Filed with the Securities and Exchange Commission on April 2, 1998
1933 Act Registration File No. 333-13593
1940 Act File No. 811-7853
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. |_|
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Post-Effective Amendment No. 2 |X|
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 4 |X|
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(Check appropriate box or boxes.)
KALMAR POOLED INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
BARLEY MILL HOUSE, 3701 KENNETT PIKE, GREENVILLE, DE 19807
(Address of Principal Executive Offices) (Zip Code)
with a copy of communications to:
Joseph V. Del Raso, Esquire
Pepper Hamilton LLP
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103
Registrant's Telephone Number, including Area Code: (302) 658-7575
FORD B. DRAPER, JR., PRESIDENT, BARLEY MILL HOUSE,
3701 KENNETT PIKE, GREENVILLE, DE 19807
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
|X| immediately upon filing pursuant to paragraph (b)
|_| on _________ pursuant to paragraph (b)
|_| 60 days after filing pursuant to paragraph (a)(1)
|_| on pursuant to paragraph (a)(1)
|_| 75 days after filing pursuant to paragraph (a)(2)
|_| on pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
CROSS-REFERENCE SHEET
Pursuant to Rule 481(a)
KALMAR POOLED INVESTMENT TRUST
Items Required By Form N-1A
PART A - PROSPECTUS
FORM N-1A
ITEM NUMBER LOCATION IN PROSPECTUS
1. Cover Page Cover
2. Synopsis Expenses of the Fund
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Prospectus Cover; Investment
Objective and Policies;
Risks and Special
Considerations
5. Management of the Fund Board of Trustees;
Investment Adviser; Fund
Officers and Portfolio
Managers; Distributor;
Administrator; Transfer
Agent; and Custodian;
Expenses
5A. Management's Discussion of To be provided in
Fund Performance Registrant's Annual
Report to Shareholders
6. Capital Stock and other Securities Shares of Beneficial
Interest and Voting Rights;
Shareholder Meetings;
Dividends, Capital Gains
Distributions and Taxes
7. Purchase of Securities Being Offered Calculation of Net Asset
Value; How to Purchase
Shares
8. Redemption or Repurchase How to Redeem Shares
9. Legal Proceedings Not Applicable
CROSS-REFERENCE SHEET
Pursuant to Rule 481(a)
KALMAR POOLED INVESTMENT TRUST
Items Required By Form N-1A
PART B - STATEMENT OF ADDITIONAL INFORMATION
FORM N-1A LOCATION IN STATEMENT
ITEM NUMBER OF ADDITIONAL INFORMATION
10. Cover Page Cover
11. Table of Contents Table of Contents
12. General Information and History Not Applicable
13. Investment Objectives and Policies Cover; Investments;
Investment Restrictions
14. Management of the Registrant Management; Trustees and
Officers
15. Control Persons and Principal Holders Principal Holders of
of Securities Securities
16. Investment Advisory and Other Services Investment Advisory
Agreement; Distributor;
Administrator, Transfer
Agent and Fund Accounting
Agent
17. Brokerage Allocation Portfolio Brokerage and
Turnover
18. Capital Stock and Other Securities General Information
19. Purchase, Redemption and Pricing of Purchases; Redemptions
Securities Being Offered
20. Tax Status Not Applicable
21. Underwriters Distributor
22. Calculation of Performance Data Performance
23. Financial Statements Financial Statements
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LOGO [GRAPHIC OMITTED]
"GROWTH-WITH-VALUE"
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KALMAR
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KALMAR "GROWTH-WITH-VALUE" SMALL CAP FUND
A SERIES OF
KALMAR POOLED INVESTMENT TRUST
BARLEY MILL HOUSE
3701 KENNETT PIKE
GREENVILLE, DELAWARE 19807
(800) 282-2319
PROSPECTUS DATED APRIL 2, 1998
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 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 the Fund's investment adviser, Kalmar Investment Advisers (the
"Adviser"). Using this investment philosophy, the Fund will invest primarily in
a diversified portfolio of common stocks of companies with market
capitalizations ranging from $50 million to $1 billion 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 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."
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 April 2, 1998, 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
1
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TABLE OF
CONTENTS
PAGE
Prospectus Summary............................................. 3
Fund Expenses.................................................. 4
Financial Highlights........................................... 6
Adviser's Investment Performance............................... 6
Investment Objective and Policies.............................. 7
Investment Philosophy..................................... 7
Investment Policies....................................... 8
Other Investment Practices................................ 11
Risks and Special Considerations............................... 12
Management of the Fund......................................... 13
Board of Trustees......................................... 13
Investment Adviser........................................ 13
Fund Officers and Portfolio Managers...................... 14
Distributor............................................... 16
Administrator, Transfer Agent and Custodian............... 16
Year 2000................................................. 16
Expenses....................................................... 16
Calculation of Net Asset Value................................. 17
How to Purchase Shares......................................... 17
How to Redeem Shares........................................... 19
Retirement Plans............................................... 21
Fund Performance Information................................... 22
General Information............................................ 23
Dividends, Capital Gains Distributions and Taxes............... 24
Shareholder Accounts........................................... 25
2
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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 invests primarily in a
diversified portfolio of common stocks of companies with market capitalizations
ranging from $50 million to $1 billion 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, in a longer
term context. 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 shareholders 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 undervalued levels. See "Investment Objective and
Policies."
INVESTMENT ADVISER. Kalmar Investment Advisers serves as the investment adviser
for the Fund. Over the past sixteen years, the Adviser's portfolio management
team has managed micro cap and small cap assets in separate accounts now
totaling in excess of $750 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. Kalmar invests 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" on page 6. Information about the performance
of the fund itself since inception on April 11, 1997 is provided in the section
of the Prospectus called "Fund Performance Information" on page 22.
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 subsequent investments must total at least $1,000. The
minimum initial investment amount for investments by qualified retirement
accounts is $1,000 and there is no minimum for subsequent investments. An
application is included with this prospectus and further information is
available by calling (800) 282-2319. See "How To Purchase Shares."
3
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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 realized 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,
Capital Gains 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 market for small capitalization stocks is generally less liquid
than the markets for larger stocks, which can contribute to increased price
volatility of such stocks; (3) the Fund may lend its securities which entails a
risk of loss should a borrower fail financially; (4) 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 (5)
although the Adviser's portfolio management team has extensive investment
management experience with private separately managed accounts, it has served as
the adviser to a mutual fund for a relatively short period of time. 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, PNC Bank, N.A., and the Fund's
administrative, transfer agency and fund accounting services are provided by
PFPC Inc. The Distributor of the Fund's shares is Provident Distributors, Inc.
See "Management of the Fund" and "General Information."
- ---------------------
FUND
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES: There are no transactional expenses paid by
shareholders in connection with purchases or redemptions of the Fund's shares.
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 1.00%
12b-1 Fees None
OTHER EXPENSES 0.25%
Total Operating Expenses 1.25%*
* Rodney Square Management Corporation, the Fund's former administrator and
accounting agent, waived a portion of its fees for the Fund's fiscal period
ended December 31, 1997. Without such waivers, the Other Expenses and Total
Operating Expenses would have been 0.32% and 1.32%, respectively.
4
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KALMAR
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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 FIVE YEARS TEN YEARS
$13 $40 $69 $151
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
SHARES OF THE FUND WILL BEAR DIRECTLY OR INDIRECTLY. THE FUND IS NEW AND
THEREFORE THE AMOUNTS OF THE "OTHER EXPENSES" IN THE EXPENSE TABLE AND THE
NUMBERS IN THE EXAMPLE ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL
YEAR.
5
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FINANCIAL
HIGHLIGHTS
The following table includes selected data for a share outstanding of the Fund
throughout the period beginning April 11, 1997 (Commencement of Operations)
through December 31, 1997. The figures in this table should be read in
conjunction with the Fund's financial statements and notes thereto which are
included in the Fund's Annual Report dated December 31, 1997.
Net asset value at beginning of period.......................... $ 10.00
========
INVESTMENT OPERATIONS
Net investment loss.......................................... (0.04)
Net realized and unrealized gain on investments.............. 4.66
--------
Total from investment operations................................ 4.62
--------
DISTRIBUTIONS:
From net realized gain on investments........................ (0.57)
In excess of net realized gain on investments................ (0.35)
--------
Total distributions........................................ (0.92)
--------
Net asset value at end of period................................ $ 13.70
========
Total return.................................................... 46.35%
RATIOS (TO AVERAGE NET ASSETS)/SUPPLEMENTAL DATA:
Expenses(DOUBLE DAGGER)...................................... 1.25%*
Net investment loss.......................................... (0.51)%*
Portfolio turnover rate......................................... 34.39%
Average commission rate paid1................................... $ 0.0544
Net assets at end of period (000 omitted)....................... $226,706
* ANNUALIZED.
(DOUBLE DAGGER) RODNEY SQUARE MANAGEMENT CORPORATION, THE FUND'S FORMER
ADMINISTRATOR AND ACCOUNTING AGENT, WAIVED A PORTION OF ITS FEES FOR THE PERIOD.
IF THESE EXPENSES HAD BEEN INCURRED BY THE FUND, THE ANNUALIZED RATIO OF
EXPENSES TO AVERAGE DAILY NET ASSETS FOR THE PERIOD WOULD HAVE BEEN 1.32%.
1 COMPUTED BY DIVIDING THE TOTAL AMOUNT OF BROKERAGE COMMISSIONS BY THE TOTAL
SHARES OF INVESTMENT SECURITIES PURCHASED AND SOLD DURING THE PERIOD FOR WHICH
COMMISSIONS WERE CHARGED.
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ADVISER'S
INVESTMENT
PERFORMANCE
Set forth below is certain performance information relating to separate accounts
managed by the Fund's portfolio management team. The performance data for the
separate accounts is net of all fees and expenses. These accounts are managed
according 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 Investments"), 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 has
been approximately $250 million, and the Fund may purchase shares of companies
leading to a greater market capitalization. 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
6
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INVESTMENT
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applicable, may have adversely affected the performance of such accounts. For
performance data relating to the Fund, see "Fund Performance Information" on
page 22.
YEAR KALMAR RUSSELL 2000 S & P 500
ENDING NET RETURN* TOTAL RETURN TOTAL RETURN
------ ---------- ------------ ------------
12/31/84 1.46 (7.30) 6.26
12/31/85 33.98 31.05 31.76
12/31/86 28.14 5.68 18.70
12/31/87 (1.90) (8.77) 5.22
12/31/88 23.58 24.89 16.57
12/31/89 38.42 16.24 31.65
12/31/90 (7.58) (19.51) (3.14)
12/31/91 65.52 46.05 30.45
12/31/92 8.87 18.41 7.62
12/31/93 27.11 19.91 10.06
12/31/94 3.08 (1.82) 1.30
12/31/95 25.35 26.21 37.54
12/31/96 7.06 14.76 22.99
12/31/97 36.30 22.24 33.34
CUMULATIVE
RETURN KALMAR* RUSSELL S & P 500
------ ------ ------- ---------
14 Years*
1984-1997 1066.99% 393.33% 817.68%
AVERAGE ANNUAL
RETURN
------
14 Years*
1984-1997 19.18% 12.08% 17.16%
* 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.
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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
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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 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.
INVESTMENT POLICIES.
The Fund seeks to achieve its objective by investing, under normal market
conditions, at least 65% of its total assets in smaller companies in terms of
market capitalization, whose stock market capitalizations (total market value of
outstanding shares) 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 drops as
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.
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EQUITY SECURITIES. The Fund will purchase primarily 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 investment grade 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. Rights represent a preemptive right to purchase additional
shares of stock at the time of new issuance, before stock is offered to the
general public, so that the stockholder can retain the same percentage after the
new stock offering.
The Fund's assets will be invested primarily in equity securities of small
companies; however, the Fund may, consistent with its objective, invest a
portion of its total assets in equity securities of larger capitalization
companies 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. Although the Fund intends to remain substantially
fully invested, 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 the Fund may invest
up to 100% of its net assets 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 bankers' acceptances issued by commercial banks or
savings and loan associations meeting certain qualifications. The Fund may also
purchase commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by
Moody's, or, if not rated, issued by a corporation having an outstanding
unsecured debt issue rated high-grade (A or better by S&P or by Moody's); and
may invest in short term corporate obligations rated high-grade (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 and investment grade convertible debt (those rated
Baa or higher by S&P and BBB or higher by Moody's), 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 (those rated BB or lower by S&P
or Ba
9
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POOLED
INVESTMENT
TRUST
- -----------------
or lower by Moody's) and unrated securities of comparable quality. 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 their 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 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.
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 such securities 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, that equals or exceeds the
repurchase price, and the seller will be required to transfer additional
securities to the Fund on a daily basis to ensure that the value of the
collateral does not decrease below the repurchase price. No more than 15% 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
10
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POOLED
INVESTMENT
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- -----------------
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 in shares of other open and
closed-end investment companies which principally invest in securities of the
type in which the Fund invests. This approach will most likely be used for cash
management purposes. The Fund may only invest in other investment companies
within limits set by the Investment Company Act, which currently allows the Fund
to invest up to 10% of its total assets in other investment companies. No more
than 5% of the Fund's total assets may be invested in securities of any one
investment company, nor may the Fund acquire more than 3% of the voting
securities of any investment company. Investments in other investment companies
will generally involve duplication of advisory fees and other expenses. The Fund
may also acquire securities of other investment companies beyond such limits
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. The Fund is required by SEC rules to collateralize short
positions by maintaining cash or liquid securities in a segregated account. 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 money market mutual
funds, and 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 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.
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KALMAR
POOLED
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- -----------------
ILLIQUID AND RESTRICTED SECURITIES. The Fund may invest up to 15% of its net
assets in securities which may be considered illiquid, by virtue of the absence
of a readily available market, legal or contractual restrictions on resale,
longer maturities, or other factors limiting the marketability of the security.
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. This policy does not limit the
acquisition of (i) restricted securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933 or
(ii) commercial paper issued pursuant to Section 4(2) of the Securities Act of
1933, that are determined to be liquid in accordance with guidelines established
by the Board of Trustees of the Trust. While maintaining oversight, the Board of
Trustees has delegated the day-to-day function of determining liquidity to the
Adviser.
- -------------------------
RISKS AND
SPECIAL
CONSIDER-
ATIONS
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 presents greater risks than investment in
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
larger company stocks. 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 small 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 the 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.
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POOLED
INVESTMENT
TRUST
- -----------------
INVESTMENT ADVISER. The Adviser has served as the investment adviser for a
mutual fund for only a short period of time, and therefore, historical
information about the performance of a mutual fund managed by the Adviser is
limited to the Fund's performance since April 11, 1997 (commencement of
operations). However, 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."
- -----------------------
MANAGEMENT
OF THE FUND
BOARD OF TRUSTEES
The Board of Trustees of the Trust consists of five individuals, two 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 the Trust;
Founder, President, Director and Chief Investment
Officer of Kalmar Investments since 1982 and Kalmar
Investment Advisers since inception.
WENDELL FENTON* President of the law firm of Richards, Layton and
Finger (joined 1971).
JOHN J. QUINDLEN Trustee of The Rodney Square Funds; Senior Vice
President and Chief Financial Officer of E.I. Dupont
de Nemours & Co. from 1954 through 1993 (retired).
DAVID M. REESE, JR.* Portfolio manager/research analyst for Kalmar
Investments from 1982 through March, 1996; private
investor.
DAVID D. WAKEFIELD Retired private investor; formerly Executive Secretary,
Longwood Foundation and Welfare Foundation, 1992 to
1997; Chairman and President, J.P. Morgan Delaware from
1989 to 1992.
*"Interested person" of the Trust as that term is defined in the Investment
Company Act.
INVESTMENT ADVISER
Kalmar Investment Advisers, located at 3701 Kennett Pike, Greenville, Delaware
19807 (previously defined as the "Adviser") serves as the investment adviser for
the Fund pursuant to an investment advisory agreement dated January 31, 1997
(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.
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POOLED
INVESTMENT
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- -----------------
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 with
Mr. Draper, as chief investment officer, leading and supervising the portfolio
management team. The Adviser is the "sister" company to Kalmar Investments, a
registered investment adviser founded 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 was organized as a separate company on
November 6, 1996 for the sole purpose of functioning as the adviser to the
Kalmar Funds. The ownership and management of the Adviser is identical to that
of Kalmar Investments, 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 Investments presently manages approximately $750 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
Investments invests 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.
- ---------------------
FUND OFFICERS
AND PORTFOLIO
MANAGERS
[GRAPHIC OMITTED]
FORD B. DRAPER, JR.
CHAIRMAN, PRESIDENT, TREASURER AND CHIEF INVESTMENT OFFICER
A graduate of Yale University, Mr. Draper also received an M.B.A. from Columbia
University Graduate School of Business, and has over thirty years experience in
investment research and management. Mr. Draper began his career in 1967 in the
investment research and capital management departments of Smith, Barney & Co. In
1970, he joined Baker, Fentress & Company, a publicly-owned closed-end mutual
fund, where he performed original investment research on a broad spectrum of
companies and industries. In 1972, he became Vice President with
responsibilities that included trading, investment research, investment
strategy, and management of the fund's portfolio. For the following ten years at
Baker, Fentress, Mr. Draper developed positive investment performance for the
then $250 million fund. Mr. Draper founded Kalmar Investments in 1982, which
provides investment management services to separately managed accounts.
14
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST
----------------
[GRAPHIC OMITTED]
JORDAN J. COX
PORTFOLIO MANAGER/RESEARCH ANALYST
After a BA in Economics and Applied Mathematics from Lehigh University and the
University of Oregon Doctoral program in Economics, Mr. Cox worked from
1986-1989 as a research analyst and Vice President for Ferris Baker, Watts, and
from 1989-1990 as Director of Institutional Research for Johnston Lemon & Co.,
both regional brokerage firms. His research focused on small to medium sized
companies with emphasis in the computer software and service industries. From
1990-1995 he moved into that industry, as Senior Director of New Business
Development of Systems & Computer Technology, a publicly traded computer
software and services firm. Mr. Cox joined Kalmar Investments in 1995.
[GRAPHIC OMITTED]
FORD B. DRAPER, III
MANAGER, TRADING DEPARTMENT
After earning a BA in International Relations from Lynchburg College, plus
additional travel and education, Mr. Draper joined Kalmar Investments in 1991.
There he built the firm's professional trading operations, which specialize in
small cap equities, which he continues to manage.
[GRAPHIC OMITTED]
GREGORY A. HARTLEY, C.F.A.
PORTFOLIO MANAGER/RESEARCH ANALYST
Mr. Hartley graduated from Indiana University's School of Business, held an
accounting position, and later earned an M.B.A. from Indiana University's
Graduate School of Business. Mr. Hartley joined Kalmar Investments in 1993 after
nine years of prior investment experience. From 1984-1993, he worked for Ashford
Capital Management, Inc., a then $100 million investment management and
consulting firm. As a senior analyst and member of the investment committee
doing original research on small growth companies, from health care to specialty
manufacturing and financial services to technology, he was responsible for new
idea stock selection and management of over $50 million in portfolio holdings.
[GRAPHIC OMITTED]
LINN M. MORROW
DIRECTOR OF CLIENT SERVICES
Mr. Morrow, with twenty years experience in investment-related client services,
holds a BS in Economics from the University of Pennsylvania's Wharton School. He
began his career with Salomon Brothers in 1968, and subsequently worked in the
corporate trust departments of Chemical Bank, NY and Mellon Bank, NA. In 1985 he
joined Delaware Investment Advisers as Vice President of Client Services. For
ten years at Delaware, his responsibilities were acting as liaison between
clients and the investment team, client reviews, client communications and new
business. Mr. Morrow joined Kalmar Investments in 1996 to direct its client
services.
[GRAPHIC OMITTED]
DANA F. WALKER, C.F.A.
PORTFOLIO MANAGER/RESEARCH ANALYST
After the University of Virginia's McIntire School of Commerce, Mr. Walker
worked from 1982-1986 for Delfi Management, Inc., investment advisor to the
Sigma Funds, a then $350 million mutual fund group. As a senior analyst doing
original research in consumer-related industries, health care, retailing, and
distribution, he was responsible for investment selections from these areas for
the Sigma funds and for portfolios of DP Asset Management, an affiliated $100
million investment advisory firm. Mr. Walker joined Kalmar Investments in 1986.
15
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST
- -----------------
DISTRIBUTOR
Provident Distributors, Inc. ("Distributor"), located at Four Falls Corporate
Center, West Conshohocken, PA 19428-2961, has been engaged to distribute the
Fund's shares pursuant to a distribution agreement dated February 17, 1998 (the
"Distribution Agreement"). Under the Distribution Agreement, the Distributor
directly or through its affiliates, provides distribution and underwriting
services, investor support and certain administrative services.
ADMINISTRATOR, TRANSFER AGENT AND CUSTODIAN
PFPC Inc. ("PFPC"), an indirect wholly owned subsidiary of PNC Bank Corp.,
located at 400 Bellevue Parkway, Wilmington, DE 19809 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 January 31,
1997 and assigned to PFPC, effective January 19, 1998.
As Administrator, PFPC supplies office facilities, non-investment related
statistical and research data, stationery and office supplies, executive and
administrative services, internal auditing and regulatory compliance services.
PFPC 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. PFPC performs
certain budgeting and financial reporting and compliance monitoring activities.
For the services provided as Administrator, PFPC 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. PFPC 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, PFPC 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, PFPC determines the Fund's net asset value per
share and provides accounting services to the Fund.
The custodian for the Fund is PNC Bank, N.A. ("Custodian"), Philadelphia, PA.
YEAR 2000
The services provided to the Fund and its shareholders by the Adviser,
Distributor, Administrator, Transfer Agent and Custodian depend on the smooth
functioning of their computer systems and those of their outside service
providers. Many computer software systems in use today cannot distinguish the
year 2000 from the year 1900 because of the way dates are encoded and
calculated. Such an event could have a negative impact on handling securities
trades, payments of interest and dividends, pricing and account services.
Although at this time, there can be no assurance that there will be no adverse
impact on the Fund, the Adviser, Distributor, Administrator, Transfer Agent and
Custodian have advised the Fund that they have been actively working on
necessary changes to their computer systems to prepare for the year 2000 and
expect that their systems, and those of their outside service providers, will be
adapted in time for that event.
- ----------------------
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, the costs of notice
16
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST
- -----------------
filings with the various states 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
PFPC 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
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 by the Fund's Distributor on a no-load basis,
without the imposition of any sales or distribution fees. Certain broker-dealers
or service agents may charge investors transaction or other account fees for
effecting transactions in Fund shares. 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 PFPC at (800) 282-2319.
17
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KALMAR
POOLED
INVESTMENT
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MINIMUM INVESTMENT. The minimum initial investment for the Fund is $10,000, and
subsequent investments must total at least $1,000. The minimum initial
investment requirement for qualified retirement accounts is $1,000 and there is
no minimum for subsequent investments.
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 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 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 resale purposes; and (iii) are liquid securities which
are not restricted as to transfer either by law or liquidity of market. 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 may 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 Fund, along with
a completed shareholder application, to Kalmar "Growth-with-Value" Fund, c/o
PFPC Inc., P.O. Box 8965, Wilmington, DE 19899-9752. A shareholder application
sent by overnight mail should be sent to Kalmar "Growth-with-Value" Fund, c/o
PFPC Inc., 400 Bellevue Parkway, Suite 108, Wilmington, DE 19809. 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, you must first
notify PFPC by calling (800) 282-2319 to request an account number and furnish
the Fund with a tax identification number. Following notification to PFPC,
federal funds and registration instructions should be wired through the Federal
Reserve System to:
PFPC INC.
C/O PNC BANK, N.A.
PHILADELPHIA, PA
ABA #031-0000-53
DDA #86-0179-1174
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 PFPC at one of the addresses stated
above under "Purchases By Mail." Investors should be aware that some banks may
impose a wire service fee.
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, PFPC, at
regular intervals, will automatically debit a shareholder's bank checking
18
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST
- ----------------
account in an amount of $100 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 PFPC at (800) 282-2319.
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 (once it has commenced
operations), 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 relative net asset values per share of each Fund next
determined after receipt and acceptance of the request.
To obtain a Prospectus of the Micro Cap Fund, or to obtain more information
about exchanges or place exchange orders contact PFPC at (800) 282-2319. 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.
- ------------------------
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 PFPC
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 PFPC 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.
Shares may be redeemed in one of the following ways:
REDEMPTION BY MAIL. A written redemption request must (i) identify the
shareholder's account number, (ii) state the number of shares or dollar amount
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 $25,000,
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 signature guarantee by a guarantor institution that is
acceptable to the Fund's transfer agent, such as a domestic bank or trust
company, broker, dealer, clearing agency or savings association, who are
participants in
19
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KALMAR
POOLED
INVESTMENT
TRUST
- -----------------
a medallion program recognized by the Securities Transfer Association. The three
recognized medallion programs are Securities Transfer Agents Medallion Program
(STAMP), Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange,
Inc. Medallion Signature Program (MSP). Signature guarantees that are not part
of these programs will not be accepted. A signature and a signature guarantee
are required for each person in whose name the account is registered. The
transfer agent may require additional supporting documents for redemptions made
by corporations, executors, administrators, trustees and guardians.
Written redemption instructions should be submitted to Kalmar
"Growth-with-Value" Small Cap Fund, c/o PFPC Inc., P.O. Box 8965, Wilmington, DE
19899-9752. A redemption order sent by overnight mail should be sent to Kalmar
"Growth-with-Value" Small Cap Fund, c/o PFPC Inc., 400 Bellevue Parkway, Suite
108, Wilmington, DE 19809. A redemption request will not be deemed to be
properly received until the transfer agent receives all required documents in
proper form. Questions with respect to the proper form for redemption requests
should be directed to the transfer agent at (800) 282-2319.
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. Telephone
redemptions may be made in amounts up to $50,000 by instructing the transfer
agent at (800) 282-2319. In order to arrange for redemption by wire or telephone
after an account has been opened, or to change the bank or account designated to
receive redemption proceeds, a written request must be sent to the transfer
agent at the address listed above. A signature guarantee is required of all
shareholders in order to change telephone redemption privileges.
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 PFPC by telephone, you may make a redemption request by mail.
The Fund or PFPC 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.
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
20
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST
- -----------------
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.
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. Shareholders who own shares with a value of $10,000
or more may participate in the Systematic Withdrawal Plan. Under the Plan,
shareholders may automatically redeem a portion of their Fund shares monthly,
bimonthly, quarterly, semiannually or annually. The minimum withdrawal available
is $100. The redemption of Fund shares will be effected at their net asset value
at the close of the NYSE on or about the 25th day of the month at the frequency
selected by the shareholder. If you expect to purchase additional Fund shares,
it may not be to your advantage to participate in the Systematic Withdrawal Plan
because contemporary purchases and redemption may result in adverse tax
consequences. For further details about this service, see the Application or
call the Transfer Agent at (800) 282-2319.
- -------------------------
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 PFPC by calling (800) 282-2319. 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.
PNC makes available its services as an IRA Custodian for each shareholder
account that is established as an IRA. For these services, PNC receives an
annual fee of $10.00 per account, which fee is paid directly to PNC 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.
21
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST
- -----------------
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.
- -------------------------
FUND
PERFORMANCE
INFORMATION
The following table and line graph show the Fund's performance for the period
April 11, 1997 through December 31, 1997 versus The Russell 2000 Index and The
Lipper Small Cap Fund Index. The Russell 2000 is an unmanaged stock market index
without any associated expenses, and its returns assume the reinvestment of all
dividends. The Lipper Small Cap Fund Index is an unweighted index of mutual fund
performance which consists of the average return of the 30 largest small cap
funds. The Fund's past performance is not necessarily indicative of future
results.
COMPARATIVE PERFORMANCE.
INCEPTION TO DATE
TOTAL RETURN 4/11/97-12/31/97
- -------------------- -----------------
Kalmar Small Cap Fund +46.35%
Russell 2000 Index +27.86%
Lipper Small Cap Funds +26.02%
KALMAR POOLED INVESTMENT TRUST - SMALL CAP "GROWTH-WITH-VALUE" FUND
GROWTH OF $10,000
VS. THE RUSSELL 2000 INDEX AND THE LIPPER SMALL CAP FUND INDEX
CHART [GRAPHIC OMITTED]
The following are the plot points contained in the Chart:
Kalmar Small Cap Russell 2000 Lipper Small Cap
4/11/97 10,000 10,000 10,000
6/30/97 12,040 11,524 11,616
9/30/97 14,880 13,235 13,387
12/31/97 14,635 12,787 12,603
* THE FUND COMMENCED OPERATIONS ON APRIL 11, 1997.
22
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST
- -----------------
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, which is composed of the 2000 smallest
stocks in the Russell 3000, a market value weighted index of the 3,000 largest
U.S. publicly-traded companies, or the Standard & Poor's 500 Stock Index, an
unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40
utility stocks and 20 transportation stocks. Comparisons of performance assume
reinvestment of dividends. The Fund may also 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.
- --------------------------
GENERAL
INFORMATION
SHARES OF BENEFICIAL INTEREST AND VOTING RIGHTS. The Trust was organized as a
Delaware business trust on November 6, 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
23
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST
- ----------------
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 inquiries should be made by writing to the Trust c/o PFPC Inc., P.O.
Box 8965, Wilmington, DE 19899-9752.
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.
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 PFPC in writing thirty days prior to record date.
Shareholders may call PFPC for more information. All shares of the Fund will
share proportionately in the investment income and expenses of the Fund.
- ------------------------
DIVIDENDS,
CAPITAL GAINS
DISTRIBUTIONS
AND TAXES
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.
Investors should also be aware that, if the Fund has unrealized gains at the
time they purchase shares in the Fund, part of their purchase price may be
returned to them in the form of a capital gain distri-
24
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST
- -----------------
bution when and if such gains are later realized by the Fund. Moreover, on
commencement of the Fund, existing clients of Adviser will have the opportunity
to transfer their assets to the Fund on a tax-free basis; any gain inherent in
such assets at the time of contribution will carryover to the Fund.
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.
- --------------------------
SHAREHOLDER
ACCOUNTS
PFPC, 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.
25
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KALMAR
POOLED
INVESTMENT
TRUST
- -----------------
INVESTMENT ADVISER
Kalmar Investment Advisers
Barley Mill House
3701 Kennett Pike
Greenville, DE 19807
DISTRIBUTOR
Provident Distributors, Inc.
Four Falls Corporate Center, 6th Floor
West Conshohocken, PA 19428-2961
SHAREHOLDER SERVICES
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
CUSTODIAN
PNC Bank, N.A.
1600 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Pepper Hamilton LLP
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103-2799
AUDITORS
Coopers & Lybrand, L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
26
<PAGE>
KALMAR "GROWTH-WITH-VALUE" SMALL CAP FUND
<TABLE>
<CAPTION>
====================================================================================================================================
<S> <C>
SHAREHOLDER APPLICATION
KALMAR Send Completed Application to:
POOLED KALMAR "GROWTH-WITH-VALUE" SMALL CAP FUND
INVESTMENT C/O PFPC INC.
TRUST P.O. BOX 8965
WILMINGTON, DE 19899-9752
====================================================================================================================================
1. ACCOUNT REGISTRATION -- PLEASE PRINT
====================================================================================================================================
[ ] INDIVIDUAL OR JOINT ACCOUNT
-------------------------------------------------------------------------------------------------------------------------------
First name Middle initial Last name Social Security Number
-------------------------------------------------------------------------------------------------------------------------------
Joint owner(s) (Joint ownership means "joint tenants with rights of survivorship" unless otherwise specified.)
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] GIFT/TRANSFER TO A MINOR
________________________________________________________ As Custodian For __________________________________________________
Name of Custodian -- ONE ONLY Minor's Name
Under the ________________________________ Uniform Gift/Transfer to Minors Act. ______________________________________________
State Minor's Social Security Number
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] TRUST [ ] CORPORATION [ ]PARTNERSHIP [ ]OTHER ENTITY ________________________________________ (Check One)
-------------------------------------------------------------------------------------------------------------------------------
Name of Entity (Corporate Resolution/Partnership Agreement Required) Taxpayer Identification Number
-------------------------------------------------------------------------------------------------------------------------------
Name of each trustee (if any) Date of trust document (must be completed for trust
registration)
====================================================================================================================================
2. ADDRESS
====================================================================================================================================
ACCOUNT HOLDER
-------------------------------------------------------------------------------------------------------------------------------
Street Address (P.O. Box acceptable if street address is given) Daytime Phone (including Area Code)
-------------------------------------------------------------------------------------------------------------------------------
City State Zip code Evening Phone (including Area Code)
I am a citizen of: [ ]U.S. [ ] __________________________________________
INTERESTED PARTY, DUPLICATE ACCOUNT STATEMENT
-------------------------------------------------------------------------------------------------------------------------------
Number and Street Telephone No. (Include Area Code)
-------------------------------------------------------------------------------------------------------------------------------
Apartment, Floor or Room Number
-------------------------------------------------------------------------------------------------------------------------------
City State Zip Code
====================================================================================================================================
3. INITIAL INVESTMENT -- MINIMUM $10,000
====================================================================================================================================
Enclosed is a check payable to the Kalmar "Growth-with-Value" Small Cap Fund for $ ____________________________________________
[ ] By Federal Funds wire (please call (800) 282-2319 for instructions):
-------------------------------------------------------------------------------------------------------------------------------
Name of Bank Wire Amount ($) Wire Date
<PAGE>
====================================================================================================================================
4. DISTRIBUTIONS
====================================================================================================================================
All dividends and capital gains distributions will be automatically reinvested in additional shares at net asset value
unless otherwise indicated by checking the box(es) below:
[ ] Dividends in cash [ ] Capital Gains in cash [ ] Dividends and Capital Gains in cash
If dividends and capital gains distributions are distributed in cash, you have the option to receive such amounts either by
direct deposit into your bank account or by check. Please check one box below.
[ ] Direct Deposit [ ] Check
PLEASE ATTACH A VOIDED CHECK IF YOU CHOOSE DIRECT DEPOSIT.
====================================================================================================================================
5. SIGNATURE AND TAX CERTIFICATIONS
====================================================================================================================================
I have received and read the Prospectus for the Kalmar "Growth-with-Value" Small Cap Fund and agree to its terms; I am of
legal age. I understand that investment in these shares involves investment risks, including possible loss of principal. If a
corporate customer, I certify that appropriate corporate resolutions authorizing investment in the Kalmar "Growth-with-Value"
Small Cap Fund Fund have been duly adopted.
I certify under penalties of perjury that the Social Security number or taxpayer identification number shown above is correct.
Unless the box below is checked, I certify under penalties of perjury that I am not subject to backup withholding because the
Internal Revenue Service (a) has not notified me that I am as a result of failure to report all interest or dividends, or (b)
has notified me that I am no longer subject to backup withholding. The certifications in this paragraph are required from all
nonexempt persons to prevent backup withholding of 31% of all taxable distributions and gross redemption proceeds under the
federal income tax law.
[ ] Check here if you are subject to backup withholding.
-------------------------------------------------------------------------------------------------------------------------------
Signature Date
-------------------------------------------------------------------------------------------------------------------------------
Signature Date
-------------------------------------------------------------------------------------------------------------------------------
Check one: [ ] Owner [ ] Trustee [ ] Custodian [ ]Other _____________________________________________
====================================================================================================================================
6. OPTIONAL SHAREHOLDER PRIVILEGES
====================================================================================================================================
A. TELEPHONE REDEMPTION AUTHORIZATION
I/We hereby authorize the use of cash transfers to effect redemptions of shares from my/our account according to telephone
instructions from any one of the authorized signers listed in Section 7 B and to send the proceeds TO (CHECK ONE OR MORE OF
THE FOLLOWING):
[ ] My address of record as indicated in Section 2 (must be $50,000 or less and address must be established for a minimum of
60 days)
[ ] My bank as designated below
[ ] Wire proceeds to my bank via the Federal Funds Wire System (minimum $1,000) as designated below
[ ] All of the above
-------------------------------------------------------------------------------------------------------------------------------
Bank Name Bank Routing Transit #
-------------------------------------------------------------------------------------------------------------------------------
Bank Account # (Checking/Savings) Account Holder
-------------------------------------------------------------------------------------------------------------------------------
Bank Address: Street City State Zip
PLEASE ATTACH A VOIDED CHECK OF THE BANK ACCOUNT DESIGNATED ABOVE.
Telephone redemption by wire can be used only with financial institutions that are participants in the Federal Reserve Bank
Wire System. If the financial institution you designate is not a Federal Reserve participant, telephone redemption proceeds
will be mailed to the named financial institution. In either case, it may take a day or two, upon receipt for your financial
institution to credit your bank account with the proceeds, depending on its internal crediting procedures.
- ------------------------------------------------------------------------------------------------------------------------------------
B. AUTOMATIC INVESTMENT PLAN -- (SUBJECT TO THE $10,000 MINIMUM INITIAL PURCHASE)
I hereby request that PFPC, the Fund's Transfer Agent, draw an automatic clearing house ("ACH") debit electronically on the
bank checking account designated on a monthly basis and invest the amount collected in Kalmar "Growth-with-Value" Small Cap
Fund shares. The shares are purchased on the same day that the Transfer Agent draws the debit, and a confirmation is sent to
you.
Mark one of your personal checks "VOID" and attach the voided check to this application. As soon as your bank accepts your
authorization, debits will be generated and purchases of Kalmar "Growth-with-Value" Small Cap Fund shares will begin. Please
note that your bank must be able to accept ACH transactions and/or may be a member of an ACH Association. The Fund cannot
guarantee acceptance by your bank. Please allow one (1) month for processing of this automatic option before the first debit
occurs.
<PAGE>
Please begin Automatic Investing for me on ________________, 19__ and invest $_________________ (minimum of $100) in shares of
the Kalmar "Growth-with-Value" Small Cap Fund on the 20th of each month.
-------------------------------------------------------------------------------------------------------------------------------
Name of Bank:
-------------------------------------------------------------------------------------------------------------------------------
Bank Address: Bank Telephone #:
-------------------------------------------------------------------------------------------------------------------------------
Signature of Depositor/Date Signature of Joint Depositor (if any)/Date:
I understand that my ACH debit will be dated on or about the 20th of the month specified. I agree that if such debit is not
honored upon presentation, PFPC may discontinue this service without prior notice, and any purchase of Fund shares may be
reversed. PFPC is under no obligation to notify the undersigned as to the nonpayment of any debit. I further understand that
the net asset value of Kalmar "Growth-with-Value" Small Cap Fund shares at the time of reversal may be less than the net asset
value on the day of the original purchase. PFPC is authorized to redeem sufficient additional full and fractional shares from
my account to make up the deficiency. Automatic Investing may be discontinued by PFPC by written notice to the shareholder at
least thirty (30) days prior to any payment date or by the investor by written notice to PFPC provided that the notice is
received not later than ten (10) business days prior to the specified investment date.
- ------------------------------------------------------------------------------------------------------------------------------------
C. SYSTEMATIC WITHDRAWAL PLAN -- (ACCOUNT BALANCES MUST BE GREATER THAN $10,000)
Frequency of withdrawals (check one): [ ] monthly [ ] bi-monthly [ ] quarterly [ ] semi-annually [ ] annually
I/We authorize PFPC to make periodic redemptions of Kalmar "Growth-with-Value" Small Cap Fund shares as necessary to provide
the payments indicated below.
Method of Payment: (check one): [ ] Check [ ] Automatic Clearing House ("ACH") electronic credit (SEE INSTRUCTIONS BELOW)
If you have chosen ACH credit option to your bank account, please mark one of your personal checks "VOID" and attach the voided
check to this application. Please note that your bank must be able to accept ACH transactions and/or may be a member of an ACH
Association. The Fund cannot guarantee acceptance by your bank.
The first withdrawal is to be made about the 25th day of _________, 19___ Amount of each withdrawal (minimum $100): $_________
-------------------------------------------------------------------------------------------------------------------------------
Name of Bank: Bank Address:
-------------------------------------------------------------------------------------------------------------------------------
Signature of Depositor/Date Signature of Joint Depositor (if any)/Date
THIS APPLICATION MUST BE RECEIVED BY THE 10TH OF THE MONTH INDICATED TO BECOME EFFECTIVE FOR THAT MONTH.
</TABLE>
<PAGE>
KALMAR POOLED INVESTMENT TRUST
BARLEY MILL HOUSE
3701 KENNETT PIKE
GREENVILLE, DE 19807
(PHONE) 302-658-7575
(FAX) 302-658-7513
KL01
<PAGE>
KALMAR "GROWTH-WITH-VALUE" MICRO CAP FUND
A SERIES OF
KALMAR POOLED INVESTMENT TRUST
BARLEY MILL HOUSE
3701 KENNETT PIKE
GREENVILLE, DELAWARE 19807
(800) 282-2319
PROSPECTUS DATED APRIL 2, 1998
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 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 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 April 2, 1998 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.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<PAGE>
Kalmar "Growth-With Value" Micro Cap Fund
Table of Contents
PAGE
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........................................
Fund Officers and Portfolio Managers......................
Distributor...............................................
Administrator, Transfer Agent and Custodian...............
Expenses
Calculation of Net Asset Value.....................................
How to Purchase Shares.............................................
How to Redeem Shares...............................................
Retirement Plans...................................................
Fund Performance Information.......................................
General Information................................................
Dividends, Capital Gains Distributions and Taxes...................
Shareholder Accounts...............................................
-2-
<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 common stocks of
small, emerging growth companies with market capitalizations 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 shareholders 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 sixteen
years, the Adviser's portfolio management team has managed micro cap and small
cap assets in separate accounts now totaling in excess of $750 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 on a tax-free basis 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 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
-3-
<PAGE>
minimum initial investment is $10,000 and subsequent investments must total at
least $1,000. The minimum initial investment amount for investments by qualified
retirement accounts is $1,000 and there is no minimum for subsequent
investments. An application and information is available by calling (800)
282-2319. 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 realized 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,
Capital Gains 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 market for micro cap stocks is less liquid than markets for
larger stocks, which increases the volatility of micro cap stocks, and may
result in substantial price decreases in a falling market; (3) the Fund may lend
its securities which entails a risk of loss should a borrower fail financially;
(4) 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 (5) although the Adviser's portfolio management team
has extensive investment management experience with private separately managed
accounts, it has served as the adviser to a mutual fund for a relatively short
period of time. 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, PNC Bank, N.A., and the Fund's
administrative, transfer agency and fund accounting services are provided by
PFPC Inc.. The distributor of the Fund's shares is Provident Distributors, Inc.
See "Management of the Fund" and "General Information."
FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES: These are no transactional expenses paid by
shareholders in connection with purchases or redemptions of the Fund's shares.
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%
-4-
<PAGE>
Total Operating Expenses 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 EXPENSES, THE FUND WOULD PAY AN ANNUAL ADVISORY FEE OF 1.00%
AND IT IS ESTIMATED THAT THE TOTAL OPERATING EXPENSES 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
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.
-5-
<PAGE>
ADVISER'S INVESTMENT PERFORMANCE
Set forth below is certain performance information relating to separate accounts
managed by the Fund's portfolio management team. The performance data for the
separate accounts is net of all fees and expenses. These accounts are managed
according 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 S & P 500
ENDING TOTAL RETURN* TOTAL RETURN TOTAL RETURN
------ ------------ ------------ ------------
12/31/84 1.46 (7.30) 6.26
12/31/85 33.98 31.05 31.76
12/31/86 28.14 5.68 18.70
12/31/87 (1.90) (8.77) 5.22
12/31/88 23.58 24.89 16.57
12/31/89 38.42 16.24 31.65
12/31/90 (7.58) (19.51) (3.14)
12/31/91 65.52 46.05 30.45
12/31/92 8.87 18.41 7.62
12/31/93 27.11 19.91 10.06
12/31/94 3.08 (1.82) 1.30
12/31/95 25.38 26.21 37.54
12/31/96 7.06 14.76 22.99
12/31/97 36.30 22.24 33.34
CUMULATIVE
TOTAL RETURN KALMAR* RUSSELL S & P 500
------------ ---------- --------- ------------
14 Years* 1066.99% 393.33% 817.68%
1984-1997
AVERAGE ANNUAL
TOTAL RETURN
--------------
14 Years* 19.18% 12.08% 17.16%
1984-1997
*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
-6-
<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 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 upward of their securities as their business success
attracts larger numbers of additional investors and greater "Wall Street"
sponsorship over time.
-7-
<PAGE>
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 total assets in companies whose stock market
capitalizations (total market value of outstanding shares) are less than $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 drops as 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 purchase primarily 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 investment grade 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. Rights represent a preemptive right to purchase additional
shares of stock at the time of new issuance, before stock is offered to the
general public, so that the stockholder can retain the same percentage after the
new stock offering.
The Fund's assets will be invested primarily in equity securities of small,
so-called "micro cap" companies; however, the Fund may, consistent with its
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.
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CASH OR CASH EQUIVALENTS. Although the Fund intends to remain substantially
fully invested, 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 the Fund may invest
up to 100% of its net assets 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 bankers' acceptances issued by commercial banks or
savings and loan associations meeting certain qualifications. The Fund may also
purchase commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 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 short-term, high quality, cash-equivalent debt
securities listed above and investment grade convertible debt (those rated Baa
or higher by S&P and BBB or high by Moody's), 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 (those rated BB or lower by S&P or Ba or
lower by Moody's) and unrated securities of comparable quality. 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 their 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 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.
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
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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 such securities 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, that equals or exceeds the
purchase price, and the seller will be required to transfer additional
securities to the Fund on a daily basis to ensure that the value of the
collateral does not decrease below the repurchase price. No more than 15% 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.
INVESTMENTS IN MUTUAL FUNDS. The Fund may invest in shares of other open and
closed-end investment companies which principally invest in securities of the
type in which the Fund invests. This approach will most likely be used for cash
management purposes. The Fund may only invest in other investment companies
within limits set by the Investment Company Act of 1940, which currently allows
the Fund to invest up to 10% of its total assets in other investment
companies.No more than 5% of the Fund's total assets may be invested in
securities of any one investment company, nor may the Fund acquire more than 3%
of the voting securities of any investment company. Investments in other
investment companies will generally involve duplication of advisory fees and
other expenses. The Fund may also acquire securities of other investment
companies beyond such limits 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 maintaining cash or liquid securities in a segregated account. 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
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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 money market mutual funds
and 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 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.
ILLIQUID AND RESTRICTED SECURITIES. The Fund may invest up to 15% of its net
assets in securities which may be considered illiquid by virtue of the absence
of a readily available market, legal or contractual restrictions on resale,
longer maturities, or other factors limiting the market ability of the security.
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. This policy does not limit the
acquisition of (i) restricted securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933 or
(ii) commercial paper issued pursuant to Section 4(2) of the Securities Act of
1933, that are determined to be liquid in accordance with guidelines established
by the Board of Trustees of the Trust. While maintaining oversight, the Board of
Trustees has delegated the day-to-day function of determining liquidity to the
Adviser.
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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
presents greater risks than investment in 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 on 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 small
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
the 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 served as the investment adviser for a
mutual fund for only a short period of time. 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."
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MANAGEMENT OF THE FUND
BOARD OF TRUSTEES
The Board of Trustees of the Trust consists of five individuals, two 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 the Trust;
Founder, President, Director and Chief Investment
Officer of Kalmar Investments since 1982 and Kalmar
Investment Advisers since inception.
WENDELL FENTON* President of the law firm of Richards, Layton and
Finger (joined 1971).
JOHN J. QUINDLEN Trustee of The Rodney Square Funds; Senior Vice
President and Chief Financial Officer of E.I. Dupont
de Nemours & Co. from 1954 through 1993 (retired).
DAVID M. REESE, JR.* Portfolio manager/research analyst for Kalmar
Investments Inc. from 1982 through March, 1996.
DAVID D. WAKEFIELD Retired Private Investor; Executive Secretary,
Longwood Foundation and Welfare Foundation, from 1992
to 1997; Executive Secretary, J.P. Morgan Delaware
from 1989 to 1992.
*"Interested person" of the Fund, as that term is defined in the Investment
Company Act.
INVESTMENT ADVISER
Kalmar Investment Advisers, located at 3701 Kennett Pike, Greenville, Delaware
19807 (previously defined as the "Adviser") serves as the investment adviser for
the Fund pursuant to an investment advisory agreement dated January 31, 1997
(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
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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.
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 with
Mr. Draper, as chief investment officer, leading and supervising the portfolio
management team. The Adviser is the "sister" company to Kalmar Investments Inc.
("Kalmar"), a registered investment adviser founded 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 was organized as a separate company on
November 6, 1996 for the sole purpose of functioning as the adviser to the
Kalmar Funds. 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 $750 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, 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 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."
FUND OFFICERS AND PORTFOLIO MANAGERS
FORD B. DRAPER, JR.
CHAIRMAN, PRESIDENT, TREASURER AND CHIEF INVESTMENT OFFICER
A graduate of Yale University, Mr. Draper also received an M.B.A. from Columbia
University Graduate School of Business, and has over thirty years experience in
investment research and management. Mr. Draper began his career in 1967 in the
investment research and capital management departments of Smith, Barney & Co. In
1970, he joined Baker, Fentress & Company, a publicly-owned closed-end mutual
fund, where he performed original investment research on a broad spectrum of
companies and industries. In 1972, he became Vice President with
responsibilities that included trading, investment research, investment
strategy, and management of the fund's portfolio. For the following ten years at
Baker, Fentress, Mr. Draper developed positive investment performance
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for the then $250 million fund. Mr. Draper founded Kalmar Investments in 1982,
which provides investment management services to separately managed accounts.
JORDAN J. COX
PORTFOLIO MANAGER/RESEARCH ANALYST
After a BA in Economics and Applied Mathematics from Lehigh University and the
University of Oregon Doctoral program in Economics, Mr. Cox worked from
1986-1989 as a research analyst and Vice President for Ferris Baker, Watts, and
from 1989-1990 as Director of Institutional Research for Johnston Lemon & Co.,
both regional brokerage firms. His research focused on small to medium sized
companies with emphasis in the computer software and service industries. From
1990-1995 he moved into that industry, as Senior Director of New Business
Development of Systems & Computer Technology, a publicly traded computer
software and services firm. Mr. Cox joined Kalmar Investments in 1995.
FORD B. DRAPER, III
MANAGER, TRADING DEPARTMENT
After earning a BA in International Relations from Lynchburg College, plus
additional travel and education, Mr. Draper joined Kalmar Investments in 1991.
There he built the firm's professional trading operations, which specializes in
small cap equities, which he continues to manage.
GREGORY A. HARTLEY, C.F.A.
PORTFOLIO MANAGER/RESEARCH ANALYST
Mr. Hartley graduated from Indiana University's School of Business, held an
accounting position, and later earned an M.B.A. from Indiana University's
Graduate School of Business. Mr. Hartley joined Kalmar Investments in 1993 after
nine years of prior investment experience. From 1984-1993, he worked for Ashford
Capital Management, Inc., a then $100 million investment management and
consulting firm. As a senior analyst and member of the investment committee
doing original research on small growth companies, from health care to specialty
manufacturing and financial services to technology, he was responsible for new
idea stock selection and management of over $50 million in portfolio holdings.
LINN M. MORROW
DIRECTOR OF CLIENT SERVICES
Mr. Morrow, with twenty years experience in investment-related client services,
holds a BS in Economics from the University of Pennsylvania's Wharton School. He
began his career with Salomon Brothers in 1968, and subsequently worked in the
corporate trust departments of Chemical Bank, NY and Mellon Bank, NA. In 1985 he
joined Delaware Investment Advisers as Vice President of Client Services. For
ten years at Delaware, his responsibilities were acting as liaison between
clients and the investment team, client reviews, client communications and new
business. Mr. Morrow joined Kalmar Investments in 1996 to direct its client
services.
DANA F. WALKER, C.F.A.
PORTFOLIO MANAGER/RESEARCH ANALYST
After the University of Virginia's McIntire School of Commerce, Mr. Walker
worked from 1982-1986 for Delfi Management, Inc., investment advisor to the
Sigma Funds, a then $350 million mutual fund group. As a senior analyst doing
original research in consumer-related industries, health care, retailing, and
distribution, he was responsible for investment selections from these areas for
the Sigma funds and for portfolios of DP Asset Management, an affiliated $100
million investment advisory firm. Mr. Walker joined Kalmar Investments in 1986.
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DISTRIBUTOR
Provident Distributors, Inc. ("Distributor"), located at Four Falls Corporate
Center, West Conshohocken, PA 19428-2961, has been engaged to distribute the
Fund's shares pursuant to a distribution agreement dated February 17, 1998 (the
"Distribution Agreement"). Under the Distribution Agreement, the Distributor
directly or through its affiliates, provides distribution and underwriting
services, investor support and certain administrative services.
ADMINISTRATOR, TRANSFER AGENT AND CUSTODIAN
PFPC Inc. ("PFPC"), an indirect wholly owned subsidiary of PNC Bank Corp.,
located at 400 Bellevue Parkway, Wilmington, DE 19809 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 January 31,
1997 and assigned to PFPC, effective January 19, 1998.
As Administrator, PFPC supplies office facilities, non-investment related
statistical and research data, stationery and office supplies, executive and
administrative services, internal auditing and regulatory compliance services.
PFPC 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. PFPC performs
certain budgeting and financial reporting and compliance monitoring activities.
For the services provided as Administrator, PFPC 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. PFPC 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." PFPC 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, PFPC 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, PFPC determines the Fund's net
asset value per share and provides accounting services to the Fund.
The custodian for the Fund is PNC Bank, N.A. ("Custodian"), Philadelphia, PA
19103.
YEAR 2000
The services provided to the Fund and its shareholders by the Adviser,
Distributor, Administrator, Transfer Agent and Custodian depend on the smooth
functioning of their computer systems and those of their outside service
providers. Many computer software systems in use today cannot distinguish the
year 2000 from the year 1900 because of the way dates are encoded and
calculated. Such an event could have a negative impact on handling securities
trades, payments of interest and dividends, pricing and account services.
Although at this time, there can be no assurance that there will be no adverse
impact on the Fund, the Adviser, Distributor, Administrator, Transfer Agent and
Custodian have advised the Fund that they have been actively working on
necessary changes to their computer systems to prepare for the year 2000 and
expect that their systems, and those of their outside service providers, will be
adapted in time for that event.
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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, the costs of notice filings with the various
states 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
PFPC 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
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.
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HOW TO PURCHASE SHARES
Shares of the Fund are offered by the Fund's distributor on a no-load basis,
without the imposition of any sales or distribution fees.. Certain
broker-dealers or service agents may charge investors transaction or other
account fees for effecting transactions in Fund shares. 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 PFPC at
(800) 282-2319.
MINIMUM INVESTMENT. The minimum initial investment for the Fund is $10,000, and
subsequent investments must total at least $1,000. The minimum investment
requirement for qualified retirement accounts is $1,000 and there is no minimum
for subsequent investments.
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 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 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 resale purposes; and (iii) are liquid securities which
are not restricted as to transfer either by law or liquidity of market. 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 may 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 "Growth-with-Value" Fund, c/o
PFPC Inc.,, P.O. Box 8965, Wilmington, DE 19899. A shareholder application sent
by overnight mail should be sent to Kalmar "Growth-with-Value" Fund, c/o PFPC
Inc., 400 Bellevue Parkway, Suite 108, Wilmington, DE 19809. 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, you must first
notify PFPC by calling (800) 282-2319 to request an account number and furnish
the Fund with a tax identification number. Following notification to PFPC,
federal funds and registration instructions should be wired through the Federal
Reserve System to:
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<PAGE>
PFPC INC.
C/O PNC BANK, N.A.
Philadelphia, PA
DDA #86-0179-1174
ABA #031 000 53
ATTENTION: KALMAR "GROWTH-WITH-VALUE" MICRO 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 PFPC at one of the addresses stated
above under "Purchases By Mail." Investors should be aware that some banks may
impose a wire service fee.
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, PFPC, at
regular intervals, will automatically debit a shareholder's bank checking
account in an amount of $100 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 PFPC at (800) 282-2319.
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
relative net asset values per share of each Fund next determined after receipt
and acceptance of the request.
To obtain a Prospectus of the Small Cap Fund, or to obtain more information
about exchanges or place exchange orders contact PFPC at (800) 282-2319. 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.
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 PFPC
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 PFPC 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
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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.
Shares may be redeemed in one of the following ways:
REDEMPTION BY MAIL. A written redemption request must (i) identify the
shareholder's account number, (ii) state the number of shares or dollar amount
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 $25,000,
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 signature guarantee by a guarantor institution that is
acceptable to the Fund's transfer agent, such as a domestic bank or trust
company, broker, dealer, clearing agency or savings association, who are
participants in a medallion program recognized by the Securities Transfer
Association. The three recognized medallion programs are Securities Transfer
Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP) and
New York Stock Exchange, Inc. Medallion Signature Program (MSP). Signature
guarantees that are not part of these programs will not be accepted. A signature
and a signature guarantee are required for each person in whose name the account
is registered. The transfer agent may require additional supporting documents
for redemptions made by corporations, executors, administrators, trustees and
guardians.
Written redemption instructions should be submitted to Kalmar
"Growth-with-Value" Small Cap Fund, c/o PFPC Inc.,, P.O. Box 8965, Wilmington,
DE 19899-9752. A redemption order sent by overnight mail should be sent to
Kalmar "Growth-with-Value" Small Cap Fund, c/o PFPC Inc., 400 Bellevue Parkway,
Suite 108, Wilmington, DE 19809. A redemption request will not be deemed to be
properly received until the transfer agent receives all required documents in
proper form. Questions with respect to the proper form for redemption requests
should be directed to the transfer agent at (800) 282-2319.
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. Telephone
redemptions may be made in amounts up to $50,000 by instructing the transfer
agent at (800) 282-2319. In order to arrange for redemption by wire or telephone
after an account has been opened, or to change the bank or account designated to
receive redemption proceeds, a written request must be sent to the transfer
agent at the address listed above. A signature guarantee is required of all
shareholders in order to qualify for or to change telephone redemption
privileges. The application contains appropriate information and instructions
and a form on which to make the signature guarantee.
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.
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<PAGE>
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.
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.
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. Shareholders who own shares with a value of $10,000
or more may participate in the Systematic Withdrawal Plan. Under the Plan,
shareholders may automatically redeem a portion of their Fund shares monthly,
bimonthly, quarterly, semiannually or annually. The minimum withdrawal available
is $100. The redemption of Fund shares will be effected at their net asset value
at the close of the NYSE on or about the 25th day of the month at the frequency
selected by the shareholder. If you expect to purchase additional Fund shares,
it may not be to your advantage to participate in the Systematic Withdrawal Plan
because contemporary purchases and redemption may result in adverse tax
consequences. For further details about this service, see the Application or
call the Transfer Agent at (800) 282-2319.
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 PFPC by calling (800) 282-2319. 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
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<PAGE>
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.
PNC makes available its services as an IRA Custodian for each shareholder
account that is established as an IRA. For these services, PNC receives an
annual fee of $10.00 per account, which fee is paid directly to PNC 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.
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<PAGE>
FUND 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, which is composed of the 2000 smallest
stocks in the Russell 3000, a market value weighted index of the 3,000 largest
U.S. publicly-traded companies, or the Standard & Poor's 500 Stock Index, an
unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40
utility stocks and 20 transportation stocks. Comparisons of performance assume
reinvestment of dividends. The Fund may also 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.
GENERAL INFORMATION
SHARES OF BENEFICIAL INTEREST AND VOTING RIGHTS. The Trust was organized as a
Delaware business trust on November 6, 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
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<PAGE>
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 inquiries should be made by writing to the Trust c/o PFPC Inc., P.O.
Box 8965, Wilmington, DE 19899-9752.
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 PFPC in writing thirty days prior to record date.
Shareholders may call PFPC 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.
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<PAGE>
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.
SHAREHOLDER ACCOUNTS
PFPC, 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.
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<PAGE>
INVESTMENT ADVISER
Kalmar Investment Advisers
Barley Mill House
3701 Kennett Pike
Greenville, DE 19807
DISTRIBUTOR
Provident Distributors, Inc.
Four Falls Corporate Center, 6th Floor
West Conshohocken, PA 19428-2961
SHAREHOLDER SERVICES
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
CUSTODIAN
PNC Bank, N.A.
1600 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Pepper Hamilton LLP
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103-2799
AUDITORS
Coopers & Lybrand, L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
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<PAGE>
KALMAR "GROWTH-WITH-VALUE" SMALL CAP FUND
KALMAR "GROWTH-WITH-VALUE" MICRO CAP FUND
EACH A SERIES OF
KALMAR POOLED INVESTMENT TRUST
Barley Mill House, 3701 Kennett Pike, Greenville, Delaware 19807
STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 2, 1998
Kalmar Pooled Investment Trust (the "Trust") 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 the Kalmar "Growth-with-Value" Micro Cap Fund (the "Micro Cap Fund")
(collectively, the "Funds") is included in separate prospectuses, each dated
April 2, 1998. 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 PROVIDENT DISTRIBUTORS, INC.
Barley Mill House Four Falls Corporate Center, 6th Floor
3701 Kennett Pike West Conshohocken, PA 19148-2961
Greenville, DE 19807 (610) 260-6533
(302) 658-7575
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THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
IN CONNECTION WITH THE CURRENT PROSPECTUS OF THE PARTICULAR FUND DATED APRIL 2,
1998. INVESTORS SHOULD RETAIN THIS STATEMENT OF ADDITIONAL INFORMATION FOR
FUTURE REFERENCE.
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TABLE OF CONTENTS
PAGE
Kalmar Pooled Investment Trust..............................................1
Investments.................................................................1
Investment Restrictions.....................................................6
Portfolio Brokerage and Turnover............................................9
Management..................................................................9
Purchases..................................................................14
Redemptions................................................................16
Taxation...................................................................16
General Information........................................................18
Performance................................................................18
Financial Statements.......................................................20
Appendix..................................................................A-1
<PAGE>
KALMAR POOLED INVESTMENT TRUST
Kalmar Pooled Investment Trust (the "Trust"), Barley Mill House, 3701 Kennett
Pike, Greenville, Delaware 19807, is an open-end, diversified, management
investment company which 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 Funds' investment adviser, Kalmar
Investment Advisers (the "Adviser") in managing each Fund, the securities in
which the Funds will invest, and the policies they will follow, and should be
read in conjunction with the "Investment Objectives and Policies" section of
each Fund's prospectus.
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
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<PAGE>
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.
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 maintain in segregated accounts with its
Custodian (as hereinafter defined) cash or liquid 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 maintain in segregated accounts cash or liquid securities equal to the
difference between (a) the market value of the securities sold short and (b) any
cash or securities required to be deposited as collateral with the broker in
connection with the short sale (but not including the proceeds of
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<PAGE>
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. 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
connection with short sales.
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 tends 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.
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<PAGE>
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 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.
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 "Investment Company 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
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<PAGE>
"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.
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
reserve of cash or liquid securities 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.
ILLIQUID AND RESTRICTED SECURITIES.
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<PAGE>
Each Fund may invest up to 15% of its net assets in illiquid or restricted
securities. Certain restricted securities eligible for resale to qualified
institutional purchasers pursuant to Rule 144A under the Securities Act of 1933
or commercial paper issued pursuant to Section 4(2) of the Securities Act of
1933 may be treated as liquid securities for purposes of the 15% limitation,
under guidelines adopted by the Board of Trustees of the Trust. While
maintaining oversight and review, the Board of Trustees has delegated to the
Adviser the day-to-day functions of determining whether or not individual
securities are liquid for purposes of the Fund's 15% limitation on illiquid
investments (or for other purposes, such as the maintenance of liquid collateral
for securities positions). 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 or commercial paper issued pursuant to
section 4(2); (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 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 15% 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 securities.
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 Fund's outstanding voting
securities. As provided in the Investment Company 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 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 instrumentalities, 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.
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<PAGE>
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; investments in certificates of deposit and
bankers' acceptances will not be considered investments in the
banking industry; utility companies will be divided according to
their services; financial service companies will be classified
according to the end users of their services; and asset-backed
securities will be classified according to the underlying assets
securing such securities.
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,
sell securities short 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 debt instruments 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.
9. Borrow amounts in excess of 33 1/3% of its total assets, taken
at market value, and then only from banks (i) as a temporary
measure for extraordinary or emergency purposes such as the
redemption of Fund shares or (ii) in connection with reverse
repurchase agreements. 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.
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<PAGE>
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 or to
collateralize securities trading practices described in the
prospectuses and Statement of Additional Information for the
Funds.
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 Investment Company 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. 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.
5. 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; 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
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<PAGE>
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. For the
period from April 11, 1997 (commencement of operations) through December 31,
1997, the Small Cap Fund paid $98,814 in brokerage commisions.
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). The portfolio turnover rate for the Small Cap Fund
for the period from April 11, 1997 (commencement of operations) through December
31, 1997 was 34.39%.
MANAGEMENT
INVESTMENT ADVISORY AGREEMENT
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. During the Small Cap
Fund's initial fiscal year, the Adviser had voluntarily agreed to limit its
advisory fees or to assume certain expenses of the Fund so that the Fund's total
operating costs would not exceed 1.25% on an annualized basis. For the period
from April 11, 1997 (commencement of operations) through December 31, 1997, the
Small Cap Fund paid Advisory fees of $1,175,911, and no Advisory fees were
waived.
The Advisory Agreements are each dated January 31, 1997, 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 of the respective Fund,
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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.
General expenses of the Trust (such as costs of maintaining corporate existence,
legal fees, insurances, etc.) will be allocated between the Funds in proportion
to their relative net assets. Expenses which relate exclusively to a particular
Fund, such as certain registration or notice filing fees, brokerage commissions
and other portfolio expenses, will be borne directly by that Fund.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Trust and their principal occupations
for the past five years are listed below:
<TABLE>
<CAPTION>
POSITION AND OFFICE PRINCIPAL OCCUPATION
NAME AND ADDRESS AGE WITH THE TRUST DURING THE PAST FIVE YEARS
- ---------------- --- -------------------- --------------------------
<S> <C> <C> <C>
Ford B. Draper, Jr.* 54 Chairman, President and Founder, President, Director, and Chief
Barley Mill House Treasurer Investment Officer of Kalmar
3701 Kennett Pike Investments since 1982; President,
Greenville, DE 19807 Kalmar Investment Advisers since
inception.
Wendell Fenton* 57 Trustee President of the law firm of Richards,
One Rodney Square Layton & Finger (joined 1971).
Wilmington, DE 19801
John J. Quindlen 64 Trustee Trustee of each investment company of
1250 W. Southwinds the Rodney Square Funds; Senior Vice
Boulevard (# 313) President and Chief Financial Officer
Vero Beach, FL 32963 of E.I. Dupont de Nemours & Co. from
1954 through 1993 (retired).
David D. Wakefield 66 Trustee Retired Private Investor, Executive
P.O. Box 601 Secretary, Longwood Foundation and
Mendenhall, PA 19357 Welfare Foundation, from 1992 to 1997;
Chairman and President, J.P. Morgan
Delaware from 1989 to 1992.
David M. Reese, Jr.* 61 Trustee Semi-retired; previously, portfolio
Barley Mill House manager, research analyst for Kalmar
3701 Kennett Pike Investments from 1982 through March,
Greenville, DE 19807 1996.
</TABLE>
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<TABLE>
<CAPTION>
POSITION AND OFFICE PRINCIPAL OCCUPATION
NAME AND ADDRESS AGE WITH THE TRUST DURING THE PAST FIVE YEARS
- ---------------- --- -------------------- --------------------------
<S> <C> <C> <C>
Marjorie L. McMenamin 48 Secretary; Compliance Administration Director, Kalmar
Barley Mill House Officer Investments since 1992 and Kalmar
3701 Kennett Pike Investment Advisers since inception.
Greenville, DE 19807
</TABLE>
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:
<TABLE>
<CAPTION>
ESTIMATED PENSION OR TOTAL
AGGREGATE RETIREMENT COMPENSATION
COMPENSATION BENEFITS ESTIMATED FROM TRUST AND
FROM TRUST ACCRUED AS PART ANNUAL BENEFITS FUND
NAME AND (CURRENT FISCAL OF TRUST UPON COMPLEX PAID
POSITION YEAR)1 EXPENSES RETIREMENT TO TRUSTEES
-------- --------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Ford B. Draper, Jr. $0 N/A N/A $0
Wendell Fenton $5,000 N/A N/A $5,000
John J. Quindlen $5,250 N/A N/A $5,2500
David M. Reese, Jr. $0 N/A N/A $0
David D. Wakefield $5,250 N/A N/A $5,250
<FN>
1 THE TRUSTEES WHO ARE BOTH "INTERESTED PERSONS" OF THE TRUST AS DEFINED
IN THE INVESTMENT COMPANY ACT AND AFFILIATES OF THE ADVISER RECEIVE NO
COMPENSATION FROM THE TRUST. FOR THEIR SERVICE AS TRUSTEES, THE OTHER
TRUSTEES RECEIVE $3,000 IN ANNUAL FEES PLUS $500 PER TRUST MEETING
ATTENDED, IN ADDITION TO REIMBURSEMENT FOR OUT-OF-POCKET EXPENSES IN
CONNECTION WITH TRAVEL AND ATTENDANCE AT BOARD MEETINGS. MEMBERS OF THE
AUDIT COMMITTEE ARE PAID $250 PER AUDIT COMMITTEE MEETING ATTENDED. THE
TRUST HAS NOT COMPLETED A FULL FISCAL YEAR OF OPERATIONS AND, AS OF THE
DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION, ONE MEETING OF THE
BOARD OF TRUSTEES WAS HELD IN THE CURRENT FISCAL YEAR 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.
</FN>
</TABLE>
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<PAGE>
March 16, 1998, the Trustees and officers of the Trust, as a group, owned
beneficially, or may be deemed to have owned beneficially, less than 1% of the
outstanding shares of the Small Cap Fund.
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.
PFPC Inc. ("PFPC"), located at 400 Bellevue Avenue, Wilmington, DE 19809,
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) prepares 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 checks 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 PFPC to perform its duties under
the Agreement.
The Administration Agreement became effective as of January 31, 1997 between the
Trust and Rodney Square Management Corporation ("Rodney Square") 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 was assigned, with the
approval of the Trust, from Rodney Square to PFPC effective January 19, 1998.
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 PFPC; or (ii) by PFPC on six (6) months' written notice to the Trust. The
Administration Agreement may also be terminable by the Trust or PFPC for cause.
As compensation for services performed under the Administration Agreement, PFPC
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 fee earned by
-14-
<PAGE>
Rodney Square for the period ended December 31, 1997 amounted to $135,814, of
which $54,651 was waived.
DISTRIBUTOR
Provident Distributors, Inc. ("PDI") 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, PDI agrees to use all
reasonable efforts as agent to secure purchasers for the various series of the
Trust. PDI 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.
The Distribution Agreement provides that PDI, 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 notice filing fees incurred
in connection with the qualification of its shares under state securities laws.
The Distribution Agreement became effective as of February 17, 1998, and will
remain in effect for a period of one year. 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 PDI; or (ii) by PDI on sixty (60) days' written notice to the
Fund.
PURCHASES
A description of the manner in which the Funds' shares are offered to investors
is set forth in each Fund's prospectus.
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
-15-
<PAGE>
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.
403(B)(7) RETIREMENT PLANS
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.
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) distribute at least 90% of its dividends,
interest and certain other taxable income each year; and (iii) 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
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<PAGE>
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.
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 year 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.
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<PAGE>
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.
PRINCIPAL HOLDERS OF SECURITIES
As of March 15, 1998, the following persons or organizations held of record 5%
or more of the shares of the Fund:
The Trustees of Boston College 13.28%
Attn: Paul Haran
140 Commonwealth Avenue, More 310
Chestnut Hill, MA 02167
SK LLC 5.27%
380 E. Park Center Blvd.
Suite 100
Boise, ID 83706
Frechette Fund Inc. 5.10%
c/o Choate Hall & Stewart
Attn: R.N. Hoehn
53 State Street
Boston, MA 02109
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
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<PAGE>
and Exchange Commission. An explanation of those and other methods used by a
Fund to compute or express performance follows.
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:
Yield = 2 [(a-b +1)6 - 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:
P(1+T)n = ERV
where:
P = a hypothetical initial payment of $1,000.
T = average annual total return.
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<PAGE>
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).
The total return for the Small Cap Fund for the period April 11, 1997
(commencement of operations) through December 31, 1997 was 46.35%.
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.
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 or information
services. Advertisements, sales literature and shareholder communications may
also compare yield or total return to yield or total return of other
investments, indices, and averages. The following publications, indices, and
averages may be used:
Barron's No Load Fund Investor
Business Week New York Stock Exchange Composite
CDA Investment Technologies, Inc. Personal Investor
Changing Times, The Kiplinger Magazine Personal Investing News
Consumer Digest Russell Indices
Consumer Price Index S&P 500 Composite Stock Price Index
Dow Jones Composite Average S&P SmallCap 600 Index
Financial World S&P MidCap 400 Index
Forbes S&P/Barra Growth & Value Indexes
Fortune Success
Investment Company Data, Inc. The New York Times
Investor's Daily U.S. News and World Report
Lipper Mutual Fund Performance Analysis USA Today
Lipper Mutual Fund Indices ValueLine Index
Money Wall Street Journal
Morningstar, Inc. Wiesenberger Investment Companies
Mutual Fund Values Services
Nasdaq Indexes Wilshire Indices
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<PAGE>
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.
FINANCIAL STATEMENTS
The audited financial statements and the financial highlights for the Fund for
the period from April 11, 1997 (commencement of operations) through December 31,
1997, as set forth in the Fund's annual report to shareholders, and the report
thereon of Coopers & Lybrand L.L.P., the Fund's independent auditors, also
appearing in the Fund's annual report, are incorporated herein by reference.
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<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
A-1
<PAGE>
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.
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.
A-2
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INVESTMENT ADVISER
Kalmar Investment Advisers
Barley Mill House
3701 Kennett Pike
Greenville, DE 19807
DISTRIBUTOR
Provident Distributors, Inc.
Four Falls Corporate Center, 6th Floor
West Conshohocken, PA 19428-2961
SHAREHOLDER SERVICES
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
CUSTODIAN
PNC Bank, N.A.
1600 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Pepper Hamilton LLP
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103-2799
AUDITORS
Coopers & Lybrand, L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
KL05
<PAGE>
KALMAR POOLED INVESTMENT TRUST
FORM N-1A
PART C - OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements:
Included in Part A of this Registration Statement:
Financial Highlights for the period April 11, 1997
(Commencement of Operations) to December 31, 1997.
Incorporated by reference into Part B of this Registration
Statement from Registrant's Annual Report to shareholders
filed via EDGAR on February 18, 1998:
Financial Statements, for the period April 11, 1997
(Commencement of Operations) to December 31, 1997.
Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Report of Independent Accountants
(b) Exhibits:
(1) Agreement and Declaration of Trust*
(2) Bylaws of the Registrant*
(3) Not Applicable
(4) Not Applicable
(5) Investment Advisory Agreement*
(6) Distribution Agreements:
(a) Distribution Agreement between the Registrant and
Provident Distributors, Inc. on behalf of the Small Cap
and Micro Cap Funds.
(b) Not Applicable.
(7) Not Applicable
(8) Custodian Agreement*
(a) Assignment of Custodian Agreement
(9) Other Material Contracts
(a) Accounting Services Agreement between the Registrant
and Rodney Square Management Corporation.**
(a)(1) Assignment of Accounting Services Agreement
1
<PAGE>
ITEM 24 (CONTINUED)
(9) Other Material Contracts (continued)
(b) Administration Agreement between the Registrant and
Rodney Square Management Corporation.**
(b)(1) Assignment of Administration Agreement
(c) Transfer Agency Agreement between the Registrant and
Rodney Square Management Corporation.**
(c)(1) Assignment of Transfer Agency Agreement
(10) Not Applicable
(11) Consent of Independent Auditors
(12) Not Applicable
(13) Investment Letter*
(14) Not Applicable
(15) Not Applicable
(16) Schedule of Computation for Performance Data
(17) Financial Data Schedule***
(18) Not Applicable
*PREVIOUSLY FILED WITH THE SEC ON FORM N-1A ON OCTOBER 7, 1996 AND
INCORPORATED HEREIN BY REFERENCE.
**PREVIOUSLY FILED WITH THE SEC ON FORM N-1A ON OCTOBER 20, 1997 AND
INCORPORATED HEREIN BY REFERENCE.
***PREVIOUSLY FILED WITH THE SEC WITH THE REGISTRANT'S FORM N-SAR ON
FEBRUARY 24, 1998 AND INCORPORATED HEREIN BY REFERENCE.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Registrant is not controlled by or under common control with
any person.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
Number of Record Holders
TITLE OF SERIES AS OF MARCH 16, 1998
Shares of Beneficial Interests of:
Kalmar "Growth-with-Value" Small Cap Portfolio 221
Kalmar "Growth-with-Value" Micro Cap Portfolio 1
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.
2
<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 case,
indemnification with respect to any proceeding by or in the
right of the Trust or in which liability shall
3
<PAGE>
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,
Barley Mill House, 3701 Kennett Pike, Greenville, Delaware 19807 (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. 801-16947, which is on file with
the U.S. Securities and Exchange Commission under the Investment
Advisers Act of 1940. Such Form ADV is incorporated by reference
herein.
ITEM 29. PRINCIPAL UNDERWRITER.
(a) Investment Companies for which Provident Distributors,
Inc. also acts as principal underwriter:
4
<PAGE>
Pacific Horizon funds, Inc.
Time Horizon Funds
World Horizon Funds, Inc.
Pacific Innovations Trust
International Dollar Reserve Fund I, Ltd.
Municipal Fund for Temporary Investment
Municipal Fund for New York Investors, Inc.
Municipal Fund for California Investors, Inc.
Temporary Investment Fund, Inc.
Trust for Federal Secruities
Columbia Common Stock Fund, Inc.
Columbia Growth Fund, Inc.
Columbia International Stock Fund, Inc.
Columbia Special Fund, Inc.
Columbia Small Cap Fund, Inc.
Columbia Real Estate Equity Fund, Inc.
Columbia Balanced Fund, Inc.
Columbia Daily Income Company
Columbia U.S. Government Securities Fund. Inc.
Columbia Fixed Income Securities Fund, Inc.
Columbia Municipal Bond Gund, Inc.
Columbia High Yield Fund, Inc.
The BlackRock Funds, Inc. (Distributed by BlackRock
Distributors, Inc., a wholly owned subsidiary of
Provident Distributors, Inc.)
Kiewit Mutual Fund
Brazos Mutual Funds
(b) Reference is made to the Caption "Distributor" in the
Prospectuses constituting Part A of this Registration
Statement. The information required by this Item 29 with
respect to each director of the underwriter is incorporated by
reference to the Form BD filed by the Underwriter with the
Commission pursuant to the Securities Exchange Act of 1934, as
amended under the File Number indicated:
Provident Distributors, Inc. SEC File No. 8-46564
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
Barley Mill House, 3701 Kennett Pike, Greenville, DE 19807, except for
those maintained by the Registrant's administrator, transfer agent,
dividend paying agent and accounting services agent, PFPC Inc., 103
Bellevue Parkway, Wilmington, DE 19809 and the Registrant's Custodian
Bank, PNC Bank, N.A.
5
<PAGE>
ITEM 31. MANAGEMENT SERVICES.
There are no management related service contracts not
discussed in Part A or Part B.
ITEM 32. UNDERTAKINGS.
(a) Inapplicable.
(b) Inapplicable
(c) The Registrant hereby undertakes to furnish each
person to whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders upon
request and without charge.
(d) 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.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, Kalmar Pooled Investment Trust,
certifies that this Post-Effective Amendment No. 2 to its Registration Statement
meets all of the requirements for effectiveness pursuant to Rule 485(b) under
the Securities Act of 1933 and the Registrant further certifies that it has duly
caused this Post-Effective Amendment No. 2 to its Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized, in the City of
Greenville, and State of Delaware on the 2nd day of April, 1998.
KALMAR POOLED INVESTMENT TRUST
------------------------------
Registrant
By: /S/ FORD B. DRAPER, JR.
-----------------------
Ford B. Draper, Jr.
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 2 to the Registration Statement has been signed
below by the following persons in the capacities and on the date indicated.
/S/ FORD B. DRAPER, JR. Trustee, April 2, 1998
- ---------------------------
Ford B. Draper, Jr. Chief Executive and
Financial Officer
/S/ WENDELL FENTON* Trustee April 2, 1998
- ---------------------------
Wendell Fenton
/S/ JOHN J. QUINDLEN* Trustee April 2, 1998
- ---------------------------
John J. Quindlen
/S/ DAVID M. REESE, JR.* Trustee April 2, 1998
- ---------------------------
David M. Reese, Jr.
/S/ DAVID D. WAKEFIELD* Trustee April 2, 1998
- ---------------------------
David D. Wakefield
*By: /S/ FORD B. DRAPER, JR.
-----------------------
Ford B. Draper, Jr., Attorney-in-Fact
(Pursuant to Power of Attorney
previously filed)
<PAGE>
EXHIBIT INDEX
Item 24(b) Exhibits
6a. Distribution Agreement between the Registrant and
Provident Distributors, Inc.
8. Assignment of Custodian Agreement
9a. Assignment of Accounting Services Agreement
9b. Assignment of Administration Agreement
9c. Assignment of Transfer Agency Agreement
11. Consent of Independent Auditors
16. Schedule of Computation for Performance Data
17. Financial Data Schedule
Exhibit 6a
DISTRIBUTION AGREEMENT
BETWEEN
KALMAR POOLED INVESTMENT TRUST
AND
PROVIDENT DISTRIBUTORS, INC.
THIS DISTRIBUTION AGREEMENT is made as of the 17th day of
February, 1998, between Kalmar Pooled Investment Trust, a Delaware business
trust (the "Trust"), having its principal place of business in Greenville,
Delaware, and Provident Distributors, Inc., a corporation organized under the
laws of the State of Delaware (the "Distributor"), having its principal place of
business in West Conshohocken, Pennsylvania.
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
("Series") each of which may offer one or more sub-series (or classes) of
shares;
WHEREAS, each share of a Series represents an individual
interest in the assets, subject to the liabilities, allocated to that Series and
each Series has a separate investment objective and investment policies;
WHEREAS, at the present time, the Trust has established two
Series, each with a single class 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"), as such Schedule shall be amended from time to
time 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 classes or 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) shall sell
such Shares
<PAGE>
only in compliance with applicable law, the terms set forth in the
Trust's currently effective registration statement, in accordance with
any plan of distribution adopted by the Trust and in compliance with
any limitations which may be imposed by the Trustees of the Trust.
2. SELLING AGREEMENTS. Subject to the supervisory authority of the
Trustees of, and on such terms as are authorized by, the Trust, the
Distributor may enter into agreements with financial or investment
consultants, brokers, dealers or other ("Selling Dealers") for the
provision of distribution services related to the sale of Shares as
well as other shareholder services as agreed by the affected parties.
The Distributor will only act as principal in entering into such
agreement.
3. 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
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; (b) the payment or reinvestment of
dividends or distributions; or (c) any offer of exchange permitted by
Section 11 of the 1940 Act.
4. 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.
5. PUBLIC OFFERING PRICE. Except as otherwise noted in the Trust's current
prospectuses (the "Prospectus") or Statements of Additional Information
(the "SAI") with respect to each Series or class, all Shares sold to
investors will be sold at the public offering price. The public
offering price for all accepted subscriptions will be the net asset
value per share, plus any applicable sales charge on such shares,
determined in the manner described in the Trust's current Prospectus or
SAI with respect to the applicable Series or class.
6. 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.
7. SOLICITATION OF SALES. In consideration of these rights granted to the
Distributor, the
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<PAGE>
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.
8. 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 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. The 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. The 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.
9. 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.
10. EXPENSES, COMPENSATION AND REIMBURSEMENT
a. The Trust shall pay all fees and expenses:
i. in connection with the preparation, typesetting 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 filings required in connection
with the Sale of Shares for sale in the various
states in which the Board of Trustees (the
"Trustees") of the Trust shall determine it advisable
to offer such Shares for sale (including registering
the Trust or Series as a broker or dealer or any
officer of the Trust as agents or salesperson in any
state);
iii. of preparing, typesetting, printing and mailing any
report or other communication to shareholders of the
Trust in their capacity as such; and
iv. of preparing, typesetting, printing and mailing
Prospectuses, SAIs, and any supplements thereto, sent
to existing shareholders.
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<PAGE>
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 will notify the
Trust of any conditions that develop that would adversely
affect the performance of the dealer's obligation under the
selling agreement.
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 incurred pursuant to this Agreement.
11. 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 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
-4-
<PAGE>
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.
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 costs of investing 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
this 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
-5-
<PAGE>
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.
12. 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 its continuance
after the one (1) year period is approved at least annually by either
(i) a majority of the Trustees of the Trust or (ii) a majority of the
outstanding voting securities of the Trust, provided that in either
event its continuance also is approved by 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
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<PAGE>
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.
13. 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.
14. 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.
15. 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.
16. SHAREHOLDER LIABILITY. The Distributor 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, 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.
17. 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.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first written above.
KALMAR POOLED INVESTMENT TRUST
BY: /S/ FORD B. DRAPER, JR.
____________________________
Ford B. Draper, Jr., President
PROVIDENT DISTRIBUTORS, INC.
BY: /S/ MONROE HAEGELE
____________________________
Acknowledgment as to reimbursement with
respect to marketing expenses of Provident
Distributors, Inc., as Distributor
Kalmar Investment Advisers, as Investment Adviser
By: /S/ FORD B. DRAPER, JR.
______________________________
Ford B. Draper, Jr., President
Date: 2/17/98
______________________________
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<PAGE>
APPENDIX A
SCHEDULE A
KALMAR POOLED INVESTMENT TRUST
FUND LISTING
Kalmar "Growth-with-Value" Small Cap Fund
Kalmar "Growth-with-Value" Micro Cap Fund
Exhibit 8
ASSIGNMENT AGREEMENT
This Agreement is entered into as of January 19, 1998 by and among
Kalmar Pooled Investment Trust (the "Fund"), Wilmington Trust Company ("WTC")
and PNC Bank, N.A. ("PNC").
WHEREAS, the Fund and WTC entered into a Custody Agreement (the "Fund
Agreement") as of January 31, 1997 pursuant to which WTC provides certain
services to the Fund as described therein;
WHEREAS, WTC wishes to assign its right, title and interest in and
under the Fund Agreement and its duties and obligations under the Fund Agreement
to PNC, and such assignment is acceptable to the Fund;
NOW THEREFORE, the parties hereto, in consideration of the premises and
agreements contained herein, and intending to be legally bound hereby, agree as
follows:
1. ASSIGNMENT. WTC hereby assigns all of its right, title and interest
in and under the Fund Agreement, and delegates its duties and obligations under
the Fund Agreement arising from the date hereof, to PNC. PNC hereby accepts such
assignment and delegation.
2. ACCEPTANCE BY FUND. The Fund hereby accepts and agrees to the
assignment described in Section 1 hereof.
3. FUND AGREEMENT. The Fund Agreement shall remain unchanged except as
is consistent with the provisions hereof.
4. TERMINATION. The Fund Agreement may be terminated without penalty by
the Fund upon sixty (60) days' written notice given to PNC, or by PNC upon sixty
(60) days' written notice given to the Fund.
5. GOVERNING LAW. This Agreement shall be governed by Delaware law,
without regard to principles of conflicts of law.
6. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
7. EXECUTION. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The facsimile signature
of any party to this Agreement shall constitute the valid and binding execution
hereof by such party.
<PAGE>
8. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as may be necessary to effectuate the purposes
hereof.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed as of the day and year first above written.
KALMAR POOLED INVESTMENT WILMINGTON TRUST COMPANY
TRUST
By: /S/ FORD B. DRAPER, JR. By: /S/ ROBERT C. HANCOCK
Title: PRESIDENT Title: VICE PRESIDENT
PNC BANK, N.A.
By: /S/ JOSEPH GRAMLICH
Title: SENIOR VICE PRESIDENT
Exhibit 9a
ASSIGNMENT AGREEMENT
This Agreement is entered into as of January 19, 1998 by and among
Kalmar Pooled Investment Trust (the "Fund"), Rodney Square Management
Corporation ("RSMC") and PFPC Inc. ("PFPC").
WHEREAS, the Fund and RSMC entered into an Accounting Services
Agreement (the "Fund Agreement") as of January 31, 1997, pursuant to which RSMC
provides certain services to the Fund as described therein;
WHEREAS, RSMC and PFPC have reached an agreement pursuant to which RSMC
will sell its mutual fund servicing business to PFPC;
WHEREAS, RSMC wishes to assign its right, title and interest in and
under the Fund Agreement and its duties and obligations under the Fund Agreement
to PFPC, and such assignment is acceptable to the Fund;
NOW THEREFORE, the parties hereto, in consideration of the premises and
agreements contained herein, and intending to be legally bound hereby, agree as
follows:
1. ASSIGNMENT. RSMC hereby assigns all of its right, title and interest
in and under the Fund Agreement, and delegates its duties and obligations under
the Fund Agreement arising from the date hereof, to PFPC. PFPC hereby accepts
such assignment and delegation.
2. ACCEPTANCE BY FUND. The Fund hereby accepts and agrees to the
assignment described in Section 1 hereof.
3. FUND AGREEMENT. The Fund Agreement shall remain unchanged except as
is consistent with the provisions hereof.
4. TERMINATION. The Fund Agreement may be terminated without penalty by
the Fund upon sixty (60) days' written notice given to PFPC, or by PFPC upon
sixty (60) days' written notice given to the Fund.
5. GOVERNING LAW. This Agreement shall be governed by Delaware law,
without regard to principles of conflicts of law.
6. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
7. EXECUTION. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same
<PAGE>
instrument. The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such party.
8. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as may be necessary to effectuate the purposes
hereof.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed as of the day and year first above written.
KALMAR POOLED INVESTMENT RODNEY SQUARE MANAGEMENT
TRUST CORPORATION
By: /S/ FORD B. DRAPER, JR. By: /S/ ROBERT C. HANCOCK
Title: PRESIDENT Title: VICE PRESIDENT
PFPC INC.
By: /S/ JOSEPH GRAMLICH
Title: SENIOR VICE PRESIDENT
Exhibit 9b
ASSIGNMENT AGREEMENT
This Agreement is entered into as of January 19, 1998 by and among
Kalmar Pooled Investment Trust (the "Fund"), Rodney Square Management
Corporation ("RSMC") and PFPC Inc. ("PFPC").
WHEREAS, the Fund and RSMC entered into an Administration Agreement
(the "Fund Agreement") as of January 31, 1997, pursuant to which RSMC provides
certain services to the Fund as described therein;
WHEREAS, RSMC and PFPC have reached an agreement pursuant to which RSMC
will sell its mutual fund servicing business to PFPC;
WHEREAS, RSMC wishes to assign its right, title and interest in and
under the Fund Agreement and its duties and obligations under the Fund Agreement
to PFPC, and such assignment is acceptable to the Fund;
NOW THEREFORE, the parties hereto, in consideration of the premises and
agreements contained herein, and intending to be legally bound hereby, agree as
follows:
1. ASSIGNMENT. RSMC hereby assigns all of its right, title and interest
in and under the Fund Agreement, and delegates its duties and obligations under
the Fund Agreement arising from the date hereof, to PFPC. PFPC hereby accepts
such assignment and delegation.
2. ACCEPTANCE BY FUND. The Fund hereby accepts and agrees to the
assignment described in Section 1 hereof.
3. FUND AGREEMENT. The Fund Agreement shall remain unchanged except as
is consistent with the provisions hereof.
4. TERMINATION. The Fund Agreement may be terminated without penalty by
the Fund upon sixty (60) days' written notice given to PFPC, or by PFPC upon
sixty (60) days' written notice given to the Fund.
5. GOVERNING LAW. This Agreement shall be governed by Delaware law,
without regard to principles of conflicts of law.
6. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
<PAGE>
7. EXECUTION. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The facsimile signature
of any party to this Agreement shall constitute the valid and binding execution
hereof by such party.
8. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as may be necessary to effectuate the purposes
hereof.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed as of the day and year first above written.
KALMAR POOLED INVESTMENT RODNEY SQUARE MANAGEMENT
TRUST CORPORATION
By: /S/ FORD B. DRAPER, JR. By: /S/ ROBERT C. HANCOCK
Title: PRESIDENT Title: VICE PRESIDENT
PFPC INC.
By: /S/ JOSEPH GRAMLICH
Title: SENIOR VICE PRESIDENT
Exhibit 9c
ASSIGNMENT AGREEMENT
This Agreement is entered into as of January 19, 1998 by and among
Kalmar Pooled Investment Trust (the "Fund"), Rodney Square Management
Corporation ("RSMC") and PFPC Inc. ("PFPC").
WHEREAS, the Fund and RSMC entered into a Transfer Agency Agreement
(the "Fund Agreement") as of January 31, 1997, pursuant to which RSMC provides
certain services to the Fund as described therein;
WHEREAS, RSMC and PFPC have reached an agreement pursuant to which RSMC
will sell its mutual fund servicing business to PFPC;
WHEREAS, RSMC wishes to assign its right, title and interest in and
under the Fund Agreement and its duties and obligations under the Fund Agreement
to PFPC, and such assignment is acceptable to the Fund;
NOW THEREFORE, the parties hereto, in consideration of the premises and
agreements contained herein, and intending to be legally bound hereby, agree as
follows:
1. ASSIGNMENT. RSMC hereby assigns all of its right, title and interest
in and under the Fund Agreement, and delegates its duties and obligations under
the Fund Agreement arising from the date hereof, to PFPC. PFPC hereby accepts
such assignment and delegation.
2. ACCEPTANCE BY FUND. The Fund hereby accepts and agrees to the
assignment described in Section 1 hereof.
3. FUND AGREEMENT. The Fund Agreement shall remain unchanged except as
is consistent with the provisions hereof.
4. TERMINATION. The Fund Agreement may be terminated without penalty by
the Fund upon sixty days' written notice given to PFPC, or by PFPC upon sixty
(60) days' written notice given to the Fund.
5. GOVERNING LAW. This Agreement shall be governed by Delaware law,
without regard to principles of conflicts of law.
6. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
<PAGE>
7. EXECUTION. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The facsimile signature
of any party to this Agreement shall constitute the valid and binding execution
hereof by such party.
8. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as may be necessary to effectuate the purposes
hereof.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed as of the day and year first above written.
KALMAR POOLED INVESTMENT RODNEY SQUARE MANAGEMENT
TRUST CORPORATION
By: /S/ FORD B. DRAPER, JR. By: /S/ ROBERT C. HANCOCK
Title: PRESIDENT Title: VICE PRESIDENT
PFPC INC.
By: /S/ JOSEPH GRAMLICH
Title: SENIOR VICE PRESIDENT
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form N-1A (file No. 333-13593 and 811-7853) of our report dated January 23,
1998, on our audit of the financial statements and financial highlights of
Kalmar "Growth-with-Value" Small Cap Fund, a series of Kalmar Pooled Investment
Trust, as of December 31, 1997 and for the period from April 11, 1997
(commencement of operations) through December 31, 1997, which report is
incorporated by reference into the Registration Statement. We also consent to
the reference to our Firm under the headings Audits and Reports and Financial
Statements in the Statement of Additional Information.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
March 31, 1998
EXHIBIT 16
KALMAR POOLED INVESTMENT TRUST - KALMAR "GROWTH-WITH-VALUE" SMALL CAP FUND
INCEPTION
---------
# YEAR IN PERIOD N/A
AVERAGE ANNUAL TOTAL RETURN N/A
CUMULATIVE TOTAL RETURN 46.35%
CUMULATIVE TOTAL RETURN
(ERV/P) -1=T
(1,463.46/1,000 ) -1 = T
0.4635 = T
46.35% = T
