the Fund will realize a gain in
the amount of the premium; however, such gain may be
offset by a decline in the market value of the
underlying security during the
<PAGE>
option period.
If the call option is exercised, the Fund will realize a gain
or loss from the sale of the underlying security. The
securities or other liquid assets covering the call
option will be maintained in a segregated account of
the Fund's custodian. The Fund does not consider a
security covered by a call option to be "pledged" as
that term is used in the Fund's policy which limits the
pledging or mortgaging of its assets.
The premium received is the market value of an
option. The premium the Fund will receive from writing
a call option, will reflect, among other things, the
current market price of the underlying security, the
relationship of the exercise price to such market
price, the historical price volatility of the
underlying security, the length of the option period,
the general supply of and demand for credit, and the
general interest rate environment. The premium
received by the Fund for writing covered call options
will be recorded as a liability in the Fund's statement
of assets and liabilities. This liability will be
adjusted daily to the option's current market value,
which will be the latest sale price at the time at
which the net asset value per share of the Fund is
computed (close of the New York Stock Exchange), or, in
the absence of such sale, the latest asked price. The
liability will be extinguished upon expiration of the
option, the purchase of an identical option in a
closing transaction, or delivery of the underlying
security upon the exercise of the option.
A closing transaction will be effected in order to
realize a profit or minimize a loss on an outstanding
call option, to prevent an underlying security from
being called or put, or to permit the sale of the
underlying security. Furthermore, effecting a closing
transaction will permit the Fund to write another call
option on the underlying security with either a
different exercise price or expiration date or both.
If the Fund desires to sell a particular security from
its portfolio on which it has written a call option, or
purchased a put option, it will seek to effect a
closing transaction prior to, or concurrently with, the
sale of the security. There is, of course, no
assurance that the Fund will be able to effect such
closing actions at a favorable price. If the Fund
cannot enter into such a transaction, it may be
required to hold a security that it might otherwise
have sold, in which case it would continue to be at
market risk on the security. This could result in
higher transaction costs, including brokerage
commissions. The Fund will pay brokerage commissions
in connection with the writing or purchase of options
to close out previously written options. Such
brokerage commissions are normally higher than the
transaction costs applicable to purchases and sales of
portfolio securities.
Call options written by the Fund will normally
have expiration dates between three and nine months
from the date written. The exercise price of the
options may be below, equal to, or above the current
market values of the underlying securities at the time
the options are written. From time to time, the Fund
may purchase an underlying security for delivery in
accordance with an exercise notice of a call option
assigned to it, rather than delivering such security
from its portfolio. In such cases additional
transaction costs will be incurred.
Covered Put Options. The Fund may also write
(sell) covered put options and purchase options to
close out options previously written by the Fund. The
Fund may write covered put options in circumstances
where it would like to acquire the underlying security
at a price lower than the then prevailing market price
of the security. Although premiums may be generated
through the use of covered put options, GCM does not
consider the premiums which may be generated as the
primary reason for writing covered put options.
A put option gives the purchaser of the option the
right to sell, and the writer (seller) has the
obligation to buy, the underlying security at the
exercise price at any time until the expiration date.
So long as the obligation of the writer continues, the
writer may be assigned an exercise notice by the broker-
dealer through whom such option was sold requiring the
writer to make payment of the exercise price against
delivery of the underlying security. The operations of
put options in other respects, including related risks
and rewards, are substantially identical to that of
call options.
The Fund will write put options only on a secured
basis, which means that the Fund would maintain a
segregated account consisting of cash or other
permissible liquid assets in an amount not less than
the exercise price of the option or the Fund will own
an option to sell the underlying security subject to
the option having an exercise price equal to or greater
than the exercise price of the covered option at all
times while the put option is outstanding. The Fund
will generally write covered put options where it
wishes to purchase a security for the Fund's portfolio
at a price less than the current market price. In this
event, the Fund would write a put option at an exercise
price which, reduced by the premium received on the
options, reflects the lower price it is willing to pay.
Since the Fund may also receive interest on the debt
securities maintained to cover the exercise price of
the option, this technique could be used to enhance
current returns during periods of market uncertainty.
The risk in such a transaction would be that the market
price of the underlying security would decline below
the exercise price less the premiums received. Such a
decline could be substantial and result in a
significant loss to the Fund. In addition, the Fund,
because it does not
<PAGE>
own the specific securities which
it may be required to purchase in the exercise of the
put, cannot benefit from appreciation, if any, with
respect to such specific securities.
Certain Considerations Regarding Options
There is no assurance that a liquid secondary
market on an options exchange will exist for any
particular option, or at any particular time, and for
some options no secondary market on an exchange or
elsewhere may exist. If the Fund is unable to close
out a call option on securities that it has written
before the option is exercised, the Fund may be
required to purchase the optioned securities in order
to satisfy its obligation under the option to deliver
such securities. If the Fund is unable to effect a
closing sale transaction with respect to options on
securities that it has purchased, it would have to
exercise the option in order to realize any profit and
would incur transaction costs upon the purchase and
sale of the underlying securities.
The writing and purchasing of options is a highly
specialized activity which involves investment
techniques and risks different from those associated
with ordinary portfolio securities transactions.
Imperfect correlation between the options and
securities markets may detract from the effectiveness
of attempted hedging. Options transactions may result
in significantly higher transaction costs and portfolio
turnover for the Fund.
Federal Tax Treatment of Options
Certain option transactions have special tax
results for the Fund. Expiration of a call option
written by the Fund will result in short-term capital
gain. If the call option is exercised, the Fund will
realize a gain or loss from the sale of the security
covering the call option, and in determining such gain
or loss the option premium will be included in the
proceeds of the sale.
If the Fund writes options other than "qualified
covered call options," as defined in Section 1092 of
the Internal Revenue Code of 1986, as amended (the
"Code"), or purchases puts, any losses on such options
transactions, to the extent they do not exceed the
unrealized gains on the securities covering the
options, may be subject to deferral until the
securities covering the options have been sold.
In the case of transactions involving "nonequity
options," as defined in Code Section 1256, the Fund
will treat any gain or loss arising from the lapse,
closing out or exercise of such positions as 60% long-
term and 40% short-term capital gain or loss as
required by Section 1256 of the Code. In addition,
such positions must be marked-to-market as of the last
business day of the year, and gain or loss must be
recognized for federal income tax purposes in
accordance with the 60%/40% rule discussed above even
though the position has not been terminated. A
"nonequity option" includes an option with respect to
any group of stocks or a stock index if there is in
effect a designation by the CFTC of a contract market
for a contract based on such group of stocks or
indexes. For example, options involving stock indexes
such as the Standard & Poor's 500 and 100 indexes would
be "nonequity options" within the meaning of Code
Section 1256.
Futures Contracts
The Fund may enter into futures contracts
(hereinafter referred to as "Futures" or "Futures
Contracts"), including interest rate and index Futures
as a hedge against movements in the equity markets and
changes in prevailing levels of interest rates, in
order to establish more definitively the effective
return on securities held or intended to be acquired by
the Fund or for other purposes permissible under the
CEA. The Fund's hedging may include sales of Futures
as an offset against the effect of expected declines in
stock prices or increases in interest rates and
purchases of Futures as an offset against the effect of
expected increases in stock prices and declines in
interest rates.
The Fund will not enter into Futures Contracts
which are prohibited under the CEA and will, to the
extent required by regulatory authorities, enter only
into Futures Contracts that are traded on national
futures exchanges and are standardized as to maturity
date and underlying financial instrument. The
principal interest rate Futures exchanges in the United
States are the Board of Trade of the City of Chicago
and the Chicago Mercantile Exchange. Futures exchanges
and trading are regulated under the CEA by the CFTC.
Although techniques other than sales and purchases of
Futures Contracts could be used to reduce the Fund's
exposure to interest rate or portfolio market price
fluctuations, the Fund may be able to hedge its
exposure more effectively and perhaps at a lower cost
through using Futures Contracts, since Futures
Contracts involve lower transaction costs (i.e.,
brokerage costs only) than options on securities and
stock index options, which require the payment of
brokerage costs and premiums.
<PAGE>
An index Futures Contract is an agreement pursuant
to which the parties agree to take or make delivery of
an amount of cash equal to the difference between the
value of the index at the close of the last trading day
of the contract and the price at which the index
Futures Contract was originally written. An interest
rate Futures Contract provides for the future sale by
one party and purchase by another party of a specified
amount of a specific financial instrument for a
specified price at a designated date, time, and place.
Transactions costs are incurred when a Futures Contract
is bought or sold and margin deposits must be
maintained. A Futures Contract may be satisfied by
delivery or purchase, as the case may be, of the
instrument or by payment of the change in the cash
value of the index. More commonly, Futures Contracts
are closed out prior to delivery by entering into an
offsetting transaction in a matching Futures Contract.
Although the value of an index might be a function of
the value of certain specified securities, no physical
delivery of those securities is made. If the
offsetting purchase price is less than the original
sale price, the Fund realizes a gain; if it is more,
the Fund realizes a loss. Conversely, if the
offsetting sale price is more than the original
purchase price, the Fund realizes a gain; if it is
less, the Fund realizes a loss. The transaction costs
must also be included in these calculations. There can
be no assurance, however, that the Fund will be able to
enter into an offsetting transaction with respect to a
particular Futures Contract at a particular time. If
the Fund is not able to enter into an offsetting
transaction, the Fund will continue to be required to
maintain the margin deposits on the Futures Contract.
As an example of an offsetting transaction in
which the underlying financial instrument is not
delivered pursuant to an interest rate Futures
Contract, the contractual obligations arising from the
sale of one Futures Contract of September Treasury
Bills on an exchange may be fulfilled at any time
before delivery is required (i.e., on a specified date
in September, the "delivery month") by the purchase of
one Futures Contract of September Treasury Bills on the
same exchange. In such instance, the difference
between the price at which the Futures Contract was
sold and the price paid for the offsetting purchase,
after allowance for transaction costs, represents the
profit or loss to the Fund.
Persons who trade in Futures Contracts may be
broadly classified as "hedgers" and "speculators."
Hedgers, such as the Fund, whose business activity
involves investment or other commitments in securities
or other obligations, use the Futures markets to offset
unfavorable changes in value that may occur because of
fluctuations in the value of the securities or
obligations held or expected to be acquired by them.
Debtors and other obligors may also hedge the interest
cost of their obligations. The speculator, like the
hedger, generally expects neither to deliver nor to
receive the financial instrument underlying the Futures
Contract; but, unlike the hedger, hopes to profit from
fluctuations in prevailing prices.
A public market exists in Futures Contracts
covering a number of indexes, including, but not
limited to, the Standard & Poor's 500 Index, the
Standard & Poor's 100 Index, the NASDAQ 100 Index, the
Value Line Composite Index and the New York Stock
Exchange Composite Index. A public market exists in
interest rate Futures Contracts primarily covering the
following financial instruments: U.S. Treasury bonds;
U.S. Treasury notes; Government National Mortgage
Association ("GNMA") modified pass-through mortgage-
backed securities; three-month U.S. Treasury bills;
90-day commercial paper; bank certificates of deposit;
and Eurodollar certificates of deposit. The standard
contract size is generally $100,000 for Futures
Contracts in U.S. Treasury bonds, U.S. Treasury notes,
and GNMA pass-through securities and $1,000,000 for the
other designated Contracts.
The Fund's Futures transactions will be entered
into for hedging purposes permissible under the CEA.
For hedging purposes, Futures Contracts may be sold to
protect against a decline in the price of securities
that the Fund owns, or Futures Contracts may be
purchased to protect the Fund against an increase in
the price of securities it intends to purchase. As
evidence of this hedging intent, the Fund expects that
approximately 75% of such Futures Contract purchases
will be "completed"; that is, upon the sale of these
long Futures Contracts, equivalent amounts of related
securities will have been or are then being purchased
by the Fund in the cash market. Alternatively, the
Fund's purchases of long Futures Contracts will not
exceed 5% of the Fund's net asset value.
Margin is the amount of funds that must be
deposited by the Fund with its custodian in a
segregated account in the name of the futures
commission merchant in order to initiate Futures
trading and to maintain the Fund's open positions in
Futures Contracts. A margin deposit is intended to
ensure the Fund's performance of the Futures Contract.
The margin required for a particular Futures Contract
is set by the exchange on which the Futures Contract is
traded and may be significantly modified from time to
time by the exchange during the term of the Futures
Contract. Futures Contracts are customarily purchased
and sold on margins that may range upward from less
than 5% of the value of the Futures Contract being
traded.
If the price of an open Futures Contract changes
(by increase in the case of a sale or by decrease in
the case of a purchase) so that the loss on the Futures
Contract reaches a point at which the margin on deposit
does not satisfy
<PAGE>
margin requirements, the broker will
require an increase in the margin. However, if the
value of a position increases because of favorable
price changes in the Futures Contract so that the
margin deposit exceeds the required margin, the broker
will pay the excess to the Fund. In computing daily
net asset value, the Fund will mark to market the
current value of its open Futures Contracts. The Fund
expects to earn interest income on its margin deposits.
The prices of Futures Contracts are volatile and
are influenced, among other things, by actual and
anticipated changes in interest rates, which in turn
are affected by fiscal and monetary policies and
national and international political and economic
events.
At best, the correlation between changes in prices
of Futures Contracts and of the securities being hedged
can be only approximate. The degree of imperfection of
correlation depends upon circumstances such as:
variations in speculative market demand for futures and
debt securities, including technical influences in
Futures trading; differences between the financial
instruments being hedged and the instruments underlying
the standard Futures Contracts available for trading;
and with respect to interest rate Futures, maturities
and creditworthiness of issuers and, in the case of
index futures contracts, the composition of the index,
including the issuers and the weighting of each issue,
may differ from the composition of the Fund's
portfolio. A decision of whether, when, and how to
hedge involves skill and judgment, and even a well-
received hedge may be unsuccessful to some degree
because of unexpected market behavior or interest rate
trends.
Because of the low margin deposits required,
Futures trading involves an extremely high degree of
leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate
and substantial loss, as well as gain, to the investor.
For example, if at the time of purchase, 10% of the
value of the Futures Contract is deposited as margin, a
subsequent 10% decrease in the value of the Futures
Contract would result in a total loss of the margin
deposit, before any deduction for the transaction
costs, if the account were then closed out. A 15%
decrease would result in a loss equal to 150% of the
original margin deposit, if the Futures Contract were
closed out. Thus, a purchase or sale of a Futures
Contract may result in losses in excess of the amount
initially invested in the Futures Contract. However,
the Fund would presumably have sustained comparable
losses if, instead of the Futures Contract, it had
invested in the underlying financial instrument and
sold it after the decline.
Most United States Futures exchanges limit the
amount of fluctuation permitted in Futures Contract
prices during a single trading day. The daily limit
establishes the maximum amount that the price of a
Futures Contract may vary either up or down from the
previous day's settlement price at the end of a trading
session. Once the daily limit has been reached in a
particular type of Futures Contract, no trades may be
made on that day at a price beyond that limit. The
daily limit governs only price movement during a
particular trading day and therefore does not limit
potential losses, because the limit may prevent the
liquidation of unfavorable positions. Futures Contract
prices have occasionally moved to the daily limit for
several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of
Futures positions and subjecting some Futures traders
to substantial losses.
There can be no assurance that a liquid market
will exist at a time when the Fund seeks to close out a
Futures or futures option position. The Fund would
continue to be required to meet margin requirements
until the position is closed, possibly resulting in a
decline in the Fund's net asset value. In addition,
many of the contracts discussed above are relatively
new instruments without a significant trading history.
As a result, there can be no assurance that an active
secondary market will develop or continue to exist.
Options on Futures
The Fund may also purchase or write put and call
options on Futures Contracts and enter into closing
transactions with respect to such options to terminate
an existing position. A futures option gives the
holder the right, in return for the premium paid, to
assume a long position (call) or short position (put)
in a Futures Contract at a specified exercise price
prior to the expiration of the option. Upon exercise
of a call option, the holder acquires a long position
in the Futures Contract and the writer is assigned the
opposite short position. In the case of a put option,
the opposite is true. Prior to exercise or expiration,
a futures option may be closed out by an offsetting
purchase or sale of a futures option of the same
series.
The Fund may use its options on Futures Contracts
in connection with hedging strategies. Generally,
these strategies would be employed under the same
market and market sector conditions in which the Fund
uses put and call options on securities or indexes.
The purchase of put options on Futures Contracts is
analogous to the purchase of puts on securities or
indexes so as to hedge the Fund's portfolio of
securities against the risk of declining market prices.
The writing of a call option or the purchasing of a put
option on a Futures Contract constitutes a partial
hedge against declining prices of the securities which
are deliverable upon exercise of the Futures Contract.
If the futures
<PAGE>
price at expiration of a written call
option is below the exercise price, the Fund will
retain the full amount of the option premium which
provides a partial hedge against any decline that may
have occurred in the Fund's holdings of securities. If
the futures price when the option is exercised is above
the exercise price, however, the Fund will incur a
loss, which may be offset, in whole or in part, by the
increase in the value of the securities in the Fund's
portfolio that were being hedged. Writing a put option
or purchasing a call option on a Futures Contract
serves as a partial hedge against an increase in the
value of the securities the Fund intends to acquire.
If the Futures Contract price at expiration of a put
option the Fund has written is above the exercise
price, the Fund will retain the full amount of the
option premium which provides a partial hedge against
any increase that may have occurred in the price of the
securities the Fund intends to acquire. If the Futures
Contract price at expiration of a put option the Fund
has written is below the exercise price, however, the
Fund will incur a loss, which may be offset, in whole
or in part, by the decrease in the price of the
securities the Fund intends to acquire.
As with investments in Futures Contracts, the Fund
is also required to deposit and maintain margin with
respect to put and call options on Futures Contracts
written by it. Such margin deposits will vary
depending on the nature of the underlying Futures
Contract (and the related initial margin requirements),
the current market value of the option, and other
futures positions held by the Fund. The Fund will set
aside in a segregated account at the Fund's custodian
liquid assets, such as cash, U.S. government securities
or other high grade debt obligations equal in value to
the amount due on the underlying obligation. Such
segregated assets will be marked to market daily, and
additional assets will be placed in the segregated
account whenever the total value of the segregated
account falls below the amount due on the underlying
obligation.
The risks associated with the use of options on
Futures Contracts include the risk that the Fund may
close out its position as a writer of an option only if
a liquid secondary market exists for such options,
which cannot be assured. The Fund's successful use of
options on Futures Contracts depends on GCM's ability
to correctly predict the movement in prices of Futures
Contracts and the underlying instruments, which may
prove to be incorrect. In addition, there may be
imperfect correlation between the instruments being
hedged and the Futures Contract subject to the option.
(For additional information, see "Futures Contracts.")
Federal Tax Treatment of Futures Contracts
For federal income tax purposes, the Fund is
required to recognize as income for each taxable year
its net unrealized gains and losses on Futures
Contracts as of the end of the year, as well as gains
and losses actually realized during the year. Except
for transactions in Futures Contracts that are
classified as part of a "mixed straddle" under Code
Section 1256, any gain or loss recognized with respect
to a Futures Contract is considered to be 60% long-term
capital gain or loss and 40% short-term capital gain or
loss, without regard to the holding period of the
Futures Contract. In the case of a Futures transaction
not classified as a "mixed straddle," the recognition
of losses may be deferred to a later taxable year.
Sales of Futures Contracts that are intended to
hedge against a change in the value of securities held
by the Fund may affect the holding period of such
securities and, consequently, the nature of the gain or
loss on such securities upon disposition.
The Fund intends to operate as a "Regulated
Investment Company" under Subchapter M of the Code, and
therefore will not be liable for federal income taxes
to the extent earnings are distributed on a timely
basis. In addition, as a result of being a Regulated
Investment Company, net capital gains that the Fund
distributes to shareholders will retain their original
capital gain character in the shareholders' individual
tax returns.
In order for the Fund to qualify for federal
income tax treatment as a Regulated Investment Company,
at least 90% of its gross income for a taxable year
must be derived from qualifying income; i.e.,
dividends, interest, income derived from loans of
securities and gains from the sale of securities, and
other income (including gains on options and futures
contracts) derived with respect to the Fund's business
of investing in stock or securities. In addition,
gains realized on the sale or other disposition of
securities or Futures Contracts held for less than
three months must be limited to less than 30% of the
Fund's annual gross income. It is anticipated that any
net gain realized from the closing out of Futures
Contracts will be considered gain from the sale of
securities and therefore will be qualifying income for
purposes of the 90% requirement. For purposes of
applying these tests, any increase in value on a
position that is part of a designated hedge will be
offset by any decrease in value (whether or not
realized) on any other position that is part of such
hedge. It is anticipated that unrealized gains on
Futures Contracts which have been open for less than
three months as of the end of the Fund's fiscal year
and which are recognized for tax purposes will not be
considered gains on securities held less than three
months for purposes of the 30% test.
<PAGE>
The Fund will distribute to shareholders annually
any net capital gains which have been recognized for
federal income tax purposes (including unrealized gains
at the end of the Fund's fiscal year) on Futures
transactions. Such distributions will be combined with
distributions of capital gains realized on the Fund's
other investments and shareholders will be advised of
the nature of the payments.
Warrants
The Fund may invest in warrants if after giving
effect thereto, not more than 5% of its net assets will
be invested in warrants other than warrants acquired in
units or attached to other securities. Of such 5% not
more than 2% of the Fund's net assets at the time of
purchase may be invested in warrants that are not
listed on the New York Stock Exchange or the American
Stock Exchange. Investments in warrants is pure
speculation in that they have no voting rights, pay no
dividends, and have no rights with respect to the
assets of the corporation issuing them. Warrants
basically are options to purchase equity securities at
a specific price for a specific period of time. They
do not represent ownership of the securities but only
the right to buy them. Warrants differ from call
options in that warrants are issued by the issuer of
the security which may be purchased on their exercise,
whereas call options may be written or issued by
anyone. (See "Purchasing Put and Call Options" above.)
The prices of warrants do not necessarily move parallel
to the prices of the underlying securities.
When-Issued Securities
The Fund may from time to time invest up to 5% of
its net assets in securities purchased on a "when-
issued" basis. The price of securities purchased on a
when-issued basis is fixed at the time the commitment
to purchase is made, but delivery and payment for the
securities take place at a later date. Normally, the
settlement date occurs within 45 days of the purchase.
During the period between the purchase and settlement,
no payment is made by the Fund to the issuer, no
interest is accrued on debt securities, and no dividend
income is earned on equity securities. Forward
commitments involve a risk of loss if the value of the
security to be purchased declines prior to the
settlement date, which risk is in addition to the risk
of decline in value of the Fund's other assets. While
when-issued securities may be sold prior to the
settlement date, the Fund intends to purchase such
securities with the purpose of actually acquiring them.
At the time the Fund makes the commitment to purchase a
security on a when-issued basis, it will record the
transaction and reflect the value of the security in
determining its net asset value. The Fund does not
believe that its net asset value will be adversely
affected by its purchases of securities on a when-
issued basis.
The Fund will maintain cash and marketable
securities equal in value to commitments for when-
issued securities. Such segregated securities either
will mature or, if necessary, be sold on or before the
settlement date. When the time comes to pay for when-
issued securities, the Fund will meet its obligations
from then available cash flow, sale of the securities
held in the separate account, described above, sale of
other securities or, although it would not normally
expect to do so, from the sale of the when-issued
securities themselves (which may have a market value
greater or less than the Fund's payment obligation).
Repurchase Obligations
The Fund may enter into repurchase agreements with
respect to no more than 25% of its net assets with
member banks of the Federal Reserve System and certain
non-bank dealers. In a repurchase agreement, the Fund
buys a security at one price and, at the time of the
sale, the seller agrees to repurchase the obligation at
a mutually agreed upon time and price (usually within
seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding
period, while the seller's obligation to repurchase is
secured by the value of the underlying security. GCM
will monitor, on an ongoing basis, the value of the
underlying securities to ensure that the value always
equals or exceeds the repurchase price plus accrued
interest. Repurchase agreements could involve certain
risks in the event of a default or insolvency of the
other party to the agreement, including possible delays
or restrictions upon the Fund's ability to dispose of
the underlying securities.
Unseasoned Companies
The Fund may invest not more than 5% of its net
assets in unseasoned companies. While smaller
companies generally have potential for rapid growth,
they often involve higher risks because they lack the
management experience, financial resources, product
diversification, and competitive strengths of larger
corporations. In addition, in many instances, the
securities of smaller companies are traded only over-
the-counter or on regional securities exchanges, and
the frequency and volume of their trading is
substantially less than is typical of larger companies.
Therefore, the securities of smaller companies may be
subject to wider price fluctuations. When making large
sales, the Fund may have to sell portfolio holdings of
small companies at discounts from quoted prices or may
have to
<PAGE>
make a series of smaller sales over an extended
period of time due to the trading volume in smaller
company securities.
TRUSTEES AND OFFICERS OF THE TRUST
Trustees and officers of the Trust, together with
information as to their principal business occupations
during the last five years, and other information, are
shown below. Each Trustee who is deemed an "interested
person," as defined in the Investment Company Act of
1940 ("Investment Company Act"), is indicated by an
asterisk.
*Charles S. Cruice, President and a Trustee of the Trust.
Mr. Cruice has been the President of GCM since its
founding in 1989. From 1978 until 1989, Mr.
Cruice was associated with Friess Associates Inc.,
a Wilmington, Delaware investment management
company. Mr. Cruice also was a director of The
Brandywine Fund, an open-end mutual fund. Mr.
Cruice holds a B.A. from the University of Denver.
*Richard H. Gould, Treasurer and a Trustee of the Trust.
Mr. Gould has been a Vice President of GCM since
1994. From 1987 until 1994, Mr. Gould was
associated with PNC Investment Management, first
as an equity analyst and later as the co-manager
of the PNC Small Cap Growth Fund. Mr. Gould
received his Chartered Financial Analyst
designation in 1989; became a Chartered Market
Technician in 1995; and received his B.S. in 1983
and his M.B.A. in Finance in 1985, both from The
Pennsylvania State University.
Dr. Peter Utsinger, a Trustee of the Trust.
Dr. Utsinger has been a practicing physician for
arthritis and rheumatic disease since 1970 when he
received his M.D. from Georgetown University. Dr.
Utsinger has written several publications in his
area of specialty.
Richard W. Vague, a Trustee of the Trust
Mr. Vague has been the President and a director of
First USA, Inc. since 1991, the Chairman and CEO
of First USA Bank since 1995, the Chairman of
First USA, FSB since 1996 and a director of First
USA Paymentech and Physicians Support Systems,
Inc. since 1996. From 1987 until 1995, Mr. Vague
was President and CEO of First USA Bank.
Robert D. Harrison, a Trustee of the Trust
Mr. Harrison was a director of Fidelity Mutual
Life Insurance Company from 1969 to 1992, of
Meritor Savings Bank from 1978 to 1992 and of PECO
Energy Co. from 1970 to 1994. Mr. Harrison also
served as a trustee of Mutual Assurance Company
from 1974 to 1993.
The address for Messrs. Cruice and Gould is
Greenville Capital Management, Inc., 100 South Rockland
Falls Road, Rockland, Delaware, 19732. The address for Dr.
Utsinger is 8909 Crefield Street, Philadelphia,
Pennsylvania, 19118. The address for Mr. Vague is 201
N. Walnut, 15th Floor, Wilmington, Delaware, 19801.
The address for Mr. Harrison is 74 Parkridge Drive,
Bryn Mawr, Pennsylvania, 19020.
As of October 21, 1996, officers and trustees of
the Trust beneficially owned 9,500 shares of beneficial
interest in the Fund, which was 95% of the Fund's then
outstanding shares. Trustees and officers of the Trust
who are officers, directors, employees or shareholders
of GCM do not receive any remuneration from the Trust
or the Fund for serving as Trustees or officers.
Each Trustee who is not deemed an "interested
person," as defined in the Investment Company Act,
receives $ 1,000 per year payable in Fund shares on
September 30th. The Board anticipates holding three
meetings during 1997.
<PAGE>
PRINCIPAL SHAREHOLDERS
As of October 21, 1996 the following persons owned
of record or are known by the Company to own of record
or beneficially 5% or more of the outstanding shares of
the Fund:
Name and Address No. Shares Percentage
Charles S. Cruice 6,200 62%
Greenville Capital Management, Inc.
100 South Rockland Road
Rockland, Delaware, 19732
Richard H. Gould 2,500 25%
Greenville Capital Management, Inc.
100 South Rockland Road
Rockland, Delaware, 19732
Jeffrey Rugen 800 8%
Greenville Capital Management, Inc.
100 South Rockland Road
Rockland, Delaware, 19732
Molly Lewis 500 5%
Greenville Capital Management, Inc.
100 South Rockland Road
Rockland, Delaware, 19732
As of October __, 1996, Mr. Cruice and Mr. Gould
each owned a controlling interest in the Fund.
Shareholders with a controlling interest could affect
the outcome of proxy voting or the direction of
management of the Fund.
INVESTMENT ADVISOR
GCM is the investment advisor to the Fund. Mr.
Charles S. Cruice controls GCM and is the President and
a director of GCM. Ms. Kathryn S. Cruice is the
Secretary and a director of GCM. Mr. Charles S. Cruice
owns a voting majority interest in GCM. Mr. Richard H.
Gould is a Vice President and officer of GCM. A brief
description of the Fund's investment advisory agreement
is set forth in each Prospectus under "MANAGEMENT."
The Fund's Investment Advisory Agreement is dated
______________, 1996 (the "Advisory Agreement"). The
Advisory Agreement has an initial term of two years and
thereafter is required to be approved annually by the
Board of Trustees of the Trust or by vote of a majority
of the Fund's outstanding voting securities (as defined
in the Investment Company Act). Each annual renewal
must also be approved by the vote of a majority of the
Trustees who are not parties to the Advisory Agreement
or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such
approval. The Advisory Agreement was approved by the
vote of a majority of the Trust's Trustees who are not
parties to the Advisory Agreement or interested persons
of any such party on October 22,1996 and by the initial
shareholders of the Fund on __________, 1996. The
Advisory Agreement is terminable without penalty, on 60
days' written notice by the Board of Trustees of the
Trust by vote of a majority of the Trust's outstanding
voting securities, or by GCM, and will terminate
automatically in the event of its assignment.
Under the terms of the Advisory Agreement, GCM
manages the Fund's investments subject to the
supervision of the Trust's Board of Trustees. GCM is
responsible for investment decisions and supplies
investment research and portfolio management. At its
expense, GCM provides office space and all necessary
office facilities, equipment and personnel for
servicing the investments of the Fund.
As compensation for its services, the Trust, on
behalf of the Fund, pays to GCM a monthly advisory fee
at the annual rate of 1.00% of the average daily net
asset value of the Fund. See "Determination of Net
Asset Value" in the Prospectuses. From time to time,
GCM may voluntarily waive all or a portion of its
management fee for the
<PAGE>
Fund. The organizational
expenses of the Fund were advanced by GCM and will be
reimbursed by the Fund over a period of not more than
60 months. The organizational expenses for the Fund
were approximately $ 34,800
Various states impose expense limitations. The
most restrictive percentage limitation currently
applicable to the Fund will be 2 1/2% of its average
net asset value up to $30,000,000, 2% on the next
$70,000,000 of its average net asset value and 1 1/2%
of its average net asset value in excess of
$100,000,000. Reimbursement of expenses in excess of
the applicable limitation will be made on a monthly
basis and will be paid to the Fund by reduction of
GCM's fee, subject to later adjustment, month by month,
for the remainder of the Fund's fiscal year. GCM may
from time to time voluntarily absorb expenses for the
Fund in addition to the reimbursement of expenses in
excess of the limitations described above.
UNDERWRITER
Under a Distribution Agreement dated __________
(the "Distribution Agreement"), AmeriPrime Financial
Securities, Inc. (the "Distributor") acts as
underwriter of the Fund's shares. The Distribution
Agreement provides that the Distributor will use its
best efforts to distribute the Fund's shares. The
Retail shares are offered for sale by the Fund
continuously at net asset value per share plus a
maximum initial sales charge of 3.00% of the offering
price. No sales charge is imposed on the reinvestment
of dividends or capital gains. Certain other
exceptions to the imposition of this sales charge
apply, as discussed more fully in the Retail class
prospectuses under the caption "HOW TO PURCHASE FUND
SHARES -- Purchases at Net Asset Value." These
exceptions are made available because minimal or no
sales effort is required with respect to the categories
of investors so excepted. Pursuant to the terms of the
Distribution Agreement, either the Distributor or GCM
bears the costs of printing prospectuses and
shareholder reports which are used for selling
purposes, as well as advertising and any other costs
attributable to the distributor of Fund shares. The
Distribution Agreement is subject to the same
termination and renewal provisions as are described
above with respect to the Advisory Agreement, except
that the Distribution Agreement need not be approved by
the Fund's shareholders.
DISTRIBUTION PLAN
Description of Plan
The Fund has adopted a plan pursuant to Rule 12b-1
under the Investment Company Act (the "Plan"), which
requires the Retail class to pay the Distributor, in
its capacity as the principal underwriter of Fund
shares, a distribution fee of up to 0.25% per annum of
the Retail class' average daily net assets. Under the
terms of the Plan, the Distributor is authorized to, in
turn, pay all or a portion of this fee to any
securities dealer, financial institution or any other
person (the "Recipient") who renders assistance in
distributing or promoting the sale of Retail class
shares pursuant to a written agreement (the "Rule 12b-1
Related Agreement"). To the extent such fee is not
paid to such persons, the Distributor may use the fee
for its own distribution expenses incurred in
connection with the sale of the Retail class' shares,
although it is the Distributor's current intention to
pay out all or most of the fee. A form of the 12b-1
Related Agreement referred to above has been approved
by a majority of the Board of Trustees, and of the
Disinterested Trustees voting separately. Accordingly,
GCM may enter into 12b-1 Related Agreements with
securities dealers, financial institutions or other
persons without further Board approval.
Pursuant to the terms of the Plan, payment of the
distribution fee is to be made quarterly, within 30
days after the close of the quarter for which the fee
is payable, upon the Distributor forwarding to the
Board of Trustees a written report of all amounts
expended pursuant to the Plan; provided, however, that
the aggregate payments by the Retail class under the
Plan in any month to the Distributor and all Recipients
may not exceed 0.25% of the Retail class' average net
assets for that quarter; and provided further that no
fee may be paid in excess of the distribution expenses
as set forth in the quarterly written report. Thus,
the Plan does not provide for the payment of
distribution fees in subsequent periods that relate to
expenses incurred in prior periods.
The Plan, and any Rule 12b-1 Related Agreement
which is entered into, will continue in effect for a
period of more than one year only so long as its
continuance is specifically approved at least annually
by a vote of a majority of the Fund's Board of
Trustees, and of the Disinterested Trustees, cast in
person at a meeting called for the purpose of voting on
the Plan, or the Rule 12b-1 Related Agreement, as
applicable. In addition, the Plan, and any Rule 12b-1
Related Agreement, may be terminated at any time,
without penalty, by vote of a majority of the
outstanding voting securities of the Retail class, or
by vote of a majority of Disinterested Trustees, on not
more than sixty (60) days' written notice.
<PAGE>
Anticipated Benefits to the Retail Class
Prior to approving the Plan, the Board of Trustees
was furnished with a copy of the Plan and related
materials, including information relating to the
advantages and disadvantages of 12b-1 plans currently
being used in the mutual fund industry. Legal counsel
for the Fund provided additional information,
summarized the provisions of the proposed Plan and
discussed the legal and regulatory considerations in
adopting such Plan.
The Board considered various factors in connection
with its decision to approve the Plan, including: (a)
the nature and causes of the circumstances which made
implementation of the Plan necessary and appropriate;
(b) the way in which the Plan would address those
circumstances, including the nature and potential
amount of expenditures; (c) the nature of the
anticipated benefits; (d) the merits of possible
alternative plans or pricing structures; (e) the
relationship of the Plan to other distribution efforts
of the Retail class, including the imposition of the
3.00% front-end sales load, subject to certain
exceptions; and (f) the possible benefits of the Plan
to any other person relative to those of the Retail
class.
Based upon its review of the foregoing factors and
the material presented to it, and in light of its
fiduciary duties under relevant state law and the
Investment Company Act, the Board determined, in the
exercise of its business judgment, that the Plan was
reasonably likely to benefit the Retail class and its
shareholders in at least one or several potential ways.
Specifically, the Board concluded that the Distributor
and any Recipients operating under Rule 12b-1 Related
Agreements would have little or no incentive to incur
promotional expenses on behalf of the Retail class if a
Rule 12b-1 Plan were not in place to reimburse them,
thus making the adoption of such Plan important to the
Retail class. In addition, the Board determined that
the payment of distribution fees to these persons
should motivate them to maintain and enhance the level
of service provided to the Retail class shareholders,
which would, of course, benefit such shareholders.
Finally, the adoption of the Plan would likely lead to
an increase in net assets under management, given the
enhanced marketing efforts on the part of the
Distributor and Recipients to sell Fund shares.
While there is no assurance that the expenditure
of Retail class assets to finance distribution of
Retail class shares will have the anticipated results,
the Board of Trustees believes there is a reasonable
likelihood that one or more of such benefits will
result, and since the Board will be in a position to
monitor the distribution expenses of the Retail class,
it will be able to evaluate the benefit of such
expenditures in deciding whether to continue the Plan.
PORTFOLIO TRANSACTIONS AND BROKERAGE
As investment advisor to the Fund, GCM is
responsible for decisions to buy and sell securities
for the Fund and for the placement of the Fund's
portfolio business, the negotiation of the commissions
to be paid on such transactions and the allocation of
portfolio brokerage and principal business. It is the
policy of GCM to seek the best execution at the best
security price available with respect to each
transaction, in light of the overall quality of
brokerage and research services provided to GCM or the
Fund. The best price to the Fund means the best net
price without regard to the mix between purchase or
sale price and commission, if any. Purchases may be
made from underwriters, dealers, and, on occasion, the
issuers. Commissions will be paid on the Fund's
futures and options transactions, if any. The purchase
price of portfolio securities purchased from an
underwriter or dealer may include underwriting
commissions and dealer spreads. The Fund may pay
mark-ups on principal transactions. In selecting
broker-dealers and in negotiating commissions, GCM
considers the firm's reliability, the quality of its
execution services on a continuing basis and its
financial condition. Brokerage will not be allocated
based on the sale of the Fund's shares.
Section 28(e) of the Securities Exchange Act of
1934 ("Section 28(e)") permits an investment advisor,
under certain circumstances, to cause an account to pay
a broker or dealer who supplies brokerage and research
services a commission for effecting a transaction in
excess of the amount of commission another broker or
dealer would have charged for effecting the
transaction. Brokerage and research services include
(a) furnishing advice as to the value of securities,
the advisability of investing, purchasing or selling
securities, and the availability of securities or
purchasers or sellers of securities; (b) furnishing
analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio
strategy, and the performance of accounts; and (c)
effecting securities transactions and performing
functions incidental thereto (such as clearance,
settlement, and custody).
GCM is responsible for selecting brokers in
connection with securities transactions. In selecting
such brokers, GCM considers investment and market
information and other research, such as economic,
securities and performance measurement research,
provided by such brokers, and the quality and
reliability of brokerage services, including execution
capability, performance, and financial responsibility.
Accordingly, the commissions charged by
<PAGE>
any such broker
may be greater than the amount another firm might
charge if GCM determines in good faith that the amount
of such commissions is reasonable in relation to the
value of the research information and brokerage
services provided by such broker to the Fund. GCM
believes that the research information received in this
manner provides the Fund with benefits by supplementing
the research otherwise available to the Fund. The
Advisory Agreement provides that such higher
commissions will not be paid by the Fund unless (a) GCM
determines in good faith that the amount is reasonable
in relation to the services in terms of the particular
transaction or in terms of GCM's overall
responsibilities; and (b) such payment is made in
compliance with the provisions of Section 28(e) and
other applicable state and federal laws. The
investment advisory fees paid by the Fund under the
Advisory Agreement are not reduced as a result of GCM's
receipt of research services.
GCM places portfolio transactions for other
advisory accounts managed by GCM. Research services
furnished by firms through which the Fund effects its
securities transactions may be used by GCM in servicing
all of its accounts; not all of such services may be
used by GCM in connection with the Fund. GCM believes
it is not possible to measure separately the benefits
from research services to each of the accounts
(including the Fund) managed by it. Because the volume
and nature of the trading activities of the accounts
are not uniform, the amount of commissions in excess of
those charged by another broker paid by each account
for brokerage and research services will vary.
However, GCM believes such costs to the Fund will not
be disproportionate to the benefits received by the
Fund on a continuing basis. GCM seeks to allocate
portfolio transactions equitably whenever concurrent
decisions are made to purchase or sell securities by
the Fund and another advisory account. In some cases,
this procedure could have an adverse effect on the
price or the amount of securities available to the
Fund. In making such allocations between the Fund and
other advisory accounts, the main factors considered by
GCM are the respective investment objectives, the
relative size of portfolio holdings of the same or
comparable securities, the availability of cash for
investment and the size of investment commitments
generally held.
The Fund anticipates that its portfolio turnover
rate may exceed 70%, although such rate is not expected
to exceed 110%. The annual portfolio turnover rate
indicates changes in the Fund's portfolio; for
instance, a rate of 100% would result if all the
securities in the portfolio (excluding securities whose
maturities at acquisition were one year or less) at the
beginning of an annual period had been replaced by the
end of the period. The turnover rate may vary from
year to year, as well as within a year, and may be
affected by portfolio sales necessary to meet cash
requirements for redemptions of the Fund's shares.
CUSTODIAN
As custodian of the Fund's assets, Firstar Trust
Company ("Firstar") has custody of all securities and
cash of the Fund, delivers and receives payment for
securities sold, receives and pays for securities
purchased, collects income from investments and
performs other duties, all as directed by the officers
of the Trust. The custodian is in no way responsible
for any of the investment policies or decisions of the
Fund.
TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
Firstar also acts as transfer agent and dividend-
disbursing agent for the Fund. Firstar is compensated
based on an annual fee per open account of $14, plus
out-of-pocket expenses such as postage and printing
expenses in connection with shareholder communications.
Firstar also receives an annual fee per closed account
of $14.
TAXES
As indicated under "INCOME DIVIDENDS, CAPITAL
GAINS DISTRIBUTIONS, AND TAX TREATMENT" in the
Prospectuses, it is the Trust's intent, on behalf of
the Fund, to qualify annually as a "regulated
investment company" under the Code. This qualification
does not involve government supervision of the Fund's
management practices or policies.
A dividend or capital gains distribution received
shortly after the purchase of shares reduces the net
asset value of shares by the amount of the dividend or
distribution and, although in effect a return of
capital, will be subject to income taxes. Net gain on
sale of securities when realized and distributed, any
or constructively, is taxable as capital gain. If the
net asset value of shares were reduced below a
shareholder's cost by distribution of gains realized on
sales of securities, such distribution would be a
return of investment although taxable as stated above.
<PAGE>
DETERMINATION OF NET ASSET VALUE
As set forth in the Prospectuses under the same
caption, the net asset value of each class will be
determined as of the close of trading on each day the
New York Stock Exchange is open for trading. The Fund
does not determine net asset value on days the New York
Stock Exchange is closed and at other times described
in the Prospectus. The New York Stock Exchange is
closed on New Year's Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving
Day, and Christmas Day. Additionally, if any of the
aforementioned holidays falls on a Saturday, the New
York Stock Exchange will not be open for trading on the
preceding Friday and when such holiday falls on a
Sunday, the New York Stock Exchange will not be open
for trading on the succeeding Monday, unless unusual
business conditions exist, such as the ending of a
monthly or the yearly accounting period.
SHAREHOLDER MEETINGS
Delaware law permits registered investment
companies, such as the Trust, to operate without an
annual meeting of shareholders under specified
circumstances if an annual meeting is not required by
the Investment Company Act. The Trust has adopted the
appropriate provisions in its Bylaws and may, at its
discretion, not hold an annual meeting in any year in
which the election of trustees is not required to be
acted on by shareholders under the Investment Company
Act.
The Trust's Bylaws also contain procedures for the
removal of trustees by shareholders. At any meeting of
shareholders, duly called and at which a quorum is
present, the shareholders may, by the affirmative vote
of the holders of a majority of the votes entitled to
be cast thereon, remove any trustees from office and
may elect a successor or successors to fill any
resulting vacancies for the unexpired terms of removed
trustees.
Upon the written request of the holders of shares
entitled to not less than ten percent (10%) of all the
votes entitled to be cast at such meeting, the
Secretary of the Trust shall promptly call a special
meeting of shareholders for the purpose of voting upon
the question of removal of any trustee. Whenever ten
or more shareholders of record who have been such for
at least six months preceding the date of application,
and who hold in the aggregate either shares having a
net asset value of at least $25,000 or at least one
percent (1%) of the total outstanding shares, whichever
is less, shall apply to the Trust's Secretary in
writing, stating that they wish to communicate with
other shareholders with a view to obtaining signatures
to a request for a meeting as described above and
accompanied by a form of communication and request
which they wish to transmit, the Secretary shall within
five business days after such application either: (1)
afford to such applicants access to a list of the names
and addresses of all shareholders as recorded on the
books of the Trust; or (2) inform such applicants as to
the approximate number of shareholders of record and
the approximate cost of mailing to them the proposed
communication and form of request.
If the Secretary elects to follow the course
specified in clause (2) of the last sentence of the
preceding paragraph, the Secretary, upon the written
request of such applicants, accompanied by a tender of
the material to be mailed and of the reasonable
expenses of mailing, shall, with reasonable promptness,
mail such material to all shareholders of record at
their addresses as recorded on the books unless within
five business days after such tender the Secretary
shall mail to such applicants and file with the SEC,
together with a copy of the material to be mailed, a
written statement signed by at least a majority of the
Board of Trustees to the effect that in their opinion
either such material contains untrue statements of fact
or omits to state facts necessary to make the
statements contained therein not misleading, or would
be in violation of applicable law, and specifying the
basis of such opinion.
After opportunity for hearing upon the objections
specified in the written statement so filed, the SEC
may, and if demanded by the Board of Trustees or by
such applicants shall, enter an order either sustaining
one or more of such objections or refusing to sustain
any of them. If the SEC shall enter an order refusing
to sustain any of such objections, or if, after the
entry of an order sustaining one or more of such
objections, the SEC shall find, after notice and
opportunity for hearing, that all objections so
sustained have been met, and shall enter an order so
declaring, the Secretary shall mail copies of such
material to all shareholders with reasonable promptness
after the entry of such order and the renewal of such
tender.
<PAGE>
PERFORMANCE INFORMATION
As described in the "Performance" section of each
class' respective Prospectus, each class' historical
performance or return may be shown in the form of
various performance figures. The Fund may occasionally
cite statistics to reflect its volatility or risk.
Each class' performance figures are based upon
historical results and are not necessarily
representative of future performance. Factors
affecting each class' performance include general
market conditions, operating expenses, the imposition
of sales charges and investment management. Any
additional fees charged by a dealer or other financial
services firm would reduce the returns described in
this section.
Total Return
The average annual total return of each class is
computed by finding the average annual compounded rates
of return over the periods that would equate the
initial amount invested to the ending redeemable value,
according to the following formula:
P(1+T)n = ERV
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 of
the stated periods at the end of the stated
periods.
Calculation of each class' total return is not
subject to a standardized formula. Total return
performance for a specific period is calculated by
first taking an investment (assumed to be $1,000)
("initial investment") in each class' respective shares
on the first day of the period and computing the
"ending value" of that investment at the end of the
period. The total return percentage is then determined
by subtracting the initial investment from the ending
value and dividing the remainder by the initial
investment and expressing the result as a percentage.
With respect to the Retail class, the calculation
reflects the deduction of the maximum initial sales
charge and assumes that all income and capital gains
dividends paid by the Retail class have been reinvested
at the net asset value of the Retail class on the
reinvestment dates during the period. Total return may
also be shown as the increased dollar value of the
hypothetical investment over the period.
Cumulative total return represents the simple
change in value of an investment over a stated period
and may be quoted as a percentage or as a dollar
amount. Total returns may be broken down into their
components of income and capital (including capital
gains and changes in share price) in order to
illustrate the relationship between these factors and
their contributions to total return.
Volatility
Occasionally statistics may be used to specify
Fund volatility or risk. Measures of volatility or
risk are generally used to compare net asset value or
performance relative to a market index. One measure of
volatility is beta. Beta is the volatility of a fund
relative to the total market as represented by the
Standard & Poor's 500 Stock Index. A beta of more than
1.00 indicates volatility greater than the market, and
a beta of less than 1.00 indicates volatility less than
the market. Another measure of volatility or risk is
standard deviation. Standard deviation is used to
measure variability of net asset value or total return
around an average, over a specified period of time.
The premise is that greater volatility connotes greater
risk undertaken in achieving performance.
Comparisons
Each class may compare its performance to that of
United States Treasury Bills, Notes or Bonds. Treasury
obligations are issued in selected denominations.
Rates of Treasury obligations are fixed at the time of
issuance and payment of principal and interest is
backed by the full faith and credit of the United
States Treasury. The market value of such instruments
will generally fluctuate inversely with interest rates
prior to maturity and will equal par value at maturity.
Generally, the values of obligations with shorter
maturities will fluctuate less than those with longer
maturities.
From time to time, in marketing and other fund
literature, each class' performance may be compared to
the performance of other mutual funds in general or to
the performance of particular types of mutual funds
with similar investment goals, as tracked by
independent organizations. Among these organizations,
Lipper Analytical Services,
<PAGE>
Inc. ("Lipper"), a widely
used independent research firm which ranks mutual funds
by overall performance, investment objectives, and
assets, may be cited. Lipper performance figures are
based on changes in net asset value, with all income
and capital gains dividends reinvested. Such
calculations do not include the effect of any sales
charges. The Fund will be compared to Lipper's
appropriate fund category, that is, by fund objective
and portfolio holdings.
Each class' performance may also be compared to
the performance of other mutual funds by Morningstar,
Inc. ("Morningstar"), which rates funds on the basis of
historical risk and total return. Morningstar's
ratings range from five stars (highest) to one star
(lowest) and represent Morningstar's assessment of the
historical risk level and total return of a fund as a
weighted average for 3, 5, and 10 year periods.
Ratings are not absolute or necessarily predictive of
future performance.
Evaluations of each class' performance made by
independent sources may also be used in advertisements
concerning a class, including reprints of or selections
from, editorials or articles about a class. Sources
for performance and articles about the Fund may include
publications such as Money, Forbes, Kiplinger's,
Financial World, Business Week, U.S. News and World
Report, the Wall Street Journal, Barron's and a variety
of investment newsletters.
Each class may compare its performance to a wide
variety of indices and measures of inflation including
the Standard & Poor's Index of 500 Stocks and the
NASDAQ Over-the-Counter Composite Index. There are
differences and similarities between the investments
that the Fund may purchase for its portfolio and the
investments measured by these indices.
Investors may want to compare a class' performance
to that of certificates of deposit offered by banks and
other depository institutions. Certificates of deposit
may offer fixed or variable interest rates and
principal is guaranteed and may be insured. Withdrawal
of the deposits prior to maturity normally will be
subject to a penalty. Rates offered by banks and other
depository institutions are subject to change at any
time specified by the issuing institution.
Investors may also want to compare performance of
a class to that of money market funds. Money market
fund yields will fluctuate and shares are not insured,
but share values usually remain stable.
INDEPENDENT ACCOUNTANTS
KMPG Peat Marwick LLP have been selected as the
independent accountants for the Fund.
FINANCIAL STATEMENTS
The following Financial Statements of the Fund are
contained herein:
(a) Statement of Assets and Liabilities.
The Rockland Funds Trust
Statement of Assets and Liabilities
October 21, 1996
Rockland
Growth Fund
ASSETS
Cash $100,000
Unamortized organizational
costs (Note 4) 31,474
Total Assets 131,474
LIABILITIES
Payable to Advisor 31,474
Total Liabilities 31,474
NET ASSETS $100,000
Capital Stock, $0.001 par value;
unlimited shares authorized; 10,000
Institutional shares outstanding $100,000
Offering and redemption price/net
asset value per share (based on
10,000 Institutional shares of
capital stock issued and
outstanding) $10.00
The accompanying notes to financial
statements are an integral part of this
statement.
(b) Notes to Financial Statements.
The Rockland Funds Trust
The Rockland Growth Fund
Notes to Financial Statement
October 21, 1996
1. The Rockland Growth Fund (the Fund) is a
mutual fund created by The Rockland
Funds Trust (the Trust) which was
organized as a business trust under the
laws of Delaware on July 31, 1996. The
Fund is the only series of the Trust and
consists of both a Retail and
Institutional class. Each class of
shares represent interests in the assets
of the Fund and have identical voting,
dividend, liquidation and other rights
on the same terms and conditions, except
that distribution fees related to the
Retail class shares are borne solely by
that class. The Fund is an open-end,
diversified management company
registered under the Investment Company
Act of 1940, as amended. The Fund has
had no operations to date other than
those relating to organization matters
and the sale of 10,000 shares of its
Common Stock to Greenville Capital
Management, Inc. (the Advisor).
2. The Rockland Funds Trust has an
agreement with the Adviser, with whom
certain officers and directors of the
Fund are affiliated, pursuant to which
the Advisor manages the Fund's
investments and business affairs,
subject to the supervision of the
Trust's Board of Trustees. Under the
agreement, the Trust, on behalf of the
Fund, compensates the the Advisor for
its investment advisory services at the
annual rate of 1.00% of the Fund's
average net assets. The Advisor has
voluntarily agreed to waive its
management fee and/or reimburse the
operating expenses to the extent
necessary to ensure that the Retail
class' and Institutional class' total
operating expenses do not exceed 2.00%
and 1.75%, respectively, of the Fund's
average daily net assets. The Fund has
adopted a plan pursuant to Rule 12b-1
under the Investment Company Act (the
"Plan") which requires the Retail class
to pay the Distributor a distribution
fee of up to 0.25% of its average daily
net assets computed on an annual basis.
3. The preparation of financial statements
in conformity with generally accepted
accounting principles requires
management to make estimates and
assumptions
<PAGE>
that affect the reported
amounts of assets and liabilities at the
date of the financial statements.
Actual results could differ from those
estimates.
4. Organizational costs are being deferred
and amortized over the period of
benefit, but not to exceed sixty months
from the Fund's commencement of
operations. These costs were advanced
by the Advisor and will be reimbursed by
the Fund. The proceeds of any
redemption of the initial shares by the
original stockholders or any transferee
will be reduced by a pro-rata portion of
any then unamortized organizational
expense in the same proportion as the
number of initial shares being redeemed
bears to the number of initial shares
outstanding at the time of such
redemption.
(c) Report of Independent Accountants.
Independent Auditors' Report
The Shareholder and Board of Directors of
The Rockland Growth Fund:
We have audited the accompanying statement of
assets and liabilities of The Rockland Growth
Fund (the "Fund"), a series of The Rockland
Funds Trust, a Delaware corporation, as of
October 21, 1996. This financial statement
is the responsibility of the Fund's
management. Our responsibility is to express
an opinion on this financial statement based
on our audit.
We conducted our audit in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform
the audit to obtain reasonable assurance
about whether the financial statement is free
of material misstatement. An audit of a
financial statement includes examining, on a
test basis, evidence supporting the amounts
and disclosures in the financial statement.
Our procedures included confirmation of cash
owned with the custodian. 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 statement of assets and
liabilities referred to above presents
fairly, in all material respects, the
financial position of The Rockland Growth
Fund as of October 21, 1996, in conformity
with generally accepted accounting
principles.
/s/ KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Milwaukee, Wisconsin
October 23, 1996
<PAGE>
APPENDIX
SHORT-TERM RATINGS
Standard & Poor's Commercial Paper Ratings
A Standard & Poor's commercial paper rating is a
current assessment of the likelihood of timely payment
of debt having an original maturity of no more than 365
days. The categories are as follows:
A issues assigned this highest rating are
regarded as having the greatest capacity for
timely payment. Issues within this category are
delineated with the numbers 1, 2 and 3 to indicate
the relative degree of safety.
A-1 designation indicates that the
degree of safety regarding timely payment is
either overwhelming or very strong. Those
issues determined to possess overwhelming
safety characteristics are designated A-1+.
A-2 designation indicates that the
capacity for timely payment is strong.
However, the relative degree of safety is not
as high as for issues designated A-1.
A-3 designation indicates a
satisfactory capacity for timely payment.
Issues with this designation however, are
somewhat more vulnerable to the adverse
effects of changes in circumstances than
obligations carrying the higher designations.
B issues are regarded as having only an
adequate capacity for timely payment. They are,
however, somewhat more vulnerable to the adverse
effects of changes in circumstances than
obligations carrying the higher designations.
C issues have a doubtful capacity for
payment.
D issues are in payment default. The D
rating category is used when interest payments or
principal payments are not made on the due date
even if the applicable grace period has not
expired, unless Standard & Poor's believes that
such payments will be made during such grace
period.
Standard & Poor's Note Ratings
A Standard & Poor's note rating reflects the
liquidity concerns and market access risks unique to
notes. Notes due in three years or less normally
receive a note rating. Notes maturing beyond three
years normally receive a bond rating, although the
following criteria are used in making such an
assessment: (i) the amortization schedule (the larger
the final maturity relative to the other maturities,
the more likely the issue will be rated as a note), and
(ii) the source of payment (the more dependent the
issue is on the market for its refinancing, the more
likely it will be rated as a note).
SP-1 notes have very strong or strong
capacity to pay principal and interest. Those
issues determined to possess overwhelming safety
characteristics are designated as SP-1+.
SP-2 notes have satisfactory capacity to pay
principal and interest.
SP-3 notes have speculative capacity to pay
principal and interest.
Moody's Commercial Paper Ratings
Moody's rates commercial paper as either Prime,
which contains three categories, or Not Prime. The
commercial paper ratings are as follows:
P-1 issuers (or related supporting
institutions) have a superior capacity for
repayment of short-term promissory obligations,
normally evidenced by the following
characteristics: (i) leading market positions in
well established industries, (ii) high rates of
return on funds employed, (iii) conservative
capitalization structures with moderate reliance
on debt and ample asset protection, (iv) broad
margins in earnings
<PAGE>
coverage of fixed financial
charges and high internal cash generation and (v)
well established access to a range of financial
markets and assured sources of alternate
liquidity.
P-2 issuers (or related supporting
institutions) have a strong capacity for repayment
of short-term promissory obligations, normally
evidenced by many of the characteristics of a P-1
rating, but to a lesser degree. Earnings trends
and coverage ratios, while sound, will be more
subject to variation. Capitalization
characteristics, while still appropriate, may be
more affected by external conditions. Ample
alternate liquidity is maintained.
P-3 issuers (or related supporting
institutions) have an acceptable capacity for
repayment of short-term promissory obligations.
The effect of industry characteristics and market
composition may be more pronounced. Variability
in earnings and profitability may result in
changes in the level of debt protection
measurements and the requirement for relatively
high financial leverage. Adequate alternate
liquidity is maintained.
Not Prime issuers (or related supporting
institutions) do not fall within any of the Prime
rating categories.
Moody's Note Ratings
MIG-1 notes are the best quality. There is
present strong protection by established cash flows,
superior liquidity support or demonstrated broad-based
access to the market for refinancing.
MIG-2 notes are high quality. Margins of
protection are ample although not so large as in the
preceding group.
MIG-3 notes are favorable quality. All security
elements are accounted for but there is lacking the
undeniable strength of the preceding grades. Liquidity
and cash flow protection may be narrow and market
access for refinancing is likely to be less well
established.
MIG-4 notes are adequate quality. Protection
commonly regarded as required of an investment security
is present and although not distinctly or predominantly
speculative, there is specific risk.
S.G. notes are speculative quality. Debt
instruments in this category lack margins of
protection.
Fitch Investors Service, Inc. Commercial Paper and Note Ratings
Fitch's short-term ratings apply to debt
obligations that are payable on demand or have original
maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and
municipal and investment notes. Although the credit
analysis is similar to Fitch's bond rating analysis,
the short-term rating places greater emphasis on the
existence of liquidity necessary to meet the issuer's
obligations in a timely manner. Fitch's short-term
ratings are as follows:
Fitch-1+ (Exceptionally
Strong Credit Quality) Issues
assigned this rating are regarded
as having the strongest degree of
assurance for timely payment.
Fitch-2 (Very Strong Credit
Quality) Issues assigned this
rating reflect an assurance of
timely payment only slightly less
in degree than issues rated
Fitch-1+.
Fitch-2 (Good Credit
Quality) Issues carrying this
rating have a satisfactory degree
of assurance for timely payment
but the margin of safety is not as
great as the two higher
categories.
Fitch-3 (Fair Credit
Quality) Issues carrying this
rating have characteristics
suggesting that the degree of
assurance for timely payment is
adequate, however, near-term
adverse change is likely to cause
these securities to be rated below
investment grade.
<PAGE>
Fitch-S (Weak Credit
Quality) Issues carrying this
rating have characteristics
suggesting a minimal degree of
assurance for timely payment and
are vulnerable to near term
adverse changes in financial and
economic conditions.
D (Default) Issues
carrying this rating are in actual
or imminent payment default.
Duff & Phelps, Inc. Short-Term Ratings
Duff & Phelps' short-term ratings are consistent
with the rating criteria utilized by money market
participants. The ratings apply to all obligations
with maturities of under one year, including commercial
paper, the uninsured portion of certificates of
deposit, unsecured bank loans, master notes, bankers
acceptances, irrevocable letters of credit, and current
maturities of long-term debt. Asset-backed commercial
paper is also rated according to this scale.
Emphasis is placed on liquidity which is defined
as not only cash from operations, but also access to
alternative sources of funds, including trade credit,
bank lines, and the capital markets. An important
consideration is the level of an obligor's reliance on
short-term funds on an ongoing basis.
A. Category 1: High Grade
Duff 1+ Highest certainty
of timely payment. Short-term
liquidity, including internal
operating factors and/or access to
alternative sources of funds, is
outstanding, and safety is just
below risk-free U.S. Treasury
short-term obligations.
Duff 1 Very high certainty
of timely payment. Liquidity
factors are excellent and
supported by good fundamental
protection factors. Risk factors
are minor.
Duff 1- High certainty of
timely payment. Liquidity factors
are strong and supported by good
fundamental protection factors.
Risk factors are very small.
B. Category 2: Good Grade
Duff 2 Good certainty of
timely payment. Liquidity factors
and company fundamentals are
sound. Although ongoing funding
needs may enlarge total financing
requirements, access to capital
markets is good. Risk factors are
small.
C. Category 3: Satisfactory Grade
Duff 3 Satisfactory
liquidity and other protection
factors quality issue as to
investment grade. Risk factors
are larger and subject to more
variation. Nevertheless, timely
payment is expected.
D. Category 4: Non-investment Grade
Duff 4 Speculative
investment characteristics.
Liquidity is not sufficient to
insure against disruption in debt
service. Operating factors and
market access may be subject to a
high degree of variation.
E. Category 5: Default
Duff 5 Issuer failed to
meet scheduled principal and/or
interest payments.
BOND RATINGS
Standard & Poor's Bond Ratings
A Standard & Poor's corporate rating is a current
assessment of the creditworthiness of an obligor with
respect to a specific obligation. This assessment may
take into consideration obligors such as guarantors,
insurers, or lessees.
<PAGE>
The debt rating is not a recommendation to
purchase, sell, or hold a security, inasmuch as it does
not comment as to market price or suitability for a
particular investor.
The ratings are based on current information
furnished by the issuer or obtained by Standard &
Poor's from other sources it considers reliable.
Standard & Poor's does not perform an audit in
connection with any rating and may, on occasion, rely
on unaudited financial information. The ratings may be
changed, suspended, or withdrawn as a result of changes
in, or unavailability of, such information, or for
other circumstances.
The ratings are based, in varying degrees, on the
following considerations:
1. Likelihood of default -- capacity and
willingness of the obligor as to the timely
payment of interest and repayment of principal in
accordance with the terms of the obligation.
2. Nature of and provisions of the
obligation.
3. Protection afforded by, and relative
position of, the obligation in the event of
bankruptcy, reorganization, or other arrangement
under the laws of bankruptcy and other laws
affecting creditors' rights.
AAA Bonds have the highest rating assigned by
Standard & Poor's. Capacity to pay interest and repay
principal is extremely strong.
AA Bonds have a very strong capacity to pay
interest and repay principal and differs from the
highest rated issues only in small degree.
A Bonds have a strong capacity to pay interest and
repay principal although it is somewhat more
susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in
higher rated categories.
BBB Bonds are regarded as having an adequate
capacity to pay interest and repay principal. Whereas
they normally exhibit adequate protection parameters,
adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category
than in higher rated categories.
BB, B, CCC, CC and C Bonds are regarded, on
balance, as predominantly speculative with respect to
capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB
indicates the least degree of speculation and C the
highest degree of speculation. While such debt will
likely have some quality and protective
characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse
conditions. A C rating is typically applied to debt
subordinated to senior debt which is assigned an actual
or implied CCC rating. It may also be used to cover a
situation where a bankruptcy petition has been filed,
but debt service payments are continued.
Moody's Bond Ratings
Aaa Bonds are judged to be of the best quality.
They carry the smallest degree of investment risk and
are generally referred to as "gilt edged". Interest
payments are protected by a large or by an
exceptionally stable margin and principal is secure.
While the various protective elements are likely to
change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of
such issues.
Aa Bonds are judged to be of high quality by all
standards. Together with the Aaa group they comprise
what are generally known as high grade bonds. They are
rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater
amplitude or there may be other elements present which
make the long-term risks appear somewhat larger than in
Aaa securities.
A Bonds possess many favorable investment
attributes and are to be considered as upper-medium
grade obligations. Factors giving security to
principal and interest are considered adequate, but
elements may be present which suggest a susceptibility
to impairment some time in the future.
Baa Bonds are considered as medium-grade
obligations (i.e., they are neither highly protected
nor poorly secured). Interest payments and principal
security appear adequate for the present but certain
protective elements
<PAGE>
may be lacking or may be
characteristically unreliable over any great length of
time. Such Bonds lack outstanding investment
characteristics and in fact have speculative
characteristics as well.
Ba Bonds are judged to have speculative elements;
their future cannot be considered as well-assured.
Often the protection of interest and principal payments
may be very moderate, and thereby not well safeguarded
during both good and bad times over the future.
Uncertainty of position characterizes Bonds in this
class.
B Bonds generally lack characteristics of the
desirable investment. Assurance of interest and
principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
Caa Bonds are of poor standing. Such issues may
be in default or there may be present elements of
danger with respect to principal or interest.
Ca Bonds represent obligations which are
speculative in a high degree. Such issues are often in
default or have other marked shortcomings.
C Bonds are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment
standing.
Fitch Investors Service, Inc. Bond Ratings
The Fitch Bond Rating provides a guide to
investors in determining the investment risk associated
with a particular security. The rating represents its
assessment of the issuer's ability to meet the
obligations of a specific debt issue. Fitch bond
ratings are not recommendations to buy, sell or hold
securities since they incorporate no information on
market price or yield relative to other debt
instruments.
The rating takes into consideration special
features of the issue, its relationship to other
obligations of the issuer, the record of the issuer and
of any guarantor, as well as the political and economic
environment that might affect the future financial
strength and credit quality of the issuer.
Bonds which have the same rating are of similar
but not necessarily identical investment quality since
the limited number of rating categories cannot fully
reflect small differences in the degree of risk.
Moreover, the character of the risk factor varies from
industry to industry and between corporate, health care
and municipal obligations.
In assessing credit risk, Fitch Investors Service
relies on current information furnished by the issuer
and/or guarantor and other sources which it considers
reliable. Fitch does not perform an audit of the
financial statements used in assigning a rating.
Ratings may be changed, withdrawn or suspended at
any time to reflect changes in the financial condition
of the issuer, the status of the issue relative to
other debt of the issuer, or any other circumstances
that Fitch considers to have a material effect on the
credit of the obligor.
AAA rated bonds are considered to be
investment grade and of the highest credit
quality. The obligor has an extraordinary
ability to pay interest and repay principal,
which is unlikely to be affected by
reasonably foreseeable events.
AA rated bonds are considered to be
investment grade and of very high credit
quality. The obligor's ability to pay
interest and repay principal, while very
strong, is somewhat less than for AAA rated
securities or more subject to possible change
over the term of the issue.
A rated bonds are considered to be
investment grade and of high credit quality.
The obligor's ability to pay interest and
repay principal is considered to be strong,
but may be more vulnerable to adverse changes
in economic conditions and circumstances than
bonds with higher ratings.
BBB rated bonds are considered to be
investment grade and of satisfactory credit
quality. The obligor's ability to pay
interest and repay principal is considered to
be adequate. Adverse changes in economic
conditions and circumstances, however, are
more likely to weaken this ability than bonds
with higher ratings.
<PAGE>
BB rated bonds are considered
speculative and of low investment grade. The
obligor's ability to pay interest and repay
principal is not strong and is considered
likely to be affected over time by adverse
economic changes.
B rated bonds are considered highly
speculative. Bonds in this class are lightly
protected as to the obligor's ability to pay
interest over the life of the issue and repay
principal when due.
CCC rated bonds may have certain
identifiable characteristics which, if not
remedied, could lead to the possibility of
default in either principal or interest
payments.
CC rated bonds are minimally
protected. Default in payment of interest
and/or principal seems probable.
C rated bonds are in actual or
imminent default in payment of interest or
principal.
Duff & Phelps, Inc. Long-Term Ratings
These ratings represent a summary opinion of the
issuer's long-term fundamental quality. Rating
determination is based on qualitative and quantitative
factors which may vary according to the basic economic
and financial characteristics of each industry and each
issuer. Important considerations are vulnerability to
economic cycles as well as risks related to such
factors as competition, government action, regulation,
technological obsolescence, demand shifts, cost
structure, and management depth and expertise. The
projected viability of the obligor at the trough of the
cycle is a critical determination.
Each rating also takes into account the legal form
of the security, (e.g., first mortgage bonds,
subordinated debt, preferred stock, etc.). The extent
of rating dispersion among the various classes of
securities is determined by several factors including
relative weightings of the different security classes
in the capital structure, the overall credit strength
of the issuer, and the nature of covenant protection.
Review of indenture restrictions is important to the
analysis of a company's operating and financial
constraints.
The Credit Rating Committee formally reviews all
ratings once per quarter (more frequently, if
necessary).
Rating
Scale Definition
AAA Highest credit quality. The risk
factors are negligible, being only
slightly more than for risk-free
U.S. Treasury debt.
AA+ High credit quality. Protection
AA factors are strong. Risk is modest,
AA- but may vary slightly from time to
time because of economic conditions.
A+ Protection factors are average but
A adequate. However, risk factors
A- are more variable and greater in
periods of economic stress.
BBB+ Below average protection factors
BBB but still considered sufficient
BBB- for prudent investment.
Considerable variability in risk
during economic cycles.
BB+ Below investment grade but deemed
likely to meet obligations when due.
BB Present or prospective financial
protection factors fluctuate according to
BB- industry conditions or company
fortunes. Overall quality may move
up or down frequently within this category.
<PAGE>
B+ Below investment grade and
B possessing risk that obligations will
B not be met when due. Financial
protection factors will fluctuate widely
according to economic cycles, industry
conditions and/or company fortunes.
Potential exists for frequent changes in
the rating within this category
or into a higher or lower rating grade.
CCC Well below investment grade
securities. Considerable uncertainty
exists as to timely payment of
principal, interest or preferred
dividends. Protection factors are
narrow and risk can be substantial
with unfavorable economic/industry
conditions, and/or with unfavorable
company developments.
DD Defaulted debt obligations. Issuer
failed to meet scheduled principal
and/or interest payments.
DP Preferred stock with dividend
arrearages.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements (All included in Parts A and B)
Financial Statements
Report of Independent Accountants
Notes to Financial Statements
(b) Exhibits
(1.1) Certificate of Trust dated July 31, 1996
(1.2) Trust Instrument
(2) Registrant's By-Laws
(3) None
(4) None
(5) Investment Advisory Agreement
(6.1) Distribution Agreement
(6.2) Form of Dealer Agreement
(7) None
(8) Custodian Agreement with Firstar Trust Company
(9.1) Transfer Agent Agreement with Firstar Trust Company
(9.2) Fund Administration Agreement with Firstar Trust
Company
(9.3) Fund Accounting Servicing Agreement with Firstar
Trust Company
(10) Opinion and Consent of Godfrey & Kahn, S.C.
(11) Consent of KPMG Peat Marwick LLP
(12) None
(13.1) Subscription Agreement with Charles S. Cruice
(13.2) Subscription Agreement with Richard H. Gould
(13.3) Subscription Agreement with Jeffrey Rugen
(13.4) Subscription Agreement with Molly Lewis
(14) Individual Retirement Trust Account
Disclosure Statement and Custodial Account
(15) Rule 12b-1 Distribution Plan with respect to the
Retail Class
(16) None
<PAGE>
(17) None
(18) Rule 18f-3 Plan
(19) Powers of Attorney for Trustees and Officers (see
signature page)
Item 25. Persons Controlled by or under Common Control with Registrant
Registrant neither controls any person nor is
under common control with any other person.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Securities as of October 21, 1996
Shares of beneficial interest
Retail Class Shares ___
Institutional Class Shares 4
Item 27. Indemnification
Section 9.2 of The Rockland Funds Trust governing
instrument provides:
9.2 Indemnification.
(a) Subject to the exceptions and
limitations contained in subsections (b)
and (c) below:
(i) every person who is, or has
been, a Trustee or an officer, employee or
agent of the Trust ("Covered Person")
shall be indemnified by the Trust or the
appropriate Series to the fullest extent
permitted by law against liability and
against all expenses reasonably incurred
or paid by him or her in connection with
any claim, action, suit or proceeding in
which he or she becomes involved as a
party or otherwise by virtue of his or her
being or having been a Covered Person and
against amounts paid or incurred by him or
her in the settlement thereof;
(ii)as used herein, 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 and
other liabilities.
(b) No indemnification shall be provided
hereunder to a Covered Person:
(i) who shall have been adjudicated
by a court or body before which the
proceeding was brought (A) to be liable to
the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross
negligence or reckless disregard of the
duties involved in the conduct of his or
her office, or (B) not to have acted in
good faith in the reasonable belief that
his or her action was in the best interest
of the Trust; or
(ii)in the event of a settlement,
unless there has been a determination that
such Covered Person did not engage in
willful misfeasance, bad faith, gross
negligence or reckless disregard of the
duties involved in the conduct of his or
her office; (A) by the court or other body
approving the settlement; (B) by the vote
of at least a majority of those Trustees
who are neither Interested Persons of the
Trust nor are parties to the proceeding
based upon a review of readily available
facts (as opposed to a full trial-type
inquiry); or (C) by written opinion of
independent legal counsel based upon a
review of readily available facts (as
opposed to a full trial-type inquiry).
(c) The rights of indemnification herein
provided may be insured against by policies
maintained by the Trust, shall be severable,
shall not be exclusive of or affect any other
rights to which any Covered Person may now or
hereafter be entitled, and shall inure to the
benefit of the heirs, executors and
administrators of a Covered Person.
<PAGE>
(d) To the maximum extent permitted by
applicable law, expenses in connection with
the preparation and presentation of a defense
to any claim, action, suit or proceeding of
the character described in subsection (a) of
this Section may be paid by the Trust or
applicable Series from time to time prior to
final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered
Person that such amount will be paid over by
him or her to the Trust or applicable Series
if it is ultimately determined that he or she
is not entitled to indemnification under this
Section; provided, however, that either (i)
such Covered Person shall have provided
appropriate security for such undertaking,
(ii) the Trust is insured against losses
arising out of any such advance payments or
(iii) either a majority of the Trustees who
are neither Interested Persons of the Trust
nor parties to the proceeding, or independent
legal counsel in a written opinion, shall
have determined, based upon a review of
readily available facts (as opposed to a full
trial-type inquiry) that there is reason to
believe that such Covered Person will not be
disqualified from indemnification under this
Section.
(e) Any repeal or modification of this
Article IX by the Shareholders of the Trust,
or adoption or modification of any other
provision of the Trust Instrument or By-Laws
inconsistent with this Article, shall be
prospective only, to the extent that such
repeal or modification would, if applied
retrospectively, adversely affect any
limitation on the liability of any Covered
Person or indemnification available to any
Covered Person with respect to any act or
omission which occurred prior to such repeal,
modification or adoption.
Item 28. Business and Other Connections of Investment Adviser
None.
Item 29. Principal Underwriters
(a) None
(b) Incorporated by reference to the
information contained under "DISTRIBUTOR" in
the Prospectuses and "UNDERWRITER" in the
Statement of Additional Information, all
pursuant to Rule 411 under the Securities Act
of 1933.
(c) None
Item 30. Location of Accounts and Records
All accounts, books or other documents required to
be maintained by section 31(a) of the Investment
Company Act of 1940 and the rules promulgated
thereunder are in the possession of GCM, Registrant's
investment adviser, at Registrant's corporate offices,
except records held and maintained by Firstar Trust
Company, Mutual Fund Services, Third Floor, 615 East
Michigan Street, Milwaukee, Wisconsin 53202, relating
to its function as custodian, transfer agent, fund
accountant and administrator.
Item 31. Management Services
All management-related service contracts entered
into by Registrant are discussed in Parts A and B of
this Registration Statement.
Item 32. Undertakings.
(a) Registrant undertakes to call a meeting
of shareholders, if requested to do so by the
holders of at least 10% of the Registrant's
outstanding shares, for the purpose of voting
upon the question of removal of a trustee or
trustees. The Registrant also undertakes to
assist in communications with other
shareholders as required by Section 16(c) of
the Investment Company Act of 1940; and
(b) Registrant undertakes to file a post-
effective amendment to this Registration
Statement within four to six months of the
effective date of this Registration Statement
which will contain financial statements
(which need not be certified) as of and for
the time period reasonably close or as soon
as practicable to the date of such post-
effective amendment.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933 and the Investment Company Act of 1940, the
Registrant has duly caused this Pre-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-
1A to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Greenville
and State of Delaware on the ____day of October, 1996.
THE ROCKLAND FUNDS TRUST
(Registrant)
By: /s/ Charles S. Cruice
----------------------
Charles S. Cruice
President
Each person whose signature appears below
constitutes and appoints Charles S. Cruice and Richard
Gould and each of them, his true and lawful attorney-in-
fact and agent with full power of substitution and
resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all
pre-effective amendments to this Registration Statement
and to file the same, with all exhibits thereto, and
any other documents in connection therewith, with the
Securities and Exchange Commission and any other
regulatory body, granting unto said attorney-in-fact
and agent, full power and authority to do and perform
each and every act and thing requisite and necessary to
be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or
his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act
of 1933, this Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A has
been signed below by the following persons in the
capacities and on the date(s) indicated.
Name Title Date
/s/ Charles S. Cruice President and a Trustee October __, 1996
- ------------------------
Charles S. Cruice
/s/ Richard H. Gould Treasurer and a Trustee October __, 1996
- -------------------------
Richard H. Gould
Trustee October __, 1996
- -------------------------
Dr. Peter Utsinger
/s/ Robert Harrison Trustee October __, 1996
- -------------------------
Robert Harrison
Trustee October__, 1996
- -------------------------
Richard Vague
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
(1.1) Certificate of Trust dated
July 31, 1996 (previously filed
as Exhibit 1.1 to the Registration
Statement on Form N-1A, (File Nos.
811-7743 and 333-9355)
(1.2) Trust Instrument (previously filed
as exhibit 1.2 to the Registration
Statement on Form N-1A, (File Nos.
811-7743 and 333-9355)
(2) Registrant's By-Laws
(3) None
(4) None
(5) Investment Advisory Agreement
(6.1) Distribution Agreement
(6.2) Form of Dealer Agreement
(7) None
(8) Custodian Agreement with Firstar Trust
Company
(9.1) Transfer Agent Agreement with Firstar Trust Company
(9.2) Fund Administration Servicing Agreement
with Firstar Trust Company
(9.3) Fund Accounting Agreement with Firstar Trust
Company
(10) Opinion and Consent of Godfrey & Kahn, S.C.
(11) Consent of KPMG Peat Marwick LLP
(12) None
(13.1) Subscription Agreement with Charles S. Cruice
(13.2) Subscription Agreement with Richard H. Gould
(13.3) Subscription Agreement with Jeffrey Rugen
(13.4) Subscription Agreement with Molly Lewis
(14) Individual Retirement Trust
Account Disclosure Statement and Custodial
Account
(15) Rule 12b-1 Distribution Plan with respect
to the Retail Class
(16) None
(17) None
(18) Rule 18f-3 Plan
(19) Powers of Attorney for Trustees and
Officers (see signature page)
BY-LAWS
OF
THE ROCKLAND FUNDS TRUST
These By-Laws of The Rockland Funds Trust (the
"Trust"), a Delaware business trust, are subject to the
Trust Instrument of the Trust dated as of July 31,
1996, as from time to time amended, supplemented or
restated (the "Trust Instrument"). Capitalized terms
used herein have the same meanings as in the Trust
Instrument.
ARTICLE I
PRINCIPAL OFFICE AND SEAL
1.1 Principal Office. The principal office of
the Trust shall be located in Greenville, Delaware or
such other location as the Trustees determine. The
Trust may establish and maintain other offices and
places of business as the Trustees determine.
1.2 Seal. The Trustees may adopt a seal for the
Trust in such form and with such inscription as the
Trustees determine. Any Trustee or officer of the
Trust shall have authority to affix the seal to any
document.
ARTICLE II
MEETINGS OF TRUSTEES
2.1 Action by Trustees. Trustees may take
actions at meetings held at such places and times as
the Trustees may determine, or without meetings, all as
provided in Section 2.7, of the Trust Instrument.
2.2 Compensation of Trustees. Each Trustee who
is neither an employee of an investment adviser of the
Trust or any Series nor an employee of an entity
affiliated with the investment adviser may receive such
compensation from the Trust for services and
reimbursement for expenses as the Trustees may
determine.
ARTICLE III
COMMITTEES
3.1 Establishment. The Trustees may designate
one or more committees of the Trustees. The Trustees
shall determine the number of members of each committee
and its powers and shall appoint its members and its
chair. Each committee member shall serve at the
pleasure of the Trustees. The Trustees may abolish any
committee at any time. Each committee shall maintain
records of its meetings and report its actions to the
Trustees. The Trustees may rescind any action of any
committee, but such rescission shall not have
retroactive effect. The Trustees may delegate to any
committee any of its powers, subject to the limitations
of applicable law.
3.2 Proceedings; Quorum; Action. Each committee
may adopt such rules governing its proceedings, quorum
and manner of acting as it shall deem proper and
desirable. In the absence of such rules, a majority of
any committee shall constitute a quorum, and a
committee shall act by the vote of a majority of a
quorum.
3.3 Compensation of Committee Members. Each
committee member who is not an "interested person" of
the Trust ("Disinterested Trustees"), as defined in the
Investment Company Act of 1940, as amended (the "1940
Act"), may receive such compensation from the Trust for
services and reimbursement for expenses as the Trustees
may determine.
ARTICLE IV
OFFICERS
4.1 General. The officers of the Trust shall
include a President, one or more Vice Presidents, a
Treasurer and a Secretary, and may include one or more
Assistant Treasurers or Assistant Secretaries and such
other officers ("Other Officers") as the Trustees may
determine.
4.2 Election, Tenure and Qualifications of
Officers. The Trustees shall elect the officers of the
Trust. Each officer elected by the Trustees shall hold
office until his or her successor shall have been
elected and qualified or until his or her earlier
death, inability to serve, or resignation. Any person
may hold one or more offices. A person who holds more
than one office in the Trust may not act in more than
one capacity to execute, acknowledge, or verify an
instrument required by law to be executed, acknowledged
or verified by more than one officer.
4.3 Vacancies and Newly Created Offices.
Whenever a vacancy occurs in an office or if a new
office is created, the Trustees may fill such vacancy
or new office.
4.4 Removal and Resignation. Officers serve at
the pleasure of the Trustees and may be removed at any
time with or without cause. The Trustees may delegate
this power to the President with respect to any Other
Officer. Such removal shall be without prejudice to
the contract rights, if any, of the person removed.
Any officer may resign from office at any time by
delivering a written resignation to the Trustees or the
President. Unless otherwise specified, the resignation
shall take effect upon delivery.
4.5 President. The President shall be the chief
executive officer of the Trust. Subject to the
direction of the Trustees, the President shall have
general charge, supervision and control over the
Trust's business affairs and shall be responsible for
the management thereof and the execution of policies
established by the Trustees. Except as the Trustees
may otherwise order, the President shall have the power
to grant, issue, execute or sign such powers of
attorney, proxies, agreements or other documents. The
President also shall have the power to employ
attorneys, accountants and other advisers and agents
for the Trust. The President shall exercise such other
powers and perform such other duties as the Trustees
may assign to the President.
4.6 Vice President(s). The Vice President(s)
shall have such powers and perform such duties as the
Trustees or the President may determine. At the
request or in the absence or disability of the
President, the Vice President(s) shall perform all the
duties of the President and when so acting shall have
all the powers of the President.
4.7 Treasurer and Assistant Treasurer(s). The
Treasurer shall be the principal financial and
accounting officer of the Trust. The Treasurer shall
have general charge of the finances and books of the
Trust and shall report to the Trustees annually
regarding the financial condition of each Series as
soon as possible after the close of such Series' fiscal
year. The Treasurer shall be responsible for the
delivery of all funds and securities of the Trust to
such company as the Trustees shall retain as Custodian.
The Treasurer shall furnish such reports concerning the
financial condition of the Trust as the Trustees may
request. The Treasurer shall perform all acts
incidental to the office of Treasurer, subject to the
Trustees' supervision, and shall perform such
additional duties as the Trustees may designate. Any
Assistant Treasurer may perform such duties of the
Treasurer as the Trustees or the Treasurer may assign,
and, in the absence of the Treasurer, may perform all
the duties of the Treasurer.
4.8 Secretary and Assistant Secretaries. The
Secretary shall record all votes and proceedings of the
meetings of Trustees and Shareholders in books to be
kept for that purpose. The Secretary shall be
responsible for giving and serving notices of the
Trust. The Secretary shall have custody of any seal of
the Trust and shall be responsible for the records of
the Trust, including the Share register and such other
books and documents as may be required by the Trustees
or by law. The Secretary shall perform all acts
incidental to the office of Secretary, subject to the
supervision of the Trustees, and shall perform such
additional duties as the Trustees may designate. Any
Assistant Secretary may perform such duties of the
Secretary as the Trustees or the Secretary may assign,
and, in the absence of the Secretary, may perform all
the duties of the Secretary.
4.9 Compensation of Officers. Each officer may
receive compensation from the Trust for services and
reimbursement for expenses as the Trustees may
determine.
4.10 Surety Bond. The Trustees may require any
officer or agent of the Trust to execute a bond
(including, without limitation, any bond required by
the 1940 Act and the rules and regulations of the
Securities and Exchange Commission ("Commission")) to
the Trust in such sum and with such surety or sureties
as the Trustees may determine, conditioned upon the
faithful performance of his or her duties to the Trust,
including responsibility for negligence and for the
accounting of any of the Trust's property, funds or
securities that may come into his or her hands.
ARTICLE V
MEETINGS OF SHAREHOLDERS
5.1 No Annual Meetings. There shall be no annual
Shareholders' meetings, unless required by law.
5.2 Special Meetings. The Secretary shall call a
special meeting of Shareholders of any Series or Class
whenever ordered by the Trustees. The Secretary also
shall call a special meeting of Shareholders of any
Series or Class upon the written request of
Shareholders owning at least ten percent of the
Outstanding Shares of such Series or Class entitled to
vote at such meeting; provided, that (1) such request
shall state the purposes of such meeting and the
matters proposed to be acted on, and (2) the
Shareholders requesting such meeting shall have paid to
the Trust the reasonably estimated cost of preparing
and mailing the notice thereof, which the Secretary
shall determine and specify to such Shareholders. If
the Secretary fails for more than thirty days to call a
special meeting when required to do so, the Trustees or
the Shareholders requesting such a meeting may, in the
name of the Secretary, call the meeting by giving the
required notice. The Secretary shall not call a
special meeting upon the request of Shareholders of any
Series or Class to consider any matter that is
substantially the same as a matter voted upon at any
special meeting of Shareholders of such Series or Class
held during the preceding twelve months, unless
requested by the holders of a majority of the
Outstanding Shares of such Series or Class entitled to
be voted at such meeting. A special meeting of
Shareholders of any Series or Class shall be held at
such time and place as is determined by the Trustees
and stated in the notice of that meeting.
5.3 Notice of Meetings; Waiver. The Secretary
shall call a special meeting of Shareholders by giving
written notice of the place, date, time, and purposes
of that meeting at least fifteen days before the date
of such meeting. The Secretary may deliver or mail,
postage prepaid, the written notice of any meeting to
each Shareholder entitled to vote at such meeting. If
mailed, notice shall be deemed to be given when
deposited in the United States mail directed to the
Shareholder at his or her address as it appears on the
records of the Trust.
5.4 Adjourned Meetings. A Shareholders' meeting
may be adjourned one or more times for any reason,
including the failure of the presence of a quorum to
attend the meeting. No notice of adjournment of a
meeting to another time or place need be given to
Shareholders if such time and place are announced at
the meeting at which the adjournment is taken or
reasonable notice is given to persons present at the
meeting, and if the adjourned meeting is held within a
reasonable time after the date set for the original
meeting. Any business that might have been transacted
at the original meeting may be transacted at any
adjourned meeting. If after the adjournment a new
record date is fixed for the adjourned meeting, the
Secretary shall give notice of the adjourned meeting to
Shareholders of record entitled to vote at such
meeting. Any irregularities in the notice of any
meeting or the nonreceipt of any such notice by any of
the Shareholders shall not invalidate any action
otherwise properly taken at any such meeting.
5.5 Validity of Proxies. Subject to the
provisions of the Trust Instrument, Shareholders
entitled to vote may vote either in person or by proxy;
provided, that either (1) the Shareholder or his or her
duly authorized attorney has signed and dated a written
instrument authorizing such proxy to act, or (2) the
Trustees adopt by resolution an electronic, telephonic,
computerized or other alternative to execution of a
written instrument authorizing the proxy to act, but if
a proposal by anyone other than the officers or
Trustees is submitted to a vote of the Shareholders of
any Series or Class, or if there is a proxy contest or
proxy solicitation or proposal in opposition to any
proposal by the officers or Trustees, Shares may be
voted only in person or by written proxy. Unless the
proxy provides otherwise, it shall not be valid for
more than eleven months prior to the date of the
meeting. All proxies shall be delivered to the
Secretary or other person responsible for recording the
proceedings before being voted. A proxy with respect
to Shares held in the name of two or more persons shall
be valid if executed by one of them unless at or prior
to exercise of such proxy the Trust receives a specific
written notice to the contrary from any one of them.
Unless otherwise specifically limited by their terms,
proxies shall entitle the Shareholder to vote at any
adjournment of a Shareholders' meeting. A proxy
purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at
or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. At every
meeting of Shareholders, unless the voting is conducted
by inspectors, the chairman of the meeting shall decide
all questions concerning the qualifications of voters,
the validity of proxies, and the acceptance or
rejection of votes. Subject to the provisions of the
Delaware Business Trust Act, the Trust Instrument or
these By-Laws, the General Corporation Law of the State
of Delaware relating to proxies and judicial
interpretations thereunder shall govern all matters
concerning the giving, voting or validity of proxies,
as if the Trust were a Delaware corporation and the
Shareholders were shareholders of a Delaware
corporation.
5.6 Record Date. The Trustees may fix in advance
a date up to ninety days prior to the date of any
Shareholders' meeting as a record date for the
determination of the Shareholders entitled to notice
of, and to vote at, any such meeting. The Shareholders
of record entitled to vote at a Shareholders' meeting
shall be deemed the Shareholders of record at any
meeting reconvened after one or more adjournments,
unless the Trustees have fixed a new record date. If
the Shareholders' meeting is adjourned for more than
sixty days after the original date, the Trustees shall
establish a new record date.
5.7 Action Without a Meeting. Shareholders may
take any action without a meeting if a majority (or
such greater amount as may be required by law) of the
Outstanding Shares entitled to vote on the matter
consent to the action in writing and such written
consents are filed with the records of Shareholders'
meetings. Such written consent shall be treated for
all purposes as a vote at a meeting of the
Shareholders.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
6.1 No Share Certificates. Neither the Trust nor
any Series or Class shall issue certificates certifying
the ownership of Shares, unless the Trustees may
otherwise specifically authorize such certificates.
6.2 Transfer of Shares. Shares shall be
transferable only by a transfer recorded on the books
of the Trust by the Shareholder of record in person or
by his or her duly authorized attorney or legal
representative. Shares may be freely transferred and
the Trustees may, from time to time, adopt rules and
regulations regarding the method of transfer of such
Shares.
ARTICLE VII
CUSTODY OF SECURITIES
7.1 Employment of a Custodian. The Trust shall
at all times place and maintain all cash, securities
and other assets of the Trust and of each Series in the
custody of a custodian meeting the requirements set
forth in Section 7.4 of the Trust Instrument
("Custodian"). The Custodian shall be appointed from
time to time by the Board of Trustees, who shall
determine its remuneration.
7.2 Termination of Custodian Agreement. Upon
termination of any Custodian Agreement or the inability
of the Custodian to continue to serve as custodian, in
either case with respect to the Trust or any Series,
the Board of Trustees shall use its best efforts to
obtain a successor Custodian and require that the cash,
securities and other assets owned by the Trust or any
Series be delivered directly to the successor
Custodian.
7.3 Other Arrangements. The Trust may make such
other arrangements for the custody of its assets
(including deposit arrangements) as may be required by
any applicable law, rule or regulation.
ARTICLE VIII
FISCAL YEAR AND ACCOUNTANT
8.1 Fiscal Year. The fiscal year of the Trust
shall end on September 30.
8.2 Accountant. The Trust shall employ
independent certified public accountants as its
Accountant to examine the accounts of the Trust and to
sign and certify financial statements filed by the
Trust. The Accountant's certificates and reports shall
be addressed both to the Trustees and to the
Shareholders. A majority of the Disinterested Trustees
shall select the Accountant at any meeting held within
ninety days before or after the beginning of the fiscal
year of the Trust, acting upon the recommendation of
the Audit Committee. The employment of the Accountant
shall be conditioned upon the right of the Trust to
terminate such employment without any penalty by vote
of a Majority Shareholder Vote at any Shareholders'
meeting called for that purpose.
ARTICLE IX
AMENDMENTS
9.1 General. Except as provided in Section 9.2,
these By-Laws may be amended by the Trustees or by the
affirmative vote of a majority of the Outstanding
Shares entitled to vote at any meeting.
9.2 By Shareholders Only. After the issue of any
Shares, this Article may only be amended by the
affirmative vote of the holders of the lesser of at
least two-thirds of the Outstanding Shares present and
entitled to vote at any meeting or at least fifty
percent of the Outstanding Shares.
ARTICLE X
NET ASSET VALUE
10.1 Net Asset Value. The term "Net Asset Value"
of any Series shall mean that amount by which the
assets belonging to that Series exceed its liabilities,
all as determined by or under the direction of the
Trustees. Net Asset Value per Share shall be
determined separately for each Series and each Class
and shall be determined on such days and at such times
as the Trustees may determine. The Trustees shall make
such determination with respect to securities for which
market quotations are readily available, at the market
value of such securities, and with respect to other
securities and assets, at the fair value as determined
in good faith by the Trustees; provided, however, that
the Trustees, without Shareholder approval, may alter
the method of appraising portfolio securities insofar
as permitted under the 1940 Act and the rules,
regulations and interpretations thereof promulgated or
issued by the Commission or insofar as permitted by any
order of the Commission applicable to the Series or to
the Class. The Trustees may delegate any of their
powers and duties under this Article X with respect to
appraisal of assets and liabilities. At any time the
Trustees may cause the Net Asset Value per Share last
determined to be determined again in a similar manner
and may fix the time when such redetermined values
shall become effective.
ARTICLE XI
MISCELLANEOUS
11.1 Inspection of Books. The Board of Trustees
shall from time to time determine whether and to what
extent, and at what times and places, and under what
conditions the accounts and books of the Trust or any
Series or Class shall be open to the inspection of
Shareholders. No Shareholder shall have any right to
inspect any account or book or document of the Trust
except as conferred by law or otherwise by the Board of
Trustees or by resolution of Shareholders.
11.2 Severability. The provisions of these
By-Laws are severable. If the Board of Trustees
determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the
regulated investment company provisions of the Internal
Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed
never to have constituted a part of these By-Laws;
provided, however, that such determination shall not
affect any of the remaining provisions of these By-Laws
or render invalid or improper any action taken or
omitted prior to such determination. If any provision
hereof shall be held invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall
attach only to such provision only in such jurisdiction
and shall not affect any other provision of these By-
Laws.
11.3 Headings. Headings are placed in these
By-Laws for convenience of reference only and in case
of any conflict, the text of these By-Laws rather than
the headings shall control.
11.4 Definitions. Any capitalized terms in these
By-Laws shall have the same meaning as in the Trust
Instrument.
THE ROCKLAND FUNDS TRUST
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is entered into as of the ____ day
of _________, 1996, between The Rockland Funds Trust, a
Delaware business trust (the "Trust"), and Greenville
Capital Management, Inc., a Delaware corporation
("Greenville").
W I T N E S S E T H
WHEREAS, the Trust is an open-end investment
company registered under the Investment Company Act of
1940, as amended (the "Act"). The Trust is authorized
to create separate series, each with its own separate
investment portfolio (the "Funds"), and the beneficial
interest in each such series will be represented by a
separate series of shares (the "Shares"). In addition,
Each series may issue one or more classes of shares.
WHEREAS, Greenville is a registered investment
adviser, engaged in the business of rendering
investment advisory services.
WHEREAS, in managing the Trust's assets, as well
as in the conduct of certain of its affairs, the Trust
seeks the benefit of Greenville's services and its
assistance in performing certain managerial functions.
Greenville desires to furnish such services and to
perform the functions assigned to it under this
Agreement for the consideration provided for herein.
NOW THEREFORE, the parties mutually agree as
follows:
1. Appointment. The Trust hereby appoints
Greenville as investment adviser for each of the Funds
of the Trust on whose behalf the Trust executes an
Exhibit to this Agreement, and Greenville, by execution
of each such Exhibit, accepts the appointments.
Subject to the direction of the Board of Trustees (the
"Trustees") of the Trust, Greenville shall manage the
investment and reinvestment of the assets of each Fund
in accordance with the Fund's investment objective and
policies and limitations, for the period and upon the
terms herein set forth. The investment of funds shall
also be subject to all applicable restrictions of the
Trust's Declaration of Trust and Bylaws as may from
time to time be in force.
2. Expenses Paid by Greenville. In addition to
the expenses which Greenville may incur in the
performance of its responsibilities under this
Agreement, and the expenses which it may expressly
undertake to incur and pay, Greenville shall incur and
pay all reasonable compensation, fees and related
expenses of the Trust's officers and its Trustees,
except for such Trustees who are not interested persons
(as that term is defined in Section 2(a)(19) of the
Act) of Greenville, including all expenses related to
the Trust's offices.
3. Investment Advisory Functions. In its
capacity as investment adviser, Greenville shall have
the following responsibilities:
(a) To furnish continuous advice and
recommendations to the Funds, as to the acquisition,
holding or disposition of any or all of the securities
or other assets which the Funds may own or contemplate
acquiring from time to time;
(b) To cause its officers to attend meetings
and furnish oral or written reports, as the Trust may
reasonably require, in order to keep the Trustees and
appropriate officers of the Trust fully informed as to
the condition of the investments of the Funds, the
investment recommendations of Greenville, and the
investment considerations which have given rise to
those recommendations; and
(c) To supervise the purchase and sale of
securities or other assets as directed by the
appropriate officers of the Trust.
The services of Greenville are not to be deemed
exclusive and Greenville shall be free to render
similar services to others as long as its services for
others do not in any way hinder, preclude or prevent
Greenville from performing its duties and obligations
under this Agreement. In the absence of willful
misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the
part of Greenville, Greenville shall not be subject to
liability to the Trust, the Funds, or to any
shareholder for any act or omission in the course of,
or connected with, rendering services hereunder or for
any losses that may be sustained in the purchase,
holding or sale of any security.
4. Obligations of the Trust. The Trust shall
have the following obligations under this Agreement:
(a) To keep Greenville continuously and
fully informed as to the composition of the Funds'
investments and the nature of all of its assets and
liabilities;
(b) To furnish Greenville with a copy of any
financial statement or report prepared for it by
certified or independent public accountants, and with
copies of any financial statements or reports made to
the Funds' shareholders or to any governmental body or
securities exchange;
(c) To furnish Greenville with any further
materials or information which Greenville may
reasonably request to enable it to perform its
functions under this Agreement; and
(d) To compensate Greenville for its
services in accordance with the provisions of paragraph
5 hereof.
5. Compensation. Each Fund shall pay to
Greenville for its services a monthly fee, as set forth
on the Exhibit(s) hereto, payable on the last day of
each month during which or during part of which this
Agreement is in effect. For the month during which
this Agreement becomes effective and any month during
which it terminates, however, there shall be an appro
priate proration of the fee payable for such month
based on the number of calendar days of such month
during which this Agreement is effective. Greenville
may from time to time and for such periods as it deems
appropriate reduce its compensation (and/or assume
expenses) for one or more of the Funds.
6. Expenses Paid by Trust.
(a) Except as provided in this paragraph,
nothing in this Agreement shall be construed to impose
upon Greenville the obligation to incur, pay, or
reimburse the Trust for any expenses not specifically
assumed by Greenville under paragraph 2 above. Each
Fund shall pay or cause to be paid all of its expenses
and the Fund's allocable share of the Trust's expenses,
including, but not limited to, investment adviser fees;
any compensation, fees, or reimbursements which the
Trust pays to its Trustees who are not interested
persons (as that phrase is defined in Section 2(a)(19)
of the Act) of Greenville; fees and expenses of the
custodian, transfer agent, registrar or dividend
disbursing agent; current legal, accounting and
printing expenses; administrative, clerical,
recordkeeping and bookkeeping expenses; brokerage
commissions and all other expenses in connection with
the execution of Fund transactions; interest; all
federal, state and local taxes (including stamp,
excise, income and franchise taxes); expenses of
shareholders' meetings and of preparing, printing and
distributing proxy statements, notices and reports to
shareholders; expenses of preparing and filing reports
and tax returns with federal and state regulatory
authorities; and all expenses incurred in complying
with all federal and state laws and the laws of any
foreign country applicable to the issue, offer, or sale
of Shares of the Funds, including but not limited to,
all costs involved in the registration or qualification
of Shares of the Funds for sale in any jurisdiction and
all costs involved in preparing, printing and
distributing prospectuses and statements of additional
information to existing shareholders of the Funds.
(b) If expenses borne by a Fund in any
fiscal year (including Greenville's fee, but excluding
interest, taxes, fees incurred in acquiring and
disposing of Fund securities and, to the extent
permitted, extraordinary expenses), exceed those set
forth in any statutory or regulatory formula prescribed
by any state in which Shares of a Fund are registered
at such time, Greenville will reimburse the Fund for
any excess.
7. Brokerage Commissions. For purposes of this
Agreement, brokerage commissions paid by a Fund upon
the purchase or sale of securities shall be considered
a cost of the securities of the Fund and shall be paid
by the respective Fund. Greenville is authorized and
directed to place Fund transactions only with brokers
and dealers who render satisfactory service in the
execution of orders at the most favorable prices and at
reasonable commission rates, provided, however, that
Greenville may pay a broker or dealer an amount of
commission for effecting a securities transaction in
excess of the amount of commission another broker or
dealer would have charged for effecting that
transaction, if Greenville determines in good faith
that such amount of commission was reasonable in
relation to the value of the brokerage and research
services provided by such broker or dealer viewed in
terms of either that particular transaction or the
overall responsibilities of Greenville. In placing
Fund business with such broker or dealers, Greenville
shall seek the best execution of each transaction, and
all such brokerage placement shall be made in
compliance with Section 28(e) of the Securities
Exchange Act of 1934 and other applicable state and
federal laws. Notwithstanding the foregoing, the Trust
shall retain the right to direct the placement of all
Fund transactions, and the Trustees may establish
policies or guidelines to be followed by Greenville in
placing Fund transactions for the Funds pursuant to the
foregoing provisions.
8. Proprietary Rights. Greenville has
proprietary rights in each Fund's name and the Trust's
name. Greenville may withdraw the use of such names
from the Fund or the Trust.
9. Termination. This Agreement may be
terminated at any time, without penalty, by the
Trustees of the Trust or by the shareholders of a Fund
acting by the vote of at least a majority of its
outstanding voting securities (as that phrase is
defined in Section 2(a)(42) of the Act), provided in
either case that 60 days' written notice of termination
be given to Greenville at its principal place of
business. This Agreement may be terminated by
Greenville at any time by giving 60 days' written
notice of termination to the Trust, addressed to its
principal place of business.
10. Assignment. This Agreement shall terminate
automatically in the event of any assignment (as the
term is defined in Section 2(a)(4) of the Act) of this
Agreement.
11. Term. This Agreement shall begin for each
Fund as of the date of execution of the applicable
Exhibit(s) and shall continue in effect with respect to
each Fund for two years from the date of this Agreement
and thereafter for successive periods of one year,
subject to the provisions for termination and all of
the other terms and conditions hereof if such
continuation shall be specifically approved at least
annually by the vote of a majority of the Trustees of
the Trust, including a majority of the Trustees who are
not parties to this Agreement or interested persons of
any such party (other than as Trustees of the Trust),
cast in person at a meeting called for that purpose.
12. Amendments. This Agreement may be amended by
the mutual consent of the parties, provided that the
terms of each such amendment shall be approved by the
Trustees or by the affirmative vote of a majority of
the outstanding voting securities (as that phrase is
defined in Section 2(a)(42) of the Act) of each Fund.
This Agreement will become binding on the parties
hereto upon their execution of the Exhibit(s) to this
Agreement.
EXHIBIT A
to the
Investment Advisory Agreement
ROCKLAND GROWTH FUND
For all services rendered by Greenville hereunder,
the above-named Fund shall pay Greenville and
Greenville agrees to accept as full compensation for
all services rendered hereunder, an annual investment
advisory fee equal to 1.00% of the average daily net
assets of the Fund.
The portion of the fee based upon the average
daily net assets of the Fund shall be accrued daily at
the rate of 1.00% applied to the daily net assets of
the Fund.
The advisory fee so accrued shall be paid to
Greenville monthly.
Executed this _____ day of _________________, 19___.
GREENVILLE CAPITAL MANAGEMENT, INC.
By:___________________________
Charles S. Cruice, President
THE ROCKLAND FUNDS TRUST
By:_____________________________
THE ROCKLAND FUNDS TRUST
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement") is
made as of the _____ day of October, 1996 by and
among The Rockland Funds Trust (the "Fund"), a
Delaware business trust, Greenville Capital Management
(the "Adviser"), a Delaware corporation, and
AmeriPrime Financial Securities, Inc. (the
"Distributor"), a Texas corporation.
WITNESSETH THAT:
WHEREAS, the Fund is registered as an open-end
management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act") and
has registered its shares of common stock (the
"Shares") under the Securities Act of 1933, as
amended (the "1933 Act") in one or more distinct
series of Shares, and classes thereof (each class is
hereinafter referred to as a "Portfolio");
WHEREAS, the Adviser has been appointed investment
adviser to the Fund;
WHEREAS, the Distributor is a broker-dealer
registered with the U.S. Securities and Exchange
Commission (the "SEC") and a member in good standing of
the National Association of Securities Dealers, Inc.
(the "NASD");
WHEREAS, the Fund has adopted a plan of
distribution (the "Distribution Plan") pursuant to
Rule 12b-1 under the 1940 Act relating to the payment
by the Fund of distribution expenses; and
WHEREAS, the Fund, the Adviser and the
Distributor desire to enter into this Agreement
pursuant to which the Distributor will provide
distribution services to the Portfolios of the Fund
identified on Schedule A, as may be amended from time
to time, on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the
premises and mutual covenants contained in this
Agreement, the Fund, the Adviser and the
Distributor, intending to be legally bound hereby,
agree as follows:
1. APPOINTMENT OF DISTRIBUTOR. The Fund hereby
appoints the Distributor as its exclusive agent for
the distribution of the Shares, and the Distributor
hereby accepts such appointment under the terms of
this Agreement. The Fund shall not sell any Shares
to any person except to fill orders for the Shares
received through the Distributor; provided,
however, that the foregoing exclusive right shall
not apply: (i) to Shares issued or sold in connection
with the merger or consolidation of any other
investment company with the Fund or the acquisition by
purchase or otherwise of all or substantially all of
the assets of any investment company or substantially
all of the outstanding shares of any such company by
the Fund; (ii) to Shares which may be offered by the
Fund to its shareholders for reinvestment of cash
distributed from capital gains or net investment
income of the Fund; (iii) to Shares which may be
issued to shareholders of other funds who exercise any
exchange privilege set forth in the Fund's Prospectus;
or (iv) to Shares which may be sold to persons
purchasing such Shares directly from the Fund or the
Fund's Transfer Agent. Notwithstanding any other
provision hereof, the Fund may terminate, suspend, or
withdraw the offering of the Shares whenever, in its
sole discretion, it deems such action to be
desirable, and the Distributor shall process no
further orders for Shares after it receives
notice of such termination, suspension or
withdrawal.
2. FUND DOCUMENTS. The Fund has provided the
Distributor with properly certified or authenticated
copies of the following Fund related documents in
effect on the date hereof: the Fund's organizational
documents, including the Trust Instrument and By-Laws;
the Fund's Registration Statement on Form N-1A,
including all exhibits thereto; the Fund's most current
Prospectus and Statement of Additional Information;
and resolutions of the Fund's Board of Trustees
authorizing the appointment of the Distributor and
approving this Agreement. The Fund shall promptly
provide to the Distributor copies, properly
certified or authenticated, of all amendments or
supplements to the foregoing. The Fund shall provide to
the Distributor copies of all other information which
the Distributor may reasonably request for use in
connection with the distribution of Shares,
including, but not limited to, a certified copy of
all financial statements prepared for the Fund by its
independent public accountants. The Fund shall also
supply the Distributor with such number of copies of
the current Prospectus, Statement of Additional
Information and shareholder reports as the Distributor
shall reasonably request.
3. DISTRIBUTION SERVICES. The Distributor shall
sell and repurchase Shares as set forth below, subject
to the registration requirements of the 1933 Act and
the rules and regulations thereunder, and the laws
governing the sale of securities in the various states
("Blue Sky Laws"):
a. The Distributor, as agent for the Fund,
shall sell Shares to the public against orders therefor
at the public offering price, which shall be the net
asset value of the Shares then in effect plus any
applicable sales loads.
b. The net asset value of the Shares shall be
determined in the manner provided in the then current
Prospectus and Statement of Additional Information.
The net asset value of the Shares shall be calculated
by the Fund or by another entity on behalf of the Fund.
The Distributor shall have no duty to inquire into or
liability for the accuracy of the net asset value
per Share as calculated.
c. Upon receipt of purchase instructions,
the Distributor shall transmit such instructions
to the Fund or its transfer agent for
registration of the Shares purchased.
d. The Distributor, in light of Fund
policies, procedures and disclosure documents,
shall also have the right to take, as agent for the
Fund, all actions which, in the Distributor's
judgment, are necessary to effect the distribution of
Shares.
e. Nothing in this Agreement shall prevent
the Distributor or any "affiliated person" from
buying, selling or trading any securities for its or
their own account or for the accounts of others for
whom it or they may be acting; provided, however, that
the Distributor expressly agrees that it shall not for
its own account purchase any Shares of the Fund
except for investment purposes and that it shall not
for its own account sell any such Shares except for
redemption of such Shares by the Fund, and that it
shall not undertake activities which, in its judgment,
would adversely affect the performance of its
obligations to the Fund under this Agreement.
f. The Distributor, as agent for the Fund,
shall repurchase Shares at such prices and upon such
terms and conditions as shall be specified in the
Prospectus.
4. DISTRIBUTION SUPPORT SERVICES. In addition to
the sale and repurchase of Shares, the Distributor
shall perform the distribution support services set
forth on Schedule B attached hereto, as may be
amended from time to time.
5. REASONABLE EFFORTS. The Distributor shall use
all reasonable efforts in connection with the
distribution of Shares. The Distributor shall have
no obligation to sell any specific number of Shares
and shall only sell Shares against orders received
therefor. The Fund shall retain the right to refuse at
any time to sell any of its Shares for any reason
deemed adequate by it.
6. COMPLIANCE. In furtherance of the distribution
services being provided hereunder, the Distributor
and the Fund agree as follows:
a. The Distributor shall comply with
the Rules of Fair Practice of the NASD and the
securities laws of any jurisdiction in which it
sells, directly or indirectly, Shares.
b. The Distributor shall require
each dealer with whom the Distributor has a selling
agreement to conform to the applicable provisions of
the Fund's most current Prospectus and Statement of
Additional Information, with respect to the public
offering price of the Shares.
c. The Fund agrees to furnish to the
Distributor sufficient copies of any agreements,
plans, communications with the public or other
materials it intends to use in connection with any
sales of Shares in a timely manner in order to allow
the Distributor to review, approve and file such
materials with the appropriate regulatory
authorities and obtain clearance for use. The Fund
agrees not to use any such materials until so filed
and cleared for use by appropriate authorities and the
Distributor.
d. The Distributor, at its own expense,
shall qualify as a broker or dealer, or otherwise,
under all applicable Federal or state laws required
to permit the sale of Shares in such states as
shall be mutually agreed upon by the parties;
provided, however that the Distributor shall have no
obligation to register as a broker or dealer under the
Blue Sky Laws of any jurisdiction if it determines
that registering or maintaining registration in such
jurisdiction would be uneconomical.
e. The Distributor shall not, in
connection with any sale or solicitation of a sale of
the Shares, or make or authorize any representative,
service organization, broker or dealer to make, any
representations concerning the Shares except those
contained in the Fund's most current Prospectus
covering the Shares and in communications with
the public or sales materials approved by the
Distributor as information supplemental to such
Prospectus.
7. EXPENSES. Expenses shall be allocated as
follows:
a. The Fund shall bear the
following expenses: preparation, setting in type,
and printing of sufficient copies of the Prospectus
and Statement of Additional Information for
distribution to existing shareholders; preparation
and printing of reports and other communications
to existing shareholders; distribution of copies of the
Prospectus, Statement of Additional Information
and all other communications to existing
shareholders; registration of the Shares under the
Federal securities laws; qualification of the
Shares for sale in the jurisdictions mutually agreed
upon by the Fund and the Distributor; transfer
agent/shareholder servicing agent services;
supplying information, prices and other data to be
furnished by the Fund under this Agreement; any
original issue taxes or transfer taxes applicable to
the sale or delivery of the Shares or certificates
therefor; and items covered by the Distribution Plan.
b. To the extent not covered by the
Distribution Plan, the Adviser shall pay all
other expenses incident to the sale and
distribution of the Shares sold hereunder,
including, without limitation: printing and
distributing copies of the Prospectus, Statement of
Additional Information and reports prepared for use
in connection with the offering of Shares for
sale to the public; advertising in connection with
such offering, including public relations services,
sales presentations, media charges, preparation,
printing and mailing of advertising and sales
literature; filing fees required by regulatory
authorities for sales literature and advertising
materials; any additional out-of-pocket expenses
incurred in connection with the foregoing and any other
costs of distribution.
8. COMPENSATION. For the distribution and
distribution support services provided by the
Distributor pursuant to the terms of the Agreement,
the Fund shall, pursuant to the Distribution
Plan, pay to the Distributor the compensation set
forth in Schedule A attached hereto, which schedule
may be amended from time to time. In addition, the
Distributor may retain any portion of any sales load
which is imposed on the sale of Shares and not
reallocated by the Distributor to a dealer, as set
forth in the Prospectus and subject to applicable NASD
rules, and offset the amount payable to the Distributor
pursuant to Schedule A against any amounts so retained.
To the extent not covered by the Distribution Plan or
offset by the retention of sales loads, the Adviser
shall pay to Distributor the compensation set forth
in Schedule A and shall also reimburse the Distributor
for its out-of-pocket expenses related to the
performance of its duties hereunder, including,
without limitation, telecommunications charges,
postage and delivery charges, record retention
costs, reproduction charges and traveling and
lodging expenses incurred by officers and employees
of the Distributor. If this Agreement becomes
effective subsequent to the first day of the month or
terminates before the last day of the month, the Fund
shall pay to the Distributor a distribution fee
that is prorated for that part of the month in which
this Agreement is in effect. All rights of
compensation and reimbursement under this Agreement
for services performed by the Distributor as of the
termination date shall survive the termination of
this Agreement.
9. USE OF DISTRIBUTOR'S NAME. The Fund
shall not use the name of the Distributor or any of
its affiliates in the Prospectus, Statement of
Additional Information, sales literature or other
material relating to the Fund in a manner not approved
prior thereto in writing by the Distributor; provided,
however, that the Distributor shall approve all uses
of its and its affiliates' names that merely refer in
accurate terms to their appointments or that are
required by the Securities and Exchange Commission
(the "SEC") or any state securities commission; and
further provided, that in no event shall such
approval be unreasonably withheld.
10. USE OF FUND'S NAME. Neither the Distributor
nor any of its affiliates shall use the name of the
Fund or material relating to the Fund on any forms
(including any checks, bank drafts or bank
statements) for other than internal use in a manner not
approved prior thereto in writing by the Fund;
provided, however, that the Fund shall approve all
uses of its name that merely refer in accurate terms to
the appointment of the Distributor hereunder or
that are required by the SEC or any state securities
commission; and further provided, that in no event
shall such approval be unreasonably withheld.
11. LIABILITY OF DISTRIBUTOR. The duties of the
Distributor shall be limited to those expressly set
forth herein, and no implied duties, except the duty
to act in good faith, are assumed by or may be asserted
against the Distributor hereunder. The Distributor may,
in connection with this Agreement employ agents or
attorneys in fact, and shall not be liable for any
loss arising out of or in connection with its actions
under this Agreement, so long as it acts in good faith
and with due diligence, and is not negligent or
guilty of any willful misfeasance, bad faith or
gross negligence, or reckless disregard of its
obligations and duties under this Agreement. As used
in this Section 11 and in Section 12 (except the
second paragraph of Section 12), the term
"Distributor" shall include directors, officers,
employees and other agents of the Distributor.
12. INDEMNIFICATION OF DISTRIBUTOR. Any
director, officer, employee, shareholder or agent of
the Distributor who may be or become an officer,
Trustee, employee or agent of the Fund, shall be
deemed, when rendering services to the Fund or acting
on any business of the Fund (other than services or
business in connection with the Distributor's
duties hereunder), to be rendering such services to
or acting solely for the Fund and not as a director,
officer, employee, shareholder or agent of, or one
under the control or direction of, the Distributor,
even though receiving a salary from the Distributor.
The Fund agrees to indemnify and hold harmless
the Distributor, and each person, who controls the
Distributor within the meaning of Section 15 of the
1933 Act, or Section 20 of the Securities Exchange Act
of 1934, as amended ("1934 Act"), against any and all
liabilities, losses, damages, claims and expenses,
joint or several (including, without limitation,
reasonable attorneys' fees and disbursements and
investigation expenses incident thereto) to which
they, or any of them, may become subject under the
1933 Act, the 1934 Act, the 1940 Act or other Federal
or state laws or regulations, at common law or
otherwise, insofar as such liabilities, losses,
damages, claims and expenses (or actions, suits or
proceedings in respect thereof) arise out of or relate
to any untrue statement or alleged untrue statement
of a material fact contained in a Prospectus,
Statement of Additional Information, supplement
thereto, sales literature or other written information
prepared by the Fund and provided by the Fund to the
Distributor for the Distributor's use hereunder, or
arise out of or relate to any omission or alleged
omission to state therein a material fact required to
be stated therein or necessary to make the statements
therein not misleading. The Distributor (or any person
controlling the Distributor) shall not be entitled to
indemnity hereunder for any liabilities, losses,
damages, claims or expenses (or actions, suits or
proceedings in respect thereof) resulting from (i)
an untrue statement or omission or alleged untrue
statement or omission made in the Prospectus,
Statement of Additional Information, or supplement,
sales or other literature, in reliance upon and in
conformity with information furnished in writing to the
Fund by the Distributor specifically for use therein
or (ii) the Distributor's own willful misfeasance, bad
faith, gross negligence or reckless disregard of
its duties and obligations in the performance of
this Agreement.
The Distributor agrees to indemnify and hold
harmless the Fund, and each person who controls the
Fund within the meaning of Section 15 of the 1933 Act,
or Section 20 of the 1934 Act, against any and all
liabilities, losses, damages, claims and expenses,
joint or several (including, without limitation
reasonable attorneys' fees and disbursements and
investigation expenses incident thereto) to which
they, or any of them, may become subject under the
1933 Act, the 1934 Act, the 1940 Act or other
Federal or state laws, at common law or otherwise,
insofar as such liabilities, losses, damages, claims or
expenses arise out of or relate to any untrue
statement or alleged untrue statement of a material
fact contained in the Prospectus or Statement of
Additional Information or any supplement thereto,
sales literature or other written material, or arise
out of or relate to actions or oral representations of
Distributor's associated persons and to any omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, if based upon
information furnished in writing to the Fund by the
Distributor specifically for use therein.
A party seeking indemnification hereunder (the
"Indemnitee") shall give prompt written notice to
the party from whom indemnification is sought
("Indemnitor") of a written assertion or claim of any
threatened or pending legal proceeding which may be
subject to indemnity under this Section; provided,
however, that failure to notify the Indemnitor of
such written assertion or claim shall not relieve
the Indemnitor of any liability arising from this
Section. The Indemnitor shall be entitled, if it
so elects, to assume the defense of any suit brought
to enforce a claim subject to this Agreement and such
defense shall be conducted by counsel chosen by
the Indemnitor and satisfactory to the Indemnitee;
provided, however, that if the defendants include
both the Indemnitee and the Indemnitor, and the
Indemnitee shall have reasonably concluded that there
may be one or more legal defenses available to it
which are different from or additional to those
available to the Indemnitor ("conflict of interest"),
the Indemnitor shall not have the right to elect to
defend such claim on behalf of the Indemnitee, and the
Indemnitee shall have the right to select separate
counsel to defend such claim on behalf of the
Indemnitee. In the event that the Indemnitor elects to
assume the defense of any suit pursuant to the
preceding sentence and retains counsel satisfactory to
the Indemnitee, the Indemnitee shall bear the fees
and expenses of additional counsel retained by it
except for reasonable investigation costs which shall
be borne by the Indemnitor. If the Indemnitor (i)
does not elect to assume the defense of a claim, (ii)
elects to assume the defense of a claim but chooses
counsel that is not satisfactory to the Indemnitee
or (iii) has no right to assume the defense of a claim
because of a conflict of interest, the Indemnitor
shall advance or reimburse the Indemnitee, at the
election of the Indemnitee, reasonable fees and
disbursements of any counsel retained by
Indemnitee, including reasonable investigation costs.
13. ADVISER PERSONNEL. The Adviser agrees that
only its employees who are registered representatives
of the Distributor ("dual employees") or registered
representatives of another NASD member firm shall
offer or sell Shares of the Portfolios. The Adviser
further agrees that the activities of any such
employees as registered representatives of the
Distributor shall be limited to offering and selling
Shares. If there are dual employees, one employee of
the Adviser shall register as a principal of the
Distributor and assist the Distributor in monitoring
the marketing and sales activities of the dual
employees. The Adviser shall maintain errors and
omissions and fidelity bond insurance policies
providing reasonable coverage for its employees
activities and shall provide copies of such policies
to the Distributor. The Adviser shall indemnify and
hold harmless the Distributor against any and all
liabilities, losses, damages, claims and expenses
(including reasonable attorneys' fees and
disbursements and investigation costs incident
thereto) arising from or related to the Adviser's
employees' activities as registered representatives,
including, without limitation, any and all such
liabilities, losses, damages, claims and expenses
arising from or related to the breach by such
employees of any rules or regulations of the NASD or
SEC.
14. FORCE MAJEURE. The Distributor shall not
be liable for any delays or errors occurring by reason
of circumstances not reasonably foreseeable and
beyond its control, including, but not limited, to
acts of civil or military authority, national
emergencies, work stoppages, fire, flood, catastrophe,
acts of God, insurrection, war, riot or failure of
communication or power supply. In the event of
equipment breakdowns which are beyond the reasonable
control of the Distributor and not primarily
attributable to the failure of the Distributor to
reasonably maintain or provide for the maintenance
of such equipment, the Distributor shall, at no
additional expense to the Fund, take reasonable steps
in good faith to minimize service interruptions, but
shall have no liability with respect thereto.
15. SCOPE OF DUTIES. The Distributor and the Fund
shall regularly consult with each other regarding the
Distributor's performance of its obligations and its
compensation under the foregoing provisions. In
connection therewith, the Fund shall submit to the
Distributor at a reasonable time prior to or at the
same time as filing with the SEC copies of any amended
or supplemented Registration Statement of the Fund
(including exhibits) under the 1940 Act and the
1933 Act, and at a reasonable time in advance of
their proposed use, copies of any amended or
supplemented forms relating to any plan, program or
service offered by the Fund. Any change in such
materials that would require any change in the
Distributor's obligations under the foregoing
provisions shall be subject to the Distributor's
approval. In the event that a change in such
documents or in the procedures contained therein
increases the cost or burden to the Distributor of
performing its obligations hereunder, the
Distributor shall be entitled to receive
reasonable compensation therefore.
16. DURATION. This Agreement shall become
effective as of the date first above written, and
shall continue in force for two years from that date
and thereafter from year to year, provided continuance
is approved at least annually by (i) either the vote of
a majority of the Trustees of the Fund, or by the vote
of a majority of the outstanding voting securities
of each Portfolio, and (ii) the vote of a majority of
those Trustees of the Fund who are not interested
persons of the Fund, and who are not parties to this
Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of
voting on the approval.
17. TERMINATION. This Agreement shall terminate as
follows:
a. This Agreement shall terminate
automatically in the event of its assignment.
b. This Agreement shall terminate upon the
failure to approve the continuance of the Agreement
after the initial two year term as set forth in Section
16 above.
c. This Agreement shall terminate at any
time upon a vote of the majority of the Trustees who
are not interested persons of the Fund or by a vote of
the majority of the outstanding voting securities of
each Portfolio, upon not less than 60 days prior
written notice to the Distributor.
d. The Distributor may terminate this
Agreement upon not less than 60 days prior written
notice to the Fund.
Upon the termination of this Agreement, the
Fund shall pay to the Distributor such compensation
and out-of-pocket expenses as may be payable for the
period prior to the effective date of such
termination. In the event that the Fund designates
a successor to any of the Distributor's
obligations hereunder, the Distributor shall, at
the expense and direction of the Fund, transfer to
such successor all relevant books, records and
other data established or maintained by the
Distributor pursuant to the foregoing provisions.
Sections 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17,
20, 21, 22, 23, 24, 25, 26 and 27 shall survive any
termination of this Agreement.
18. AMENDMENT. The terms of this Agreement
shall not be waived, altered, modified, amended or
supplemented in any manner whatsoever except by a
written instrument signed by the Distributor and the
Fund and shall not become effective unless its terms
have been approved by the majority of the Trustees of
the Fund or by a "vote of majority of the outstanding
voting securities" of each Portfolio and by a majority
of those Trustees who are not "interested persons" of
the Fund or any party to this Agreement.
19. NON-EXCLUSIVE SERVICES. The services of the
Distributor rendered to the Fund are not exclusive.
The Distributor may render such services to any other
investment company.
20. DEFINITIONS. As used in this Agreement, the
terms "vote of a majority of the outstanding voting
securities," "assignment," "interested person" and
"affiliated person" shall have the respective meanings
specified in the 1940 Act and the rules enacted
thereunder as now in effect or hereafter amended.
21. CONFIDENTIALITY. The Distributor shall
treat confidentially and as proprietary information
of the Fund all records and other information relating
to the Fund and prior, present or potential
shareholders and shall not use such records and
information for any purpose other than
performance of its responsibilities and duties
hereunder, except as may be required by
administrative or judicial tribunals or as requested by
the Fund.
22. NOTICE. Any notices and other
communications required or permitted hereunder shall
be in writing and shall be effective upon delivery by
hand or upon receipt if sent by certified or registered
mail (postage prepaid and return receipt requested)
or by a nationally recognized overnight courier
service (appropriately marked for overnight delivery)
or upon transmission if sent by telex or facsimile
(with request for immediate confirmation of receipt in
a manner customary for communications of such
respective type and with physical delivery of the
communication being made by one or the other means
specified in this Section 22 as promptly as
practicable thereafter). Notices shall be addressed
as follows:
(a) if to the Fund:
The Rockland Funds Trust
100 South Rockland Falls Road
Rockland, DE 19732
Attn: Charles Cruice
(b) if to the Adviser:
Greenville Capital Management
100 South Rockland Falls Road
Rockland, DE 19732
Attn: Charles Cruice
(c) if to the Distributor:
AmeriPrime Financial Securities, Inc.,
1793 Kingswood Drive
Suite 200
Southlake, TX 76092
Attn: Kenneth D. Trumpfheller
or to such other respective addresses as the parties
shall designate by like notice, provided that notice
of a change of address shall be effective only upon
receipt thereof.
23. SEVERABILITY. If any provision of this
Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
24. GOVERNING LAW. This Agreement shall be
administered, construed and enforced in accordance
with the laws of the State of Texas to the extent that
such laws are not preempted by the provisions of any
law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time.
25. ENTIRE AGREEMENT. This Agreement
(including the Schedules attached hereto) contains
the entire agreement and understanding of the parties
with respect to the subject matter hereof and
supersedes all prior written or oral agreements and
understandings with respect thereto.
26. MISCELLANEOUS. Each party agrees to perform
such further acts and execute such further
documents as are necessary to effectuate the
purposes hereof. The captions in this Agreement are
included for convenience of reference only and in no
way define or delimit any of the provisions hereof or
otherwise affect their construction. This Agreement may
be executed in three counterparts, each of which taken
together shall constitute one and the same instrument.
27. LIMITATION OF LIABILITY. The term "The
Rockland Funds Trust" means and refers to the Trustees
from time to time serving under the Trust Instrument of
the Fund dated July 31, 1996, as the same may
subsequently thereto have been, or subsequently
hereto be, amended. It is expressly agreed that
obligations of the Fund hereunder shall not be binding
upon any Trustee, shareholder, nominees, officers,
agents or employees of the Fund, personally, but bind
only the assets and property of the Fund, as
provided in the Trust Instrument. The execution and
delivery of this Agreement have been authorized by
the Trustees and signed by an authorized officer of
the Fund, acting as such, and neither such
authorization nor such execution and delivery shall be
deemed to have been made by any of them individually
or to impose any liability on any of them
personally, but shall bind only the assets and property
of the Fund as provided in the Trust Instrument. The
Trust Instrument is on file with the Secretary of the
State of Delaware.
IN WITNESS WHEREOF, the parties have duly executed
this Agreement as of the day and year first above
written.
THE ROCKLAND FUNDS TRUST
By: ________________________________
President & Trustee
GREENVILLE CAPITAL MANAGEMENT
By:_________________________________
AMERIPRIME FINANCIAL SECURITIES, INC.
By: _________________________________
SCHEDULE A
THE ROCKLAND FUNDS TRUST
Portfolios and Fee Schedule
Portfolios covered by Distribution Agreement:
Series Portfolio
Rockland Growth Fund Retail Class
Rockland Growth Fund Institutional Class
Fees for distribution and distribution support
services on behalf of the Portfolios:
Annual Fee $ 18,000
SCHEDULE B
ROCKLAND FUNDS TRUST
Distribution Support Services
1. Review and submit for approval all advertising and
promotional materials.
2. Maintain all books and records required by the
NASD.
3. Monitor Distribution Plan(s) and report to Board
of Trustees.
4. Prepare quarterly reports to Board of Trustees
relating to distribution activities.
5. Subject to approval of Distributor, license
personnel as registered representatives of the
Distributor.
THE ROCKLAND FUNDS TRUST
DEALER'S AGREEMENT
AmeriPrime Financial Securities, Inc.
("Distributor") invites you, as a selected dealer, to
participate as principal in the distribution of shares
(the "Shares") of the mutual funds set forth on
Schedule A to this Agreement (the "Funds"), of which it
is the exclusive Distributor. Distributor agrees to
sell to you, subject to any limitations imposed by the
Funds, Shares issued by the Funds and to promptly
confirm each sale to you. All sales will be made
according to the following terms:
1. All offerings of any of the Shares by you
must be made at the public offering prices, and shall
be subject to the conditions of offering, set forth in
the then current Prospectus of the applicable Fund and
to the terms and conditions herein set forth, and you
agree to comply with all requirements applicable to you
of all applicable laws, including federal and state
securities laws, the rules and regulations of the
Securities and Exchange Commission, and the Rules of
Fair Practice of the National Association of Securities
Dealers, Inc. (the "NASD"), including Section 24 of the
Rules of Fair Practice of the NASD. You will not offer
the Shares for sale in any state or other jurisdiction
where they are not qualified for sale under the Blue
Sky Laws and regulations of such state or jurisdiction,
or where you are not qualified to act as a dealer.
Upon application to Distributor, Distributor will
inform you as to the states or other jurisdictions in
which Distributor believes the Shares may legally be
sold.
2. (a) You will receive a discount from the
public offering price ("concession") on all Shares
purchased by you from Distributor as indicated on
Schedule A, as it may be amended by Distributor from
time to time.
(b) In all transactions in open accounts in
which you are designated as Dealer of Record, you will
receive the concessions as set forth on Schedule A.
You hereby authorize Distributor to act as your agent
in connection with all transactions in open accounts in
which you are designated as Dealer of Record. All
designations as Dealer of Record, and all
authorizations of Distributor to act as your agent
pursuant thereto, shall cease upon the termination of
this Agreement or upon the investor's instructions to
transfer his open account to another Dealer of Record.
No dealer concessions will be allowed on purchases
generating less than $1.00 in dealer concessions.
(c) As the exclusive Distributor of the
Shares, Distributor reserves the privilege of revising
the discounts specified on Schedule A at any time by
written notice.
3. Concessions will be paid to you at the
address of your principal office, as indicated below in
your acceptance of this Agreement.
4. Distributor reserves the right to cancel this
Agreement at any time without notice if any Shares
shall be offered for sale by you at less than the then
current public offering prices determined by, or for,
the Funds.
5. All orders are subject to acceptance or
rejection by Distributor in its sole discretion. We
reserve the right, in our discretion, without notice,
to suspend sales or withdraw the offering of Shares
entirely.
6. Payment shall be made to the Funds and shall
be received by its Transfer Agent within three (3)
business days after the acceptance of your order or
such shorter time as may be required by law. With
respect to all Shares ordered by you for which payment
has not been received, you hereby assign and pledge to
Distributor all of your right, title and interest in
such Shares to secure payment therefor. You appoint
Distributor as your agent to execute and deliver all
documents necessary to effectuate any of the
transactions described in this paragraph. If such
payment is not received within the required time
period, Distributor reserves the right, without notice,
and at its option, forthwith (a) to cancel the sale,
(b) to sell the Shares ordered by you back to the
Funds, or (c) to assign your payment obligation,
accompanied by all pledged Shares, to any person. You
agree that Distributor may hold you responsible for any
loss, including loss of profit, suffered by the Funds,
its Transfer Agent or Distributor, resulting from your
failure to make payment within the required time
period.
7. No person is authorized to make any
representations concerning Shares of the Funds except
those contained in the current applicable Prospectus
and Statement of Additional Information and in sales
literature issued and furnished by Distributor
supplemental to such Prospectus. Distributor will
furnish additional copies of the current Prospectus and
Statement of Additional Information and such sales
literature and other releases and information issued by
Distributor in reasonable quantities upon request.
8. Under this Agreement, you act as principal
and are not employed by Distributor as broker, agent or
employee. You are not authorized to act for
Distributor nor make any representation on its behalf;
and in purchasing or selling Shares hereunder, you rely
only upon the current Prospectus and Statement of
Additional Information furnished to you by Distributor
from time to time and upon such written representations
as may hereafter be made by Distributor to you over its
signature.
9. You appoint the Transfer Agent for the Funds
as your agent to execute the purchase transactions of
Shares in accordance with the terms and provisions of
any account, program, plan or service established or
used by your customers and to confirm each purchase to
your customers on your behalf, and you guarantee the
legal capacity of your customers so purchasing such
Shares and any co-owners of such Shares.
10. You will (a) maintain all records required by
law relating to transactions in the Shares, and upon
the request of Distributor, or the request of the
Funds, promptly make such of these records available to
Distributor or to the Funds as are requested, and (b)
promptly notify Distributor if you experience any
difficulty in maintaining the records required in the
foregoing clause in an accurate and complete manner.
In addition, you will establish appropriate procedures
and reporting forms and schedules, approved by
Distributor and by the Funds, to enable the parties
hereto and the Funds to identify all accounts opened
and maintained by your customers.
11. Each party hereto represents that it is at
present, and at all times during the term of this
Agreement will be, a member in good standing of the
NASD and agrees to abide by all its Rules of Fair
Practice including, but not limited to, the following
provisions:
(a) You shall not withhold placing
customers' orders for any Shares so as to
profit yourself as a result of such
withholding. You shall not purchase any
Shares from Distributor other than for
investment, except for the purpose of
covering purchase orders already received.
(b) All conditional orders received by
Distributor must be at a specified definite
price.
(c) If any Shares purchased by you are
repurchased by the Funds (or by Distributor
for the account of the Funds) or are tendered
for redemption within seven business days
after confirmation of the original sale of
such Shares (1) you agree to forthwith refund
to Distributor the full concession allowed to
you on the original sale, such refund to be
paid by Distributor to the Funds, and (2)
Distributor shall forthwith pay to the Funds
that part of the discount retained by
Distributor on the original sale. Notice
will be given to you of any such repurchase
or redemption within ten days of the date on
which the repurchase or redemption request is
made.
(d) Neither Distributor, as exclusive
Distributor for the Funds, nor you as
principal, shall purchase any Shares from a
record holder at a price lower than the net
asset value then quoted by, or for, the
Funds. Nothing in this sub-paragraph shall
prevent you from selling Shares for the
account of a record holder to Distributor or
the Funds at the net asset value currently
quoted by, or for, the Funds and charging the
investor a fair commission for handling the
transaction.
(e) You warrant on behalf of yourself
and your registered representatives and
employees that any purchase of Shares at net
asset value by the same pursuant to the terms
of the Prospectus of the applicable Fund is
for investment purposes only and not for
purposes of resale. Shares so purchased may
be resold only to the Fund which issued them.
12. You agree that you will indemnify
Distributor, each Fund, each Fund's Transfer Agent,
each Fund's Investment Adviser, and each Fund's
Custodian and hold such persons harmless from any
claims or assertions relating to the lawfulness of your
company's participation in this Agreement and the
transactions contemplated hereby or relating to any
activities of any persons or entities affiliated with
your company which are performed in connection with the
discharge of your responsibilities under this
Agreement. If any claims are asserted, the indemnified
parties shall have the right to engage in their own
defense, including the selection and engagement of
legal counsel of their choosing, and all costs of such
defense shall be borne by you.
13. This Agreement will automatically terminate
in the event of its assignment. Either party hereto
may cancel this Agreement without penalty upon ten
days' written notice. This Agreement may also be
terminated as to any Fund at any time without penalty
by the vote of a majority of the members of the Board
of Trustees of the terminating Fund who are not
"interested persons" (as such term is defined in the
Investment Company Act of 1940) or by a vote of a
majority of the outstanding voting securities of the
terminating Fund on ten days' written notice.
14. All communications to Distributor should be
sent to AmeriPrime Financial Securities, Inc., 1793
Kingswood Drive, Suite 200, Southlake, Texas 76092, or
at such other address as Distributor may designate in
writing. Any notice to you shall be duly given if
mailed or telegraphed to you at the address of your
principal office, as indicated below in your acceptance
of this Agreement.
15. This Agreement supersedes any other agreement
with you relating to the offer and sale of the Shares,
and relating to any other matter discussed herein.
16. This Agreement shall be binding (i) upon
placing your first order with Distributor for the
purchase of Shares, or (ii) upon receipt by Distributor
in Southlake, Texas of a counterpart of this Agreement
duly accepted and signed by you, whichever shall occur
first. This Agreement shall be construed in accordance
with the laws of the State of Texas.
17. The undersigned, executing this Agreement on
behalf of Dealer, hereby warrants and represents that
he is duly authorized to so execute this Agreement on
behalf of Dealer.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return
to us one copy of this Agreement.
AmeriPrime Financial Securities, Inc.
By:______________________________________
Kenneth D. Trumpfheller, President
ACCEPTED BY DEALER:
_________________________________________
Firm Name
By: _____________________________________ ___________________________
Authorized Signature, Position Type or Print Name
ADDRESS (Principal Office):
_________________________________________
_________________________________________
_________________________________________
Date: ___________________________________
SCHEDULE A
THE ROCKLAND FUNDS TRUST
The Rockland Growth Fund, Retail Class
Dollar Amount of Purchase Total Sales Dealer
(At Offering Price) Charge* Concession
- -----------------------------------------------------------------------------
Less than $100,000 3.00% 3.00%
$100,000 but less than $250,000 2.00% 2.00%
$250,000 but less than $500,000 1.00% 1.00%
$500,000 and above No sales charge No sales charge
________________________________
* As a percentage of offering price.
Brokers may invest for their own account at NAV.
CUSTODIAN AGREEMENT
THIS AGREEMENT made on ____________ ___, 1996,
between The Rockland Funds Trust, a Delaware business
trust (hereinafter called the "Company") and Firstar
Trust Company, a corporation organized under the laws
of the State of Wisconsin (hereinafter called the
"Custodian").
WHEREAS, the Company is an open-ended management
investment company which is registered under the
Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Company is authorized to create
separate series, each with its own separate investment
portfolio; and
WHEREAS, the Company desires that the securities
and cash of each series of the Company listed on
Schedule A attached hereto (hereinafter collectively
called the "Funds"), as may be amended from time to
time, shall be hereafter held and administered by the
Custodian pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual
agreements herein made, the Company and the Custodian
agree as follows:
1. Definitions
The word "securities" as used herein includes
stocks, shares, bonds, debentures, notes, mortgages or
other obligations, and any certificates, receipts,
warrants or other instruments representing rights to
receive, purchase or subscribe for the same, or
evidencing or representing any other rights or
interests therein, or in any property or assets.
The words "officers' certificate" shall mean a
request or direction or certification in writing signed
in the name of the Company by any two of the President,
a Vice President, the Secretary and the Treasurer of
the Company, or any other persons duly authorized to
sign by the Board of Trustees.
The word "Board" shall mean Board of Trustees of
The Rockland Funds Trust.
2. Names, Titles, and Signatures of the Company's
Officers
An officer of the Company will certify to the
Custodian the names and signatures of those persons
authorized to sign the officers' certificates described
in Section 1 hereof, and the names of the members of
the Board of Trustees, together with any changes which
may occur from time to time.
3. Receipt and Disbursement of Money
A. The Custodian shall open and maintain a
separate account or accounts in the name of the
Company, subject only to draft or order by the
Custodian acting pursuant to the terms of this
Agreement. The Custodian shall hold in such account or
accounts, subject to the provisions hereof, all cash
received by it from or for the account of the Company.
The Custodian shall make payments of cash to, or for
the account of, the Company from such cash only:
(a) for the purchase of securities for the
portfolio of a Fund upon the delivery of such
securities to the Custodian, registered in
the name of the Company or of the nominee of
the Custodian referred to in Section 7 or in
proper form for transfer;
(b) for the purchase or redemption of shares
of common stock of a Fund upon delivery
thereof to the Custodian, or upon proper
instructions from the Company;
(c) for the payment of interest, dividends,
taxes, investment adviser's fees or operating
expenses (including, without limitation
thereto, fees for legal, accounting, auditing
and custodian services and expenses for
printing and postage);
(d) for payments in connection with the
conversion, exchange or surrender of
securities owned or subscribed to by a Fund
held by or to be delivered to the Custodian;
or
(e) for other proper corporate purposes
certified by resolution of the Board of
Trustees of the Company.
Before making any such payment, the Custodian
shall receive (and may rely upon) an officers'
certificate requesting such payment and stating that it
is for a purpose permitted under the terms of items
(a), (b), (c), or (d) of this Subsection A, and also,
in respect of item (e), upon receipt of an officers'
certificate specifying the amount of such payment,
setting forth the purpose for which such payment is to
be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to
whom such payment is to be made, provided, however,
that an officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a
money market instrument, or any other security with
same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the
Company issues appropriate oral or facsimile
instructions to the Custodian and an appropriate
officers' certificate is received by the Custodian
within two business days thereafter.
B. The Custodian is hereby authorized to endorse
and collect all checks, drafts or other orders for the
payment of money received by the Custodian for the
account of the Company.
C. The Custodian shall, upon receipt of proper
instructions, make federal funds available to the
Company as of specified times agreed upon from time to
time by the Company and the Custodian in the amount of
checks received in payment for shares of a Fund which
are deposited into such Fund's account.
4. Segregated Accounts
Upon receipt of proper instructions, the Custodian
shall establish and maintain segregated accounts for
and on behalf of each Fund, into which accounts may be
transferred cash and/or securities.
5. Transfer, Exchange, Redelivery, etc. of Securities
The Custodian shall have sole power to release or
deliver any securities of the Company held by it
pursuant to this Agreement. The Custodian agrees to
transfer, exchange or deliver securities held by it
hereunder only:
(a) for sales of such securities for the
account of a Fund upon receipt by the
Custodian of payment therefor;
(b) when such securities are called,
redeemed or retired or otherwise become
payable;
(c) for examination by any broker selling
any such securities in accordance with
"street delivery" custom;
(d) in exchange for, or upon conversion
into, other securities alone or other
securities and cash whether pursuant to any
plan of merger, consolidation,
reorganization, recapitalization or
readjustment, or otherwise;
(e) upon conversion of such securities
pursuant to their terms into other
securities;
(f) upon exercise of subscription, purchase
or other similar rights represented by such
securities;
(g) for the purpose of exchanging interim
receipts or temporary securities for
definitive securities;
(h) for the purpose of redeeming in kind
shares of common stock of a Fund upon
delivery thereof to the Custodian; or
(i) for other proper corporate purposes.
As to any deliveries made by the Custodian
pursuant to items (a), (b), (d), (e), (f), and (g),
securities or cash receivable in exchange therefor
shall be deliverable to the Custodian.
Before making any such transfer, exchange or
delivery, the Custodian shall receive (and may rely
upon) an officers' certificate requesting such
transfer, exchange or delivery, and stating that it is
for a purpose permitted under the terms of items (a),
(b), (c), (d), (e), (f), (g), or (h) of this Section 5
and also, in respect of item (i), upon receipt of an
officers' certificate specifying the securities to be
delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be
made, provided, however, that an officers' certificate
need not precede any such transfer, exchange or
delivery of a money market instrument, or any other
security with same or next-day settlement, if the
President, a Vice President, the Secretary or the
Treasurer of the Company issues appropriate oral or
facsimile instructions to the Custodian and an
appropriate officers' certificate is received by the
Custodian within two business days thereafter.
6. The Custodian's Acts Without Instructions
Unless and until the Custodian receives an
officers' certificate to the contrary, the Custodian
shall: (a) present for payment all coupons and other
income items held by it for the account of a Fund and
hold the cash received by it upon such payment for the
account of such Fund; (b) collect interest and cash
dividends received, with notice to the Company, for the
account of a Fund; (c) hold for the account of a Fund
hereunder all stock dividends, rights and similar
securities issued with respect to any securities held
by it hereunder; and (d) execute, as agent on behalf of
the Company, all necessary ownership certificates
required by the Internal Revenue Code (the "Code") or
the Income Tax Regulations (the "Regulations") of the
United States Treasury Department (the "Treasury
Department") or under the laws of any state now or
hereafter in effect, inserting the Company's name on
such certificates as the owner of the securities
covered thereby, to the extent it may lawfully do so.
7. Registration of Securities
Except as otherwise directed by an officers'
certificate, the Custodian shall register all
securities, except such as are in bearer form, in the
name of a registered nominee of the Custodian as
defined in the Code and any Regulations of the Treasury
Department issued thereunder or in any provision of any
subsequent federal tax law exempting such transaction
from liability for stock transfer taxes, and shall
execute and deliver all such certificates in connection
therewith as may be required by such laws or
regulations or under the laws of any state. All
securities held by the Custodian hereunder shall be at
all times held in an account or accounts of the
Custodian containing only the assets of the Company.
The Company shall from time to time furnish to the
Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for
transfer, or to register in the name of its registered
nominee, any securities which it may hold for the
account of the Company and which may from time to time
be registered in the name of the Company.
8. Voting and Other Action
Neither the Custodian nor any nominee of the
Custodian shall vote any of the securities held
hereunder by or for the account of the Company, except
in accordance with the instructions contained in an
officers' certificate. The Custodian shall deliver, or
cause to be executed and delivered, to the Company all
notices, proxies and proxy soliciting materials with
respect to such securities, such proxies to be executed
by the registered holder of such securities (if
registered otherwise than in the name of the Company),
but without indicating the manner in which such proxies
are to be voted.
9. Transfer Tax and Other Disbursements
The Company shall pay or reimburse the Custodian
from time to time for any transfer taxes payable upon
transfers of securities made hereunder, and for all
other necessary and proper disbursements and expenses
made or incurred by the Custodian in the performance of
this Agreement.
The Custodian shall execute and deliver such
certificates in connection with securities delivered to
it or by it under this Agreement as may be required
under the provisions of the Code and any Regulations of
the Treasury Department issued thereunder, or under the
laws of any state, to exempt from taxation any
exemptible transfers and/or deliveries of any such
securities.
10. Concerning the Custodian
The Custodian shall be paid as compensation for
its services pursuant to this Agreement such
compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in
writing, such compensation shall be as set forth in
Schedule B attached hereto.
The Custodian shall not be liable for any action
taken in good faith upon any certificate herein
described or certified copy of any resolution of the
Board, and may rely on the genuineness of any such
document which it may in good faith believe to have
been validly executed.
The Company agrees to indemnify and hold harmless
the Custodian and its nominee from all taxes, charges,
expenses, assessments, claims and liabilities
(including reasonable counsel fees) incurred or
assessed against it or by its nominee in connection
with the performance of this Agreement, except such as
may arise from its or its nominee's own bad faith,
negligent action, negligent failure to act or willful
misconduct. The Custodian is authorized to charge any
account of the Fund for such items.
In the event of any advance of cash for any
purpose made by the Custodian resulting from orders or
instructions of the Company, or in the event that the
Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this
Agreement, except such as may arise from its or its
nominee's own bad faith, negligent action, negligent
failure to act or willful misconduct, any property at
any time held for the account of the Company shall be
security therefor.
The Custodian agrees to indemnify and hold
harmless the Company from all charges, expenses,
assessments, and claims/liabilities (including
reasonable counsel fees) incurred or assessed against
it in connection with the performance of this
Agreement, except such as may arise from the Company's
own bad faith, negligent action, negligent failure to
act or willful misconduct.
11. Subcustodians
The Custodian is hereby authorized to engage
another bank or trust company as a subcustodian for all
or any part of the Company's assets, so long as any
such bank or trust company is itself qualified under
the 1940 Act and the rules and regulations thereunder,
and provided further that, if the Custodian utilizes
the services of a subcustodian, the Custodian shall
remain fully liable and responsible for any losses
caused to the Company by the subcustodian as fully as
if the Custodian was directly responsible for any such
losses under the terms of this Agreement.
Notwithstanding anything contained herein, if the
Company requires the Custodian to engage specific
subcustodians for the safekeeping and/or clearing of
assets, the Company agrees to indemnify and hold
harmless the Custodian from all claims, expenses and
liabilities incurred or assessed against it in
connection with the use of such subcustodian in regard
to the Company's assets, except as may arise from the
Custodian's own bad faith, negligent action, negligent
failure to act or willful misconduct.
12. Reports by the Custodian
The Custodian shall furnish the Company
periodically as agreed upon with a statement
summarizing all transactions and entries for the
account of the Company. The Custodian shall furnish to
the Company, at the end of every month, a list of the
portfolio securities for each Fund showing the
aggregate cost of each issue. The books and records of
the Custodian pertaining to its actions under this
Agreement shall be open to inspection and audit at
reasonable times by officers of, and by auditors
employed by, the Company.
13. Termination or Assignment
This Agreement may be terminated by the Company,
or by the Custodian, on ninety (90) days notice, given
in writing and sent by registered mail to the Custodian
at P.O. Box 2054, Milwaukee, Wisconsin 53201, or to the
Company at 100 South Rockland Road, Rockland, Maryland
19732, as the case may be. Upon any termination of
this Agreement, pending appointment of a successor to
the Custodian or a vote of the shareholders of the
Company to dissolve or to function without a custodian
of its cash, securities and other property, the
Custodian shall not deliver cash, securities or other
property of the Company to the Company, but may deliver
them to a bank or trust company of its own selection
that meets the requirements of the 1940 Act to act as a
Custodian for the Company to be held under terms
similar to those of this Agreement, provided, however,
that the Custodian shall not be required to make any
such delivery or payment until full payment shall have
been made by the Company of all liabilities
constituting a charge on or against the properties then
held by the Custodian or on or against the Custodian,
and until full payment shall have been made to the
Custodian of all its fees, compensation, costs and
expenses, subject to the provisions of Section 10 of
this Agreement.
This Agreement may not be assigned by the
Custodian without the consent of the Company,
authorized or approved by a resolution of its Board of
Trustees.
14. Deposits of Securities in Securities Depositories
No provision of this Agreement shall be deemed to
prevent the use by the Custodian of a central
securities clearing agency or securities depository,
provided, however, that the Custodian and the central
securities clearing agency or securities depository
meet all applicable federal and state laws and
regulations, and the Board of Trustees of the Company
approves by resolution the use of such central
securities clearing agency or securities depository.
15. Records
The Custodian shall keep records relating to its
services to be performed hereunder, in the form and
manner, and for such period, as it may deem advisable
and is agreeable to the Company but not inconsistent
with the rules and regulations of appropriate
government authorities, in particular Section 31 of the
1940 Act and the rules thereunder. The Custodian
agrees that all such records prepared or maintained by
the Custodian relating to the services performed by the
Custodian hereunder are the property of the Company and
will be preserved, maintained, and made available in
accordance with such section and rules of the 1940 Act
and will be promptly surrendered to the Company on and
in accordance with its request.
16. Miscellaneous
The captions in this Agreement are included for
convenience of reference only and in no way define or
limit any of the provisions hereof or otherwise affect
their construction or effect. If any provision of this
Agreement shall be held invalid by a court or
regulatory agency decision, statute, rule, or
otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be governed by
Wisconsin law. However, nothing herein shall be
construed in a manner inconsistent with the 1940 Act or
any rule or regulation promulgated by the SEC
thereunder. This Agreement constitutes the entire
Agreement of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed as of the date first
above-written by their respective officers thereunto
duly authorized.
Executed in several counterparts, each of which is
an original.
FIRSTAR TRUST COMPANY
By: ___________________________
Attest: _______________________
THE ROCKLAND FUNDS TRUST
By: ____________________________
Attest: ________________________
Schedule A
SEPARATE SERIES OF THE ROCKLAND FUNDS TRUST
Name of Series Date Added
The Rockland Growth Fund ____________, 1996
- Retail Class
- Institutional Class
Schedule B
Mutual Fund Custodial Agent Service
Domestic Portfolios
Annual Fee Schedule
Fund groups less than $500 million
Annual fee based on market value of assets:
$0.20 per $1,000 (2.0 basis points)
Minimum annual fee per fund: $3,000
Investment transactions: (purchase, sale, exchange,
tender, redemption, maturity, receipt delivery)
$12.00 per book entry security (depository or Federal Reserve system)
$25.00 per definitive security (physical)
$75.00 per Euroclear
$8.00 per principal reduction on pass-through certificates
$35.00 per option/future contracts
Variable Amount Notes: Used as a short-term
investment, variable amount notes offer safety and
prevailing high interest rates. Our charge, which is
1/4 of 1%, is deducted from the variable amount note
income at the time it is credited to your account
Extraordinary expenses: Based on time and complexity
involved
Out-of-pocket expenses charged to the account include
but are not limited to:
$10.00 per variation margin transaction
$10.00 per Fed wire deposit or withdrawal
Fees are billed monthly, based on market value at the
beginning of the month
TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into on this
__________________, 1996, by and between The Rockland
Funds Trust, a Delaware business trust (hereinafter
referred to as the "Company") and Firstar Trust
Company, a corporation organized under the laws of the
State of Wisconsin (hereinafter referred to as the
"Agent").
WHEREAS, the Company is an open-ended management
investment company which is registered under the
Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Company is authorized to create
separate series, each with its own separate investment
portfolio;
WHEREAS, the Agent is a trust company and, among
other things, is in the business of administering
transfer and dividend disbursing agent functions for
the benefit of its customers; and
WHEREAS, the Company desires to retain the Agent
to provide transfer and dividend disbursing agent
services to each series of the Company listed on
Schedule A attached hereto (hereinafter collectively
referred to as the "Funds"), as may be amended from
time to time.
NOW, THEREFORE, the Company and the Agent do
mutually promise and agree as follows:
1. Terms of Appointment; Duties of the Agent
Subject to the terms and conditions set forth in
this Agreement, the Company hereby employs and
appoints the Agent to act as transfer agent and
dividend disbursing agent for each of the Funds.
The Agent shall perform all of the customary
services of a transfer agent and dividend
disbursing agent, and as relevant, agent in
connection with accumulation, open account or
similar plans (including without limitation any
periodic investment plan or periodic withdrawal
program), including, but not limited to:
A. Process purchase orders with prompt
delivery, where appropriate, of payment and
supporting documentation to the Company's
custodian, and issue the appropriate number
of certificated or uncertificated shares with
such uncertificated shares being held in the
appropriate shareholder accounts;
B. Process redemption requests received in
good order and, where relevant, deliver
appropriate documentation to the Company's
custodian;
C. Pay monies (upon receipt from the
Company's custodian, where relevant) in
accordance with the instructions of redeeming
shareholders;
D. Process transfers of shares in
accordance with the shareowner's
instructions;
E. Process exchanges between the Funds and
the Portico Money Fund;
F. Issue and/or cancel certificates as
instructed; replace lost, stolen or destroyed
certificates upon receipt of satisfactory
indemnification or surety bond;
G. Prepare and transmit payments for
dividends and distributions declared by the
Company with respect to the Funds;
H. Make changes to shareholder records,
including, but not limited to, address
changes in plans (i.e., systematic
withdrawal, automatic investment, dividend
reinvestment, etc.);
I. Record the issuance of shares of each
Fund and maintain, pursuant to Rule
17ad-10(e) promulgated under the Securities
Exchange Act of 1934, as amended (the
"Exchange Act"), a record of the total number
of shares of each Fund which are authorized,
issued and outstanding;
J. Prepare shareholder meeting lists and,
if applicable, mail, receive and tabulate
proxies;
K. Mail shareholder reports and
prospectuses to current shareholders;
L. Prepare and file U.S. Treasury
Department Forms 1099 and other appropriate
information returns required with respect to
dividends and distributions for all
shareholders;
M. Provide shareholder account information
upon request and prepare and mail
confirmations and statements of account to
shareholders for all purchases, redemptions
and other confirmable transactions as agreed
upon with the Company; and
N. Provide a Blue Sky System which will
enable the Company to monitor the total
number of shares of each Fund sold in each
state. In addition, the Company or its
agent, including the Agent, shall identify to
the Agent in writing those transactions and
assets to be treated as exempt from Blue Sky
reporting to the Company for each state. The
responsibility of the Agent for the Company's
Blue Sky state registration status is solely
limited to the initial compliance by the
Company and the reporting of such
transactions to the Company or its agent.
2. Compensation
The Company agrees to pay the Agent for the
performance of the duties listed in this Agreement
as set forth on Schedule B attached hereto; the
fees and out-of-pocket expenses include, but are
not limited to the following: printing, postage,
forms, stationery, record retention (if requested
by the Company), mailing, insertion, programming
(if requested by the Company), labels, shareholder
lists and proxy expenses.
These fees and reimbursable expenses may be
changed from time to time subject to mutual
written agreement between the Company and the
Agent.
The Company agrees to pay all fees and
reimbursable expenses within ten (10) business
days following the mailing of the billing notice.
3. Representations of the Agent
The Agent represents and warrants to the Company
that:
A. It is a trust company duly organized,
existing and in good standing under the laws
of Wisconsin;
B. It is a registered transfer agent under
the Exchange Act;
C. It is duly qualified to carry on its
business in the State of Wisconsin;
D. It is empowered under applicable laws
and by its charter and bylaws to enter into
and perform this Agreement;
E. All requisite corporate proceedings have
been taken to authorize it to enter and
perform this Agreement;
F. It has and will continue to have access
to the necessary facilities, equipment and
personnel to perform its duties and
obligations under this Agreement; and
G. It will comply with all applicable
requirements of the Securities Act of 1933,
as amended (the "Securities Act"), the
Exchange Act, the 1940 Act, and any laws,
rules, and regulations of governmental
authorities having jurisdiction.
4. Representations of the Company
The Company represents and warrants to the Agent
that:
A. The Company is an open-ended diversified
investment company under the 1940 Act;
B. The Company is a business trust
organized, existing and in good standing
under the laws of Delaware;
C. The Company is empowered under
applicable laws and by its Trust Investment
and Bylaws to enter into and perform this
Agreement;
D. All necessary proceedings required by
the Trust Instrument have been taken to
authorize it to enter into and perform this
Agreement;
E. The Company will comply with all
applicable requirements of the Securities
Act, the Exchange Act, the 1940 Act, and any
laws, rules and regulations of governmental
authorities having jurisdiction; and
F. A registration statement under the
Securities Act is currently effective and
will remain effective, and appropriate state
securities law filings have been made and
will continue to be made, with respect to all
shares of the Company being offered for sale.
5. Covenants of the Company and the Agent
The Company shall furnish the Agent a certified
copy of the resolution of the Board of Trustees of
the Company authorizing the appointment of the
Agent and the execution of this Agreement. The
Company shall provide to the Agent a copy of its
Trust Instrument, Bylaws and all amendments
thereto.
The Agent shall keep records relating to the
services to be performed hereunder, in the form
and manner as it may deem advisable. To the
extent required by Section 31 of the 1940 Act and
the rules thereunder, the Agent agrees that all
such records prepared or maintained by the Agent
relating to the services to be performed by the
Agent hereunder are the property of the Company
and will be preserved, maintained and made
available in accordance with such section and
rules and will be surrendered to the Company on
and in accordance with its request.
6. Indemnification; Remedies Upon Breach
The Agent shall exercise reasonable care in the
performance of its duties under this Agreement.
The Agent shall not be liable for any error of
judgment or mistake of law or for any loss
suffered by the Company in connection with matters
to which this Agreement relates, including losses
resulting from mechanical breakdowns or the
failure of communication or power supplies beyond
the Agent's control, except a loss resulting from
the Agent's refusal or failure to comply with the
terms of this Agreement or from bad faith,
negligence, or willful misconduct on its part in
the performance of its duties under this
Agreement. Notwithstanding any other provision of
this Agreement, the Company shall indemnify and
hold harmless the Agent from and against any and
all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact
or law) of any and every nature (including
reasonable attorneys' fees) which the Agent may
sustain or incur or which may be asserted against
the Agent by any person arising out of any action
taken or omitted to be taken by it in performing
the services hereunder (i) in accordance with the
foregoing standards, or (ii) in reliance upon any
written or oral instruction provided to the Agent
by any duly authorized officer of the Company,
such duly authorized officer to be included in a
list of authorized officers furnished to the Agent
and as amended from time to time in writing by
resolution of the Board of Trustees of the
Company.
Further, the Company will indemnify and hold the
Agent harmless against any and all losses, claims,
damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting
from any claim, demand, action, or suit as a
result of the negligence of the Company or the
principal underwriter of the Company (unless
contributed to by the Agent's breach of this
Agreement or other Agreements between the Company
and the Agent, or the Agent's own negligence or
bad faith); or as a result of the Agent acting
upon telephone instructions relating to the
exchange or redemption of shares received by the
Agent and reasonably believed by the Agent under a
standard of care customarily used in the industry
to have originated from the record owner of the
subject shares; or as a result of acting in
reliance upon any genuine instrument or stock
certificate signed, countersigned, or executed by
any person or persons authorized to sign,
countersign, or execute the same.
In the event of a mechanical breakdown or failure
of communication or power supplies beyond its
control, the Agent shall take all reasonable steps
to minimize service interruptions for any period
that such interruption continues beyond the
Agent's control. The Agent will make every
reasonable effort to restore any lost or damaged
data and correct any errors resulting from such a
breakdown at the expense of the Agent. The Agent
agrees that it shall, at all times, have
reasonable contingency plans with appropriate
parties, making reasonable provision for emergency
use of electrical data processing equipment to the
extent appropriate equipment is available.
Representatives of the Company shall be entitled
to inspect the Agent's premises and operating capa
bilities at any time during regular business hours
of the Agent, upon reasonable notice to the Agent.
Regardless of the above, the Agent reserves the
right to reprocess and correct administrative
errors at its own expense.
In order that the indemnification provisions
contained in this section shall apply, it is
understood that if in any case the Company may be
asked to indemnify or hold the Agent harmless, the
Company shall be fully and promptly advised of all
pertinent facts concerning the situation in
question, and it is further understood that the
Agent will use all reasonable care to notify the
Company promptly concerning any situation which
presents or appears likely to present the
probability of such a claim for indemnification
against the Company. The Company shall have the
option to defend the Agent against any claim which
may be the subject of this indemnification. In
the event that the Company so elects, it will so
notify the Agent and thereupon the Company shall
take over complete defense of the claim, and the
Agent shall in such situation initiate no further
legal or other expenses for which it shall seek
indemnification under this section. The Agent
shall in no case confess any claim or make any
compromise in any case in which the Company will
be asked to indemnify the Agent except with the
Company's prior written consent.
The Agent shall indemnify and hold the Company
harmless from and against any and all claims,
demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of
any and every nature (including reasonable
attorneys' fees) which may be asserted against the
Company by any person arising out of any action
taken or omitted to be taken by the Agent as a
result of the Agent's refusal or failure to comply
with the terms of this Agreement, its bad faith,
negligence, or willful misconduct.
7. Confidentiality
The Agent agrees on behalf of itself and its
directors, officers and employees to treat
confidentially and as proprietary information of
the Company all records and other information
relative to the Company and prior, present, or
potential shareholders (and clients of said
shareholders) and not to use such records and
information for any purpose other than the
performance of its responsibilities and duties
hereunder, except after prior notification to and
approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be
withheld where the Agent may be exposed to civil
or criminal contempt proceedings for failure to
comply after being requested to divulge such
information by duly constituted authorities, or
when so requested by the Company.
8. Miscellaneous
The captions in this Agreement are included for
convenience of reference only and in no way define
or limit any of the provisions hereof or otherwise
affect their construction or effect. If any
provision of this Agreement shall be held invalid
by a court or regulatory agency decision, statute,
rule, or otherwise, the remainder of this
Agreement shall not be affected thereby. This
Agreement shall be governed by Wisconsin law,
provided, however, that nothing herein shall be
construed in a manner inconsistent with the 1940
Act or any rule or regulation promulgated by the
SEC thereunder. This Agreement constitutes the
entire Agreement of the parties hereto.
9. Amendment, Assignment, Termination and Notice
A. This Agreement may be amended by the
mutual written consent of the parties.
B. This Agreement may be terminated upon
ninety (90) days' written notice given by one
party to the other.
C. This Agreement and any right or
obligation hereunder may not be assigned by
either party without the signed, written
consent of the other party.
D. Any notice required to be given by the
parties to each other under the terms of this
Agreement shall be in writing, addressed and
delivered, or mailed to the principal place
of business of the other party. If to the
Agent, such notice should be sent to P.O. Box
2054, Milwaukee, Wisconsin 53201. If to the
Company, such notice should be sent toThe
Rockland Funds Trust, 100 South Rockland
Road, Rockland, DE 19732.
E. In the event that the Company gives to
the Agent its written intention to terminate
and appoint a successor transfer agent, the
Agent agrees to cooperate in the transfer of
its duties and responsibilities to the
successor, including any and all relevant
books, records and other data established or
maintained by the Agent under this Agreement.
F. Should the Company exercise its right to
terminate, all reasonable out-of-pocket
expenses associated with the movement of
records and material will be paid by the
Company.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by a duly authorized officer
on one or more counterparts as of the day and year
first written above.
The Rockland Funds Trust Firstar Trust Company:
By: _________________________________ By: ________________________________
Attest: _______________________________ Attest: _____________________________
Schedule A
SEPARATE SERIES OF THE ROCKLAND FUNDS TRUST
Name of Series Date Added
The Rockland Growth Fund ____________, 1996
- Retail Class
- Institution Class
Schedule B
Shareholder Accounting Services
Load Funds
Annual Fee Schedule
$16.00 per shareholder account
Minimum annual fee of $24,000 for the first fund and
$10,000 for each additional fund
Plus out-of-pocket expenses, including, but not limited
to:
Telephone - toll-free lines
Postage
Programming
Stationery/envelopes
Mailing
Insurance
Proxies
Retention of Records
Microfilm/fiche of records
Special reports
All other out-of-pocket expenses
ACH fees
Fees are billed monthly
Shareholder Fees
(Charged to Investors)
Defined Contribution
403(b)(7), 401(k)
I. Qualified Plan Fees IRA Accounts Plan Accounts
Annual maintenance fee per $ 12.50 $ 12.50
Account
Transfer to successor trustee 15.00 15.00
Distribution to a participant
(exclusive of systematic
withdrawal plans) 15.00 15.00
Refund of excess contribution 15.00 15.00
II. Additional Shareholder Fees Amount
Any outgoing wire $7.50/wire
Telephone exchange 5.00/telephone exchange
Return check fee 15.00/return check
Stop payment fee (liquidation,
dividend, draft check) 15.00/stop payment
Research fee 5.00/research item
(For requested items of the second
calendar year [or previous] to the
request)
These fees are subject to change upon notification by
Firstar Trust Company to the Mutual Fund client.
Shareholder Accounting Services
Automatic Investment Plan Processing
ACH Service
Automatic Investment Plan
Telephone Purchase, Liquidation
EFT Payments of Dividends, Capital Gains, SWP's
$125.00 per month
$0.50 per account set-up and/or change
$0.35 per item
$3.50 per correction, reversal, or return item
Fees are billed monthly
FUND ADMINISTRATION SERVICING AGREEMENT
This Agreement is made and entered into on this
__________________, 1996, by and between The Rockland
Funds Trust, a Delaware business trust (hereinafter
referred to as the "Company") and Firstar Trust
Company, a corporation organized under the laws of the
State of Wisconsin (hereinafter referred to as "FTC").
WHEREAS, the Company is an open-ended management
investment company which is registered under the
Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Company is authorized to create
separate series, each with its own separate investment
portfolio;
WHEREAS, FTC is a trust company and, among other
things, is in the business of providing fund
administration services for the benefit of its
customers; and
WHEREAS, the Company desires to retain FTC to act
as Administrator for each series of the Company listed
on Schedule A attached hereto (hereinafter collectively
referred to as the "Funds"), as may be amended from
time to time.
NOW, THEREFORE, the Company and FTC do mutually
promise and agree as follows:
I. Appointment of the Administrator
The Company hereby appoints FTC as Administrator
of the Funds on the terms and conditions set forth
in this Agreement, and FTC hereby accepts such
appointment and agrees to perform the services and
duties set forth in this Agreement in
consideration of the compensation provided for
herein.
II. Duties and Responsibilities of FTC
A. General Fund Management
1. Act as liaison among all
Company service providers
2. Coordinate Board communication
by:
a. Assisting Company counsel in establishing
meeting agendas
b. Preparing Board reports based on
financial and administrative data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and
director and officer liability coverage,
and making the necessary SEC filings relating
thereto
e. Preparing minutes of meetings of the Board
and shareholders
3. Audits
a. Prepare appropriate schedules and assist
independent auditors
b. Provide information to SEC and facilitate
audit process
c. Provide office facilities
4. Assist in overall operations of the Company
5. Maintain the Company's governing documents, including
the Trust Instrument, the By-laws and the minute book
B. Compliance
1. Regulatory Compliance
a. Monitor compliance with 1940 Act requirements,
including:
1) Asset diversification tests
2) Total return and SEC yield
calculations
3) Maintenance of books and
records under Rule 31a-3
4) Code of Ethics
b. Monitor compliance with the policies and
investment limitations of each Fund as set
forth in the Funds' Prospectus and Statement
of Additional Information
2. Blue Sky Compliance
a. Prepare and file with the appropriate state
securities authorities any and all required
compliance filings relating to the
registration of the securities of the
Company so as to enable the Company to make a
continuous offering of its shares
b. Monitor status and maintain registrations
in each state
3. SEC Registration and Reporting
a. Assist Company counsel in updating Prospectus
and Statement of Additional Information
and in preparing proxy statements and Rule
24f-2 notices
b. Prepare annual and semiannual reports
c. Coordinate the printing of publicly
disseminated Prospectuses and reports
4. IRS Compliance
a. Monitor Company's status as a regulated
investment company under Subchapter M through
review of the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Monitor short-short testing
c. Calculate required distributions (including
excise tax distributions)
C. Financial Reporting
1. Provide financial data required by Funds' Prospectus
and Statement of Additional Information
2. Prepare financial reports for shareholders, the Board,
the SEC, and independent auditors
3. Supervise the Company's Custodian and Fund Accountants
in the maintenance of the Company's general ledger
and in the preparation of the Company's financial
statements, including oversight of expense accruals
and payments, of the determination of net asset value
of each Fund's net assets and of each Fund's shares,
and of the declaration and payment of dividends
and other distributions to shareholders
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal
and state tax returns including Forms 1120/8610 with
any necessary schedules
2. Prepare state income breakdowns where relevant
3. File Form 1099 Miscellaneous for payments to directors
and other service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate
shareholders
III. Compensation
The Company, on behalf of the Funds, agrees to pay
FTC for the performance of the duties listed in
this Agreement and the fees and out-of-pocket
expenses as set forth in the attached Schedule B.
The Company agrees to pay all fees and
reimbursable expenses within ten (10) business
days following the mailing of the billing notice.
IV. Performance of Service; Limitation of Liability
A. FTC shall exercise reasonable care in
the performance of its duties under this
Agreement. FTC shall not be liable for any
error of judgment or mistake of law or for
any loss suffered by the Company in
connection with matters to which this
Agreement relates, including losses resulting
from mechanical breakdowns or the failure of
communication or power supplies beyond FTC's
control, except a loss resulting from FTC's
refusal or failure to comply with the terms
of this Agreement or from bad faith,
negligence, or willful misconduct on its part
in the performance of its duties under this
Agreement. Notwithstanding any other
provision of this Agreement, the Company
shall indemnify and hold harmless FTC from
and against any and all claims, demands,
losses, expenses, and liabilities (whether
with or without basis in fact or law) of any
and every nature (including reasonable
attorneys' fees) which FTC may sustain or
incur or which may be asserted against FTC by
any person arising out of any action taken or
omitted to be taken by it in performing the
services hereunder (i) in accordance with the
foregoing standards, or (ii) in reliance upon
any written or oral instruction provided to
FTC by any duly authorized officer of the
Company, such duly authorized officer to be
included in a list of authorized officers
furnished to FTC and as amended from time to
time in writing by resolution of the Board of
Trustees of the Company.
In the event of a mechanical breakdown
or failure of communication or power supplies
beyond its control, FTC shall take all
reasonable steps to minimize service
interruptions for any period that such
interruption continues beyond FTC's control.
FTC will make every reasonable effort to
restore any lost or damaged data and correct
any errors resulting from such a breakdown at
the expense of FTC. FTC agrees that it
shall, at all times, have reasonable
contingency plans with appropriate parties,
making reasonable provision for emergency use
of electrical data processing equipment to
the extent appropriate equipment is
available. Representatives of the Company
shall be entitled to inspect FTC's premises
and operating capabilities at any time during
regular business hours of FTC, upon
reasonable notice to FTC.
Regardless of the above, FTC reserves
the right to reprocess and correct
administrative errors at its own expense.
B. In order that the indemnification
provisions contained in this section shall
apply, it is understood that if in any case
the Company may be asked to indemnify or hold
FTC harmless, the Company shall be fully and
promptly advised of all pertinent facts
concerning the situation in question, and it
is further understood that FTC will use all
reasonable care to notify the Company
promptly concerning any situation which
presents or appears likely to present the
probability of such a claim for
indemnification against the Company. The
Company shall have the option to defend FTC
against any claim which may be the subject of
this indemnification. In the event that the
Company so elects, it will so notify FTC and
thereupon the Company shall take over
complete defense of the claim, and FTC shall
in such situation initiate no further legal
or other expenses for which it shall seek
indemnification under this section. FTC
shall in no case confess any claim or make
any compromise in any case in which the
Company will be asked to indemnify FTC except
with the Company's prior written consent.
C. FTC shall indemnify and hold the Company
harmless from and against any and all claims,
demands, losses, expenses, and liabilities
(whether with or without basis in fact or
law) of any and every nature (including
reasonable attorneys' fees) which may be
asserted against the Company by any person
arising out of any action taken or omitted to
be taken by FTC as a result of FTC's refusal
or failure to comply with the terms of this
Agreement, its bad faith, negligence, or
willful misconduct.
V. Proprietary and Confidential information
FTC agrees on behalf of itself and its directors,
officers, and employees to treat confidentiality
and as proprietary information of the Company all
records and other information relative to the
Company and prior, present, or potential
shareholders of the Company (and clients of said
shareholders), and not to use such records and
information for any purpose other than the
performance of its responsibilities and duties
hereunder, except after prior notification to and
approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be
withheld where FTC may be exposed to civil or
criminal contempt proceedings for failure to
comply, when requested to divulge such information
by duly constituted authorities, or when so
requested by the Company.
VI. Data Necessary to Perform Services
The Company or its agent, which may be FTC, shall
furnish to FTC the data necessary to perform the
services described herein at times and in such
form as mutually agreed upon.
VII. Terms of the Agreement
This Agreement shall become effective as of the
date hereof and, unless sooner terminated as
provided herein, shall continue automatically in
effect for successive annual periods. The
Agreement may be terminated by either party upon
giving ninety (90) days prior written notice to
the other party or such shorter period as is
mutually agreed upon by the parties.
The terms of this Agreement shall not be waived,
altered, modified, amended, or supplemented in any
manner whatsoever except by a written instrument
signed by FTC and the Company.
VIII. Duties in the Event of Termination
In the event that, in connection with termination,
a successor to any of FTC's duties or
responsibilities hereunder is designated by the
Company by written notice to FTC, FTC will
promptly, upon such termination and at the expense
of the Company, transfer to such successor all
relevant books, records, correspondence, and other
data established or maintained by FTC under this
Agreement in a form reasonably acceptable to the
Company (if such form differs from the form in
which FTC has maintained, the Company shall pay
any expenses associated with transferring the data
to such form), and will cooperate in the transfer
of such duties and responsibilities, including
provision for assistance from FTC's personnel in
the establishment of books, records, and other
data by such successor.
IX. Choice of Law
This Agreement shall be construed in accordance
with the laws of the State of Wisconsin.
X. Notices
Notices of any kind to be given by either party to
the other party shall be in writing and shall be
duly given if mailed or delivered as follows:
Notice to FTC shall be sent to P.O. Box 2054,
Milwaukee, Wisconsin 53201, and notice to the
Company shall be sent to The Rockland Funds Trust,
100 South Rockland Road, Rockland, DE 19732.
XI. Records
FTC shall keep records relating to the services to
be performed hereunder in the form and manner and
for such period as it may deem advisable and is
agreeable to the Company but not inconsistent with
the rules and regulations of appropriate
government authorities, in particular, Section 31
of the 1940 Act and the rules thereunder. FTC
agrees that all such records prepared or
maintained by FTC relating to the services to be
performed by FTC hereunder are the property of the
Company and will be preserved, maintained, and
made available in accordance with such section and
rules of the 1940 Act and will be promptly
surrendered to the Company on and in accordance
with its request.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by a duly authorized
officer on one or more counterparts as of the day and
year first written above.
The Rockland Funds Trust: Firstar Trust Company:
By: _________________________________ By: ________________________________
Attest: _______________________________ Attest: ______________________________
Schedule A
SEPARATE SERIES OF THE ROCKLAND FUNDS TRUST
Name of Series Date Added
The Rockland Growth Fund ____________, 1996
- Retail Class
- Institutional Class
Schedule B
Fund Administration and Compliance
Annual Fee Schedule
Minimum annual fee per fund: $30,000
6 basis points (.0006) on the first $200,000,000
5 basis points (.0005) on the next $300,000,000
3 basis points (.0003) on the balance
Out-of-Pocket expenses, including, but not limited to:
Postage
Stationery
Programming
Proxies
Retention of records
Special reports
Federal and state regulatory filing fees
Certain insurance premiums
All other out-of-pocket expenses
Expenses from Board of Directors meetings
Auditing and legal expenses
Fees are billed monthly.
FUND ACCOUNTING SERVICING AGREEMENT
This contract between The Rockland Funds Trust, a
Delaware business trust (hereinafter called the
"Company") and Firstar Trust Company, a Wisconsin
corporation (hereinafter called "FTC") is entered into
on this _________________, 1996.
WHEREAS, the Company is an open-ended management
investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company is authorized to create
separate series, each with its own separate investment
portfolio;
WHEREAS, FTC is in the business of providing,
among other things, mutual fund accounting services to
investment companies; and
WHEREAS, the Company desires to retain FTC to
provide accounting services to each series of the
Company listed on Schedule A attached hereto
(hereinafter collectively called the "Funds"), as may
be amended from time to time.
NOW, THEREFORE, the parties do mutually promise
and agree as follows:
1. Services. FTC agrees to provide the
following mutual fund accounting services to the
Company and each of the Funds:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on
a trade date +1 basis using security trade
information communicated from the investment
manager on a timely basis.
(2) For each valuation date,
obtain prices from a pricing source approved
by the Board of Trustees of the Company and
apply those prices to the portfolio
positions. For those securities where market
quotations are not readily available, the
Board of Trustees of the Company shall
approve, in good faith, the method for
determining the fair value for such
securities.
(3) Identify interest and dividend
accrual balances as of each valuation date
and calculate gross earnings on investments
for the accounting period.
(4) Determine gain/loss on
security sales and identify them as to short-
short, short- or long-term status; account
for periodic distributions of gains or losses
to shareholders and maintain undistributed
gain or loss balances as of each valuation
date.
B. Expense Accrual and Payment
Services:
(1) For each valuation date,
calculate the expense accrual amounts as
directed by the Company as to methodology,
rate or dollar amount.
(2) Record payments for Fund
expenses upon receipt of written
authorization from the Company.
(3) Account for Fund expenditures
and maintain expense accrual balances at the
level of accounting detail, as agreed upon by
FTC and the Company.
(4) Provide expense accrual and
payment reporting.
C. Fund Valuation and Financial
Reporting Services:
(1) Account for Fund share
purchases, sales, exchanges, transfers,
dividend reinvestments, and other Fund share
activity as reported by the transfer agent on
a timely basis.
(2) Apply equalization accounting
as directed by the Company.
(3) Determine net investment
income (earnings) for each Fund as of each
valuation date. Account for periodic
distributions of earnings to shareholders and
maintain undistributed net investment income
balances as of each valuation date.
(4) Maintain a general ledger and
other accounts, books and financial records
for each Fund in the form as agreed upon.
(5) Determine the net asset value
of each Fund according to the accounting
policies and procedures set forth in the
Funds' Prospectus.
(6) Calculate per share net asset
value, per share net earnings, and other per
share amounts reflective of Fund operations
at such time as required by the nature and
characteristics of each Fund.
(7) Communicate, at an agreed upon
time, the per share price for each valuation
date to parties as agreed upon from time to
time.
(8) Prepare monthly reports which
document the adequacy of accounting detail to
support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records
for the investment portfolio of the Funds to
support the tax reporting required for IRS-
defined regulated investment companies.
(2) Maintain tax lot detail for
the investment portfolio.
(3) Calculate taxable gain/loss on
security sales using the tax lot relief
method designated by the Company.
(4) Provide the necessary
financial information to support the taxable
components of income and capital gains
distributions to the transfer agent to
support tax reporting to the shareholders.
E. Compliance Control Services:
(1) Support reporting to
regulatory bodies and support financial
statement preparation by making the Funds'
accounting records available to the Company,
the Securities and Exchange Commission, and
the outside auditors.
(2) Maintain accounting records
according to the 1940 Act and regulations
provided thereunder.
2. Pricing of Securities. For each valuation
date, obtain prices from a pricing source selected by
FTC but approved by the Company's Board of Trustees and
apply those prices to the portfolio positions of each
Fund. For those securities where market quotations are
not readily available, the Company's Board of Trustees
shall approve, in good faith, the method for
determining the fair value for such securities.
If the Company desires to provide a price which
varies from the pricing source, the Company shall
promptly notify and supply FTC with the valuation of
any such security on each valuation date. All pricing
changes made by the Company will be in writing and must
specifically identify the securities to be changed by
CUSIP, name of security, new price or rate to be
applied, and, if applicable, the time period for which
the new price is effective.
3. Changes in Accounting Procedures. Any
resolution passed by the Board of Trustees of the
Company that affects accounting practices and
procedures under this Agreement shall be effective upon
written receipt and acceptance by FTC.
4. Changes in Equipment, Systems, Service, Etc.
FTC reserves the right to make changes from time to
time, as it deems advisable, relating to its services,
systems, programs, rules, operating schedules and
equipment, so long as such changes do not adversely
affect the service provided to the Company under this
Agreement.
5. Compensation. FTC shall be compensated for
providing the services set forth in this Agreement in
accordance with the fee schedule attached hereto as
Schedule B and as mutually agreed upon and amended from
time to time.
6. Performance of Service.
A. FTC shall exercise reasonable care in
the performance of its duties under this
Agreement. FTC shall not be liable for any error
of judgment or mistake of law or for any loss
suffered by the Company in connection with matters
to which this Agreement relates, including losses
resulting from mechanical breakdowns or the
failure of communication or power supplies beyond
FTC's control, except a loss resulting from FTC's
refusal or failure to comply with the terms of
this Agreement or from bad faith, negligence, or
willful misconduct on its part in the performance
of its duties under this Agreement.
Notwithstanding any other provision of this
Agreement, the Company shall indemnify and hold
harmless FTC from and against any and all claims,
demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of
any and every nature (including reasonable
attorneys' fees) which FTC may sustain or incur or
which may be asserted against FTC by any person
arising out of any action taken or omitted to be
taken by it in performing the services hereunder
(i) in accordance with the foregoing standards, or
(ii) in reliance upon any written or oral
instruction provided to FTC by any duly authorized
officer of the Company, such duly authorized
officer to be included in a list of authorized
officers furnished to FTC and as amended from time
to time in writing by resolution of the Board of
Trustees of the Company.
In the event of a mechanical breakdown
or failure of communication or power supplies
beyond its control, FTC shall take all reasonable
steps to minimize service interruptions for any
period that such interruption continues beyond
FTC's control. FTC will make every reasonable
effort to restore any lost or damaged data and
correct any errors resulting from such a breakdown
at the expense of FTC. FTC agrees that it shall,
at all times, have reasonable contingency plans
with appropriate parties, making reasonable
provision for emergency use of electrical data
processing equipment to the extent appropriate
equipment is available. Representatives of the
Company shall be entitled to inspect FTC's
premises and operating capabilities at any time
during regular business hours of FTC, upon
reasonable notice to FTC.
Regardless of the above, FTC reserves
the right to reprocess and correct administrative
errors at its own expense.
B. In order that the indemnification
provisions contained in this section shall apply,
it is understood that if in any case the Company
may be asked to indemnify or hold FTC harmless,
the Company shall be fully and promptly advised of
all pertinent facts concerning the situation in
question, and it is further understood that FTC
will use all reasonable care to notify the Company
promptly concerning any situation which presents
or appears likely to present the probability of
such a claim for indemnification against the
Company. The Company shall have the option to
defend FTC against any claim which may be the
subject of this indemnification. In the event
that the Company so elects, it will so notify FTC
and thereupon the Company shall take over complete
defense of the claim, and FTC shall in such
situation initiate no further legal or other
expenses for which it shall seek indemnification
under this section. FTC shall in no case confess
any claim or make any compromise in any case in
which the Company will be asked to indemnify FTC
except with the Company's prior written consent.
C. FTC shall indemnify and hold the Company
harmless from and against any and all claims,
demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of
any and every nature (including reasonable
attorneys' fees) which may be asserted against the
Company by any person arising out of any action
taken or omitted to be taken by FTC as a result of
FTC's refusal or failure to comply with the terms
of this Agreement, its bad faith, negligence, or
willful misconduct.
7. No Agency Relationship. Nothing herein
contained shall be deemed to authorize or empower FTC
to act as agent for the other party to this Agreement,
or to conduct business in the name of, or for the
account of, the other party to this Agreement.
8. Records. FTC shall keep records relating to
the services to be performed hereunder, in the form and
manner, and for such period as it may deem advisable
and is agreeable to the Company but not inconsistent
with the rules and regulations of appropriate
government authorities, in particular, Section 31 of
the 1940 Act and the rules thereunder. FTC agrees that
all such records prepared or maintained by FTC relating
to the services to be performed by FTC hereunder are
the property of the Company and will be preserved, main
tained, and made available in accordance with such
section and rules of the 1940 Act and will be promptly
surrendered to the Company on and in accordance with
its request.
9. Proprietary and Confidential Information.
FTC agrees on behalf of itself and its directors,
officers, and employees to treat confidentiality and as
proprietary information of the Company all records and
other information relative to the Company and prior,
present, or potential shareholders of the Company (and
clients of said shareholders), and not to use such
records and information for any purpose other than the
performance of its responsibilities and duties
hereunder, except after prior notification to and
approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be
withheld where FTC may be exposed to civil or criminal
contempt proceedings for failure to comply, when
requested to divulge such information by duly
constituted authorities, or when so requested by the
Company.
10. Data Necessary to Perform Services. The
Company or its agent, which may be FTC, shall furnish
to FTC the data necessary to perform the services
described herein at such times and in such form as
mutually agreed upon.
11. Notification of Error. The Company will
notify FTC of any balancing or control error caused by
FTC within three (3) business days after receipt of any
reports rendered by FTC to the Company, or within three
(3) business days after discovery of any error or
omission not covered in the balancing or control
procedure, or within three (3) business days of
receiving notice from any shareholder.
12. Term of Agreement. This Agreement may be
terminated by either party upon giving ninety (90) days
prior written notice to the other party or such shorter
period as is mutually agreed upon by the parties.
However, this Agreement may be replaced or modified by
a subsequent agreement between the parties.
13. Duties in the Event of Termination. In the
event that in connection with termination, a successor
to any of FTC's duties or responsibilities hereunder is
designated by the Company by written notice to FTC, FTC
will promptly, upon such termination and at the expense
of the Company, transfer to such successor all relevant
books, records, correspondence and other data
established or maintained by FTC under this Agreement
in a form reasonably acceptable to the Company (if such
form differs from the form in which FTC has maintained
the same, the Company shall pay any expenses associated
with transferring the same to such form), and will
cooperate in the transfer of such duties and
responsibilities, including provision for assistance
from FTC's personnel in the establishment of books,
records and other data by such successor.
14. Notices. Notices of any kind to be given by
either party to the other party shall be in writing and
shall be duly given if mailed or delivered as follows:
Notice to FTC shall be sent to P.O. Box 2054,
Milwaukee, Wisconsin 53201 and notice to the Company
shall be sent toThe Rockland Funds Trust, 100 South
Rockland Road, Rockland, DE 19732.
15. Miscellaneous. The captions in this
Agreement are included for convenience of reference
only and in no way define or limit any of the
provisions hereof or otherwise affect their
construction or effect. If any provision of this
Agreement shall be held invalid by a court or
regulatory agency decision, statute, rule, or
otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be governed by
Wisconsin law, provided, however, that nothing herein
shall be construed in a manner inconsistent with the
1940 Act or any rule or regulation promulgated by the
SEC thereunder. This Agreement constitutes the entire
Agreement of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by a duly authorized
officer on one or more counterparts as of the day and
year first written above.
The Rockland Funds Trust Firstar Trust Company:
By:_________________________ By:______________________
Attest:_______________________ Attest:____________________
Schedule A
SEPARATE SERIES OF THE ROCKLAND FUNDS TRUST
Name of Series Date Added
The Rockland Growth Fund ____________, 1996
- Retail Class
- Institutional Class
Schedule B
Fund Valuation and Accounting
Domestic Portfolios
Annual Fee Schedule
Fixed Income Funds
Annual fee per fund based on market value of assets:
$25,000 for the first $40,000,000
2/100 of 1% (2 basis points) on the next $200,000,000
1/100 of 1% (1 basis point) on the balance
Out-of-pocket expenses, including daily pricing service
Equity/Balance Funds
Annual fee per fund based on market value of assets:
$22,000 for the first $40,000,000
1/100 of 1% (1 basis point) on the next $200,000,000
5/1000 of 1% (1/2 basis point) on the balance
Out-of-pocket expenses, including daily pricing service
Money Market Funds
Annual fee per fund based on market value of assets:
$25,000 for the first $40,000,000
1/100 of 1% (1 basis point) on the next $200,000,000
5/1000 of 1% (1/2 basis point) on the balance
Out-of-pocket expenses, including daily pricing service
All fees and out-of-pocket expenses are billed monthly.
Fund Valuation and Accounting
Asset Pricing Cost
Charge per Item and Valuation
Asset Type (daily, weekly, etc.)
Domestic and Canadian Equities $0.15
Options $0.15
Corporate/Government/Agency Bonds $0.50
CMOs $0.80
International Equities and Bonds $0.50
Municipal Bonds $0.80
Money Market Instruments $0.80
Pricing costs are billed monthly.
GODFREY & KAHN, S.C.
ATTORNEYS AT LAW
780 North Water Street
Milwaukee, Wisconsin 53202
Phone: (414) 273-3500 Fax: (414) 273-5198
October 25, 1996
The Rockland Funds Trust
4001 Centerville Road
Greenville, DE 19807
Gentlemen:
We have acted as your counsel in connection with
the preparation of a Registration Statement on Form N-
1A (Registration Nos. 333-9355 and 811-7743) (the
"Registration Statement") relating to the sale by you
of an indefinite number of shares of beneficial
interest, $.001 par value (the "Shares"), of The
Rockland Funds Trust (the "Trust"), in the manner set
forth in the Registration Statement.
We have examined: (a) the Registration Statement,
including the prospectuses included therein; (b) the
Trust's Declaration of Trust and By-Laws; (c) certain
resolutions of the Trust's Board of Trustees; and (d)
such other proceedings, documents and records as we
have deemed necessary to enable us to render this
opinion.
Based upon the foregoing, we are of the opinion
that the Shares, when sold as contemplated in the
Registration Statement, will be duly authorized and
validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an
exhibit to the Registration Statement. In giving this
consent, however, we do not admit that we are "experts"
within the meaning of Section 11 of the Securities Act
of 1933, as amended, or within the category of persons
whose consent is required by Section 7 of said Act.
Very truly yours,
/s/ Godfrey & Kahn, S.C.
GODFREY & KAHN, S.C.
CONSENT OF INDEPENDENT AUDITORS
The Shareholder and Board of Directors of
The Rockland Growth Fund:
We consent to the use of our report included herein and
to the reference to our Firm in the Statement of
Additional Information under the heading "Independent
Auditors".
/s/ KPMG Peat Marwick LLP
Milwaukee, Wisconsin
October 25, 1996
THE ROCKLAND FUNDS TRUST
SUBSCRIPTION AGREEMENT
To the Board of Directors of The Rockland Funds Trust:
The undersigned purchaser (the "Purchaser") hereby
subscribes to 6200 shares (the "Shares") of beneficial
interest in The Rockland Funds Trust (the "Company") in
consideration for which the Purchaser agrees to
transfer to the Company upon demand Sixty-Two Thousand
Dollars ($62,000) in cash. The Purchaser desires to
invest the $62,000 in The Rockland Growth Fund.
Accordingly, the Purchaser will receive 6200 Shares of
The Rockland Growth Fund.
It is understood that a certificate representing
the Shares shall not be issued to the undersigned, but
such ownership shall be recorded on the books and
records of the Company's transfer agent.
Notwithstanding the fact that a certificate
representing ownership will not be issued, the Shares
will be deemed fully paid and nonassessable.
The Purchaser agrees that the Shares are being
purchased for investment with no present intention to
resell or redeem the Shares.
The Purchaser acknowledges that costs incurred by
the Company in connection with its organization,
registration and initial public offering of Shares of
the Company have been deferred and are being amortized
over a period of five years from the date upon which
the Company commences its investment activities.
The Purchaser agrees that in the event any of the
Shares purchased under this Subscription Agreement are
redeemed during this five year period, the Company is
authorized to reduce the redemption proceeds to cover
any unamortized organizational expenses in the same
proportion as the number of Shares being redeemed bears
to the number of Shares outstanding at the time of the
redemption. If, for any reason, the reduction of
redemption proceeds is not in fact made by the Company
in the event of such a redemption, the Purchaser agrees
to reimburse the Company immediately for any
unamortized organizational expenses in the proportion
stated above.
Dated and effective as of the 24th day of October, 1996.
/s/ Charles S. Cruice
_____________________________
Charles S. Cruice
ACCEPTANCE
The foregoing subscription is hereby accepted.
Dated and effective as of the 24th day of October, 1996.
THE ROCKLAND FUNDS TRUST
/s/ Charles S. Cruice
_________________________________
By: Charles S. Cruice, President
/s/ Richard H. Gould
__________________________________
Attest: By: Richard H. Gould, Treasurer
THE ROCKLAND FUNDS TRUST
SUBSCRIPTION AGREEMENT
To the Board of Directors of The Rockland Funds Trust:
The undersigned purchaser (the "Purchaser") hereby
subscribes to 2500 shares (the "Shares") of beneficial
interest in The Rockland Funds Trust (the "Company") in
consideration for which the Purchaser agrees to
transfer to the Company upon demand Twenty-Five
Thousand Dollars ($25,000) in cash. The Purchaser
desires to invest the $25,000 in The Rockland Growth
Fund. Accordingly, the Purchaser will receive 2500
Shares of The Rockland Growth Fund.
It is understood that a certificate representing
the Shares shall not be issued to the undersigned, but
such ownership shall be recorded on the books and
records of the Company's transfer agent.
Notwithstanding the fact that a certificate
representing ownership will not be issued, the Shares
will be deemed fully paid and nonassessable.
The Purchaser agrees that the Shares are being
purchased for investment with no present intention to
resell or redeem the Shares.
The Purchaser acknowledges that costs incurred by
the Company in connection with its organization,
registration and initial public offering of Shares of
the Company have been deferred and are being amortized
over a period of five years from the date upon which
the Company commences its investment activities.
The Purchaser agrees that in the event any of the
Shares purchased under this Subscription Agreement are
redeemed during this five year period, the Company is
authorized to reduce the redemption proceeds to cover
any unamortized organizational expenses in the same
proportion as the number of Shares being redeemed bears
to the number of Shares outstanding at the time of the
redemption. If, for any reason, the reduction of
redemption proceeds is not in fact made by the Company
in the event of such a redemption, the Purchaser agrees
to reimburse the Company immediately for any
unamortized organizational expenses in the proportion
stated above.
Dated and effective as of the 24th day of October, 1996.
/s/ Richard H. Gould
__________________________
Richard H. Gould
ACCEPTANCE
The foregoing subscription is hereby accepted.
Dated and effective as of the 24th day of October, 1996.
THE ROCKLAND FUNDS TRUST
/s/ Charles S. Cruice
_________________________________
By: Charles S. Cruice, President
/s/ Richard H. Gould
___________________________________
Attest: By: Richard H. Gould, Treasurer
THE ROCKLAND FUNDS TRUST
SUBSCRIPTION AGREEMENT
To the Board of Directors of The Rockland Funds Trust:
The undersigned purchaser (the "Purchaser") hereby
subscribes to 800 shares (the "Shares") of beneficial
interest in The Rockland Funds Trust (the "Company") in
consideration for which the Purchaser agrees to
transfer to the Company upon demand Eight Thousand
Dollars ($8,000) in cash. The Purchaser desires to
invest the $8,000 in The Rockland Growth Fund.
Accordingly, the Purchaser will receive 800 Shares of
The Rockland Growth Fund.
It is understood that a certificate representing
the Shares shall not be issued to the undersigned, but
such ownership shall be recorded on the books and
records of the Company's transfer agent.
Notwithstanding the fact that a certificate
representing ownership will not be issued, the Shares
will be deemed fully paid and nonassessable.
The Purchaser agrees that the Shares are being
purchased for investment with no present intention to
resell or redeem the Shares.
The Purchaser acknowledges that costs incurred by
the Company in connection with its organization,
registration and initial public offering of Shares of
the Company have been deferred and are being amortized
over a period of five years from the date upon which
the Company commences its investment activities.
The Purchaser agrees that in the event any of the
Shares purchased under this Subscription Agreement are
redeemed during this five year period, the Company is
authorized to reduce the redemption proceeds to cover
any unamortized organizational expenses in the same
proportion as the number of Shares being redeemed bears
to the number of Shares outstanding at the time of the
redemption. If, for any reason, the reduction of
redemption proceeds is not in fact made by the Company
in the event of such a redemption, the Purchaser agrees
to reimburse the Company immediately for any
unamortized organizational expenses in the proportion
stated above.
Dated and effective as of the 24th day of October, 1996.
/s/ Jeffrey Rugen
_________________________
Jeffrey Rugen
ACCEPTANCE
The foregoing subscription is hereby accepted.
Dated and effective as of the 24th day of October, 1996.
THE ROCKLAND FUNDS TRUST
Charles S. Cruice
_________________________________
By: Charles S. Cruice, President
/s/ Richard H. Gould
__________________________________
Attest: By: Richard H. Gould, Treasurer
THE ROCKLAND FUNDS TRUST
SUBSCRIPTION AGREEMENT
To the Board of Directors of The Rockland Funds Trust:
The undersigned purchaser (the "Purchaser") hereby
subscribes to 500 shares (the "Shares") of beneficial
interest in The Rockland Funds Trust (the "Company") in
consideration for which the Purchaser agrees to
transfer to the Company upon demand Five Thousand
Dollars ($5,000) in cash. The Purchaser desires to
invest the $5,000 in The Rockland Growth Fund.
Accordingly, the Purchaser will receive 500 Shares of
The Rockland Growth Fund.
It is understood that a certificate representing
the Shares shall not be issued to the undersigned, but
such ownership shall be recorded on the books and
records of the Company's transfer agent.
Notwithstanding the fact that a certificate
representing ownership will not be issued, the Shares
will be deemed fully paid and nonassessable.
The Purchaser agrees that the Shares are being
purchased for investment with no present intention to
resell or redeem the Shares.
The Purchaser acknowledges that costs incurred by
the Company in connection with its organization,
registration and initial public offering of Shares of
the Company have been deferred and are being amortized
over a period of five years from the date upon which
the Company commences its investment activities.
The Purchaser agrees that in the event any of the
Shares purchased under this Subscription Agreement are
redeemed during this five year period, the Company is
authorized to reduce the redemption proceeds to cover
any unamortized organizational expenses in the same
proportion as the number of Shares being redeemed bears
to the number of Shares outstanding at the time of the
redemption. If, for any reason, the reduction of
redemption proceeds is not in fact made by the Company
in the event of such a redemption, the Purchaser agrees
to reimburse the Company immediately for any
unamortized organizational expenses in the proportion
stated above.
Dated and effective as of the 24th day of October, 1996.
/s/ Molly Lewis
___________________________
Molly Lewis
ACCEPTANCE
The foregoing subscription is hereby accepted.
Dated and effective as of the 24th day of October, 1996.
THE ROCKLAND FUNDS TRUST
/s/ Charles S. Cruice
________________________________
By: Charles S. Cruice, President
/s/ Richard H. Gould
________________________________
Attest: By: Richard H. Gould, Treasurer
Rockland Growth Fund
Individual Retirement Account
Disclosure Statement &
Custodial Account Agreement
Rockland Growth Fund
100 South Rockland Road
Rockland, DE 19732
Mutual Fund Services
615 East Michigan Street
P.O. Box 701
Milwaukee, WI 53201-0701
1-800-497-3933
Individual Retirement Account Disclosure Statement
Please read the following information together with the
Individual Retirement Account Custodial Agreement and
the Prospectus(es) for the fund(s) you select for
investment of your IRA contributions.
You may revoke this account any time within seven
calendar days after it is established by mailing or
delivering a written request for revocation to:
Rockland Growth Fund, c/o Firstar Trust Company, 615
East Michigan Street, 3rd Floor, Milwaukee, WI 53202,
Attention: Mutual Fund Services. If your revocation
is mailed, the date of the postmark (or the date of
certification if sent by certified or registered mail)
will be considered your revocation date. Upon proper
revocation, you will receive a full refund of your
initial contribution, without any adjustments for items
such as administrative fees or fluctuations in market
value.
1. General
Your IRA is a custodial account created for your
exclusive benefit, and Firstar Trust Company serves as
custodian. Your interest in the account is
nonforfeitable.
2. Investments
Contributions made to your IRA will be invested in one
or more of the regulated investment companies for which
Greenville Capital Management, Inc. serves as
investment advisor or any other regulated investment
company designated by Rockland Growth Fund. No part of
your account may be invested in life insurance
contracts; further, the assets of your account may be
not commingled with other property.
3. Eligibility
Employees and self-employed individuals are eligible to
contribute to an IRA. Employers may also contribute to
employer-sponsored IRAs established for the benefit of
their employees. You may also establish an IRA to
receive rollover contributions and transfers from
another IRA custodian or trustee or from certain other
retirement plans.
4. Time of Contribution
You may make regular contributions to your IRA any time
up to and including the due date for filing your tax
return for the year, not including extensions. You may
continue to make regular contributions to your IRA up
to (but not including) the calendar year in which you
reach 70-1/2. Employer contributions to a SEP-IRA plan
may be continued after you attain age 70-1/2. Rollover
contributions and transfers nay be made at any time,
including after you reach age 70-1/2.
5. Amount of Contribution
You may make annual regular contributions to an IRA in
any amount up to 100% of your compensation for the year
or $2,000, whichever is less. Qualifying rollover
contributions and transfers are not subject to this
limitation.
6. Spousal IRA
If you are married and your spouse is not employed (or
if your employed spouse elects to be treated as having
no compensation), you may make contributions to a
spousal IRA in addition to your own IRA. The maximum
amount contributed to both your own and to your
spouse's IRA may not exceed 100% of your compensation
or $2,250, whichever is less. In no event, however,
may the annual contribution to either your account or
your spouse's account exceed $2,000.
7. Rollover and Transfers
You are allowed to "rollover" a distribution or
transfer your assets from one individual retirement
account to another without any tax liability.
Rollovers between IRAs may be made once per year and
must be accomplished within 60 days after the
distribution. Also, under certain conditions, you may
roll over (tax free) all or a portion of a distribution
received from a qualified plan or tax-sheltered annuity
in which you participate or in which your deceased
spouse participated. However, strict limitations apply
to such rollovers, and you should seek competent advice
in order to comply with all of the rules governing
rollovers.
Most distributions from qualified retirement plans will
be subject to a 20% withholding requirement. The 20%
withholding can be avoided by directly transferring the
amount of the distribution to an individual retirement
account or to certain other types of retirement plans.
You should receive more information regarding these new
withholding rules and whether your distribution can be
transferred to an IRA from the plan administrator prior
to receiving your distribution.
8. Tax Deductibility of Annual Contributions
Although you may make an IRA contribution within the
limitations described above, all or a portion of your
contribution may be nondeductible. No deduction is
allowed for a rollover contribution or transfer. If
you are not married and are not an "active participant"
in an employer-sponsored retirement plan, you may make
a fully deductible IRA contribution in any amount up to
$2,000 or 100% of your compensation for the year,
whichever is less. The same limits apply if you are
married and file a joint return with your spouse and
neither you nor your spouse is an "active participant"
in an employer-sponsored retirement plan.
An employer-sponsored retirement plan includes any of
the following types of retirement plans:
x a qualified pension, profit-sharing, or stock
bonus plan established in accordance with IRC
401(a) or 401(k),
x a Simplified Employee Pension Plan (SEP) (IRC
408(k)),
x a deferred compensation plan maintained by a
governmental unit or agency,
x tax-sheltered annuities and custodial accounts
(IRC 403(b) and 403(b)(7)),
x a qualified annuity plan under IRC Section 403(a).
Distributions from the types of plans listed above are
eligible to be rolled over or transferred to your IRA.
Generally, you are considered an "active participant"
in a defined contribution plan if an employer
contribution or forfeiture was credited to your account
during the year. You are considered an "active
participant" in a defined benefit plan if you are
eligible to participate in a plan even though you elect
not to participate. You are also treated as an "active
participant" if you make a voluntary or mandatory
contribution to any type of plan, even if your employer
makes no contribution to the plan.
If you (or your spouse, if filing a joint tax return)
are covered by an employer-sponsored retirement plan,
your IRA contribution is fully deductible if your
adjusted gross income (or combined income if you file a
joint tax return) does not exceed certain limits. For
this purpose adjusted gross income is not modified to
take into account any deduction for IRA contributions,
but does take into account the passive loss limitations
under Code Section 86 and any taxable benefits under
the Social Security Act and the Railroad Retirement
Act.
If you (or your spouse, if filing a joint tax return)
are covered by an employer-sponsored retirement plan,
the deduction for your IRA contribution is reduced
proportionately for adjusted gross income which exceeds
the applicable dollar amount. The applicable dollar
amount for an individual is $25,000 and $40,000 for
married couples filing a joint tax return. The
applicable dollar limit for married individuals filing
separate returns is $0. If your adjusted gross income
exceeds the applicable dollar amount by $10,000 or
less, you may make a deductible IRA contribution. The
deductible amount, however, will be less than $2,000.
To determine the amount of your deductible
contribution, use the following calculations:
1) Subtract the applicable dollar amount from your
adjusted gross income. If the result is $10,000
or more, you can only make a nondeductible
contribution to your IRA.
2) Divide the above figure by $10,000, and multiply
that percentage by $2,000.
3) Subtract the dollar amount (result from #2 above)
from $2,000 to determine the amount which is
deductible.
If the deduction limit is not a multiple of $10, then
it should be rounded up to the next $10. There is a
$200 minimum floor on the deduction limit if your
adjusted gross income does not exceed $35,000 (for a
single taxpayer), $50,000 (for married taxpayers filing
jointly) or $10,000 (for a married taxpayer filing
separately).
Even if your income exceeds the limits described above,
you may make a contribution to your IRA up to the
contribution limitations described in Section 5 above.
To the extent that your contribution exceeds the
deductible limits, it will be nondeductible. However,
earnings on all IRA contributions are tax deferred
until distribution.
9. Excess Contributions
Contributions which exceed the allowable maximum for
federal income tax purposes are treated as excess
contributions. A nondeductible penalty tax of 6% of
the excess amount contributed will be added to your
income tax for each year in which the excess
contribution remains in your account.
10. Correction of Excess Contribution
If you make a contribution in excess of your allowable
maximum, you may correct the excess contribution and
avoid the 6% penalty tax for that year by withdrawing
the excess contribution and its earnings on or before
the date, including extensions, for filing your tax
return. Any earnings on the withdrawn excess
contribution will be taxable in the year the excess
contribution was made and may be subject to a 10%
penalty tax if you are under age 59-1/2. In addition,
in certain cases an excess contribution may be
withdrawn after the time for filing your tax return.
Finally excess contributions for one year may be
carried forward and applied against the contribution
limitation in succeeding years.
11. Simplified Employee Pension Plan
Your IRA may be used as part of a Simplified Employee
Pension Plan established by your employer. Your
employer may contribute to your IRA/SEP up to a maximum
of 15% of your compensation or $30,000, whichever is
less. If your SEP Plan permits, you may also elect to
have your employer make salary reduction contributions
of up to $9,500 for 1996 (adjusted periodically for
cost of living increases) per year to your IRA.
However, the combination of the employer's
contributions and your salary reduction contributions
may not exceed the lesser of 15% of your compensation
or $30,000. It is your responsibility and that of your
employer to see that contributions in excess of normal
IRA limits are made under a valid Simplified Employee
Pension Plan and are, therefore, proper.
12. Form of Distributions
Distributions may be made in any one of three methods:
(a) a lump-sum distribution,
(b) installments over a period not extending beyond
your life expectancy (as determined by actuarial
tables), or
(c) installments over a period not extending beyond
the joint life expectancy of you and your
designated beneficiary (as determined by actuarial
tables).
(d) you may also use your account balance to purchase
an annuity contract, in which case your custodial
account will terminate.
13. Latest Time to Withdraw
You must begin receiving the assets in your account no
later than April 1 following the calendar year in which
you reach age 70-1/2 (your "required beginning date").
In general, the minimum amount that must be distributed
each year is equal, to the amount obtained by dividing
the balance in your IRA on the last day of the prior
year (or the last day of the year prior to the year in
which you attain age 70-1/2) by your life expectancy,
the joint life expectancy of you and your beneficiary,
or the specified payment term, whichever is applicable.
A federal tax penalty may be imposed against you if the
required minimum distribution is not made for the year
you reach age 70-1/2 and for each year thereafter. The
penalty is equal to 50% of the amount by which the
actual distribution is less than the required minimum.
Unless you or your spouse elects otherwise, your life
expectancy and the life expectancy of your spouse will
be recalculated annually. An election not to
recalculate life expectancy(ies) is irrevocable and
will apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be
recalculated.
If you have two or more IRAs, you may satisfy the
minimum distribution requirements by receiving a
distribution from one of your IRAs in an amount
sufficient to satisfy the minimum distribution
requirements for your other IRAs. You must still
calculate the required minimum distribution separately
for each IRA, but then such amounts may be totalled and
the total distribution taken from one or more of your
individual IRAs.
Distribution from your IRA must satisfy the special
"incidental death benefit" rules of the Internal
Revenue Code. These provisions set forth certain
limitations on the joint life expectancy of you and
your beneficiary. If your beneficiary is not your
spouse, your beneficiary will be generally considered
to be no more than 10 years younger than you for the
purpose of calculating the minimum amount that must be
distributed.
14. Distribution of Account Assets After Death
If you die before receiving the balance of your
account, distribution of your remaining account balance
is subject to several special rules. If you die on or
after your required beginning date, distribution must
continue in a method at least as rapid as under the
method of distribution in effect at your death. If you
die before your required beginning date, your remaining
interest will, at the election of your beneficiary or
beneficiaries, (i) be distributed by December 31 of the
year in which occurs the fifth anniversary of your
death, or (ii) commence to be distributed by December
31 of the year following your death over a period not
exceeding the life or life expectancy of your
designated beneficiary or beneficiaries.
Two additional distribution options are available if
your spouse is the beneficiary: (i) payments to your
spouse may commence as late as December 31 of the year
you would have attained age 70-1/2 and be distributed
over a period not exceeding the life or life expectancy
of your spouse, or (ii) your spouse can simply elect to
treat your IRA as his or her own, in which case
distributions will be required to commence by April 1
following the calendar year in which your spouse
attains age 70-1/2.
15. Tax Treatment of Distributions
Amounts distributed to you are generally includable in
your gross income in the taxable year you receive them
and are taxable as ordinary income. To the extent,
however, that any part of a distribution constitutes a
return of your nondeductible contributions, it will not
be included in your income. The amount of any
distribution excludable from income is the portion that
bears the same ratio as your aggregate nondeductible
contributions bear to the balance of your IRA at the
end of the year (calculated after adding back
distributions during the year). For this purpose, all
of your IRAs are treated as a single IRA. Furthermore,
all distributions from an IRA during a taxable year are
to be treated as one distribution. The aggregate
amount of distributions excludable from income for all
years cannot exceed the aggregate nondeductible
contributions for all calendar years.
No distribution to you or anyone else from your account
can qualify for capital gains treatment under the
federal income tax laws. Similarly, you are not
entitled to the special five- or ten-year averaging
rule for lump-sum distributions available to persons
receiving distributions from certain other types of
retirement plans. All distributions are taxed to the
recipient as ordinary income except the portion of a
distribution which represents a return of nondeductible
contributions.
Any distribution which is properly rolled over will not
be includable in your gross income.
16. Early Distributions
Distributions from your IRA made before age 59-1/2 will
be subject to a 10% nondeductible penalty tax unless
the distribution is a return of nondeductible
contributions or is made because of your death,
disability, as part of a series of substantially equal
periodic payments over your life expectancy or the
joint life expectancy of you and your beneficiary, or
the distribution is an exempt withdrawal of an excess
contribution. The penalty tax may also be avoided if
the distribution is rolled over to another individual
retirement account.
17. Qualification of Plan
Your Individual Retirement Account Plan has been
approved as to form by the Internal Revenue Service.
The Internal Revenue Service approval is a
determination only as to the form of the Plan and does
not represent a determination of the merits of the Plan
as adopted by you. You may obtain further information
with respect to your Individual Retirement Account from
any district office of the Internal Revenue Service.
18. Prohibited Transactions
If you engage in a "prohibited transaction" as defined
in section 4975 of the Internal Revenue Code, your
account will be disqualified, and the entire balance in
your account will be treated as if distributed to you
and will be taxable to you as ordinary income.
Examples of prohibited transactions are:
(a) the sale, exchange, or leasing of any property
between you and your account,
(b) the lending of money or other extensions of credit
between you and your account,
(c) the furnishing of goods, services, or facilities
between you and your account.
If you are under age 59-1/2, you may also be subject to
the 10% penalty tax on early distributions.
19. Penalty for Pledging Account
If you use (pledge) all or part of your IRA as security
for a loan, then the portion so pledged will be treated
as if distributed to you and will be taxable to you as
ordinary income during the year in which you make such
pledge. The 10% penalty tax on early distributions may
also apply.
20. Reporting for Tax Purposes
Deductible contributions to your IRA may be claimed as
a deduction on your IRS tax form 1040 for the taxable
year contributed. If any nondeductible contributions
are made by you during a tax year, such amounts must be
reported on Form 8606 and attached to your Federal
Income Tax Return for the year contributed. If you
report a nondeductible contribution to your IRA and do
not make the contribution, you will be subject to a
$100 penalty for each overstatement unless a reasonable
cause is shown for not contributing. Other reporting
will be required by you in the event that special taxes
or penalties described herein are due.
You must also file Treasury Form 5329 with the IRS for
each taxable year in which the contribution limits are
exceeded, a premature distribution takes place, or less
than the required minimum amount is distributed from
your IRA.
21. Allocation of Earnings
The method of computing and allocating annual earnings
is set forth in Article VIII, Section 1 of the
Individual Retirement Account Custodial Agreement. The
growth in value of your IRA is neither guaranteed or
projected.
22. Income Tax Withholding
You must indicate on distribution requests whether or
not federal income taxes should be withheld.
Redemption requests not indicating an election not to
have federal income tax withheld will be subject to
withholding.
23. Other Information
Information about the shares of each mutual fund
available for investment by your IRA must be furnished
to you in the form of a prospectus governed by rules of
the Securities and Exchange Commission. Please refer
to the prospectus for detailed information concerning
your mutual fund. You may obtain further information
concerning IRAs from any District Office of the
Internal Revenue Service.
Fees and other expenses of maintaining your account may
be charged to you or your account. The Custodian's fee
schedule as of the date you establish the IRA is
included below.
Annual maintenance fee per account $12.50
Transfer to successor trustee 15.00
Distribution to a participant 15.00
(exclusive of systematic withdrawal plans)
Refund of excess contribution 15.00
Individual Retirement
Custodial Account
The following constitutes an agreement establishing an
Individual Retirement Account (under Section 408(a) of
the Internal Revenue Code) between the Depositor and
the Custodian.
Article I
The Custodian may accept additional cash contributions
on behalf of the Depositor for a tax year of the
Depositor. The total cash contributions are limited to
$2,000 for the tax year unless the contribution is a
rollover contribution described in Section 402(c) (but
only after December 31,1992), 403(a)(4), 403(b)(8),
408(d)(3), or an employer contribution to a simplified
employee pension plan as described in Section 408(k).
Rollover contributions before January 1, 1993, include
rollovers described in Section 402(a)(5), 402(a)(6),
402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an
employer contribution to a simplified employee pension
plan as described in Section 408(k).
Article II
The Depositor's interest in the balance in the
custodial account is nonforfeitable.
Article III
1. No part of the custodial funds may be invested in
life insurance contracts, nor may the assets of
the custodial account be commingled with other
property except in a common trust fund or common
investment fund (within the meaning of Section
408(a)(5)).
2. No part of the custodial funds may be invested in
collectibles (within the meaning of Section
408(m)) except as otherwise permitted by Section
408(m)(3) which provides an exception for certain
gold and silver coins and coins issued under the
laws of any state.
Article IV
1. Notwithstanding any provision of this agreement to
the contrary, the distribution of the Depositor's
interest in the custodial account shall be made in
accordance with the following requirements and
shall otherwise comply with Section 408(a)(6) and
Proposed Regulations Section 1.408-8, including
the incidental death benefit provisions of
Proposed Regulations Section 1.401(a)(9)-2, the
provisions of which are herein incorporated by
reference.
2. Unless otherwise elected by the tire distributions
are required to begin to the Depositor under
Paragraph 3, or to the surviving spouse under
Paragraph 4, other than in the case of a life
annuity, life expectancies shall be recalculated
annually. Such election shall be irrevocable as
to the Depositor and the surviving spouse and
shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be
recalculated.
3. The Depositor's entire interest in the custodial
account must be, or begin to he, distributed by
the Depositor's required beginning date, April 1
following the calendar year end in which the
Depositor reaches age 70-1/2. By that date, the
Depositor may elect, in a manner acceptable to the
Custodian, to have the balance in the custodial
account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal
or substantially equal monthly, quarterly, or
annual payments over the life of the
Depositor.
(c) An annuity contract that provides equal
or substantially equal monthly, quarterly, or
annual payments over the joint and last
survivor lives of the Depositor and his or
her designated beneficiary.
(d) Equal or substantially equal annual
payments over a specified period that may not
be longer than the Depositor's life
expectancy.
(e) Equal or substantially equal annual
payments over a specified period that may not
be longer than the joint life and last
survivor expectancy of the Depositor and his
or her designated beneficiary.
4. If the Depositor dies before his or her entire
interest is distributed to him or her, the entire
remaining interest will be distributed as follows:
(a) If the Depositor dies on or after
distribution of his or her interest has
begun, distribution must continue to be made
in accordance with Paragraph 3.
(b) If the Depositor dies before
distribution of his or her interest has
begun, the entire remaining interest will, at
the election of the Depositor or, if the
Depositor has not so elected, at the election
of the beneficiary or beneficiaries, either:
(i) Be distributed by the December
31 of the year containing the fifth
anniversary of the Depositor's death, or
(ii) Be distributed in equal or
substantially equal payments over the
life or life expectancy of the
designated beneficiary or beneficiaries
sag by December 31 of the year following
the year of the Depositor's death. If,
however, the beneficiary is the
Depositor's surviving spouse, then this
distribution is not required to begin
before December 31 of the year in which
the Depositor would have turned age
70-1/2.
(c) Except where distribution in the form of
an annuity meeting the requirements of
Section 408(b)(3) and its related regulations
has irrevocably commenced, distributions are
treated as having begun on the Depositor's
required beginning date, even though payments
may actually have been made before that date.
(d) If the Depositor dies before his or her
entire interest has been distributed and if
the beneficiary is other than the surviving
spouse, no additional cash contributions or
rollover contributions may be accepted in the
account.
5. In the case of a distribution over life expectancy
in equal or substantially equal annual payments,
to determine the minimum annual payment for each
year, divide the Depositor's entire interest in
the custodial account as of the close of business
on December 31 of the preceding year by the life
expectancy of the Depositor (or the joint life and
last survivor expectancy of the Depositor and the
Depositor's designated beneficiary, or the life
expectancy of the designated beneficiary,
whichever applies). In the case of distributions
under Paragraph 3, determine the initial life
expectancy (or joint life and last survivor
expectancy) using the attained ages of the
Depositor and designated beneficiary as of their
birthdays in the year the Depositor reaches age
70-1/2. In the case of a distribution in
accordance with Paragraph 4(b)(ii), determine life
expectancy using the attained age of the
designated beneficiary as of the beneficiary's
birthday in the year distributions are required to
commence.
6. The owner of two or more individual retirement
accounts may use the "alternative method"
described in Notice 88-38, 1988-1 C.B. 524, to
satisfy the minimum distribution requirements
described above. This method permits an
individual to satisfy these requirements by taking
from one individual retirement account the amount
required to satisfy the requirement for another.
Article V
1. The Depositor agrees to provide the Custodian with
information necessary for the Custodian to prepare
any reports required under Section 408(i) and
Regulations Section 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the
Internal Revenue Service and the Depositor
prescribed by the Internal Revenue Service.
Article VI
Notwithstanding any other articles which may be added
or incorporated, the provisions of Articles I through
III and this sentence will be controlling. Any
additional articles that are not consistent with
Section 408(a) and related regulations will be invalid.
Article VII
This agreement will be amended from time to time to
comply with the provisions of the Code and related
regulations. Other amendments may be made with the
consent of the persons whose signatures appear below.
Article VIII
1. Investment of Account Assets
(a) All contributions to the custodial
account shall be invested in the shares of
the Rockland Growth Fund or, if available,
any other series of Rockland Growth Fund or
other regulated investment companies for
which Greenville Capital Management, Inc.
serves as investment advisor or designates as
being eligible for investment ("Investment
Company"). Shares of stock of an Investment
Company shall be referred to as "Investment
Company Shares." To the extent that two or
more funds are available for investment,
contributions shall be invested in accordance
with the Depositor's investment election.
(b) Each contribution to the custodial
account shall identify the Depositor's
account number and be accompanied by a signed
statement directing the investment of that
contribution. The Custodian may return to
the Depositor, without liability for interest
thereon, any contribution which is not
accompanied by adequate account
identification or an appropriate signed
statement directing investment of that
contribution.
(c) Contributions shall be invested in whole
and fractional Investment Company Shares at
the price and in the manner such shares are
offered to the public. All distributions
received on Investment Company Shares,
including both dividend and capital gains,
distributions, held in the custodial account
shall be reinvested in like shares. If any
distribution of Investment Company Shares may
be received in additional like shares or in
cash or other property, the Custodian shall
elect to receive such distribution in
additional like Investment Company Shares.
(d) All Investment Company Shares acquired
by the Custodian shall be registered in the
name of the Custodian or its nominee. The
Depositor shall be the beneficial owner of
all Investment Company Shares held in the
custodial account and the Custodian shall not
vote any such shares, except upon written
direction of the Depositor, timely received,
in a form acceptable to the Custodian. The
Custodian agrees to forward to the Depositor
each prospectus, report, notice, proxy and
related proxy soliciting materials applicable
to Investment Company Shares held in the
custodial account received by the Custodian.
(e) The Depositor may, at any time, by
written notice to the Custodian, in a form
acceptable to the Custodian, redeem any
number of shares held in the custodial
account and reinvest the pus in the shares of
any other Investment Company upon the terms
and within the limitations imposed by then
current prospectus of such other Investment
Company in which the Depositor elects to
invest. By giving such instructions, the
Depositor will be deemed to have acknowledged
receipt of such prospectus. Such redemptions
and reinvestments shall be done at the price
and in the manner such shares are then being
redeemed or offered by the respective
Investment Companies.
2. Amendment and Termination
(a) Greenville Capital Management, Inc., the
investment advisor for Rockland Growth Fund,
may amend the Custodial Account (including
retroactive amendments) by delivering to
Custodian and to the Depositor written notice
of such amendment setting forth the substance
and effective date of the amendment. The
Custodian and the Depositor shall be deemed
to have consented to any such amendment not
objected to in writing by the Custodian or
Depositor as applicable within thirty (30)
days of receipt of the notice, provided that
no amendment shall cause or permit any part
of the assets of the custodial account to be
diverted to purposes other than for the
exclusive benefit of the Depositor or his or
her beneficiaries.
(b) The Depositor may terminate the
custodial account at any time by delivering
to the Custodian a written notice of such
termination.
(c) The custodial account shall
automatically terminate upon distribution to
the Depositor or his or her beneficiaries of
its entire balance.
3. Taxes and Custodial Fees
Any income taxes or other taxes levied or assessed upon
or in respect of the assets or income of the custodial
account and any transfer taxes incurred shall be paid
from the custodial account. All administrative
expenses incurred by the Custodian in the performance
of its duties, including fees for legal services
rendered to the Custodian, in connection with the
custodial account, and the Custodian's compensation
shall be paid from the custodial account, unless
otherwise paid by the Depositor or his or her
beneficiaries.
Sufficient shares will be liquidated from the custodial
account to pay such fees and expenses.
The Custodian's fees are set forth in a schedule
provided to the Depositor. Extraordinary charges
resulting from unusual administrative responsibilities
not contemplated by the schedule will be subject to
such additional charges as will reasonably compensate
the Custodian. Fees for refund of excess
contributions, transferring to a successor trustee or
custodian, or redemption/reinvestment of Investment
Company Shares will be deducted from the refund or
redemption pro and the remaining balance will be
remitted to the Depositor, or reinvested or transferred
in accordance with the Depositor's instructions.
(a) The Custodian shall keep adequate
records of transactions it is required to
perform hereunder. After the close of each
calendar year, the Custodian shall provide to
the Depositor or his or her legal
representative a written report or reports
reflecting the actions effected by it during
such year and the assets and liabilities of
the Custodial Account at the close of the
year.
(b) All communications or notices shall be
deemed to be given upon receipt by the
Custodian at: Firstar Trust Company, P.O.
Box 701, Milwaukee, Wisconsin 53201-0701 or
the Depositor at his or her most recent
address shown in the Custodian's records.
The Depositor agrees to advise the Custodian
promptly, in writing, of any change of
address.
5. Designation of Beneficiary
The Depositor may designate a beneficiary or
beneficiaries to receive benefits from the custodial
account in the event of the Depositor's death. In the
event the Depositor has not designated a beneficiary,
or if all beneficiaries shall predecease the Depositor,
the following persons shall take in the order named:
(a) The spouse of the Depositor;
(b) If the spouse shall predecease the
Depositor or if the Depositor does not have a
spouse, then to the Depositor's estate.
The Depositor may also change or revoke any previously
made designation of beneficiary. An designation or
change or revocation of a designation shall be made by
written notice in a form acceptable to and filed with
the Custodian, prior to the complete distribution of
the balance in the custodial account. The last such
designation on file at the time of the Depositor's
death shall govern. If a beneficiary dies after the
Depositor, but prior to receiving his or her entire
interest in the custodial account, the remaining
interest in the custodial account shall be paid to the
beneficiary's estate.
6. Multiple Individual Retirement Accounts
In the event the Depositor maintains more than one
individual retirement account (as defined in Section
408(a)) and elects to satisfy his or her minimum
distribution requirements described in Article IV above
by making a distribution for another individual
retirement account in accordance with Paragraph 6
thereof, the Depositor shall be deemed to have elected
to calculate the amount of his or her minimum
distribution under this custodial account in the same
manner as under the individual retirement account from
which the distribution is made.
7. Inalienability of Benefits
The benefits provided under this custodial nor the
assets held therein account shall be subject to
alienation, assignment, garnishment, attachment,
execution or levy of any kind and any attempt to cause
such benefits or assets to be so subjected shall not be
recognized except to the extent as may be required by
law.
8. Rollover Contributions and Transfers
The Custodian shall have the right to receive rollover
contributions and to receive direct transfers from
other custodians or trustees. All contributions must
be made in cash or check.
9. Conflict in Provisions
To the extent that any provisions of this Article VIII
shall conflict with the provisions of Articles IV, V
and/or VII, the provisions of this Article VIII shall
govern.
10. Applicable State Law
This custodial account shall be construed, administered
and enforced according to the laws of the State of
Wisconsin.
11. Resignation or Removal of Custodian
The Custodian may resign at any time upon thirty (30)
days notice in writing to the Investment Company. Upon
such resignation, the Investment Company shall notify
the Depositor, and shall appoint a successor custodian
under this Agreement. The Depositor or the Investment
Company at any time may remove the Custodian upon 30
days written notice to that effect in a form acceptable
to and filed with the Custodian. Such notice must
include designation of a successor custodian. The
successor custodian shall satisfy the requirements of
section 408(h) of the Code. Upon receipt by the
Custodian of written acceptance of such appointment by
the successor custodian, the Custodian shall transfer
and pay over to such successor the assets of and
records relating to the Custodial Account. The
Custodian is authorized, however, to reserve such sum
of money as it may deem advisable for payment of all
its fees, compensation, costs and expenses, or for
payment of any other liability constituting a charge on
or against the assets of the Custodial Account or on or
against the Custodian, and where necessary may
liquidate shares in the Custodial Account for such
payments. Any balance of such reserve remaining after
the payment of all such items shall be paid over to the
successor Custodian. The Custodian shall not be liable
for the acts or omissions of any predecessor or
successor custodian or trustee.
12. Limitation on Custodian Responsibility
The Custodian will not under any circumstances be
responsible for the timing, purpose or propriety of any
contribution or of any distribution made hereunder, nor
shall the Custodian incur any liability or
responsibility for any tax imposed on account of any
such contribution or distribution. Further, the
custodian shall not incur any liability or
responsibility in taking or omitting to take any action
based on any notice, election, or instruction or any
written instrument believed by the Custodian to be
genuine and to have been properly executed. The
Custodian shall be under no duty of inquiry with
respect to any such notice, election, instruction, or
written instrument, but in its discretion may request
any tax waivers, proof of signatures or other evidence
which it reasonably deems necessary for its protection.
The Depositor and the successors of the Depositor
including any executor or administrator of the
Depositor shall, to the extent permitted by law
indemnify the Custodian and its successors and assigns
against any and all claims, actions or liabilities of
the Custodian to the Depositor or the successors or
beneficiaries of the Depositor whatsoever (including
without limitation all reasonable expenses incurred in
defending against or settlement of such claims, actions
or liabilities) which may arise in connection with this
Agreement or the Custodial Account, except those due to
the Custodian's own bad faith, gross negligence or
willful misconduct. The Custodian shall not be under
any duty to take any action not specified in this
Agreement, unless the Depositor shall furnish it with
instructions in proper form and such instructions shall
have been specifically agreed to by the Custodian, or
to defend or engage in any suit with respect hereto
unless it shall have first agreed in writing to do so
and shall have been fully indemnified to its
satisfaction.
THE ROCKLAND GROWTH FUND - RETAIL CLASS
RULE 12b-1 DISTRIBUTION PLAN
The following Distribution Plan (the "Plan") has
been adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "Act"),
by The Rockland Funds Trust (the "Trust") on behalf of
the Retail class shares of The Rockland Growth Fund
(the "Fund"). The Plan has been approved by a majority
of the Trust's Board of Trustees, including a majority
of the Trustees who are not interested persons of the
Trust and who have no direct or indirect financial
interest in the operation of the Plan (the
"Disinterested Trustees"), cast in person at a meeting
called for the purpose of voting on such plan.
In reviewing the Plan, the Board of Trustees
determined that adoption of the Plan would be prudent
and in the best interests of the Fund and its Retail
class shareholders. Such approval included a
determination, in the exercise of their reasonable
business judgement and in light of their fiduciary
duties, that there is a reasonable likelihood that the
Plan will benefit the Fund and its Retail class
shareholders. The Plan has also been approved by a
vote of the initial shareholder(s) of Retail class
shares of the Fund.
The provisions of the Plan are as follows:
1. PAYMENTS BY THE COMPANY TO PROMOTE THE SALE OF THE
FUND'S RETAIL CLASS SHARES
(a) The Fund will pay AmeriPrime Financial
Securities, Inc. (the "Distributor"), as a principal
underwriter of the Fund's shares, a distribution
fee of up to 0.25% per annum of the Fund's average
daily net assets. The Distributor may pay all or
a portion of this fee to any securities dealer,
financial institution or any other person (the
"Recipient") who renders assistance in
distributing or promoting the sale of the Fund's
Retail class shares pursuant to a written
agreement (the "Rule 12b-1 Related Agreement"), a
form of which is attached hereto as Appendix A.
To the extent such fee is not paid to such
persons, the Distributor may use the fee for its
distribution expenses incurred in connection with
the sale of the Fund's Retail class shares.
Payment of the distribution fee shall be made
quarterly, within 30 days after the close of the
quarter for which the fee is payable, upon the
Distributor forwarding to the Trust's Board of
Trustees the written report required by Section 2
of this Plan; provided that the aggregate payments
by the Fund, under the Plan in any month to the
Distributor and all Recipients shall not exceed
0.25% of the Fund's average net assets for that
quarter; and provided further that no fee shall be
paid in excess of the distribution expenses
verified in a written report and submitted by the
Distributor to the Trust's Board of Trustees as
required under Section 2 of this Plan.
(b) No Rule 12b-1 Related Agreement shall be
entered into, and no payments shall be made
pursuant to any Rule 12b-1 Related Agreement,
unless such Rule 12b-1 Related Agreement is in
writing and has first been delivered to and
approved by a vote of a majority of the Trust's
Board of Trustees, and of a majority of the
members of the Disinterested Trustees, cast in
person at a meeting called for the purpose of
voting on such Rule 12b-1 Related Agreement.
(c) Any Rule 12b-1 Related Agreement shall
describe the services to be performed by the
Recipient and shall specify the amount of, or the
method for determining, the compensation to the
Recipient.
(d) No Rule 12b-1 Related Agreement may be
entered into unless it provides that it may be
terminated at any time, without the payment of any
penalty, by vote of a majority of the
Disinterested Trustees or by vote of a majority of
the outstanding voting securities of the Fund on
not more than 60 days' written notice to the other
party to the Rule 12b-1 Related Agreement and that
the Rule 12b-1 Related Agreement shall
automatically terminate in the event of its
assignment.
(e) Any Rule 12b-1 Related Agreement shall
continue in effect for a period of more than one
year from the date of its execution only if such
continuance is specifically approved at least
annually by a vote of a majority of the Board of
Trustees, and of the Disinterested Trustees, cast
in person at a meeting called for the purpose of
voting on such Rule 12b-1 Related Agreement.
2. QUARTERLY REPORTS
The Distributor shall provide to the Board of
Trustees, and the Trustees shall review, at least
quarterly, a written report of all amounts
expended pursuant to the Plan. This report shall
include the identity of the Recipient of each
payment and the purpose for which the amounts were
expended and such other information as the Board
of Trustees may reasonably request.
3. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective immediately upon
approval by both (a) the vote of a majority of the
Board of Trustees, and of the Disinterested
Trustees, cast in person at a meeting called for
the purpose of voting on the approval of the Plan
and (b) the vote of a majority of the outstanding
voting securities of the Fund's Retail class. The
Plan shall continue in effect for a period of one
year from its effective date unless terminated
pursuant to its terms. Thereafter, the Plan shall
continue from year to year, provided that such
continuance is approved at least annually by a
vote of a majority of the Board of Trustees of the
Trust, and of the Disinterested Trustees, cast in
person at a meeting called for the purpose of
voting on such continuance. The Plan may be
terminated at any time by the vote of (a) a
majority of the Disinterested Trustees or (b) a
majority of the outstanding voting securities of
the Fund's Retail class.
4. SELECTION OF DISINTERESTED TRUSTEES
During the period in which the Plan is effective,
the selection and nomination of those Trustees who
are Disinterested Trustees of the Trust shall be
committed to the discretion of the Disinterested
Trustees.
5. AMENDMENTS
All material amendments of the Plan shall be in
writing and shall be approved by a vote of a
majority of the Board of Trustees, and of the
Disinterested Trustees, cast in person at a
meeting called for the purpose of voting on such
amendment. In addition, the Plan may not be
amended to increase materially the amount to be
expended by the Fund's Retail class, hereunder
without approval by a majority of the outstanding
voting securities of the Fund's Retail class.
APPENDIX A
Rule 12b-1 Related Agreement
AmeriPrime Financial Securities, Inc.
_______________________
_______________________
____________ , 1996
[Recipient's Name and Address]
_________________________
_________________________
Ladies and Gentlemen:
This letter will confirm our understanding and
agreement with respect to payments to be made to you
pursuant to a plan of distribution (the "Plan") adopted
by The Rockland Funds Trust (the "Trust") on behalf of
the Retail class shares of The Rockland Growth Fund
(the "Fund") pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Act"). The Plan
and this related agreement (the "Rule 12b-1 Related
Agreement") have been approved by a majority of the
Board of Trustees of the Trust, including a majority of
the Board of Trustees who are not "interested persons"
of the Trust, as defined in the Act, and who have no
direct or indirect financial interest in the operation
of the Plan or in this or any other Rule 12b-1 Related
Agreement (the "Disinterested Trustees"), cast in
person at a meeting called for the purpose of voting
thereon. Such approval included a determination by the
Board of Trustees that, in the exercise of reasonable
business judgment and in light of their fiduciary
duties, there is a reasonable likelihood that the Plan
will benefit the Fund's Retail class shareholders. The
Plan has also been approved by a vote of at least a
majority of the Fund's Retail class' outstanding voting
securities, as defined in the Act.
1. To the extent you provide distribution and
marketing services in the promotion of the Fund's
Retail class shares, including furnishing services and
assistance to your customers who invest in and own
shares of the Fund, including, but not limited to,
answering routine inquiries regarding the Fund and
assisting in changing distribution options, account
designations and addresses, we shall pay you a fee of
up to 0.25% on an annual basis of the net asset value
of the Fund's Retail class shares which are owned of
record by your firm as nominee for your customers or
which are owned by those customers of your firm whose
records, as maintained by the Fund or its agent,
designate your firm as the customer's dealer of record.
We reserve the right to increase, decrease or
discontinue the fee at any time in our sole discretion
upon written notice to you.
We shall make the determination of the net asset
value of the Fund's Retail class shares, which
determination shall be made in the manner specified in
the Fund's current Prospectus, on or about the 45th day
of each quarter and pay to you quarterly, on the basis
of such determination, the fee specified above. No
such quarterly fee will be paid to you with respect to
shares purchased by you and redeemed or repurchased by
the Fund or by us as agent within seven (7) business
days after the date of our confirmation of such
purchase. In addition, no such quarterly fee will be
paid to you with respect to any of your customers if
the amount of such fee based upon the value of such
customer's Fund shares will be less than $1.00.
Payment of such quarterly fee shall be made within 45
days after the close of each quarter for which such fee
is payable.
2. You shall furnish us with such information as
shall reasonably be requested by the Board of Trustees,
on behalf of the Fund, with respect to the fees paid to
you pursuant to this Rule 12b-1 Related Agreement.
3. We shall furnish to the Board of Trustees,
for their review, on a quarterly basis, a written
report of the amounts expended under the Plan by us and
the purposes for which such expenditures were made.
4. This Rule 12b-1 Related Agreement may be
terminated by the vote of a majority of the
Disinterested Trustees or by a vote of majority of the
Fund's outstanding Retail class shares on sixty (60)
days' written notice, without payment of any penalty.
In addition, this Rule 12b-1 Related Agreement will be
terminated by any act which terminates the Distribution
Agreement between the Trust and us and shall terminate
immediately in the event of its assignment. This Rule
12b-1 Related Agreement may be amended by us upon
written notice to you, and you shall be deemed to have
consented to such amendment upon effecting any
purchases of shares for your own account or on behalf
of any of your customer's accounts following your
receipt of such notice.
5. The provisions of the Distribution Agreement
between the Trust and us are incorporated herein by
reference. This Rule 12b-1 Related Agreement shall
become effective on the date accepted by you and shall
continue in full force and effect so long as the
continuance of the Distribution Agreement and the Plan
and this Rule 12b-1 Related Agreement are approved at
least annually by a vote of the Board of Trustees and
of the Disinterested Trustees, cast in person at a
meeting called for the purpose of voting thereon. All
communications to us should be sent to the above
address. Any notice to you shall be duly given if
mailed or telegraphed to you at the address specified
by you below. This Rule 12b-1 Related Agreement shall
be construed under the laws of the State of Delaware.
AMERIPRIME FINANCIAL SECURITIES, INC.
By:____________________________
(Authorized Signature)
Accepted:
_____________________________
(Dealer's Name)
_____________________________
(Street Address)
_____________________________
(City) (State) (ZIP)
By:_________________________________
(Authorized Signature of Dealer)
THE ROCKLAND FUNDS TRUST
RULE 18f-3
MULTIPLE CLASS PLAN
October 22, 1996
The Rockland Funds Trust (the "Trust"), a
registered investment company currently consisting of
The Rockland Growth Fund (the "Fund"), has elected to
rely on Rule 18f-3 under the Investment Company Act of
1940, as amended (the "1940 Act"), in offering multiple
classes of shares of the Fund. The Trustees of the
Fund have determined that the following plan is in the
best interests of each class individually and the Fund
as a whole:
1. Class Designation. Fund shares will be
designated either the Retail Class or Institutional
Class.
2. Class Characteristics. Each class of shares
will represent interests in the same portfolio of
investments and will be identical in all respects to
the other class, except as set forth below:
Retail Class: Class A shares
will be sold subject to a minimum
initial investment of $10,000 (or
$250 through an automatic
investment plan) and subsequent
investments of $250 or more. Class
A shares will be sold subject to a
front-end sales charge of 3.00% for
purchases up to $100,000, 2.00% for
purchases of $100,000 up to $250,000,
1.00% for purchases of $250,000 up to
$500,000 and 0.00% for purchases of
$500,000 or more,except for purchases
made under certain circumstances.
Class A shares will be subject to a
distribution plan adopted pursuant
to Rule 12b-1 under the 1940 Act,
which provides for an annual
distribution fee of 0.25% of the
average daily net assets of Class A
shares. The distribution plan fees
for the Class A shares will be used
to reimburse the Fund's distributor
for distributing the Class A
shares.
Institutional Class: Class D
shares will be sold subject to a
minimum initial investment of
Class: $100,000 (or $2,000 through
individual retirement accounts) and
subsequent investments of $1,000.
Class D shares will be offered for
sale at net asset value per share
without the imposition of a sales
charge or Rule 12b-1 fee.
3. Expense Allocations. The following expenses
will be allocated on a class-by-class basis, to the
extent practicable: (i) fees under the distribution
plan, if applicable; (ii) printing and postage expenses
related to preparing and distributing materials to
current shareholders of a particular class; (iii)
Securities and Exchange Commission and blue sky
registration fees incurred by a particular class; (iv)
the expense of administrative personnel and services
required to support the shareholders of a particular
class; (v) accounting, auditor, litigation or other
legal expenses relating solely to a particular class;
(vi) transfer agent fees identified by the transfer
agent as being attributable to a particular class; and
(vii) expenses incurred in connection with shareholder
meetings as a result of issues relating to particular
class. Income, realized and unrealized capital gains
and losses, and expenses of the Fund not allocated to a
particular class will be allocated in accordance with
Rule 18f-3(c). Notwithstanding the foregoing, a
service provider for the Fund may waive or reimburse
the expenses of a specific class or classes to the
extent permitted under Rule 18f-3 of the 1940 Act.
4. Exchanges and Conversions. There are no
exchange or conversion features associated with the
Retail Class or Institutional Class shares.
5. General. Each class will vote exclusively
with respect to any matter related solely to that
class. Each class will vote separately with respect to
any matter in which the interests of one class differ
from the interests of the other class. On an ongoing
basis, the Trustees will monitor the Trust for any
material conflicts between the interests of the classes
of shares. The Trustees will take such action as is
reasonably necessary to eliminate any conflict that
develops. The investment adviser and distributor will
be responsible for alerting the Trustees to any
material conflicts that may arise. Any material
amendment to this Plan must be approved by a majority
of the Trustees, including a majority of the Trustees
who are not interested persons of the Fund, as defined
in the 1940 Act. This Plan is qualified by and subject
to the then current prospectus for the applicable
class, which contains additional information about that
class.
