As filed with the Securities and Exchange Commission on September 30, 1996
File Nos.: 811-__________
33-___________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
Amendment No. [ ]
KALMAR POOLED INVESTMENT TRUST
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(Exact Name of Registrant as Specified in Charter)
1300 Market Street
Suite 500, Wilmington, DE 19801
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(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, Including Area Code (302) 658-7575
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Ford B. Draper, Jr., President
1300 Market Street
Suite 500, Wilmington, DE 19801
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(Name and Address of Agent for Service)
Please send copies of all communications to:
Joseph V. Del Raso, Esquire
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Approximate Date of Proposed Public Offering: As soon as practical after
the effective date of this registration statement.
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Registrant hereby elects to register an indefinite number of shares of its
securities under this Registration Statement pursuant to Rule 24f-2 under
the Investment Company Act of 1940.
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Registrant hereby amends this Registration Statement on such 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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to such Section
8(a), may determine.
<PAGE>
TABLE OF CONTENTS
TO FORM N-1A
The Facing Page
1- Cross-Reference Sheet
2- Part A - Prospectus for the Kalmar "Growth-with-Value"
Small Cap Fund
- Prospectus for the Kalmar "Growth-with-Value"
Micro Cap Fund
3- Part B - Statement of Additional Information
4- Part C - Other Information
5- Signature Page
Exhibits
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 481(a))
[***TO BE UPDATED, ONCE DRAFT FINALIZED***]
N-1A
Item No. Caption or Location in Prospectus
Part A
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1 Cover
2 Expenses of the Fund
3 N/A
4 Prospectus Cover, Investment Objective and Policies, Special
Risk Considerations, Investment Restrictions
5 Board of Trustees, Investment Adviser, Distributor,
Distribution Agreement, Administrator, Transfer Agent,
Dividend Paying Agent and Custodian and Expenses
6 Shares of Beneficial Interest, Voting Rights and Shareholder
Meetings, Dividends, Distributions and Taxes
7 Calculation of Net Asset Value, How to Purchase Shares
8 How to Redeem Shares
9 N/A
Part B
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10 Cover
11 Table of Contents
12 N/A
13 Cover, Investments, Investment Restrictions
14 Officers and Trustees of the Trust
15 N/A
16 Investment Adviser, Distributor, Administrator, Transfer
Agent, Dividend Paying Agent and Custodian
17 Allocation of Portfolio Brokerage
18 N/A
19 Purchase of Shares
20 N/A
21 Distributor, Distribution Agreement and Purchase of Shares
22 Performance
23 N/A
Part C
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Items 24 through 32 have been answered in order in Part C.
<PAGE>
KALMAR "GROWTH-WITH-VALUE" SMALL CAP FUND
A SERIES OF
KALMAR POOLED INVESTMENT TRUST
1300 MARKET STREET, SUITE 500
WILMINGTON, DE
(302) 658-7575
PROSPECTUS DATED __________________, 1996
This prospectus offers shares of the Kalmar "Growth-with-Value" Small Cap
Fund (the "Fund"), which is a series of Kalmar Pooled Investment Trust (the
"Trust"), an open-end diversified management investment company commonly
known as a mutual fund. The Trust currently offers shares of both the Fund
and the Kalmar "Growth-with-Value" Micro Cap Fund, each of which has a
diversified portfolio of assets and a specific investment objective and
policies. Shares of the Kalmar "Growth-with-Value" Micro Cap Fund are
offered by a separate prospectus.
The Fund's investment objective is long-term capital appreciation. The
Fund was created to offer investors the opportunity to invest in small
capitalization stocks according to the longer-term "Growth-with-Value"
investment philosophy, and with the small cap and micro cap investing
expertise of the investment professionals of Fund's investment adviser,
Kalmar Investment Advisers (the "Adviser"). Using this investment
philosophy, the Fund seeks to achieve its objective by investing primarily
in a diversified portfolio of common stocks of smaller companies which, in
the Adviser's opinion, have the potential for significant business
growth and capital appreciation, and yet whose stocks are, at the time of
purchase, trading at at least reasonable to, preferably, undervalued
prices in the public trading markets. The Fund believes that its
philosophy of purchasing promising, growing companies that may also be
undervalued can result in lower risk and higher return when compared to
many other small company investment strategies. See "Investment Objectives
and Policies."
Shares of the Fund may be purchased on a no-load basis without sales or
distribution charges through the Fund's distributor or through investment
management and financial consultants or brokers, and may be purchased or
redeemed at any time. Requests to purchase or redeem shares will be
processed at the net asset value per share next determined following
receipt and acceptance of the investor's purchase order or redemption
request. See "How to Purchase Shares," "How to Redeem Shares" and
"Calculation of Net Asset Value."
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This Prospectus sets forth information about the Fund that a prospective
investor should know before investing, and should be read and retained for
future reference. More information about both the Fund and the Kalmar
"Growth-with-Value" Micro Cap Fund has been filed with the U.S. Securities
and Exchange Commission and is contained in a "Statement of Additional
Information" dated _________, 1996, as amended from time to time, which is
available upon request and without charge by writing or calling the Fund or
its distributor at the addresses and numbers set forth on the back cover of
this prospectus. The Statement of Additional Information is incorporated
by reference into this Prospectus.
<PAGE>
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<PAGE>
Prospectus
Kalmar Pooled Investment Trust
Contents Page
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Prospectus Summary.........................................
Fund Expenses..............................................
Adviser's Investment Performance...........................
Investment Objective and Policies..........................
Investment Philosophy.................................
Investment Policies...................................
Other Investment Practices............................
Risks and Special Considerations...........................
Management of the Fund.....................................
Board of Trustees.....................................
Investment Adviser....................................
Distributor...........................................
Administrator, Transfer Agent and Custodian...........
Expenses...................................................
Calculation of Net Asset Value.............................
How to Purchase Shares.....................................
Retirement Plans...........................................
How to Redeem Shares.......................................
Performance Information....................................
General Information........................................
Dividends, Capital Gains Distributions and Taxes...........
Shareholder Accounts.......................................
PROSPECTUS SUMMARY
INVESTMENT OBJECTIVE AND POLICIES. The objective of the Kalmar "Growth-
with-Value" Small Cap Fund is long-term capital appreciation. The Fund was
created to offer investors the opportunity to invest in small
capitalization stocks according to the longer term "Growth-with-Value"
investment philosophy and with the small cap and micro cap investing
expertise of the investment professionals of the Fund's investment adviser,
Kalmar Investment Advisers (the "Adviser"). Using this investment
philosophy, the Fund seeks to achieve its objective by investing primarily
in a diversified portfolio of common stocks of smaller companies which, in
the Adviser's opinion, have the potential for significant business
growth and capital appreciation, and yet whose stocks are, at the time of
purchase, trading at at least reasonable to, preferably, undervalued
prices in the public trading markets. The Fund believes that its
philosophy of purchasing promising, growing companies that may be also
undervalued can result in both lower risk and higher return when compared
to many other small company investment strategies.
The Fund utilizes the Adviser's "Growth-with-Value" investment philosophy
which purposefully seeks to INTEGRATE the best elements of creative growth
company investing, with discriminating value-seeking investment discipline,
and a longer-term intent. With its intent of owning the "good growth
businesses" underlying its stocks, the Adviser seeks to make fewer, better
investment decisions for longer holding periods and larger gains, based
on in-depth, in-house, hands-on research and company business analysis.
The resulting low relative levels of trading and portfolio turnover versus
typical "aggressive growth" or "emerging growth" investment styles can
<PAGE>
produce meaningful transaction cost savings to benefit all fund share-
holders as well as greater tax efficiency for taxable shareholders by
producing a preponderance of long-term, as opposed to short term, capital
gains. Importantly, the Adviser's "Growth-with-Value" philosophy and
in-depth research seek both lower risks AND higher reward relative to small
company equity markets generally through its integrated strategy of
investing in solid, promising, smaller growth companies that have not yet
been fully recognized and exploited by other institutional investors and,
hence, whose stocks may be purchased at under-valued levels. See
"Investment Objective and Policies."
INVESTMENT ADVISER. Kalmar Investment Advisers serves as the investment
adviser for the Fund. Over the past fourteen years, the Adviser's
portfolio management team has managed micro cap and small cap assets in
separate accounts now totaling in excess of $600 million for a variety of
clients such as high net worth individuals and family trusts, corporations,
pensions and profit-sharing plans and other institutions such as
endowments, foundations, hospitals and other charitable institutions, all
according to the same longer-term oriented "Growth-with-Value" philosophy
utilized by the Fund. Existing clients of the Adviser will have the
opportunity to transfer their assets to the Fund in exchange for shares,
and thereby avail themselves of a pooled investment vehicle. Kalmar intends
to invest assets of its own profit-sharing plan in shares of the Fund, as
do members of its investment team and other employees. The Adviser selects
investments and supervises the assets of the Fund in accordance with the
investment objective, policies and restrictions of the Fund, subject to
the supervision and direction of the officers and Board of Trustees of the
Trust. For its services, the Adviser is paid a monthly fee at the annual
rate of 1.00% of the Fund's average daily net assets. This fee is
comparable to the fees charged by most small company equity mutual fund
managers, however, it is higher than that charged by many other mutual
funds. See "Investment Adviser."
ADVISER'S INVESTMENT PERFORMANCE. Information about the performance record
of the Adviser's portfolio management team for its separately managed
accounts over the past fourteen years is provided in the section of the
Prospectus called "Adviser's Investment Performance."
HOW TO INVEST. Shares of the Fund may be purchased on a no-load basis,
without sales or distribution charges, and are sold through investor
relationships with investment management and financial consultants, brokers
or dealers, or directly by the Fund's distributor. The public offering
price of shares of the Fund is the net asset value per share of the Fund
next determined after receipt and acceptance of an order and payment
satisfactory to the Fund. The minimum initial investment is $10,000 and
there is no minimum for subsequent investment. There is no minimum initial
investment amount for investments by qualified retirement accounts. An
application and information is available by calling [(800) ___-_________.]
See "How To Purchase Shares."
HOW TO REDEEM SHARES. Shares may be redeemed by the Fund, or repurchased
by the Distributor, at the net asset value per share next determined after
receipt and acceptance of a redemption request in proper form by the Fund,
without the imposition of sales charges or redemption fees. See "How to
Redeem Shares."
DIVIDEND REINVESTMENT. The Fund intends to pay dividends from its net
investment income and any net capital gains, if any, on an annual basis.
Any dividends and distribution payments will be reinvested at net asset
<PAGE>
value in additional full and fractional shares of the Fund, unless the
shareholder specifically elects to receive such distributions in cash. See
"Dividends, Distributions and Taxes."
RISKS AND SPECIAL CONSIDERATIONS. Prospective investors should consider
the following factors: (1) investments in small capitalization stocks
involve greater risks than investments in larger, more established
companies, are more volatile, and may suffer significant losses as well as
realize substantial gains; (2) the Fund may lend its securities which
entails a risk of loss should a borrower fail financially; (3) to the
extent that the Fund invests in foreign securities, such investment may
involve political, economic or currency risks not ordinarily associated
with domestic securities; and (4) although the Adviser's portfolio
management team has extensive investment management experience with private
separately managed accounts, it has not previously served as the adviser to
a mutual fund. See "Risks and Special Considerations."
ORGANIZATION AND MANAGEMENT OF THE FUND. The Fund is a series of Kalmar
Pooled Investment Trust (the "Trust"), which is an open-end diversified
management investment company commonly known as a mutual fund. The Trust
also offers shares of the Kalmar "Growth-with-Value" Micro Cap Fund through
a separate prospectus. The Fund's assets are held by its custodian,
Wilmington Trust Company, and the Fund's administrative, transfer agency
and fund accounting services are provided by Rodney Square Management
Corporation. The distributor of the Fund's shares is Rodney Square
Distributors, Inc. See "Management of the Fund" and "General Information."
FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Contingent Deferred Sales Charge None
Redemption Fees None
ESTIMATED ANNUAL OPERATING EXPENSES: These expenses, which cover the cost
of investment management, administration, distribution, marketing and
shareholder communications, are quoted as a percentage of average daily net
assets of the Fund. The expenses are factored into the Fund's share price
and are not billed directly to shareholders.
Advisory Fee (after voluntary waiver) 0.97%
12b-1 Fees None
Other Expenses 0.28%
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Total Operating Costs 1.25%1
1 FOR THE CURRENT FISCAL YEAR, THE ADVISER HAS VOLUNTARILY AGREED TO
WAIVE ITS FEE OR ASSUME CERTAIN EXPENSES OF THE FUND SO THAT THE
TOTAL ANNUAL OPERATING COSTS OF THE FUND WILL NOT EXCEED 1.25% OF THE
AVERAGE DAILY NET ASSETS OF THE FUND. ABSENT THE ADVISER'S ACTIONS TO
LIMIT THE OPERATING COSTS, THE FUND WOULD PAY AN ANNUAL ADVISORY FEE
OF 1.00% AND IT IS ESTIMATED THAT THE TOTAL OPERATING COSTS OF THE
FUND DURING ITS FIRST FISCAL YEAR WOULD BE 1.28% ON AN ANNUALIZED
BASIS.
<PAGE>
EXAMPLE: The following example illustrates the expenses that an investor
would pay on a $1,000 investment in the Fund over various time periods
assuming a 5% annual rate of return and redemption at the end of each time
period.
One Year Three Years
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$13 $40
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES IN FUTURE YEARS MAY BE GREATER OR
LESSER THAN THOSE SHOWN. THE PURPOSE OF THE ABOVE EXPENSE TABLES AND
EXAMPLE IS TO ASSIST THE INVESTOR IN UNDERSTANDING THE VARIOUS EXPENSES
THAT AN INVESTOR IN EITHER CLASS OF SHARES OF THE FUND WILL BEAR DIRECTLY
OR INDIRECTLY. THE FUND IS NEW AND THEREFORE THE AMOUNTS OF THE "ADVISORY
FEE (AFTER VOLUNTARY WAIVER)" AND "OTHER EXPENSES" IN THE EXPENSE TABLE AND
THE NUMBERS IN THE EXAMPLE ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT
FISCAL YEAR.
<PAGE>
ADVISER'S INVESTMENT PERFORMANCE
Set forth below is certain information relating to separate accounts managed
by the Fund's portfolio management team. These accounts are managed accord-
ing to the same investment objective and "Growth-with-Value" investment
philosophy, and are subject to substantially similar investment policies
and techniques as those used by the Fund. See "Investment Objectives and
Policies." The performance record shown below relates to the activities of
the portfolio management team with respect to its activities at Kalmar
Investments Inc. ("Kalmar"), which provides advisory services to separately
managed accounts, and is the sister company of the Adviser. See
"Investment Adviser." The results presented are not intended to predict or
suggest the return to be experienced by the Fund or the return that an
individual investor might achieve by investing in the Fund. The Fund's
results may be different from the composite of separate accounts shown due
to the fact that the average market capitalization of the companies included
in the separate account portfolios was approximately $250 million and the
Fund may purchase shares of companies with greater market capitalizations.
The Fund's results may also be different because of, among other things,
differences in fees and expenses, and because private accounts are not
subject to certain investment limitations, diversification requirements, and
other restrictions imposed by the Investment Company Act of 1940, as amended
(the "Investment Company Act") and the Internal Revenue,Code, as amended,
which, if applicable, may have adversely affected the performance of such
accounts.
YEAR KALMAR RUSSELL 2000 NASDAQ COMPOSITE S & P 500
ENDING TOTAL RETURN* TOTAL RETURN TOTAL RETURN TOTAL RETURN
------ ------------- ------------ ------------ ------------
12/31/84 1.46 (7.30) (11.22) 6.26
12/31/85 33.98 31.05 31.36 31.76
12/31/86 28.14 5.68 7.36 18.70
12/31/87 (1.90) (8.77) (5.26) 5.22
12/31/88 23.58 24.89 15.41 16.57
12/31/89 38.42 16.24 19.26 31.65
12/31/90 (7.58) (19.51) (17.80) (3.14)
12/31/91 65.52 46.05 56.84 30.45
12/31/92 8.87 18.41 15.45 7.62
12/31/93 27.11 19.91 14.75 10.06
12/31/94 3.08 (1.82) (3.20) 1.30
12/31/95 25.38 26.21 39.92 37.54
CUMULATIVE
TOTAL RETURN KALMAR* RUSSELL NASDAQ S & P 500
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12 Years* 699.73% 252.21% 277.39% 459.58%
1984-1995
AVERAGE ANNUAL
TOTAL RETURN
------------
12 Years* 18.92% 11.06% 11.70% 15.43%
1984-1995
*The results shown above represent a composite of discretionary, fee paying,
separate accounts under management for at least six months, reflect the
reinvestment of any dividends or capital gains, and are shown after
deduction of advisory, brokerage or other expenses (excluding fees such as
custody fees which are paid separately by the investor). Certain
<PAGE>
individual accounts that are subject to investment restrictions, tax,
income or other special considerations that constrain the investment
process are excluded from the composite figures shown above.
INVESTMENT OBJECTIVES AND POLICIES
The Fund's investment objective is long-term capital appreciation. The
investment objective of the Fund is a fundamental policy, which means that
it may not be changed without the approval of the holders of a majority of
the Fund's outstanding voting securities. The Fund seeks to achieve its
objective by investing primarily in a diversified portfolio of common
stocks of smaller companies which, in the Adviser's opinion, have the
potential for significant business growth and capital appreciation, and yet
whose stocks are, at the time of purchase, trading at at least reasonable
to, preferably, undervalued prices in the public trading markets. There
can be no assurance that the Fund will achieve its objective.
INVESTMENT PHILOSOPHY.
The Fund utilizes the Adviser's "Growth-with-Value" investment philosophy,
which integrates what the Adviser believes to be the best elements of
creative growth company investing, with discriminating value-seeking
investment discipline, all with a view toward longer-term ownership of the
"good growth businesses" underlying its portfolio holdings. The investment
philosophy is a primarily bottom-up, fundamentals-driven approach, with the
goal of fewer, better investment decisions, for longer holding periods and
larger gains. The Adviser views its "Growth-with-Value" philosophy as a
relatively conservative approach to small company investing, yet one which
the Adviser believes can result in both lower risk and higher rewards over
the longer term when compared to the small company equity markets
generally, or to the typical high-turnover "aggressive growth" or "emerging
growth" investment styles of most other small company investment managers.
By investing with a longer-term focus, and thereby limiting trading and
portfolio turnover, the Fund seeks to limit transaction costs and to
increase tax efficiency for its shareholders.
In identifying, analyzing, selecting, and monitoring investments, the
Fund's portfolio management team utilizes an independent, hands-on,
fundamental, in-house-research-driven approach. To identify solid, well
managed, rapidly growing small capitalization companies, and qualify such
companies for investment, the Fund's portfolio managers perform fundamental
research and business analysis of a given company's publicly available
financial information, engage in extensive and on-going management contact,
facility visits, and appropriate in-depth cross checks with customers,
suppliers, competitors, etc., as well as with industry trade groups,
consultants and such other "experts" as they deem appropriate. The
portfolio management team, of course, also attempts to utilize the best
information provided by Wall Street analysts, strategists, etc., to
complement its in-house research and investment management decision making.
As a central ingredient in its investment philosophy and investment
selection process, the Fund seeks to invest in promising smaller companies
which meet its objectives for above average future business value growth,
but which have not yet been fully recognized and exploited by other
institutional small company investors. Such companies may be followed by
relatively few, or sometimes no securities analysts, and, therefore, may be
inefficiently valued and available for purchase at undervalued prices. By
investing in such companies over the longer-term, the Fund's investors can
benefit both from their vigorous potential earnings and business value
growth and also from the potential re-valuation upward of their securities
as their business success attracts larger numbers of additional investors
and greater "Wall Street" sponsorship over time.
Except as described herein, the following investment policies are not
fundamental policies of the Fund which means that the Trustees may change
such policies without the affirmative vote of a "majority of the
outstanding voting securities" of the Fund, as defined in the Investment
Company Act.
<PAGE>
INVESTMENT POLICIES.
The Fund seeks to achieve its objective by investing, under normal market
conditions, at least 65% of its assets in smaller companies in terms of
market capitalization and/or total revenues, whose stock market
capitalization (total market value of outstanding shares) or total revenues
range from $50 million to $1 billion at the time of investment. Small
capitalization growth companies often pay no dividends and, therefore,
current income is not a factor in the selection of stocks. Capital
appreciation is likely to be the predominant component of the Fund's
return. In the event that the Adviser, through fundamental investment
analysis, identifies a company whose stock appears to be substantially
overvalued in the trading markets, the Fund may engage in short sales of
the company's stock. This process allows the Fund to realize profits if
the value of a company's stock is reduced to a level that was anticipated
by the Adviser.
In addition, the Fund may invest in other types of securities such as
preferred stocks, securities convertible into common stocks, as well as
certain debt securities, consistent with its long-term capital appreciation
objective. The Fund may invest up to 15% of its assets in foreign
securities, including sponsored or unsponsored American Depository Receipts
("ADRs"). The Fund may also buy and sell options on individual securities
or indices, for purposes of achieving additional return or for hedging
purposes, although at no time will more than 5% of the Fund's assets be
allocated to premiums or margins required to establish options positions
for non-hedging purposes, and no more than 10% of the Fund's assets will be
subject to obligations underlying such options. Additional information
about the Fund's investments, policies and restrictions is provided below
and in the Fund's Statement of Additional Information.
EQUITY SECURITIES. The Fund will predominately purchase common stocks,
which represent an ownership interest in the issuer, entitle the holder to
participate in any income and/or capital gains of the issuer and generally
have voting rights. The Fund may also purchase securities with an equity
component such as convertible preferred stock, debt securities convertible
into or exchangeable for common stock and securities such as warrants or
rights that are convertible into common stock. A convertible security is
a security that may be converted either at a stated price or rate within a
specified period of time into a specified number of shares of common or
preferred stock. By investing in convertible securities, the Fund seeks to
participate in the capital appreciation of the common stock into which the
securities are convertible through the conversion feature. A warrant is a
security that gives the holder the right, but not the obligation, to
subscribe for newly created securities of the issuer or a related company
at a fixed price either at a certain date or during a set period.
The Fund's assets will be invested primarily in equity securities of small
companies, however, it may, consistent with its objective, invest a portion
of its total assets in equity securities of larger capitalization companies
<PAGE>
if the Adviser believes that suitable small company opportunities are not
available or if such larger stocks have strong growth potential and meet
the Adviser's "Growth-with-Value" criteria and investment discipline.
Although the Adviser anticipates that the majority of the Fund's assets
will ordinarily be invested in U.S. based companies, the Fund may invest in
foreign securities, provided such investments are consistent with the
Fund's objective and policies and meet the "Growth-with-Value" philosophy.
The Fund generally limits its foreign investing to securities of Canadian
companies traded on Canadian or U.S. exchanges or markets, or shares of
foreign companies traded as sponsored or unsponsored American Depository
Receipts ("ADRs"), which are receipts typically issued by a U.S. bank or
trust company evidencing ownership of underlying securities issued by a
foreign company. "Sponsored" ADRs are issued jointly by the issuer of the
underlying security and a depository, whereas "unsponsored" ADRs are issued
without participation of the issuer of the deposited security.
CASH OR CASH EQUIVALENTS. The Fund may invest its assets in cash or cash
equivalents, during periods when excess cash is generated through purchases
and sales of its shares, or when the Fund desires to hold cash to maintain
liquidity for redemptions or pending investment in suitable securities.
There may also be times when economic or market conditions are such that
the Adviser deems a temporary defensive position to be appropriate, during
which greater than 35% of its net assets may be invested in the types of
short-term, cash equivalent investments described below.
The Fund may invest in short-term debt securities, including time deposits,
certificates of deposit or banker's acceptances issued by commercial banks
or savings and loan associations meeting certain qualifications. The Fund
may also purchase commercial paper rated A-1 by S&P or Prime-1 by Moody's,
or, if not rated, issued by a corporation having an outstanding unsecured
debt issue rated A or better by S&P or by Moody's; and may invest in short
term corporate obligations rated A or better by S&P or Moody's.
The fund may also purchase U.S. Government obligations including bills,
notes, bonds and other debt securities issued by the U.S. Treasury; and may
invest in U.S. Government agency securities issued or also guaranteed by
U.S. Government sponsored instrumentalities and federal agencies. The Fund
may also invest in repurchase agreements collateralized by the cash
equivalent securities listed above.
DEBT SECURITIES. In addition to the short-term, high quality, cash-
equivalent debt securities listed above, the Fund is authorized to invest
up to 5% of its assets in lower-rated or "compromised" corporate debt
securities such as bonds, debentures and notes. The Fund may invest in
such debt securities, sometimes referred to as "junk bonds," when the
Adviser, through fundamental research and investment analysis, believes
that the securities possess intrinsic value in excess of the current market
price, or have the potential for capital appreciation as a result of
improvement in the creditworthiness of the issuer. The Fund may also buy
such securities when the Adviser believes that the Issuer is likely to
negotiate to replace such securities with equity securities. Lower-rated
securities (including those rated D, which are in default) are considered
to be predominately speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the
obligation and generally involve more credit risk than securities in the
high rating categories. See "Debt Securities-Risks" in the Statement of
Additional Information for further information concerning the risks of
lower-rated securities.
<PAGE>
OPTIONS. The Fund may purchase or sell options on individual securities as
well as on indices of securities as a means of achieving additional return
or of hedging the value of the Fund's portfolio. A call option is a
contract that gives the holder of the option the right, in return for a
premium paid, to buy from the seller the security underlying the option at
a specified exercise price at any time during the term of the option or, in
some cases, only at the end of the term of the option. The seller of the
call option has the obligation upon exercise of the option to deliver the
underlying security upon payment of the exercise price. A put option is a
contract that gives the holder of the option the right, in return for a
premium paid, to sell to the seller the underlying security at a specified
price. The seller of the put option, on the other hand, has the obligation
to buy the underlying security upon exercise at the exercise price.
If the Fund has sold an option, it may terminate its obligation by
effecting a closing purchase transaction. This is accomplished by
purchasing an option of the same series as the option previously sold.
There can be no assurance that a closing purchase transaction can be
effected when the Fund so desires.
The purchaser of an option risks a total loss of the premium paid for the
option if the price of the underlying security does not increase
or decrease sufficiently to justify exercise. The seller of an option,
on the other hand, will recognize the premium as income if the option
expires unrecognized but forgoes any capital appreciation in excess of
the exercise price in the case of a call option and may be required to
pay a price in excess of current market value in the case of a put option.
Options purchased and sold other than on an exchange in private
transactions also impose on the Fund the credit risk that the counterparty
will fail to honor its obligations. The Fund will not purchase options if,
as a result, its aggregate obligations relating to outstanding options
exceeds 10% of the Fund's assets.
REPURCHASE AGREEMENTS. For purposes of cash management only, the Fund may
enter into repurchase agreements with qualified brokers, dealers, banks and
other financial institutions deemed creditworthy by the Adviser under
standards adopted by the Board of Trustees. Under repurchase agreements,
the Fund may purchase any of the cash equivalent securities and
simultaneously commit to resell that security at a future date to the
seller at an agreed upon price plus interest. The Seller will be required
to collateralize the agreement by transferring securities to the Fund with
an initial market value, including accrued interest, of at least 102% of
the dollar amount invested by the Fund in each agreement, and the seller
will be required to transfer additional securities to the Fund on a daily
basis to ensure that the collateral is in compliance with the 102%
described above. No more than 10% of the Fund's net assets will be
invested in illiquid securities, including repurchase agreements which have
a maturity of longer than seven days. For purposes of the diversification
test for qualification as a regulated investment company under the Internal
Revenue Code, repurchase agreements are not counted as cash, cash items or
receivables, but rather as securities issued by the counter-party to the
repurchase agreements. If the seller of the underlying security under the
repurchase agreement should default on its obligation to repurchase the
underlying security, the Fund may experience delay or difficulty in
recovering its cash. To the extent that in the meantime, the value of the
security purchased had decreased, the Fund could experience a loss. While
management of the Fund acknowledges these risks, it is expected that they
can be controlled through stringent security selection and careful
monitoring procedures.
<PAGE>
INVESTMENTS IN MUTUAL FUNDS. The Fund may invest up to 10% of its total
assets in other investment companies, although not more than 5% of the
Fund's total assets may be invested in any one investment company and the
Fund's investment in another investment company may not represent more than
3% of the securities of any one investment company. The Fund may also
acquire securities of other investment companies pursuant to a merger,
consolidation or reorganization.
OTHER INVESTMENT PRACTICES.
SHORT SALES. If the Fund anticipates that the price of a security will
decline, it may sell the security short and borrow the same security from a
broker or other institution to complete the sale. The Fund may realize a
profit or loss depending upon whether the market price of the security
decreases or increases between the date of the short sale and the date on
which the Fund must replace the borrowed security. Short selling is a
technique that may be considered speculative and involves risk beyond the
initial capital necessary to secure each transaction. The Fund is required
by SEC rules to collateralize short positions by placing assets in a
segregated account and the Fund will not sell securities if, immediately
after and as a result of the sale, the value of all securities sold short
by the Fund exceeds 10% of its total assets. The value of any one issuer
in which the Fund is short may not exceed the lesser of 2% of the fund's
net assets or 2% of the securities of any class of the issuers' securities.
The Fund's policy regarding short sales is fundamental.
BORROWING. As a matter of fundamental policy, the Fund may borrow up to
one third of its total assets, taken at market value as a temporary measure
for extraordinary or emergency purposes to meet redemptions or to settle
securities transactions. Any borrowing will be done from a bank with the
required asset coverage of at least 300%. In the event that such asset
coverage shall at any time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday or holidays) or such longer period as
the SEC may prescribe by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset coverage of such borrowings
shall be at least 300%. The Fund will not pledge more than 10% of its net
assets, or issue senior securities as defined in the Investment Company
Act, except for notes to banks.
LENDING OF PORTFOLIO SECURITIES. The Fund may from time to time lend
securities from its portfolio, with a value not exceeding one-third of its
total assets, to banks, brokers and other financial institutions and
receive collateral in cash, a letter of credit issued by a bank or
securities issued or guaranteed by the U.S. Government which will be
maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. The lending of securities is a
common practice in the securities industry. The Fund engages in security
loan arrangements with the primary objective of increasing the Fund's
income either through investing the cash collateral in short-term interest
bearing obligations or by receiving a loan premium from the borrower.
Under the securities loan agreement, the Fund continues to be entitled to
all dividends or interest on any loaned securities. As with any extension
of credit, there are risks of delay in recovery and loss of rights in the
collateral should the borrower of the security fail financially. The
Fund's policy regarding lending of portfolio securities is fundamental.
During the period of such a loan, the Fund receives the income on both the
loaned securities and the collateral and thereby increases its yield. In
the event that the borrower defaults on its obligation to return borrowed
<PAGE>
securities because of insolvency or otherwise, the Fund could experience
delays and costs in gaining access to the collateral and could suffer a
loss to the extent the value of the collateral falls below the market value
of the borrowed securities.
RESTRICTED, ILLIQUID AND RULE 144A SECURITIES. The Fund may invest up to
10% of its assets in securities which may be considered illiquid, due to
restrictions on resale, longer maturities, or other factors limiting the
marketability of the security. While maintaining oversight, the Board of
Trustees has delegated to the Adviser the day-to-day functions of
determining whether or not individual securities purchased under Rule 144A
of the Securities Act of 1933, as amended, are liquid for purposes of the
Fund's 10% limitation on investments in illiquid assets. Generally, an
illiquid security is any security that cannot be disposed of within seven
days in the ordinary course of business at approximately the amount at
which the Fund has valued the security. Examples of illiquid securities
are repurchase agreements maturing in greater than seven days and other
securities with contractual restrictions on resale. The Board of Trustees
of the Trust has instructed the Adviser to consider the following factors
in determining the liquidity of a security purchased under Rule 144A; (i)
the frequency of trades and trading volume for the security; (ii) whether
at least three dealers are willing to purchase or sell the security and the
number of potential purchasers; (iii) whether at least two dealers are
making a market in the security; and (iv) the nature of the security and
the nature of the marketplace trades (e.g., the time needed to dispose of
the security, the method of soliciting offers and the mechanics of
transfer). Although having delegated the day-to-day functions, the Board
of Trustees will continue to monitor and will periodically review the
Adviser's selection of Rule 144A securities as well as the Adviser's
determinations as to their liquidity.
If the Adviser determines that a security purchased in reliance on Rule
144A which was previously determined to be liquid, is no longer liquid and,
as a result, the Fund's holdings of illiquid securities exceed the Fund's
10% limit on investment in such securities, the Adviser will determine what
action shall be taken to ensure that the Fund continues to adhere to such
limitation including disposing of illiquid assets which may include such
Rule 144A securities.
RISKS AND SPECIAL CONSIDERATIONS
SMALL CAPITALIZATION SECURITIES. Investments in common stocks in general
are subject to market, economic and business risks that will cause their
price to fluctuate over time. Therefore, an investment in the Fund may be
more suitable for long-term investors who can bear the risk of these
fluctuations. Additionally, securities of companies with smaller revenues
and capitalizations may offer greater opportunity for capital appreciation
than larger companies, but investment in such companies present greater
risks than securities of larger, more established companies. Indeed,
historically, small capitalization stocks have been more volatile in price
than larger capitalization stocks. Among the reasons for the greater price
volatility of these securities are the lower degree of liquidity in the
markets for such stocks, and the potentially greater sensitivity of such
small companies to changes in or failure of management, and in many other
changes in competitive, business, industry and economic conditions,
including risks associated with limited product lines, markets, management
depth, or financial resources. Besides exhibiting greater volatility,
micro and small company stocks may, to a degree, fluctuate independently of
<PAGE>
larger company stocks. Micro and small company stocks may decline in price
as large company stocks rise, or rise in price as large company stocks
decline. Investors should therefore expect that the value of the Fund's
shares will be more volatile than the shares of a fund that invests in
larger capitalization stocks. Additionally, while the markets in
securities of such companies have grown rapidly in recent years, such
securities may trade less frequently and in smaller volume than more widely
held securities. The values of these securities may fluctuate more sharply
than those of other securities, and a Fund may experience some difficulty
in establishing or closing out positions in these securities at prevailing
market prices. There may be less publicly available information about the
issuers of these securities or less market interest in such securities than
in the case of larger companies, and it may take a longer period of time
for the prices of such securities to reflect the full value of their
issuers' underlying earnings potential or assets. The Fund should not be
considered suitable for investors who are unable or unwilling to assume the
risks of loss inherent in such a program, nor should investment in the Fund
be considered a balanced or complete investment program.
FOREIGN INVESTMENT. Investments in foreign securities may involve risks
not ordinarily associated with investments in domestic securities. These
risks may include legal, political or economic developments such as
fluctuations in currency rates, imposition of withholding taxes or exchange
controls or other governmental restrictions or political or policy changes.
In addition, with respect to certain countries, there is the possibility of
expropriation of assets, confiscatory taxation, or political or social
unrest that could adversely affect the value of foreign securities. There
may be less publicly available information about foreign companies than
about U.S. companies, and foreign companies may not be subject to
accounting, auditing and financial reporting standards that are as uniform
as those applicable to U.S. companies. The Fund will attempt to limit
risks associated with foreign investing by investing primarily in
securities of stable, developed countries such as Canada.
INVESTMENT ADVISER. The Adviser has not previously served as the
investment adviser for a mutual fund, and therefore, historical information
about the performance of a fund managed by the Adviser is not available.
However, the Adviser's portfolio management team responsible from managing
the assets of the Fund has managed small cap assets for private investors
for the past fourteen years. See "Adviser's Investment Performance."
<PAGE>
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES
The Board of Trustees of the Trust consists of five individuals, three of
whom are not "interested persons" of the Trust as defined in the Investment
Company Act. The members of the Trust's Board of Trustees are fiduciaries
for the Fund's shareholders and, in this regard, are governed by the laws
of the State of Delaware. The Trustees establish policy for the operation
of the Fund, and appoint the officers who conduct the daily business of the
Fund. The following is a list of the Trustees and a brief statement of
their principal occupations:
FORD B. DRAPER, JR.* Chairman, President and Treasurer of
1300 Market Street, Suite 500 the Trust; Founder, President,
Wilmington, DE 19801 Director and Chief Investment
Officer of Kalmar Investments since
1981 and Kalmar Investment Advisers
since inception
JOHN J. QUINDLEN [Background]
DAVID M. REESE, JR.* [Background]
1300 Market Street, Suite 500
Wilmington, DE 19801
DAVID D. WAKEFIELD [Background]
[TRUSTEE TO BE NAMED] [Background]
- -------------------
*These people are deemed to be "interested persons" of the Fund as that
term is defined in the Investment Company Act.
INVESTMENT ADVISER
Kalmar Investment Advisers, located at 1300 Market Street, Wilmington, DE
19801 (previously defined as the "Adviser") serves as the investment
adviser for the Fund pursuant to an investment advisory agreement dated
[____________, 1996] (the "Advisory Agreement"). The Advisory Agreement
initially will be in effect for two years, and may be renewed each year
thereafter, provided its continuance is approved annually by the Board of
Trustees, including a majority of the Trustees who are not "interested
persons" of the Fund as defined in the Investment Company Act.
The Adviser manages the investments of the Fund in accordance with the
Fund's stated investment objective, philosophy and policies and subject to
its limitations or restrictions. Subject to the supervision of the Board
of Trustees, the Adviser makes the Fund's day-to-day investment decisions,
selects brokers and dealers to execute portfolio transactions and generally
manages the Fund's investments. In selecting brokers, the Adviser seeks to
obtain the best net results for the Fund, taking into account such factors
as price (including the applicable brokerage commission or dealer spread),
size of order, difficulty of execution and operational facilities of the
firm involved and the firm's risk in positioning a block of securities.
While the Adviser generally seeks favorable and competitive commission
<PAGE>
rates, the Fund does not necessarily pay the lowest commission or spread
available. In addition, consistent with rules established by the National
Association of Securities Dealers, Inc., the Fund may consider sales of
shares of the Fund as a factor in the selection of brokers or dealers to
execute portfolio transactions for the Fund.
Because of its longer-term investment philosophy, the Fund does not intend
to engage in frequent trading tactics which could result in high turnover,
less favorable tax consequences (i.e., a high proportion of short-term
capital gains relative to long term capital gains) or increased trading and
brokerage expenses paid by the Fund. The Fund anticipates that its annual
portfolio turnover rate should not exceed 50% under normal conditions,
although it is impossible to predict portfolio turnover rates. The Adviser
will buy or sell portfolio securities without regard to holding period if,
in its judgment, such transactions are advisable in light of opportunities
in particular stocks, or a change in circumstances for any particular
company or companies, or in general market, economic or financial
conditions.
The Adviser, which is registered as an investment adviser under the
Investment Advisers Act of 1940, is presently wholly-owned by its founder,
Ford B. Draper, Jr. The Adviser utilizes a team approach in managing the
Fund's portfolio. Mr. Draper, as chief investment officer, leads and
supervises the portfolio management team. Other key members of the
Adviser's portfolio management team include Dana F. Walker, C.F.A., a
portfolio manager/research analyst who joined Kalmar in 1986 after serving
as an analyst for Delfi Management, Inc., adviser to the Sigma Funds, and
Gregory A. Hartley, C.F.A., a portfolio manager/research analyst who joined
Kalmar in 1993 after serving as senior analyst and investment committee
member for Ashford Capital Management, Inc., an investment management and
consultingfirm.
The Adviser is the "sister" company to Kalmar Investments Inc. ("Kalmar"),
a registered investment adviser founded by Mr. Draper in 1982, which has
been providing investment advice to and managing the assets of private
accounts since its inception according to the same investment objective and
"Growth-with-Value" philosophy used by the Fund. The Adviser itself was
recently organized as a Delaware business trust on [_____________, 1996]
for the sole purpose of functioning as the adviser to each of the series of
the Trust. The ownership and management of the Adviser is identical to
that of Kalmar, and the same portfolio management team approach used in
managing the assets of the Fund is used to manage the assets of Kalmar's
private accounts. Kalmar presently manages approximately $600 million
primarily in micro capitalization and small capitalization stocks in
separately managed accounts for clients such as high net worth individuals
and family trusts, corporations, pensions and profit-sharing plans and
institutions such as endowments, foundations, hospitals and charitable
institutions. Kalmar intends to invest assets of its own profit-sharing
plan in shares of the Fund, as do members of its investment team and other
employees.
For its services, the Adviser is paid a monthly fee at the annual rate of
1.00% of the Fund's average daily net assets. This fee is comparable to
the fees charged by most small company equity mutual fund managers,
however, it is higher than that paid by many other mutual funds for
investment advisory services. During the Fund's first fiscal year, the
Adviser has voluntarily agreed to limit its fees or assume certain expenses
of the Fund to keep the total annual operating costs of the Fund within
<PAGE>
specified limits, see "Fund Expenses," and will also limit such expenses to
the extent necessary to meet any applicable state expense limitation.
DISTRIBUTOR
Rodney Square Distributors, Inc. ("RSD"), a subsidiary of Wilmington Trust
Company located at 1105 North Market Street, Wilmington, DE 19890, has been
engaged to distribute the Fund's shares pursuant to a distribution
agreement dated [_____________, 1996] (the "Distribution Agreement").
Under the Distribution Agreement, RSD directly or through its affiliates,
provides distribution and underwriting services, investor support and
certain administrative services.
ADMINISTRATOR, TRANSFER AGENT AND CUSTODIAN
Rodney Square Management Corporation ("Rodney Square"), a subsidiary of
Wilmington Trust Company located at Rodney Square North, 1100 N. Market
Street, Wilmington, DE 19890 serves as the Fund's Administrator, Transfer
Agent and Dividend Paying Agent and also provides accounting services to
the Fund pursuant to separate Administration, Transfer Agency and
Accounting Services Agreements with the Trust, each dated [_____________,
1996.]
As Administrator, Rodney Square supplies office facilities, non-investment
related statistical and research data, stationery and office supplies,
executive and administrative services, internal auditing and regulatory
compliance services. Rodney Square also assists in the preparation of
reports to shareholders, prepares proxy statements, updates prospectuses
and makes filings with the U.S. Securities and Exchange Commission (the
"SEC") and state securities authorities. Rodney Square performs certain
budgeting and financial reporting and compliance monitoring activities.
For the services provided as Administrator, Rodney Square receives annual
fees equal to 0.15% of the average annual net assets of the Trust for the
first $50 million in assets and 0.10% for assets in excess of $50 million,
subject to certain minimum amounts. Rodney Square has also agreed to waive
specified portions of its fees during the Fund's first year of operations,
provided the Adviser would have otherwise been required to waive its fees
under the voluntary waiver described under "Fund Expenses." Rodney Square
also serves as the Transfer Agent and Dividend Paying Agent of the Fund as
well as the Accounting Agent to the Fund. As Transfer Agent and Dividend
Paying Agent, Rodney Square is responsible for administering the issuance,
transfer and redemption or repurchase of shares, as well as the payment of
distributions and dividends. As Accounting Agent, Rodney Square determines
the Fund's net asset value per share and provides accounting services to
the Fund.
The custodian for the Fund is Wilmington Trust Company ("WTC"), Rodney
Square North, 1100 N. Market Street, Wilmington, DE 19890-0001.
EXPENSES
Except as indicated above, the Fund is responsible for the payment of the
pro rata portions of the Trust's expenses attributable to the Fund, as
distinguished from any other series of the Trust, other than those borne by
the Adviser, and such expenses may include, but are not limited to: (a)
management fees; (b) the charges and expenses of the Fund's legal counsel
and independent auditors; (c) brokers' commissions, mark-ups and mark-downs
and any issue or transfer taxes chargeable to the Fund in connection with
its securities transactions; (d) all taxes and corporate fees payable by
<PAGE>
the Fund to governmental agencies; (e) the fees of any trade association of
which the Trust or Fund is a member; (f) the cost of certificates, if any,
representing shares of the Fund; (g) amortization and reimbursements of the
organization expenses of the Trust or Fund and the fees and expenses
involved in registering and maintaining registration of the Trust and its
shares with the SEC, and the preparation and printing of the Trust's
registration statements and prospectuses for such purposes; (h) allocable
communications expenses with respect to investor services and all expenses
of shareholders and trustees' meetings and of preparing, printing and
mailing prospectuses and reports to shareholders; (i) litigation and
indemnification expenses and other extraordinary expenses not incurred in
the ordinary course of the Trust's business; and (j) compensation for
employees of the Trust.
CALCULATION OF NET ASSET VALUE
Rodney Square determines the net asset value per share ("net asset value")
of the Fund as of the close of regular trading on each day that the New
York Stock Exchange is open for unrestricted trading from Monday through
Friday (generally 4:00 p.m.) and on which there is a purchase or redemption
of the Fund's shares. The net asset value is determined by dividing the
value of the Fund's securities, plus any cash and other assets, less all
liabilities, by the number of shares outstanding. Expenses and fees of the
Fund, including management, distribution and shareholder servicing fees,
are accrued daily and taken into account for the purpose of determining the
net asset value.
Fund securities listed or traded on a securities exchange for which
representative market quotations are available will be valued at the last
quoted sales price on the security's principal exchange on that day.
Listed securities not traded on an exchange that day will be valued at the
mean between the last bid and asked price on that day, if any. Unlisted
securities which are quoted on the National Association of Securities
Dealers National Market System for which there are sales of such securities
on such day, shall be valued at the last sale price reported on such system
the day the security is valued. If there are no such sales on such day,
the value shall be the mean between the closing asked price and closing bid
price. Securities for which market quotations are not readily available
and all other assets will be valued at their respective fair value as
determined in good faith by, or under procedures established by, the Board
of Trustees. In determining fair value, the Fund or its service providers
may employ an independent pricing service.
Money market securities with less than sixty days remaining to maturity
when acquired by the Fund will be valued on an amortized cost basis by the
Fund, excluding unrealized gains or losses thereon from the valuation.
This is accomplished by valuing the security at cost and then assuming a
constant amortization to maturity of any premium or discount from cost
versus par value at maturity. If the Fund acquires a money market security
with more than sixty days remaining to its maturity, it will be valued at
current market value until the 60th day prior to maturity, and will then be
valued on an amortized cost basis based upon the value on such date unless
the Trustees determine during such 60-day period that this amortized cost
value does not represent fair market value.
Each share of the Fund will bear, pro-rata, all of the common expenses of
the Fund. The net asset values of all outstanding shares of the Fund will
be computed on a pro-rata basis for each outstanding share based on the
<PAGE>
proportionate participation in the Fund represented by the value of such
shares. All income earned and expenses incurred by the Fund will be borne
on a pro-rata basis by each outstanding share, based on each share's
percentage in the Fund represented by the value of such shares.
HOW TO PURCHASE SHARES
Shares of the Fund are offered on a no-load basis, without the imposition
of any sales or distribution fees through investment management and
financial consultants, brokers or dealers, or directly through the Fund's
distributor. Shares of the Kalmar "Growth-with-Value" Micro Cap Fund
series of the Trust (the "Micro Cap Fund") may be purchased in a similar
manner, and such shares are offered through a separate prospectus. The
Fund's shares are offered at the net asset value per share next determined
after the receipt and acceptance of a purchase order and payment in proper
form by the Fund. Information on how to invest in the Fund is presented
below, and any requests for applications, additional information or
questions may be directed to Rodney Square at [800 ___-_____.]
MINIMUM INVESTMENT. The minimum initial investment for the Fund is
$10,000, with no subsequent minimum investments. There is no minimum
investment requirement for qualified retirement accounts.
PURCHASE PRICE. Purchase orders for shares of the Fund which are received
in proper form and accepted by the Fund prior to the close of regular
trading hours on the New York Stock Exchange (currently 4:00 p.m. Eastern
time) on any day that the Fund calculates its net asset value per share,
are priced according to the respective net asset value determined on that
day. Purchase orders received in proper form and accepted by the Fund
after the close of the Exchange on a particular day are priced as of the
time the respective net asset value per share is next determined.
IN-KIND PURCHASES. At the discretion of the Fund, investors may be
permitted to purchase Fund shares by transferring securities to the Fund
that: (i) meet the Fund's investment objective and policies; (ii) are
acquired by the Fund for investment and not for retail purposes; (iii) are
liquid securities which are not restricted as to transfer either by law or
liquidity of market; (iv) have a value which is readily ascertainable (and
not established only by evaluation procedures) as evidenced by a listing on
the American Stock Exchange, the NYSE, or NASDAQ; and (v) at the discretion
of the Fund, the value of any such security (except U.S. Government
Securities) being exchanged together with other securities of the same
issuer owned by the Fund will not exceed 5% of the net assets of the Fund
immediately after the transactions.
Securities transferred to the Fund will be valued in accordance with the
same procedures used to determine the Fund's net asset value. All
dividends, interests, subscription, or other rights pertaining to such
securities shall become the property of the Fund and must be delivered to
the Fund by the investor upon receipt from the issuer. Investors who are
permitted to transfer such securities will be required to recognize all
gains or losses on such transfers, and pay taxes thereon, if applicable,
measured by the difference between the fair market value of the securities
and the investors' bases therein.
Purchases may be made in one of the following ways:
PURCHASES BY MAIL. Shareholders may purchase shares by sending a check
drawn on a U.S. bank payable to the Kalmar "Growth-with-Value" Small Cap
<PAGE>
Fund, along with a completed shareholder application, to Kalmar Pooled
Investment Trust, c/o Rodney Square Management Corporation, P.O. Box 8987,
Wilmington, DE 19899-9752. A shareholder application sent by overnight
mail should be sent to Kalmar Pooled Investment Trust, c/o Rodney Square
Management Corporation, 1105 N. Market St., 3rd Floor, Wilmington, DE
19890. If a subsequent investment is being made, investors should use the
purchase stub and return envelope from the most recent account statement
and the check should also indicate the investor's Fund account number.
PURCHASES BY WIRE. To purchase shares by wiring federal funds, Rodney
Square must first be notified by calling (800) ____-_______ to request an
account number and furnish the Fund with a tax identification number.
Following notification to Rodney Square, federal funds and registration
instructions should be wired through the Federal Reserve System to:
RODNEY SQUARE MANAGEMENT CORPORATION
C/O WILMINGTON TRUST COMPANY
WILMINGTON, DE
DDA #_________________
ABA #0311 000 92
ATTENTION: KALMAR "GROWTH-WITH-VALUE" SMALL CAP FUND
FURTHER CREDIT [SHAREHOLDER NAME AND ACCOUNT NUMBER]
For initial purchases by wire, a completed application with signature(s) of
investor(s) must promptly be filed with Rodney Square at one of the
addresses stated above under "Purchases By Mail." Investors should be
aware that some banks may impose a wire service fee.
[(AVAILABLE IF DESIRED:) AUTOMATIC INVESTMENT PLAN. Shareholders may
purchase Fund shares through an Automatic Investment Plan. The Plan
provides a convenient method by which investors may have monies deducted
directly from their checking, savings or bank money market accounts for
investment in the Fund. Under the Plan, Rodney Square, at regular
intervals, will automatically debit a shareholder's bank checking account
in an amount of $1,000 or more (subsequent to the $10,000 minimum initial
investment), as specified by the shareholder. A shareholder may elect to
invest the specified amount monthly, bimonthly, quarterly, semi-annually or
annually. The purchase of Fund shares will be effected at the net asset
value at the close of regular trading on the New York Stock Exchange
(currently 4:00 p.m. Eastern time) on or about the 20th day of the month.
To obtain an Application for the Automatic Investment Plan, check the
appropriate box of the Application accompanying this Prospectus or call
Rodney Square at (800) ___-______.]
EXCHANGE PRIVILEGE. Shareholders of the Fund may exchange all or a portion
of their shares of the Fund for shares of the Micro Cap Fund, and
shareholders of the Micro Cap Fund may similarly exchange into the Fund,
provided the Fund is authorized to sell its shares in the state where the
purchaser is located. A purchase or redemption of shares through an
exchange will be effected at the net asset value per share next determined
after receipt and acceptance by the Fund of the request.
To obtain a Prospectus of the Micro Cap Fund, or to obtain more information
about exchanges or place exchange orders contact Rodney Square at (800)
____-______. The Fund reserves the right to terminate or modify the
exchange offer described here and will give shareholders sixty days notice
of such termination or modification as required by the SEC.
<PAGE>
RETIREMENT PLANS
Shares of the Fund are available for use in all types of tax-deferred
retirement plans such as IRA's, employer-sponsored defined contribution
plans (including 401(k) plans) and tax-sheltered custodial accounts
described in Section 403(b)(7) of the Internal Revenue Code. Qualified
investors benefit from the tax-free compounding of income dividends and
capital gains distributions. Application forms and brochures describing
investments in the Fund for retirement plans can be obtained from Rodney
Square by calling [(800) ___-____.] The following is a description of the
types of retirement plans for which the Fund's shares may be used for
investment:
INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS"). Individuals, who are not active
participants (and, when a joint return is filed, who do not have a spouse
who is an active participant) in an employer maintained retirement plan are
eligible to contribute on a deductible basis to an IRA account. The IRA
deduction is also available for individual taxpayers and married couples
with adjusted gross incomes not in excess of certain specified limits. All
individuals who have earned income may make nondeductible IRA contributions
to the extent that they are not eligible for a deductible contribution.
Income earned by an IRA account will continue to be tax-deferred. A
special IRA program is available for employers under which the employers
may establish IRA accounts for their employees in lieu of establishing tax
qualified retirement plans. Known as SEP-IRA's (Simplified Employee
Pension-IRA), they free the employer of many of the recordkeeping
requirements of establishing and maintaining a tax qualified retirement
plan trust.
If you are entitled to receive a distribution from a qualified retirement
plan, you may rollover all or part of that distribution into the Fund's
IRA. Your rollover contribution is not subject to the limits on annual IRA
contributions. You can continue to defer Federal income taxes on your
contribution and on any income that is earned on that contribution.
WTC makes available its services as an IRA Custodian for each shareholder
account that is established as an IRA. For these services, WTC receives an
annual fee of $10.00 per account, which fee is paid directly to WTC by the
IRA shareholder. If the fee is not paid by the date due, shares of the
Fund owned by the shareholder in the IRA account will be redeemed
automatically for purposes of making the payment.
401(K) PLANS AND OTHER DEFINED CONTRIBUTION PLANS. The Fund's shares may
be used for investment in defined contribution plans by both self-employed
individuals (sole proprietorships and partnerships) and corporations who
wish to use shares of the Fund as a funding medium for a retirement plan
qualified under the Internal Revenue Code. Such plans typically allow
investors to make annual deductible contributions, which may be matched by
their employers up to certain percentages based on the investor's pre-
contribution earned income.
403(B)(7) RETIREMENT PLANS. The Fund's shares are also available for use
by schools, hospitals, and certain other tax-exempt organizations or
associations who wish to use shares of the Fund as a funding medium for a
retirement plan for their employees. Contributions are made to the
403(b)(7) Plan as a reduction to the employee's regular compensation. Such
contributions, to the extent they do not exceed applicable limitations
(including a generally applicable limitation of $9,500 per year), are
<PAGE>
excludable from the gross income of the employee for Federal Income tax
purposes.
HOW TO REDEEM SHARES
Shareholders may redeem all or a portion of their shares without charge on
any day that the Fund calculates its net asset value. See "Calculation of
Net Asset Value." Except as noted below, redemption requests received and
accepted by Rodney Square prior to the close of regular trading hours on
the Exchange on any business day that the Fund calculates its per share net
asset value are effective at the net asset value per share determined that
day. Redemption requests received and accepted by Rodney Square after the
close of the Exchange are effective as of the time the net asset value per
share is next determined. Redemption proceeds are normally sent on the
next business day following receipt and acceptance by the Fund of the
redemption request but, in any event, redemption proceeds are sent within
seven business days of receipt and acceptance of the request, or earlier if
required under applicable law. Redemption requests should be accompanied
by the Fund's name and the shareholder's account number. Corporations,
other organizations, trusts, fiduciaries and other institutional investors
may be required to furnish certain additional documentation to authorize
redemptions.
Delivery of the proceeds of a redemption of shares purchased and paid for
by check shortly before the receipt of the request may be delayed until the
Fund determines that the Custodian has completed collection of the purchase
check which may take up to 10 days. Also, redemption requests for accounts
for which purchases were made by wire may be delayed until the Fund
receives a completed application for the account. The Board of Trustees
may suspend the right of redemption or postpone the date of payment during
any period when (a) trading on the New York Stock Exchange is restricted as
determined by the SEC or such Exchange is closed for other than weekends
and holidays, (b) the SEC has by order permitted such suspension, or (c) an
emergency, as defined by rules of the SEC, exists during which time the
sale of Fund shares or valuation of securities held by the Fund are not
reasonably practicable.
IN-KIND REDEMPTION. The Fund will satisfy redemption requests in cash to
the fullest extent feasible, so long as such payments would not, in the
opinion of the Adviser or the Board of Trustees, result in the necessity of
the Fund selling assets under disadvantageous conditions and to the
detriment of the remaining shareholders of the Fund. Pursuant to the
Fund's Agreement and Declaration of Trust, payment for shares redeemed may
be made either in cash or in-kind, or partly in cash and partly in-kind.
Any portfolio securities paid or distributed in-kind would be valued as
described under "Calculation of Net Asset Value." In the event that an
in-kind distribution is made, a shareholder may incur additional expenses,
such as the payment of brokerage commissions, on the sale or other
disposition of the securities received from the Fund. In-kind payments
need not constitute a cross-section of the Fund's portfolio. Where a
shareholder has requested redemption of all or a part of the shareholder's
investment, and where the Fund completes such redemption in-kind, the Fund
will not recognize gain or loss for federal tax purposes, on the securities
used to complete the redemption but the shareholder will recognize gain or
loss equal to the difference between the fair market value of the
securities received and the shareholder's basis in the Fund shares redeemed.
<PAGE>
Shares may be redeemed in one of the following ways:
REDEMPTION BY MAIL. A written redemption request must (i) identify the
Fund and the shareholder's account number, (ii) state the number of shares
to be redeemed, and (iii) be signed by each registered owner exactly as the
shares are registered. [A redemption request for an amount in excess of
$5,000, or for any amount if for payment other than to the shareholder of
record, or if the proceeds are to be sent elsewhere than the address of
record, must be accompanied by a guarantee of their signature by an
"eligible guarantor institution" as defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934. Eligible guarantor institutions include
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations. Broker-dealers guaranteeing signatures must be a member of a
clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees. Signature
guarantees will be accepted from any eligible guarantor institution which
participates in a signature guarantee program. A signature and a signature
guarantee are required for each person in whose name the account is
registered.]
Written redemption instructions should be submitted to Kalmar Pooled
Investment Trust, c/o Rodney Square Management Corporation, P.O. Box 8987,
Wilmington, DE 19899-9752. A redemption order sent by overnight mail
should be sent to Kalmar Pooled Investment Trust, c/o Rodney Square
Management Corporation, P.O. Box 8987, 1105 N. Market Street, 3rd Floor,
Wilmington, DE 19890.
REDEMPTION BY TELEPHONE. Shareholders who prefer to redeem their shares by
telephone must elect to do so by completing the telephone redemption
section of the shareholder application which describes the telephone
redemption procedures in more detail and requires certain information that
will be used to identify the shareholder when a telephone redemption
request is made. To obtain this application, check the appropriate box of
the shareholder application or call Rodney Square at (800) ___-________.
Neither the Fund nor any of its service contractors will be liable for any
loss or expense in acting upon any telephone instructions that are
reasonably believed to be genuine. In attempting to confirm that telephone
instructions are genuine, the Fund will use such procedures as are
considered reasonable, including requesting a shareholder to correctly
state his or her Fund account number, the name in which his or her account
is registered, the number of shares to be redeemed and certain other
information necessary to identify the shareholder.
During times of drastic economic or market changes, the telephone
redemption privilege may be difficult to implement. In the event that
shareholders are unable to reach Rodney Square by telephone, you may make a
redemption request by mail. The Fund or Rodney Square reserves the right
to refuse a wire or telephone redemption if it is believed advisable to do
so. Procedures for redeeming Fund shares by wire or telephone may be
modified or terminated at any time by the Fund.
REDEMPTIONS BY WIRE. Redemption proceeds may be wired to a predesignated
bank account at any commercial bank in the United States if the amount is
$1,000 or more. The receiving bank may charge a fee for this service.
Amounts redeemed by wire are normally wired on the next business day after
receipt and acceptance of redemption instructions (if received before the
<PAGE>
close of regular trading on the Exchange), but in no event later than five
days following such receipt and acceptance.
INVOLUNTARY REDEMPTION. The Fund reserves the right to redeem an
investor's account where the account is inactive and is worth less than the
minimum initial investment when the account was established, currently
$10,000. [In calculating the minimum amount necessary to avoid involuntary
redemption, the Fund will include amounts held in both the Fund and the
Micro Cap Fund together.] The Fund will advise the shareholder of its
intention to redeem the account in writing at least sixty (60) days prior
to effecting such redemption, during which time the shareholder may
purchase additional shares in any amount necessary to bring the account
back to the appropriate minimum amount, and the Fund will not redeem any
account that is worth less than the appropriate minimum amount solely on
account of a market decline.
SYSTEMATIC WITHDRAWAL PLAN. [Available if desired]
ADDITIONAL REDEMPTION INFORMATION. Redemption proceeds may be mailed or
electronically transferred to your bank or, for amounts of $5,000 or less,
mailed to your Fund account address of record if the address has been
established for a minimum of 60 days. In order to authorize the Fund to
mail redemption proceeds to your Fund account address of record, complete
the appropriate section of the shareholder application or include your Fund
account address of record when you submit written instructions. You may
change the account which you have designated to receive amounts redeemed at
any time. Any request to change the account designated to receive
redemption proceeds should be accompanied by a guarantee of the
shareholder's signature by an eligible guarantor institution. Further
documentation will be required to change the designated account when shares
are held by a corporation, other organization, trust, fiduciary or other
institutional investor. For more information on redemption services,
contact Rodney Square.
PERFORMANCE INFORMATION
Advertisements, sales literature and communications to shareholders may
contain measures of the Fund's performance, including various expressions
of total return, current yield or current distribution rate. They may also
cite statistics relating to volatility and risk and compare such measures
to those of other funds. The Fund's total return may be calculated on an
annualized and aggregate basis for various periods as will be stated in the
advertisement. Average annual return reflects the average percentage
change per year in value of an investment in the Fund. Aggregate total
return reflects the total percentage change over the stated period.
The Fund may compare its investment performance to other mutual funds, or
groups of mutual funds, with similar or dissimilar investment objectives
and policies that are tracked or ranked by independent services such as
Lipper Analytical Services, Inc. or Morningstar, Inc. or other financial or
industry publications that monitor the performance of mutual funds,
investment managers and the like. The Fund may also compare its
performance to unmanaged stock indices such as the Russell 2000 Small
Capitalization Index or the S&P 500 or quote performance information or
information relating to fund management, investment philosophy or
investment techniques, that is published in financial and business
publications including Money Magazine, Forbes, Barron's or The Wall Street
Journal, etc. Further information about the sources for comparative
<PAGE>
performance and other information that may be utilized by the Fund, and
information about the Fund's calculation of performance figures, is
contained in the Fund's Statement of Additional Information.
All data will be based on the Fund's past investment results and does not
predict future performance. Investment performance, which will vary, is
based on many factors, including market conditions, the composition of the
investments in the Fund, and the Fund's operating expenses. Investment
performance also often reflects the risk associated with the Fund's
investment objective and policies. In addition, averages are generally
unmanaged, and items included in the calculations of such averages may not
be identical to the formula used by the Fund to calculate its performance.
These factors should be considered when comparing the Fund to other mutual
funds and other investment vehicles.
GENERAL INFORMATION
SHARES OF BENEFICIAL INTEREST AND VOTING RIGHTS. The Trust was organized
as a Delaware business trust on [____________, 1996.] The Trust's
Agreement and Declaration of Trust permits the trustees to issue an
unlimited number of shares of beneficial interest in various series or
classes (subseries) with a par value of $0.01 per share. Each series, in
effect, represents a separate mutual fund with its own investment objective
and policies. The Board of Trustees has the power to designate additional
series or classes of shares of beneficial interest and to classify or
reclassify any unissued shares with respect to such series or classes.
The Trust's Agreement and Declaration of Trust gives shareholders the right
to vote: (i) for the election or removal of trustees; (ii) with respect to
additional matters relating to the Trust as required by the Investment
Company Act; and (iii) on such other matters as the trustees consider
necessary or desirable. The shares of the Fund each have one vote and,
when issued, will be fully paid and non-assessable and within each series
or class, have no preference as to conversion, exchange, dividends,
retirement or other features. The shares of the Trust which the trustees
may, from time to time, establish, shall have no preemptive rights. The
shares of the Trust 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 100% of the trustees if they choose to do so. A shareholder is
entitled to one vote for each full share held (and a fractional vote for
each fractional share held), then standing in their name on the books of
the Trust. On any matter submitted to a vote of shareholders, all shares
of the Trust then issued and outstanding and entitled to vote on a matter
shall vote without differentiation between separate series on a one-vote-
per share basis. If a matter to be voted on does not affect the interests
of all series of the Trust, then only the shareholders of the affected
series shall be entitled to vote on the matter.
SHAREHOLDER MEETINGS. Pursuant to the Trust's Agreement and Declaration of
Trust, the Trust does not intend to hold shareholder meetings except when
required to elect trustees, or with respect to additional matters relating
to the Trust as required under the Investment Company Act.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
The Fund intends to declare and pay annual dividends to its shareholders of
substantially all of its net investment income, if any, earned during the
year from its investments. The Fund will distribute net realized capital
<PAGE>
gains, if any, once with respect to each year. Expenses of the Fund,
including the advisory fee, are accrued each day. Reinvestments of
dividends and distributions in additional shares of the Fund will be made
at the net asset value determined on the ex date of the dividend or
distribution unless the shareholder has elected in writing to receive
dividends or distributions in cash. An election may be changed by
notifying Rodney Square in writing thirty days prior to record date.
Shareholders may call Rodney Square for more information. All shares of
the Fund will share proportionately in the investment income and expenses
of the Fund.
The Fund intends to qualify annually to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code"). As such, the Fund will not be subject to federal
income tax, or to any excise tax, to the extent its earnings are
distributed as provided in the Code and by satisfying certain other
requirements relating to the sources of its income and diversification of
its assets.
Dividends from net investment income or net short-term capital gains will
be taxable to shareholders as ordinary income, whether received in cash or
in additional shares. For corporate investors in the Fund, dividends from
net investment income will generally qualify in part for the 70% corporate
dividends-received deduction. However, the portion of the dividends so
qualified depends on the aggregate qualifying dividend income received by
the Fund from domestic (U.S.) sources.
Distributions paid by the Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to investors as long-
term capital gains, regardless of the length of time an investor has owned
shares in the Fund. The Fund does not seek to realize any particular
amount of capital gains during a year; rather, realized gains are a
byproduct of management activities. Consequently, capital gains
distributions may be expected to vary considerably from year to year.
Also, if purchases of shares in a Fund are made shortly before the record
date for a capital gains distribution or a dividend, a portion of the
investment will be returned as a taxable distribution.
Dividends which are declared in October, November or December to
shareholders of record in such a month but which, for operational reasons,
may not be paid to the shareholder until the following January, will be
treated for tax purposes as if paid by the Fund and received by the
shareholder on December 31 of the calendar year in which they are declared.
A sale or redemption of shares of the Fund is a taxable event and may
result in a capital gain or loss to shareholders subject to tax. Any loss
incurred on sale or exchange of a Fund's shares held for six months or less
will be treated as a long-term capital loss to the extent of any capital
gain dividends received with respect to such shares.
In addition to federal taxes, shareholders may be subject to state and
local taxes on distributions. It is recommended that shareholders consult
their tax advisers regarding specific questions as to federal, state, local
or foreign taxes. Each year, the Fund will mail you information on the tax
status of the Fund's dividends and distributions made to you.
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied
with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your account registration form
<PAGE>
your proper taxpayer identification number and by certifying that you are
not subject to backup withholding.
The tax discussion set forth above is included for general information
only. Prospective investors should consult their own tax advisers
concerning the federal, state, local or foreign tax consequences of an
investment in the Fund. Additional information on tax matters relating to
the Fund and to its shareholders is included in the Statement of Additional
Information.
SHAREHOLDER ACCOUNTS
Rodney Square, as Transfer Agent, maintains for each shareholder an account
expressed in terms of full and fractional shares of the Fund rounded to the
nearest 1/1000th of a share. In the interest of economy and convenience,
the Fund does not issue share certificates. Each shareholder is sent a
statement at least quarterly showing all purchases in or redemption from
the shareholder's account. The statement also sets forth the balance of
shares held in the shareholder's account.
<PAGE>
INVESTMENT ADVISER
Kalmar Investment Advisers
1300 Market Street
Suite 500
Wilmington, DE 19801
UNDERWRITER
Rodney Square Distributors, Inc.
1105 N. Market Street
Wilmington, DE 19890
SHAREHOLDER SERVICES
Rodney Square Management Corporation
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
CUSTODIAN
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Coopers & Lybrand, L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
<PAGE>
KALMAR "GROWTH-WITH-VALUE" MICRO CAP FUND
A SERIES OF
KALMAR POOLED INVESTMENT TRUST
1300 MARKET STREET, SUITE 500
WILMINGTON, DE
(302) 658-7575
PROSPECTUS DATED __________________, 1996
This prospectus offers shares of the Kalmar "Growth-with-Value" Micro Cap
Fund (the "Fund"), which is a series of Kalmar Pooled Investment Trust (the
"Trust"), an open-end diversified management investment company commonly
known as a mutual fund. The Trust currently offers shares of both the Fund
and the Kalmar "Growth-with-Value" Small Cap Fund, each of which has a
diversified portfolio of assets and a specific investment objective and
policies. Shares of the Kalmar "Growth-with-Value" Small Cap Fund are
offered by a separate prospectus.
The Fund's investment objective is long-term capital appreciation. The
Fund was created to offer investors the opportunity to invest in micro
capitalization stocks according to the longer-term "Growth-with-Value"
investment philosophy, and with the micro cap and small cap investing
expertise of the investment professionals of the Fund's investment adviser,
Kalmar Investment Advisers (the "Adviser"). Using this investment
philosophy, the Fund seeks to achieve its objective by investing primarily
in a diversified portfolio of common stocks of small or emerging growth
companies (so-called "micro cap" companies) with market capitalizations
or total revenues under $250 million at the time of investment which, in
the Advisers' opinion, have the potential for significant business growth
and capital appreciation, and yet whose stocks are, at the time of
purchase, trading at at least reasonable to, preferably, undervalued
prices in the public trading markets. The Fund believes that its
philosophy of purchasing promising, growing companies that may also be
undervalued can result in lower risk and higher return when compared to
many other micro cap investment strategies. See "Investment Objectives
and Policies."
Shares of the Fund may be purchased on a no-load basis without sales or
distribution charges through the Fund's distributor or through investment
management and financial consultants or brokers, and may be purchased or
redeemed at any time. Requests to purchase or redeem shares will be
processed at the net asset value per share next determined following
receipt and acceptance of the investor's purchase order or redemption
request. See "How to Purchase Shares," "How to Redeem Shares" and
"Calculation of Net Asset Value."
- ---------------------------------------------------------------------------
This Prospectus sets forth information about the Fund that a prospective
investor should know before investing, and should be read and retained for
future reference. More information about both the Fund and the Kalmar
"Growth-with-Value" Small Cap Fund has been filed with the U.S. Securities
and Exchange Commission and is contained in a "Statement of Additional
Information" dated _________, 1996, as amended from time to time, which is
available upon request and without charge by writing or calling the Fund or
its distributor at the addresses and numbers set forth on the back cover of
this prospectus. The Statement of Additional Information is incorporated
by reference into this Prospectus.
<PAGE>
- ---------------------------------------------------------------------------
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>
Prospectus
Kalmar Pooled Investment Trust
Contents Page
- -------- ----
Prospectus Summary.........................................
Fund Expenses..............................................
Investment Objective and Policies..........................
Investment Philosophy.................................
Investment Policies...................................
Other Investment Practices............................
Risks and Special Considerations...........................
Management of the Fund.....................................
Board of Trustees.....................................
Investment Adviser....................................
Distributor...........................................
Administrator, Transfer Agent and Custodian...........
Expenses...................................................
Calculation of Net Asset Value.............................
How to Purchase Shares.....................................
Retirement Plans...........................................
How to Redeem Shares.......................................
Performance Information....................................
General Information........................................
Dividends, Capital Gains Distributions and Taxes...........
Shareholder Accounts.......................................
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT OBJECTIVE AND POLICIES. The objective of the Kalmar "Growth-
with-Value" Micro Cap Fund is long-term capital appreciation. The Fund was
created to offer investors the opportunity to invest in micro
capitalization stocks according to the longer term "Growth-with-Value"
investment philosophy and with the micro cap and small cap investing
expertise of the investment professionals of the Fund's investment adviser,
Kalmar Investment Advisers (the "Adviser"). Using this investment
philosophy, the Fund seeks to achieve its objective by investing primarily
in a diversified portfolio of stocks of small, emerging growth companies
with market capitalizations or total revenues under $250 million at the
time of investment which, in the Adviser's opinion, have the potential
for significant business growth and capital appreciation, and yet whose
stocks are, at the time of purchase, trading at at least reasonable to,
preferably, undervalued prices in the public trading markets. The Fund
believes that its philosophy of purchasing promising, growing companies
that may be also undervalued can result in both lower risk and higher
return when compared to many other small company investment strategies.
The Fund utilizes the Adviser's "Growth-with-Value" investment philosophy
which purposefully seeks to integrate the best elements of creative growth
company investing, with discriminating value-seeking investment discipline,
and a longer-term intent. With its intent of owning the "good growth
businesses" underlying its stocks, the Adviser seeks to make fewer, better
investment decisions for longer holding periods and larger gains, based on
in-depth, in-house, hands-on research and company business analysis. The
resulting low relative levels of trading and portfolio turnover versus
typical "aggressive growth" or "emerging growth" investment styles can
produce meaningful transaction cost savings to benefit all fund share-
holders as well as greater tax efficiency for taxable shareholders by
producing a preponderance of longer term as opposed to short term, capital
gains. Importantly, the Adviser's "Growth-with-Value" philosophy and in-
depth research seek both lower risks and higher reward relative to micro
cap equity markets generally through its integrated strategy of investing
in promising, small or emerging growth companies that have not yet been
fully recognized and exploited by other institutional investors and, hence,
whose stocks may be purchased at undervalued levels. See "Investment
Objective and Policies."
INVESTMENT ADVISER. Kalmar Investment Advisers (previously defined as the
"Adviser") serves as the investment adviser for the Fund. Over the past
fourteen years, the Adviser's portfolio management team has managed micro
cap and small cap assets in separate accounts now totaling in excess of
$600 million for a variety of clients such as high net worth individuals
and family trusts, corporations, pensions and profit-sharing plans and
other institutions such as endowments, foundations, hospitals and other
charitable institutions, all according to the same longer-term oriented
"Growth-with-Value" philosophy utilized by the Fund. Existing clients of
the Adviser will have the opportunity to transfer their assets to the Fund
in exchange for shares, and thereby avail themselves of a pooled investment
vehicle. Kalmar intends to invest assets of its own profit-sharing plan
in shares of the Fund, as do members of its investment team and other
employees. The Adviser selects investments and supervises the assets of the
Fund in accordance with the investment objective, policies and restrictions
of the Fund, subject to the supervision and direction of the officers and
<PAGE>
Board of Trustees of the Trust. For its services, the Adviser is paid a
monthly fee at the annual rate of 1.00% of the Fund's average daily net
assets. This fee is comparable to the fees charged by most micro cap
equity mutual fund managers, however it is higher than that charged by many
other mutual funds. See "Investment Adviser."
ADVISER'S INVESTMENT PERFORMANCE. Information about the performance record
of the Adviser's portfolio management team for its separately managed
accounts over the past fourteen years is provided in the section of the
Prospectus called "Adviser's Investment Performance."
HOW TO INVEST. Shares of the Fund may be purchased on a no-load basis,
without sales or distribution charges, and are sold through investor
relationships with investment management and financial consultants, brokers
or dealers, or directly by the Fund's distributor. The public offering
price of shares of the Fund is the net asset value per share of the Fund
next determined after receipt and acceptance of an order and payment
satisfactory to the Fund. The minimum initial investment is $10,000 and
there is no minimum for subsequent investments. There is no minimum
investment amount for investments by qualified retirement accounts. An
application and information is available by calling [(800) ___-_________.]
See "How To Purchase Shares."
HOW TO REDEEM SHARES. Shares may be redeemed by the Fund, or repurchased
by the Distributor, at the net asset value per share next determined after
receipt and acceptance of a redemption request in proper form by the Fund,
without the imposition of sales charges or redemption fees. See "How to
Redeem Shares."
DIVIDEND REINVESTMENT. The Fund intends to pay dividends from its net
investment income and any net capital gains, if any, on an annual basis.
Any dividends and distribution payments will be reinvested at net asset
value in additional full and fractional shares of the Fund, unless the
shareholder specifically elects to receive such distributions in cash. See
"Dividends, Distributions and Taxes."
RISKS AND SPECIAL CONSIDERATIONS. Prospective investors should consider
the following factors: (1) investments in very small, development stage or
emerging growth company stocks, so-called "micro cap" stocks, involve
greater risks than investments in securities of larger, more established
companies, are more volatile, and may suffer significant losses as well as
realize substantial gains; (2) the Fund may lend its securities which
entails a risk of loss should a borrower fail financially; (3) to the
extent that the Fund invests in foreign securities, such investment may
involve political, economic or currency risks not ordinarily associated
with domestic securities; and (4) although the Adviser's portfolio
management team has extensive investment management experience with private
separately managed accounts, it has not previously served as the adviser to
a mutual fund. See "Risks and Special Considerations."
ORGANIZATION AND MANAGEMENT OF THE FUND. The Fund is a series of Kalmar
Pooled Investment Trust (the "Trust"), which is an open-end diversified
management investment company commonly known as a mutual fund. The Trust
also offers shares of the Kalmar "Growth-with-Value" Small Cap Fund through
a separate prospectus. The Fund's assets are held by its custodian,
Wilmington Trust Company, and the Fund's administrative, transfer agency
and fund accounting services are provided by Rodney Square Management
Corporation. The distributor of the Fund's shares is Rodney Square
Distributors, Inc. See "Management of the Fund" and "General Information."
<PAGE>
FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Contingent Deferred Sales Charge None
Redemption Fees None
ESTIMATED ANNUAL OPERATING EXPENSES: These expenses, which cover the cost
of investment management, administration, distribution, marketing and
shareholder communications, are quoted as a percentage of average daily net
assets of the Fund. The expenses are factored into the Fund's share price
and are not billed directly to shareholders.
Advisory Fee (after voluntary waiver) 0.50%
12b-1 Fees None
Other Expenses 0.75%
Total Operating Costs 1.25%1
1 FOR THE CURRENT FISCAL YEAR, THE ADVISER HAS VOLUNTARILY AGREED TO
WAIVE ITS FEE OR ASSUME CERTAIN EXPENSES OF THE FUND SO THAT THE
TOTAL ANNUAL OPERATING COSTS OF THE FUND WILL NOT EXCEED 1.25% OF THE
AVERAGE DAILY NET ASSETS OF THE FUND. ABSENT THE ADVISER'S ACTIONS TO
LIMIT THE OPERATING COSTS, THE FUND WOULD PAY AN ANNUAL ADVISORY FEE
OF 1.00% AND IT IS ESTIMATED THAT THE TOTAL OPERATING COSTS OF THE
FUND DURING ITS FIRST FISCAL YEAR WOULD BE 1.75% ON AN ANNUALIZED
BASIS.
EXAMPLE: The following example illustrates the expenses that an investor
would pay on a $1,000 investment in the Fund over various time periods
assuming a 5% annual rate of return and redemption at the end of each time
period.
One Year Three Years
-------- -----------
$13 $40
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES IN FUTURE YEARS MAY BE GREATER OR
LESSER THAN THOSE SHOWN. THE PURPOSE OF THE ABOVE EXPENSE TABLES AND
EXAMPLE IS TO ASSIST THE INVESTOR IN UNDERSTANDING THE VARIOUS EXPENSES
THAT AN INVESTOR IN EITHER CLASS OF SHARES OF THE FUND WILL BEAR DIRECTLY
OR INDIRECTLY. THE FUND IS NEW AND THEREFORE THE AMOUNTS OF THE "ADVISORY
FEE (AFTER VOLUNTARY WAIVER)" AND "OTHER EXPENSES" IN THE EXPENSE TABLE AND
THE NUMBERS IN THE EXAMPLE ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT
FISCAL YEAR.
<PAGE>
ADVISER'S INVESTMENT PERFORMANCE
Set forth below is certain information relating to separate accounts managed
by the Fund's portfolio management team. These accounts are managed accord-
ing to the same investment objective and "Growth-with-Value" investment
philosophy, and are subject to substantially similar investment policies
and techniques as those used by the Fund. See "Investment Objectives and
Policies." The performance record shown below relates to the activities of
the portfolio management team with respect to its activities at Kalmar
Investments Inc. ("Kalmar"), which provides advisory services to separately
managed accounts, and is the sister company of the Adviser. See
"Investment Adviser." The results presented are not intended to predict or
suggest the return to be experienced by the Fund or the return that an
individual investor might achieve by investing in the Fund. The Fund's
results may be different from the composite of separate accounts shown
due to the fact that the average market capitalization of the companies
included in the separate account portfolios was approximately $250 million
while the Fund will generally only purchase shares of companies with market
capitalizations below $250 million. The Fund's results may also be
different because of, among other things, differences in fees and expenses,
and because private accounts are not subject to certain investment
limitations, diversification requirements, and other restrictions imposed by
the Investment Company Act of 1940, as amended (the "Investment Company
Act") and the Internal Revenue Code, as amended, which, if applicable, may
have adversely affected the performance of such accounts.
YEAR KALMAR RUSSELL 2000 NASDAQ COMPOSITE S & P 500
ENDING TOTAL RETURN* TOTAL RETURN TOTAL RETURN TOTAL RETURN
------ ------------- ------------ ------------ ------------
12/31/84 1.46 (7.30) (11.22) 6.26
12/31/85 33.98 31.05 31.36 31.76
12/31/86 28.14 5.68 7.36 18.70
12/31/87 (1.90) (8.77) (5.26) 5.22
12/31/88 23.58 24.89 15.41 16.57
12/31/89 38.42 16.24 19.26 31.65
12/31/90 (7.58) (19.51) (17.80) (3.14)
12/31/91 65.52 46.05 56.84 30.45
12/31/92 8.87 18.41 15.45 7.62
12/31/93 27.11 19.91 14.75 10.06
12/31/94 3.08 (1.82) (3.20) 1.30
12/31/95 25.38 26.21 39.92 37.54
CUMULATIVE
TOTAL RETURN KALMAR* RUSSELL NASDAQ S & P 500
- ------------ ------- ------- ------ ---------
12 Years* 699.73% 252.21% 277.39% 459.58%
1984-1995
AVERAGE ANNUAL
TOTAL RETURN
------------
12 Years* 18.92% 11.06% 11.70% 15.43%
1984-1995
<PAGE>
*The results shown above represent a composite of discretionary, fee paying,
separate accounts under management for at least six months, reflect the
reinvestment of any dividends or capital gains, and are shown after
deduction of advisory, brokerage or other expenses (excluding fees such as
custody fees which are paid separately by the investor). Certain
individual accounts that are subject to investment restrictions, tax,
income or other special considerations that constrain the investment
process are excluded from the composite figures shown above
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The Fund's investment objective is long-term capital appreciation. The
investment objective of the Fund is a fundamental policy, which means that
it may not be changed without the approval of the holders of a majority of
the Fund's outstanding voting securities. The Fund seeks to achieve its
objective by investing primarily in a diversified portfolio of common
stocks of small, emerging growth companies with market capitalizations or
total revenues under $250 million at the time of investment which, in the
Adviser's opinion, have the potential for significant business growth
and capital appreciation, and yet whose stocks are, at the time of
purchase, trading at at least reasonable to, preferably, undervalued prices
in the public trading markets. There can be no assurance that the Fund
will achieve its objective.
INVESTMENT PHILOSOPHY.
The Fund utilizes the Adviser's "Growth-with-Value" investment philosophy,
which integrates what the Adviser believes to be the best elements of
creative growth company investing, with discriminating value-seeking
investment discipline, all with a view toward longer-term ownership of the
"good growth businesses" underlying its portfolio holdings. The investment
philosophy is a primarily bottom-up, fundamentals-driven approach, with the
goal of fewer, better investment decisions, for longer holding periods and
larger gains. The Adviser views its "Growth-with-Value" philosophy as a
relatively conservative approach to micro cap investing, yet one which the
Adviser believes can result in both lower risk and higher rewards over the
longer term when compared to the micro cap equity markets generally, or to
the high-turnover "aggressive growth" or "emerging growth" investment
styles of most other micro cap investment managers. By investing with a
longer-term focus, and thereby limiting trading and portfolio turnover,
the Fund seeks to limit transaction costs and to increase tax efficiency
for its shareholders.
In identifying, analyzing, selecting, and monitoring investments, the
Fund's portfolio management team utilizes an independent, hands-on,
fundamental, in-house-research-driven approach. To identify solid, well
managed, rapidly growing micro cap companies, and qualify such companies
for investment, the Fund's portfolio managers perform fundamental research
and business analysis of a given company's publicly available financial
information, engage in extensive and on-going management contact, facility
visits, and appropriate in-depth cross checks with customers, suppliers,
competitors, etc., as well as with industry trade groups, consultants and
such other "experts" as they deem appropriate. The portfolio management
team, of course, also attempts to utilize the best information provided by
Wall Street analysts, strategists, etc., to complement its in-house
research and investment management decision making.
As a central ingredient in its investment philosophy and investment
selection process, the Fund seeks to invest in promising companies which
meet its objectives for above average future business value growth, but
which have not yet been fully recognized and exploited by other
institutional micro cap investors. Such companies may be followed by
relatively few, or sometimes no securities analysts, and their securities,
therefore, may be inefficiently valued and available for purchase at
undervalued prices. By investing in such companies over the longer-term,
the Fund's investors can benefit both from their vigorous potential
earnings and business value growth and also from the potential re-valuation
<PAGE>
upward of their securities as their business success attracts larger
numbers of additional investors and greater "Wall Street" sponsorship over
time.
Except as described herein, the following investment policies are not
fundamental policies of the Fund, which means that the Trustees may change
such policies without the affirmative vote of a "majority of the
outstanding voting securities" of the Fund, as defined in the Investment
Company Act.
INVESTMENT POLICIES.
The Fund seeks to achieve its objective by investing, under normal market
conditions, at least 65% of its assets in micro cap companies in terms of
market capitalization and/or total revenues, whose stock market
capitalization (total market value of outstanding shares) or total revenues
are under $250 million at the time of investment. Such companies often pay
no dividends and, therefore, current income is not a factor in the
selection of stocks. Capital appreciation is likely to be the predominant
component of the Fund's return. In the event that the Adviser, through
fundamental research and investment analysis, identifies a company whose
stock appears to be substantially overvalued in the trading markets, the
Fund may engage in short sales of the company's stock. This process allows
the Fund to realize profits if the value of a company's stock is reduced to
a level that was anticipated by the Adviser.
In addition, the Fund may invest in other types of securities such as
securities convertible into common stocks, as well as certain debt
securities, consistent with its long-term capital appreciation objective.
The Fund may invest up to 15% of its assets in foreign securities,
including sponsored or unsponsored American Depository Receipts ("ADRs").
The Fund may also buy and sell options on individual securities or indices,
for purposes of achieving additional return or for hedging purposes,
although at no time will more than 5% of the Fund's assets be allocated to
premiums or margin required to establish options positions for non-hedging
purposes, and no more than 10% of the Fund's assets will be subject to
obligations underlying such options. Additional information about the
Fund's investments, policies and restrictions is provided below and in the
Fund's Statement of Additional Information.
EQUITY SECURITIES. The Fund will predominantly purchase common stocks,
which represent an ownership interest in the issuer, entitle the holder to
participate in any income and/or capital gains of the issuer and generally
have voting rights. The Fund may also purchase securities with an equity
component such as convertible preferred stock, debt securities convertible
into or exchangeable for common stock and securities such as warrants or
rights that are convertible into common stock. A convertible security is a
security that may be converted either at a stated price or rate within a
specified period of time into a specified number of shares of common or
preferred stock. By investing in convertible securities, the Fund seeks to
participate in the capital appreciation of the common stock into which the
securities are convertible through the conversion feature. A warrant is a
security that gives the holder the right, but not the obligation, to
subscribe for newly created securities of the issuer or a related company
at a fixed price either at a certain date or during a set period.
The Fund's assets will be invested primarily in equity securities of small,
so-called "micro cap" companies, however, it may, consistent with its
<PAGE>
objective, invest a portion of its total assets in equity securities of
larger capitalization companies if the Adviser believes that suitable micro
cap company opportunities are not available or if such larger stocks have
strong growth potential and meet the Adviser's "Growth-with-Value" criteria
and investment discipline.
Although the Adviser anticipates that the majority of the Fund's assets
will ordinarily be invested in U.S. based companies, the Fund may invest in
foreign securities, provided such investments are consistent with the
Fund's objective and policies and meet the "Growth-with-Value" philosophy.
The Fund generally limits its foreign investing to securities of Canadian
companies traded on Canadian or U.S. exchanges or markets, or shares of
foreign companies traded as sponsored or unsponsored American Depository
Receipts ("ADRs"), which are receipts typically issued by a U.S. bank or
trust company evidencing ownership of underlying securities issued by a
foreign company. "Sponsored" ADRs are issued jointly by the issuer of the
underlying security and a depository, whereas "unsponsored" ADRs are issued
without participation of the issuer of the deposited security.
CASH OR CASH EQUIVALENTS. The Fund may invest its assets in cash or cash
equivalents, during periods when excess cash is generated through purchases
and sales of its shares, or when the Fund desires to hold cash to maintain
liquidity for redemptions or pending investment in suitable securities.
There may also be times when economic or market conditions are such that
the Adviser deems a temporary defensive position to be appropriate, during
which greater than 35% of its net assets may be invested in the types of
short-term, cash equivalent investments described below.
The Fund may invest in short-term debt securities, including time deposits,
certificates of deposit or banker's acceptances issued by commercial banks
or savings and loan associations meeting certain qualifications. The Fund
may also purchase commercial paper rated A-1 by S&P or Prime-1 by Moody's,
or, if not rated, issued by a corporation having an outstanding unsecured
debt issue rated A or better by S&P or by Moody's; and may invest in short
term corporate obligations rated A or better by S&P or Moody's.
The fund may also purchase U.S. Government obligations including bills,
notes, bonds and other debt securities issued by the U.S. Treasury; and may
invest in U.S. Government agency securities issued or guaranteed by U.S.
Government sponsored instrumentalities and federal agencies. The Fund may
also invest in repurchase agreements collateralized by the cash equivalent
securities listed above.
DEBT SECURITIES. In addition to the short-term, high quality, cash-
equivalent debt securities listed above, the Fund is authorized to invest
up to 5% of its assets in lower-rated or "compromised" corporate debt
securities such as bonds, debentures and notes. The Fund may invest in
such debt securities, sometimes referred to as "junk bonds," when the
Adviser, through fundamental research and investment analysis, believes
that the securities possess intrinsic value in excess of the current market
price, or have the potential for capital appreciation as a result of
improvement in the creditworthiness of the issuer. The Fund may also buy
such securities when the Adviser believes that the Issuer is likely to
negotiate to replace such securities with equity securities. Lower-rated
securities (including those rated D, which are in default) are considered
to be predominately speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the
obligation and generally involve more credit risk than securities in the
<PAGE>
high rating categories. See "Debt Securities-Risks" in the Statement of
Additional Information for further information concerning the risks of
lower-rated securities.
OPTIONS. The Fund may purchase or sell options on individual securities as
well as on indices of securities as a means of achieving additional return
or of hedging the value of the Fund's portfolio. A call option is a
contract that gives the holder of the option the right, in return for a
premium paid, to buy from the seller the security underlying the option at
a specified exercise price at any time during the term of the option or, in
some cases, only at the end of the term of the option. The seller of the
call option has the obligation upon exercise of the option to deliver the
underlying security upon payment of the exercise price. A put option is a
contract that gives the holder of the option the right, in return for a
premium paid, to sell to the seller the underlying security at a specified
price. The seller of the put option, on the other hand, has the obligation
to buy the underlying security upon exercise at the exercise price.
If the Fund has sold an option, it may terminate its obligation by
effecting a closing purchase transaction. This is accomplished by
purchasing an option of the same series as the option previously sold.
There can be no assurance that a closing purchase transaction can be
effected when the Fund so desires.
The purchaser of an option risks a total loss of the premium paid for the
option if the price of the underlying security does not increase
or decrease sufficiently to justify exercise. The seller of an option,
on the other hand, will recognize the premium as income if the option
expires unrecognized but forgoes any capital appreciation in excess of
the exercise price in the case of a call option and may be required to
pay a price in excess of current market value in the case of a put option.
Options purchased and sold other than on an exchange in private
transactions also impose on the Fund the credit risk that the counterparty
will fail to honor its obligations. The Fund will not purchase options if,
as a result, its aggregate obligations relating to outstanding options
exceeds 10% of the Fund's assets.
REPURCHASE AGREEMENTS. For purposes of cash management only, the Fund may
enter into repurchase agreements with qualified brokers, dealers, banks and
other financial institutions deemed creditworthy by the Adviser under
standards adopted by the Board of Trustees. Under repurchase agreements,
the Fund may purchase any of the cash equivalent securities described above
and simultaneously commit to resell that security at a future date to the
seller at an agreed upon price plus interest. The Seller will be required
to collateralize the agreement by transferring securities to the Fund with
an initial market value, including accrued interest, of at least 102% of
the dollar amount invested by the Fund in each agreement, and the seller
will be required to transfer additional securities to the Fund on a daily
basis to ensure that the collateral is in compliance with the 102%
described above. No more than 10% of the Fund's net assets will be
invested in illiquid securities, including repurchase agreements which have
a maturity of longer than seven days. For purposes of the diversification
test for qualification as a regulated investment company under the Internal
Revenue Code, repurchase agreements are not counted as cash, cash items or
receivables, but rather as securities issued by the counter-party to the
repurchase agreements. If the seller of the underlying security under the
repurchase agreement should default on its obligation to repurchase the
underlying security, the Fund may experience delay or difficulty in
<PAGE>
recovering its cash. To the extent that in the meantime, the value of the
security purchased had decreased, the Fund could experience a loss. While
management of the Fund acknowledges these risks, it is expected that they
can be controlled through stringent security selection and careful
monitoring procedures.
INVESTMENTS IN MUTUAL FUNDS. The Fund may invest up to 10% of its total
assets in other investment companies, although not more than 5% of the
Fund's total assets may be invested in any one investment company and the
Fund's investment in another investment company may not represent more than
3% of the securities of any one investment company. The Fund may also
acquire securities of other investment companies pursuant to a merger,
consolidation or reorganization.
OTHER INVESTMENT PRACTICES.
SHORT SALES. If the Fund anticipates that the price of a security will
decline, it may sell the security short and borrow the same security from a
broker or other institution to complete the sale. The Fund may realize a
profit or loss depending upon whether the market price of the security
decreases or increases between the date of the short sale and the date on
which the Fund must replace the borrowed security. Short selling is a
technique that may be considered speculative and involves risk beyond the
initial capital necessary to secure each transaction. The Fund is required
by SEC rules to collateralize its short positions by placing assets in a
segregated account, and the Fund will not sell securities short if,
immediately after and as a result of the sale, the value of all securities
sold short by the Fund exceeds 10% of its total assets. The value of any
one issuer in which the Fund is short may not exceed the lesser of 2% of
the Fund's net assets or 2% of the securities of any class of the issuers'
securities. The Fund's policy regarding short sales is fundamental.
BORROWING. As a matter of fundamental policy, the Fund may borrow up to
one third of its total assets, taken at market value as a temporary measure
for extraordinary or emergency purposes to meet redemptions or to settle
securities transactions. Any borrowing will be done from a bank with the
required asset coverage of at least 300%. In the event that such asset
coverage shall at any time fall below 300%, the Fund shall, within three
days thereafter (not including Sunday or holidays) or such longer period as
the SEC may prescribe by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset coverage of such borrowings
shall be at least 300%. The Fund will not pledge more than 10% of its net
assets, or issue senior securities as defined in the Investment Company
Act, except for notes to banks.
LENDING OF PORTFOLIO SECURITIES. The Fund may from time to time lend
securities from its portfolio, with a value not exceeding one-third of its
total assets, to banks, brokers and other financial institutions and
receive collateral in cash, a letter of credit issued by a bank or
securities issued or guaranteed by the U.S. Government which will be
maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. The lending of securities is a
common practice in the securities industry. The Fund engages in security
loan arrangements with the primary objective of increasing the Fund's
income either through investing the cash collateral in short-term interest
bearing obligations or by receiving a loan premium from the borrower.
Under the securities loan agreement, the Fund continues to be entitled to
all dividends or interest on any loaned securities. As with any extension
of credit, there are risks of delay in recovery and loss of rights in the
<PAGE>
collateral should the borrower of the security fail financially. The
Fund's policy regarding lending of portfolio securities is fundamental.
During the period of such a loan, the Fund receives the income on both the
loaned securities and the collateral and thereby increases its yield. In
the event that the borrower defaults on its obligation to return borrowed
securities because of insolvency or otherwise, the Fund could experience
delays and costs in gaining access to the collateral and could suffer a
loss to the extent the value of the collateral falls below the market value
of the borrowed securities.
RESTRICTED, ILLIQUID AND RULE 144A SECURITIES. The Fund may invest up to
10% of its assets in securities which may be considered illiquid, due to
restrictions on resale, longer maturities, or other factors limiting the
marketability of the security. While maintaining oversight, the Board of
Trustees has delegated to the Adviser the day-to-day functions of
determining whether or not individual securities purchased under Rule 144A
of the Securities Act of 1933, as amended, are liquid for purposes of the
Fund's 10% limitation on investments in illiquid assets. Generally, an
illiquid security is any security that cannot be disposed of within seven
days in the ordinary course of business at approximately the amount at
which the Fund has valued the security. Examples of illiquid securities
are repurchase agreements maturing in greater than seven days and other
securities with contractual restrictions on resale. The Board of Trustees
of the Trust has instructed the Adviser to consider the following factors
in determining the liquidity of a security purchased under Rule 144A; (i)
the frequency of trades and trading volume for the security; (ii) whether
at least three dealers are willing to purchase or sell the security and the
number of potential purchasers; (iii) whether at least two dealers are
making a market in the security; and (iv) the nature of the security and
the nature of the marketplace trades (e.g., the time needed to dispose of
the security, the method of soliciting offers and the mechanics of
transfer). Although having delegated the day-to-day functions, the Board
of Trustees will continue to monitor and will periodically review the
Adviser's selection of Rule 144A securities as well as the Adviser's
determinations as to their liquidity.
If the Adviser determines that a security purchased in reliance on Rule
144A which was previously determined to be liquid, is no longer liquid and,
as a result, the Fund's holdings of illiquid securities exceed the Fund's
10% limit on investment in such securities, the Adviser will determine what
action shall be taken to ensure that the Fund continues to adhere to such
limitation including disposing of illiquid assets which may include such
Rule 144A securities.
RISKS AND SPECIAL CONSIDERATIONS
MICRO CAP COMPANIES. Investments in common stocks in general are subject
to market, economic and business risks that will cause their price to
fluctuate over time. Therefore, an investment in the Fund may be more
suitable for long-term investors who can bear the risk of these
fluctuations. Additionally, the Fund will invest in relatively small, new
or unseasoned companies which may be in their early stages of development,
or small companies positioned in new and emerging industries where the
opportunity for rapid growth is expected to be above average. Securities
of such companies may offer greater opportunity for capital appreciation
than larger companies, but investments in such companies present greater
<PAGE>
risks than securities of larger, more established companies. The companies
in which the Fund will generally invest may have relatively small revenues,
limited or very focused product lines, and may have a small share of the
market for their products or services or a very large share of an emerging
market. Small or development stage companies may lack depth of management,
they may be unable to internally generate funds necessary for growth or
potential development or to generate such funds through external financing
or favorable terms, or they may be developing or marketing new products or
services for which markets are not yet established and may never become
well established. Due to these and other factors, such companies may
suffer significant losses as well as realize substantial growth and
profitability, and investments in such companies will be volatile and are
therefore speculative. Historically, micro capitalization stocks have been
more volatile in price than larger capitalization stocks. Among the
reasons for the greater price volatility of these securities are the lower
degree of liquidity in the markets for such stocks, and the potentially
greater sensitivity of such small companies to changes in or failure of
management and in many other changes in competitive, business, industry and
economic conditions. Besides exhibiting greater volatility, micro and
small company stocks may, to a degree, fluctuate independently of larger
company stocks. Micro and small company stocks may decline in price as
large company stocks rise, or rise in price as large company stocks
decline. Investors should therefore expect that the value of the Fund's
shares will be more volatile than the shares of a fund that invests in
larger capitalization stocks. Additionally, while the markets in
securities of such companies have grown rapidly in recent years, such
securities may trade less frequently and in smaller volume than more widely
held securities. The values of these securities may fluctuate more sharply
than those of other securities, and a Fund may experience some difficulty
in establishing or closing out positions in theses securities at prevailing
market prices. There may be less publicly available information about the
issuers of these securities or less market interest in such securities than
in the case of larger companies, and it may take a longer period of time
for the prices of such securities to reflect the full value of their
issuers' underlying earnings potential or assets. The Fund should not be
considered suitable for investors who are unable or unwilling to assume the
risks of loss inherent in such a program, nor should investment in the Fund
be considered a balanced or complete investment program.
FOREIGN INVESTMENT. Investments in foreign securities may involve risks
not ordinarily associated with investments in domestic securities. These
risks may include legal, political or economic developments such as
fluctuations in currency rates, imposition of withholding taxes or exchange
controls or other governmental restrictions or political or policy changes.
In addition, with respect to certain countries, there is the possibility of
expropriation of assets, confiscatory taxation, or political or social
unrest that could adversely affect the value of foreign securities.
There may be less publicly available information about foreign companies
than about U.S. companies, and foreign companies may not be subject to
accounting, auditing and financial reporting standards that are as uniform
as those applicable to U.S. companies. The Fund will attempt to limit
risks associated with foreign investing by investing primarily in
securities of stable, developed countries such as Canada.
INVESTMENT ADVISER. The Adviser has not previously served as the
investment adviser for a mutual fund, and therefore, historical information
about the performance of a fund managed by the Adviser is not available.
<PAGE>
However, the Adviser's portfolio management team responsible for managing
the Fund has managed micro and small cap assets for private investors for
the past fourteen years.
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES
The Board of Trustees of the Trust consists of five individuals, three of
whom are not "interested persons" of the Trust as defined in the Investment
Company Act. The members of the Trust's Board of Trustees are fiduciaries
for the Fund's shareholders and, in this regard, are governed by the laws
of the State of Delaware. The Trustees establish policy for the operation
of the Fund, and appoint the officers who conduct the daily business of the
Fund. The Statement of Additional Information contains more information
regarding the Officers and Trustees of the Trust.
INVESTMENT ADVISER
Kalmar Investment Advisers, located at 1300 Market Street, Wilmington, DE
19801 (previously defined as the "Adviser") serves as the investment
adviser for the Fund pursuant to an investment advisory agreement dated
____________, 1996 (the "Advisory Agreement"). The Advisory Agreement
initially will be in effect for two years, and may be renewed each year
thereafter, provided its continuance is approved annually by the Board of
Trustees, including a majority of the Trustees who are not "interested
persons" of the Fund as defined in the Investment Company Act.
The Adviser manages the investments of the Fund in accordance with the
Fund's stated investment objective, philosophy and policies and subject to
its limitations or restrictions. Subject to the supervision of the Board
of Trustees, the Adviser makes the Fund's day-to-day investment decisions,
selects brokers and dealers to execute portfolio transactions and generally
manages the Fund's investments. In selecting brokers, the Adviser seeks to
obtain the best net results for the Fund, taking into account such factors
as price (including the applicable brokerage commission or dealer spread),
size of order, difficulty of execution and operational facilities of the
firm involved and the firm's risk in positioning a block of securities.
While the Adviser generally seeks favorable and competitive commission
rates, the Fund does not necessarily pay the lowest commission or spread
available. In addition, consistent with rules established by the National
Association of Securities Dealers, Inc., the Fund may consider sales of
shares of the Fund as a factor in the selection of brokers or dealers to
execute portfolio transactions for the Fund.
Because of its longer-term investment philosophy, the Fund does not intend
to engage in frequent trading tactics which could result in high turnover,
less favorable tax consequences (i.e., a high proportion of short-term
capital gains relative to long-term capital gains) or increased trading and
brokerage expenses paid by the Fund. The Fund anticipates that its annual
portfolio turnover rate should not exceed 50% under normal conditions,
although it is impossible to predict portfolio turnover rates. The Adviser
will buy or sell portfolio securities without regard to holding period if,
in its judgment, such transactions are advisable in light of opportunities
in particular stocks, or a change in circumstances for any particular
company or companies, or in general market, economic or financial
conditions.
<PAGE>
The Adviser, which is registered as an investment adviser under the
Investment Advisers Act of 1940, is presently wholly-owned by its founder,
Ford B. Draper, Jr. The Adviser utilizes a team approach in managing the
Fund's portfolio. Mr. Draper, as chief investment officer, leads and
supervises the portfolio management team. Other key members of the
Adviser's portfolio management include are Dana F. Walker, C.F.A., a
portfolio manager/research analyst who joined Kalmar in 1986 after serving
as an analyst for Delfi Management, Inc., adviser to the Sigma Funds, and
Gregory A. Hartley, C.F.A., a portfolio manager/research analyst who
joined Kalmar in 1993 after serving as senior analyst and investment
committee member for Ashford Capital Management, Inc., an investment
management and consulting firm. The Adviser is the "sister" company to
Kalmar Investments Inc. ("Kalmar"), a registered investment adviser
founded by Mr. Draper in 1982 which has been providing investment advice
to and managing the assets of private accounts since its inception
according to the same investment objective and "Growth-with-Value"
philosophy used by the Fund. The Adviser itself was recently organized as
a Delaware business trust on ______________, 1996 for the sole purpose of
functioning as the adviser to each of the eries of the Trust. The owner-
ship and management of the Adviser is identical to that of Kalmar, and
the same portfolio management team approach used in managing the assets of
the Fund is used to manage the assets of Kalmar's private accounts.
Kalmar presently manages approximately $600 million primarily in micro
and small capitalization stocks in separately managed accounts for clients
such as high net worth individuals and family trusts, corporations,
pensions and profit-sharing plans and institutions such as endowments,
foundations, hospitals and charitable institutions. Kalmar intends to
invest assets of its own profit-sharing plan in shares of the Fund.
For its services, the Adviser is paid a monthly fee at the annual rate of
1.00% of the Fund's average daily net assets. This fee is comparable to
the fee charged by most micro cap equity mutual fund managers, however, it
is higher than that paid by many other mutual funds for investment advisory
services. During the Fund's first fiscal year, the Adviser has voluntarily
agreed to limit its fees or assume certain expenses of the Fund to keep the
total annual operating costs of the Fund's classes within specified limits,
see "Fund Expenses," and will also limit such expenses to the extent
necessary to meet any applicable state expense limitation.
DISTRIBUTOR
Rodney Square Distributors, Inc. ("RSD"), a subsidiary of Wilmington Trust
Company located at 1105 North Market Street, Wilmington, DE 19890, has been
engaged to distribute the Fund's shares pursuant to a distribution
agreement dated [_____________, 1996] (the "Distribution Agreement").
Under the Distribution Agreement, RSD directly or through its affiliates,
provides distribution and underwriting services, investor support and
certain administrative services.
ADMINISTRATOR, TRANSFER AGENT AND CUSTODIAN
Rodney Square Management Corporation ("Rodney Square"), a subsidiary of
Wilmington Trust Company located at Rodney Square North, 1100 N. Market
Street, Wilmington, DE 19890 serves as the Fund's Administrator, Transfer
Agent and Dividend Paying Agent and also provides accounting services to
the Fund pursuant to separate Administration, Transfer Agency and
Accounting Services Agreements with the Trust, each [dated ________,1996.]
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As Administrator, Rodney Square supplies office facilities, non-investment
related statistical and research data, stationery and office supplies,
executive and administrative services, internal auditing and regulatory
compliance services. Rodney Square also assists in the preparation of
reports to shareholders, prepares proxy statements, updates prospectuses
and makes filings with the U.S. Securities and Exchange Commission (the
"SEC") and state securities authorities. Rodney Square performs certain
budgeting and financial reporting and compliance monitoring activities.
For the services provided as Administrator, Rodney Square receives annual
fees equal to 0.15% of the average annual net assets of the Trust for the
first $50 million in assets and 0.10% for assets in excess of $50 million,
subject to certain minimum amounts. Rodney Square has also agreed to waive
specified portions of its fees during the Fund's first year of operations,
provided the Adviser would have otherwise been required to waive its fees
under the voluntary waiver described under "Fund Expenses." Rodney Square
also serves as the Transfer Agent and Dividend Paying Agent of the Fund as
well as the Accounting Agent to the Fund. As Transfer Agent and Dividend
Paying Agent, Rodney Square is responsible for administering the issuance,
transfer and redemption or repurchase of shares, as well as the payment of
distributions and dividends. As Accounting Agent, Rodney Square determines
the Fund's net asset value per share and provides accounting services to
the Fund.
The custodian for the Fund is Wilmington Trust Company ("WTC"), Rodney
Square North, 1100 N. Market Street, Wilmington, DE 19890-0001.
EXPENSES
Except as indicated above, the Fund is responsible for the payment of the
pro rata portions of the Trust's expenses attributable to the Fund, as
distinguished from any other series of the Trust, other than those borne by
the Adviser, and such expenses may include, but are not limited to: (a)
management fees; (b) the charges and expenses of the Fund's legal counsel
and independent auditors; (c) brokers' commissions, mark-ups and mark-downs
and any issue or transfer taxes chargeable to the Fund in connection with
its securities transactions; (d) all taxes and corporate fees payable by
the Fund to governmental agencies; (e) the fees of any trade association of
which the Trust or Fund is a member; (f) the cost of certificates, if any,
representing shares of the Fund; (g) amortization and reimbursements of the
organization expenses of the Trust or Fund and the fees and expenses
involved in registering and maintaining registration of the Trust and its
shares with the SEC, and the preparation and printing of the Trust's
registration statements and prospectuses for such purposes; (h) allocable
communications expenses with respect to investor services and all expenses
of shareholders and trustees' meetings and of preparing, printing and
mailing prospectuses and reports to shareholders; (i) litigation and
indemnification expenses and other extraordinary expenses not incurred in
the ordinary course of the Trust's business; and (j) compensation for
employees of the Trust.
CALCULATION OF NET ASSET VALUE
Rodney Square determines the net asset value per share ("net asset value")
of the Fund as of the close of regular trading on each day that the New
York Stock Exchange is open for unrestricted trading from Monday through
Friday (generally 4:00 p.m.) and on which there is a purchase or redemption
of the Fund's shares. The net asset value is determined by dividing the
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value of the Fund's securities, plus any cash and other assets, less all
liabilities, by the number of shares outstanding. Expenses and fees of the
Fund, including management, distribution and shareholder servicing fees,
are accrued daily and taken into account for the purpose of determining the
net asset value.
Fund securities listed or traded on a securities exchange for which
representative market quotations are available will be valued at the last
quoted sales price on the security's principal exchange on that day.
Listed securities not traded on an exchange that day will be valued at the
mean between the last bid and asked price on that day, if any. Unlisted
securities which are quoted on the National Association of Securities
Dealers National Market System for which there are sales of such securities
on such day, shall be valued at the last sale price reported on such system
the day the security is valued. If there are no such sales on such day,
the value shall be the mean between the closing asked price and closing bid
price. Securities for which market quotations are not readily available
and all other assets will be valued at their respective fair value as
determined in good faith by, or under procedures established by, the Board
of Trustees. In determining fair value, the Fund or its service providers
may employ an independent pricing service.
Money market securities with less than sixty days remaining to maturity
when acquired by the Fund will be valued on an amortized cost basis by the
Fund, excluding unrealized gains or losses thereon from the valuation.
This is accomplished by valuing the security at cost and then assuming a
constant amortization to maturity of any premium or discount from cost
versus par value at maturity. If the Fund acquires a money market security
with more than sixty days remaining to its maturity, it will be valued at
current market value until the 60th day prior to maturity, and will then be
valued on an amortized cost basis based upon the value on such date unless
the Trustees determine during such 60-day period that this amortized cost
value does not represent fair market value.
Each share of the Fund will bear, pro-rata, all of the common expenses of
the Fund. The net asset values of all outstanding shares of the Fund will
be computed on a pro-rata basis for each outstanding share based on the
proportionate participation in the Fund represented by the value of such
shares. All income earned and expenses incurred by the Fund will be borne
on a pro-rata basis by each outstanding share, based on each share's
percentage in the Fund represented by the value of such shares.
HOW TO PURCHASE SHARES
Shares of the Fund are offered on a no-load basis, without the imposition
of any sales or distribution fees through investment management and
financial consultants, brokers or dealers, or directly through the Fund's
distributor. Shares of the Kalmar "Growth-with-Value" Small Cap Fund
series of the Trust (the "Small Cap Fund") may be purchased in a similar
manner, and such shares are offered through a separate prospectus. The
Fund's shares are offered at the net asset value per share next determined
after the receipt and acceptance of a purchase order and payment in proper
form by the Fund. Information on how to invest in the Fund is presented
below, and any requests for applications, additional information or
questions may be directed to Rodney Square at [800 ___-_____.]
MINIMUM INVESTMENT. The minimum initial investment for the Fund is
$10,000, with no subsequent minimum investments. There is no minimum
investment requirement for qualified retirement accounts.
<PAGE>
PURCHASE PRICE. Purchase orders for shares of the Fund which are received
in proper form and accepted by the Fund prior to the close of regular
trading hours on the New York Stock Exchange (currently 4:00 p.m. Eastern
time) on any day that the Fund calculates its net asset value per share,
are priced according to the respective net asset value determined on that
day. Purchase orders received in proper form and accepted by the Fund
after the close of the Exchange on a particular day are priced as of the
time the respective net asset value per share is next determined.
IN-KIND PURCHASES. At the discretion of the Fund, investors may be
permitted to purchase Fund shares by transferring securities to the Fund
that: (i) meet the Fund's investment objective and policies; (ii) are
acquired by the Fund for investment and not for retail purposes; (iii) are
liquid securities which are not restricted as to transfer either by law or
liquidity of market; (iv) have a value which is readily ascertainable (and
not established only by evaluation procedures) as evidenced by a listing on
the American Stock Exchange, the NYSE, or NASDAQ; and (v) at the discretion
of the Fund, the value of any such security (except U.S. Government
Securities) being exchanged together with other securities of the same
issuer owned by the Fund will not exceed 5% of the net assets of the Fund
immediately after the transactions.
Securities transferred to the Fund will be valued in accordance with the
same procedures used to determine the Fund's net asset value. All
dividends, interests, subscription, or other rights pertaining to such
securities shall become the property of the Fund and must be delivered to
the Fund by the investor upon receipt from the issuer. Investors who are
permitted to transfer such securities will be required to recognize all
gains or losses on such transfers, and pay taxes thereon, if applicable,
measured by the difference between the fair market value of the securities
and the investors' bases therein.
Purchases may be made in one of the following ways:
PURCHASES BY MAIL. Shareholders may purchase shares by sending a check
drawn on a U.S. bank payable to the Kalmar "Growth-with-Value" Micro Cap
Fund, along with a completed shareholder application, to Kalmar Pooled
Investment Trust, c/o Rodney Square Management Corporation, P.O. Box 8987,
Wilmington, DE 19899-9752. A shareholder application sent by overnight
mail should be sent to Kalmar Pooled Investment Trust, c/o Rodney Square
Management Corporation, 1105 N. Market St., 3rd Floor, Wilmington, DE
19890. If a subsequent investment is being made, investors should use the
purchase stub and return envelope from the most recent account statement
and the check should also indicate the investor's Fund account number.
PURCHASES BY WIRE. To purchase shares by wiring federal funds, Rodney
Square must first be notified by calling [(800) ____-_______] to request an
account number and furnish the Fund with a tax identification number.
Following notification to Rodney Square, federal funds and registration
instructions should be wired through the Federal Reserve System to:
RODNEY SQUARE MANAGEMENT CORPORATION
C/O WILMINGTON TRUST COMPANY
WILMINGTON, DE
ABA #0311 000 92
DDA #_________________
ATTENTION: KALMAR "GROWTH-WITH-VALUE" MICRO CAP FUND
FURTHER CREDIT [SHAREHOLDER NAME AND ACCOUNT NUMBER]
<PAGE>
For initial purchases by wire, a completed application with signature(s) of
investor(s) must promptly be filed with Rodney Square at one of the
addresses stated above under "Purchases By Mail." Investors should be
aware that some banks may impose a wire service fee.
[(AVAILABLE IF DESIRED:) AUTOMATIC INVESTMENT PLAN. Shareholders may
purchase Fund shares through an Automatic Investment Plan. The Plan
provides a convenient method by which investors may have monies deducted
directly from their checking, savings or bank money market accounts for
investment in the Fund. Under the Plan, Rodney Square, at regular
intervals, will automatically debit a shareholder's bank checking account
in an amount of $1,000 or more (subsequent to the $10,000 minimum initial
investment), as specified by the shareholder. A shareholder may elect to
invest the specified amount monthly, bimonthly, quarterly, semi-annually or
annually. The purchase of Fund shares will be effected at the net asset
value at the close of regular trading on the New York Stock Exchange
(currently 4:00 p.m. Eastern time) on or about the 20th day of the month.
To obtain an Application for the Automatic Investment Plan, check the
appropriate box of the Application accompanying this Prospectus or call
Rodney Square at (800) ___-______.]
EXCHANGE PRIVILEGE. Shareholders of the Fund may exchange all or a portion
of their shares of the Fund for shares of the Small Cap Fund, and
shareholders of the Small Cap Fund may similarly exchange into the Fund,
provided the Fund is authorized to sell its shares in the state where the
purchaser is located. A purchase or redemption of shares through an
exchange will be effected at the net asset value per share next determined
after receipt and acceptance by the Fund of the request.
To obtain a Prospectus of the Small Cap Fund, or to obtain more information
about exchanges or place exchange orders contact Rodney Square at [(800)
____-______.] The Fund reserves the right to terminate or modify the
exchange offer described here and will give shareholders sixty days notice
of such termination or modification as required by the SEC.
RETIREMENT PLANS
Shares of the Fund are available for use in all types of tax-deferred
retirement plans such as IRA's, employer-sponsored defined contribution
plans (including 401(k) plans) and tax-sheltered custodial accounts
described in Section 403(b)(7) of the Internal Revenue Code. Qualified
investors benefit from the tax-free compounding of income dividends and
capital gains distributions. Application forms and brochures describing
investments in the Fund for retirement plans can be obtained from Rodney
Square by calling [(800) ___-____.] The following is a description of the
types of retirement plans for which the Fund's shares may be used for
investment:
INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS"). Individuals, who are not active
participants (and, when a joint return is filed, who do not have a spouse
who is an active participant) in an employer maintained retirement plan are
eligible to contribute on a deductible basis to an IRA account. The IRA
deduction is also available for individual taxpayers and married couples
with adjusted gross incomes not in excess of certain specified limits. All
individuals who have earned income may make nondeductible IRA contributions
to the extent that they are not eligible for a deductible contribution.
Income earned by an IRA account will continue to be tax-deferred. A
<PAGE>
special IRA program is available for employers under which the employers
may establish IRA accounts for their employees in lieu of establishing tax
qualified retirement plans. Known as SEP-IRA's (Simplified Employee
Pension-IRA), they free the employer of many of the recordkeeping
requirements of establishing and maintaining a tax qualified retirement
plan trust.
If you are entitled to receive a distribution from a qualified retirement
plan, you may rollover all or part of that distribution into the Fund's
IRA. Your rollover contribution is not subject to the limits on annual IRA
contributions. You can continue to defer Federal income taxes on your
contribution and on any income that is earned on that contribution.
WTC makes available its services as an IRA Custodian for each shareholder
account that is established as an IRA. For these services, WTC receives an
annual fee of $10.00 per account, which fee is paid directly to WTC by the
IRA shareholder. If the fee is not paid by the date due, shares of the
Fund owned by the shareholder in the IRA account will be redeemed
automatically for purposes of making the payment.
401(K) PLANS AND OTHER DEFINED CONTRIBUTION PLANS. The Fund's shares may
be used for investment in defined contribution plans by both self-employed
individuals (sole proprietorships and partnerships) and corporations who
wish to use shares of the Fund as a funding medium for a retirement plan
qualified under the Internal Revenue Code. Such plans typically allow
investors to make annual deductible contributions, which may be matched by
their employers up to certain percentages based on the investor's pre-
contribution earned income.
403(B)(7) RETIREMENT PLANS. The Fund's shares are also available for use
by schools, hospitals, and certain other tax-exempt organizations or
associations who wish to use shares of the Fund as a funding medium for a
retirement plan for their employees. Contributions are made to the
403(b)(7) Plan as a reduction to the employee's regular compensation. Such
contributions, to the extent they do not exceed applicable limitations
(including a generally applicable limitation of $9,500 per year), are
excludable from the gross income of the employee for Federal Income tax
purposes.
HOW TO REDEEM SHARES
Shareholders may redeem all or a portion of their shares without charge on
any day that the Fund calculates its net asset value. See "Calculation of
Net Asset Value." Except as noted below, redemption requests received and
accepted by Rodney Square prior to the close of regular trading hours on
the Exchange on any business day that the Fund calculates its per share net
asset value are effective at the net asset value per share determined that
day. Redemption requests received and accepted by Rodney Square after the
close of the Exchange are effective as of the time the net asset value per
share is next determined. Redemption proceeds are normally sent on the
next business day following receipt and acceptance by the Fund of the
redemption request but, in any event, redemption proceeds are sent within
seven business days of receipt and acceptance of the request, or earlier if
required under applicable law. Redemption requests should be accompanied
by the Fund's name and the shareholder's account number. Corporations,
other organizations, trusts, fiduciaries and other institutional investors
may be required to furnish certain additional documentation to authorize
redemptions.
<PAGE>
Delivery of the proceeds of a redemption of shares purchased and paid for
by check shortly before the receipt of the request may be delayed until the
Fund determines that the Custodian has completed collection of the purchase
check which may take up to 10 days. Also, redemption requests for accounts
for which purchases were made by wire may be delayed until the Fund
receives a completed application for the account. The Board of Trustees
may suspend the right of redemption or postpone the date of payment during
any period when (a) trading on the New York Stock Exchange is restricted as
determined by the SEC or such Exchange is closed for other than weekends
and holidays, (b) the SEC has by order permitted such suspension, or (c) an
emergency, as defined by rules of the SEC, exists during which time the
sale of Fund shares or valuation of securities held by the Fund are not
reasonably practicable.
IN-KIND REDEMPTION. The Fund will satisfy redemption requests in cash to
the fullest extent feasible, so long as such payments would not, in the
opinion of the Adviser or the Board of Trustees, result in the necessity of
the Fund selling assets under disadvantageous conditions and to the
detriment of the remaining shareholders of the Fund. Pursuant to the
Fund's Agreement and Declaration of Trust, payment for shares redeemed may
be made either in cash or in-kind, or partly in cash and partly in-kind.
Any portfolio securities paid or distributed in-kind would be valued as
described under "Calculation of Net Asset Value." In the event that an
in-kind distribution is made, a shareholder may incur additional expenses,
such as t he payment of brokerage commissions, on the sale or other
disposition of the securities received from the Fund. In-kind payments
need not constitute a cross-section of the Fund's portfolio. Where a
shareholder has requested redemption of all or a part of the share-
holder's investment, and where the Fund completes such redemption in-kind,
the Fund will not recognize gain or loss for federal tax purposes, on the
securities used to complete the redemption but the shareholder will
recognize gain or loss equal to the difference between the fair market
value of the securities received and the shareholder's basis in the Fund
shares redeemed.
Shares may be redeemed in one of the following ways:
REDEMPTION BY MAIL. A written redemption request must (i) identify the
Fund and the shareholder's account number, (ii) state the number of shares
to be redeemed, and (iii) be signed by each registered owner exactly as the
shares are registered. [A redemption request for an amount in excess of
$5,000, or for any amount if for payment other than to the shareholder of
record, or if the proceeds are to be sent elsewhere than the address of
record, must be accompanied by a guarantee of their signature by an
"eligible guarantor institution" as defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934. Eligible guarantor institutions include
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations. Broker-dealers guaranteeing signatures must be a member of a
clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees. Signature
guarantees will be accepted from any eligible guarantor institution which
<PAGE>
participates in a signature guarantee program. A signature and a signature
guarantee are required for each person in whose name the account is
registered.]
Written redemption instructions should be submitted to Kalmar Pooled
Investment Trust, c/o Rodney Square Management Corporation, P.O. Box 8987,
Wilmington, DE 19899-9752. A redemption order sent by overnight mail
should be sent to Kalmar Pooled Investment Trust, c/o Rodney Square
Management Corporation, P.O. Box 8987, 1105 N. Market Street, 3rd Floor,
Wilmington, DE 19890.
REDEMPTION BY TELEPHONE. Shareholders who prefer to redeem their shares by
telephone must elect to do so by completing the telephone redemption
section of the shareholder application which describes the telephone
redemption procedures in more detail and requires certain information that
will be used to identify the shareholder when a telephone redemption
request is made. To obtain this application, check the appropriate box of
the shareholder application or call Rodney Square at (800) ____-________.
Neither the Fund nor any of its service contractors will be liable for any
loss or expense in acting upon any telephone instructions that are
reasonably believed to be genuine. In attempting to confirm that telephone
instructions are genuine, the Fund will use such procedures as are
considered reasonable, including requesting a shareholder to correctly
state his or her Fund account number, the name in which his or her account
is registered, the number of shares to be redeemed and certain other
information necessary to identify the shareholder.
During times of drastic economic or market changes, the telephone
redemption privilege may be difficult to implement. In the event that
shareholders are unable to reach Rodney Square by telephone, you may make a
redemption request by mail. The Fund or Rodney Square reserves the right
to refuse a wire or telephone redemption if it is believed advisable to do
so. Procedures for redeeming Fund shares by wire or telephone may be
modified or terminated at any time by the Fund.
REDEMPTIONS BY WIRE. Redemption proceeds may be wired to a predesignated
bank account at any commercial bank in the United States if the amount is
$1,000 or more. The receiving bank may charge a fee for this service.
Amounts redeemed by wire are normally wired on the next business day after
receipt and acceptance of redemption instructions (if received before the
close of regular trading on the Exchange), but in no event later than five
days following such receipt and acceptance.
INVOLUNTARY REDEMPTION. The Fund reserves the right to redeem an
investor's account where the account is inactive and is worth less than the
minimum initial investment when the account was established, currently
$10,000. [In calculating the minimum amount necessary to avoid involuntary
redemption, the Fund will include amounts held in both the Fund and the
Small Cap Fund together.] The Fund will advise the shareholder of its
intention to redeem the account in writing at least sixty (60) days prior
to effecting such redemption, during which time the shareholder may
purchase additional shares in any amount necessary to bring the account
back to the appropriate minimum amount, and the Fund will not redeem any
account that is worth less than the appropriate minimum amount solely on
account of a market decline.
SYSTEMATIC WITHDRAWAL PLAN. [Available if desired]
<PAGE>
ADDITIONAL REDEMPTION INFORMATION. Redemption proceeds may be mailed or
electronically transferred to your bank or, for amounts of $5,000 or less,
mailed to your Fund account address of record if the address has been
established for a minimum of 60 days. In order to authorize the Fund to
mail redemption proceeds to your Fund account address of record, complete
the appropriate section of the shareholder application or include your Fund
account address of record when you submit written instructions. You may
change the account which you have designated to receive amounts redeemed at
any time. Any request to change the account designated to receive
redemption proceeds should be accompanied by a guarantee of the
shareholder's signature by an eligible guarantor institution. Further
documentation will be required to change the designated account when shares
are held by a corporation, other organization, trust, fiduciary or other
institutional investor. For more information on redemption services,
contact Rodney Square.
PERFORMANCE INFORMATION
Advertisements, sales literature and communications to shareholders may
contain measures of the Fund's performance, including various expressions
of total return, current yield or current distribution rate. They may also
cite statistics relating to volatility and risk and compare such measures
to those of other funds. The Fund's total return may be calculated on an
annualized and aggregate basis for various periods as will be stated in the
advertisement. Average annual return reflects the average percentage
change per year in value of an investment in the Fund. Aggregate total
return reflects the total percentage change over the stated period.
The Fund may compare its investment performance to other mutual funds, or
groups of mutual funds, with similar or dissimilar investment objectives
and policies that are tracked or ranked by independent services such as
Lipper Analytical Services, Inc. or Morningstar, Inc. or other financial or
industry publications that monitor the performance of mutual funds,
investment managers, and the like. The Fund may also compare its
performance to unmanaged stock indices such as the Russell 2000 Small
Capitalization Index or the S&P 500, or quote performance information or
information relating to fund management, investment philosophy or
investment techniques, that is published in financial and business
publications including Money Magazine, Forbes, Barron's or The Wall Street
Journal, etc. Further information about the sources for comparative
performance and other information that may be utilized by the Fund, and
information about the Fund's calculation of performance figures, is
contained in the Fund's Statement of Additional Information.
All data will be based on the Fund's past investment results and does not
predict future performance. Investment performance, which will vary, is
based on many factors, including market conditions, the composition of the
investments in the Fund, and the Fund's operating expenses. Investment
performance also often reflects the risk associated with the Fund's
investment objective and policies. In addition, averages are generally
unmanaged, and items included in the calculations of such averages may not
be identical to the formula used by the Fund to calculate its performance.
These factors should be considered when comparing the Fund to other mutual
funds and other investment vehicles.
<PAGE>
GENERAL INFORMATION
SHARES OF BENEFICIAL INTEREST AND VOTING RIGHTS. The Trust was organized
as a Delaware business trust on [____________, 1996.] The Trust's
Agreement and Declaration of Trust permits the trustees to issue an
unlimited number of shares of beneficial interest in various series or
classes (subseries) with a par value of $0.01 per share. Each series, in
effect, represents a separate mutual fund with its own investment objective
and policies. The Board of Trustees has the power to designate additional
series or classes of shares of beneficial interest and to classify or
reclassify any unissued shares with respect to such series or classes.
The Trust's Agreement and Declaration of Trust gives shareholders the right
to vote: (i) for the election or removal of trustees; (ii) with respect to
additional matters relating to the Trust as required by the Investment
Company Act; and (iii) on such other matters as the trustees consider
necessary or desirable. The shares of the Fund each have one vote and,
when issued, will be fully paid and non-assessable and within each series
or class, have no preference as to conversion, exchange, dividends,
retirement or other features. The shares of the Trust which the trustees
may, from time to time, establish, shall have no preemptive rights. The
shares of the Trust 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 100% of the trustees if they choose to do so. A shareholder is
entitled to one vote for each full share held (and a fractional vote for
each fractional share held), then standing in their name on the books of
the Trust. On any matter submitted to a vote of shareholders, all shares
of the Trust then issued and outstanding and entitled to vote on a matter
shall vote without differentiation between separate series on a one-vote-
per share basis. If a matter to be voted on does not affect the interests
of all series of the Trust, then only the shareholders of the affected
series shall be entitled to vote on the matter.
SHAREHOLDER MEETINGS. Pursuant to the Trust's Agreement and Declaration of
Trust, the Trust does not intend to hold shareholder meetings except when
required to elect trustees, or with respect to additional matters relating
to the Trust as required under the Investment Company Act.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
The Fund intends to declare and pay annual dividends to its shareholders of
substantially all of its net investment income, if any, earned during the
year from its investments. The Fund will distribute net realized capital
gains, if any, once with respect to each year. Expenses of the Fund,
including the advisory fee, are accrued each day. Reinvestments of
dividends and distributions in additional shares of the Fund will be made
at the net asset value determined on the ex date of the dividend or
distribution unless the shareholder has elected in writing to receive
dividends or distributions in cash. An election may be changed by
notifying Rodney Square in writing thirty days prior to record date.
Shareholders may call Rodney Square for more information. All shares of
the Fund will share proportionately in the investment income and expenses
of the Fund.
The Fund intends to qualify annually to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code"). As such, the Fund will not be subject to federal
<PAGE>
income tax, or to any excise tax, to the extent its earnings are
distributed as provided in the Code and by satisfying certain other
requirements relating to the sources of its income and diversification of
its assets.
Dividends from net investment income or net short-term capital gains will
be taxable to shareholders as ordinary income, whether received in cash or
in additional shares. For corporate investors in the Fund, dividends from
net investment income will generally qualify in part for the 70% corporate
dividends-received deduction. However, the portion of the dividends so
qualified depends on the aggregate qualifying dividend income received by
the Fund from domestic (U.S.) sources.
Distributions paid by the Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to investors as long-
term capital gains, regardless of the length of time an investor has owned
shares in the Fund. The Fund does not seek to realize any particular
amount of capital gains during a year; rather, realized gains are a
byproduct of management activities. Consequently, capital gains
distributions may be expected to vary considerably from year to year.
Also, if purchases of shares in a Fund are made shortly before the record
date for a capital gains distribution or a dividend, a portion of the
investment will be returned as a taxable distribution.
Dividends which are declared in October, November or December to
shareholders of record in such a month but which, for operational reasons,
may not be paid to the shareholder until the following January, will be
treated for tax purposes as if paid by the Fund and received by the
shareholder on December 31 of the calendar year in which they are declared.
A sale or redemption of shares of the Fund is a taxable event and may
result in a capital gain or loss to shareholders subject to tax. Any loss
incurred on sale or exchange of a Fund's shares held for six months or less
will be treated as a long-term capital loss to the extent of any capital
gain dividends received with respect to such shares.
In addition to federal taxes, shareholders may be subject to state and
local taxes on distributions. It is recommended that shareholders consult
their tax advisers regarding specific questions as to federal, state, local
or foreign taxes. Each year, the Fund will mail you information on the tax
status of the Fund's dividends and distributions made to you.
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied
with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your account registration form
your proper taxpayer identification number and by certifying that you are
not subject to backup withholding.
The tax discussion set forth above is included for general information
only. Prospective investors should consult their own tax advisers
concerning the federal, state, local or foreign tax consequences of an
investment in the Fund. Additional information on tax matters relating to
the Fund and to its shareholders is included in the Statement of Additional
Information.
<PAGE>
SHAREHOLDER ACCOUNTS
Rodney Square, as Transfer Agent, maintains for each shareholder an account
expressed in terms of full and fractional shares of the Fund rounded to the
nearest 1/1000th of a share. In the interest of economy and convenience,
the Fund does not issue share certificates. Each shareholder is sent a
statement at least quarterly showing all purchases in or redemption from
the shareholder's account. The statement also sets forth the balance of
shares held in the shareholder's account.
<PAGE>
INVESTMENT ADVISER
Kalmar Investment Advisers
1300 Market Street
Suite 500
Wilmington, DE 19801
UNDERWRITER
Rodney Square Distributors, Inc.
1105 N. Market Street
Wilmington, DE 19890
SHAREHOLDER SERVICES
Rodney Square Management Corporation
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
CUSTODIAN
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Coopers & Lybrand, L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
<PAGE>
KALMAR "GROWTH-WITH-VALUE" SMALL CAP FUND
KALMAR "GROWTH-WITH-VALUE" MICRO CAP FUND
EACH A SERIES OF
KALMAR POOLED INVESTMENT TRUST
1300 Market Street, Suite 500, Wilmington, DE 19801
STATEMENT OF ADDITIONAL INFORMATION [DATED _______________, 1996]
Kalmar Pooled Investment Trust (the "Trust") currently offers two separate
series of shares, each with its own investment objective and policies.
Information concerning the Kalmar "Growth-with-Value" Small Cap Fund (the
"Small Cap Fund") and Kalmar "Growth-with-Value" Micro Cap Fund (the "Micro
Cap Fund") (collectively, the "Funds") is included in separate
prospectuses, each dated [_____________, 1996.] No investment in shares
should be made without first reading the applicable prospectus. A copy of
each prospectus may be obtained without charge at the addresses and
telephone numbers listed below.
INVESTMENT ADVISER: UNDERWRITER:
KALMAR INVESTMENT ADVISERS RODNEY SQUARE DISTRIBUTORS, INC.
1300 Market Street, Suite 500 1105 N. Market Street
Wilmington, DE 19801 Wilmington, DE 19890
(302) 658-7575 (800) _________
- ---------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE
READ IN CONNECTION WITH THE CURRENT PROSPECTUS OF THE PARTICULAR FUND DATED
_____________, 1996. INVESTORS SHOULD RETAIN THIS STATEMENT OF ADDITIONAL
INFORMATION FOR FUTURE REFERENCE.
- ---------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
Kalmar Pooled Investment Trust.............................
Investments................................................
Investment Restrictions....................................
Portfolio Brokerage and Turnover...........................
Management.................................................
Purchases..................................................
Redemptions................................................
Taxation...................................................
General Information........................................
Performance................................................
Financial Statements.......................................
Appendix...................................................
<PAGE>
KALMAR POOLED INVESTMENT TRUST
Kalmar Pooled Investment Trust (the "Trust"), 1300 Market Street, Suite
500, Wilmington, DE 19801, is an open-end diversified, management
investment company which currently offers shares of two series representing
separate portfolios of investments, the Kalmar "Growth-with-Value" Small
Cap Fund (the "Small Cap Fund") and the Kalmar "Growth-with-Value" Micro
Cap Fund (the "Micro Cap Fund") (each individually, a "Fund" and
collectively, the "Funds."). Shares of both Funds are offered and sold on
a no-load basis, without the imposition of sales or distribution charges.
INVESTMENTS
Each Fund seeks to achieve its objective by following the philosophy
outlined in its prospectus and by making investments selected in accordance
with its investment policies and restrictions. The Funds will vary their
investment strategies as described in each Fund's prospectus to achieve
their objectives. This Statement of Additional Information contains
further information concerning the techniques and operations employed by
the Fund's investment adviser, Kalmar Investment Advisers (the "Adviser")
in managing each Fund, the securities in which the Fund's will invest, and
the policies they will follow, and should be read in conjunction with the
"Investment Objectives and Policies" section of the prospectus of each
Fund.
CONVERTIBLE SECURITIES
Traditional convertible securities include corporate bonds, notes and
preferred stocks that may be converted into or exchanged for common stock,
and other securities that also provide an opportunity for equity
participation. These securities are generally convertible either at a
stated price or a stated rate (that is, for a specific number of shares of
common stock or other security). As with other fixed income securities,
the price of a convertible security to some extent varies inversely with
interest rates. While providing a fixed-income stream (generally higher in
yield than the income derivable from a common stock but lower than that
afforded by a non-convertible debt security), a convertible security also
affords the investor an opportunity, through its conversion feature, to
participate in the capital appreciation of the common stock into which it
is convertible. As the market price of the underlying common stock
declines, convertible securities tend to trade increasingly on a yield
basis and so may not experience market value declines to the same extent as
the underlying common stock. When the market price of the underlying
common stock increases, the price of a convertible security tends to rise
as a reflection of the value of the underlying common stock. To obtain
such a higher yield, the Funds may be required to pay for a convertible
security an amount in excess of the value of the underlying common stock.
Common stock acquired by the Funds upon conversion of a convertible
security will generally be held for so long as the Adviser anticipates such
stock will provide the Funds with opportunities which are consistent with
the Funds' investment objectives and policies.
WARRANTS
The Funds may invest in warrants, in addition to warrants acquired in units
or attached to securities. A warrant is an instrument issued by a
corporation which gives the holder the right to subscribe to a specified
amount of the issuer's capital stock at a set price for a specified period
of time.
<PAGE>
WHEN ISSUED, DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS
The Funds may enter into forward commitments for the purchase or sale of
securities, including on a "when issued" or "delayed delivery" basis in
excess of customary settlement periods for the type of security involved.
In some cases, a forward commitment may be conditioned upon the occurrence
of a subsequent event, such as approval and consummation of a merger,
corporate reorganization or debt restructuring, i.e., a when, as and if
issued security. When such transactions are negotiated, the price is fixed
at the time of the commitment, with payment and delivery taking place in
the future, generally a month or more after the date of the commitment.
While the Funds will only enter into a forward commitment with the
intention of actually acquiring the security, the Funds may sell the
security before the settlement date if it is deemed advisable.
Securities purchased under a forward commitment are subject to market
fluctuation, and no interest (or dividends) accrues to the Funds prior to
the settlement date. The Funds will segregate with its Custodian (as
hereinafter defined) cash or liquid high-grade debt securities in an
aggregate amount at least equal to the amount of its outstanding forward
commitments.
AMERICAN DEPOSITORY RECEIPTS
The Funds may make foreign investments through the purchase and sale of
sponsored or unsponsored American Depository Receipts ("ADRs"). ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. The
Funds may purchase ADRs whether they are "sponsored" or "unsponsored".
"Sponsored" ADRs are issued jointly by the issuer of the underlying
security and a depository, whereas "unsponsored" ADRs are issued without
participation of the issuer of the deposited security. Holders of
unsponsored ADRs generally bear all the costs of such facilities and the
depository of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the
deposited security or to pass through voting rights to the holders of such
receipts in respect of the deposited securities. Therefore, there may not
be a correlation between information concerning the issuer of the security
and the market value of an unsponsored ADR. ADRs may result in a
withholding tax by the foreign country of source which will have the effect
of reducing the income distributable to shareholders.
SHORT SALES
The Fund is authorized to engage in short sales of stocks which the Adviser
believes are substantially overvalued. Whenever the Fund effects a short
sale, it will set aside in segregated accounts cash, U.S. government
securities or other high grade debt instruments equal to the difference
between (a) the market value of the securities sold short and (b) any cash
or U.S. government securities required to be deposited as collateral with
the broker in connection with the short sale (but not including the
proceeds of the short sale). Until the Fund replaces the security it
borrowed to make the short sale, it must maintain daily the segregated
account at such a level that (a) the amount deposited in it plus the amount
deposited with the broker as collateral will equal the current market value
of the securities sold short, and (b) the amount deposited in it plus the
amount deposited with the broker will not be less than the market value of
the securities at the time they were sold short. No more than 10% of the
value of the Fund's total net assets will be, when added together, (a)
deposited as collateral for the obligation to replace securities borrowed
to effect short sales, and (b) allocated to segregated accounts in
<PAGE>
connection with short sales. The Fund's ability to make short sales may be
limited by a requirement applicable to "regulated investment companies"
under Subchapter M of the Internal Revenue Code that no more than 30% of
the Fund's gross income in any year may be the result of gains from the
sale of property held for less than three months.
DEBT SECURITIES-RISKS
The Funds are also authorized to invest in debt securities, which may
include bonds, debentures, or notes (and cash equivalent debt securities as
described below). The Funds may invest their assets in debt securities
pending investment in suitable equity securities or if the Adviser believes
such securities have the potential for capital appreciation as a result of
improvement in the creditworthiness of the issuer. The receipt of income
from such debt securities is incidental to the Funds' investment objective
of capital appreciation.
The Fund may invest up to 5% of its net assets, at the time of investment,
in lower rated, fixed-income securities and unrated securities of
comparable quality, commonly referred to as "junk bonds". The market value
of lower rated, fixed-income securities tend to reflect individual
developments affecting the issuer to a greater extent than the market value
of higher rated securities, which react primarily to fluctuations in the
general level of interest rates. Lower rated securities also tend to be
more sensitive to economic conditions than higher rated securities. These
lower rated fixed-income securities are considered by the rating agencies,
on balance, to be predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal in accordance with the terms
of the obligation and will generally involve more credit risk than
securities in the higher rating categories. Even bonds rated BBB by
Standard & Poor's Corporation ("S&P") or Baa by Moody's Investors Service
("Moody's"), ratings which are considered investment grade, possess some
speculative characteristics.
Issuers of high yielding, fixed-income securities are often highly
leveraged and may not have more traditional methods of financing available
to them. Therefore, the risk associated with acquiring the securities of
such issuers is generally greater than is the case with higher rated
securities. For example, during an economic downturn or a sustained period
of rising interest rates, highly leveraged issuers of high yielding
securities may experience financial stress. During these periods, such
issuers may not have sufficient cash flow to meet their interest payment
obligations. The issuer's ability to service its debt obligations may also
be adversely affected by specific developments affecting the issuer, the
issuer's inability to meet specific projected business forecasts, or the
unavailability of additional financing. The risk of loss due to default by
the issuer may be significantly greater for the holders of high yielding
securities because such securities are generally unsecured and are often
subordinated to other creditors of the issuer. The Fund may retain an
issue that has defaulted because such issue may present an opportunity for
subsequent price recovery.
High yielding, fixed-income securities frequently have call or buy-back
features which permit an issuer to call or repurchase the securities from
the Fund. Although such securities are typically not callable for a period
from three to five years after their issuance, if a call were exercised by
the issuer during periods of declining interest rates, the Fund would
likely have to replace such called securities with lower yielding
securities, thus decreasing the net investment income to the Fund and
<PAGE>
dividends to shareholders. The premature disposition of a high yielding
security due to a call or buy-back feature, the deterioration of the
issuer's creditworthiness, or a default may also make it more difficult for
the Fund to manage the timing of its receipt of income, which may have tax
implications.
The Fund may have difficulty disposing of certain high yielding securities
because there may be a thin trading market for a particular security at any
given time. The market for lower rated, fixed-income securities generally
tends to be concentrated among a smaller number of dealers than is the case
for securities which trade in a broader secondary retail market.
Generally, purchasers of these securities are predominantly dealers and
other institutional buyers, rather than individuals. To the extent the
secondary trading market for a particular high yielding, fixed-income
security does exist, it is generally not as liquid as the secondary market
for higher rated securities. Reduced liquidity in the secondary market may
have an adverse impact on market price and the Fund's ability to dispose of
particular issues, when necessary, to meet the Fund's liquidity needs or in
response to a specific economic event, such as a deterioration in the
creditworthiness of the issuer. Reduced liquidity in the secondary market
for certain securities may also make it more difficult for the Fund to
obtain market quotations based on actual trades for purposes of valuing the
Fund's portfolio. Current values for these high yield issues are obtained
from pricing services and/or a limited number of dealers and may be based
upon factors other than actual sales. (See "How Are Fund Shares Valued?"
in the Prospectus and this SAI.)
For a description of debt security ratings, please refer to the "Appendix"
in the Statement of Additional Information.
LOANS OF PORTFOLIO SECURITIES.
Each Fund may lend its investment securities to approved borrowers who need
to borrow securities in order to complete certain transactions, such as
covering short sales, avoiding failures to deliver securities or completing
arbitrage operations. By lending its investment securities, a Fund
attempts to increase its income through the receipt of interest on the
loan. Any gain or loss in the market price of the securities loaned that
might occur during the term of the loan would be for the account of the
Fund. Each Fund may lend its investment securities to qualified brokers,
dealers, domestic and foreign banks or other financial institutions, so
long as the terms, the structure and the aggregate amount of such loans are
not inconsistent with the Investment Company Act of 1940, as amended, (the
"1940 Act") or the Rules and Regulations or interpretations of the
Securities and Exchange Commission (the "SEC") thereunder, which currently
require that: (a) the borrower pledge and maintain with a Fund collateral
consisting of cash, an irrevocable letter of credit issued by a bank or
securities issued or guaranteed by the United States Government having a
value at all times not less than 100% of the value of the securities
loaned; (b) the borrower add to such collateral whenever the price of the
securities loaned rises (i.e., the borrower "marks to the market" on a
daily basis); (c) the loan be made subject to termination by a Fund at any
time; and (d) the Fund receives reasonable interest on the loan (which may
include the Fund investing any cash collateral in interest bearing short-
term investments). All relevant facts and circumstances, including the
creditworthiness of the broker, dealer or institution, will be considered
in making decisions with respect to the lending of securities, subject to
review by the Board of Trustees.
<PAGE>
At the present time, the staff of the SEC does not object if an investment
company pays reasonable negotiated fees in connection with loaned
securities so long as such fees are set forth in a written contract and
approved by the investment company's Board of Trustees. In addition,
voting rights may pass with the loaned securities, but if a material event
occurs affecting an investment on a loan, the loan must be called and the
securities voted.
WRITING COVERED CALL OPTIONS
The general reason for writing call options is to attempt to realize
income. By writing covered call options, each Fund gives up the
opportunity, while the option is in effect, to profit from any price
increase in the underlying security above the option exercise price. In
addition, each Fund's ability to sell the underlying security will be
limited while the option is in effect unless the Fund effects a closing
purchase transaction. A closing purchase transaction cancels out the
Fund's position as the writer of an option by means of offsetting purchase
of an identical option prior to the expiration of the option it has
written. Covered call options serve as a partial hedge against the price
of the underlying security declining. Each Fund writes only covered
options, which means that so long as a Fund is obligated as the writer of
the option it will, through its custodian, have deposited the underlying
security of the option or, if there is a commitment to purchase the
security, a segregated cash reserve of cash, cash equivalents, U.S.
Government securities or other high grade liquid debt securities
denominated in U.S. dollars or non-U.S. currencies with a securities
depository with a value equal to or greater than the exercise price of the
underlying securities. By writing a put, a Fund will be obligated to
purchase the underlying security at a price that may be higher than the
market value of that security at the time of exercise for as long as the
option is outstanding. Each Fund may engage in closing transactions in
order to terminate put options that it has written.
PURCHASING OPTIONS
A put option may be purchased to partially limit the risks of the value of
an underlying security or the value of a commitment to purchase that
security for forward delivery. The amount of any appreciation in the value
of the underlying security will be partially offset by the amount of the
premium paid for the put option and any related transaction costs. Prior
to its expiration, a put option may be sold in a closing sale transaction
and profit or loss from a sale will depend on whether the amount received
is more or less than the premium paid for the put option plus the related
transaction costs. A closing sale transaction cancels out a Fund's
position as purchaser of an option by means of an offsetting sale of an
identical option prior to the expiration of the option it has purchased.
In certain circumstances, a Fund may purchase call options on securities
held in its investment portfolio on which it has written call options or on
securities which it intends to purchase.
INVESTMENT RESTRICTIONS
The Funds have adopted the investment restrictions set forth below, some of
which (as indicated), are fundamental policies of each Fund and cannot be
changed without the approval of a majority of the outstanding voting
securities. As provided in the 1940 Act, a "vote of a majority of the
outstanding voting securities" means the affirmative vote of the lesser
of: (i) more than 50% of the outstanding shares; or (ii) 67% or more of the
<PAGE>
shares present at a meeting if more than 50% of the outstanding shares are
represented at the meeting in person or by proxy. As a matter of
fundamental policy, each Fund may not:
1. As to 75% of its total assets, invest more than 5% of the
total assets of such Fund in the securities of any one issuer,
other than cash or cash items, or obligations issued or
guaranteed by the U.S. Government, its agencies or instrument-
alities, or other investment companies.
2. As to 75% of its total assets, purchase more than 10% of the
voting securities, or any class of securities, of any single
issuer. For purposes of this restriction, all outstanding
fixed income securities of an issuer are considered as one
class.
3. Invest more than 25% of its total assets (taken at market
value at the time of each investment) in the securities of
issuers in any particular industry, except for temporary
defensive purposes. This limitation shall not apply to
obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, and investments in certificates
deposit and banker's acceptances will not be considered
investments in the banking industry.
4. Invest in real estate or interests in real estate, however,
this will not prevent a Fund from investing in securities
secured by real estate or interests therein, or in publicly-
held real estate investment trusts or marketable securities of
companies which may represent indirect interests in real
estate.
5. Purchase or sell commodities or commodity contracts, except
that the Funds may purchase or sell stock index options, stock
index futures, financial futures and related options on such
futures.
6. Issue senior securities, except that a Fund may borrow money
in accordance with investment limitation 9, purchase
securities on a when-issued, delayed settlement or forward
delivery basis, and enter into reverse repurchase agreements.
7. Purchase any securities on margin, except that the Fund may
obtain such short-term credit as may be necessary for the
clearance of purchases and sales of portfolio securities. The
payment by the Fund of initial or variation margin in
connection with options transactions, if applicable, shall not
be considered the purchase of a security on margin.
8. Make loans of money or property, except through: (i) the
purchase of fixed-income obligations in which a Fund may
invest consistent with its investment objective and policies;
(ii)investment in repurchase agreements; or (iii) loans of
portfolio securities in a manner consistent with a Fund's
investment objective and policies and the provisions of the
Investment Company Act and regulations and SEC positions
thereunder.
<PAGE>
9. Borrow amounts in excess of 33 1/3% of its total assets, taken
at market value, and then only from banks as a temporary
measure for extraordinary or emergency purposes such as the
redemption of Fund shares. Utilization of borrowings may
exaggerate increases or decreases in an investment company's
net asset value. However, the Fund will not purchase
securities while borrowings exceed 5% of its total assets,
except to honor prior commitments and to exercise subscription
rights when outstanding borrowings have been obtained
exclusively for settlements of other securities transactions.
10. Mortgage, pledge, hypothecate or otherwise encumber its
assets, except in amounts up to 33 1/3% of its total assets,
but only to secure borrowings authorized in the preceding
restriction.
11. Underwrite securities of other issuers except insofar as the
Fund may be deemed an underwriter under the Securities Act of
1933, as amended, in selling portfolio securities.
The policies set forth below are non-fundamental policies of each Fund and
may be amended without the approval of the shareholders of the respective
Funds. Each Fund will not:
1. Purchase securities of other investment companies, except to
the extent permitted under the 1940 Act or in connection with
a merger, consolidation, acquisition or reorganization, or in
accordance with any exemptive order granted by the SEC.
2. Make investments in securities for the purpose of exercising
control over or management of the issuer.
3. Invest more than 5% of its total assets in securities of
issuers having a record, together with predecessors, of less
than three years of continuous operation, except for certain
real estate investment trusts.
4. Invest more than 15% of its total assets, determined at the
time of investment, in securities subject to legal or
contractual restrictions or resale, or which are not otherwise
readily marketable, including repurchase agreements maturing
in more than seven days.
5. Purchase or sell interests in oil, gas or other mineral
exploration or development programs or leases, rights or
royalty contracts or exploration or development programs,
except that the Fund may invest in securities of companies
which invest in or sponsor such programs.
6. Purchase or retain the securities of any issuer if, to the
knowledge of the Fund, those officers and Trustees (or
Directors) of the Trust or the Adviser who own more than 0.5%
of such securities together own more than 5% of such
securities;
7. Invest in warrants if, at the time of acquisition, its
investment in warrants, valued at the lower of cost or
market value, would exceed 5% of the Fund's net assets;
<PAGE>
included within such limitation, but not to exceed 2% of the
Fund's net assets, are warrants which are not listed on the
New York or American Stock Exchanges. For purposes of this
policy, warrants acquired by the Fund in units or attached to
securities may be deemed to be without value;
PORTFOLIO BROKERAGE AND TURNOVER
The Adviser, when effecting the purchases and sales of portfolio securities
for the account of a Fund, will seek execution of trades either: (i) at the
most favorable and competitive rate of commission charged by any broker,
dealer or member of an exchange; or (ii) at a higher rate of commission
charges if reasonable in relation to brokerage and research services
provided to the Funds or the Adviser by such member, broker, or dealer when
viewed in terms of either a particular transaction or the Adviser's overall
responsibilities to the Trust. Such services may include, but are not
limited to, any one or more of the following: information as to the
availability of securities for purchase or sale, statistical or factual
information, or opinions pertaining to investments. The Adviser may use
research and services provided to it by brokers and dealers in servicing
all its clients, and not all such services will be used by the Adviser in
connection with the Funds.
While it is the policy of each Fund generally not to engage in frequent
trading and turnover tactics for short-term gains, the Adviser will effect
portfolio transactions without regard to holding period if, in its
judgment, such transactions are advisable in light of a change in
circumstances of a particular company or within a particular industry or in
general market, economic or financial conditions. While the Funds
anticipate that their annual portfolio turnover rate should not exceed 50%
under normal conditions, it is impossible to predict portfolio turnover
rates. The portfolio turnover rate is calculated by dividing the lesser of
a Fund's annual sales or purchases of portfolio securities (exclusive of
purchases or sales of securities whose maturities at the time of
acquisition were one year or less) by the monthly average value of the
securities in the portfolio during the year. High portfolio turnover would
involve additional transaction costs (such as brokerage commissions) which
are borne by a Fund, or adverse tax effects. (See "Dividends,
Distributions and Taxes" in the Prospectus). Each Fund is subject to the
Federal income tax requirement that less than 30% of a Fund's gross income
must be derived from gains from the sale or other disposition of securities
held for less than three months.
MANAGEMENT
INVESTMENT ADVISER AND ADVISORY AGREEMENT
Kalmar Investment Advisers (previously defined as the "Adviser") serves as
the investment adviser for both Funds. The Adviser was organized as a
Delaware business trust on [__________, 1996] for the sole purpose of
serving as the investment adviser for the series of the Trust. The Adviser
is the sister company to Kalmar Investments Inc., a Delaware corporation
which has been providing investment advisory services to individual
accounts since its inception in 1981. Both Kalmar and the Adviser are
registered as investment advisers under the Investment Advisers Act of
1940, and are wholly-owned by Ford B. Draper, Jr. The investment personnel
who comprise the portfolio management team at Kalmar and the Adviser are
identical.
<PAGE>
The Trust has entered into separate investment advisory agreements on
behalf of each Fund with the Adviser (the "Advisory Agreements"), for the
provision of investment advisory services to the Funds, subject to the
supervision and direction of the Board of Trustees. Pursuant to the
Advisory Agreements, each Fund is obligated to pay the Adviser a monthly
fee equal to an annual rate of 1.00% of the respective Fund's average daily
net assets.
The Advisory Agreements are each dated [____________, 1996,] and are
effective for an initial period of two years. The Agreements may be
renewed after their initial term only so long as such renewal and
continuance are specifically approved at least annually by the Board of
Trustees or by vote of a majority of the outstanding voting securities the
respective Fund, and only if the terms of the renewal thereof have been
approved by the vote of a majority of the Trustees who are not parties
thereto or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. The Advisory
Agreements will terminate automatically in the event of their assignment.
During the Fund's first fiscal year, the Adviser has voluntarily agreed to
limit its advisory fees or to assume certain expenses of the Fund so that
the Fund's total operating costs do not exceed 1.25% on an annualized
basis. The Adviser may terminate this arrangement at any time. The
Adviser has also voluntarily agreed to limit its advisory fee or assume the
expenses of the Funds in an amount equal to the total expenses of a Fund
for any fiscal year which exceeds the permissible limits applicable to that
Fund in any state in which its shares are then qualified for sale. At the
present time, the most restrictive state expense limitation limits a Fund's
annual expenses (excluding interest, taxes, distribution expense, brokerage
commissions and extraordinary expenses and other expenses subject to
approval by state securities administrators) to 2.5% of the first $30
million of its average daily net assets, 2.0% of the next $70 million of
its average daily net assets and 1.5% of its average daily net assets in
excess of $100 million.
General expenses of the Trust (such as costs of maintaining corporate
existence, legal fees, insurances, etc.) will be allocated among the Funds
in proportion to their relative net assets. Expenses which relate
exclusively to a particular Fund, such as certain registration fees,
brokerage commissions and other portfolio expenses, will be borne directly
by that Fund.
TRUSTEES AND OFFICERS
The Trustees and principal executive officers of the Trust and their
principal occupations for the past five years are listed below:
PRINCIPAL OCCUPATION
POSITION AND OFFICE DURING THE PAST FIVE
NAME AND ADDRESS AGE WITH THE TRUST YEARS
- ---------------- --- ------------------- --------------------
Ford B. Draper, Jr.* [__] Chairman, President President and Director,
1300 Market Street and Treasurer Kalmar Investments Inc.
Suite 500 since 1981; President,
Wilmington, DE 19801 Kalmar Investment
Advisers since
inception ______, 1996.
<PAGE>
John J. Quindlen [__] Trustee [___________________]
David M. Reese, Jr.* [__] Trustee Semi-retired; previously,
1300 Market Street portfolio manager,
Suite 500 research analyst for
Wilmington, DE 19801 Kalmar Investments, Inc.
from 1981 through
March, 1996.
David D. Wakefield [__] Trustee
[Trustee to be named]
[Trust officers to be
determined]
__________________
*Trustees who are "interested persons" as defined in the Investment
Company Act of 1940.
The officers conduct and supervise the daily business operations of the
Trust, while the trustees, in addition to the functions set forth under
"Investment Adviser" and "Distributor" review such actions and decide on
general policy. Compensation to officers and Trustees of the Trust who are
affiliated with the Adviser is paid by the Adviser, and not by the Trust.
Information relating to the compensation to be paid to the Trustees of the
Trust is set forth below:
Pension or
Estimated Retirement Total Com-
Aggregate Benefits Estimated pensation
Compensation Accrued as Annual From Trust
From Trust Part of Benefits and Fund
Name and (Current Trust Upon Complex Paid
Position Fiscal Year)1 Expenses Retirement to Trustees
- -------- ------------- -------- ---------- -----------
Ford B. Draper, Jr. $0 N/A N/A $0
John J. Quindlen [$__] N/A N/A [$__]
David M. Reese, Jr. [$__] N/A N/A [$__]
David D. Wakefield [$__] N/A N/A [$__]
[Trustee to be
named]
1 THE TRUSTEES WHO ARE "INTERESTED PERSONS" OF THE TRUST AS DEFINED IN
THE INVESTMENT COMPANY ACT RECEIVE NO COMPENSATION FOR THEIR SERVICE
AS TRUSTEES. [FOR THEIR SERVICE AS TRUSTEES, THE "NON-INTERESTED"
TRUSTEES RECEIVE A $______ ANNUAL FEE AND $_____ PER FUND PER TRUST
MEETING ATTENDED, AS WELL AS REIMBURSEMENT FOR OUT-OF-POCKET EXPENSES
IN CONNECTION WITH TRAVEL AND ATTENDANCE AT BOARD MEETINGS.] THE
TRUST HAS NOT COMPLETED A FULL FISCAL YEAR AND, AS OF THE DATE OF THIS
STATEMENT OF ADDITIONAL INFORMATION, [ONE] MEETING OF THE BOARD OF
TRUSTEES WAS HELD AT WHICH ALL OF THE TRUSTEES WERE PRESENT. THE
AMOUNT IN COLUMN 2 REPRESENTS THE ESTIMATED AGGREGATE COMPENSATION TO
BE PAID TO EACH TRUSTEE FROM THE TRUST FOR THE CURRENT FISCAL YEAR.
IT IS EXPECTED THAT THE TRUST WILL HOLD FOUR TRUSTEE MEETINGS PER
YEAR.
<PAGE>
The Trust has an Audit Committee which has the responsibility, among other
things, to (i) recommend the selection of the Trust's independent auditors;
(ii) review and approve the scope of the independent auditors' audit
activity; (iii) review the financial statements which are the subject of
the independent public auditors' certifications; and (iv) review with such
independent public auditors the adequacy of the Funds' basic accounting
system and the effectiveness of the Funds' internal accounting controls.
There is no separate Nominating or Investment Committee. Items pertaining
to these Committees are submitted to the full Board of Trustees.
The Trust has not adopted a pension plan or any other plan that would
afford benefits to its Trustees.
ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTING AGENT.
Rodney Square Management Corporation ("Rodney Square"), located at Rodney
Square North, 1100 N. Market Street, Wilmington, DE 19801-0001, provides
certain administrative services to the Trust pursuant to an Administration
Agreement. [Under the Administration Agreement, the Administrator: (1)
coordinates with the Custodian and Transfer Agent and monitors the services
they provide to the Funds; (2) coordinates and monitors any other third
parties furnishing services to the Funds; (3) provides the Funds with
necessary office space, telephones and other communications facilities and
personnel competent to perform administrative and clerical functions; (4)
supervises the maintenance by third parties of such books and records of
the Funds as may be required by applicable federal or state law; (5)
prepare and, after approval by the Funds, arranges for the filing of such
registration statements and other documents with the Securities and
Exchange Commission and other federal and state regulatory authorities as
may be required by applicable law; (8) reviews and submits to the officers
of the Trust, for their approval, invoices or other requests for payment of
the Funds' expenses and instructs the Custodian to issue check in payment
thereof; and (9) takes such other action with respect to the Trust or the
Funds as may be necessary in the opinion of Rodney Square to perform its
duties under the Agreement.]
As compensation for services performed under the Administration Agreement,
Rodney Square receives a fee payable monthly at an annual rate (as
described in each Fund's Prospectus) multiplied by the average daily net
assets of the Trust.
The Administration Agreement became effective as of _____________, 1996 for
an initial period of three years, and will remain in effect from year to
year thereafter, provided such continuance is approved at least annually by
a vote of the Trustees of the Trust. The Administration Agreement is also
terminable without payment of any penalty with respect to either Fund: (i)
by the Trust on sixty (60) days' written notice to Rodney Square; or (ii)
by Rodney Square on six (6) months' written notice to the Trust. The
Administration Agreement may also be terminable by the Trust or Rodney
Square for cause.
DISTRIBUTOR
Rodney Square Distributors, Inc. ("RSD") serves as the principal
underwriter and distributor of each Fund's shares pursuant to a
Distribution Agreement with the Trust. Under the terms of the Distribution
Agreement, RSD agrees to use all reasonable efforts as agent to secure
purchasers for the various series of the Trust. RSD also assists the Trust
in the production and distribution of advertising, marketing and sales
literature materials, and review such materials for compliance with
applicable regulations.
<PAGE>
The Distribution Agreement provides that RSD, in the absence of willful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of reckless disregard of its obligations and duties under the
agreement, will not be liable to the Trust or its shareholders for losses
arising in connection with the sale of Fund shares.
Each Fund shall continue to bear the expense of all filing or registration
fees incurred in connection with the registration of shares under state
securities laws.
The Distribution Agreement became effective as of ___________ __, 1996, and
will remain in effect for a period of two years. Thereafter, the
Distribution Agreement continues in effect from year to year as long as its
continuance is approved at least annually by a majority of the Trustees,
including a majority of the Trustees who are not parties to the
Distribution Agreement or interested persons of any such party (the
"Independent Trustees") and terminates automatically in the event of its
assignment. The Distribution Agreement is also terminable without payment
of any penalty with respect to either Fund: (i) by such Fund (by vote of a
majority of the Independent Trustees or by vote of a majority of the
outstanding voting securities of the Fund) on sixty (60) days' written
notice to RSD; or (ii) by RSD on sixty (60) days' written notice to the
Fund.
PURCHASES
Shares of the Funds are sold at the net asset value next determined after
the receipt and acceptance of a purchase application in proper form by
Rodney Square. The minimum initial investment for each Fund is $10,000 and
there is no subsequent investment minimums.
TAX-DEFERRED RETIREMENT PLANS
All types of tax-deferred retirement plans such as IRAs, employer-sponsored
defined contribution plans (including 401(k) plans) and tax-sheltered
custodial accounts described in Section 403(b)(7) of the Internal Revenue
Code of 1986, as amended are available to shareholders of the Funds.
Qualified investors benefit from the tax-free compounding of income
dividends and capital gains distributions.
INDIVIDUAL RETIREMENT ACCOUNTS (IRA)
Individuals, who are not active participants (and, when a joint return is
filed, who do not have a spouse who is an active participant) in an
employer maintained retirement plan are eligible to contribute on a
deductible basis to an IRA account. The IRA deduction is also retained for
individual taxpayers and married couples with adjusted gross incomes not in
excess of certain specified limits. All individuals who have earned income
may make nondeductible IRA contributions to the extent that they are not
eligible for a deductible contribution. Income earned by an IRA account
will continue to be tax deferred. A special IRA program is available for
employers under which the employers may establish IRA accounts for their
employees in lieu of establishing tax-qualified retirement plans. Known as
SEP-IRAs (Simplified Employee Pension-IRA), they free the employer of many
of the recordkeeping requirements of establishing and maintaining a tax-
qualified retirement plan trust.
If you are entitled to receive a distribution from a qualified retirement
plan, you may rollover all or part of that distribution into a Fund's IRA.
Your rollover contribution is not subject to the limits on annual IRA
<PAGE>
contributions. You can continue to defer Federal income taxes on your
contribution and on any income that is earned on that contribution.
DEFINED CONTRIBUTION PLANS
Profit sharing plans and money purchase plans (the "Defined Contribution
Plans") are for use by both self-employed individuals (sole proprietorships
and partnerships) and corporations who wish to use shares of the Funds as a
funding medium for a retirement plan qualified under the Internal Revenue
Code.
Annual deductible contributions to the Defined Contribution Plans generally
may be made on behalf of each participant in a total amount of up to the
lesser of 20% of a self-employed participant's pre-contribution earned
income (after reducing the earned income by the self-employed's deduction
for 1/2 of his or her self-employment tax) (25% of a non-self-employed
participant's wages) or $30,000. Unless the employer chooses to take
Social Security contributions into account, the same percentage of earned
income (or wages) must be contributed on behalf of each participant in the
Defined Contribution Plans. Earned income and wages are limited for this
purpose to $150,000 for 1994 indexed for cost of living adjustments in
subsequent years.
403(B)(7) RETIREMENT PLAN
A 403(b)(7) Plan is for use by schools, hospitals, and certain other tax-
exempt organizations or associations who wish to use shares of the Funds as
a funding medium for a retirement plan for their employees. Contributions
are made to the 403(b)(7) Plan as a reduction to the employee's regular
compensation. Such contributions, to the extent they do not exceed
applicable limitations (including a generally applicable limitation of
$9,500 per year), are excludable from the gross income of the employee for
Federal Income tax purposes. Assets withdrawn from the 403(b)(7) Plan are
subject to Federal Income tax and to the additional 10% tax discussed above
under "Defined Contribution Plans."
In all these Plans, distributions of net investment income and capital
gains will be automatically reinvested.
REDEMPTIONS
Under normal circumstances, you may redeem your shares at any time without
a fee. The redemption price will be based upon the net asset value per
share next determined after receipt of the redemption request, provided it
has been submitted in the manner described in the Prospectus of each Fund.
See "How to Redeem Shares" in the Prospectus. The redemption price may be
more or less than your cost, depending upon the net asset value per share
at the time of redemption.
Payment for shares tendered for redemption is made by check within seven
days after receipt and acceptance of your redemption request by Rodney
Square, except that each Fund reserves the right to suspend the right of
redemption, or to postpone the date of payment upon redemption beyond seven
days, (i) for any period during which the New York Stock Exchange is
restricted, (ii) for any period during which an emergency exists as
determined by the Securities and Exchange Commission as a result of which
disposal of securities owned by a given Fund is not reasonably predictable
or it is not reasonably practicable for such Fund fairly to determine the
value of its net assets, or (iii) for such other periods as the Securities
<PAGE>
and Exchange Commission may by order permit for the protection of Fund
shareholders.
TAXATION
Each Fund intends to qualify each year as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code").
In order to so qualify, a Fund must, among other things (i) derive at least
90% of its gross income from dividends, interest, payments with respect to
certain securities loans, gains from the sale of securities or foreign
currencies, or other income (including but not limited to gains from
options, futures or forward contracts) derived with respect to its business
of investing in such stock, securities or currencies; (ii) derive less than
30% of its gross income from the sale or other disposition of stock or
securities or certain futures and options thereon held for less than three
months ("short-short gains"); (iii) distribute at least 90% of its
dividends, interest and certain other taxable income each year; and (iv) at
the end of each fiscal quarter maintain at least 50% of the value of its
total assets in cash, government securities, securities of other regulated
investment companies, and other securities of issuers which represent, with
respect to each issuer, no more than 5% of the value of a fund's total
assets and 10% of the outstanding voting securities of such issuer, and
with no more than 25% of its assets invested in the securities (other than
those of the government or other regulated investment companies) of any one
issuer or of two or more issuers which the Fund controls and which are
engaged in the same, similar or related trades and businesses.
To the extent a Fund qualifies for treatment as a regulated investment
company, it will not be subject to federal income tax on income and net
capital gains paid to shareholders in the form of dividends or capital
gains distributions. The Funds have elected to be treated as regulated
investment companies under Subchapter M of the Code and each intends to
qualify as such for each future fiscal year. The Directors reserve the
right not to maintain the qualification of the Fund as a regulated
investment company if they determine such course of action to be beneficial
to you. In such case, the Fund will be subject to federal, and possibly
state, corporate taxes on its taxable income and gains, and distributions
to you will be taxable as ordinary dividend income to the extent of the
Fund's available earnings and profits. Shareholders will be advised
annually as to the Federal income tax consequences of distributions made
during the year.
An excise tax at the rate of 4% will be imposed on the excess, if any, of a
Fund's "required distributions" over actual distributions in any calendar
year. Generally, the "required distribution" is 98% of a fund's ordinary
income for the calendar year plus 98% of its capital gain net income
recognized during the one-year period ending on October 31 plus
undistributed amounts from prior years. The Funds intend to make
distributions sufficient to avoid imposition of the excise tax.
Distributions declared by the Funds during October, November or December to
shareholders of record during such month and paid by January 31 of the
following year will be taxable to shareholders in the calendar year in
which they are declared, rather than the calendar year in which they are
received.
<PAGE>
Each Fund will provide an information return to shareholders describing the
federal tax status of the dividends paid by the Fund during the preceding
year within 60 days after the end of each year as required by present tax
law. Individual shareholders will receive Form 1099-DIV and Form 1099-B as
required by present tax law during January of each year. If the Fund makes
a distribution after the close of its fiscal which is attributable to
income or gains earned in such earlier fiscal year, then the Fund shall
send a notice to its shareholders describing the amount and character of
such distribution within 60 days after the close of the year in which the
distribution is made. Shareholders should consult their tax advisors
concerning the state or local taxation of such dividends, and the federal,
state and local taxation of capital gains distributions.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations currently in effect. For
the complete provisions, reference should be made to the pertinent Code
sections and regulations. The Code and regulations are subject to change
by legislative or administrative action at any time, and retroactively.
Dividends and distributions also may be subject to state and local taxes.
GENERAL INFORMATION
AUDITS AND REPORTS
The accounts of the Trust are audited each year by Coopers & Lybrand
L.L.P., independent certified public accountants. Shareholders receive
semi-annual and annual reports of the Trust including the annual audited
financial statements and a list of securities owned.
PERFORMANCE
Current yield and total return may be quoted in advertisements, shareholder
reports or other communications to shareholders. Yield is the ratio of
income per share derived from a Fund's investments to a current maximum
offering price expressed in terms of percent. The yield is quoted on the
basis of earnings after expenses have been deducted. Total return is the
total of all income and capital gains paid to shareholders, assuming
reinvestment of all distributions, plus (or minus) the change in the value
of the original investment, expressed as a percentage of the purchase
price. Occasionally, a Fund may include its distribution rate in
advertisements. The distribution rate is the amount of distributions per
share made by a Fund over a 12-month period divided by the current maximum
offering price.
The Securities and Exchange Commission rules require the use of
standardized performance quotations or, alternatively, that every non-
standardized performance quotation furnished by a Fund be accompanied by
certain standardized performance information computed as required by the
Commission. Current yield and total return quotations used by a Fund are
based on the standardized methods of computing performance mandated by the
Securities and Exchange Commission. An explanation of those and other
methods used by a Fund to compute or express performance follows.
<PAGE>
CURRENT YIELD
As indicated below, current yield is determined by dividing the net
investment income per share earned during the period by the maximum
offering price per share on the last day of the period and analyzing the
result. Expenses accrued for the period include any fees charged to all
shareholders during the 30-day base period. According to the Securities
and Exchange Commission formula:
6
Yield = 2 [(a-b +1) - 1]
---
cd
where
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the
period.
TOTAL RETURN
As the following formula indicates, the average annual total return is
determined by multiplying a hypothetical initial purchase order of $1,000
by the average annual compound rate of return (including capital
appreciation/depreciation and dividends and distributions paid and
reinvested) for the stated period less any fees charged to all shareholder
accounts and analyzing the result. The calculation assumes the maximum
sales load is deducted from the initial $1,000 purchase order and that all
dividends and distributions are reinvested at the public offering price on
the reinvestment dates during the period. The quotation assumes the
account was completely redeemed at the end of each one, five and ten-year
period and assumes the deduction of all applicable charges and fees.
According to the Securities and Exchange Commission formula:
n
P(1+T) = ERV
where:
P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment made
at the beginning of the 1, 5 or 10-year periods, determined at
the end of the 1, 5 or 10-year periods (or fractional portion
thereof).
Regardless of the method used, past performance is not necessarily
indicative of future results, but is an indication of the return to
shareholders only for the limited historical period used.
<PAGE>
COMPARISONS AND ADVERTISEMENTS
To help investors better evaluate how an investment in a Fund might satisfy
their investment objective; advertisements, sales literature and other
shareholder communications regarding a Fund may discuss yield or total
return for such Fund as reported by various financial publications.
Advertisements, sales literature and shareholder communications may also
compare yield or total return to yield or total return as reported by other
investments, indices, and averages. The following publications, indices,
and averages may be used:
Barron's Personal Investor
Business Week Personal Investing News
CDA Investment Technologies, Inc. Russell 2000 Index
Changing Times, The Kiplinger Magazine Russell 2000 Value and Growth Indexes
Consumer Digest S&P 500 Composite Stock Price Index
Financial World S&P SmallCap 600 Index
Forbes S&P MidCap 400 Index
Fortune S&P/Barra Growth & Value Indexes
Investment Company Data, Inc. Success
Investor's Daily The New York Times
Lipper Mutual Fund Performance Analysis U.S. News and World Report
Lipper Mutual Fund Indices USA Today
Money Wall Street Journal
Morningstar, Inc. Wiesenberger Investment Companies
Mutual Fund Values Services
Nasdaq Indexes Wilshire Medium & Small Cap Indexes
A Fund may also from time to time along with performance advertisements,
present its investments, as of a current date, in the form of the "Schedule
of Investments" included in the Semi-Annual and Annual Reports to the
shareholders of the Trust.
<PAGE>
FINANCIAL STATEMENTS
[To be provided]
<PAGE>
APPENDIX
Description of Corporate Bond Ratings
Moody's
Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by large or 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 rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large, 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.
A - Bonds rated A possess many favorable investment attributes and are
considered 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 sometime in the future.
Baa - Bonds rated Baa are considered medium grade obligations. They are
neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements 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 rated Ba are judged to have predominantly speculative elements
and their future cannot be considered well assured. Often the protection of
interest and principal payments is 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 rated B 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.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond ratings. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; modifier 2 indicates a mid-range ranking; and
modifier 3 indicates that the issue ranks in the lower end of its generic
rating category.
S&P
AAA - This is the highest rating assigned by S&P to a debt obligation and
indicates an extremely strong capacity to pay principal and interest.
AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong and, in the majority of
instances, differ from AAA issues only in small degree.
<PAGE>
A - Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for
bonds in this category than for bonds in the A category.
BB, B, CCC, CC - Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms of the
obligations. BB indicates the lowest degree of speculation and CC the
highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
<PAGE>
INVESTMENT ADVISER
Kalmar Investment Advisers
1300 Market Street
Suite 500
Wilmington, DE 19801
UNDERWRITER
Rodney Square Distributors, Inc.
1105 N. Market Street
Wilmington, DE 19890
SHAREHOLDER SERVICES
Rodney Square Management Corporation
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
CUSTODIAN
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Coopers & Lybrand, L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
<PAGE>
PART C: OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements:
To be filed by amendment.
See "Financial Statements" in Part B of this Registration Statement
(b) Exhibits:
(1) Agreement and Declaration of Trust of Kalmar Pooled Investment
Trust (the "Registrant") dated September 12, 1996 is filed
herewith.
(2) By-laws of the Registrant is filed herewith.
(3) Voting Trust Agreement --- Not Applicable.
(4) Specimen copy of each security to be issued by the Registrant
--- Not Applicable.
(5) Investment Advisory Agreements ---
(a) "Form of" Investment Advisory Agreement between the
Registrant on behalf of the Kalmar "Growth-with-Value"
Small Cap Fund series (the "Small Cap Fund") and Kalmar
Investment Advisers is filed herewith.
(b) "Form of" Investment AdvisoryAgreement between Registrant
on behalf of the Kalmar "Growth-with-Value" Micro Cap Fund
series (the "Micro Cap Fund") and Kalmar Investment
Advisers is filed herewith.
(6) Distribution Agreements ---
(a) "Form of" Distribution Agreement between the Registrant
on behalf of the Small Cap and Micro Cap Funds and Rodney
Square Distributors, Inc. is filed herewith.
(b) Dealer/Selling Agreements of the Registrant --- Not
applicable.
(7) Bonus, profit-sharing and pension contracts of the Registrant
--- Not Applicable.
(8) Custodian Agreement --- "Form of" Custody Agreement between
the Registrant and Wilmington Trust Company is filed herewith.
(9) Other Material Contracts ---
(a) "Form of" Accounting Services Agreement between the
Registrant and Rodney Square Management Corporation is
filed herewith.
(b) "Form of" Administration Agreement between the Registrant
and Rodney Square Management Corporation is filed herewith.
(c) "Form of" Transfer Agency Agreement between the Registrant
and Rodney Square Management Corporation is filed herewith.
<PAGE>
(10) Opinion and Consent of Counsel as to the legality of the
securities to be issued will be filed by the Registrant on a
yearly basis along with its Rule 24f-2 Notice.
(11) Consent of Independent Auditors.
To be filed by amendment.
(12) Other Financial Statements --- Not Applicable.
(13) Letter of Understanding relating to initial capital.
To be filed by amendment.
(14) Model Plans --- Not Applicable.
(15) 12b-1 Plans --- Not Applicable.
(16) Schedule for Computation of Performance Quotation --- Not
Applicable.
(17) Financial Data Schedule --- Not Applicable.
(18) Multiple Class Plan --- Not Applicable.
(19) Powers-of-Attorney.
To be filed by amendment.
ITEM 25. PERSONS CONTROLLED OR UNDER COMMON CONTROL WITH THE REGISTRANT.
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES:
The number of record holders of securities of the Registrant as
of the effective date of this registration statement is as
follows:
(1) (2)
Title of Class Number of Record Holders
-------------- ------------------------
Shares of beneficial
interest, par value of
$[_____]:
Small Cap Fund [_____]
Micro Cap Fund [_____]
ITEM 27. INDEMNIFICATION.
Under the terms of the Delaware Business Trust Act and the
Registrant's Agreement and Declaration of Trust and By-Laws, no
officer or trustee of the Fund shall have any liability to the Trust
or its shareholders, except to the extent such limitation of liability
is precluded by Delaware law, the Agreement and Declaration of Trust,
or the By-Laws.
<PAGE>
Subject to the standards and restrictions set forth in the Trust's
Agreement and Declaration of Trust, the Delaware Business Trust Act,
section 3817, permits a business trust to indemnify and hold harmless
any trustee, beneficial owner, or other person from and against any
and all claims and demands whatsoever. Section 3803 protects a
trustee, when acting in such capacity, from personal liability to any
person other than the business trust or a beneficial owner for any
act, omission, or obligation of the business trust or any trustee
thereof, except as otherwise provided in the Agreement and Declaration
of Trust.
The Agreement and Declaration of Trust provides that the Trustees
shall not be responsible or liable in any event for any neglect or
wrong-doing of any officer, agent, employee, Manager or Principal
Underwriter of the Fund, nor shall any Trustee be responsible for the
act or omission of any other Trustee. Subject to the provisions of
the By-Laws, the Trust, out of its assets, may indemnify and hold
harmless each and every Trustee and officer of the Trust from and
against any and all claims, demands, costs, losses, expenses, and
damages whatsoever arising out of or related to such Trustees'
performance of his or her duties as a Trustee or officer of the Trust;
provided that nothing in the Declaration of Trust shall indemnify,
hold harmless or protect any Trustee or officer from or against any
liability to the Trust or any Shareholder to which he or she would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his or her office.
The By-Laws provide indemnification for each Trustee and officer who
was or is a party or is threatened to be made a party to any
proceeding, by reason of service in such capacity, to the fullest
extent, if it is determined that Trustee or officer acted in good
faith and reasonably believed: (a) in the case of conduct in his
official capacity as an agent of the Trust, that his conduct was in
the Trust's best interests; (b) in all other cases, that his conduct
was at least not opposed to the Trust's best interests; and (c) in the
case of a criminal proceeding, that he had no reasonable cause to
believe the conduct of that person was unlawful. However, there shall
be no right to indemnification for any liability arising by reason of
willful misfeasance, bad faith, gross negligence, or the reckless
disregard of the duties involved in the conduct of the Trustee's or
officer's office with the Trust. Further, no indemnification shall be
made:
(a) In respect of any proceeding as to which any Trustee or
officer shall have been adjudged to be liable on the basis
that personal benefit was improperly received by him,
whether or not the benefit resulted from an action taken in
the person's official capacity; or
(b) In respect of any proceeding as to which any Trustee or
officer shall have been adjudged to be liable in the
performance of that person's duty to the Trust, unless and
only to the extent that the court in which that action was
brought shall determine upon application that in view
of all the relevant circumstances of the case, that person
is fairly and reasonably entitled to indemnity for the
expenses which the court shall determine; however, in such
<PAGE>
case, indemnification with respect to any proceeding by or
in the right of the Trust or in which liability shall have
been adjudged by reason of the disabling conduct set forth
in the preceding paragraph shall be limited to expenses; or
(c) Of amounts paid in settling or otherwise disposing of a
proceeding, with or without court approval, or of expenses
incurred in defending a proceeding which is settled or
otherwise disposed of without court approval, unless the
required court approval set forth in the By-Laws is
obtained.
In any event, the Trust shall indemnify each officer and Trustee
against expenses actually and reasonably incurred in connection with
the successful defense of any proceeding to which each such officer or
Trustee is a party by reason of service in such capacity, provided
that the Board of Trustees, including a majority who are
disinterested, non-party trustees, also determines that such officer
or Trustee was not liable by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of his or her duties of
office. The Trust shall advance to each officer and Trustee who is
made a party to a proceeding by reason of service in such capacity the
expenses incurred by such person in connection therewith, if: (a) the
officer or Trustee affirms in writing that his good faith belief that
he has met the standard of conduct necessary for indemnification, and
gives a written undertaking to repay the amount of advance if it is
ultimately determined that he has not met those requirements; and (b)
a determination that the facts then known to those making the
determination would not preclude indemnification.
The Trustees and officers of the Trust are entitled and empowered
under the Declaration of Trust and By-Laws, to the fullest extent
permitted by law, to purchase errors and omissions liability insurance
with assets of the Trust, whether or not the Trust would have the
power to indemnify him against such liability under the Declaration of
Trust or By-Laws.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Trustees, officers, the
underwriter or control persons of the Registrant pursuant to the
foregoing provisions, the Registrant has been informed that, in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in that Act and
is, therefore, unenforceable.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER.
KALMAR INVESTMENT ADVISERS:
The sole business activity of Kalmar Investment Advisers 1300 Market
Street, Wilmington, DE 19801 (the "Adviser") is to serve as investment
adviser to each series of the Registrant. Information as to the
ownership and officers of the Adviser is included in its Form ADV,
File No. 801-[____], filed on [__________________], with the U.S.
Securities and Exchange Commission under the Investment Advisers Act
of 1940. Such Form ADV is incorporated by reference herein.
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITER.
(a) Rodney Square Distributors, Inc. ("RSD"), the principal
underwriter and distributor for the Registrant's securities
and currently acts as distributor for the following entities:
The Rodney Square Fund
The Rodney Square Multi-Manager Fund
The Rodney Square Tax-Exempt Fund
The Rodney Square Strategic Fixed-Income Fund
Heitman Real Estate Fund, Institutional Class
Kiewit Mutual Fund
1838 Investment Advisors Funds
The Olstein Funds
The HomeState Group
(b) The table below sets forth certain information as to the
Distributor's Directors, officers and Control Persons:
POSITION(S) AND OFFICE(S) POSITION(S)
NAME AND PRINCIPAL WITH RODNEY SQUARE AND OFFICE(S)
BUSINESS ADDRESS DISTRIBUTORS, INC. WITH REGISTRANT
- -------------------------------------------------------------------------
Jeffrey O. Stroble President, Secretary, None
1105 North Market Street Treasurer & Director
Wilmington, DE 19890
Martin L. Klopping Director None
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Cornelius G. Curran Vice President None
1105 North Market Street
Wilmington, DE 19890
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
Each account, book or other document required to be maintained by
Section 31(a) of the 1940 Act and the Rules (17 CFR 270-31a-1 to 31a-
3) promulgated thereunder, is maintained by the Registrant at 1300
Market Street, Wilmington, DE 19801, except for those maintained by
the Registrant's administrator, transfer agent, dividend paying agent
and accounting services agent, Rodney Square Management Corporation,
at Rodney Square North, 1100 North Market Street, Wilmington, DE
19890.
ITEM 31. MANAGEMENT SERVICES.
There are no management related service contracts not discussed in
Part A or Part B.
<PAGE>
ITEM 32. UNDERTAKINGS.
(a) Inapplicable.
(b) The Registrant hereby undertakes to file a post-effective
amendment, using reasonably current financial statements
which need not be audited, within four to six months from the
commencement of investment operations.
(c) The Registrant hereby undertakes, if requested to do so by the
holders of at least 10% of the Registrant's outstanding shares,
to call a meeting of shareholders for the purpose of voting upon
the question of removal of a trustee or trustees and to assist
in communication with other shareholders, as directed by Section
16(c) of the Investment Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Wilmington, and state of Delaware
on the 30th day of September, 1996.
Kalmar Pooled Investment Trust
By: Ford B. Draper, Jr.
-------------------
Ford B. Draper, Jr.
Chairman, President and Treasurer
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
Signature Title Date
- --------- ----- ----
Ford B. Draper, Jr. Chairman, President September 30, 1996
- -------------------
Ford B. Draper, Jr. and Treasurer
John J. Quindlen Trustee September 20, 1996
- -------------------
John J. Quindlen
David M. Reese, Jr. Trustee September 30, 1996
- -------------------
David M. Reese, Jr.
David D. Wakefield Trustee September 20, 1996
- -------------------
David D. Wakefield
_______________________ Trustee
*By: ____________________________________
Ford B. Draper, Jr., Attorney-in-Fact
(Pursuant to Power of Attorney
filed herewith)
<PAGE>
EXHIBIT INDEX
Exhibit Page No.
- ------- --------
Agreement and Declaration of Trust of the
Registrant dated September 12, 1996. EX-99.B1
By-Laws of the Registrant. EX-99.B2
"Form of" Investment Advisory Agreement
between the Registrant on behalf of the
Small Cap Fund and Kalmar Investment
Advisers. EX-99.B5A
"Form of" Investment Advisory Agreement
between the Registrant on behalf of the
Micro Cap Fund and Kalmar Investment
Advisers. EX-99.B5B
"Form of" Distribution Agreement between
the Registrant and Rodney Square
Distributors, Inc. EX-99.B6
"Form of" Custodian Agreement between the
Registrant and Wilmington Trust Company. EX-99.B8
"Form of" Accounting Services Agreement
between the Registrant and Rodney Square
Management Corporation. EX-99.B9
"Form of" Administration Agreement
between the Registrant and Rodney Square
Management Corporation. EX-99.B9
"Form of" Transfer Agency Agreement
between the Registrant and Rodney Square
Management Corporation. EX-99.B9
Exhibit 1
Effective as of
September 12, 1996
AGREEMENT AND DECLARATION OF TRUST
==================================
of
Kalmar Pooled Investment Trust
a Delaware Business Trust
Principal Place of Business:
1300 Market Street
Suite 500
Wilmington, DE 19801
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I..................................................... 1
Name and Definitions................................ 1
Section 1. Name............................... 1
Section 2. Definitions........................ 1
(a) Trust................................ 1
(b) Trust Property....................... 1
(c) Trustees............................. 1
(d) Shares............................... 2
(e) Shareholder.......................... 2
(f) Person............................... 2
(g) 1940 Act............................. 2
(h) Commission and Principal
Underwriter.......................... 2
(i) Declaration of Trust................. 2
(j) By-Laws.............................. 2
(k) Interested Person.................... 2
(l) Investment Manager................... 2
(m) Series............................... 2
ARTICLE II.................................................... 2
Purpose of Trust.................................... 2
ARTICLE III................................................... 3
Shares.............................................. 3
Section 1. Division of Beneficial Interest.... 3
Section 2. Ownership of Shares................ 3
Section 3. Investments in the Trust........... 4
Section 4. Status of Shares and Limitation of
Personal Liability................. 4
Section 5. Power of Board of Trustees to
Change Provisions Relating to
Shares............................. 4
Section 6. Establishment and Designation of
Shares............................. 5
(a) Assets Held with Respect to
a Particular Series................... 5
(b) Liabilities Held with Respect to a
Particular Series..................... 5
(c) Dividends, Distributions,
Redemptions, and Repurchases.......... 6
(d) Voting................................ 6
(e) Equality.............................. 6
(f) Fractions............................. 7
(g) Exchange Privilege.................... 7
(h) Combination of Series................. 7
(i) Elimination of Series................. 7
ARTICLE IV.................................................... 7
The Board of Trustees............................... 7
(i)
<PAGE>
Page
----
Section 1. Number, Election and Tenure........ 7
Section 2. Effect of Death, Resignation,
etc. of a Trustee.................. 8
Section 3. Powers............................. 8
Section 4. Payment of Expenses by the Trust... 11
Section 5. Ownership of Assets of the Trust... 12
Section 6. Service Contracts.................. 12
ARTICLE V..................................................... 13
Shareholders' Voting Powers and Meetings............ 13
Section 1. Voting Powers...................... 13
Section 2. Voting Power and Meetings.......... 14
Section 3. Quorum and Required Vote........... 14
Section 4. Action by Written Consent.......... 14
Section 5. Record Dates....................... 14
ARTICLE VI.................................................... 15
Net Asset Value, Distributions, and Redemptions..... 15
Section 1. Determination of Net Asset Value,
Net Income, and Distributions...... 15
Section 2. Redemptions and Repurchases........ 15
Section 3. Redemptions at the Option of the
Trust.............................. 16
Section 4. Transfer of Shares................. 16
ARTICLE VII................................................... 16
Compensation and Limitation of Liability............ 16
Section 1. Compensation of Trustees........... 16
Section 2. Indemnification and Limitation
of Liability....................... 16
Section 3. Trustee's Good Faith Action,
Expert Advice, No Bond or Surety... 17
Section 4. Insurance.......................... 17
ARTICLE VIII.................................................. 17
Miscellaneous....................................... 17
Section 1. Liability of Third Persons
Dealing with Trustees.............. 17
Section 2. Termination of Trust or Series..... 18
Section 3. Merger and Consolidation........... 18
Section 4. Amendments......................... 18
Section 5. Filing of Copies, References,
Headings........................... 19
Section 6. Applicable Law..................... 19
Section 7. Provisions in Conflict with Law
or Regulations..................... 19
Section 8. Business Trust Only................ 20
Section 9. Use of the Name "Kalmar"........... 20
(ii)
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
==================================
OF
KALMAR POOLED INVESTMENT TRUST
==============================
WHEREAS, this AGREEMENT AND DECLARATION OF TRUST is made and
entered into as of the date set forth below by the Trustees named hereunder
for the purpose of forming a Delaware business trust in accordance with the
provisions hereinafter set forth,
NOW, THEREFORE, the Trustees hereby direct that a Certificate of
Trust be filed with the Office of the Secretary of State of the State of
Delaware and do hereby declare that the Trustees will hold IN TRUST all
cash, securities and other assets which the Trust now possesses or may
hereafter acquire from time to time in any manner and manage and dispose of
the same upon the following terms and conditions for the pro rata benefit
of the holders of Shares in this Trust.
ARTICLE I.
Name and Definitions
SECTION 1. NAME. This trust shall be known as "Kalmar Pooled
Investment Trust" and the Trustees shall conduct the business of the Trust
under that name or any other name as they may from time to time determine.
SECTION 2. DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "Trust" refers to the Delaware business trust
established by this Agreement and Declaration of Trust, as amended from
time to time;
(b) The "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for the
account of the Trust;
(c) "Trustees" refers to the persons who have signed this
Agreement and Declaration of Trust, so long as they continue in office in
accordance with the terms hereof, and all other persons who may from time
to time be duly elected or appointed to serve on the Board of Trustees in
accordance with the provisions hereof, and reference herein to a Trustee or
the Trustees shall
refer to such person or persons in their capacity as trustees hereunder;
(d) "Shares" means the shares of beneficial interest into which
the beneficial interest in the Trust shall be divided from time to time and
includes fractions of Shares as well as whole Shares;
(e) "Shareholder" means a record owner of outstanding Shares;
(f) "Person" means and includes individuals, corporations,
partnerships, trusts, foundations, plans, associations, joint ventures,
estates and other entities, whether or not legal entities, and governments
<PAGE>
and agencies and political subdivisions thereof, whether domestic or
foreign;
(g) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from time to time.
References herein to specific sections of the 1940 Act shall be deemed to
include such Rules and Regulations as are applicable to such sections as
determined by the Trustees or their designees;
(h) The terms "Commission" and "Principal Underwriter" shall
have the respective meanings given them in Section 2(a)(7) and Section
(2)(a)(29) of the 1940 Act;
(i) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust, as amended or restated from time to time;
(j) "By-Laws" shall mean the By-Laws of the Trust as amended
from time to time;
(k) The term "Interested Person" has the meaning given it in
Section 2(a)(19) of the 1940 Act;
(l) "Investment Manager" or "Manager" means a party furnishing
services to the Trust pursuant to any contract described in Article IV,
Section 7(a) hereof;
(m) "Series" refers to each Series of Shares established and
designated under or in accordance with the provisions of Article III.
ARTICLE II.
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the
business of a management investment company registered under the 1940 Act
through one or more Series investing primarily in securities.
ARTICLE III.
Shares
SECTION 1. DIVISION OF BENEFICIAL INTEREST. The beneficial
interest in the Trust shall at all times be divided into an unlimited
number of Shares, with a par value of $0.01 per Share. The Trustees may
authorize the division of Shares into separate Series and the division of
Series into separate classes of Shares. The different Series shall be
established and designated, and the variations in the relative rights and
preferences as between the different Series shall be fixed and determined,
by the Trustees. If only one Series shall be established, the Shares shall
have the rights and preferences provided for herein and in Article III,
Section 6 hereof to the extent relevant and not otherwise provided for
herein.
Subject to the provisions of Section 6 of this Article III, each
Share shall have voting rights as provided in Article V hereof, and holders
of the Shares of any Series shall be entitled to receive dividends, when,
if and as declared with respect thereto in the manner provided in Article
VI, Section 1 hereof. No Share shall have any priority or preference over
<PAGE>
any other Share of the same Series with respect to dividends or
distributions of the Trust or otherwise. All dividends and distributions
shall be made ratably among all Shareholders of a Series (or class) from
the assets held with respect to such Series according to the number of
Shares of such Series (or class) held of record by such Shareholders on the
record date for any dividend or distribution or on the date of termination
of the Trust, as the case may be. Shareholders shall have no preemptive or
other right to subscribe to any additional Shares or other securities
issued by the Trust or any Series. The Trustees may from time to time
divide or combine the Shares of a Series into a greater or lesser number of
Shares of such Series without thereby materially changing the proportionate
beneficial interest of such Shares in the assets held with respect to that
Series or materially affecting the rights of Shares of any other Series.
SECTION 2. OWNERSHIP OF SHARES. The ownership of Shares shall
be recorded on the books of the Trust or a transfer or similar agent for
the Trust, which books shall be maintained separately for the Shares of
each Series. No certificates evidencing the ownership of Shares shall be
issued except as the Board of Trustees may otherwise determine from time to
time. The Trustees may make such rules as they consider appropriate for
the transfer of Shares of each Series (or class) and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar
agent, as the case may be, shall be conclusive as to the identity of the
Shareholders of each Series and as to the number of Shares of each Series
held from time to time by each Shareholder.
SECTION 3. INVESTMENTS IN THE TRUST. Investments may be
accepted by the Trust from such Persons, at such times, on such terms, and
for such consideration as the Trustees from time to time may authorize.
Each investment shall be credited to the Shareholder's account in the form
of full and fractional Shares of the Trust, in such Series (or class) as
the purchaser shall select, at the net asset value per Share next
determined for such Series (or class) after receipt of the investment;
provided, however, that the Trustees may, in their sole discretion, impose
a sales charge or reimbursement fee upon investments in the Trust.
SECTION 4. STATUS OF SHARES AND LIMITATION OF PERSONAL
LIABILITY. Shares shall be deemed to be personal property giving only the
rights provided in this instrument and the By-Laws of the Trust. Every
Shareholder by virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms hereof. The death of a
Shareholder during the existence of the Trust shall not operate to
terminate the Trust, nor entitle the representative of any deceased
Shareholder to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but shall entitle such representative
only to the rights of said deceased Shareholder under this Declaration of
Trust. Ownership of Shares shall not entitle a Shareholder to any title in
or to the whole or any part of the Trust Property or right to call for a
partition or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders as partners or joint
venturers. Neither the Trust nor the Trustees, nor any officer, employee
or agent of the Trust shall have any power to bind personally any
Shareholder, or to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at
any time agree to pay.
<PAGE>
SECTION 5. POWER OF BOARD OF TRUSTEES TO CHANGE PROVISIONS
RELATING TO SHARES. Notwithstanding any other provision of this
Declaration of Trust to the contrary, and without limiting the power of the
Board of Trustees to amend the Declaration of Trust as provided elsewhere
herein, the Board of Trustees shall have the power to amend this
Declaration of Trust, at any time and from time to time, in such manner as
the Board of Trustees may determine in their sole discretion, without the
need for Shareholder action, so as to add to, delete, replace or otherwise
modify any provisions relating to the Shares contained in this Declaration
of Trust, provided that before adopting any such amendment without
Shareholder approval the Board of Trustees shall determine that it is
consistent with the fair and equitable treatment of all Shareholders and
that Shareholder approval is not required by the 1940 Act or other
applicable law. If Shares have been issued, Shareholder approval shall be
required to adopt any amendments to this Declaration of Trust which would
adversely affect to a material degree the rights and preferences of the
Shares of any Series (or class) or to increase or decrease the par value of
the Shares of any Series (or class).
SECTION 6. ESTABLISHMENT AND DESIGNATION OF SHARES. The
establishment and designation of any Series (or class) of Shares shall be
effective upon the adoption by a majority of the Trustees, of a resolution
which sets forth such establishment and designation and the relative rights
and preferences of such Series (or class). Each such resolution shall be
incorporated herein by reference upon adoption.
Shares of each Series (or class) established pursuant to this
Section 6, unless otherwise provided in the resolution establishing such
Series, shall have the following relative rights and preferences:
(a) ASSETS HELD WITH RESPECT TO A PARTICULAR SERIES. All
consideration received by the Trust for the issue or sale of Shares of a
Series, including dividends and distributions paid by, and reinvested in,
such Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds thereof
from whatever source derived, including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably be held with respect to
that Series for all purposes, subject only to the rights of creditors, and
shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits and proceeds thereof, from
whatever source derived, including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds, in
whatever form the same may be, are herein referred to as "assets held with
respect to" that Series. In the event that there are any assets, income,
earnings, profits and proceeds thereof, funds or payments which are not
readily identifiable as assets held with respect to any particular Series
(collectively "General Assets"), the Trustees shall allocate such General
Assets to, between or among any one or more of the Series in such manner
and on such basis as the Trustees, in their sole discretion, deem fair and
equitable, and any General Asset so allocated to a particular Series shall
be held with respect to that Series. Each such allocation by the Trustees
shall be conclusive and binding upon the Shareholders of all Series for all
purposes in absence of manifest error.
<PAGE>
(b) LIABILITIES HELD WITH RESPECT TO A PARTICULAR SERIES. The
assets of the Trust held with respect to each Series shall be charged with
the liabilities of the Trust with respect to such Series and all expenses,
costs, charges and reserves attributable to such Series, and any general
liabilities of the Trust which are not readily identifiable as being held
in respect of a Series shall be allocated and charged by the Trustees to
and among any one or more Series in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges, and reserves so charged to a Series
are herein referred to as "liabilities held with respect to" that Series.
Each allocation of liabilities, expenses, costs, charges and reserves by
the Trustees shall be conclusive and binding upon the holders of all Series
for all purposes in absence of manifest error. All Persons who have
extended credit which has been allocated to a particular Series, or who
have a claim or contract which has been allocated to a Series, shall look
exclusively to the assets held with respect to such Series for payment of
such credit, claim, or contract. In the absence of an express agreement so
limiting the claims of such creditors, claimants and contracting parties,
each creditor, claimant and contracting party shall be deemed nevertheless
to have agreed to such limitation unless an express provision to the
contrary has been incorporated in the written contract or other document
establishing the contractual relationship.
(c) DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS, AND REPURCHASES. No
dividend or distribution including, without limitation, any distribution
paid upon termination of the Trust or of any Series (or class) with respect
to, or any redemption or repurchase of, the Shares of any Series (or class)
shall be effected by the Trust other than from the assets held with respect
to such Series, nor shall any Shareholder of any Series otherwise have any
right or claim against the assets held with respect to any other Series
except to the extent that such Shareholder has such a right or claim
hereunder as a Shareholder of such other Series. The Trustees shall have
full discretion to determine which items shall be treated as income and
which items as capital; and each such determination and allocation shall be
conclusive and binding upon the Shareholders in absence of manifest error.
(d) VOTING. All Shares of the Trust entitled to vote on a
matter shall vote without differentiation between the separate Series on a
one-vote-per-Share basis; provided however, if a matter to be voted on
affects only the interests of not all Series (or class of a Series), then
only the Shareholders of such affected Series (or class) shall be entitled
to vote on the matter.
(e) EQUALITY. All the Shares of each Series shall represent an
equal proportionate undivided interest in the assets held with respect to
such Series (subject to the liabilities of such Series and such rights and
preferences as may have been established and designated with respect to
classes of Shares within such Series), and each Share of a Series shall be
equal to each other Share of such Series.
(f) FRACTIONS. Any fractional Share of a Series shall have
proportionately all the rights and obligations of a whole share of such
Series, including rights with respect to voting, receipt of dividends and
distributions and redemption of Shares.
(g) EXCHANGE PRIVILEGE. The Trustees shall have the authority
to provide that the holders of Shares of any Series shall have the right to
exchange such Shares for Shares of one or more other Series in accordance
<PAGE>
with such requirements and procedures as may be established by the
Trustees.
(h) COMBINATION OF SERIES. The Trustees shall have the
authority, without the approval of the Shareholders of any Series unless
otherwise required by applicable law, to combine the assets and liabilities
held with respect to any two or more Series into assets and liabilities
held with respect to a single Series.
(i) ELIMINATION OF SERIES. At any time that there are no Shares
outstanding of a Series (or class), the Trustees may abolish such Series
(or class).
ARTICLE IV.
The Board of Trustees
SECTION 1. NUMBER, ELECTION AND TENURE. The number of Trustees
constituting the Board of Trustees shall be fixed from time to time by a
written instrument signed, or by resolution approved at a duly constituted
meeting, by a majority of the Board of Trustees, provided, however, that
the number of Trustees shall in no event be less than one (1) nor more than
fifteen (15). Subject to the requirements of Section 16(a) of the 1940
Act, the Board of Trustees, by action of a majority of the then Trustees at
a duly constituted meeting, may fill vacancies in the Board of Trustees and
remove Trustees with or without cause. Each Trustee shall serve during the
continued lifetime of the Trust until he or she dies, resigns, is declared
bankrupt or incompetent by a court of competent jurisdiction, or is
removed. Any Trustee may resign at any time by written instrument signed
by him and delivered to any officer of the Trust or to a meeting of the
Trustees. Such resignation shall be effective upon receipt unless
specified to be effective at some other time. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee
resigning and no Trustee removed shall have any right to any compensation
for any period following his or her resignation or removal, or any right to
damages or other payment on account of such removal. Any Trustee may be
removed at any meeting of Shareholders by a vote of two-thirds of the
outstanding Shares of the Trust. A meeting of Shareholders for the purpose
of electing or removing one or more Trustees may be called (i) by the
Trustees upon their own vote, or (ii) upon the demand of Shareholders
owning 10% or more of the Shares of the Trust in the aggregate.
SECTION 2. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The
death, declination, resignation, retirement, removal, or incapacity of one
or more Trustees, or all of them, shall not operate to annul the Trust or
to revoke any existing agency created pursuant to the terms of this
Declaration of Trust. Whenever a vacancy in the Board of Trustees shall
occur, until such vacancy is filled as provided in Article IV, Section 1,
the Trustees in office, regardless of their number, shall have all the
powers granted to the Trustees and shall discharge all the duties imposed
upon the Trustees by this Declaration of Trust.
SECTION 3. POWERS. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Board of Trustees, and such Board shall have all powers necessary or
convenient to carry out that responsibility including the power to engage
in transactions of all kinds on behalf of the Trust. Trustees, in all
instances, shall act as principals and are and shall be free from the
<PAGE>
control of the Shareholders. The Trustees shall have full power and
authority to do any and all acts and to make and execute any and all
contracts, documents and instruments that they may consider desirable,
necessary or appropriate in connection with the administration of the
Trust. Without limiting the foregoing, the Trustees may: adopt, amend and
repeal By-Laws not inconsistent with this Declaration of Trust providing
for the regulation and management of the affairs of the Trust; elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; appoint from their own number and establish and terminate one
or more committees consisting of two or more Trustees who may exercise the
powers and authority of the Board of Trustees to the extent that the
Trustees determine; employ one or more custodians of the assets of the
Trust and may authorize such custodians to employ subcustodians and to
deposit all or any part of such assets in a system or systems for the
central handling of securities or with a Federal Reserve Bank, retain a
transfer agent or a shareholder servicing agent, or both; provide for the
issuance and distribution of Shares by the Trust directly or through one or
more Principal Underwriters or otherwise; redeem, repurchase and transfer
Shares pursuant to applicable law; set record dates for the determination
of Shareholders with respect to various matters; declare and pay dividends
and distributions to Shareholders of each Series from the assets of such
Series; establish from time to time, in accordance with the provisions of
Article III, Section 6 hereof, any Series of Shares, each such Series to
operate as a separate and distinct investment medium and with separately
defined investment objectives and policies and distinct investment purpose;
and in general delegate such authority as they consider desirable to any
officer of the Trust, to any committee of the Trustees and to any agent or
employee of the Trust or to any such custodian, transfer or shareholder
servicing agent, Investment Manager or Principal Underwriter. Any
determination as to what is in the interests of the Trust made by the
Trustees in good faith shall be conclusive. In construing the provisions
of this Declaration of Trust, the presumption shall be in favor of a grant
of power to the Trustees and unless otherwise specified herein or required
by the 1940 Act or other applicable law, any action by the Board of
Trustees shall be deemed effective if approved or taken by a majority of
the Trustees then in office or a majority of any duly constituted committee
of Trustees. Any action required or permitted to be taken at any meeting
of the Board of Trustees, or any committee thereof, may be taken without a
meeting if all members of the Board of Trustees or committee (as the case
may be) consent thereto in writing, and the writing or writings are filed
with the minutes of the proceedings of the Board of Trustees, or committee,
except as otherwise provided in the 1940 Act.
Without limiting the foregoing, the Trust shall have power and
authority:
(a) To invest and reinvest cash and cash items, to hold cash
uninvested, and to subscribe for, invest in, reinvest in, purchase or
otherwise acquire, own, hold, pledge, sell, assign, transfer, exchange,
distribute, write options on, lend or otherwise deal in or dispose of
contracts for the future acquisition or delivery of all types of
securities, futures contracts and options thereon, and forward currency
contracts of every nature and kind, including, without limitation, all
types of bonds, debentures, stocks, preferred stocks, negotiable or
non-negotiable instruments, obligations, evidences of indebtedness,
certificates of deposit or indebtedness, commercial paper, repurchase
agreements, bankers' acceptances, and other securities of any kind, issued,
created, guaranteed, or sponsored by any and all Persons, including,
<PAGE>
without limitation, states, territories, and possessions of the United
States and the District of Columbia and any political subdivision, agency,
or instrumentality thereof, any foreign government or any political
subdivision of the U.S. Government or any foreign government, or any
international instrumentality or organization, or by any bank or savings
institution, or by any corporation or organization organized under the laws
of the United States or of any state, territory, or possession thereof, or
by any corporation or organization organized under any foreign law, or in
"when issued" contracts for any such securities, futures contracts and
options thereon, and forward currency contracts, to change the investments
of the assets of the Trust; and to exercise any and all rights, powers, and
privileges of ownership or interest in respect of any and all such
investments of every kind and description, including, without limitation,
the right to consent and otherwise act with respect thereto, with power to
designate one or more Persons, to exercise any of said rights, powers, and
privileges in respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate,
lease, or write options with respect to or otherwise deal in any property
rights relating to any or all of the assets of the Trust or any Series;
(c) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(d) To exercise powers and right of subscription or otherwise
which in any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating
that it is trust property, whether in bearer, unregistered or other
negotiable form, or in its own name or in the name of a custodian or
subcustodian or a nominee or nominees or otherwise or to authorize the
custodian or a subcustodian or a nominee or nominees to deposit the same in
a securities depository, subject in each case to the applicable provisions
of the 1940 Act;
(f) To consent to, or participate in, any plan for the
reorganization, consolidation or merger of any corporation or issuer of any
security which is held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer; and
to pay calls or subscriptions with respect to any security held in the
Trust;
(g) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection
to deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to
pay, such portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper;
(h) To litigate, compromise, arbitrate, settle or otherwise
adjust claims in favor of or against the Trust or a Series, or any matter
in controversy, including but not limited to claims for taxes;
<PAGE>
(i) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(j) To borrow funds or other property in the name of the Trust
or Series exclusively for Trust purposes;
(k) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof;
(l) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary, desirable or appropriate for
the conduct of the business, including, without limitation, insurance
policies insuring the assets of the Trust or payment of distributions and
principal on its portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents, Investment Manager,
principal underwriters, or independent contractors of the Trust,
individually against all claims and liabilities of every nature arising by
reason of holding Shares, holding, being or having held any such office or
position, or by reason of any action alleged to have been taken or omitted
by any such Person as Trustee, officer, employee, agent, Investment
Manager, Principal Underwriter, or independent contractor, including any
action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person
against liability; and
(m) To adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement,
incentive and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing
such retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust.
The Trust shall not be limited to investing in obligations
maturing before the possible termination of the Trust or one or more of its
Series. The Trust shall not in any way be bound or limited by any present
or future law or custom in regard to investment by fiduciaries. The Trust
shall not be required to obtain any court order to deal with any assets of
the Trust or take any other action hereunder.
SECTION 4. PAYMENT OF EXPENSES BY THE TRUST. Subject to the
provisions of Article III, Section 6(b), the Trustees are authorized to pay
or cause to be paid out of the principal or income of the Trust or Series,
or partly out of the principal and partly out of income, and to charge or
allocate the same to, between or among such one or more of the Series that
may be established or designated pursuant to Article III, Section 6, all
expenses, fees, charges, taxes and liabilities incurred or arising in
connection with the Trust or Series, or in connection with the management
thereof, including, but not limited to, the Trustees' compensation and such
expenses and charges for the services of the Trust's officers, employees,
Investment Manager, Principal Underwriter, auditors, counsel, custodian,
transfer agent, Shareholder servicing agent, and such other agents or
independent contractors and such other expenses and charges as the Trustees
may deem necessary or proper to incur.
SECTION 5. OWNERSHIP OF ASSETS OF THE TRUST. Title to all of
the assets of the Trust shall at all times be considered as vested in the
Trust, except that the Trustees shall have power to cause legal title to
<PAGE>
any Trust Property to be held by or in the name of one or more of the
Trustees, or in the name of the Trust, or in the name of any other Person
as nominee, on such terms as the Trustees may determine. Upon the
resignation, incompetency, bankruptcy, removal, or death of a Trustee he or
she shall automatically cease to have any such title in any of the Trust
Property, and the title of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. Such vesting and cessation of
title shall be effective whether or not conveyancing documents have been
executed and delivered. The Trustees may determine that the Trust or the
Trustees, acting for and on behalf of the Trust, shall be deemed to hold
beneficial ownership of any income earned on the securities owned by the
Trust, whether domestic or foreign.
SECTION 6. SERVICE CONTRACTS.
(a) The Trustees may, at any time and from time to time,
contract for exclusive or nonexclusive advisory, management and/or
administrative services for the Trust or for any Series with any Person;
and any such contract may contain such other terms as the Trustees may
determine, including without limitation, authority for the Investment
Manager to determine from time to time without prior consultation with the
Trustees what investments shall be purchased, held, sold or exchanged and
what portion, if any, of the assets of the Trust shall be held uninvested
and to make changes in the Trust's investments, and such other
responsibilities as may specifically be delegated to such Person.
(b) The Trustees may also, at any time and from time to time,
contract with any Persons, appointing such Persons exclusive or
nonexclusive distributor or Principal Underwriter for the Shares of one or
more of the Series or other securities to be issued by the Trust. Every
such contract may contain such other terms as the Trustees may determine.
(c) The Trustees are also empowered, at any time and from time
to time, to contract with any Persons, appointing such Person(s) to serve
as custodian(s), transfer agent and/or shareholder servicing agent for the
Trust or one or more of its Series. Every such contract shall comply with
such terms as may be required by the Trustees.
(d) The Trustees are further empowered, at any time and from
time to time, to contract with any Persons to provide such other services
to the Trust or one or more of the Series, as the Trustees determine to be
in the best interests of the Trust and the applicable Series.
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers of
the Trust is a shareholder, director, officer, partner, trustee,
employee, Manager, adviser, Principal Underwriter, distributor,
or affiliate or agent of or for any Person with which an
advisory, management or administration contract, or Principal
Underwriter's or distributor's contract, or transfer, shareholder
servicing or other type of service contract may be made, or that
(ii) any Person with which an advisory, management or
administration contract or Principal Underwriter's or
distributor's contract, or transfer, shareholder servicing or
other type of service contract may be made also has an advisory,
management or administration contract, or principal underwriter's
<PAGE>
or distributor's contract, or transfer, shareholder servicing or
other service contract, or has other business or interests with
any other Person, shall not affect the validity of any such
contract or disqualify any Shareholder, Trustee or officer of the
Trust from voting upon or executing the same, or create any
liability or accountability to the Trust or its Shareholders,
provided approval of each such contract is made pursuant to the
applicable requirements of the 1940 Act.
ARTICLE V.
Shareholders' Voting Powers and Meetings
SECTION 1. VOTING POWERS. Subject to the provisions of Article
III, Sections 5 and 6(d), the Shareholders shall have right to vote only
(i) for the election or removal of Trustees as provided in Article IV,
Section 1, and (ii) with respect to such additional matters relating to the
Trust as may be required by the applicable provisions of the 1940 Act,
including Section 16(a) thereof, and (iii) on such other matters as the
Trustees may consider necessary or desirable. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and
each fractional Share shall be entitled to a proportionate fractional vote.
There shall be no cumulative voting in the election of Trustees. Shares
may be voted in person or by proxy. A proxy purporting to be executed by
or on behalf of a Shareholder shall be deemed valid unless challenged at or
prior to its exercise and the burden of proving invalidity shall rest on
the challenger.
SECTION 2. VOTING POWER AND MEETINGS. Meetings of the
Shareholders may be called by the Trustees for the purposes described in
Section 1 of this Article V. A meeting of Shareholders may be held at any
place designated by the Trustees. Written notice of any meeting of
Shareholders shall be given or caused to be given by the Trustees by
delivering personally or mailing such notice not more than ninety (90), nor
less than ten (10) days before such meeting, postage prepaid, stating the
time and place of the meeting, to each Shareholder at the Shareholder's
address as it appears on the records of the Trust. Whenever notice of a
meeting is required to be given to a Shareholder under this Declaration of
Trust, a written waiver thereof, executed before or after the meeting by
such Shareholder or his or her attorney thereunto authorized and filed with
the records of the meeting, or actual attendance at the meeting of
Shareholders in person or by proxy, shall be deemed equivalent to such
notice.
SECTION 3. QUORUM AND REQUIRED VOTE. Except when a larger
quorum is required by the applicable provisions of the 1940 Act, the
presence in person or by proxy of a majority of the Shares entitled to vote
on a matter shall constitute a quorum at a Shareholders' meeting. Any
meeting of Shareholders may be adjourned from time to time by a majority of
the votes properly cast upon the question of adjourning a meeting to
another date and time, whether or not a quorum is present, and the meeting
may be held as adjourned within a reasonable time after the date set for
the original meeting without further notice. Subject to the provisions of
Article III, Section 6(d) and the applicable provisions of the 1940 Act,
when a quorum is present at any meeting, a majority of the Shares voted
shall decide any questions except only a plurality vote shall be necessary
to elect Trustees.
<PAGE>
SECTION 4. ACTION BY WRITTEN CONSENT. Any action taken by
Shareholders may be taken without a meeting if all the holders of Shares
entitled to vote on the matter are provided with not less than 7 days
written notice thereof and written consent to the action is filed with the
records of the meetings of Shareholders by the holders of the number of
shares that would be required to approve the matter as provided in Article
V, Section 3. Such consent shall be treated for all purposes as a vote
taken at a meeting of Shareholders.
SECTION 5. RECORD DATES. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any
adjournment thereof, the Trustees may fix a time, which shall be not more
than ninety (90) nor less than ten (10) days before the date of any meeting
of Shareholders, as the record date for determining the Shareholders having
the right to notice of and to vote at such meeting and any adjournment
thereof, and in such case only Shareholders of record on such record date
shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date. For the purpose of determining the
Shareholders who are entitled to receive payment of any dividend or of any
other distribution, the Trustees may fix a date, which shall be before the
date for the payment of such dividend or distribution, as the record date
for determining the Shareholders having the right to receive such dividend
or distribution. Nothing in this Section shall be construed as precluding
the Trustees from setting different record dates for different Series.
ARTICLE VI.
Net Asset Value, Distributions, and Redemptions
SECTION 1. DETERMINATION OF NET ASSET VALUE, NET INCOME, AND
DISTRIBUTIONS. Subject to Article III, Section 6 hereof, the Trustees, in
their absolute discretion, may prescribe and shall set forth in the By-laws
or in a duly adopted resolution of the Trustees such bases and time for
determining the per Share net asset value of the Shares of any Series and
the declaration and payment of dividends and distributions on the Shares of
any Series, as they may deem necessary or desirable.
SECTION 2. REDEMPTIONS AND REPURCHASES. The Trust shall
purchase such Shares as are offered by any Shareholder for redemption, upon
receipt by the Trust or a Person designated by the Trust that the Trust
redeem such Shares or in accordance with such procedures for redemption as
the Trustees may from time to time authorize; and the Trust will pay
therefor the net asset value thereof, in accordance with the By-Laws and
the applicable provisions of the 1940 Act. Payment for said Shares shall
be made by the Trust to the Shareholder within seven days after the date on
which the request for redemption is received in proper form. The
obligation set forth in this Section 2 is subject to the provision that in
the event that any time the New York Stock Exchange (the "Exchange") is
closed for other than weekends or holidays, or if permitted by the Rules of
the Commission during periods when trading on the Exchange is restricted or
during any emergency which makes it impracticable for the Trust to dispose
of the investments of the applicable Series or to determine fairly the
value of the net assets held with respect to such Series or during any
other period permitted by order of the Commission for the protection of
investors, such obligations may be suspended or postponed by the Trustees.
The redemption price may in any case or cases be paid in cash or
wholly or partly in kind in accordance with Rule 18f-1 under the 1940 Act
<PAGE>
if the Trustees determine that such payment is advisable in the interest of
the remaining Shareholders of the Series of which the Shares are being
redeemed. Subject to the foregoing, the selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price shall be determined by or under authority of the Trustees.
In no case shall the Trust be liable for any delay of any corporation or
other Person in transferring securities selected for delivery as all or
part of any payment in kind.
SECTION 3. REDEMPTIONS AT THE OPTION OF THE TRUST. The Trust
shall have the right, at its option, upon 60 days notice to the affected
Shareholder at any time to redeem Shares of any Shareholder at the net
asset value thereof as described in Section 1 of this Article VI: (i) if
at such time such Shareholder owns Shares of any Series having an aggregate
net asset value of less than a minimum value determined from time to time
by the Trustees; or (ii) to the extent that such Shareholder owns Shares of
a Series equal to or in excess of a maximum percentage of the outstanding
Shares of such Series determined from time to time by the Trustees; or
(iii) to the extent that such Shareholder owns Shares equal to or in excess
of a maximum percentage, determined from time to time by the Trustees, of
the outstanding Shares of the Trust.
SECTION 4. TRANSFER OF SHARES. The Trust shall transfer shares
held of record by any Person to any other Person upon receipt by the Trust
or a Person designated by the Trust of a written request therefore in such
form and pursuant to such procedures as may be approved by the Trustees.
ARTICLE VII.
Compensation and Limitation of Liability
SECTION 1. COMPENSATION OF TRUSTEES. The Trustees as such shall
be entitled to reasonable compensation from the Trust, and they may fix the
amount of such compensation from time to time. Nothing herein shall in any
way prevent the employment of any Trustee to provide advisory, management,
legal, accounting, investment banking or other services to the Trust and to
be specially compensated for such services by the Trust.
SECTION 2. INDEMNIFICATION AND LIMITATION OF LIABILITY. The
Trustees shall not be responsible or liable in any event for any neglect or
wrong-doing of any officer, agent, employee, Manager or Principal
Underwriter of the Trust, nor shall any Trustee be responsible for the act
or omission of any other Trustee, and, subject to the provisions of the
Bylaws, the Trust out of its assets may indemnify and hold harmless each
and every Trustee and officer of the Trust from and against any and all
claims, demands, costs, losses, expenses, and damages whatsoever arising
out of or related to such Trustee's performance of his or her duties as a
Trustee or officer of the Trust; provided that nothing herein contained
shall indemnify, hold harmless or protect any Trustee or officer from or
against any liability to the Trust or any Shareholder to which he or she
would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his or her office.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever issued, executed or
done by or on behalf of the Trust or the Trustees or any of them in
connection with the Trust shall be conclusively deemed to have been issued,
<PAGE>
executed or done only in or with respect to their or his or her capacity as
Trustees or Trustee, and such Trustees or Trustee shall not be personally
liable thereon.
SECTION 3. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND
OR SURETY. The exercise by the Trustees of their powers hereunder shall be
binding upon everyone interested in or dealing with the Trust. A Trustee
shall be liable to the Trust and to any Shareholder solely for his or her
own wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee, and shall
not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration of Trust, and shall be under no
liability for any act or omission in accordance with such advice nor for
failing to follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.
SECTION 4. INSURANCE. The Trustees shall be entitled and
empowered to the fullest extent permitted by law to purchase with Trust
assets insurance for liability and for all expenses reasonably incurred or
paid or expected to be paid by a Trustee or officer in connection with any
claim, action, suit or proceeding in which he or she becomes involved by
virtue of his or her capacity or former capacity with the Trust, whether or
not the Trust would have the power to indemnify him or her against such
liability under the provisions of this Article.
ARTICLE VIII.
Miscellaneous
SECTION 1. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No
Person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
SECTION 2. TERMINATION OF TRUST OR SERIES. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The
Trust may be terminated at any time by the Trustees upon 60 days prior
written notice to the Shareholders. Any Series may be terminated at any
time by the Trustees upon 60 days prior written notice to the Shareholders
of that Series.
Upon termination of the Trust (or any Series, as the case may
be), after paying or otherwise providing for all charges, taxes, expenses
and liabilities held, severally, with respect to each Series (or the
applicable Series, as the case may be), whether due or accrued or
anticipated as may be determined by the Trustees, the Trust shall, in
accordance with such procedures as the Trustees consider appropriate,
reduce the remaining assets held, severally, with respect to each Series
(or the applicable Series, as the case may be), to distributable form in
cash or shares or other securities, and any combination thereof, and
distribute the proceeds held with respect to each Series (or the applicable
Series, as the case may be), to the Shareholders of that Series, as a
Series, ratably according to the number of Shares of that Series held by
the several Shareholders on the date of termination.
<PAGE>
SECTION 3. MERGER AND CONSOLIDATION. The Trustees may cause (i)
the Trust or one or more of its Series to the extent consistent with
applicable law to be merged into or consolidated with another Trust, series
or Person, (ii) the Shares of the Trust or any Series to be converted into
beneficial interests in another business trust (or series thereof), (iii)
the Shares to be exchanged for assets or property under or pursuant to any
state or federal statute to the extent permitted by law or (iv) a sale of
assets of the Trust or one or more of its Series. Such merger or
consolidation, Share conversion, Share exchange or sale of assets must be
authorized by vote as provided in Article V, Section 3 herein; provided
that in all respects not governed by statute or applicable law, the
Trustees shall have power to prescribe the procedure necessary or
appropriate to accomplish a sale of assets, Share exchange, merger or
consolidation including the power to create one or more separate business
trusts to which all or any part of the assets, liabilities, profits or
losses of the Trust may be transferred and to provide for the conversion of
Shares of the Trust or any Series into beneficial interests in such
separate business trust or trusts (or series thereof).
SECTION 4. AMENDMENTS. This Declaration of Trust may be
restated and/or amended at any time by an instrument in writing signed by a
majority of the Trustees then holding office. Any such restatement and/or
amendment hereto shall be effective immediately upon execution and
approval. The Certificate of Trust of the Trust may be restated and/or
amended by a similar procedure, and any such restatement and/or amendment
shall be effective immediately upon filing with the Office of the Secretary
of State of the State of Delaware or upon such future date as may be stated
therein.
SECTION 5. FILING OF COPIES, REFERENCES, HEADINGS. The original
or a copy of this instrument and of each restatement and/or amendment
hereto shall be kept at the office of the Trust where it may be inspected
by any Shareholder. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such
restatements and/or amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it
were the original, may rely on a copy certified by an officer of the Trust
to be a copy of this instrument or of any such restatements and/or
amendments. In this instrument and in any such restatements and/or
amendment, references to this instrument, and all expressions like
"herein," "hereof" and "hereunder," shall be deemed to refer to this
instrument as amended or affected by any such restatements and/or
amendments. Headings are placed herein for convenience of reference only
and shall not be taken as a part hereof or control or affect the meaning,
construction or effect of this instrument. Whenever the singular number is
used herein, the same shall include the plural; and the neuter, masculine
and feminine genders shall include each other, as applicable. This
instrument may be executed in any number of counterparts each of which
shall be deemed an original.
SECTION 6. APPLICABLE LAW. This Agreement and Declaration of
Trust is created under and is to be governed by and construed and
administered according to the laws of the State of Delaware and the
Delaware Business Trust Act, as amended from time to time (the "Act"). The
Trust shall be a Delaware business trust pursuant to such Act, and without
limiting the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a business trust.
<PAGE>
SECTION 7. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
(a) The provisions of the Declaration of Trust are severable,
and if the Trustees shall determine, with the advice of counsel, that any
of such provisions is in conflict 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 the Declaration of Trust; provided,
however, that such determination shall not affect any of the remaining
provisions of the Declaration of Trust or render invalid or improper any
action taken or omitted prior to such determination.
(b) If any provision of the Declaration of Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction
and shall not in any manner affect such provision in any other jurisdiction
or any other provision of the Declaration of Trust in any jurisdiction.
SECTION 8. BUSINESS TRUST ONLY. It is the intention of the
Trustees to create a business trust pursuant to the Act, and thereby to
create only the relationship of trustee and beneficial owners within the
meaning of such Act between the Trustees and each Shareholder. It is not
the intention of the Trustees to create a general partnership, limited
partnership, joint stock association, corporation, bailment, joint venture,
or any form of legal relationship other than a business trust pursuant to
such Act. Nothing in this Declaration of Trust shall be construed to make
the Shareholders, either by themselves or with the Trustees, partners or
members of a joint stock association.
SECTION 9. USE OF THE NAME "KALMAR". The name "Kalmar" and all
rights to the use of the name "Kalmar" belong to Kalmar Investment
Advisors, the manager of the Trust and Kalmar Investments, Inc., which are
affiliated companies (the "Kalmar Advisers"). The Kalmar Advisers have
consented to the use by the Trust of the identifying word "Kalmar" and have
granted to the Trust a non-exclusive license to use the name "Kalmar" as
part of the name of the Trust and the name of any Series of Shares. In the
event the Kalmar Advisers or their affiliates are not appointed as Manager
or cease to be the Manager of the Trust or of any Series using such names,
the non-exclusive license granted herein may be revoked by either one of
the Kalmar Advisers. Upon receipt of such a written revocation from such a
Kalmar Adviser or any successor to its interests in such name, the Trustees
agree to execute such amendment to the Trust's Certificate of Trust and
this Declaration of Trust as may be required to effect a change in the name
of Trust or any Series of Shares of the Trust, and the Trust promptly shall
cease using the name "Kalmar" and as part of its name or the name of any
Series of Shares.
This Agreement and Declaration of Trust may be executed in one or
more counterparts which, taken together, shall constitute one and the same
document.
IN WITNESS WHEREOF, the Trustees named below do hereby
make and enter into this Agreement and Declaration of Trust as of the 12th
day of September, 1996.
<PAGE>
--------------------------
Ford B. Draper, Jr.
--------------------------
John J. Quinlan
-------------------------
David M. Reese, Jr.
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS
1300 Market Street
Suite 500
Wilmington, DE 19801
173610.1
Exhibit 2
BY-LAWS
OF
KALMAR POOLED INVESTMENT TRUST
ARTICLE I
FISCAL YEAR AND OFFICES
SECTION 1. FISCAL YEAR. Unless otherwise provided by resolution
of the Board of Trustees, the fiscal year of Kalmar Pooled Investment Trust
(the "Trust") shall begin on the first day of October and end on the last
day of September.
SECTION 2. DELAWARE OFFICE. The Board of Trustees shall
establish a registered office in the State of Delaware and shall appoint as
the Trust's registered agent for service of process in the State of
Delaware an individual resident of the State of Delaware or a Delaware
corporation or a foreign corporation authorized to transact business in the
State of Delaware; in each case the business office of such registered
agent for service of process shall be identical with the registered
Delaware office of the Trust.
SECTION 3. OTHER OFFICES. The Board of Trustees may at any time
establish branch or subordinate offices at any place or places where the
Trust intends to do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 1. PLACE OF MEETING. Meetings of the shareholders for
the election of trustees shall be held in such place as shall be fixed by
resolution of the Board of Trustees and stated in the notice of the
meeting.
SECTION 2. ANNUAL MEETINGS. An Annual Meeting of shareholders
will not be held unless the Investment Company Act of 1940 requires the
election of trustees to be acted upon.
SECTION 3. SPECIAL MEETINGS. Special Meetings of the
shareholders may be called at any time by the President, or by a majority
of the Board of Trustees, and shall be called by the Secretary upon written
request of the holders of shares entitled to cast not less than ten percent
of all the votes entitled to be cast at such meeting provided that (a) such
request shall state the purposes of such meeting and the matters proposed
to be acted on and (b) the shareholders requesting such meeting shall have
paid to the Trust the reasonable estimated cost of preparing and mailing
the notice thereof, which the Secretary shall determine and specify to such
shareholders. No special meeting need be called upon the request of
shareholders entitled to cast less than a majority of all votes entitled to
be cast at such meeting to consider any matter which is substantially the
same as a matter voted on at any meeting of the shareholders held during
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the preceding twelve months. The foregoing provisions of this section 3
notwithstanding a special meeting of shareholders shall be called upon the
request of the holders of at least ten percent of the shares entitled to
vote for the purpose of consideration removal of a director from office as
provided in section 16(c) of the Investment Company Act of 1940.
SECTION 4. NOTICE. Not less than ten, nor more than ninety days
before the date of every Annual or Special Shareholders Meeting, the
Secretary shall cause to be mailed to each shareholder entitled to vote at
such meeting at his (her) address (as it appears on the records of the
Trust at the time of mailing) written notice stating the time and place of
the meeting and, in the case of a Special Meeting of Shareholders, shall be
limited to the purposes stated in the notice. Notice of adjournment of a
shareholders meeting to another time or place need not be given, if such
time and place are announced at the meeting.
SECTION 5. RECORD DATE FOR MEETINGS. Subject to the provisions
of the Declaration of Trust, the Board of Trustees may fix in advance a
date not more than ninety, nor less than ten days, prior to the date of any
annual or special meeting of the shareholders as a record date for the
determination of the shareholders entitled to receive notice of, and to
vote at any meeting and any adjournment thereof; and in such case such
shareholders and only such shareholders as shall be shareholders of record
on the date so fixed shall be entitled to receive notice of and to vote at
such meeting and any adjournment thereof as the case may be,
notwithstanding any transfer of any stock on the books of the Trust after
any such record date fixed as aforesaid.
SECTION 6. QUORUM. At any meeting of shareholders, the presence
in person or by proxy of the holders of record of a majority of the shares
issued and outstanding and entitled to vote there shall constitute a quorum
for the transaction of any business at the meeting, except as otherwise
provided by the Investment Company Act of 1940 or in the Trust's
Declaration of Trust. If, however, such quorum shall not be present or
represented at any meeting of the shareholders, the holders of a majority
of the shares present or in person or by proxy shall have the power to
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented
to a date not more than 120 days after the original record date. At such
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting
as originally notified.
SECTION 7. VOTING. Each shareholder shall have one vote for
each full share and a fractional vote for each fractional share of stock
having voting power held by such shareholder on the record date set
pursuant to Section 5 on each matter submitted to a vote at a meeting of
shareholders. Such vote may be made in person or by proxy. At all
meetings of the shareholders, a quorum being present, all matters shall be
decided by majority vote of the shares of beneficial interest entitled to
vote held by shareholders present in person or by proxy, unless the
question is one for which by express provision of the laws of the State of
Delaware, the Investment Company Act of 1940, as from time to time amended,
or the Declaration of Trust, a different vote is required, in which case
such express provision shall control the decision of such question. At all
meetings of shareholders, unless the voting is conducted by inspectors, all
questions relating to the qualification of voters and the validity of
proxies and the acceptance or rejection of votes shall be decided by the
Chairman of the meeting.
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SECTION 8. INSPECTORS. At any election of trustees, the Board
of Trustees prior thereto may, or, if they have not so acted, the Chairman
of the meeting may appoint one or more inspectors of election who shall
first subscribe an oath of affirmation to execute faithfully the duties of
inspectors at such election with strict impartiality and according to the
best of their ability, and shall after the election make a certificate of
the result of the vote taken.
SECTION 9. STOCK LEDGER AND LIST OF SHAREHOLDERS. It shall be
the duty of the Secretary or Assistant Secretary of the Trust to cause an
original or duplicate share ledger to be maintained at the office of the
Trust's transfer agent. Such share ledger may be in written form or any
other form capable of being converted into written form within a reasonable
time for visual inspection.
SECTION 10. ACTION WITHOUT MEETING. Any action to be taken by
shareholders may be taken without a meeting if (a) all shareholders
entitled to vote on the matter consent to the action in writing, and (b)
all shareholders entitled to notice of the meeting but not entitled to vote
at it sign a written waiver of any right to dissent, and (c) the written
consents are filed with the records of the meetings of shareholders. Such
consent shall be treated for all purposes as a vote at a meeting.
ARTICLE III
TRUSTEES
SECTION 1. GENERAL POWERS. The business of the Trust shall be
managed under the direction of its Board of Trustees, which may exercise
all powers of the Trust, except such as are by statute, or the Declaration
of Trust, or by these Bylaws conferred upon or reserved to the
shareholders.
SECTION 2. NUMBER AND TERM OF OFFICE. The number of trustees
which shall constitute the whole Board shall be determined from time to
time by the Board of Trustees, but shall not be fewer than the minimum
number permitted by applicable laws, nor more than fifteen. Each trustee
elected shall hold office until his successor is elected and qualified.
Trustees need not be shareholders.
SECTION 3. ELECTIONS. Provided a quorum is present, the
directors shall be elected by the vote of a plurality of the shares present
in person or by proxy, except that any vacancy on the Board of Trustees may
be filled by a majority vote of the Board of Trustees, although less than a
quorum, subject to the requirements of Section 16(a) of the Investment
Company Act of 1940.
SECTION 4. PLACE OF MEETING. Meetings of the Board of Trustees,
regular or special, may be held at any place as the Board may from time to
time determine.
SECTION 5. QUORUM. At all meetings of the Board of Trustees,
one-third of the entire Board of Trustees shall constitute a quorum for the
transaction of business provided that in no case may a quorum be less than
two persons. The action of a majority of the trustees present at any
meeting at which a quorum is present shall be the action of the Board of
Trustees unless the concurrence of a greater proportion is required for
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such action by the Investment Company Act of 1940, these Bylaws or the
Declaration of Trust. If a quorum shall not be present at any meeting of
trustees, the trustees present thereat may by a majority vote adjourn the
meeting from time to time without notice other than announcement at the
meeting, until a quorum shall be present.
SECTION 6. REGULAR MEETINGS. Regular meetings of the Board of
Trustees may be held without additional notice at such time and place as
shall from time to time be determined by the Board of Trustees provided
that notice of any change in the time or place of such meetings shall be
sent promptly to each trustee not present at the meeting at which such
change was made in the manner provided for notice of special meetings.
SECTION 7. SPECIAL MEETINGS. Special meetings of the Board of
Trustees may be called by the President on one day's notice to each
trustee; Special meetings shall be called by the President or Secretary in
like manner and on like notice on the written request of two trustees.
SECTION 8. TELEPHONE MEETING. Members of the Board of Trustees
or a committee of the Board of Trustees may participate in a meeting by
means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
SECTION 9. INFORMAL ACTIONS. Any action required or permitted
to be taken at any meeting of the Board of Trustees or of any committee
thereof may be taken without a meeting, if a written consent to such action
is signed by all members of the Board or of such committee, as the case may
be, and such written consent is filed with the minutes of proceedings of
the Board or committee.
SECTION 10. COMMITTEES. The Board of Directors may by
resolution passed by a majority of the entire Board appoint from among its
members an Executive Committee and other committees composed of two or more
directors, and may delegate to such committees, in the intervals between
meetings of the Board of Trustees, any or all of the powers of the Board of
Trustees in the management of the business and affairs of the Trust.
SECTION 11. ACTION OF COMMITTEES. In the absence of an
appropriate resolution of the Board of Trustees, each committee may adopt
such rules and regulations governing its proceedings, quorum and manner of
acting as it shall deem proper and desirable, provided that the quorum
shall not be less than two trustees. The committees shall keep minutes of
their proceedings and shall report the same to the Board of Trustees at the
meeting next succeeding, and any action by the committee shall be subject
to revision and alteration by the Board of Trustees, provided that no
rights of third persons shall be affected by any such revision or
alteration. In the absence of any member of such committee, the members
thereof present at any meeting, whether or not they constitute a quorum,
may appoint a member of the Board of Trustees to act in the place of such
absent member.
SECTION 12. COMPENSATION. Any trustee, whether or not he is a
salaried officer or employee of the Trust, may be compensated for his
services as trustee or as a member of a committee of trustees, or as
Chairman of the Board or chairman of a committee by fixed periodic payments
or by fees for attendance at meetings or by both, and in addition may be
reimbursed for transportation and other expenses, all in such manner and
amounts as the Board of Trustees may from time to time determine.
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ARTICLE IV
NOTICES
SECTION 1. FORM. Notices to shareholders shall be in writing
and delivered personally or mailed to the shareholders at their addresses
appearing on the books of the Trust. Notices to trustees shall be oral or
by telephone or telegram or in writing delivered personally or mailed to
the trustees at their addresses appearing on the books of the Trust.
Notice by mail shall be deemed to be given at the time when the same shall
be mailed. Subject to the provisions of the Investment Company Act of
1940, notice to trustees need not state the purpose of a regular or special
meeting.
SECTION 2. WAIVER. Whenever any notice of the time, place or
purpose of any meeting of shareholders, trustees or a committee is required
to be given under the provisions of the Declaration of Trust or these
Bylaws, a waiver thereof in writing, signed by the person or persons
entitled to such notice and filed with the records of the meeting, whether
before or after the holding thereof, or actual attendance at the meeting of
shareholders in person or by proxy, or at the meeting of Trustees or a
committee in person, shall be deemed equivalent to the giving of such
notice to such persons.
ARTICLE V
OFFICERS
SECTION 1. EXECUTIVE OFFICERS. The officers of the Trust shall
be chosen by the Board of Trustees and shall include a President, a
Secretary and a Treasurer. The Board of Trustees may, from time to time,
elect or appoint a Controller, one or more Vice Presidents, Assistant
Secretaries and Assistant Treasurers. The Board of Trustees, at its
discretion, may also appoint a director as Chairman of the Board who shall
perform and execute such executive and administrative duties and powers as
the Board of Trustees shall from time to time prescribe. The same person
may hold two or more offices, except that no person shall be both President
and Vice-President and no officer shall execute, acknowledge or verify any
instrument in more than one capacity, if such instrument is required by
law, the Declaration of Trust or these Bylaws to be executed, acknowledged
or verified by two or more officers.
SECTION 2. ELECTION. The Board of Trustees shall choose a
President, a Secretary and a Treasurer.
SECTION 3. OTHER OFFICERS. The Board of Trustees from time to
time may appoint such other officers and agents as it shall deem advisable,
who shall hold their offices for such terms and shall exercise powers and
perform such duties as shall be determined from time to time by the Board.
The Board of Trustees from time to time may delegate to one or more
officers or agents the power to appoint any such subordinate officers or
agents and to prescribe their respective rights, terms of office,
authorities and duties.
SECTION 4. COMPENSATION. The salaries or other compensation of
all officers and agents of the Trust shall be fixed by the Board of
Trustees, except that the Board of Trustees may delegate to any person or
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group of persons the power to fix the salary or other compensation of any
subordinate officers or agents appointed pursuant to Section 3 of this
Article V.
SECTION 5. TENURE. The officers of the Trust shall serve at the
pleasure of the Board of Trustees. Any officer or agent may be removed by
the affirmative vote of a majority of the Board of Trustees whenever, in
its judgment, the best interests of the Trust will be served thereby. In
addition, any officer or agent appointed pursuant to Section 3 may be
removed, either with or without cause, by any officer upon whom such power
of removal shall have been conferred by the Board of Trustees. Any vacancy
occurring in any office of the Trust by death, resignation, removal or
otherwise shall be filled by the Board of Trustees, unless pursuant to
Section 3 the power of appointment has been conferred by the Board of
Trustees on any other officer.
SECTION 6. PRESIDENT. The President shall be the Chief
Executive Officer of the Trust and shall see that all orders and
resolutions of the Board are carried into effect. The President shall also
be the Chief Administrative Officer of the Trust and shall perform such
other duties and have such other powers as the Board of Trustees may from
time to time prescribe.
SECTION 7. CHAIRMAN OF THE BOARD. The Chairman of the Board, if
one shall be chosen, shall perform and execute such executive duties and
administrative powers as the Board of Trustees shall from time to time
prescribe.
SECTION 8. VICE-PRESIDENT. The Vice-Presidents, in order of
their seniority, shall, in the absence or disability of the President,
perform the duties and exercise the powers of the President and shall
perform such other duties as the Board of Trustees or the President may
from time to time prescribe.
SECTION 9. SECRETARY. The Secretary shall attend all meetings
of the Board of Trustees and all meetings of the shareholders and record
all the proceedings thereof and shall perform like duties for any committee
when required. He shall give, or cause to be given, notice of meetings of
the shareholders and of the Board of Trustees, shall have charge of the
records of the Trust, including the stock books, and shall perform such
other duties as may be prescribed by the Board of Trustees or Chief
Executive Officer, under whose supervision he shall be. He shall keep in
safe custody the seal of the Trust and, when authorized by the Board of
Trustees, shall affix and attest the same to any instrument requiring it.
The Board of Trustees may give general authority to any other officer to
affix the seal of the Trust and to attest the affixing by his signature.
SECTION 10. ASSISTANT SECRETARIES. The Assistant Secretaries in
order of their seniority, shall, in the absence or disability of the
Secretary, perform the duties and exercise the powers of the Secretary and
shall perform such other duties as the Board of Trustees shall prescribe.
SECTION 11. TREASURER. The Treasurer, unless another officer
has been so designated, shall be the Chief Financial Officer of the Trust.
He shall have general charge of the finances and books of account of the
Trust. Except as otherwise provided by the Board of Trustees, he shall
have general supervision of the funds and property of the Trust and of the
performance by the custodian of its duties with respect thereto. He shall
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render to the Board of Trustees, whenever directed by the Board, an account
of the financial condition of the Trust and of all his transactions as
Treasurer. He shall cause to be prepared annually a full and correct
statement of the affairs of the Trust, including a balance sheet and a
statement of operations for the preceding fiscal year. He shall perform
all the acts incidental to the office of Treasurer, subject to the control
of the Board of Trustees.
SECTION 12. ASSISTANT TREASURER. The Assistant Treasurer shall
in the absence or disability of the Treasurer, perform the duties and
exercise the powers of the Treasurer and shall perform such other duties as
the Board of Trustees may from time to time prescribe.
ARTICLE VI
INDEMNIFICATION AND INSURANCE
SECTION 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of
this Article, "agent" means any person who is or was a Trustee or officer
of this Trust and any person who, while a trustee or officer of this Trust,
is or was serving at the request of this Trust as a Trustee, director,
officer, partner, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise;
"Trust" includes any domestic or foreign predecessor entity of this Trust
in a merger, consolidation, or other transaction in which the predecessor's
existence ceased upon consummation of the transaction; "proceeding" means
any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, or investigative; and "expenses" includes
without limitation attorney's fees and any expenses of establishing a right
to indemnification under this Article.
SECTION 2. ACTIONS OTHER THAN BY TRUST. This Trust shall
indemnify any person who was or is a party or is threatened to be made a
party to any proceeding (other than an action by or in the right of this
Trust) by reason of the fact that such person is or was an agent of this
Trust, against expenses, judgments, fines, settlements and other amounts
actually and reasonably incurred in connection with such proceeding, if it
is determined that person acted in good faith and reasonably believed: (a)
in the case of conduct in his official capacity as an agent of the Trust,
that his conduct was in the Trust's best interests and (b) in all other
cases, that his conduct was at least not opposed to the Trust's best
interests and (c) in the case of a criminal proceeding, that he had no
reasonable cause to believe the conduct of that person was unlawful. The
termination of any proceeding by judgment, order or settlement shall not of
itself create a presumption that the person did not meet the requisite
standard of conduct set forth in this Section. The termination of any
proceeding by conviction, or a plea of nolo contendere or its equivalent,
or an entry of an order of probation prior to judgment, creates a
rebuttable presumption that the person did not meet the requisite standard
of conduct set forth in this Section.
SECTION 3. ACTIONS BY THE TRUST. This Trust shall indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding by or in the right of this Trust to procure a judgment in its
favor by reason of the fact that that person is or was an agent of this
Trust, against expenses actually and reasonably incurred by that person in
connection with the defense or settlement of that action if that person
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acted in good faith, in a manner that person believed to be in the best
interests of this Trust and with such care, including reasonable inquiry,
as an ordinarily prudent person in a like position would use under similar
circumstances.
SECTION 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any
provision to the contrary contained herein, there shall be no right to
indemnification for any liability arising by reason of willful misfeasance,
bad faith, gross negligence, or the reckless disregard of the duties
involved in the conduct of the agent's office with this Trust.
No indemnification shall be made under Sections 2 or 3 of this
Article:
(a) In respect of any proceeding as to which that
person shall have been adjudged to be liable on the basis
that personal benefit was improperly received by him,
whether or not the benefit resulted from an action taken in
the person's official capacity; or
(b) In respect of any proceeding as to which that
person shall have been adjudged to be liable in the
performance of that person's duty to this Trust, unless and
only to the extent that the court in which that action was
brought shall determine upon application that in view of all
the relevant circumstances of the case, that person is
fairly and reasonably entitled to indemnity for the expenses
which the court shall determine; however, in such case,
indemnification with respect to any proceeding by or in the
right of the Trust or in which liability shall have been
adjudged by reason of the disabling conduct set forth in the
preceding paragraph shall be limited to expenses; or
(c) Of amounts paid in settling or otherwise disposing
of a proceeding, with or without court approval, or of
expenses incurred in defending a proceeding which is settled
or otherwise disposed of without court approval, unless the
required approval set forth in Section 6 of this Article is
obtained.
SECTION 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an
agent of this Trust has been successful, on the merits or otherwise, in the
defense of any proceeding referred to in Sections 2 or 3 of this Article
before the court or other body before whom the proceeding was brought, the
agent shall be indemnified against expenses actually and reasonably
incurred by the agent in connection therewith, provided that the Board of
Trustees, including a majority who are disinterested, non-party Trustees,
also determines that based upon a review of the facts, the agent was not
liable by reason of the disabling conduct referred to in Section 4 of this
Article.
SECTION 6. REQUIRED APPROVAL. Except as provided in Section 5
of this Article, any indemnification under this Article shall be made by
this Trust only if authorized in the specific case on a determination that
indemnification of the agent is proper in the circumstances because the
agent has met the applicable standard of conduct set forth in Sections 2 or
3 of this Article and is not prohibited from indemnification because of the
disabling conduct set forth in Section 4 of this Article, by:
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(a) A majority vote of a quorum consisting of Trustees
who are not parties to the proceeding and are not interested
persons of the Trust (as defined in the Investment Company
Act of 1940);
(b) A written opinion by an independent legal counsel;
or
(c) The shareholders; however, shares held by agents
who are parties to the proceeding may not be voted on the
subject matter under this Sub-Section.
SECTION 7. ADVANCE OF EXPENSES. Expenses incurred in defending
any proceeding may be advanced by this Trust before the final disposition
of the proceeding if (a) receipt of a written affirmation by the agent of
his good faith belief that he has met the standard of conduct necessary for
indemnification under this Article and a written undertaking by or on
behalf of the agent, such undertaking being an unlimited general obligation
to repay the amount of the advance if it is ultimately determined that he
has not met those requirements, and (b) a determination that the facts then
known to those making the determination would not preclude indemnification
under this Article. Determinations and authorizations of payments under
this Section must be made in the manner specified in Section 6 of this
Article for determining that the indemnification is permissible.
SECTION 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this
Article shall affect any right to indemnification to which persons other
than Trustees and officers of this Trust or any subsidiary hereof may be
entitled by contract or otherwise.
SECTION 9. LIMITATIONS. No indemnification or advance shall be
made under this Article, except as provided in Sections 5 or 6 in any
circumstances where it appears:
(a) That it would be inconsistent with a provision of
the Agreement and Declaration of Trust of the Trust, a
resolution of the shareholders, or an agreement in effect at
the time of accrual of the alleged cause of action asserted
in the proceeding in which the expenses were incurred or
other amounts were paid which prohibits or otherwise limits
indemnification; or
(b) That it would be inconsistent with any condition
expressly imposed by a court in approving a settlement.
SECTION 10. INSURANCE. Upon and in the event of a determination
by the Board of Trustees of this Trust to purchase such insurance, this
Trust shall purchase and maintain insurance on behalf of any agent or
employee of this Trust against any liability asserted against or incurred
by the agent or employee in such capacity or arising out of the agent's or
employee's status as such to the fullest extent permitted by law.
SECTION 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article
does not apply to any proceeding against any Trustee, investment manager or
other fiduciary of an employee benefit plan in that person's capacity as
such, even though that person may also be an agent of this Trust as defined
in Section 1 of this Article. Nothing contained in this Article shall
limit any right to indemnification to which such a Trustee, investment
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manager, or other fiduciary may be entitled by contract or otherwise which
shall be enforceable to the extent permitted by applicable law other than
this Article.
ARTICLE VII
SHARES OF BENEFICIAL INTEREST
SECTION 1. CERTIFICATES. A certificate or certificates
representing and certifying the class and the full, but not fractional,
number of shares of beneficial interest owned by each shareholder in the
Trust shall not be issued except as the Board of Trustees may otherwise
determine from time to time. Any such certificate issued shall be signed
by facsimile signature or otherwise by the President or a Vice-President
and counter-signed by the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer.
SECTION 2. SIGNATURE. In case any officer who has signed any
certificate ceases to be an officer of the Trust before the certificate is
issued, the certificate may nevertheless be issued by the Trust with the
same effect as if the officer had not ceased to be such officer as of the
date of its issue.
SECTION 3. RECORDING AND TRANSFER WITHOUT CERTIFICATES. The
Trust shall have the full power to participate in any program approved by
the Board of Trustees providing for the recording and transfer of ownership
of the Trust's shares by electronic or other means without the issuance of
certificates.
SECTION 4. LOST CERTIFICATES. The Board of Trustees may direct
a new certificate or certificates to be issued in place of any certificate
or certificates theretofore issued by the Trust alleged to have been
stolen, lost or destroyed, upon the making of an affidavit of that fact by
the person claiming the certificate of stock to have been stolen, lost or
destroyed, or upon other satisfactory evidence of such theft, loss or
destruction and may in its discretion and as a condition precedent to the
issuance thereof, require the owner of such stolen, lost or destroyed
certificate or certificates, or his legal representative, to give the Trust
a bond with sufficient surety, to the Trust to indemnify it against any
loss or claim that may be made by reason of the issuance of a new
certificate.
SECTION 5. TRANSFER OF SHARES. Transfers of shares of
beneficial interest of the Trust shall be made on the books of the Trust by
the holder of record thereof (in person or by his attorney thereunto duly
authorized by a power of attorney duly executed in writing and filed with
the Secretary of the Trust) (i) if a certificate or certificates have been
issued, upon the surrender of the certificate or certificates, properly
endorsed or accompanied by proper instruments of transfer, representing
such shares, or (ii) as otherwise prescribed by the Board of Trustees.
Every certificate exchanged, surrendered for redemption or otherwise
returned to the Trust shall be marked "Canceled" with the date of
cancellation.
SECTION 6. REGISTERED SHAREHOLDERS. The Trust shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to
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hold liable for calls and assessments a person registered on its books as
the owner of shares, and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof,
except as otherwise provided by applicable law or the Declaration of Trust.
SECTION 7. TRANSFER AGENTS AND REGISTRARS. The Board of
Trustees may, from time to time, appoint or remove transfer agents and or
registrars of the Trust, and they may appoint the same person as both
transfer agent and registrar. Upon any such appointment being made, all
certificates representing shares of beneficial interest thereafter issued
shall be countersigned by such transfer agent and shall not be valid unless
so countersigned.
SECTION 8. STOCK LEDGER. The Trust shall maintain an original
stock ledger containing the names and addresses of all shareholders and the
number and class of shares held by each shareholder. Such stock ledger may
be in written form or any other form capable of being converted into
written form within reasonable time for visual inspection.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 1. CUSTODIANSHIP. Except as otherwise provided by
resolution of the Board of Trustees, the Trust shall place and at all times
maintain in the custody of a custodian (including any sub-custodian for the
custodian) all funds, securities and similar investments owned by the
Trust. Subject to the approval of the Board of Trustees, the custodian may
enter into arrangements with securities depositories, provided such
arrangements comply with the provisions of the Investment Company Act of
1940 and the rules and regulations promulgated thereunder.
SECTION 2. EXECUTION OF INSTRUMENTS. All deeds, documents,
transfers, contracts, agreements and other instruments requiring execution
by the Trust shall be signed by the President or a Vice President.
SECTION 3. NET ASSET VALUE. The net asset value per share shall
be determined separately as to each class of the Trust's shares, by
dividing the sum of the total market value of the class's investments and
other assets, less any liabilities, by the total outstanding shares of such
class, subject to the Investment Company Act of 1940 and any other
applicable Federal securities law or rule or regulation currently in
effect.
ARTICLE IX
AMENDMENTS
The Board of Trustees shall have the power to make, alter and
repeal the Bylaws of the Trust.
173607.1
Exhibit 5(a)
KALMAR POOLED INVESTMENT TRUST
KALMAR GROWTH-WITH-VALUE SMALL CAP FUND
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made by and between KALMAR POOLED INVESTMENT TRUST, a
Delaware business trust (the "Trust"), on behalf of KALMAR GROWTH-WITH-
VALUE SMALL CAP FUND (the "Fund"), and KALMAR INVESTMENT ADVISERS, a
Delaware business trust (the "Investment Adviser").
W I T N E S S E T H:
WHEREAS, the Trust has been organized and operates as an investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act") and engages in the business of investing and reinvesting
its assets in securities; and
WHEREAS, the Investment Adviser is a registered Investment Adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act")
and engages in the business of providing investment management services;
and
WHEREAS, the Trust has selected the Investment Adviser to serve as the
investment adviser for the Fund effective as of the date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it
is agreed as follows:
1. The Trust on behalf of the Fund hereby employs the Investment
Adviser to manage the investment and reinvestment of the Fund's assets and
to administer its affairs, subject to the direction of the Board of
Trustees and officers of the Trust, for the period and on the terms
hereinafter set forth. The Investment Adviser hereby accepts such
employment and agrees during such period to render the services and assume
the obligations herein set forth for the compensation herein provided. The
<PAGE>
Investment Adviser shall for all purposes herein, be deemed to be an
independent contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to act for or to represent the Trust or the
Fund in any way, or in any way be deemed an agent of the Trust or the Fund.
The Investment Adviser shall regularly make decisions as to what securities
to purchase and sell on behalf of the Fund and shall record and implement
such decisions and shall furnish the Board of Trustees of the Trust with
such information and reports regarding the Fund's investments as the
Investment Adviser deems appropriate or as the Trustees of the Trust may
reasonably request. Subject to compliance with the requirements of the
1940 Act, the Investment Adviser may retain as a sub-adviser to the Fund,
at the Investment Adviser's own expense, any investment adviser registered
under the Advisers Act.
2. The Fund shall conduct its own business and affairs and shall
bear the expenses and salaries necessary and incidental thereto including,
but not in limitation of the foregoing, the costs incurred in: the
maintenance of its corporate existence; the maintenance of its own books,
records and procedures; dealing with its own shareholders; the payment of
dividends; transfer of stock, including issuance, redemption and repurchase
of shares; preparation of share certificates; reports and notices to
shareholders; calling and holding of shareholders' meetings; miscellaneous
office expenses; brokerage commissions; custodian fees; legal and
accounting fees; and taxes. Partners and employees of the Investment
Adviser may be trustees, directors, officers and employees of the funds of
which the Investment Adviser serves as investment adviser. Partners and
employees of the Investment Adviser who are trustees, officers and/or
employees of the Trust shall not receive any compensation from the Trust
for acting in such dual capacity.
In the conduct of the respective businesses of the parties hereto and
in the performance of this Agreement, the Trust may obtain office space and
<PAGE>
facilities from the Investment Adviser and will reimburse the Investment
Adviser for its rent or other expenses thereby incurred.
3. (a) The Investment Adviser shall place and execute Fund orders
for the purchase and sale of portfolio securities with broker-dealers.
Subject to the obtaining the best available prices and execution, the
Investment Adviser is authorized to place orders for the purchase and sale
of portfolio securities for the Fund with such broker-dealers as it may
select from time to time. Subject to subparagraph (b) below, the
Investment Adviser is also authorized to place transactions with brokers
who provide research or statistical information or analyses to the Fund, to
the Investment Adviser, or to any other client for which the Investment
Adviser provides investment advisory services. Subject to obtaining the
best available prices and execution, the Investment Adviser may also place
brokerage transactions with broker-dealers who sell shares of the Fund.
Broker-dealers who sell shares of the Fund shall only receive orders for
the purchase or sale of portfolio securities to the extent that the placing
of such orders is in compliance with the Rules of the U.S. Securities and
Exchange Commission and the National Association of Securities Dealers,
Inc. The Investment Adviser also agrees that it will cooperate with the
Trust to execute instructions that brokerage transactions be allocated to
brokers or dealers who provide benefits directly to the Fund.
(b) Notwithstanding the provisions of subparagraph (a) above and
subject to such policies and procedures as may be adopted by the Board of
Trustees and officers of the Trust, the Investment Adviser is authorized to
pay a member of an exchange, broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission
another member of an exchange, broker or dealer would have charged for
effecting that transaction, in such instances where the Investment Adviser
has determined in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by
<PAGE>
such member, broker or dealer, viewed in terms of either that particular
transaction or the Investment Adviser's overall responsibilities with
respect to the Fund and to other funds for which the Investment Adviser
exercises investment discretion.
(c) The Investment Adviser is authorized to direct portfolio
transactions to a broker which is an affiliated person of the Investment
Adviser or the Fund in accordance with such standards and procedures as may
be approved by the Board in accordance with 1940 Act Rule 17e-1, or other
rules promulgated by the Securities and Exchange Commission. Any
transaction placed with an affiliated broker must (i) be placed at best
price and execution, and (ii) may not be a principal transaction.
4. As compensation for the services to be rendered to the Fund by
the Investment Adviser under the provisions of this Agreement, the Trust on
behalf of the Fund shall pay to the Investment Adviser from the Fund's
assets an annual fee equal to 1.00% of the daily average net assets of the
Fund, payable on a monthly basis, subject to reduction to the extent
necessary to comply with the most stringent limits prescribed by any state
in which the Fund's shares are offered for sale.
If this Agreement is terminated prior to the end of any calendar
month, the management fee shall be prorated for the portion of any month in
which this Agreement is in effect according to the proportion which the
number of calendar days, during which the Agreement is in effect, bears to
the number of calendar days in the month, and shall be payable within 10
days after the date of termination.
5. The services to be rendered by the Investment Adviser to the
Trust on behalf of the Fund under the provisions of this Agreement are not
to be deemed to be exclusive, and the Investment Adviser shall be free to
render similar or different services to others so long as its ability to
render the services provided for in this Agreement shall not be impaired
thereby.
<PAGE>
6. The Investment Adviser, its partners, employees, and agents may
engage in other businesses, may render investment advisory services to
other investment companies, or to any other corporation, association, firm
or individual, and may render underwriting services to the Trust on behalf
of the Fund or to any other investment company, corporation, association,
firm or individual.
7. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of duties of the
Investment Adviser to the Fund, the Investment Adviser shall not be subject
to liabilities to the Fund or to any shareholder of the Fund for any action
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, or otherwise.
8. In accordance with the Agreement and Declaration of Trust of the
Trust, in the event that the Investment Adviser ceases to be the Fund's
investment adviser for any reason, the Trust will (unless the Investment
Adviser otherwise agrees in writing) promptly take all necessary steps to
propose to the Fund's shareholders at the next regular meeting that the
Fund change to a name not including the word "Kalmar."
9. This Agreement shall be executed and become effective as of the
date written below if approved by the vote of a majority of the outstanding
voting securities of the Fund. It shall continue in effect for a period of
two years and may be renewed thereafter only so long as such renewal and
continuance is specifically approved at least annually by the Board of
Trustees or by vote of a majority of the outstanding voting securities of
the Fund and only if the terms and the renewal hereof have been approved by
the vote of a majority of the Trustees of the Trust who are not parties
hereto or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval. No amendment to this
Agreement shall be effective unless the terms thereof have been approved by
<PAGE>
the vote of a majority of the outstanding voting securities of the Fund and
by the vote of a majority of Trustees of the Trust who are not parties to
the Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. Notwithstanding
the foregoing, this Agreement may be terminated by the Trust at any time,
without the payment of a penalty, on sixty days written notice to the
Investment Adviser of the Trust's intention to do so, pursuant to action by
the Board of Trustees of the Trust or pursuant to a vote of a majority of
the outstanding voting securities of the Fund. The Investment Adviser may
terminate this Agreement at any time, without the payment of penalty on
sixty days' written notice to the Trust of its intention to do so. Upon
termination of this Agreement, the obligations of all the parties hereunder
shall cease and terminate as of the date of such termination, except for
any obligation to respond for a breach of this Agreement committed prior to
such termination, and except for the obligation of the Trust to pay to the
Investment Adviser the fee provided in Paragraph 4 hereof, prorated to the
date of termination. This Agreement shall automatically terminate in the
event of its assignment.
10. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
11. For the purposes of this Agreement, the terms "vote of a majority
of the outstanding voting securities"; "interested persons"; and
"assignment" shall have the meaning defined in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused their corporate
seals to be affixed and duly attested and their presents to be signed by
their duly authorized officers this 18th day of _________________, 1996.
Attest: KALMAR POOLED INVESTMENT TRUST
<PAGE>
_________________________ By:______________________________
Ford B. Draper, Jr., Chairman
and President
Attest: KALMAR INVESTMENT ADVISERS
_________________________ By:______________________________
Ford B. Draper, Jr., Chairman
and President
179785.1
Exhibit 5(b)
KALMAR POOLED INVESTMENT TRUST
KALMAR GROWTH-WITH-VALUE MICRO CAP FUND
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made by and between KALMAR POOLED INVESTMENT TRUST, a
Delaware business trust (the "Trust"), on behalf of KALMAR GROWTH-WITH-
VALUE MICRO CAP FUND (the "Fund"), and KALMAR INVESTMENT ADVISERS, a
Delaware business trust (the "Investment Adviser").
W I T N E S S E T H:
WHEREAS, the Trust has been organized and operates as an investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act") and engages in the business of investing and reinvesting
its assets in securities; and
WHEREAS, the Investment Adviser is a registered Investment Adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act")
and engages in the business of providing investment management services;
and
WHEREAS, the Trust has selected the Investment Adviser to serve as the
investment adviser for the Fund effective as of the date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it
is agreed as follows:
1. The Trust on behalf of the Fund hereby employs the Investment
Adviser to manage the investment and reinvestment of the Fund's assets and
to administer its affairs, subject to the direction of the Board of
Trustees and officers of the Trust, for the period and on the terms
hereinafter set forth. The Investment Adviser hereby accepts such
employment and agrees during such period to render the services and assume
the obligations herein set forth for the compensation herein provided. The
<PAGE>
Investment Adviser shall for all purposes herein, be deemed to be an
independent contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to act for or to represent the Trust or the
Fund in any way, or in any way be deemed an agent of the Trust or the Fund.
The Investment Adviser shall regularly make decisions as to what securities
to purchase and sell on behalf of the Fund and shall record and implement
such decisions and shall furnish the Board of Trustees of the Trust with
such information and reports regarding the Fund's investments as the
Investment Adviser deems appropriate or as the Trustees of the Trust may
reasonably request. Subject to compliance with the requirements of the
1940 Act, the Investment Adviser may retain as a sub-adviser to the Fund,
at the Investment Adviser's own expense, any investment adviser registered
under the Advisers Act.
2. The Fund shall conduct its own business and affairs and shall
bear the expenses and salaries necessary and incidental thereto including,
but not in limitation of the foregoing, the costs incurred in: the
maintenance of its corporate existence; the maintenance of its own books,
records and procedures; dealing with its own shareholders; the payment of
dividends; transfer of stock, including issuance, redemption and repurchase
of shares; preparation of share certificates; reports and notices to
shareholders; calling and holding of shareholders' meetings; miscellaneous
office expenses; brokerage commissions; custodian fees; legal and
accounting fees; and taxes. Partners and employees of the Investment
Adviser may be trustees, directors, officers and employees of the funds of
which the Investment Adviser serves as investment adviser. Partners and
employees of the Investment Adviser who are trustees, officers and/or
employees of the Trust shall not receive any compensation from the Trust
for acting in such dual capacity.
In the conduct of the respective businesses of the parties hereto and
in the performance of this Agreement, the Trust may obtain office space and
<PAGE>
facilities from the Investment Adviser and will reimburse the Investment
Adviser for its rent or other expenses thereby incurred.
3. (a) The Investment Adviser shall place and execute Fund orders
for the purchase and sale of portfolio securities with broker-dealers.
Subject to the obtaining the best available prices and execution, the
Investment Adviser is authorized to place orders for the purchase and sale
of portfolio securities for the Fund with such broker-dealers as it may
select from time to time. Subject to subparagraph (b) below, the
Investment Adviser is also authorized to place transactions with brokers
who provide research or statistical information or analyses to the Fund, to
the Investment Adviser, or to any other client for which the Investment
Adviser provides investment advisory services. Subject to obtaining the
best available prices and execution, the Investment Adviser may also place
brokerage transactions with broker-dealers who sell shares of the Fund.
Broker-dealers who sell shares of the Fund shall only receive orders for
the purchase or sale of portfolio securities to the extent that the placing
of such orders is in compliance with the Rules of the U.S. Securities and
Exchange Commission and the National Association of Securities Dealers,
Inc. The Investment Adviser also agrees that it will cooperate with the
Trust to execute instructions that brokerage transactions be allocated to
brokers or dealers who provide benefits directly to the Fund.
(b) Notwithstanding the provisions of subparagraph (a) above and
subject to such policies and procedures as may be adopted by the Board of
Trustees and officers of the Trust, the Investment Adviser is authorized to
pay a member of an exchange, broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission
another member of an exchange, broker or dealer would have charged for
effecting that transaction, in such instances where the Investment Adviser
has determined in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by
<PAGE>
such member, broker or dealer, viewed in terms of either that particular
transaction or the Investment Adviser's overall responsibilities with
respect to the Fund and to other funds for which the Investment Adviser
exercises investment discretion.
(c) The Investment Adviser is authorized to direct portfolio
transactions to a broker which is an affiliated person of the Investment
Adviser or the Fund in accordance with such standards and procedures as may
be approved by the Board in accordance with 1940 Act Rule 17e-1, or other
rules promulgated by the Securities and Exchange Commission. Any
transaction placed with an affiliated broker must (i) be placed at best
price and execution, and (ii) may not be a principal transaction.
4. As compensation for the services to be rendered to the Fund by
the Investment Adviser under the provisions of this Agreement, the Trust on
behalf of the Fund shall pay to the Investment Adviser from the Fund's
assets an annual fee equal to 1.00% of the daily average net assets of the
Fund, payable on a monthly basis, subject to reduction to the extent
necessary to comply with the most stringent limits prescribed by any state
in which the Fund's shares are offered for sale.
If this Agreement is terminated prior to the end of any calendar
month, the management fee shall be prorated for the portion of any month in
which this Agreement is in effect according to the proportion which the
number of calendar days, during which the Agreement is in effect, bears to
the number of calendar days in the month, and shall be payable within 10
days after the date of termination.
5. The services to be rendered by the Investment Adviser to the
Trust on behalf of the Fund under the provisions of this Agreement are not
to be deemed to be exclusive, and the Investment Adviser shall be free to
render similar or different services to others so long as its ability to
render the services provided for in this Agreement shall not be impaired
thereby.
<PAGE>
6. The Investment Adviser, its partners, employees, and agents may
engage in other businesses, may render investment advisory services to
other investment companies, or to any other corporation, association, firm
or individual, and may render underwriting services to the Trust on behalf
of the Fund or to any other investment company, corporation, association,
firm or individual.
7. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of duties of the
Investment Adviser to the Fund, the Investment Adviser shall not be subject
to liabilities to the Fund or to any shareholder of the Fund for any action
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, or otherwise.
8. In accordance with the Agreement and Declaration of Trust of the
Trust, in the event that the Investment Adviser ceases to be the Fund's
investment adviser for any reason, the Trust will (unless the Investment
Adviser otherwise agrees in writing) promptly take all necessary steps to
propose to the Fund's shareholders at the next regular meeting that the
Fund change to a name not including the word "Kalmar."
9. This Agreement shall be executed and become effective as of the
date written below if approved by the vote of a majority of the outstanding
voting securities of the Fund. It shall continue in effect for a period of
two years and may be renewed thereafter only so long as such renewal and
continuance is specifically approved at least annually by the Board of
Trustees or by vote of a majority of the outstanding voting securities of
the Fund and only if the terms and the renewal hereof have been approved by
the vote of a majority of the Trustees of the Trust who are not parties
hereto or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval. No amendment to this
Agreement shall be effective unless the terms thereof have been approved by
<PAGE>
the vote of a majority of the outstanding voting securities of the Fund and
by the vote of a majority of Trustees of the Trust who are not parties to
the Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. Notwithstanding
the foregoing, this Agreement may be terminated by the Trust at any time,
without the payment of a penalty, on sixty days written notice to the
Investment Adviser of the Trust's intention to do so, pursuant to action by
the Board of Trustees of the Trust or pursuant to a vote of a majority of
the outstanding voting securities of the Fund. The Investment Adviser may
terminate this Agreement at any time, without the payment of penalty on
sixty days' written notice to the Trust of its intention to do so. Upon
termination of this Agreement, the obligations of all the parties hereunder
shall cease and terminate as of the date of such termination, except for
any obligation to respond for a breach of this Agreement committed prior to
such termination, and except for the obligation of the Trust to pay to the
Investment Adviser the fee provided in Paragraph 4 hereof, prorated to the
date of termination. This Agreement shall automatically terminate in the
event of its assignment.
10. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
11. For the purposes of this Agreement, the terms "vote of a majority
of the outstanding voting securities"; "interested persons"; and
"assignment" shall have the meaning defined in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused their corporate
seals to be affixed and duly attested and their presents to be signed by
their duly authorized officers this 18th day of _________________, 1996.
<PAGE>
Attest: KALMAR POOLED INVESTMENT TRUST
_________________________ By:______________________________
Ford B. Draper, Jr., Chairman
and President
Attest: KALMAR INVESTMENT ADVISERS
_________________________ By:______________________________
Ford B. Draper, Jr., Chairman
and President
179790.1
Exhibit 6(a)
DISTRIBUTION AGREEMENT
BETWEEN
KALMAR POOLED TRUST
AND
RODNEY SQUARE DISTRIBUTORS, INC.
THIS DISTRIBUTION AGREEMENT is made as of the ____ day of
_______________, 1996, between Kalmar Pooled Trust, a Delaware business
trust (the "Trust"), having its principal place of business in Wilmington,
Delaware, and Rodney Square Distributors, Inc., a corporation organized
under the laws of the State of Delaware (the "Distributor"), having its
principal place of business in Wilmington, Delaware.
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment
company, and offers for sale one or more series of shares of beneficial
interest;
WHEREAS, each share of a Series represents an undivided interest in the
assets, subject to the liabilities, allocated to that Series and each
Series has a separate investment objective and policies;
WHEREAS, at the present time, the Trust has established two Series, of
which one Series consists of the two separate classes of shares and the
Trust may establish additional Series and/or classes in the future; and
WHEREAS, the Trust desires to avail itself of the services of
Distributor, with such assistance from its affiliates as the latter may
provide; and the Distributor is willing to furnish such services to the
Trust with respect to each of the Series listed on Schedule A to this
Agreement (each a "Fund" or collectively "Funds") on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties agree as follows:
1. SALE OF SHARES. The Trust grants to the Distributor the right to sell
shares of beneficial interest in all series of the Trust, now or
hereafter created, (the "Shares") on its behalf during the term of this
Agreement and subject to the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and of the laws
governing the sale of securities in various states (the "Blue Sky
Laws") under the following terms and conditions: the Distributor (i)
shall have the right to sell, as agent on behalf of the Trust, Shares
authorized for issue and registered under the 1933 Act; (ii) may sell
Shares under offers of exchange, if available, between and among the
funds distributed by Distributor and advised by Rodney Square
Management Corporation or Wilmington Trust Company; and (iii) shall
sell such Shares only in compliance with the terms set forth in the
Trust's currently effective registration statement. Distributor may
enter into selling agreements with selected dealers and others for the
sale of Trust Shares and will act only on its own behalf as principal
in entering into such selling agreements.
2. SALE OF SHARES BY THE TRUST. The rights granted to the Distributor
shall be non-exclusive in that the Trust reserves the right to sell its
<PAGE>
Shares to investors on applications received and accepted by the Trust.
Further, the Trust reserves the right to issue Shares in connection
with (a) the merger or consolidation, or acquisition by the Trust
through purchase or otherwise, with any other investment company, trust
or personal holding company; and (b) a pro rata distribution directly
to the holders of Shares in the nature of a stock dividend or split-up.
3. SHARES COVERED BY THIS AGREEMENT. This Agreement shall apply to issued
Shares of all series of the Trust, Shares of all series of the Trust
held in its treasury in the event that in the discretion of the Trust
treasury Shares shall be sold, and Shares of all series of the Trust
repurchased for resale.
4. SUSPENSION OF SALES. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for Shares shall be processed by the Distributor except such
unconditional orders placed with the Distributor before it had
knowledge of the suspension. In addition, the Trust reserves the right
to suspend sales and the Distributor's authority to process orders for
Shares on behalf of the Trust if, in the judgment of the Trust, it is
in the best interests of the Trust to do so. Suspension will continue
for such period as may be determined by the Trust. In addition, the
Distributor reserves the right to reject any purchase order.
5. SOLICITATION OF SALES. In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for Shares of
the Trust. This shall not prevent the Distributor from entering into
like arrangements (including arrangements involving the payment of
underwriting commissions) with other issuers. Distributor agrees to
use all reasonable efforts to ensure that taxpayer identification
numbers provided for shareholders of the Trust are correct.
6. AUTHORIZED REPRESENTATIONS. The Distributor is not authorized by the
Trust to give any information or to make any representations other than
those contained in the appropriate registration statements,
Prospectuses or Statements of Additional Information ("SAIs") filed
with the Securities and Exchange Commission under the 1933 Act (as
those registration statements, Prospectuses and SAIs may be amended
from time to time), or contained in shareholder reports or other
material that may be prepared by or on behalf of the Trust for the
Distributor's use. This shall not be construed to prevent the
Distributor from preparing and distributing, in compliance with
applicable laws and regulations, sales literature or other material as
it may deem appropriate. Distributor will furnish or cause to be
furnished copies of such sales literature or other material to the
President of the Trust or his designee and will provide him with a
reasonable opportunity to comment on it. Distributor agrees to take
appropriate action to cease using such sales literature or other
material to which the Trust reasonably objects as promptly as
practicable after receipt of the objection.
7. PORTFOLIO SECURITIES. Portfolio securities of every series of the
Trust may be bought or sold by or through the Distributor, and the
Distributor may participate directly or indirectly in brokerage
commissions or "spreads" for transactions in portfolio securities of
any series of the Trust. However, all sums of money received by the
Distributor as a result of such purchases and sales or as a result of
<PAGE>
such participation must, after reimbursement of actual expenses of the
Distributor in connection with such activity, be paid over by the
Distributor to or for the benefit of the applicable series.
8. REGISTRATION OF SHARES. The Trust agrees that it will take all action
necessary to register Shares under the 1933 Act (subject to the
necessary approval, if any, of its shareholders) so that there will be
available for sale the number of Shares the Distributor may reasonably
be expected to sell. The Trust shall furnish to the Distributor copies
of all information, financial statements and other papers which the
Distributor may reasonably request for use in connection with the
distribution of Shares of each series of the Trust.
9. EXPENSES, COMPENSATION AND REIMBURSEMENT
(a)The Trust shall pay all fees and expenses:
(i) in connection with the preparation, setting in type and filing
of any registration statement, Prospectus and SAI under the
1933 Act, and any amendments thereto, for the issue of its
Shares;
(ii)in connection with the registration and qualification of Shares
for sale in the various states in which the Board of Trustees
(the "Trustees") of the Trust shall determine it advisable to
qualify such Shares for sale (including registering the Trust
or Series as a broker or dealer or any officer of the Trust as
agent or salesperson in any state);
(iii)of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Trust in their
capacity as such; and
(iv) of preparing, setting in type, printing and mailing
Prospectuses, SAIs, and any supplements thereto, sent to
existing shareholders.
(b)The Distributor shall pay expenses of:
(i) printing and distributing Prospectuses, SAIs and reports
prepared for its use in connection with the offering of the
Shares for sale to the public;
(ii) any other literature used in connection with such offering; and
(iii)advertising in connection with such offering.
(c) In addition to the services described above, Distributor will
provide services including assistance in the production of
marketing and advertising materials for the sale of Shares of the
Trust and their review for compliance with applicable regulatory
requirements, entering into dealer agreements with broker-dealers
to sell Shares of the Trust and monitoring their financial strength
and contractual compliance, providing, directly or through its
affiliates certain investor support services, personal service, and
the maintenance of shareholder accounts.
(d) In connection with the services to be provided by the
Distributor under this Agreement, the Distributor shall receive
reimbursement from the Trust's investment adviser for fees and
expenses (which may include without limitation reimbursement
for the expenses incurred pursuant to Section 9(b) hereof).
<PAGE>
10.INDEMNIFICATION.
(a) The Trust agrees to indemnify and hold harmless the Distributor and
each of its directors and officers and each person, if any, who
controls the Distributor within the meaning of Section 15 of the
1933 Act and Section 20(a) of the Securities Act of 1934 (the "1934
Act") against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any
alleged loss, liability, claim, damages, or expense and reasonable
counsel fees incurred in connection therewith) arising by reason of
any person acquiring any Shares, based upon the 1933 Act or any
other statute or common law, alleging any wrongful act of the Trust
or any of its employees or representatives, or based upon the
grounds that the registration statements, Prospectuses, SAIs,
shareholder reports or other information filed or made public by
the Trust (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact
required to be stated or necessary in order to make the statements
not misleading. However, the Trust does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with,
information furnished to the Trust in writing by or on behalf of
the Distributor. In no case (i) is the indemnity of the Trust in
favor of the Distributor or any person indemnified to be deemed to
protect the Distributor or any person against any liability to the
Trust or its security holders to which the Distributor or such
person would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties
under this Agreement, or (ii) is the Trust to be liable under its
indemnity agreement contained in this Section 10(a) with respect to
any claim made against the Distributor or any person indemnified
unless the Distributor or person, as the case may be, shall have
notified the Trust in writing of the claim within a reasonable time
after the summons or other first written notification giving
information of the nature of the claim shall have been served upon
the Distributor or any such person or after the Distributor or such
person shall have received notice of service on any designated
agent. However, failure to notify the Trust of any claim shall not
relieve the Trust from any liability which it may have to the
Distributor or any person against whom such action is brought other
than on account of its indemnity agreement contained in this
Section 10(a). The Trust shall be entitled to participate at its
own expense in the defense, or, if it so elects, to assume the
defense of any suit brought to enforce any claims, but if the Trust
elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Distributor, or person
or persons, defendant or defendants in the suit. In the event the
Trust elects to assume the defense of any suit and retain counsel,
the Distributor, officers or directors or controlling person(s) or
defendant(s) in the suit, shall bear the fees and expenses of any
additional counsel retained by them. If the Trust does not elect
to assume the defense of any suit, it will reimburse the
Distributor, officers or directors or controlling person(s) or
defendant(s) in the suit, for the reasonable fees and expenses of
any counsel retained by them. The Trust agrees to notify the
Distributor promptly of the commencement of any litigation or
proceedings against it or any of its officers or Trustees in
connection with the issuance or sale of any of the Shares.
<PAGE>
(b) The Distributor also covenants and agrees that it will indemnify
and hold harmless the Trust and each of the members of its Trustees
and officers and each person, if any, who controls the Trust within
the meaning of Section 15 of the 1933 Act, against any loss,
liability, damages, claim or expense (including the reasonable cost
of investigating or defending any alleged loss, liability, damages,
claim or expense and reasonable counsel fees incurred in connection
therewith) arising by reason of any person acquiring any Shares,
based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its
employees or representatives, or alleging that the registration
statements, Prospectuses, SAIs, shareholder reports or other
information filed or made public by the Trust (as from time to time
amended) included an untrue statement of a material fact or omitted
to state a material fact required to be stated or necessary in
order to make the statements not misleading, insofar as the
statement or omission was made in reliance upon, and in conformity
with, information furnished in writing to the Trust by or on behalf
of the Distributor. In no case (i) is the indemnity of the
Distributor in favor of the Trust or any person indemnified to be
deemed to protect the Trust or any person against any liability to
which the Trust or such person would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of
its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in
this Section 10(b) with respect to any claim made against the Trust
or any person indemnified unless the Trust or person, as the case
may be, shall have notified the Distributor in writing of the claim
within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall
have been served upon the Trust or any such person or after the
Trust or such person shall have received notice of service on any
designated agent. However, failure to notify the Distributor of
any claim shall not relieve the Distributor from any liability
which it may have to the Trust or any person against whom the
action is brought other than on account of its indemnity agreement
contained in this Section 10(b). In the case of any notice to the
Distributor, it shall be entitled to participate, at its own
expense, in the defense, or, if it so elects, to assume the defense
of any suit brought to enforce any claims, but if the Distributor
elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Trust, to its officers
and Trustees and to any controlling person(s) or any defendants(s)
in the suit. In the event the Distributor elects to assume the
defense of any suit and retain counsel, the Trust or controlling
person(s) or defendant(s) in the suit, shall bear the fees and
expenses of any additional counsel retained by them. If the
Distributor does not elect to assume the defense of any suit, it
will reimburse the Trust, its officers or Trustees, controlling
person(s) or defendant(s) in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees
to notify the Trust promptly of the commencement of any litigation
or proceedings against it in connection with the issue and sale of
any of the Shares.
<PAGE>
11.EFFECTIVENESS, TERMINATION, ETC. This Agreement shall become effective
on the day and year first written above, and unless terminated as
provided, shall continue in force for one (1) year from the date of its
execution and thereafter from year to year, provided continuance after
the one (1) year period is approved at least annually by either (i) the
vote of a majority of the Trustees of the Trust, or by the vote of a
majority of the outstanding voting securities of the Trust, and (ii)
the vote of a majority of those Trustees of the Trust who are not
interested persons of the Trust, who have no direct or indirect
financial interest in the operation of any Plan of the Trust or any
agreements related to the Plan and who are not parties to this
Agreement or interested persons of any party, cast in person at a
meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment.
As used in this Section 12, the terms "vote of a majority of the
outstanding voting securities," "assignment" and "interested person"
shall have the respective meanings specified in the 1940 Act and the
rules enacted thereunder as now in effect or as hereafter amended. In
addition to termination by failure to approve continuance or by
assignment, this Agreement may at any time be terminated without the
payment of any penalty by vote of a majority of the Trustees of the
Trust who are not interested persons of the Trust and who have no
direct or indirect financial interest in the operation of any Plan of
the Trust or any agreements related to the Plan, or by vote of a
majority of the outstanding voting securities of the Trust, on not more
than sixty (60) days' written notice to the Trust. This Agreement may
be terminated by the Distributor upon not less than sixty (60) days'
prior written notice to the Trust.
12.NOTICE. Any notice under this Agreement shall be given in writing
addressed and hand delivered or sent by registered or certified mail,
postage prepaid, to the other party to this Agreement at its principal
place of business.
13.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.
14.GOVERNING LAW. To the extent that state law has not been 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, this Agreement
shall be administered, construed and enforced according to the laws of
the State of Delaware.
15.SHAREHOLDER LIABILITY. The Distributor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Trust Instrument of the Trust and agrees that obligations assumed by
the Trust pursuant to this Agreement shall be limited in all cases to
the Trust and its assets, and if the liability relates to one or more
series, the obligations hereunder shall be limited to the respective
assets of such series. The Distributor further agrees that it shall
not seek satisfaction of any such obligation from the shareholders or
any individual shareholder of a series of the Trust, nor from the
Trustees or any individual Trustee of the Trust.
16.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
<PAGE>
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed in two counterparts, each of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
KALMAR POOLED TRUST
By: -----------------------------
Name, Title
RODNEY SQUARE DISTRIBUTORS, INC.
By: ------------------------------
Jeffrey O. Stroble, President
Acknowledgment as to reimbursement with respect to marketing expenses
of Rodney Square Distributors, Inc. as Distributor.
Kalmar Investment Adviser, as Investment Adviser
By: -----------------------------
Ford B. Draper, President
Date: ---------------------------
Exhibit 8
CUSTODIAL AGREEMENT
BETWEEN
KALMAR POOLED INVESTMENT TRUSTS
AND
WILMINGTON TRUST COMPANY
THIS AGREEMENT is made this _____ day of ________ , 19___,
between ____________________________________________________________
("Principals"), and WILMINGTON TRUST COMPANY, a Delaware corporation
("Custodian").
WHEREAS, Principals intend to deliver property to
Custodian from time to time and desires to enter into an agreement
setting forth Custodian's duties with respect thereto;
NOW, THEREFORE, in consideration of the premises, and in
further consideration of the covenants set forth below, it is hereby
agreed mutually as follows:
I. AGREEMENTS AND COVENANTS OF CUSTODIAN.
Custodian agrees and covenants to:
(a) Hold such property as may be delivered to it
hereunder (the "Property") in safekeeping until it is disposed of in
accordance with this Agreement.
(b) Register the Property in the name of its nominee,
unless instructed otherwise.
(c) Collect and receive, when due and if made payable to
it or its nominee, all principal and income of every nature arising
from the Property.
(d) Notify Principals of all communications received by
it with respect to the Property and requiring action by the owner,
unless instructed otherwise.
(e) Change the investment of the Property if, as and when
instructed to do so.
(f) Invest idle, or otherwise uninvested, cash as
provided in Paragraph II(g).
(g) Unless instructed otherwise, vote any stock
registered in the name of its nominee, including shares of
Wilmington Trust Corporation and shares in any of the Rodney Square
family of mutual funds, as Custodian, in its sole discretion, deems
appropriate.
(h) Participate in any plan or proceeding for protecting
or enforcing any right or interest arising from the Property if, as
and when instructed to do so.
(i) Create and/or terminate such separate accounts and
allocate the Property among such accounts if, as and when instructed
to do so.
<PAGE>
(j) Deliver any Property from time to time if, as and
when instructed to do so, upon obtaining an appropriate receipt
therefor.
(k) Render to Principals, and to such other person as
Principals may instruct, statements of the Property held by it from
time to time.
II. AGREEMENTS AND COVENANTS OF PRINCIPALS.
Principals agree and covenant:
(a) That Kalmar Investments, Inc. has been appointed by
Principals as investment manager (the "Manager") with authority to
provide in writing all investment and investment related
instructions on behalf of Principals; provided that withdrawals of
Property will be permitted only at the written direction of
Principals. All securities transactions processed through a
securities depository or clearing corporation, including Depository
Trust Company, for which Manager is the affirming party will be
deemed sufficient confirmation of such transactions on behalf of
Principals.
(b) To indemnify and hold Custodian harmless from and
against any loss, cost or other damage arising out of Custodian's
complying with the terms hereof and/or with instructions given as
provided herein.
(c) To pay to Custodian compensation for its services in
accordance with the current rates charged by Custodian from time to
time for accounts of similar size and character. Any change in fees
or charges will be applicable only after reasonable notice to
Principals. In the event that Custodian is called upon to render
any extraordinary services, it will be entitled to additional
compensation.
(d) That this agreement shall be binding upon Principals
and Principals' successor.
(e) That for purposes of regulations issued by the
Federal Deposit Insurance Corporation ("FDIC"), Custodian's regular
account statements will be sufficient information concerning
securities transactions effected for Principals' account; provided
that Principals, upon request, have the right to receive written
confirmations of securities transactions within five business days
from the date of Custodian's receipt of the broker/dealer
confirmations thereof.
(f) That Custodian may deposit or arrange for the deposit
of any Property at Depository Trust Company or any other securities
depository or clearing corporation, and may hold any Property on
behalf of Principals at any correspondent bank of Custodian. Such
Property may be registered in the depository's or the
correspondent's nominee name.
(g) That Custodian is authorized to invest idle, or
otherwise uninvested, cash in either The Rodney Square Fund or The
Rodney Square Tax-Exempt Fund, as directed from time to time, or, in
<PAGE>
the absence of such direction, as Custodian in its sole discretion
deems appropriate. Principals acknowledge that the Rodney Square
mutual funds are entities separate from Rodney Square Management
Corporation and Wilmington Trust Company; shares in these mutual
funds are not obligations of Wilmington Trust Company, are not
deposits and are not insured by the FDIC; Wilmington Trust Company,
or its subsidiary, is compensated by these mutual funds for services
rendered in its capacity as investment advisor, custodian or
transfer agent; and such compensation is both described in detail in
the prospectus for each fund under the heading "Management of the
Fund", and is in addition to the compensation, if any, paid to
Wilmington Trust Company in its capacity as Custodian hereunder with
respect to such funds.
III. LIMITATION OF LIABILITY.
Custodian will have no responsibility or liability:
(a) To take any action with respect to the Property,
other than as undertaken in Paragraph I, unless and until it has
actually received instructions as provided herein.
(b) To institute any proceeding for the collection of any
principal and income of any nature arising from, or to institute,
appear in or defend any proceeding with respect to, the Property,
unless and until it has received instructions as provided herein,
and it has had advanced or guaranteed to it funds sufficient to meet
any expenses.
(c) To change the investment of the Property, other than
as with instructions as provided herein.
(d) For any depreciation in principal of the Property.
(e) For assuming that the authority of any person or
organization designated by Principals to give instructions, unless
otherwise in such designation, is continuing until Principals
deliver a written revocation of such authority to Custodian, or
until the termination of this agreement.
(f) To determine whether Principals in entering into this
agreement or giving any instructions are acting within the scope of
their power and authority.
IV. SHAREHOLDER COMMUNICATIONS ACT.
Unless otherwise directed by Principals in writing,
Custodian is authorized to disclose Principals' name,
address and share positions to companies over whose securities
Principals exercise voting authority or to others upon request by
such companies.
V. TERMINATION.
This agreement may be terminated by either party upon
delivery of written notice of such termination to the other; and
shall be terminated by the withdrawal, in accordance with the
provisions of Paragraph I(j) hereof, of all of the Property or upon
<PAGE>
receipt by Custodian of written notice of that Principals have
ceased to act as trustees, unless Principal's successor ratifies
this agreement within 60 days thereafter. Upon termination,
Custodian will deliver to Principals, or to Principals' successor,
as the case may be, the Property then held by it, if any, upon
obtaining an appropriate receipt. Paragraph II(b) and (c) hereof
will survive termination of this agreement.
VI. GOVERNING LAW.
This is a Delaware contract and is governed by Delaware
law in all respects.
IN WITNESS WHEREOF, Principals have set their Hands and
Seals, and Custodian has caused this agreement to be signed in its
name by one of its Vice Presidents and its corporate seal to be
hereto affixed by one of its Assistant
Secretaries, all done in duplicate as of the day and year first
above written.
Witness:__________________ ________________________(Seal)
Witness:__________________ ________________________(Seal)
[Corporate Seal] WILMINGTON TRUST COMPANY
Attest:_______________________ By:________________________
Assistant Secretary Vice President
Exhibit 9(a)
ACCOUNTING SERVICES AGREEMENT
BETWEEN
KALMAR POOLED TRUST
AND
RODNEY SQUARE MANAGEMENT CORPORATION
THIS ACCOUNTING SERVICES AGREEMENT is made as of the ____ day of
______________, 1996 between Kalmar Pooled Trust, a Delaware business trust
(the "Trust") having its principal place of business in Wilmington,
Delaware, and Rodney Square Management Corporation, a Delaware corporation
("Rodney Square") having its principal place of business in Wilmington,
Delaware.
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end, management investment
company and offers for public sale one or more series of shares of
beneficial interest, each of which may offer one or more classes of shares;
WHEREAS, each share of a series represents an undivided interest in
the assets, subject to the liabilities, allocated to that series;
WHEREAS, at the present time, the Trust has established two Series, of
which one Series consists of the two separate classes of shares and the
Trust may establish additional Series and/or classes in the future; and
WHEREAS, the Trust desires to avail itself of the services of Rodney
Square to provide certain accounting services; and Rodney Square is willing
to furnish such services to the Trust with respect to each of the series
listed on Appendix A to this Agreement (each a "Fund" or collectively the
"Funds") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints Rodney Square to provide
certain accounting services to the Trust for the period and on the terms
set forth in this Agreement. Rodney Square accepts such appointment and
agrees to furnish the services herein set forth in return for the
compensation as provided in Paragraph 12 of this Agreement. Rodney Square
agrees to comply with all relevant provisions of the 1940 Act and
applicable rules and regulations thereunder, and to remain open for
business on any day on which the New York Stock Exchange, the Federal
Reserve Bank of Philadelphia and Wilmington Trust Company are open for
business. The Trust may from time to time issue separate series or classes
or classify and reclassify shares of such series or class. Rodney Square
shall identify to each such series or class property belonging to such
series or class and in such reports, confirmations and notices to the Trust
called for under this Agreement shall identify the series or class to which
such report, confirmation or notice pertains.
2. DOCUMENTS. The Trust has furnished Rodney Square copies of the
Trust's Agreement and declarartion of Trust, By-Laws, Advisory Contract,
Distribution Agreement, Administration Agreement, Custody Agreement,
Transfer Agency Agreement, most recent Registration Statement on Form N-1A,
current Prospectus and Statement of Additional Information (the "SAI") and
all forms relating to any plan, program or service offered by the Trust.
<PAGE>
The Trust shall furnish promptly to Rodney Square a copy of any amendment
or supplement to the above-mentioned documents. The Trust shall furnish
promptly to Rodney Square any additional documents necessary for it to
perform its functions hereunder or such other documents as Rodney Square
shall request.
3. DEFINITIONS.
(a) Authorized Person. As used in this Agreement, the term
"Authorized Person" means the President, Treasurer, Secretary and any
Vice President of the Trust and any other person, whether or not any
such person is an officer or employee of the Trust, duly authorized by
the Board of Trustees of the Trust to give Oral and Written
Instructions on behalf of the Trust and listed on Appendix B listing
persons duly authorized to give Oral and Written Instructions on
behalf of the Trust as may be received by Rodney Square from time to
time.
(b) Oral Instructions. As used in this Agreement, the term "Oral
Instructions" means oral instructions actually received by Rodney
Square from an Authorized Person or from a person reasonably believed
by Rodney Square to be an Authorized Person. The Trust agrees to
deliver to Rodney Square, at the time and in the manner specified in
Paragraph 4(b) of this Agreement, Written Instructions confirming oral
Instructions.
(c) Written Instructions. As used in this Agreement, the term
"Written Instructions" means written instructions delivered by hand,
mail, tested telegram, cable, telex or facsimile sending device, and
received by Rodney Square, signed by two Authorized Persons.
4. INSTRUCTIONS CONSISTENT WITH TRUST INSTRUMENT, ETC.
(a) Unless otherwise provided in this Agreement, Rodney Square shall
act only upon Oral and Written Instructions. Although Rodney Square
may know of the provisions of the Trust Instrument and By-Laws of the
Trust, Rodney Square may assume that any Oral or Written Instructions
received hereunder are not in any way inconsistent with any provisions
of such Trust Instrument or By-Laws or any vote, resolution or
proceeding of the Shareholders, or of the Board of Trustees, or of any
committee thereof.
(b) Rodney Square shall be entitled to rely upon any Oral
Instructions and any Written Instructions actually received by Rodney
Square pursuant to this Agreement. The Trust agrees to forward to
Rodney Square Written Instructions confirming Oral Instructions in
such manner that the Written Instructions are received by Rodney
Square, whether by hand delivery, telex, facsimile sending device or
otherwise, by the close of business of the same day that such Oral
Instructions are given to Rodney Square. The Trust agrees that the
fact that such confirming Written Instructions are not received by
Rodney Square shall in no way affect the validity of the transactions
or enforceability of the transactions authorized by the Trust by
giving Oral Instructions.
The Trust agrees that Rodney Square shall incur no liability to the
Trust in acting upon Oral Instructions given to Rodney Square hereunder
concerning such transactions provided such instructions reasonably appear
to have been received from an Authorized Person.
<PAGE>
5. SERVICES ON A CONTINUING BASIS.
(a) Rodney Square will perform the following accounting functions on
a daily basis:
(i) Journalize each Fund's investment, capital share and income
and expense activities;
(ii) Verify investment buy/sell trade tickets when received from
the
Trust's Investment Advisor ("Advisor") and transmit trades
to the
Trust's custodian for proper settlement;
(iii)Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of each Fund with the
Custodian, and provide the Advisor with the beginning cash
balance available for investment purposes;
(vi) Update the cash availability throughout the day as required
by the
Advisor;
(vii)Post to and prepare each Fund's Statement of Assets and
Liabilities and the Statement of Operations;
(viii)Calculate expenses payable pursuant to the Fund's various
contractual obligations;
(ix) Control all disbursements from the Trust on behalf of each
Fund
and authorize such disbursements upon Written Instructions;
(x) Calculate capital gains and losses;
(xi) Determine each Fund's net income;
(xii)Obtain security market quotes from services approved by the
Advisor, or if such quotes are unavailable, then obtain such
prices
from services approved by the Advisor, and in either case
calculate the market or fair value of each Fund's
investments;
(xiii)Transmit or mail a copy of the portfolio valuation to the
Advisor;
(xiv)Compute the net asset value of each class of each Fund;
(xv) Compute the yield, total return and expense ratio of each
class of
each Fund, and each Fund's portfolio turnover rate; and
(xvi)Monitor the expense accruals and notify Trust management of
any
proposed adjustments.
(b) In addition, Rodney Square will:
(i) Prepare monthly financial statements, which will include
without
limitation the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses;
(ii) Prepare monthly security transactions listings;
(iii)Prepare quarterly broker security transactions summaries;
(iv) Supply various Trust, Fund and class statistical data as
requested
on an ongoing basis;
<PAGE>
(v) Assist in the preparation of support schedules necessary for
completion of Federal and state tax returns;
(vi) Assist in the preparation and filing of the Trust's Semi-
Annual
Reports with the SEC on Form N-SAR;
(vii)Assist in the preparation and filing of the Trust's annual
and semi-
annual shareholder reports and proxy statements;
(viii)Assist with the preparation of and Amendments to the
Trust's
registration statements on Form N-lA and other filings
relating to
the registration of shares; and
(ix) Monitor each Fund's status as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as
amended.
6. RECORDS. Rodney Square shall keep all books and records with
respect to the Trust's books of account and records of the Trust's
securities transactions. The books and records pertaining to the Trust
which are in the possession of Rodney Square shall be the property of the
Trust. Such books and records shall be prepared and maintained as required
by the 1940 Act and other applicable securities laws and rules and
regulations. The Trust, or the Trust's authorized representatives, shall
have access to such books and records at all times during Rodney Square's
normal business hours. Upon the reasonable request of the Trust, copies of
any such books and records shall be provided by Rodney Square to the Trust
or the Trust's authorized representative at the Trust's expense.
7. LIAISON WITH ACCOUNTANTS. Rodney Square shall act as liaison
with the Trust's independent public accountants and shall provide account
analyses, fiscal year summaries, and other audit related schedules. Rodney
Square shall take all reasonable action in the performance of its
obligations under this Agreement to assure that the necessary information
is made available to such accountants for the expression of their opinion,
as such may be required by the Trust from time to time.
8. CONFIDENTIALITY. Rodney Square agrees on behalf of itself and
its employees to treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and its
prior, present or potential Shareholders, and not to use such records and
information for any purpose other than performance of its responsibilities
and duties hereunder, except, after prior notification to and approval in
writing by the Trust, which approval shall not be unreasonably withheld and
may not be withheld where Rodney Square 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
Trust.
9. EQUIPMENT FAILURES. In the event of equipment failures beyond
Rodney Square's control, Rodney Square shall, at no additional expense to
the Trust, take reasonable steps to minimize service interruptions but
shall have no liability with respect thereto. Rodney Square shall enter
into and shall maintain in effect with appropriate parties one or more
agreements making reasonable provision of emergency use of electronic data
processing equipment to the extent appropriate equipment is available.
<PAGE>
10. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF TRUST. If Rodney Square shall be in doubt as to any
action to be taken or omitted by it, it may request, and shall
receive, from the Trust directions or advice, including Oral or
Written Instructions where appropriate.
(b) ADVICE OF COUNSEL. If Rodney Square shall be in doubt as to any
question of law involved in any action to be taken or omitted by
Rodney Square, it may request advice at the Tust's expense from
counsel of its own choosing (who may be the regularly retained counsel
for the Trust or Rodney Square, at the option of Rodney Square).
(c) CONFLICTING ADVICE. In case of conflict between oral and written
instructions received by Rodney Square, Rodney Square shall be
entitled to rely on and follow written instructions alone. In case of
conflict between advice received from the Trust under (a) and (b)
above, Rodney Square shall be entitled to rely on and follow advice
obtained in accordance with (b) above.
(d) PROTECTION OF RODNEY SQUARE. Rodney Square shall be protected in
any action or inaction which it takes in reliance on any directions,
advice or Oral or Written Instructions received pursuant to
subsections (a) or (b) of this paragraph which Rodney Square, after
receipt of any such directions, advice or Oral or Written
Instructions, in good faith believes to be consistent with such
directions, advice or Oral or Written Instructions, as the case may
be. However, nothing in this paragraph shall be construed as imposing
upon Rodney Square any obligation (i) to seek such directions, advice
or Oral or Written Instructions, or (ii) to act in accordance with
such directions, advice or Oral or Written Instructions when received,
unless, under the terms of another provision of this Agreement, the
same is a condition to Rodney Square's properly taking or omitting to
take such action
11. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The Trust
assumes full responsibility for insuring that the Trust complies with
all applicable requirements of the Securities Act of 1933 ("1933 Act"), the
Securities Exchange Act of 1934, as amended ("1934 Act"), the 1940 Act, and
any laws, rules and regulations of governmental authorities having
jurisdiction.
12. COMPENSATION. For the performance of its obligations under this
Agreement, the Trust on behalf of each Fund, shall pay Rodney Square in
accordance with the fee arrangements described in Schedule A attached
hereto, as such schedule may be amended from time to time.
13. INDEMNIFICATION. The Trust agrees to indemnify and hold harmless
Rodney Square and any officer, director, or employee of Rodney Square and
any person who controls Rodney Square within the meaning of Section 15 of
the 1933 Act or Section 20(a) of the 1934 Act (collectively, "Rodney Square
Affiliates") from all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, liabilities arising under the
1933 Act, the 1934 Act, the 1940 Act, and any other laws, rules and
regulations of any governmental authorities, all as or to be amended from
time to time) and expenses, including (without limitation) attorneys' fees
and disbursements, arising directly or indirectly from any action or thing
which Rodney Square takes or does or omits to take or do (i) at the request
or on the direction of or in reliance on the written advice of the Trust or
<PAGE>
(ii) upon Oral or Written Instructions, provided, that neither Rodney
Square nor any of its nominees shall be indemnified against any liability
to the Trust or to its Shareholders (or any expenses incident to such
liability) arising out of Rodney Square's own willful misfeasance, bad
faith, negligence or reckless disregard of its duties and obligations
specifically described in this Agreement.
14. RESPONSIBILITY OF RODNEY SQUARE. In the performance of its duties
hereunder, Rodney Square shall be obligated to exercise care and diligence
and to act in good faith and to use its best efforts within reasonable
limits in performing services provided for under this Agreement. Rodney
Square shall be under no duty to take any action on behalf of the Trust
except as specifically set herein or as may be specifically agreed to by
Rodney Square in writing. Neither Rodney Square nor any Rodney Square
Affiliate shall be liable for any error of judgment or mistake of law, or
for any loss suffered by the Trust in connection with the matters to which
this Agreement relates except to the extent that such loss. arise out of
Rodney Square's own negligence, bad faith or willful misfeasance, or
reckless disregard of obligations and duties under this Agreement. Any
person, even though also an officer, director, employee or agent of Rodney
Square or any of its affiliates who may be or become an officer or director
of the Trust, shall be deemed, when rendering services to the Trust as such
officer or acting on any business of the Trust in such capacity (other than
services or business in connection with Rodney Square's duties under this
Agreement), to be rendering such services to or acting solely for the Trust
and not as an officer, director, employee or agent or one under the control
or direction of Rodney Square or any of its affiliates, even though paid
by one of those entities. Rodney Square shall not be liable or responsible
for any acts or omissions of any predecessor administrator or any other
persons having responsibility for matters to which this Agreement relates
nor shall Rodney Square be responsible for reviewing any such act or
omissions.
Without limiting the generality of the foregoing or of any other
provision of this Agreement, Rodney Square in connection with its duties
under this Agreement shall not be under any duty or obligation to inquire
into and shall not be liable for or in respect of (i) the validity or
invalidity or authority or lack thereof of any Oral or Written Instruction,
notice or other instrument which conforms to the applicable requirements of
this Agreement, and which Rodney Square reasonably believes to be genuine;
or (ii) delays or errors or loss of data occurring by reason of
circumstances beyond Rodney Square's control, including acts of civil or
military authority, national emergencies, labor difficulties, fire,
mechanical breakdown (except as provided in paragraph 9), flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply.
15. DURATION AND TERMINATION. The provisions of this Agreement may
not be changed, waived, discharged or terminated orally, but only by
written instrument that shall make specific reference to this Agreement and
that shall be signed by the party against which enforcement of such change,
waiver, discharge or termination is sought.
This Agreement shall become effective as of the day and year
first written above, and unless terminated as provided, shall continue in
force for three (3) years from the date of its execution and thereafter
from year to year, provided continuance after the three (3) year period is
approved at least annually by a vote of the Trustees of the Trust. This
<PAGE>
Agreement may at any time be terminated on sixty (60) days' written notice
given to Rodney Square or by Rodney Square by six (6) months' written
notice given to the Trust; provided, however, that the foregoing provisions
of this Agreement may be terminated immediately at any time for cause
either by the Trust or by Rodney Square in the event that such cause shall
have remained unremedied for sixty (60) days or more after receipt of
written specification of such cause. Any such termination shall not affect
the rights and obligations of the parties under Section 13 hereof.
Upon the termination of this Agreement, the Trust shall pay to
Rodney Square such compensation as may be payable for the period prior to
the effective date of such termination, including reimbursement for any out-
of-pocket expenses reasonably incurred by Rodney Square to such date. In
the event that the Trust designates a successor to any of Rodney Square's
obligations hereunder, Rodney Square shall, at the expense and direction of
the Trust, transfer to such successor all relevant books, records and other
data established or maintained by Rodney Square under the foregoing
provisions.
16. NOTICES. Any notice under this Agreement shall be given in
writing addressed and delivered or mailed, postage prepaid, to the other
party to this Agreement at its principal place of business.
17. FURTHER ACTIONS. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the
purposes hereof.
18. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
19. DELEGATION. On thirty (30) days' prior written notice to the
Trust, Rodney Square may assign all its rights and delegate its duties
hereunder to any wholly-owned direct or indirect subsidiary of Wilmington
Trust Company provided that (i) the delegate agrees with Rodney Square to
comply with all relevant provisions of the 1940 Act and applicable rules
and regulations; (ii) Rodney Square shall remain responsible for the
performance of all of its duties under this Agreement; (iii) Rodney Square
and such delegate shall promptly provide such information as the Trust may
request; and (iv) Rodney Square shall respond to such questions as the
Trust may ask, relative to the delegation, including (without limitation)
the capabilities of the delegate.
20. MISCELLANEOUS.
(a) 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 or effect. This Agreement may be executed in two
counterparts, each of which taken together shall constitute one and the
same instrument.
(b) This Agreement embodies the entire agreement and understanding
between the parties thereto, and supersedes all prior agreements and
understandings, relating to the subject matter hereof, provided that the
parties hereto may embody in one or more separate documents their
agreement, if any, with respect to Written and/or Oral Instructions. The
<PAGE>
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 or effect. This Agreement shall be deemed to be
a contract made in Delaware and governed by Delaware law. 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. This Agreement shall be binding and shall inure to the
benefits of the parties hereto and their respective successors.
(c) Rodney Square is hereby expressly put on notice of the limitation
of shareholder liability as set forth in the Trust Instrument of the Trust
and agree that obligations assumed by the Trust under this Agreement shall
be limited in all cases to the Trust and its assets, and if the liability
relates to one or more Funds, the obligations hereunder shall be limited to
the respective assets of such Fund or Funds. Rodney Square further agrees
that it shall not seek satisfaction of any such obligations from the
shareholders or any individual shareholder of the Funds, nor from the
Trustees or any individual Trustee of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below on the day and year first
written above.
KALMAR POOLED TRUST
By: --------------------------------
RODNEY SQUARE MANAGEMENT CORPORATION
By: --------------------------------
<PAGE>
APPENDIX A
ACCOUNTING SERVICES AGREEMENT
KALMAR POOLED TRUST
FUND LISTINGS AND FEE SCHEDULE
For accounting services provided to Kalmar Pooled Trust pursuant to
this Accounting Services Agreement, Rodney Square Management Corporation
shall receive an annual fee for the first class of each portfolio
calculated as follows:
$45,000 for assets up to $50 million, plus;
0.03% of the next $50 million in assets, plus;
0.02% of assets in excess of $100 million.
The fee paid by each additional class of a portfolio shall be
calculated as follows:
$12,000 for assets up to $50 million, plus;
0.02% of assets in excess of $50 million
PORTFOLIO'S:
- -----------
Small Cap Portfolio
Class A Shares
Class B Shares
Micro-Cap Portfolio
This accounting fee shall be payable monthly as soon as practicable after
the last day of each month based on the average of the daily net assets of
each Portfolio, as determined at the close of business on each day
throughout the month.
Out of pocket expenses shall be reimbursed by the Trust to Rodney Square or
paid directly by the Trust.
LIQUIDATED DAMAGES:
Upon the termination of the attached Agreement within the initial three (3)
year term by the Trust or the Trust's Board of Trustees, the Trust shall
pay to Rodney Square six (6) months of base fees in liquidated damages with
respect to each Portfolio.
<PAGE>
APPENDIX B
ACCOUNTING SERVICES AGREEMENT
KALMAR POOLED TRUST
AUTHORIZED PERSONS
The following persons have been duly authorized by the Board of Trustees to
give Oral and Written Instructions on behalf of the Portfolios:
Exhibit 9(b)
ADMINISTRATION AGREEMENT
BETWEEN
KALMAR POOLED TRUST
AND
RODNEY SQUARE MANAGEMENT CORPORATION
THIS ADMINISTRATION AGREEMENT is made as of the ___ day of
____________, 1996, between Kalmar Pooled Trust, a Delaware business trust
(the "Trust"), having its principal place of business in Wilmington,
Delaware, and Rodney Square Management Corporation, a Delaware corporation
("Rodney Square"), having its principal place of business in Wilmington,
Delaware.
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company
and offers for public sale one or more series of shares of beneficial
interest ("Series");
WHEREAS, each share of a Series represents an undivided interest in
the assets, subject to the liabilities, allocated to that Series;
WHEREAS, at the present time, the Trust has established two Series, of
which one Series consists of the two separate classes of shares and the
Trust may establish additional Series and/or classes in the future; and
WHEREAS, the Trust desires to avail itself of the services of Rodney
Square and to have Rodney Square provide certain administrative services;
and Rodney Square is willing to furnish such services to the Trust with
respect to each Series listed on Schedule A to this Agreement (each a
"Fund" and collectively the "Funds") on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:
1. APPOINTMENT. The Trust hereby appoints and employs Rodney Square
as agent to perform those services described in this Agreement for the
Trust such appointment to take effect at the close of business on the date
first written above. Rodney Square shall act under such appointment and
perform the obligations thereof upon the terms and conditions hereinafter
set forth and in accordance with the principles of principal and agent
enunciated by the common law.
2. DOCUMENTS. The Trust has furnished Rodney Square copies of the
Trust's Agreement and Delaration of Trust, By-Laws, Advisory Agreement,
Distribution Agreement, Accounting Services Agreement, Custody Agreement,
Transfer Agency Agreement, Shareholder Servicing Plan and Agreement, most
recent Registration Statement on Form N-1A, current Prospectus and
Statement of Additional Information (the "SAI") and all forms relating to
the plan, program or service offered by the Trust. The Trust shall furnish
promptly to Rodney Square a copy of any amendment or supplement to the
above-mentioned documents. The Trust shall furnish promptly to Rodney
Square any additional documents necessary for it to perform its functions
hereunder or such other documents as Rodney Square shall request.
<PAGE>
3. ADMINISTRATIVE SERVICES. Subject to the direction and control of
the Board of Trustees of the Trust (the "Trustees") and to the extent not
otherwise the responsibility of, or provided by, the Trust or other supply
agents of the Trust, Rodney Square shall provide the following
administrative services:
a. Supply:
(i) office facilities (which may be in Rodney Square's or
its affiliates' own offices);
(ii) non-investment related statistical and research data;
(iii)executive and administrative services;
(iv) stationery and office supplies at Trust expense; and
(v) corporate secretarial services, such as the preparation
and distribution of materials at Trust expense for
meetings of the Board of Trustee or shareholders;
b. Prepare and file, if necessary, reports to shareholders of
the Trust and reports with the Securities and Exchange Commission
(the "SEC"), state securities authorities including preliminary
and definitive proxy materials, post-effective amendments to the
Trust's registration statement, Rule 24f-2 Notices, Form N-SAR
filings and Prospectus supplements;
c. Monitor each Fund's compliance with the investment
restrictions and limitations imposed by the 1940 Act, and state
securities laws and applicable regulations thereunder, the
fundamental and non-fundamental investment policies and
limitations set forth in the Prospectus and SAI, and the
investment restrictions and limitations necessary for each Fund
to qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code") or
any successor statute;
d. Monitor sales of each Fund's shares and ensure that such
shares are properly, registered as required with the SEC and
applicable state authorities;
e. Prepare and distribute to appropriate parties notices
announcing the declaration of dividends and other distributions
to shareholders;
f. Prepare financial statements and footnotes and other
financial information with such frequency and in such format as
required to be included in reports to shareholders and the SEC;
g. Review sales literature and file such with regulatory
authorities, as necessary;
h. Provide information regarding material developments in state
securities regulation; and
i. Provide personnel to serve as officers of the Trust if so
elected by the Board of Trustees.
4. EXPENSES OF THE TRUST. The Trust agrees that it will pay all its
expenses other than those expressly stated to be payable by Rodney Square
hereunder, which expenses payable by the Trust shall include, without
limitation:
<PAGE>
a. Fees payable for investment advisory services provided by
the Trust's Investment Adviser;
b. Fees payable for services provided by the Trust's
independent public accountants;
c. Fees payable for accounting services;
d. Fees payable for transfer agency services;
e. Fees payable for custodial services;
f. The cost of obtaining quotations for calculating the value
of the assets of each Fund;
g. Taxes levied against the Trust or any Fund;
h. Brokerage fees, mark-ups and commissions in connection with
the purchase and sale of portfolio securities;
i. Costs, including the interest expense, of borrowing money;
j. Costs and/or fees incident to holding meetings of the Board
of Trustees and shareholders, preparation (including typesetting,
printing and EDGAR filing charges) and mailing of prospectuses,
reports and proxy materials to the existing shareholders of the
Trust, filing of reports with regulatory bodies, maintenance of
the Trust's corporate existence, and registration of shares with
federal and state securities authorities;
k. Legal fees and expenses;
l. Costs of printing share certificates representing shares of
the Trust;
m. Fees payable to, and expenses of, members of the Board of
Trustees who are not "interested persons" of the Trust;
n. Out-of-pocket expenses incurred in connection with the
provision of administration, accounting, custodial and transfer
agency services;
o. Premiums payable on the fidelity bond required by Section
17(g) of the 1940 Act, and any other premiums payable on
insurance policies related to the Trust's business and the
investment activities of its Funds;
p. Rule 12b-1 fees, if any;
q. Shareholder service fees, if any;
r. Fees, voluntary assessments and other expenses incurred in
connection with the Trust's membership in investment company
organizations; and
s. Such non-recurring expenses as may arise, including actions,
suits or proceedings to which the Trust is a party and the legal
obligation which the Trust may have to indemnify its Trustees and
officers with respect thereto.
<PAGE>
Except as otherwise agreed by Rodney Square, Rodney Square will not
reimburse the Trust for (or have deducted from its fees payable under this
Agreement) any expenses in excess of any expense limitations imposed by
state securities commissions having jurisdiction over the sale of Fund
shares.
5. RECORDKEEPING AND OTHER INFORMATION. Rodney Square shall create
and maintain all necessary records in accordance with all applicable laws,
rules and regulations, including, but not limited to, records required by
Section 31(a) of the 1940 Act and the rules thereunder, as the same may be
amended from time to time, pertaining to the various functions (described
above) performed by it and not otherwise created and maintained by another
party pursuant to contract with the Trust. All records shall be the
property of the Trust at all times and shall be available for inspection
and use by the Trust. Where applicable, such records shall be maintained
by Rodney Square for the periods and in the places required by Rule 31a-2
under the 1940 Act.
6. AUDIT, INSPECTION AND VISITATION. Rodney Square shall make
available during regular business hours all records and other data created
and maintained pursuant to the foregoing provisions of this Agreement for
reasonable audit and inspection by the Trust, any person retained by the
Trust or any regulatory agency having authority over the Trust.
7. APPOINTMENT OF AGENTS. Rodney Square may at any time or times in
its discretion appoint (and may at any time remove) other parties as its
agent to carry out such of the provisions of this Agreement as Rodney
Square may from time to time direct; provided, however, that the
appointment of any such agent shall not relieve Rodney Square of any of its
responsibilities or liabilities hereunder.
8. RIGHT TO RECEIVE ADVICE.
a. Advice of Trust. If Rodney Square shall be in doubt as to
any action to be taken or omitted by it, it may request, and
shall receive, from the Trust directions or advice, including
oral or written instructions where appropriate.
b. Advice of Counsel. If Rodney Square shall be in doubt as to
any question of law involved in any action to be taken or omitted
by Rodney Square, it may request advice at its own cost from
counsel of its own choosing (who may be the regularly retained
counsel for the Trust or Rodney Square or the in-house counsel
for Rodney Square, at the option of Rodney Square).
c. Conflicting Advice. In case of conflict between oral and
written instructions received by Rodney Square, Rodney Square
shall be entitled to rely on and follow written instructions
alone. In case of conflict between advice received from the
Trust under (a) and (b) above, Rodney Square shall be entitled to
rely on and follow advice obtained in accordance with (b) above.
d. Protection of Rodney Square. Rodney Square shall be
protected in any action or inaction which it takes in reliance on
any directions, advice or oral or written Instructions received
pursuant to subsections a or b of this Section which Rodney
Square, after receipt of any such directions, advice or oral or
written instructions, in good faith believes to be consistent
with such directions, advice or oral or written instructions, as
<PAGE>
the case may be. However, nothing in this Section shall be
construed as imposing upon Rodney Square any obligation (i) to
seek such direction, advice or oral or written instructions, or
(ii) to act in accordance with such directions, advice or oral or
written instructions when received, unless, under the terms of
another provision of this Agreement, the same is a condition to
Rodney Square's properly taking or omitting to take such action..
9. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. Except as
otherwise provided herein, the Trust assumes full responsibility for
ensuring that the Trust complies with all applicable requirements of the
Securities Act of 1933, as amended (the "1933 Act"), the Securities
Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, the
Commodity Exchange Act and any laws, rules and regulations of governmental
authorities having jurisdiction.
10. COMPENSATION. For the performance of its obligations under this
Agreement, each Fund shall pay Rodney Square an administrative fee with
respect to each Fund in accordance with the fee arrangements described in
Schedule A attached hereto, as such schedule may be amended from time to
time.
11. USE OF RODNEY SQUARE'S NAME. The Trust shall not use the name of
Rodney Square or any of its affiliates in any Prospectus, SAI, sales
literature or other material relating to the Trust in a manner not approved
prior thereto in writing by Rodney Square; provided, however, that Rodney
Square shall approve all uses of its and its affiliates' names that merely
refer in accurate terms to their appointments hereunder or that are
required by the SEC or a state securities commission; and further provided,
that in no event shall such approval be unreasonably withheld.
12. USE OF TRUST'S NAME. Neither Rodney Square nor any of its
affiliates shall use the name of the Trust or material relating to the
Trust on any forms (including any checks, bank drafts or bank statements)
for other than internal use in a manner not approved prior thereto by the
Trust; provided, however, that the Trust shall approve all uses of its name
that merely refer in accurate terms to the appointment of Rodney Square
hereunder or that are required by the SEC or a state securities commission;
and further provided, that in no event shall such approval be unreasonably
withheld.
13. LIABILITY OF RODNEY SQUARE OR AFFILIATES. Neither Rodney Square
nor any officer, director, or employee of Rodney Square, nor any person who
controls Rodney Square within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the 1934 Act (collectively, "Rodney Square Affiliates")
shall be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust in connection with the matters to which this
Agreement relates, except to the extent of a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard of such
person's obligations and duties under this Agreement. Any person, even
though also an officer, director, employee or agent of Rodney Square or any
of its affiliates who may be or become an officer or director of the Trust,
shall be deemed, when rendering services to the Trust as such officer or
acting on any business of the Trust in such capacity (other than services
or business in connection with Rodney Square's duties under this
Agreement), to be rendering such services to or acting solely for the Trust
and not as an officer, director, employee or agent or one under the control
<PAGE>
or direction of Rodney Square or any of its affiliates, even though paid by
one of those entities. Rodney Square shall not be liable or responsible
for any acts or omissions of any predecessor administrator or any other
persons having responsibility for matters to which this Agreement relates
nor shall Rodney Square be responsible for reviewing any such act or
omissions.
14. INDEMNIFICATION.
a. The Trust agrees to indemnify and hold harmless Rodney
Square and any person who is an Rodney Square Affiliate from all
taxes, charges, expenses, assessments, claims and liabilities
including, without limitation, liabilities arising under the 1933
Act, the 1934 Act or the 1940 Act and any applicable state and
foreign securities laws, and amendments thereto (the "Securities
Laws"), and expenses, including without limitation reasonable
attorneys' fees and disbursements, arising directly or indirectly
from any action or omission to act which Rodney Square takes (i)
at the request of or on the direction of or in reliance on the
advice of the Trust or (ii) upon oral or written instructions.
Neither Rodney Square nor any Rodney Square Affiliate shall be
indemnified against any liability (or any expenses incident to
such liability) arising out of Rodney Square's or any such
affiliate's own willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties and obligations under this
Agreement.
b. Rodney Square agrees to indemnify and hold harmless the
Trust from all taxes, charges, expenses, assessments, claims and
liabilities arising from Rodney Square's obligations pursuant to
this Agreement (including, without limitation, liabilities
arising under the Securities Laws, and any state and foreign
securities laws, and amendments thereto) and expenses, including
(without limitation) reasonable attorneys' fees and disbursements
arising directly or indirectly out of Rodney Square's or its
directors', officers', employees', agents' and representatives
own willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties and obligations under this Agreement.
c. In order that the indemnification provisions contained in
this Section 14 shall apply, upon the assertion of a claim for
which either party may be required to indemnify the other, the
party seeking indemnification shall promptly notify the other
party of such assertion, and shall keep the other party advised
with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to
participate with the party seeking indemnification in the defense
of such claim. The party seeking indemnification shall in no
case confess any claim or make any compromise in any case in
which the other party may be required to indemnify it except with
the other party's prior written consent.
15. RESPONSIBILITY OF RODNEY SQUARE. In the performance of its duties
hereunder, Rodney Square shall be obligated to exercise care and diligence
and to act in good faith and to use its best efforts within reasonable
limits in performing services provided for under this Agreement. Rodney
Square shall be under no duty to take any action on behalf of the Trust
except as specifically set forth or as may be specifically agreed to by
<PAGE>
Rodney Square in writing. Without limiting the generality of the foregoing
or of any other provision of this Agreement, Rodney Square in connection
with its duties under this Agreement shall not be under any duty or
obligation to inquire into and shall not be liable for or in respect of (i)
the validity or invalidity or authority or lack thereof of any oral or
written instruction, notice or other instrument which conforms to the
applicable requirements of this Agreement, and which Rodney Square
reasonably believes to be genuine; or (ii) delays or errors or loss of data
occurring by reason of circumstances beyond Rodney Square's control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown, flood or catastrophe, acts of
God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply, which circumstances Rodney Square shall take
minimal actions to minimize loss of data therefor.
16. DURATION, TERMINATION, ETC. The provisions of this Agreement may
not be changed, waived, discharged or terminated orally, but only by
written instrument that shall make specific reference to this Agreement and
that shall be signed by the party against which enforcement of such change,
waiver, discharge or termination is sought.
This Agreement shall become effective as of the day and year
first written above, and unless terminated as provided, shall continue in
force for three (3) years from the date of its execution and thereafter
from year to year, provided continuance after the three (3) year period is
approved at least annually by a vote of the Trustees of the Trust. This
Agreement may at any time be terminated on sixty (60) days' written notice
given to Rodney Square or by Rodney Square by six (6) months' written
notice given to the Trust; provided, however, that the foregoing provisions
of this Agreement may be terminated immediately at any time for cause
either by the Trust or by Rodney Square in the event that such cause shall
have remained unremedied for sixty (60) days or more after receipt of
written specification of such cause. Any such termination shall not affect
the rights and obligations of the parties under Section 13 hereof.
Upon the termination of this Agreement, the Trust shall pay to
Rodney Square such compensation as may be payable for the period prior to
the effective date of such termination, including reimbursement for any out-
of-pocket expenses reasonably incurred by Rodney Square to such date. In
the event that the Trust designates a successor to any of Rodney Square's
obligations hereunder, Rodney Square shall, at the expense and direction of
the Trust, transfer to such successor all relevant books, records and other
data established or maintained by Rodney Square under the foregoing
provisions.
17. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
Rodney Square and the Trust shall regularly consult with each
other regarding Rodney Square's performance of its obligations and its
compensation under the foregoing provisions. In connection therewith, the
Trust shall submit to Rodney Square at a reasonable time in advance of
filing with the SEC copies of any amended or supplemented registration
statement of the Trust (including exhibits) under the 1933 Act and the 1940
Act, and, 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 Trust. Any change in such materials that would require any
<PAGE>
change in Rodney Square's obligations under the foregoing provisions shall
be subject to the burdened party's approval, which shall not be
unreasonably withheld. In the event that a change in such documents or in
the procedures contained therein increases the cost to Rodney Square of
performing its obligations hereunder by more than an insubstantial amount,
Rodney Square shall be entitled to receive reasonable compensation
therefor.
18. NOTICE. Any notice under this Agreement shall be given in
writing addressed and delivered or mailed, postage prepaid, to the other
party to this Agreement at its principal place of business.
19. 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.
20. GOVERNING LAW. To the extent that state law has not been
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, this
Agreement shall be administered, construed and enforced according to the
laws of the State of Delaware.
21. SHAREHOLDER LIABILITY. Rodney Square is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Agreement and Declaration of Trust of the Trust and agree that obligations
assumed by the Trust under this Agreement shall be limited in all cases to
the Trust and its assets, and if the liability relates to one or more
Funds, the obligations hereunder shall be limited to the respective assets
of such Fund or Funds. Rodney Square further agrees that it shall not seek
satisfaction of any such obligations from the shareholders or any
individual shareholder of the Funds, nor from the Trustees or any
individual Trustee of the Trust.
22. 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 or effect. This
Agreement may be executed in two counterparts, each of which taken together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first written above.
KALMAR POOLED TRUST
By: ----------------------------------
Name, Title
RODNEY SQUARE MANAGEMENT
CORPORATION
By: ----------------------------------
Martin L. Klopping, President
<PAGE>
ADMINISTRATION AGREEMENT
SCHEDULE A
KALMAR POOLED TRUST
PORTFOLIO LISTING AND FEE SCHEDULE
For the services Rodney Square provides under the Administration Agreement
attached hereto, Kalmar Pooled Trust (the "Trust") agrees to pay Rodney
Square an administration fee equal to 0.15% of the first $50 million in
assets, plus 0.10% of assets over $50 million of average daily net assets
for the year. These fees are calculated on a group basis and are subject
to a $50,000 minimum for the first Portfolio and $20,000 minimum for each
additional Portfolio.
PORTFOLIOS
----------
Small Cap Portfolio
Micro-Cap Portfolio
This administration fee shall be payable monthly as soon as practicable
after the last day of each month based on the average daily net assets of
each Portfolio, as determined at the close of business on each day
throughout the month.
Out of pocket expenses shall be reimbursed by the Trust to Rodney Square or
paid directly by the Trust.
LIQUIDATED DAMAGES:
Upon the termination of the attached Agreement within the initial three (3)
year term by the Trust or the Trust's Board of Trustees , the Trust shall
pay to Rodney Square six (6) months of base fees in liquidated damages.
Exhibit 9(c)
TRANSFER AGENCY AGREEMENT
BETWEEN
KALMAR POOLED TRUST
AND
RODNEY SQUARE MANAGEMENT CORPORATION
THIS TRANSFER AGENCY AGREEMENT is made as of the ___ day of
_______________, 1996, between Kalmar Pooled Trust, a Delaware business
trust (the "Trust"), having its principal place of business in Wilmington,
Delaware, and Rodney Square Management Corporation, a Delaware corporation
("Rodney Square"), having its principal place of business in Wilmington,
Delaware.
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company
and offers for public sale distinct series of shares of beneficial interest
("Series");
WHEREAS, each share of a Series represents an undivided interest in the
assets, subject to the liabilities, allocated to that Series and each
Series has a separate investment objective and policies;
WHEREAS, at the present time, the Trust has established two Series, of
which one Series consists of the two separate classes of shares and the
Trust may establish additional Series and/or classes in the future; and
WHEREAS, the Trust desires to avail itself of the services of Rodney
Square to serve as the Trust's transfer agent and Rodney Square is willing
to furnish such services to the Trust with respect to each of the Series
listed on Schedule A to this Agreement (each a "Fund" or collectively the
"Funds") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:
1. APPOINTMENTS. The Trust hereby appoints Rodney Square as transfer
agent, registrar and dividend disbursing agent for the shares of
beneficial interest (the "Shares") in the Trust and as servicing agent
in connection with the disbursements of dividends and distributions and
as shareholders' servicing agent for the Trust, each such appointment
to take effect at the close of business on the day and year first
written above, and Rodney Square shall act as such and perform its
obligations thereof upon the terms and conditions hereafter set forth
and in accordance with the principles of principal and agent enunciated
by the common law.
2. DOCUMENTS. The Trust has furnished Rodney Square with copies of the
Trust's Agreement and Declaration of Trust, By-Laws, Management
Agreement, Custodian Agreement, Distribution Agreement, Accounting
Services Agreement, Shareholder Servicing Agreements, most recent
Registration Statement on Form N-1A, current Prospectus and Statement
of Additional Information (the "SAI"), all forms relating to any plan,
program or service offered by the Trust and a certified copy of the
resolution of its Board of Trustees (the "Trustees") approving Rodney
Square's appointment hereunder and identifying and containing the
<PAGE>
signatures of the Trust's officers authorized to issue Oral
Instructions and to sign Written Instructions, as hereinafter defined,
on behalf of the Fund and to execute stock certificates representing
Shares. Subject to the provisions of Section 21 hereof, the Trust
shall furnish promptly to Rodney Square a copy of any amendment or
supplement to the above-listed documents. The Trust shall furnish to
Rodney Square any additional documents necessary for it to perform its
functions hereunder.
3. DEFINITIONS.
(a) Authorized Person. As used in this Agreement, the term "Authorized
Person" means any officer of the Trust and any other person, whether or
not any such person is an officer or employee of the Trust, duly
authorized by the Trustees of the Trust to give Oral and Written
Instructions on behalf of the Fund and certified by the Secretary or
Assistant Secretary of the Trust or any amendment thereto as may be
received by Rodney Square from time to time.
(b) Oral Instructions. As used in this Agreement, the term "Oral
Instructions" means oral instructions actually received by Rodney
Square from an Authorized Person or from a person reasonably believed
by Rodney Square to be an Authorized Person. The Trust agrees to
deliver to Rodney Square, at the time and in the manner specified in
Section 4(b) of this Agreement, Written Instructions confirming Oral
Instructions.
(c) Written Instructions. As used in this Agreement, the term "Written
Instructions" means written instructions delivered by hand, mail,
tested telegram, cable, telex or facsimile sending device, and received
by Rodney Square and signed by an Authorized Person.
4. INSTRUCTIONS CONSISTENT WITH AGREEMENT AND DECLARATION OF TRUST, ETC.
(a) Unless otherwise provided in this Agreement, Rodney Square shall
act only upon Oral or Written Instructions. Although Rodney Square may
know of the provisions of the Agreement and Declaration of Trust and By-
Laws of the Trust, Rodney Square may assume that any Oral or Written
Instructions received hereunder are not in any way inconsistent with
any provisions of such Agreement and Declaration of Trust or By-Laws or
any vote, resolution or proceeding of the shareholders, or of the
Trustees, or of any committee thereof.
(b) Rodney Square shall be entitled to rely upon any Oral Instructions
and any Written Instructions actually received by Rodney Square
pursuant to this Agreement. The Trust agrees to forward to Rodney
Square Written Instructions confirming Oral Instructions in such manner
that the Written Instructions are received by Rodney Square by the
close of business of the same day that such Oral Instructions are given
to Rodney Square. The Trust agrees that the fact that such confirming
Written Instructions are not received by Rodney Square shall in no way
affect the validity of the transactions or enforceability of the
transactions authorized by such Oral Instructions. The Trust agrees
that Rodney Square shall incur no liability to the Trust in acting upon
Oral Instructions given to Rodney Square hereunder concerning such
transactions, provided such instructions reasonably appear to have been
received from an Authorized Person.
<PAGE>
5. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. In the absence of contrary
Written Instructions, Rodney Square is authorized to take the following
actions:
(a) Issuance of Shares. Upon receipt of a purchase order from the
Distributor, as defined in the Distribution Agreement between the Trust
and Rodney Square Distributors, Inc. or a prospective shareholder for
the purchase of Shares and sufficient information to enable Rodney
Square to establish a shareholder account or to issue Shares to an
existing shareholder account, and after confirmation of receipt or
crediting of Federal funds for such order from Rodney Square's
designated bank, Rodney Square shall issue and credit the account of
the investor or other record holder with Shares in the manner described
in the Prospectus. Rodney Square shall deposit all checks received
from prospective shareholders into an account on behalf of the Trust,
and shall promptly transfer all Federal funds received from such
checks to the Custodian, as defined in the Custodian Agreement between
the Trust and Wilmington Trust Company. (References herein to
"Custodian" shall also be construed to refer to a "Sub-Custodian" if
such appointment has been made.) If so directed by the Distributor,
the confirmation supplied to the shareholder to mark such issuance will
be accompanied by a Prospectus.
(b) Transfer of Shares; Uncertificated Securities. Where a shareholder
does not hold a certificate representing the number of Shares in its
account and does provide Rodney Square with instructions for the
transfer of such Shares which include a signature guaranteed by a
commercial bank, trust company or member firm of a national securities
exchange and such other appropriate documentation to permit a transfer,
then Rodney Square shall register such Shares and shall deliver them
pursuant to instructions received from the transferor, pursuant to the
rules and regulations of the Securities and Exchange Commission (the
"SEC"), and the laws of the State of Delaware relating to the transfer
of shares of beneficial interest.
(c) Stock Certificates. If at any time the Fund issues stock
certificates, the following provisions will apply:
(i) The Trust will supply Rodney Square with a sufficient
supply of stock certificates representing Shares, in the form
approved from time to time by the Trustees of the Trust, and, from
time to time, shall replenish such supply upon request of Rodney
Square. Such stock certificates shall be properly signed,
manually or by facsimile signature, by the duly authorized
officers of the Trust, and shall bear the corporate seal or
facsimile thereof of the Trust, and notwithstanding the death,
resignation or removal of any officer of the Trust, such executed
certificates bearing the manual or facsimile signature of such
officer shall remain valid and may be issued to shareholders until
Rodney Square is otherwise directed by Written Instructions.
(ii) In the case of the loss or destruction of any
certificate representing Shares, no new certificate shall be
issued in lieu thereof, unless there shall first have been
furnished an appropriate bond of indemnity issued by the surety
company approved by Rodney Square.
<PAGE>
(iii) Upon receipt of signed stock certificates, which shall
be in proper form for transfer, and upon cancellation or
destruction thereof, Rodney Square shall countersign, register and
issue new certificates for the same number of Shares and shall
deliver them pursuant to instructions received from the
transferor, the rules and regulations of the SEC, and the laws of
the State of Delaware relating to the transfer of shares of
beneficial interest.
(iv) Upon receipt of the stock certificates, which shall be
in proper form for transfer, together with the shareholder's
instructions to hold such stock certificates for safekeeping,
Rodney Square shall reduce such Shares to uncertificated status,
while retaining the appropriate registration in the name of the
shareholder upon the transfer books.
(v) Upon receipt of written instructions from a shareholder
of uncertificated securities for a certificate in the number of
shares in its account, Rodney Square will issue such stock
certificates and deliver them to the shareholder.
(d) Redemption of Shares. Upon receipt of a redemption order from the
Distributor or a shareholder, Rodney Square shall redeem the number of
Shares indicated thereon from the redeeming shareholder's account and
receive from the Trust's Custodian and disburse pursuant to the
redeeming shareholder's instructions the redemption proceeds therefor,
or arrange for direct payment of redemption proceeds by the Custodian
to the redeeming shareholder or as instructed by the shareholder, in
accordance with such procedures and controls as are mutually agreed
upon from time to time by and among the Trust, Rodney Square and the
Trust's Custodian.
6. AUTHORIZED ISSUED AND OUTSTANDING SHARES. The Trust agrees to notify
Rodney Square promptly of any change in the number of authorized Shares
and of any change in the number of Shares registered under the
Securities Act of 1933, as amended (the "1933 Act") or termination of
the Trust's declaration under Rule 24f-2 of the 1940 Act. The Trust
has advised Rodney Square, as of the date hereof, of the number of
Shares (a) held in any redemption or repurchase account, and (b)
registered under the 1933 Act, as amended, which are unsold. In the
event that the Trust shall declare a stock dividend or a stock split,
the Trust shall deliver to Rodney Square a certificate, upon which
Rodney Square shall be entitled to rely for all purposes, certifying
(a) the number of Shares involved, (b) that all appropriate corporate
action has been taken, and (c) that any amendment to the Agreement and
Declaration of Trust of the Trust which may be required has been filed
and is effective. Such certificate shall be accompanied by an opinion
of counsel to the Trust relating to the legal adequacy and effect of
the transaction.
7. DIVIDENDS AND DISTRIBUTIONS. The Trust shall furnish Rodney Square
with appropriate evidence of action by the Trust's Trustees authorizing
the declaration and payment of dividends and distributions as described
in the Prospectus. After deducting any amount required to be withheld
by any applicable tax laws, rules and regulations or other applicable
laws, rules and regulations, Rodney Square shall in accordance with the
instructions in proper form from a shareholder and the provisions of
the Agreement and Declaration of Trust and Prospectus, issue and credit
<PAGE>
the account of the shareholder with Shares, or, if the shareholder so
elects, pay such dividends or distributions in cash to the shareholders
in the manner described in the Prospectus. In lieu of receiving from
the Trust's Custodian and paying to shareholders cash dividends or
distributions, Rodney Square may arrange for the direct payment of cash
dividends and distributions to shareholders by the Custodian, in
accordance with such procedures and controls as are mutually agreed
upon from time to time by and among the Trust, Rodney Square and the
Trust's Custodian.
Rodney Square shall prepare, file with the Internal Revenue Service and
other appropriate taxing authorities, and address and mail to
shareholders such returns and information relating to dividends and
distributions paid by the Trust as are required to be so prepared,
filed and mailed by applicable laws, rules and regulations, or such
substitute form of notice as may from time to time be permitted or
required by the Internal Revenue Service. On behalf of the Fund,
Rodney Square shall mail certain requests for shareholders'
certifications under penalties of perjury and pay on a timely basis to
the appropriate Federal authorities any taxes to be withheld on
dividends and distributions paid by the Fund, all as required by
applicable Federal tax laws and regulation.
In accordance with the Prospectus, resolutions of the Trust's Trustees
that are not inconsistent with this Agreement and are provided to
Rodney Square from time to time, and such procedures and controls as
are mutually agreed upon from time to time by and among the Trust,
Rodney Square and the Trust's Custodian, Rodney Square shall (a)
arrange for issuance of Shares obtained through transfers of funds from
shareholders' accounts at financial institutions; (b) arrange for the
exchange of Shares for shares of other eligible investment companies,
when permitted by the Prospectus.
8. COMMUNICATIONS WITH SHAREHOLDERS.
(a) Communications to Shareholders. Rodney Square will address and
mail all communications by the Fund to its shareholders, including
reports to shareholders, confirmations of purchases and sales of
Shares, monthly statements, dividend and distribution notices and proxy
material for its meetings of shareholders. Rodney Square will receive
and tabulate the proxy cards for the meetings of the shareholders of
the Fund.
(b) Correspondence. Rodney Square will answer such correspondence from
shareholders, securities brokers and others relating to its duties
hereunder and such other correspondence as may from time to time be
mutually agreed upon between Rodney Square and the Trust.
9. SERVICES TO BE PERFORMED. Rodney Square shall be responsible for
administering and/or performing transfer agent functions, for acting as
service agent in connection with dividend and distribution functions
and for performing shareholder account administrative agent functions
in connection with the issuance, transfer and redemption or repurchase
(including coordination with the Trust's custodian bank in connection
with shareholder redemption by check) of the Trust's Shares as set
forth in Schedule B. The details of the operating standards and
procedures to be followed shall be determined from time to time by
agreement between Rodney Square and the Trust and may be expressed in
written schedules which shall constitute attachments to this Agreement.
<PAGE>
10.RECORD KEEPING AND OTHER INFORMATION.
(a) Rodney Square shall maintain records of the accounts for each
Shareholder showing the items listed in Schedule C.
(b) Rodney Square shall create and maintain all necessary records in
accordance with all applicable laws, rules and regulations, including
but not limited to records required by Section 31(a) of the 1940 Act
and the rules thereunder, as the same may be amended from time to time,
and those records pertaining to the various functions performed by it
hereunder. All records shall be the property of the Trust at all times
and shall be available for inspection and use by the Trust. Where
applicable, such records shall be maintained by Rodney Square for the
periods and in the places required by Rule 31a-2 under the 1940 Act.
11.AUDIT, INSPECTION AND VISITATION. Rodney Square shall make available
during regular business hours all records and other data created and
maintained pursuant to this Agreement for reasonable audit and
inspection by the Trust or any person retained by the Trust. Upon
reasonable notice by the Trust, Rodney Square shall make available
during regular business hours its facilities and premises employed in
connection with its performance of this Agreement for reasonable
visitation by the Trust, or any person retained by the Trust.
12.COMPENSATION. Compensation for the transfer agent services and duties
performed pursuant to this Agreement will be paid by the Trust.
Certain other fees due and expenses incurred pursuant to this Agreement
are payable by the Trust or the shareholder on whose behalf the service
is performed and are provided in Schedule D hereto.
The Trust shall reimburse Rodney Square for all reasonable out-of-
pocket expenses incurred by Rodney Square or its agents in the
performance of its obligations hereunder. Such reimbursement for
expenses incurred in any calendar month shall be made on or before the
tenth day of the next succeeding month.
The term "out-of-pocket expenses" shall mean the following expenses
incurred by Rodney Square in the performance of its obligations
hereunder: the cost of stationery and forms (including but not limited
to checks, proxy cards, and envelopes), the cost of postage, the cost
of insertion of non-standard size materials in mailing envelopes and
other special mailing preparation by outside firms, the cost of first-
class mailing insurance, the cost of external electronic communications
as approved by the Trustees (to include telephone and telegraph
equipment and an allocable portion of the cost of personnel responsible
for the maintenance of such equipment), toll charges, data
communications equipment and line charges and the cost of microfilming
of shareholder records (including both the cost of storage as well as
charges for access to such records). If Rodney Square shall undertake
the responsibility for microfilming shareholder records, it may be
separately compensated therefor in an amount agreed upon by the
principal financial officer of the Trust and Rodney Square, such amount
not to exceed the amount which would be paid to an outside firm for
providing such microfilming services.
13.USE OF RODNEY SQUARE'S NAME. The Trust shall not use the name of
Rodney Square in any Prospectus, SAI, sales literature or other
material relating to the Trust in a manner not approved prior thereto,
<PAGE>
provided, however, that Rodney Square shall approve all uses of its
name which merely refer in accurate terms to its appointments hereunder
or which are required by the SEC or a state securities commission and,
provided further, that in no event shall such approval be unreasonably
withheld.
14.USE OF TRUST'S NAME. Rodney Square shall not use the name of the Trust
or the Fund of the Trust or material relating to the Trust or the Fund
on any checks, bank drafts, bank statements or forms for other than
internal use in a manner not approved prior thereto, provided, however,
that the Trust shall approve all uses of its name which merely refer in
accurate terms to the appointment of Rodney Square hereunder or which
are required by the SEC or a state securities commission, and,
provided, further, that in no event shall such approval be unreasonably
withheld.
15.SECURITY. Rodney Square represents and warrants that, to the best of
its knowledge, the various procedures and systems which Rodney Square
has implemented with regard to safeguarding from loss or damage
attributable to fire, theft or any other cause (including provision for
twenty-four hours a day restricted access) the Trust's blank checks,
records and other data and Rodney Square's records, data, equipment,
facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes
therein from time to time as in its judgment are required for the
secure performance of its obligations hereunder. The parties shall
review such systems and procedures on a periodic basis.
16.INSURANCE. Rodney Square shall notify the Trust should any of its
insurance coverage be materially changed. Such notification shall
include the date of change and the reason or reasons therefor. Rodney
Square shall notify the Trust of any material claims against it,
whether or not they may be covered by insurance and shall notify the
Trust from time to time as may be appropriate of the total outstanding
claims made by Rodney Square under its insurance coverage.
17.ASSIGNMENT OF DUTIES TO OTHERS. Neither this Agreement nor any rights
or obligations hereunder may be assigned by Rodney Square without the
written consent of the Trust. Rodney Square may, however, at any time
or times in its discretion appoint (and may at any time remove) any
other bank or trust company, which is itself qualified under the
Securities Exchange Act of 1934, as amended (the "1934 Act") to act as
a transfer agent, as its agent to carry out such of the services to be
performed under this agreement as Rodney Square may from time to time
direct; provided, however, that the appointment of any agent shall not
relieve Rodney Square of any of its responsibilities or liabilities
hereunder.
18.INDEMNIFICATION.
(a) The Trust agrees to indemnify and hold harmless Rodney Square and
any officer, director, or employee of Rodney, nor any person who
controls Rodney Square within the meaning of Section 15 of the 1933 Act
or Section 20(a) of the 1934 Act (collectively, "Rodney Square
Affiliates") from all taxes, charges, expenses, assessments, claims and
liabilities including, without limitation, liabilities arising under
the 1933 Act, the 1934 Act and any state and foreign securities laws,
and amendments thereto (the "Securities Laws"), and expenses, including
<PAGE>
without limitation reasonable attorneys' fees and disbursements arising
directly or indirectly from any action or omission to act which Rodney
Square takes (i) at the request of or on the direction of or in
reliance on the advice of the Trust or (ii) upon Oral or Written
Instructions. No Rodney Square Affiliate shall be indemnified against
any liability (or any expenses incident to such liability) arising out
of any such person's own willful misfeasance, bad faith, negligence or
reckless disregard of its duties and obligations under this Agreement.
(b) Rodney Square agrees to indemnify and hold harmless the Trust from
all taxes, charges, expenses, assessments, claims and liabilities
arising from Rodney Square's obligations pursuant to this Agreement
(including, without limitation, liabilities arising under the
Securities Laws, and amendments thereto) and expenses, including
(without limitation) reasonable attorneys' fees and disbursements
arising directly or indirectly out of Rodney Square's or its nominees'
own willful misfeasance, bad faith, negligence or reckless disregard of
its duties and obligations under this Agreement.
(c) In order that the indemnification provisions contained in this
Section 18 shall apply, upon the assertion of a claim for which either
party may be required to indemnify the other, the party seeking
indemnification shall promptly notify the other party of such
assertion, and shall keep the other party advised with respect to all
developments concerning such claim. The party who may be required to
indemnify shall have the option to participate with the party seeking
indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to
indemnify it except with the other party's prior written consent.
19.RESPONSIBILITY OF RODNEY SQUARE. In the performance of its duties
under this Agreement, Rodney Square shall be obligated to exercise due
care and diligence in the performance of its duties hereunder, to act
in good faith and to use its best efforts in performing services
provided for under this Agreement. Rodney Square shall not be under any
duty to take any action on behalf of the Trust except as specifically
set forth herein or as may be specifically agreed to by Rodney Square
in writing. Neither Rodney Square nor any officer, employees or
director of Rodney Square shall be liable for any error of judgment or
mistake of law, or for any loss suffered by the Trust in connection
with the matters to which this Agreement relates except to the extent
such damages arise out of Rodney Square's own negligence, bad faith or
willful misfeasance, or reckless disregard of obligations and duties
under this Agreement.
Any person, even though also an officer, director, employee or agent of
Rodney Square or any of its affiliates who may be or become an officer
or director of the Trust, shall be deemed, when rendering services to
the Trust as such officer or acting on any business of the Trust in
such capacity (other than services or business in connection with
Rodney Square's duties under this Agreement), to be rendering such
services to or acting solely for the Trust and not as an officer,
director, employee or agent or one under the control or direction of
Rodney Square or any of its affiliates, even though paid by one of
those entities. Rodney Square shall not be liable or responsible for
any acts or omissions of any predecessor administrator or any other
persons having responsibility for matters to which this Agreement
<PAGE>
relates nor shall Rodney Square be responsible for reviewing any such
act or omissions.
Without limiting the generality of the foregoing or of any other
provision of this Agreement, Rodney Square, in connection with its
duties under this Agreement, shall not be under any duty or obligation
to inquire into and shall not be liable for (a) the validity or
invalidity or authority or lack thereof of any Oral or Written
Instruction, notice or other instrument which conforms to the
applicable requirements of this Agreement, and which Rodney Square
reasonably believes to be genuine; or (b) subject to the provisions of
Section 20, delays or errors or loss of data occurring by reason of
circumstances beyond Rodney Square's control, including acts of civil
or military authority, national emergencies, labor difficulties, fire,
flood or catastrophe, acts of God, insurrection, war, riots or failure
of the mails, transportation, communication or power supply.
20.ACTS OF GOD, ETC. Rodney Square shall not be liable for delays or
errors occurring by reason of circumstances beyond its control,
including but not limited to acts of civil or military authority,
national emergencies, labor difficulties, fire, flood or catastrophe,
acts of God, insurrection, war, riots, or failure of the mails,
transportation, communication or power supply. In the event of
equipment breakdowns beyond its control, Rodney Square shall, at no
additional expense to the Trust, take reasonable steps to minimize
service interruptions but shall have no liability with respect thereto.
Rodney Square shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provision
for emergency use of electronic data processing equipment to the extent
appropriate equipment is available.
21.REGISTRATION STATEMENT AMENDMENTS. Rodney Square and the Trust shall
regularly consult with each other regarding Rodney Square's performance
of its obligations and its compensation hereunder. In connection
therewith, the Trust shall submit to Rodney Square at a reasonable time
in advance of filing with the SEC copies of any amended or supplemented
registration statements (including exhibits) under the 1933 Act, as
amended, and the 1940 Act, and 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 Trust. Any change in such
material which would require any change in Rodney Square's obligations
hereunder shall be subject to Rodney Square's approval, which shall not
be unreasonably withheld. In the event that such change materially
increases the cost to Rodney Square of performing its obligations
hereunder, Rodney Square shall be entitled to receive reasonable
compensation therefor.
22.DURATION, TERMINATION, ETC. Neither this Agreement nor any provisions
hereof may be changed, waived, discharged or terminated orally, but
only by written instrument which shall make specific reference to this
Agreement and which shall be signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
This Agreement shall become effective on the day and year first written
above, and shall continue in effect for one year from the effective
date, and thereafter as the parties may mutually agree; provided,
however, that this Agreement may be terminated at any time by six
months' written notice given by Rodney Square to the Trust or six
<PAGE>
months' written notice given by the Trust to Rodney Square; and
provided further that this Agreement may be terminated immediately at
any time for cause either by the Trust or by Rodney Square in the event
that such cause remains unremedied for a period of time not to exceed
ninety days after receipt of written specification of such cause. Any
such termination shall not affect the rights and obligations of the
parties under Section 18 hereof.
Upon the termination hereof, the Trust shall reimburse Rodney Square
for any out-of-pocket expenses reasonably incurred by Rodney Square
during the period prior to the date of such termination. In the event
that the Trust designates a successor to any of Rodney Square's
obligations hereunder, Rodney Square shall, at the expense and
direction of the Trust, transfer to such successor a certified list of
the shareholders of the Trust (with name, address, and, if provided,
tax identification or Social Security number), a complete record of the
account of each shareholder, and all other relevant books, records and
other data established or maintained by Rodney Square hereunder.
Rodney Square shall be liable for any losses sustained by the Trust as
a result of Rodney Square's failure to accurately and promptly provide
these materials.
23.REGISTRATION AS A TRANSFER AGENT. Rodney Square represents that it is
currently registered with the appropriate Federal agency for the
registration of transfer agents, and that it will remain so registered
for the duration of this Agreement. Rodney Square agrees that it will
promptly notify the Trust in the event of any material change in its
status as a registered transfer agent. Should Rodney Square fail to be
registered with the Federal Deposit Insurance Corporation or any
successor regulatory authority as a transfer agent at any time during
this Agreement, the Trust may, on written notice to Rodney Square,
immediately terminate this Agreement.
24.NOTICE. Any notice under this Agreement shall be given in writing
addressed and delivered or mailed, postage prepaid, to the other party
to this Agreement at its principal place of business.
25.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.
26.GOVERNING LAW. To the extent that state law has not been 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, this Agreement
shall be administered, construed and enforced according to the laws of
the State of Delaware.
27.SHAREHOLDER LIABILITY. Rodney Square is hereby expressly put on notice
of the limitation of shareholder liability as set forth in the
Agreement and Declaration of Trust of the Trust and agrees that
obligations assumed by the Trust pursuant to this Agreement shall be
limited in all cases to the Trust and its assets. Rodney Square agrees
that it shall not seek satisfaction of any such obligation from the
shareholders or any individual shareholder of the Trust, nor from the
Trustees or any individual Trustee of the Trust.
28.MISCELLANEOUS. Both parties agree to perform such further acts and
execute such further documents as are necessary to effectuate the
<PAGE>
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 or effect.
This Agreement may be executed simultaneously in two counterparts, each
of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this agreement as of
the day and year first written above.
KALMAR POOLED TRUST
By: ------------------------------
Name, Title
RODNEY SQUARE MANAGEMENT
CORPORATION
By: -------------------------------
Martin L. Klopping, President
<PAGE>
SCHEDULE A
KALMAR POOLED TRUST
FUND LISTING
Small Cap Portfolio
Class A
Class B
Micro-Cap Portfolio
<PAGE>
SCHEDULE B
KALMAR POOLED TRUST
SERVICES TO BE PERFORMED
Rodney Square Management Corporation ("Rodney Square") will perform the
following functions as transfer agent on an ongoing basis with respect to
the Fund:
(a) furnish state-by-state registration reports;
(b) calculate sales load or compensation payment and provide such
information;
(c) calculate dealer commissions;
(d) provide toll-free lines for direct shareholder use, plus customer
liaison staff with on-line inquiry capacity;
(e) mail duplicate confirmations to dealers of their clients' activity,
whether executed through the dealer or directly with Rodney Square;
(f) provide detail for underwriter or broker confirmations and other
participating dealer,shareholder accounting, in accordance with such
procedures as may be agreed upon between the Trust and Rodney Square;
(g) provide shareholder lists and statistical information concerning
accounts of the Fund to the Trust; and
(h) provide timely notification of Fund activity and such other
information as may be agreed upon from time to time between Rodney
Square and the Fund or the Custodian, to the Trust or the Custodian.
<PAGE>
SCHEDULE C
KALMAR POOLED TRUST
SHAREHOLDER RECORDS
Rodney Square Management Corporation ("Rodney Square") shall maintain
records of the accounts for each shareholder showing the following
information:
(a) name, address and United States Tax Identification or Social
Security number;
(b) number of Shares held and number of Shares for which certificates,
if any, have been issued, including certificate numbers and
denominations;
(c) historical information regarding the account of each shareholder,
including dividends and distributions paid and the date and
price for all transactions on a shareholder's account;
(d) any stop or restraining order placed against a shareholder's
account;
(e) any correspondence relating to the current maintenance of a
shareholder's account;
(f) information with respect to withholdings; and,
(g) any information required in order for Rodney Square to perform any
calculations contemplated or required by this Agreement.
<PAGE>
SCHEDULE D
KALMAR POOLED TRUST
FEE SCHEDULE
For the services Rodney Square provides under the Transfer Agency Agreement
attached hereto, Kalmar Pooled Trust (the "Trust") agrees to pay Rodney
Square a fee for each class of shares for each portfolio for transfer
agency services equal to the following:
Fee per Annum
Type of Trust/Account per Account
--------------------- -------------
Annual, Semi-Annual or
Quarterly Dividend $15.00/year
Monthly Dividend $16.50/year
Daily Accrual Fund $18.00/year
subject to a $22,500 minimum.
Inactive Accounts: $0.50 per account per month
Checkwriting: $2.00 per account with checkwriting, per year
$0.15 per check (non-return)
$15.00 each - stop payment
$25.00 each - non-sufficient funds
$2.50 each check copy
calculated on a group basis and subject to a $22,500 minimum.
This transfer agency fee shall be pro-rated and payable monthly as soon
as practicable after the last day of each month based on the average of
the daily net assets of each Portfolio, as determined at the close of
business on each day throughout the month.
Out of pocket expenses shall be reimbursed by the Trust to Rodney
Square or paid directly by the Trust. Such expenses include but are
not limited to the following:
Transaction Charges:
--------------------
12b-1 Calculation - $.25 per account, per run
Exchange Fees - $5.00 per transaction
Wire fee for receipt or disbursement - $7.50 receipt per wire,
$12.50 disbursement
ACH transaction charges - $0.25 per trtansaction
Lockbox processing - $0.06 per transaction
New Account Opening - $0.40 electronic interface; paper application
$3.50 per account
Master/Omnibus Account - $7.50 per broker call placed transaction
<PAGE>
Additional Expenses:
--------------------
a. Toll-free lines (if required)
b. Forms, envelopes, checks, checkbooks
c. Postage (bulk, pre-sort, first-class at current prevailing
rates)
d. Hardware/phone lines for remote terminal(s) (if required)
e. Microfiche/Microfilm
f. Mailing fee - approximately $45.00 per 1,000 items
g. Cost of proxy solicitation, mailing and tabulation (if required)
h. Certificate issuance - $5.00 per certificate
i. Record retention storage - $3.50 per cubic foot per month
j. Development/programming costs/special projects (i.e. ad hoc
reports)
* Ad-hoc report set up $125 plus $0.012 per record passed
k. "B" notice mailing - $5.00 per item
l. Locating lost shareholders in anticipation of escheating - $7.50
per name
m. Labels - $0.12 per label ($75 minimum)
n. Commision Calculation - $0.25 per account
o. Reruns for incorrect NAV's, dividends or mil rates, late NAV's
p. Consolidatred Statements - to be determined, time and materials
q. Fulfillment - $2.00 per call plus vendor handling and postage
r. Retroactive Record Dates for Dividends, Proxies, etc.
s. Conversion Expenses - to be determined, time and materials
Additional Expenses (paid by shareholder):
- ------------------------------------------
Direct IRA/Keogh processing $10.00 per account per annum
$ 7.50 new account set-up fee
$ 2.50 per distribution
$10.00 per transfer out
Fund/SERV/Networking Charges
- ----------------------------
1. - FUND/SERV
Participation Fee $50.00 per month
CPU Access Fee $40.00 per month
Transaction Fee $ .50 per transaction
NSCC will deduct it's monthly fee on the 15th of each month from Rodney
Square's cash settlement that day. These charges will be included on
the next month's T/A bill as out-of-pocket expenses.
2. - Networking
Participation Fee $250.00 per month
CPU Access Fee $ 40.00 per month
Account Fee $ .045 per month on
monthly dividend funds
$ .030 per month on all
other dividend payables
Rodney Square System Access Charges for NSCC
- --------------------------------------------
1. - FUND/SERV
Base Facility Use Fee $500.00 per month
Transaction Fee $ .25 per transaction
<PAGE>
Plus: out-of-pocket expenses for settlements, wire charges, NSCC pick-
up charges, etc.
2. - Networking
Base Facility Use Fee $500.00 per month
Matrix Level Charges:
Level 1, 2 or 4 $ .30 per account/month
Level 3 $ .10 per account/month
Payment
- -------
The above will be billed within the first five (5) business days of
each month and will be paid by wire within five (5) business days of
receipt.
LIQUIDATED DAMAGES:
Upon the termination of the attached Agreement within the initial one (1)
year term by the Trust or the Trust's Board of Trustees , the Trust shall
pay to Rodney Square six (6) months of base fees in liquidated damages
with respect to each Portfolio.
