Registration Nos. 811-7921
333-16033
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
Pre-Effective Amendment No.
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Post-Effective Amendment No. 3
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/
Amendment No. 5
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(Check appropriate box or boxes)
THE BJURMAN FUNDS
(Exact Name of Registrant as Specified in Charter)
10100 Santa Monica Boulevard, Suite 1200
Los Angeles, California 90067-4103
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (310) 553-6577
G. Andrew Bjurman, Co-President
O. Thomas Barry, III, Co-President
The Bjurman Funds
10100 Santa Monica Boulevard, Suite 1200
Los Angeles, California 90067-4103
(Name and Address of Agent for Service)
Copies to:
Tina D. Hosking
Countrywide Fund Services, Inc.
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Dhiya El-Saden
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071-3197
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to Rule 485(b)
/ / on (date) pursuant to Rule 485(b)
/ / 75 days after filing pursuant to Rule 485(a)
/X/ on August 1, 1999 pursuant to Rule 485(a)
The Registrant has registered an indefinite number of shares under the
Securities Act of 1933, as amended, pursuant to Rule 24f-2 under the Investment
Company Act of 1940, as amended.
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THE BJURMAN FUNDS
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(A)
UNDER THE SECURITIES ACT OF 1933
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PART A
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Item No. Registration Statement Caption Caption in Prospectus
- -------- ------------------------------ ---------------------
1. Front and Back Cover Pages Cover Pages
2. Risk/Return Summary: Investments, Risk/Return Summary
Risks, and Performance
3. Risk/Return Summary: Fee Table Expense Summary
4. Investment Objectives, Principal Investment Objective;
Investment Strategies, and Related Investment Policies and
Risks Strategies; Investment
Selection Process; Risk
Factors
5. Management's Discussion of Fund Inapplicable (Included
Performance in Annual Report)
6. Management, Organization, and Management of the Fund
Capital Structure
7. Shareholder Information How to Purchase Shares; How
to Redeem Shares;
Shareholder Services; Net
Asset Value; Dividends and
Taxes; Application
8. Distribution Arrangements The Distribution Plan
9. Financial Highlights Information Financial Highlights
PART B
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Caption in Statement
of Additional
Item No. Registration Statement Caption Information
- -------- ------------------------------ --------------------
10. Cover Page and Table of Contents Cover Page; Table of
Contents
11. Fund History The Trust and the Fund
(i)
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12. Description of the Fund and Its Investment Policies and
Investments and Risks Techniques; Investment
Restrictions
13. Management of the Fund Trustees and Officers
14. Control Persons and Principal Holders Principal Shareholders
of Securities
15. Investment Advisory and Other Services Investment Advisory and
Other Services
16. Brokerage Allocation and Other Portfolio Transactions and
Practices Brokerage Commissions
17. Capital Stock and Other Securities The Trust; Other Information
18. Purchase, Redemption and Pricing of Net Asset Value
Shares
19. Taxation of the Fund Taxes
20. Underwriters Investment Advisory and
Other Services
21. Calculation of Performance Data Performance Information
22. Financial Statements Financial Statements
PART C
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The information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
(ii)
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INVESTMENT ADVISER
George D. Bjurman & Associates
10100 Santa Monica Boulevard, Suite 1200
Los Angeles, California 90067-4103
(310) 553-6577
UNDERWRITER
CW Fund Distributors, Inc.
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
SHAREHOLDER SERVICES PROSPECTUS
Countrywide Fund Services, Inc.
P.O. Box 5354 [LOGO OF BJURMAN APPEARS HERE]
Cincinnati, Ohio 45201-5354
(800) 227-7264 BJURMAN MICRO-CAP
GROWTH FUND
CUSTODIAN
Firstar Bank, N.A.
425 Walnut Street AUGUST 1, 1999
Cincinnati, Ohio 45202
LEGAL COUNSEL VISIT THE BJURMAN FUNDS'
Gibson, Dunn & Crutcher LLP INTERNET WEB SITE AT:
333 South Grand Avenue WWW. BJURMANFUNDS.COM
Los Angeles, California 90071-3197
AUDITORS
Deloitte & Touche, LLP
1000 Wilshire Boulevard
Los Angeles, California 90017-2472
For Additional Information about Bjurman
Micro-Cap Growth Fund call:
(800) 227-7264
or visit The Bjurman Funds' Web Site on
the Internet at:
www.bjurmanfunds.com
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BJURMAN MICRO-CAP GROWTH FUND
10100 SANTA MONICA BOULEVARD, SUITE 1200
LOS ANGELES, CALIFORNIA 90067-4103
PROSPECTUS August 1, 1999
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Bjurman Micro-Cap Growth Fund (the "Fund") seeks capital appreciation through
investments in the common stocks of smaller companies with market
capitalizations typically between $30 million and $300 million at the time of
investment. The Adviser's unique equity selection process seeks to identify
undervalued companies.
The Fund is a separate series of shares of The Bjurman Funds (the "Trust"), an
open-end, management investment company commonly known as a mutual fund. George
D. Bjurman & Associates (the "Adviser") serves as the investment adviser to the
Fund.
TABLE OF CONTENTS
PAGE
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Risk/Return Summary.......................................................... 3
Expense Summary.............................................................. 3
Investment Objective......................................................... 4
Investment Policies and Strategies........................................... 5
Investment Selection Process................................................. 5
Risk Factors................................................................. 5
Management of the Fund....................................................... 6
The Distribution Plan ....................................................... 7
How to Purchase Shares....................................................... 7
How to Redeem Shares......................................................... 8
Shareholder Services......................................................... 10
Net Asset Value.............................................................. 11
Dividends and Taxes.......................................................... 11
Financial Highlights......................................................... 13
These securities have not been approved or disapproved
by the Securities and Exchange Commission or any
state securities commission nor has the Securities
and Exchange Commission or any state securities
commission passed upon the accuracy or adequacy of this
prospectus. Any representation to the
contrary is a criminal offense.
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RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund seeks to achieve capital appreciation through investments in common
stocks of smaller companies with market capitalizations typically between $30
million and $300 million at the time of investment.
WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?
The Fund will invest, under normal market conditions, substantially all of its
assets in the common stocks of U.S. companies whose total market capitalization
at the time of purchase is between $30 million and $300 million ("Micro-Cap
Companies") and which, in the opinion of the Adviser, have superior earnings
growth characteristics. The Adviser screens the universe of Micro-Cap Companies,
using five models which factor in (1) earnings growth, (2) earnings strength,
(3) earnings revision, (4)price/earnings to growth ratio and (5) price to cash
flow. The Adviser then focuses on what it believes are the most promising
industries and seeks to identify profitable companies with capable management
teams, above average reinvestment rates, strong industry positions and
productive research and development efforts.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?
The Fund invests in securities that will fluctuate in value, and therefore you
should expect the Fund's net asset value per share to fluctuate. There is a risk
that you could lose money by investing in the Fund.
Investing in the common stock of smaller companies within the Fund's target
market capitalization involves special risks and considerations not typically
associated with investing in the common stock of larger companies. The
securities of smaller companies are less liquid and may experience more market
price volatility than the securities of larger companies, and are typically
subject to a greater degree of change in earnings and business prospects than
larger, more established companies.
The Fund is a diversified mutual fund. However, because the Fund's portfolio may
contain common stock of a limited number of companies, the Fund may be more
sensitive to changes in the market value of a single issue or industry in its
portfolio and therefore may present a greater risk than is usually associated
with a more widely diversified mutual fund.
PERFORMANCE SUMMARY
The bar chart and performance table shown below provided an indication of the
risks of investing in the Fund. The bar chart shows the average annual return of
the Fund for 1998, the first full calendar year the Fund was operational,
together with the best and worst quarters during the year. The accompanying
table shows the Fund's average annual total returns for the one year period
ended December 31, 1998 and since its inception and compares those returns to
those of a broad-based securities market index. Keep in mind that the Fund's
past performance does not indicate how it will perform in the future.
11.89%
[bar chart]
1998
During the period show in the bar chart, the highest return for a quarter was
25.41% during the quarter ended December 31, 1998 and the lowest return for a
quarter was -23.41% during the quarter ended September 30, 1998.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 1998
Since
Inception
One Year (March 31, 1997)
Bjurman Micro-Cap Growth Fund 11.89% 33.91%
Russell 2000 Growth Index
(dividends excluded) __.__% __.__%
The Russell 2000 Growth Index...[INSERT DESCRIPTION].
3
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EXPENSE SUMMARY
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY IF YOU BUY AND HOLD
SHARES OF THE FUND.
SHAREHOLDER FEES (fees paid directly from your investment): .............. None
(1) If you want to redeem shares by wire transfer, the Fund's transfer agent
charges a fee (currently $9.00) for each wire redemption. Purchases and
redemptions may also be made through broker-dealers and others who may
charge a commission or other transaction fee for their services.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets):
Advisory Fees (1) ..................................................... 1.00%
Distribution (12b-1) Fees ............................................. 0.25%
Other Expenses ........................................................ 3.15%
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Total Annual Fund Operating Expenses (1) ............................ 4.40%
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(1) The Adviser has, on a voluntary basis, agreed to waive all or a portion of
its fees and to reimburse certain expenses of the Fund necessary to limit
the total operating expenses to 1.80% of the Fund's average net assets. The
Adviser reserves the right to terminate this waiver or any reimbursement at
any time in the Adviser's sole discretion.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. It assumes that you invest
$10,000 in the Fund for the time periods indicated, reinvest all dividends and
distributions, and then redeem all of your shares at the end of those periods.
The Example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses remain the same. Although your costs may be higher
or lower, based on these assumptions your costs would be:
1 Year* $________
3 Years* ________
5 Years* ________
10 Years* ________
*Using actual expenses, net of all waivers, the costs of investing in the Fund
for one, three, five and ten years would have been $___, $___, $___ and $___,
respectively.
INVESTMENT OBJECTIVE
The Fund seeks capital appreciation through investments in common stocks of
companies with market capitalizations typically between $30 million and $300
million at the time of investment. The Adviser employs a growth-oriented
approach to equity investment management and seeks to outperform market averages
over a complete market cycle by investing in companies that the Adviser believes
have above average earnings prospects.
This objective is fundamental and may not be changed without a vote of the
holders of the majority of the outstanding voting securities of the Fund. The
Fund's investment policies and strategies described below are not fundamental
and may be changed without shareholder approval.
4
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INVESTMENT POLICIES AND STRATEGIES
The Fund intends to invest, under normal circumstances, substantially all of its
assets in the common stocks of U.S. companies whose total market capitalization
at the time of purchase typically is between $30 million and $300 million
("Micro-Cap Companies") and which, in the opinion of the Adviser, have superior
earnings growth characteristics. The Adviser expects that the Fund's portfolio
generally will be fully invested in common stocks of Micro-Cap Companies at all
times, with only minimal holdings in short-term investments. The Adviser may
also buy initial public offerings of unseasoned issuers if the Adviser has
determined that the company's quantitative analysis fits its criteria.
Under normal market conditions, the Fund will invest at least 80% of its total
assets in common stocks. The Fund may also invest without limitation in
short-term U.S. government obligations, money market instruments, and repurchase
agreements, pending investment, to meet anticipated redemption requests, or as a
temporary defense measure if the Adviser determines that market conditions
warrant. The Fund may also purchase bank obligations such as certificates of
deposit, bankers' acceptances, and interest-bearing savings and time deposits
issued by U.S. banks or savings institutions having total assets at the time of
purchase in excess of $1 billion. Short-term obligations will have short-term
debt ratings at the time of purchase in the top two categories by one or more
unaffiliated nationally recognized statistical rating organizations. Unrated
instruments purchased by the Fund will be of comparable quality as determined by
the Adviser.
Portfolio securities are sold whenever the Adviser believes it appropriate,
regardless of how long the securities have been held. Portfolio turnover
generally involves some expense to the Fund and a portfolio turnover in excess
of 100% is generally considered high and increases the Fund's transaction costs,
including brokerage commissions. In addition, high portfolio turnover may result
in increased short-term capital gains, which, when distributed to shareholders
are treated as ordinary income.
The Adviser believes that a micro-cap fund is best managed when the fund size is
limited; consequently, the Adviser currently intends to close the Fund to new
investors when total assets reach $250 million. The Adviser, at its sole
discretion, may reopen and close the Fund after total assets reach $250 million.
INVESTMENT SELECTION PROCESS
The Adviser's unique equity selection process seeks to identify undervalued
companies with superior earnings growth characteristics. The selection process
starts by screening a universe of approximately 1,900 Micro-Cap Companies using
five models which emphasize both growth and value attributes. The screening
factors include (1) earnings growth, (2) earnings strength, (3) earnings
revision, (4) price/earnings to growth ratio and (5) price to cash flow. The
next step is a top-down economic analysis designed to identify what the Adviser
believes are the 10 to 15 most promising industries over the next 12 to 18
months.
Stocks are ranked according to the above five criteria to identify approximately
100 to 190 Micro-Cap Companies offering the best growth prospects and selling at
attractive prices. The highest ranking stocks in the most promising industries
are then subjected to additional fundamental and technical research. Generally,
the Adviser attempts to identify profitable Micro-Cap Companies with capable
management teams, above average reinvestment rates, strong industry positions,
and productive research and development efforts. To ensure a well diversified
portfolio, commitments to any one issue or industry are generally limited to 5%
and 15%, respectively.
The Adviser's Investment Policy Committee reviews investment alternatives and
implements portfolio changes as attractive investment opportunities become
available. The closing prices of portfolio issues are reviewed daily. Any
position that has declined 15% from its cost or from its recent high is
reexamined as a potential sale candidate. Additionally, securities of Micro-Cap
Companies which in the Adviser's opinion are overvalued or have lost earnings
momentum, or are in industries no longer expected to perform well, are
continually evaluated for sale.
RISK FACTORS
GENERAL
Every investment carries some market risk. In addition to the risks described
below, an investment in the Fund is subject to the inherent risk that the market
prices of the Fund's investments will not correlate to the Adviser's estimation
of fundamental security values or market trends. Accordingly, the value of an
investment in the Fund will fluctuate over time. An investment in the Fund
should be part of an overall investment strategy. Before investing, please
consider the following special risks in determining the appropriateness of an
investment in the Fund. No assurance can be given as to the success of the
Adviser's investment strategy.
5
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MICRO-CAP COMPANIES
The Fund invests in Micro-Cap Companies, which are typically relatively new or
unseasoned companies in their early stages of development, or smaller companies
positioned in new or emerging industries where the Adviser believes that the
opportunity for rapid growth is above average. It should be noted, however, that
Micro-Cap Companies may not be well-known to the investing public, may not have
significant institutional ownership and may have cyclical, static or only
moderate growth prospects. Micro-Cap Companies may present greater opportunities
for capital appreciation but also may involve greater risk than larger, mature
issuers. Since Micro-Cap Companies are generally not as well-known to investors
and have less investor following than larger companies, they may provide
opportunities for greater gains as a result of inefficiencies in the
marketplace. Micro-Cap Companies may have relatively small revenues and limited
product lines, markets, or financial resources, and their securities may trade
less frequently and in more limited volume, than those of larger, more mature
companies. Therefore, purchases and sales of such securities may have a greater
impact on their market prices than is generally the case with the securities of
larger companies. In addition, the securities of Micro-Cap Companies are
frequently traded over-the-counter or on a regional exchange, and the frequency
and volume of their trading is generally substantially less than is typical of
larger companies. When making larger sales, the Fund may have to sell securities
at discounts from quoted prices or may have to make a series of small sales over
an extended period of time. Micro-Cap Companies may lack depth of management and
may be unable to internally generate funds necessary for growth or potential
development or to generate such funds through external financing on favorable
terms. In addition, Micro-Cap Companies may be developing or marketing new
products or services for which markets are not yet established and may never
become established. As a result, the prices of their securities may fluctuate
more than those of larger issuers. Micro-Cap Companies' stocks may exhibit
volatile characteristics and may decline in price as large company stocks rise,
or rise in price as large company stocks decline. An investment in shares of the
Fund may be more volatile than the shares of a fund that invests in larger
capitalization stocks. By maintaining a diversified portfolio, the Adviser will
attempt to reduce this volatility. The Fund is, however, designed for long-term
investors who seek capital appreciation and are comfortable with the risks
described here.
DIVERSIFICATION
Diversifying a mutual fund's portfolio can reduce the inherent risks of
investing by limiting the portion of your investment in any one issuer or
industry. Less diversified mutual funds may be more sensitive to changes in the
market value of a single issuer or industry. The Fund may present greater risk
than is usually associated with widely diversified mutual funds because it
typically invests in the securities of as few as 50-60 issuers. Therefore, the
Fund may not be appropriate as your sole investment and should not be considered
a balanced or complete investment program. The Fund cannot guarantee it will
achieve its objective.
MANAGEMENT OF THE FUND
THE INVESTMENT ADVISER
George D. Bjurman & Associates serves as the Fund's investment adviser and is an
investment adviser registered as such under the Investment Advisers Act of 1940,
as amended. The Adviser has been engaged in the investment management business
since 1970, and provides investment advisory services to individuals and
institutional clients. As of June 30, 1999, the Adviser managed approximately
$___ billion in assets. The principal business address of the Adviser is 10100
Santa Monica Boulevard, Suite 1200, Los Angeles, California 90067-4103. The
Adviser makes the investment decisions concerning the assets of the Fund and
reviews, supervises and administers the Fund's investments, subject to the
supervision of, and policies established by, the Trustees of the Fund.
For providing investment advisory services, the Fund pays the Adviser a monthly
fee which is calculated daily by applying an annual rate of 1.00% to the average
daily net assets of the Fund. From time to time, the Adviser may voluntarily
waive all or a portion of its management fee and/or absorb certain expenses of
the Fund without further notification of the commencement or termination of any
such waiver or absorption. Any such waiver or absorption will have the effect of
lowering the overall expense ratio of the Fund and increasing the Fund's overall
return to investors at the time any such amounts are waived and/or absorbed.
Currently, the Adviser has voluntarily agreed to waive all or a portion of its
fee, and/or to reimburse expenses of the Fund, to the extent necessary in order
to limit net operating expenses (including the investment advisory fee) to an
annual rate of not more than 1.80% of the Fund's average daily net assets. The
Adviser reserves the right to terminate its voluntary fee waiver and
reimbursement at any time in its sole discretion.
PORTFOLIO MANAGEMENT
Investment decisions for the Fund are made by the Investment Policy Committee of
the Adviser. Management of the Fund is done on a team basis, with O. Thomas
Barry, III, CFA, CIC, as the lead manager. Mr. Barry, Chief Investment Officer
and Senior Executive Vice President of the Adviser, joined the firm in 1978
after serving as Senior Investment Officer at Security Pacific National Bank. He
holds a BA in Economics and an MBA in Corporate Finance and Accounting and has
over 27 years of investment experience.
6
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THE UNDERWRITER
CW Fund Distributors, Inc. (the "Underwriter"), 312 Walnut Street, Cincinnati,
Ohio 45202 , serves as principal underwriter for the Funds and, as such, is the
exclusive agent for the distribution of shares of the Funds. The Underwriter is
an indirect wholly-owned subsidiary of Countrywide Credit Industries, Inc., a
New York Stock Exchange listed company principally engaged in the business of
residential mortgage lending.
THE ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTANT
Countrywide Fund Services, Inc. (the "Transfer Agent"), 312 Walnut Street,
Cincinnati, Ohio 45202, serves as administrator, accounting services agent and
transfer agent to the Fund. The Transfer Agent is a wholly-owned indirect
subsidiary of Countrywide Credit Industries, Inc.
YEAR 2000 DISCLOSURE
Like other mutual funds, financial and other business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and other service providers to the Fund do
not properly process and calculate date-related information and data from and
after January 1, 2000. The Fund and the Transfer Agent are taking steps to
address the Year 2000 issue with respect to the computer systems that they use
and to obtain reasonable assurances that comparable steps are being taken by the
Fund's other major service providers. There can be no assurance, however, that
these steps will be sufficient to avoid adverse impact on the Fund from this
problem. In addition, although the Adviser considers a company's Year 2000
compliance status in the investment decision making process, companies in which
the Fund invests may experience Year 2000 difficulties and the Fund is unable to
predict to what extent, if any the Year 2000 issue will impact the value of
those companies' securities.
THE DISTRIBUTION PLAN
The Board of Trustees of the Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the
"1940 Act"). As provided in the Plan, the Fund will reimburse the Adviser, the
Underwriter or others in an amount up to a maximum 0.25% of its average daily
net assets for expenses incurred in the sale and distribution of the Fund's
shares. Because these fees are paid out of the Fund's assets on an ongoing
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.
HOW TO PURCHASE SHARES
PURCHASES BY MAIL
You may purchase shares of the Fund initially by completing the application
accompanying this Prospectus and mailing it together with a check payable to
"Bjurman Micro-Cap Growth Fund" to Countrywide Fund Services, Inc. (the
"Transfer Agent"), P. O. Box 5354, Cincinnati, Ohio 45201-5354. If this is an
initial purchase, please send a minimum of $5,000 ($2,000 for IRA and SEP
accounts).
PURCHASES BY WIRE TRANSFER
You may also purchase shares of the Fund by bank wire. Please telephone the
Transfer Agent (Nationwide call toll-free 800-227-7264) for instructions. You
should be prepared to give the name in which the account is to be established,
the address, telephone number and taxpayer identification number for the
account, and the name of the bank which will wire the money.
Your investment will be made at the net asset value next determined after your
wire is received together with the account information indicated above. If the
Fund does not receive timely and complete account information, there may be a
delay in the investment of your money and any accrual of dividends. To make your
initial wire purchase, you must mail a completed account application to the
Transfer Agent. Your bank may impose a charge for sending your wire. There is
presently no fee for receipt of wired funds, but the Transfer Agent reserves the
right to charge shareholders for this service upon thirty days' prior notice.
7
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PURCHASES THROUGH BROKER-DEALERS
The Fund may accept telephone orders only from brokers, financial institutions
or service organizations which have been previously approved by the Fund. It is
the responsibility of these brokers, financial institutions or service
organizations to promptly forward such purchase orders and payments to the Fund.
Such brokers, financial institutions, service organizations, banks and bank
trust department, may charge the shareholder a transaction fee or other fee for
their respective services at the time of purchase. In addition, the Fund or the
Adviser may pay a service or distribution fee to such financial intermediaries.
Wire orders for shares of the Fund received by dealers prior to 4:00 p.m.
Eastern time, and received by the Transfer Agent before 5:00 p.m., Eastern time,
on the same day, are confirmed at that day's net asset value. Orders received by
dealers after 4:00 p.m., Eastern time, are confirmed at the net asset value on
the following business day. It is the dealer's obligation to place the order
with the Transfer Agent before 5:00 p.m., Eastern time.
PURCHASES WITH SECURITIES
Shares may be purchased by tendering payment in-kind in the form of marketable
securities, including but not limited to shares of common stock, provided the
acquisition of such securities is consistent with the Fund's investment
objective and is otherwise acceptable to the Adviser.
SUBSEQUENT INVESTMENTS
Once an account has been opened, subsequent purchases may be made by mail, bank
wire, automatic investing or direct deposit. The minimum for subsequent
investments is $500 for all accounts. When making additional investments by
mail, please return the bottom portion of a previous confirmation with your
investment in the envelope that is provided with each confirmation statement.
Your check should be made payable to "Bjurman Micro-Cap Growth Fund" and mailed
to Countrywide Financial Services, Inc., P.O. Box 5354, Cincinnati, Ohio
45201-5354. Orders to purchase shares are effective on the day the Transfer
Agent receives your check or money order.
GENERAL
Shares of the Fund are sold on a continuous basis at the net asset value next
determined after receipt of a purchase order by the Fund. Purchase orders
received by the Transfer Agent by 4:00 p.m., Eastern time, are confirmed at that
day's net asset value. Purchase orders received by the Transfer Agent after 4:00
p.m., Eastern time, are confirmed at the net asset value next determined on the
following business day.
All investments must be made in U.S. dollars, and, to avoid fees and delays,
checks must be drawn only on banks located in the United States. A charge
(minimum of $20) will be imposed if any check used for the purchase of shares is
returned. Investors who purchase Fund shares by check or money order may not
receive redemption proceeds until there is reasonable belief that the check or
money order cleared, which may take up to 15 calendar days after the purchase
date. The Fund will only accept a check where the Fund is the payee. The Fund
and the Transfer Agent each reserve the right to reject any purchase order in
whole or in part.
The Fund reserves the right to suspend the offering of shares of the Fund. The
Fund also reserves the right to vary the initial and subsequent investment
minimums, or to waive the minimum investment requirements for any investor. The
Fund mails you confirmations of all purchases or redemptions of Fund shares.
Certificates representing shares are not issued.
The Fund's account application contains provisions in favor of the Fund, the
Transfer Agent and certain of their affiliates, excluding such entities from
certain liabilities (including, among others, losses resulting from unauthorized
shareholder transactions) relating to the various services made available to
investors.
HOW TO REDEEM SHARES
You may redeem shares of the Fund without any redemption charge on any business
day that the Fund is open for business. Redemptions will be effected at the
current net asset value per share next determined the Transfer Agent receives a
redemption request meeting the requirements described below.
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REDEMPTION BY MAIL
You may redeem shares by submitting a written request for redemption to
Countrywide Fund Services, Inc., P.O. Box 5354, Cincinnati, Ohio 45201-5354.
The written redemption request must be in good order, which means that it must:
(1) identify the shareholder's account name and account number; (2) state the
number of shares (or dollar amount) to be redeemed and (3) be signed by each
registered owner exactly as the shares are registered. To prevent fraudulent
redemptions, for any redemption requests exceeding $10,000 or where proceeds are
to be mailed to an address other than the address of record, your signature must
be guaranteed by any eligible guarantor institution, including a commercial
bank, credit union, broker and dealers, member firm of a national securities
exchange, registered securities association, clearing agency or savings and loan
association. A credit union must be authorized to issue signature guarantees.
Notary public endorsement will not be accepted. A signature guarantee will aslo
be required if the name(s) or the address has been changed within 30 days of
your redemption request. Additional supporting documents for redemptions made by
corporations, executors, administrators, trustees or guardians and retirement
plans may be required.
REDEMPTION BY TELEPHONE
Shareholders who have so indicated on the application, or have subsequently
arranged in writing with the Transfer Agent to do so, may redeem shares by
calling the Transfer Agent (Nationwide call toll-free 800-227-7264). The
proceeds will be sent by mail to the address designated on your account or wired
directly to your existing account in any commercial bank or brokerage firm in
the United States as designated on your application. 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
with a signature guarantee must be sent to the Transfer Agent. Additional
supporting documents for redemptions made by corporations, executors,
administrators, trustees or guardians and retirement plans may be required. IRA
accounts are not redeemable by telephone.
The Fund reserves the right to refuse a wire or telephone redemption if the Fund
believes it is advisable to do so. Procedures for redeeming Fund shares by wire
or telephone may be modified or terminated at any time. The Transfer Agent
reserves the right to suspend the telephone redemption privilege with respect to
any account if the name(s) or the address on the account has been changed within
the previous 30 days.
Neither the Fund, the Transfer Agent, nor their respective affiliates will be
liable for complying with telephone instructions they reasonably believe to be
genuine or for any loss, damage, cost or expenses in acting on such telephone
instructions. The affected shareholders will bear the risk of any such loss. The
Trust or the Transfer Agent, or both, will employ reasonable procedures to
determine that telephone instructions are genuine. If the Trust and/or the
Transfer Agent do not employ such procedures, they may be liable for losses due
to unauthorized or fraudulent instructions. These procedures may include, among
others, requiring forms of personal identification prior to acting upon
telephone instructions, providing written confirmation of the transactions
and/or tape recording telephone instructions.
During periods of unusual economic or market changes, telephone redemptions may
be difficult to implement. In such event, shareholders should follow the
procedures for redemption by mail.
GENERAL REDEMPTION INFORMATION
A redemption request will not be deemed to be properly received until the
Transfer Agent receives all required documents in good order. If you have any
questions with respect to the proper form for redemption requests you should
contact the Transfer Agent (Nationwide call toll-free 800-227-7264).
Redemptions will be processed on any day the Fund is open for business.
Redemptions will be effective at the current net asset value per share next
determined after the receipt by the Transfer Agent of a redemption request
meeting the requirements described above. Payment is normally made within three
business days following receipt of these instructions. The Fund may, however,
delay mailing the proceeds of a redemption until it is reasonably satisfied that
the check used to pay for the shares has cleared, which may take up to 15 days
after the purchase date. Payment may also be made by wire directly to any bank
previously designated by an investor on his or her new account application.
There is a $9.00 charge for redemptions made by wire to domestic banks. Wires to
foreign or overseas banks may be charged at higher rates. It should also be
noted that banks may impose a fee for wire services. In addition, there may be
fees for redemptions made through brokers, financial institutions, service
organizations, banks and bank trust departments.
9
<PAGE>
Except as noted below, redemption requests received in proper form by the
Transfer Agent prior to 4:00 p.m., Eastern time, on any business day on which
the Fund calculates its net asset value are effective as of that day. Redemption
requests received after 4:00 p.m., Eastern time, will be effected at the net
asset value per share determined on the next business day following receipt. If
a shareholder's tax identification has not yet been certified at the time a
redemption request is received by the Transfer Agent, the redemption may be
processed subject to a backup withholding tax.
The Fund will satisfy redemption requests for cash to the fullest extent
feasible, as long as such payments would not, in the opinion of the Board of
Trustees, result in the Fund selling assets under disadvantageous conditions or
to the detriment of the remaining shareholders of the Fund. Pursuant to the
Fund's Trust Instrument, however, payment for shares redeemed may also be made
in-kind, or partly in cash and partly in-kind. The Fund has elected, pursuant to
Rule 18f-1 under the 1940 Act, to redeem its shares solely in cash up to the
lesser of $250,000 or 1% of the net asset value of the Fund, during any 90-day
period for any one shareholder. Any portolio securities distributed in-kind
would be in readily marketable securities and valued in the manner described
below. In the event that an in-kind distribution is made, you may incur
additional expenses, such as 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.
The Fund may suspend the right of redemption or postpone the date of payment for
more than three days during any period when (1) trading on the New York Stock
Exchange is restricted or is closed, other than customary weekend and holiday
closings; (2) the Securities and Exchange Commission (the "SEC") has, by order,
permitted such suspension; (3) an emergency, as defined by rules of the SEC,
exists making disposal of portfolio investments or determination of the value of
the net assets of the Fund not reasonably practicable.
Shares of the Fund may be redeemed through certain brokers, financial
institutions, service organizations, banks, and bank trust departments who may
charge the investor a transaction or other fee for their services. Such
additional transaction fees would not otherwise be charged if the shares were
redeemed directly from the Fund.
MINIMUM BALANCES
Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem shares in any account at their then-current net
asset value (which will be promptly paid to the shareholder) if at any time the
total investment does not have a value of at least $1,000 as a result of
redemptions, but not market fluctuations. You will be notified that the value of
his or her account is less than the required minimum and you will be allowed at
least 60 days to bring the value of your account up to the minimum before the
redemption is processed.
SHAREHOLDER SERVICES
The following special services are available to shareholders of the Fund. Please
contact the Transfer Agent (Nationwide call toll-free 800-227-7264) for
additional information about the Shareholder Services described below. There are
no charges for the services noted below and a shareholder may change or stop
these services at any time by written notice to the Fund.
AUTOMATIC INVESTMENT PLAN
Once an account has been opened, you can make additional monthly purchases of
shares of the Fund through an automatic investment plan. An investor may
authorize the automatic withdrawal of funds from your bank account by opening
your account with a minimum of $5,000 ($2,000 for IRA and SEP accounts) and
completing the appropriate section on the new account application enclosed with
this Prospectus. Subsequent monthly investments are subject to a minimum
required amount of $500.
RETIREMENT PLANS
The Fund is available for investment by pension and profit sharing plans
including Individual Retirement Accounts, SEP, Keogh, 401(k) and 403(b) plans
through which you may purchase Fund shares.
INTEGRATED VOICE RESPONSE SYSTEM
You may obtain access to account information and certain transaction history by
calling 800-227-7264 within the United States. The Fund's Integrated Voice
Response System provides the Fund's share price and price changes; account
balances; and account history (i.e. last transaction, latest dividend
distribution, redemption's by check during the last three months).
10
<PAGE>
NET ASSET VALUE
On each day that the Fund is open for business, the share price (net asset
value) of the Funds's shares is determined as of the close of the regular
session of trading on the New York Stock Exchange (normally 4:00 p.m., Eastern
time). The Fund is open for business on each day the New York Stock Exchange is
open for business and on any other day when there is sufficient trading in the
Fund's investments that its net asset value might be materially affected. The
net asset value per share of the Fund is calculated by dividing the sum of the
value of the securities held by the Fund plus cash or other assets minus all
liabilities (including estimated accrued expenses) by the total number of shares
outstanding of the Fund, rounded to the nearest cent. The price at which a
purchase or redemption of Fund shares is effected is based on the next
calculation of net asset value after the order is placed.
Portfolio securities are valued as follows: (1) securities which are traded on
stock exchanges or are quoted by NASDAQ are valued at the last reported sale
price as of the close of the regular session of trading on the New York Stock
Exchange on the day the securities are being valued, or, if not traded on a
particular day, at the most recent bid price, (2) securities traded in the
over-the-counter market, and which are not quoted by NASDAQ, are valued at the
last sale price (or, if the last sale price is not readily available, at the
most recent bid price as quoted by brokers that make markets in the securities)
as of the close of the regular session of trading on the New York Stock Exchange
on the day the securities are being valued, (3) securities which are traded both
in the over-the-counter market and on a stock exchange are valued according to
the broadest and most representative market, and (4) securities (and other
assets) for which market quotations are not readily available are valued at
their fair value as determined in good faith in accordance with consistently
applied procedures established by and under the general supervision of the Board
of Trustees. The net asset value per share of the Fund will fluctuate with the
value of the securities it holds.
Short-term investments having a maturity of 60 days or less are valued at
amortized cost, which the Board of Trustees believes represents fair value. When
a security is valued at amortized cost, it is valued at its cost when purchased,
and thereafter by assuming a constant amortization to maturity of any discount
or premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. In the event the amortized cost valuation deviates from
market quotations in excess of 1/4 of 1%, the Adviser will immediately inform
the chairman of the Trust's Audit Committee. In the event that the deviation is
greater than 1/2 of 1%, the Adviser will immediately report to the Board of
Trustees. All other securities and other assets are valued at their fair value
as determined in good faith under procedures established by and under the
supervision of the Board of Trustees.
DIVIDENDS AND TAXES
DIVIDENDS
It is the Fund's intention to distribute its net investment income each
December. Any net gain realized from the sale of portfolio securities are
distributed at least once each year unless losses carried forward from prior
years are used to offset them, in which case no such gain will be distributed.
Such income dividends and capital gain distributions are reinvested
automatically in additional shares at net asset value, unless you elect to
receive them in cash. Distribution options may be changed at any time by writing
to the Fund prior to a dividend record date.
Any check tendered in payment of dividends or other distributions which cannot
be delivered by the post office or which remains uncashed for a period of more
than one year may be reinvested in the shareholder's account at the then-current
net asset value, and the dividend option may be changed from cash to reinvest.
Dividends are reinvested on the ex-dividend date (the "ex-date") at the net
asset value determined at the close of business on that date. Dividends and
distributions are treated the same for tax purposes whether received in cash or
reinvested in additional shares. Please note that dividend and distributions on
shares purchased shortly before the record date for a dividend or distribution
may have the effect of returning capital although such dividends and
distributions are subject to taxes.
TAXES
The Fund has qualified and intends to continue to qualify as a "regulated
investment company" for purposes of the Internal Revenue Code of 1986, as
amended (the "Code"), which will relieve the Fund of any liability for federal
income tax to the extent that its earnings and net realized capital gains are
distributed to shareholders. To so qualify, the Fund must meet certain tests
regarding the nature if its investments and the types of its income, including
among other things, limiting its investments so that, at the close of each
quarter of its taxable year, (1) with respect to 50% of the market value of its
total assets, not more than 5% of the market value of its total assets will be
invested in the securities of any single issuer, and the Fund will not own more
than 10% of the outstanding voting securities of any single issuer and (2) not
more than 25% of the market value of the Fund's total assets will be invested in
the securities of any single issuer. The Fund also intends to make sufficient
distributions prior to the end of each calendar year in order to avoid liability
for federal excise tax based on net income.
11
<PAGE>
An investment in the Fund has certain tax consequences, depending on the type of
account. The Fund will distribute all of its net investment income to
shareholders. Distributions are subject to federal income tax and may also be
subject to state and local income taxes. Distributions are generally taxable
when they are paid, whether in cash or by reinvestment in additional shares,
except that distributions declared in October, November or December and paid in
the following January are taxable as if they were paid on December 31. Taxes on
distributions to a qualified retirement account are generally deferred until
distributions are made from the retirement account.
For federal income tax purposes, income dividends and short-term capital gain
distributions are taxed as ordinary income. Distributions of net long-term
capital gains (the excess of net long-term capital gain over net short-term
capital loss) are usually taxed as long-term capital gains, regardless of how
long a shareholder has held the Fund's shares. The tax treatment of
distributions of ordinary income or capital gains will be the same whether the
shareholder reinvests the distributions or elects to receive them in cash.
Sale, exchange or redemption of the Fund's shares is a taxable event to the
shareholder.
A Shareholder may be subject to a 31% back-up withholding on reportable dividend
and redemption payments ("back-up withholding") if a certified taxpayer
identification number is not on file with the Fund, if the Internal Revenue
Service notifies the Fund to implement back-up withholding for the shareholder,
or if to the Fund's knowledge, an incorrect number has been furnished. An
individual's taxpayer identification number is his or her Social Security
Number.
Shareholders will be advised annually of the source and tax status of all
distributions for federal income tax purposes. Information accompanying a
shareholder's statement will show the portion of those distributions that are
not taxable in certain states.
12
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned or lost on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Deloitte & Touche LLP, whose report, along with the Fund's financial
statements, are included in the Statement of Additional Information, which is
available upon request.
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHT EACH YEAR:
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 1999 March 31, 1998
<S> <C> <C>
Net asset value at beginning of year $ 20.42 $ 12.00
-------- --------
Income (loss) from investment operations:
Net investment loss (0.26) (0.10)
Net realized and unrealized gains (losses) on investments (l.80) 8.52
-------- --------
Total from investment operations (2.06) 8.42
-------- --------
Net asset value at end of year $ 18.36 $ 20.42
======== ========
Total return (10.09%) 70.17%
======== ========
Net assets at end of year (000's) $ 9,364 $ 6,507
Ratio of net expenses to average net assets 1.80% 1.80%
Ratio of gross expenses to average net assets (A) 4.40% 13.35%
Ratio of net investment loss to average net assets (1.58%) (1.41%)
Portfolio turnover rate 234% 110%
</TABLE>
(A) Represents the ratio of expenses to average net assets absent fee waivers
and/or expense reimbursement by the Adviser.
13
<PAGE>
Additional information about the Fund is included in the Statement of Additional
Information ("SAI"), which is incorporated by reference in its entirety.
Additional information about the Fund's investments is available in the Fund's
annual and semiannual reports to shareholders. In the Fund's annual report, you
will find a discussion of the market conditions and strategies that
significantly affected the Fund's performance during its last fiscal year.
To obtain a free copy of the SAI, the annual and semiannual reports or other
information about the Fund, or to make inquiries about the Fund, please call
1-248-644-8500.
Information about the Fund (including the SAI) can be reviewed and copied at the
Securities and Exchange Commission's public reference room in Washington, D.C.
Information about the operation of the public reference room can be obtained by
calling the Commission at 1-800-SEC-0330. Reports and other information about
the Fund are available on the Commission's Internet site at http://www.sec.gov.
Copies of information on the Commission's Internet site may be obtained, upon
payment of a duplicating fee, by writing to: Securities and Exchange Commission,
Public Reference Section, Washington, D.C. 20549-6009.
File No. 811-7921
<PAGE>
THE BJURMAN FUNDS
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 1, 1999
- --------------------------------------------------------------------------------
This Statement of Additional Information dated August 1, 1999 is not a
prospectus but should be read in conjunction with the separate Prospectus
describing shares of the Bjurman Micro-Cap Growth Fund (the "Fund") August 1,
1999. The Prospectus may be amended or supplemented from time to time. No
investment in shares should be made without first reading the Prospectus. This
Statement of Additional Information is intended to provide additional
information regarding the activities and operations of the Fund. A copy of the
Prospectus may be obtained without charge from CW Fund Distributors, Inc. (the
"Underwriter") or George D. Bjurman & Associates (the "Adviser") at the address
and telephone numbers below.
Underwriter: Adviser:
CW Fund Distributors, Inc. George D. Bjurman & Associates
312 Walnut Street, 21st Floor 10100 Santa Monica Boulevard
Cincinnati, OH 45202 Suite 1200
(800) 227-7264 Los Angeles, CA 90067-4103
(310) 553-6577
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS STATEMENT OF ADDITIONAL INFORMATION OR IN
THE PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THE PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE TRUST OR ITS DISTRIBUTOR. THE PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING BY THE TRUST OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
<PAGE>
TABLE OF CONTENTS
PAGE
The Trust and the Fund.........................................................3
Investment Policies and Techniques
Bankers' Acceptances........................................................3
Certificates of Deposits....................................................3
Equity Securities...........................................................3
Foreign Securities..........................................................4
Time Deposits...............................................................4
Borrowing...................................................................4
Loans of Portfolio Securities...............................................4
Illiquid Securities.........................................................5
Repurchase Agreements ......................................................5
Rule 144A Securities........................................................5
Futures.....................................................................5
Other Investments...........................................................5
Investment Restrictions........................................................6
Investment Advisory and Other Services
Investment Adviser .........................................................7
Investment Advisory Agreement...............................................7
Administrator, Transfer Agent and Fund Accountant ..........................7
Underwriter ................................................................8
Trustees and Officers..........................................................9
Compensation Table.........................................................11
Principal Shareholders........................................................11
Net Asset Value...............................................................11
Taxes.........................................................................12
Federal Income Tax.........................................................12
Portfolio Transactions and Brokerage Commissions..............................13
Performance Information
In General.................................................................14
Total Return Calculation...................................................14
Performance and Advertisements ............................................15
Other Information
Limitations on Trustees' Liability.........................................15
Independent Accountants....................................................15
Reports to Shareholders....................................................15
Financial Statements..........................................................15
2
<PAGE>
THE TRUST AND THE FUND
The Bjurman Family of Funds (the "Trust") is a diversified open-end management
investment company organized as a business trust under the laws of the State of
Delaware pursuant to a Trust Instrument dated September 26, 1996, as amended
February 11, 1997. The Trust is organized to offer separate series of shares and
is currently offering a single series of shares called Bjurman Micro-Cap Growth
Fund (the "Fund"). Each share of the Fund represents an undivided proportionate
interest in the Fund.
The Trust is authorized to issue an unlimited number of shares of beneficial
interest with no par value. Shares of the Fund represent equal proportionate
interests in the assets of the Fund only, and have identical voting, dividend,
redemption, liquidation and other rights. All shares issued are fully paid and
non-assessable, and shareholders have no preemptive or other right to subscribe
to any additional shares. The Fund may add additional classes of shares without
shareholder approval. All accounts will be maintained in book entry form and no
share certificates will be issued.
A shareholder is entitled to one vote for each full share held (and a fractional
vote for each fractional share held). All shares of the Fund participate equally
in regard to dividends, distributions, and liquidations with respect to the
Fund. Shareholders do not have preemptive, conversion or cumulative voting
rights.
The Trustees are not required, and do not intend, to hold annual meetings of
shareholders. The Trustees have undertaken to the Securities and Exchange
Commission (the "SEC"), however, that they will promptly call a meeting of
shareholders for the purpose of voting upon the question of removal of any
Trustee when requested to do so by holders of not less than 10% of the
outstanding shares of the Fund. In addition, subject to certain conditions,
shareholders of the Fund may apply to the Fund to communicate with other
shareholders to request a shareholders' meeting to vote upon the removal of a
Trustee or Trustees.
INVESTMENT POLICIES AND TECHNIQUES
The following supplements the information contained in the Fund's Prospectus
regarding the permitted investments and risk factors and the investment
objective and policies of the Fund.
BANKERS' ACCEPTANCES:
Negotiable bills of exchange or time drafts drawn on and accepted by a
commercial bank, meaning, in effect, that the bank unconditionally agrees to pay
the face value of the instrument on maturity. Bankers' Acceptances are used by
corporations to finance the shipment and storage of goods and to furnish dollar
exchanges. Banker's Acceptances generally mature within six months.
CERTIFICATES OF DEPOSIT:
A negotiable interest-bearing instrument with a specific maturity date.
Certificates of deposit are issued by U.S. commercial banks and savings and loan
institutions in exchange for the deposit of funds and normally can be traded in
the secondary market prior to maturity. Certificates of deposit generally carry
penalties for early withdrawal.
EQUITY SECURITIES:
Equity securities in which the Fund may invest include common stocks, preferred
stocks, warrants for the purchase of common stock, debt securities convertible
into or exchangeable for common or preferred stock and sponsored or unsponsored
American Depository Receipts ("ADRs").
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.
COMMON STOCK is defined as shares of a corporation that entitle the holder
to a pro rata share of the profits of the corporation, if any, without a
preference over any other shareholder or class of shareholders, including
holders of the corporation's preferred stock and other senior equity.
Common stock usually carries with it the right to vote, and frequently, an
exclusive right to do so. Holders of common stock also have the right to
participate in the remaining assets of the corporation after all other
claims, including those of debt securities and preferred stock, are paid.
3
<PAGE>
Generally, PREFERRED STOCK receives dividends prior to distributions on
common stock and usually has a priority of claim over common stockholders
if the issuer of the stock is liquidated. Unlike common stock, preferred
stock does not usually have voting rights; preferred stock, in some
instances, is convertible into common stock. In order to be payable,
dividends on preferred stock must be declared by the issuer's Board of
Directors. Dividends on preferred stock typically are cumulative, causing
dividends to accrue even if not declared by the Board of Directors. There
is, however, no assurance that dividends will be declared by the Board of
Directors of issuers of the preferred stocks in which the Fund invests.
FOREIGN SECURITIES:
The Fund may invest in securities of foreign issuers through sponsored and
unsponsored ADRs. ADRs are dollar-denominated securities which are listed and
traded in the United States, but which represent the right to receive securities
of foreign issuers deposited in a domestic or correspondent bank. ADRs are
receipts which evidence ownership of underlying securities issued by a foreign
corporation. Unsponsored ADRs differ from sponsored ADRs in that the
establishment of unsponsored ADRs is not approved by the issuer of the
underlying securities. As a result, available information concerning the issuer
may not be as current or reliable as the information for sponsored ADRs, and the
price of unsponsored ADRs may be more volatile.
Investments in foreign securities involve special risks, costs and opportunities
which are in addition to those inherent in domestic investments. Political,
economic or social instability of the issuer or the country of issue, the
possibility of expropriation or confiscatory taxation, limitations on the
removal of assets or diplomatic developments, and the possibility of adverse
changes in investment or exchange control regulations are among the inherent
risks. Securities of some foreign companies are less liquid, more volatile and
more difficult to value than securities of comparable U.S. companies. Foreign
companies are not subject to the regulatory requirements of U.S. companies and,
as such, there may be less publicly available information about such companies.
Moreover, foreign companies are not subject to uniform accounting, auditing and
financial reporting standards and requirements comparable to those applicable to
U.S. companies. Currency fluctuations may affect the net asset value of the Fund
by affecting the performance of the ADRs' underlying investments in foreign
issuers. Dividends and interest payable on a Fund's foreign portfolio securities
may be subject to foreign withholding taxes. To the extent such taxes are not
offset by credits or deductions allowed to investors under U.S. federal income
tax law, such taxes may reduce the net return to shareholders. Because of these
and other factors, the value of ADRs acquired by the Fund may be subject to
greater fluctuation than the value of securities of domestic companies.
TIME DEPOSITS:
A non-negotiable receipt issued by a bank in exchange for the deposit of funds.
Like a certificate of deposit, it earns a specified rate of interest over a
definite period of time; however, it cannot be traded in the secondary market.
Time deposits in excess of seven days with a withdrawal penalty are considered
to be illiquid securities. The Fund will not invest more than 15% of its net
assets in illiquid securities, including time deposits.
BORROWING:
The Fund may borrow as a temporary measure for extraordinary purposes or to
facilitate redemptions. The Fund intends to limit such borrowings to no more
than 5% of its net assets.
LOANS OF PORTFOLIO SECURITIES:
The Fund may lend portfolio securities to broker-dealers and financial
institutions provided that (1) the loan is secured continuously by collateral
marked-to-market daily and maintained in an amount at least equal to the current
market value of the securities loaned; (2) the Fund may call the loan at any
time and receive the securities loaned; (3) the Fund will receive any interest
or dividends paid on the loaned securities and (4) the aggregate market value of
securities loaned by the Fund will not at any time exceed 33% of the total
assets of the Fund. There may be risks of delay in receiving additional
collateral or in recovering the securities loaned or even a loss of rights in
the collateral should the borrower of the securities fail financially. However,
loans will be made only to borrowers deemed by the Adviser to be of good
standing and when, in its judgment, the income to be earned from the loan
justifies the attendant risks.
4
<PAGE>
Collateral will consist of U.S. government securities, cash equivalents or
irrevocable letters of credit. Loans of securities involve a risk that the
borrower may fail to return the securities or may fail to maintain the proper
amount of collateral. Therefore, the Fund will only enter into portfolio loans
after a review by the Adviser, under the supervision of the Board of Trustees,
including a review of the creditworthiness of the borrower. Such reviews will be
monitored on an ongoing basis.
ILLIQUID SECURITIES:
The Board of Trustees has delegated the function of making day-to-day
determinations of liquidity to the Adviser pursuant to guidelines reviewed by
the Board of Trustees. The Fund's policy is to limit its investment in illiquid
securities to a maximum of 15% of total assets at the time of purchase. The SEC
has adopted Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act") which permits the Fund to sell restricted securities to
qualified institutional buyers without limitation. The Adviser, pursuant to
procedures adopted by the Trustees of the Fund, will make a determination as to
the liquidity of each restricted security purchased by the Fund. If a restricted
security is determined to be "liquid", such security will not be included within
the category "illiquid securities". The Adviser will monitor the liquidity of
securities held by the Fund, and report periodically on such determinations to
the Board of Trustees.
REPURCHASE AGREEMENTS:
The Fund may enter into repurchase agreements with banks or broker-dealers.
Repurchase agreements are considered under the Investment Company Act of 1940,
as amended (the "1940 Act") to be collateralized loans by the Fund to the
seller, secured by the securities transferred to the Fund. In accordance with
requirements under the 1940 Act, repurchase agreements will be fully
collateralized by securities in which the Fund may directly invest. Such
collateral will be marked-to-market daily. 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 has decreased, the Fund could experience a loss. 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. The
financial institutions with whom the Fund may enter into repurchase agreements
are banks and non-bank dealers of U.S. Government securities that are listed on
the Federal Reserve Bank of New York's list of reporting dealers and banks, if
such banks and non-bank dealers are deemed creditworthy by the Adviser. The
Adviser will continue to monitor the creditworthiness of the seller under a
repurchase agreement, and will require the seller to maintain during the term of
the agreement the value of the securities subject to the agreement at not less
than the repurchase price. The Fund will only enter into a repurchase agreement
where the market value of the underlying security, including accrued interest,
will at all times be equal to or exceed the value of the repurchase agreement.
RULE 144A SECURITIES:
The Fund may invest in securities that are exempt from the registration
requirements of the Securities Act pursuant to SEC Rule 144A. Those securities
purchased pursuant to Rule 144A are traded among qualified institutional buyers,
and are subject to the Fund's limitation on illiquid investment.
Investing in securities under Rule 144A could have the effect of increasing the
levels of the Fund's illiquidity to the extent that qualified institutional
buyers become, for a time, uninterested in purchasing these securities. The Fund
will limit its investments in illiquid securities including securities of
issuers which the Fund is restricted from selling to the public without
registration under the Securities Act to no more than 15% of the Fund's net
assets (excluding restricted securities eligible for resale pursuant to Rule
144A that have been determined to be liquid by the Fund's Board of Trustees).
FUTURES:
The Fund may buy and sell futures contracts to manage its exposure to changes in
securities prices, as an efficient means of adjusting its overall exposure to
certain markets, in an effort to enhance income, and to protect the value of
portfolio securities. The Fund will not use futures contracts to leverage its
assets. Futures contracts deposits may not exceed 5% of the Fund's assets
(determined at the time of the transaction) and the Fund's total investment in
futures contracts may not exceed 20% of the Fund's total assets.
OTHER INVESTMENTS:
Subject to prior disclosure to shareholders, the Board of Trustees may, in the
future, authorize the Fund to invest in securities other than those listed here
and in the prospectus, provided that such investment would be consistent with
the Fund's investment objective, and that it would not violate any fundamental
investment policies or restrictions applicable to the Fund.
5
<PAGE>
INVESTMENT RESTRICTIONS
The investment restrictions set forth below are fundamental restrictions and may
not be changed without the approval of a majority of the outstanding voting
shares (as defined in the 1940 Act) of the Fund. Unless otherwise indicated, all
percentage limitations listed below apply at the time of the transaction only.
Accordingly, if a percentage restriction is adhered to at the time of
investment, a later increase or decrease in the percentage which results from a
relative change in values or from a change in the Fund's total assets will not
be considered a violation.
The Adviser will use "FactSet" computer software to categorize the industries in
which the Fund invests ("FactSet Codes"). The FactSet Codes that are assigned
may or may not correspond to the Standard Industry Codes ("SIC Codes"); however,
the Adviser feels that the differences are not substantial enough to effect the
percentage of asset restrictions above. In most cases the SIC Codes will match
the FactSet Codes. Except as set forth in the Prospectus, the Fund may not:
1. Purchase securities of any one issuer if, as a result of the purchase,
more than 5% of the Fund's total assets would be invested in securities of that
issuer or the Fund would own or hold more than 10% of the outstanding voting
securities of that issuer, except that up to 15% of the Fund's total assets may
be invested without regard to this limitation, and except that this limit does
not apply to securities issued or guaranteed by the U.S. government, its
agencies and instrumentalities or to securities issued by other investment
companies;
2. Purchase any security if, as a result of the purchase, 15% or more of
the Fund's total assets would be invested in securities of issuers having their
principal business activities in the same industry, except that this limitation
does not apply to securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities;
3. Issue senior securities or borrow money, except as permitted under the
1940 Act and then not in excess of one-third of the Fund's total assets
(including the amount of the senior securities issued but reduced by any
liabilities not constituting senior securities) at the time of the issuance or
borrowing, except that the Fund may borrow up to an additional 5% of its total
assets (not including the amount borrowed) for temporary or emergency purposes.
The Fund will not purchase securities when borrowings exceed 5% of its total
assets;
4. Pledge, hypothecate, mortgage or otherwise encumber its assets, except
in an amount up to one-third of the value of its net assets but only to secure
borrowing for temporary or emergency purposes, such as to effect redemptions;
5. Make loans, except through loans of securities or through repurchase
agreements, provided that, for purposes of this restriction, the acquisition of
bonds, debentures, other debt securities or instruments, or participations or
other interest therein and investments in government obligations, commercial
paper, certificates of deposit, bankers' acceptances or similar instruments will
not be considered the making of a loan;
6. Engage in the business of underwriting the securities of others, except
to the extent that the Fund might be considered an underwriter under the Federal
securities laws in connection with its disposition of securities; or
7. Purchase or sell real estate, except that investments in securities of
issuers that invest in real estate or other instruments supported by interests
in real estate are not subject to this limitation, and except that the Fund may
exercise rights under agreements relating to such securities, including the
right to enforce security interests to hold real estate acquired by reason of
such enforcement until that real estate can be liquidated in an orderly manner.
The following investment limitations are not fundamental and may be changed
without shareholder approval. The Fund does not currently intend to:
(i) Engage in uncovered short sales of securities or maintain a short
position;
(ii) Purchase securities on margin, except for short-term credit necessary
for clearance of portfolio transactions;
(iii)Purchase securities of other investment companies except as permitted
by the 1940 Act and the rules and regulations thereunder;
6
<PAGE>
(iv) Invest in companies for the purpose of exercising control or
management;
(v) Invest in oil, gas or mineral exploration or development programs or
leases, except that direct investment in securities of issuers that
invest in such programs or leases and investments in asset-backed
securities supported by receivables generated by such programs or
leases are not subject to this prohibition; and
(vi) Invest more than 5% of its net assets in warrants, including within
that amount no more than 2% in warrants which are not listed on the
New York or American Stock exchanges, except warrants acquired as a
result of its holdings of common stocks.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
George D. Bjurman & Associates serves as the Fund's investment adviser and is an
investment adviser registered as such under the Investment Advisers Act of 1940,
as amended. The Adviser was founded in 1970 and is wholly-owned by senior
associates and the Bjurman family. G. Andrew Bjurman and O. Thomas Barry, III
own 40% and 20%, respectively, of the Adviser and as a result may be deemed to
be "control persons" of the Adviser. As of June 1, 1999, the Adviser had
approximately $___ billion in assets under management.
INVESTMENT ADVISORY AGREEMENT
The Fund and the Adviser have entered into an investment advisory agreement for
a two-year period (the "Investment Advisory Agreement"). The Investment Advisory
Agreement provides that the Adviser shall furnish advice to the Fund with
respect to its investments and shall determine what securities shall be
purchased or sold by the Fund.
The Investment Advisory Agreement provides that the Adviser shall not be
protected against any liability to the Fund or its shareholders by reason of the
Adviser's willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard of its obligations or
duties thereunder.
The continuance of the Investment Advisory Agreement, after the first two years,
must be specifically approved at least annually (i) by the vote of the Trustees
or by a vote of the shareholders of Fund, and (ii) by the vote of a majority of
the Trustees who are not parties to the Investment Advisory Agreement or
"interested persons" (as that term is defined in the 1940 Act) of any party
thereto, cast in person at a meeting called for the purpose of voting on such
approval. The Investment Advisory Agreement will terminate automatically in the
event of its assignment, and is terminable at any time without penalty by the
Trustees of the Fund, or by a majority of the outstanding shares of the Fund on
60-days' written notice to the Adviser.
For providing investment advisory services, the Fund pays the Adviser a monthly
fee of one twelfth of 1.00% of the Fund's average daily net assets. The Adviser
has voluntarily agreed to waive its fee and reimburse expenses to the extent
that the Fund's total operating expenses, inclusive of distribution expenses,
exceed 1.80% of the Fund's average daily net assets. Any reductions in its fee
that are made by the Adviser are subject to reimbursement by the Fund within the
following three years, provided that the Fund is able to effect such
reimbursement and remain in compliance with applicable expense limitations. Any
potential management fee reimbursement will be disclosed in the footnotes to the
Fund's financial statements. The Adviser generally seeks reimbursement for the
oldest reductions and waivers before payment by the Fund for fees and expenses
for the current year. At such time as it appears probable that the Fund is able
to effect such reimbursement, and such reimbursement is requested by the Adviser
and approved by the Board of Trustees, the amount of reimbursement that the Fund
is able to effect will be accrued as an expense of the Fund for that current
period.
For the fiscal years ended March 31, 1998 and 1999, the Fund accrued advisory
fees of $_____ and $82,678; however, in order to reduce the Fund's operating
expenses, the Adviser waived its entire advisory fee in each year and reimbursed
the Fund $209,641 and $134,062 of expenses, respectively.
7
<PAGE>
ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTANT
The Fund has retained Countrywide Fund Services, Inc. ("Countrywide") as the
Fund's Transfer Agent, Administrator and Fund Accountant. Pursuant to a
Transfer, Dividend Disbursing, Shareholder Service and Plan Agency Agreement,
Countrywide maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other shareholder service functions. Countrywide receives for
its services as transfer agent a fee payable monthly at an annual rate of $20
per account; provided, however, that the minimum fee is $2,000 per month. In
addition, the Fund pays out-of-pocket expenses, including but not limited to,
postage, envelopes, checks, drafts, forms, reports, record storage and
communication lines.
Pursuant to an Accounting Services Agreement, Countrywide also provides
accounting and pricing services to the Fund. For calculating daily net asset
value per share and maintaining such books and records as are necessary to
enable Countrywide to perform its duties, the Fund pays Countrywide a fee in
accordance with the following schedule:
Average Monthly Net Assets Monthly Fee
-------------------------- -----------
$ 0 - $100 million $2,500
$100 million to $200 million $3,500
$200 million to $300 million $4,500
Over $300 million $5,500 + .001%
The .001% on assets over $300 million represents the asset based fee charged by
Countrywide for external pricing services.
In addition, Countrywide is retained to provide administrative services to the
Fund pursuant to an Administration Agreement. In this capacity, Countrywide
supplies non-investment related statistical and research data, internal
regulatory compliance services and executive and administrative services.
Countrywide supervises the preparation of tax returns, reports to shareholders
of the Fund, reports to and filings with the Securities and Exchange Commission
and state securities commissions, and materials for meetings of the Board of
Trustees. For the performance of these administrative services, the Fund pays
the Countrywide a fee at the annual rate of .15% of the average value of its
daily net assets up to $25,000,000, .125% of such assets from $25,000,000 to
$50,000,000 and .10% of such assets in excess of $50,000,000; provided, however,
that the minimum fee is $2,000 per month.
For the fiscal year ended March 31, 1999, Countrywide received $21,807 as
compensation for services performed as administrator, fund accountant and
transfer agent.
Prior to December 18, 1998, the Fund retained First Data Investor Services
Group, Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania 19406-0903, for
administration, fund accounting and transfer agency services. For the fiscal
year ended March 31, 1999, the Fund paid First Data Investor Services Group,
Inc. $95,174 as compensation for services performed as administrator, fund
accountant and transfer agent.
UNDERWRITER
CW Fund Distributors, Inc. (the "Distributor"), 312 Walnut Street, 21st Floor,
Cincinnati, Ohio 45202, serves as principal underwriter for the Fund pursuant to
an Underwriting Agreement. Shares are sold on a continuous basis by the
Distributor. The Distributor has agreed to use its best efforts to solicit
orders for the sale of Trust shares, but it is not obliged to sell any
particular amount of shares. For these services, the Distributor receives a
monthly fee of $500 from the Fund. The Distributor is an affiliate of
Countrywide by reason of common ownership.
The Underwriting Agreement provides that, unless sooner terminated, it will
continue in effect until December 18, 2000. Thereafter, the Underwriting
Agreement will continue from year to year only if such continuance is approved
at least annually (i) by the Board of Trustees or a vote of a majority of the
outstanding shares, and (ii) by a majority of the Trustees who are not
interested persons of the Trust or of the Distributor by vote cast in person at
a meeting called for the purpose of voting on such approval.
8
<PAGE>
The Underwriting Agreement may be terminated by the Fund at any time, without
the payment of any penalty, by vote of a majority of the entire Board of
Trustees of the Trust or by vote of a majority of the outstanding shares of the
Fund on 60 days' written notice to the Distributor, or by the Distributor at any
time, without the payment of any penalty, on 60 days' written notice to the
Trust. The Underwriting Agreement will automatically terminate in the event of
its assignment.
For the fiscal year ended March 31, 1999, the Distributor was paid $1,500 for
services provided to the Fund. Prior to December 18, 1998, the Fund retained FPS
Broker Services, Inc., 3200 Horizon Drive, King of Prussia, Pennsylvania as its
principal underwriter. For the fiscal year ended March 31, 1999, FPS Broker
Services, Inc. was paid $________ for services provided to the Fund.
Shares of the Fund are subject to a distribution plan (the "Distribution Plan")
pursuant to Rule 12b-1 under the 1940 Act. As provided in the Distribution Plan,
the Fund will pay an annual fee of 0.25% of the Fund's average daily net assets
to reimburse expenses incurred in distributing and promoting sales of the Fund.
From these amounts, the Distributor or the Fund may make payments to financial
institutions and intermediaries such as banks, savings and loan associations,
insurance companies, investment counselors and broker-dealers who assist in the
distribution of shares of the Fund or provide services to the Fund's
shareholders pursuant to service agreements with the Fund. The Fund intends to
operate the Distribution Plan in accordance with its terms and the Conduct Rules
of the National Association of Securities Dealers, Inc. concerning sales
charges. Pursuant to such Rules, the Distributor is required to limit aggregate
initial sales charges and asset-based sales charges to 6.25% of total gross
sales of shares.
The Distribution Plan will continue in effect from year to year, provided that
its continuance is approved at least annually by a vote of the Board of
Trustees, including the Trustees who are not "interested persons" of the Trust
and have no direct or indirect financial interest in the operation of the
Distribution Plan, cast in person at a meeting called for the purpose of voting
on such continuance. The Distribution Plan may be terminated at any time,
without penalty, by vote of those Trustees that are not interested persons of
the Trust or by vote of the holders of a majority of the outstanding shares of
the Fund on not more than 60-days' written notice and shall terminate
automatically in the event of its assignment. The Plan may not be amended to
increase materially the amounts to be spent for the services described herein
without approval by the shareholders of the Fund, and all material amendments
are required to be approved by the Board of Trustees. Pursuant to the Plan, the
Board of Trustees will review at least quarterly a written report of the
distribution expenses incurred on behalf of the Fund. The report will include an
itemization of the distribution expenses and the purpose of such expenditures.
For the fiscal year ended March 31, 1999, the Fund paid $20,670 for
distribution-related expenses pursuant to the Distribution Plan. Out of that
total amount, $_____ was spent on printing and mailing of prospectuses to
prospective shareholders and $______ was spent as compensation to dealers. No
interested person of the Fund or interested Trustee had a direct or indirect
financial interest in the operation of the Distribution Plan.
TRUSTEES AND OFFICERS
The Trust has a Board of Trustees that establishes the Fund's policies and
supervises and reviews the management of the Fund. The day-to-day operations of
the Fund are administered by the officers of the Trust and by the Advise. The
Trustees review, among other things, the various services provided by the
Adviser to ensure that the Fund's general investment policies and programs are
followed and that administrative services are provided to the Fund in a
satisfactory manner.
The Trustees and executive officers of the Fund and their principal occupations
for the last five years are set forth below. Each Trustee who is an "interested
person," as that term is defined in the 1940 Act, of the Fund is indicated by an
asterisk.
G. Andrew Bjurman and O. Thomas Barry, III share the office of the presidency of
the Trust. They are jointly vested in full executive authority under the Trust's
By-Laws.
9
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
NAME AGE POSITION WITH THE PRINCIPAL OCCUPATION
FUND
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
G. Andrew Bjurman* 50 Co-President; Mr. Bjurman joined George D. Bjurman &
George D. Bjurman & Trustee Associates when it was founded in 1970 as
Associates, Vice President and Portfolio Manager. At
10100 Santa Monica Boulevard, that time he assumed responsibility for the
Suite 1200, Los Angeles, CA portfolio management of institutional
90067-4103 accounts. From 1974 to 1978 he acted as
Executive Vice President and Senior
Portfolio Manager. In 1978 he assumed his
present responsibilities as President and
Chief Executive Officer of the firm. He is
currently a member of the Adviser's
Investment Policy Committee. In 1977 he
became both a Chartered Financial Analyst
and a Chartered Investment Counselor.
- -----------------------------------------------------------------------------------------------------------
O. Thomas Barry, III, * 53 Co-President; Mr. Barry, III, joined the firm in 1978 as
George D. Bjurman & Trustee Vice President and Senior Portfolio
Associates, Manager. In 1979 he became Executive Vice
10100 Santa Monica Boulevard, President and assumed the responsibilities
Suite 1200, Los Angeles, CA of Director of Research. He is a member of
90067-4103 the Adviser's Investment Policy Committee.
In 1982 he became the Senior Executive Vice
President and in 1985 he also became Chief
Investment Officer. Prior to joining the
firm, Mr. Barry acted as Senior Investment
Officer and Portfolio Manager for Security
Pacific National Bank in Los Angeles and
was a member of the Stock Selection
Committee. In 1977 he became a Chartered
Financial Analyst and in 1978 a Chartered
Investment Counselor.
- -----------------------------------------------------------------------------------------------------------
Donald W. Hudson, Jr. 53 Trustee; Mr. Hudson has been a Senior Vice-President
CB Commercial Real Estate Chairman of Audit of CB Commercial Real Estate since 1993.
21700 Oxnard Street Committee Prior to that Mr. Hudson was Associate Vice
Suite 200 President of Cushman Realty, a commercial
Woodland Hills, CA 91367 real estate firm.
- -----------------------------------------------------------------------------------------------------------
Joseph E. Maiolo 60 Trustee Mr. Maiolo is an industrial real estate
INCO Commercial Brokerage broker/developer. He is a principal of INCO
14700 Firestone Boulevard, Commercial Brokerage, Joseph E. Maiolo &
#111 Associates, Inc. and Penta Pacific Properties,
La Mirada, CA 90638 Los Angeles.
- -----------------------------------------------------------------------------------------------------------
10
<PAGE>
- -----------------------------------------------------------------------------------------------------------
NAME AGE POSITION WITH THE PRINCIPAL OCCUPATION
FUND
- -----------------------------------------------------------------------------------------------------------
William Wallace 51 Trustee Mr. Wallace is involved in residential real
Wallace Properties estate. He is Vice President of Wallace
5288 South Franklin Circle Properties.
Greenwood Village, CO 80121
- -----------------------------------------------------------------------------------------------------------
</TABLE>
COMPENSATION TABLE
Trustees and Officers
Aggregate Compensation from Trust for Fiscal Year Ending 3/31/99 1
------------------------------------------------------------------
Joseph E. Maiolo $_____
Donald W. Hudson, Jr. $_____
William Wallace $_____
G. Andrew Bjurman* $ 0
O. Thomas Barry, III* $ 0
* This Trustee is considered an "Interested Person" of the Trust as defined
under the 1940 Act.
1 This amount represents the aggregate amount of compensation paid to the
Trustees for service on the Board of Trustees. There are no other funds in
the Fund Complex.
No officer or Trustee of the Trust who is also an officer or employee of the
Adviser receives any compensation from the Trust for services to the Trust. The
Trust pays each Trustee who is not affiliated with the Adviser a fee of $4,500
per year, and reimburses each Trustee and officer for out-of-pocket expenses in
connection with travel and attendance at such meetings.
PRINCIPAL SHAREHOLDERS
As of _____, 1999, the Trustees and officers, as a group, beneficially owned
______ shares (___%) of the Fund.
As of _____, 1999, the following persons owned of record or beneficially more
than 5% of the outstanding voting shares of the Fund:
NAME & ADDRESS PERCENTAGE
-------------- ----------
Charles Schwab & Co., Inc. * 1 ____%
FBO Customers San Francisco, CA
Donaldson Lufkin & Jenrette 2 ____%
Jersey City, NJ
* Person deemed to control the Fund within the meaning of the 1940 Act.
1 Charles Schwab & Co., Inc. is a discount broker-dealer acting as a nominee
for registered investment advisers whose clients have purchased shares of
the Fund and also holds shares for the benefit of its clients.
2 Donaldson Lufkin & Jenrette Securities Corporation is a broker-dealer
holding shares for the benefit of its clients.
11
<PAGE>
NET ASSET VALUE
The net asset value per share is computed by dividing the value of the assets of
the Fund, less its liabilities, by the number of shares outstanding.
Portfolio securities are valued and net asset value per share is determined as
of the close of regular trading on the New York Stock Exchange ("NYSE"), which
currently is 4:00 p.m. (Eastern Time), on each day the NYSE is open for trading.
The NYSE is open for trading every day except Saturdays, Sundays and the
following holidays: New Year's Day, Martin Luther King Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas Day. Additionally, if any of the aforementioned holidays falls on a
Saturday, the NYSE will not be open for trading on the preceding Friday and when
such holiday falls on a Sunday, the NYSE will not be open for trading on the
succeeding Monday, unless unusual business conditions exist, such as the ending
of a monthly or the yearly accounting period.
TAXES
The following is only a summary of certain federal tax considerations generally
affecting the Fund and its shareholders that are not described in the
Prospectus, and is not intended as a substitute for careful tax planning.
Shareholders are urged to consult their tax advisers with specific reference to
their own tax situations, including their state and local tax liabilities.
Non-U.S. investors should consult their tax advisers concerning the tax
consequences of ownership of shares of the Fund, including the possibility that
distributions may be subject to a 30% U.S. withholding tax.
FEDERAL INCOME TAX
The following discussion of federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended ("the Code"), court decisions and
published administrative materials from the Internal Revenue Service and as in
effect on the date of this Statement of Additional Information. New legislation,
as well as administrative changes or court decisions, may significantly change
the conclusions expressed herein, and may have a retroactive effect with respect
to the transactions contemplated herein.
The Fund has qualified and intends to continue qualify as a "regulated
investment company" ("RIC") as defined under Subchapter M of the Code. By doing
so, the Fund expects to eliminate or reduce to a nominal amount the federal
income taxes to which it may be subject. In order to qualify for treatment as a
RIC under the Code, the Fund generally must distribute annually to its
shareholders at least 90% of its investment company taxable income (generally,
net investment income plus net short-term capital gain) (the "Distribution
Requirement") and must meet several additional requirements. Among these
requirements are the following: (i) at least 90% of the Fund's gross income each
taxable year must be derived from dividends, interest, payments with respect to
securities loans, and gains from the sale or other disposition of stock or
securities, or certain other income; (ii) at the close of each quarter of the
Fund's taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. government securities, securities of
other RICs and other securities, with such other securities limited, in respect
to any one issuer, to an amount that does not exceed 5% of the value of the
Fund's assets and that does not represent more than 10% of the outstanding
voting securities of such issuer and (iii) at the close of each quarter of the
Fund's taxable year, not more than 25% of the value of its assets may be
invested in securities (other than U.S. government securities or the securities
of other RICs) 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 or
businesses. Notwithstanding the Distribution Requirement described above, which
requires only that the Fund distribute at least 90% of its annual investment
company taxable income and does not require any minimum distribution of net
capital gain (the excess of net long-term capital gain over net short-term
capital loss), the Fund will be subject to a nondeductible 4% federal excise tax
to the extent that it fails to distribute by the end of any calendar year 98% of
its ordinary income for that year and 98% of its capital gain net income (the
excess of short- and long-term capital gains over short- and long-term capital
losses) for the one-year period ending on October 31 of that year, plus certain
other amounts. The Fund intends to make sufficient distributions of its ordinary
income and capital gain net income prior to the end of each calendar year to
avoid liability for federal excise tax.
In the case of corporate shareholders, distributions from the Fund may qualify
for the corporate dividends-received deduction to the extent the Fund designates
the amount distributed as a qualifying dividend. Availability of the
dividends-received deduction is subject to certain holding period and
debt-financing limitations.
12
<PAGE>
Distributions of net capital gains (i.e, the excess of net long-term capital
gains over net short-term capital losses) by the Fund are taxable to the
recipient shareholders as a long-term capital gain, without regard to the length
of time a shareholder has held Fund shares. Capital gain distributions are not
eligible for the dividends-received deduction referred to in the preceding
paragraph.
Any gain or loss recognized on a sale, redemption or exchange of shares of the
Fund by a non-exempt shareholder who is not a dealer in securities generally
will be treated as a long-term capital gain or loss if the shares have been held
for more than one year and otherwise generally will be treated as a short-term
capital gain or loss. If shares of the Fund on which a net capital gain
distribution has been received are subsequently sold, redeemed or exchanged and
such shares have been held for six months or less, any loss recognized will be
treated as a long-term capital loss to the extent of the long-term capital gain
distribution received with respect to such shares.
In certain cases, the Fund will be required to withhold, and remit to the U.S.
Treasury, 31% of any distributions paid to a shareholder who (1) has failed to
provide a correct taxpayer identification number, (2) is subject to backup
withholding by the Internal Revenue Service or (3) has not certified to the Fund
that such shareholder is not subject to backup withholding.
If the Fund fails to qualify as a RIC for any taxable year, it will be subject
to tax on its taxable income at regular corporate rates. In such an event,
distributions from the Fund (to the extent of its current and accumulated
"earnings and profits") generally would be eligible for the corporate
dividends-received deduction for corporate shareholders.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
The Fund does not have an obligation to place orders with any broker-dealer or
group of broker-dealers in the execution of transactions in portfolio
securities. Most transactions will be effected on a net cost basis through
brokers who make markets in the stock being purchased or sold. Subject to
policies established by the Trustees, the Adviser is responsible for placing the
orders to execute transactions for the Fund. In placing orders, it is the policy
of the Fund to seek to obtain the best execution taking into account such
factors as price (including the applicable dealer spread), the size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities, the firm's risk in positioning the securities involved,
the Adviser's past experience in placing orders through the firm, and the firm's
research capabilities. While the Adviser generally seeks reasonably competitive
spreads, the Fund will not necessarily be paying the lowest spread available for
a particular transaction. Subject to policies established by the Board of
Trustees, however, the Adviser may cause the Fund to pay a broker-dealer a
commission in excess of the amount of commission another broker-dealer would
have charged if the Adviser determines in good faith that the commission paid
was reasonable in relation to the brokerage or research services provided by
such broker-dealer.
For the fiscal years ended March 31, 1998 and 1999, the Fund incurred total
brokerage commissions of $15,069 and $________.
The Fund and the Adviser may direct portfolio transactions to persons or firms
because of research and investment services provided by such persons or firms if
the commissions or spreads on the transactions are reasonable in relation to the
value of the investment information provided. Among such research and investment
services are those that brokerage houses customarily provide to institutional
investors and include statistical and economic data and research reports on
companies and industries. Such research provides lawful and appropriate
assistance to the Adviser in the performance of its investment decision-making
responsibilities. The Adviser may use these services in connection with all of
its investment activities, and some services obtained in connection with the
Fund's transactions may be used in connection with other investment advisory
clients of the Adviser, including other mutual funds and other series of the
Trust, if any.
The Fund may invest in securities that are traded exclusively in the
over-the-counter market. The Fund may also purchase securities listed on a
national securities exchange through the "third market" (i.e., through markets
other than the exchanges on which the securities are listed). When executing
transactions in the over-the-counter market or the third market, the Adviser
will seek to execute transactions through brokers or dealers that, in the
Adviser's opinion, will provide the best overall price and execution so that the
resultant price to the Fund is as favorable as possible under prevailing market
conditions.
13
<PAGE>
It is not the Fund's practice to allocate brokerage or principal business on the
basis of sales of its shares which may be made through brokers or dealers.
However, the Adviser may place portfolio orders with qualified broker-dealers
who recommend the Fund to clients, and may, when a number of brokers and dealers
can provide best net results on a particular transaction, consider such
recommendations by a broker or dealer in selecting among broker-dealers.
It is possible that purchases or sales of securities for the Fund also may be
considered for other clients of the Adviser or its affiliates, including the
other series of the Trust, if any. Any transactions in such securities at or
about the same time will be allocated among the Fund and such other clients in a
manner deemed equitable to all by the Adviser, taking into account the
respective sizes of the Fund and the other clients' accounts, and the amount of
securities to be purchased or sold. It is recognized that it is possible that in
some cases this procedure could have a detrimental effect on the price or volume
of the security so far as the Fund is concerned. However, in other cases, it is
possible that the ability to participate in volume transactions and to negotiate
lower commissions will be beneficial to the Fund.
PERFORMANCE INFORMATION
IN GENERAL
From time to time, the Fund may include general comparative information, such as
statistical data regarding inflation, securities indices or the features or
performance of alternative investments, in advertisements, sales literature and
reports to shareholders. The Fund may also include calculations, such as
hypothetical compounding examples or tax-free compounding examples, which
describe hypothetical investment results in such communications. Such
performance examples will be based on an express set of assumptions and are not
indicative of the performance of the Fund.
From time to time, the total return of the Fund may be quoted in advertisements,
shareholder reports or other communications to shareholders.
TOTAL RETURN CALCULATION
The Fund computes average annual total return by determining the average annual
compounded rate of return during specified periods that equate the initial
amount invested to the ending redeemable value of such investment. This is done
by dividing the ending redeemable value of a hypothetical $1,000 initial payment
by $1,000 and raising the quotient to a power equal to one divided by the number
of years (or fractional portion thereof) covered by the computation and
subtracting one from the result. This calculation can be expressed as follows:
n
Average Annual Total Return = P (1 + T) = ERV
Where: ERV = ending redeemable value at the end of the period covered by the
computation of a hypothetical $1,000 payment made at the beginning
of the period.
P = hypothetical initial payment of $1,000.
n = period covered by the computation, expressed in terms of years.
T = average annual total return.
The Fund computes the aggregate total return by determining the aggregate
compounded rate of return during specified periods that likewise equate the
initial amount invested to the ending redeemable value of such investment. The
formula for calculating aggregate total return is as follows:
Aggregate Total Return = [ (ERV)/P - 1 ]
Where: ERV = ending redeemable value at the end of the period covered by the
computation of a hypothetical $1,000 payment made at the beginning
of the period.
P = hypothetical initial payment of $1,000.
14
<PAGE>
The calculations of average annual total return and aggregate total return
assume the reinvestment of all dividends and capital gain distributions on the
reinvestment dates during the period. The ending redeemable value (variable
"ERV" in each formula) is determined by assuming complete redemption of the
hypothetical investment and the deduction of all nonrecurring charges at the end
of the period covered by the computations. Since performance will fluctuate,
performance data for the Fund should not be used to compare an investment in the
Fund's shares with bank deposits, savings accounts and similar investment
alternatives which often provide an agreed-upon or guaranteed fixed yield for a
stated period of time. Shareholders should remember that performance is
generally a function of the kind and quality of the instruments held in a
portfolio, portfolio maturity, operating expenses and market conditions.
Based upon the foregoing calculations, the average annual total returns for the
Fund as of March 31, 1999 were as follows:
Since Inception
One Year (March 31, 1997)
-10.09% 23.69%
PERFORMANCE AND ADVERTISEMENTS
From time to time, in marketing and other fund literature, the Fund's
performance may be compared to the performance of other mutual funds in general
or to the performance of particular types of mutual funds with similar
investment goals, as tracked by independent organizations. Among these
organizations, Lipper Analytical Services, Inc. ("Lipper"), a widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives and assets, may be cited. Lipper performance figures are
based on changes in net asset value, with all income and capital gains dividends
reinvested. Such calculations do not include the effect of any sales charges
imposed by other funds. The Fund will be compared to Lipper's appropriate fund
category, that is, by fund objective and portfolio holdings. The Fund's
performance may also be compared to the average performance of its Lipper
category.
The Fund's performance may also be compared to the performance of other mutual
funds by Morningstar, Inc. ("Morningstar"), which ranks funds on the basis of
historical risk and total return. Morningstar's rankings range from five stars
(highest) to one star (lowest) and represent Morningstar's assessment of the
historical risk level and total return of a fund as a weighted average for
three, five and ten year periods. Ranks are not absolute or necessarily
predictive of future performance.
In assessing such comparisons of yield, return or volatility, an investor should
keep in mind that the composition of the investments in the reported indices and
averages is not identical to those of the Fund, that the averages are generally
unmanaged, and that the items included in the calculations of such averages may
not be identical to the formula used by the Fund to calculate its figures.
OTHER INFORMATION
LIMITATION OF TRUSTEES' LIABILITY
The Trust Instrument provides that a Trustee shall be personally liable only to
the Trust for any act, omission or obligation of the Trust or Trustee. A Trustee
will not be liable for any act or omission of any officer, employee, agent or
investment adviser of the Trust. The Trust Instrument also provides that the
Trust will indemnify its Trustees and officers against liabilities and expenses
incurred in connection with actual or threatened litigation in which they may be
involved because of their offices with the Trust unless it is determined in the
manner provided in the Trust Instrument that they have not acted in good faith
in the reasonable belief that their actions were in the best interests of the
Trust. However, nothing in the Trust Instrument shall protect or indemnify a
Trustee against any liability for his or her willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties. All Trustee's
liability is further subject to the limitations imposed by the 1940 Act.
15
<PAGE>
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP, 1000 Wilshire Boulevard, Los Angeles, California,
90017-2472, has been selected as the independent accountants for the Fund.
Deloitte & Touche LLP provides audit and tax services. The books of the Fund
will be audited at least once a year by Deloitte & Touche LLP.
REPORTS TO SHAREHOLDERS
Shareholders will receive unaudited semi-annual reports describing the Fund's
investment operations and annual financial statements audited by the Fund's
independent accountants. Inquiries regarding the Fund may be directed to
Countrywide Fund Services, Inc. at (800) 227-7264.
FINANCIAL STATEMENTS
The Fund's audited annual financial statements, including the notes thereto,
dated March 31, 1999, are incorporated by reference from the Fund's March 31,
1999 Annual Report to Shareholders.
<PAGE>
THE BJURMAN FUNDS
-----------------
PART C. OTHER INFORMATION
- ------- -----------------
Item 23. (a) (i) Trust Instrument*
(ii) Certificate of Amendment of Certificate of Trust*
(b) Bylaws*
(c) Incorporated by reference to Trust Instrument and Bylaws
(d) (i) Investment Advisory Agreement with George D. Bjurman &
Associates*
(ii) Amendment No. 1 to Investment Advisory Agreement
(e) Underwriting Agreement with CW Fund Distributors, Inc.
(f) Inapplicable
(g) Custody Agreement with Firstar Bank, N.A.**
(h) (i) Administration Agreement with Countrywide Fund Services,
Inc.
(ii) Accounting Services Agreement with Countrywide Fund
Services, Inc.
(iii) Transfer, Dividend Disbursing, Shareholder Service and
Plan Agency Agreement with Countrywide Fund Services, Inc.
(i) Opinion and Consent of Counsel*
(j) Consent of Independent Public Accountants
(k) Inapplicable
(l) Inapplicable
(m) Distribution Plan of The Bjurman Funds, as amended
(n) Inapplicable
(o) Inapplicable
- ---------------------------------
* Incorporated by reference to the Trust's registration statement on Form
N-1A
** To be filed by Amendment.
-1-
<PAGE>
Item 24. Persons Controlled by or Under Common Control with Registrant.
- -------- --------------------------------------------------------------
None
Item 25. Indemnification
- -------- ---------------
Incorporated by reference to Article X of the Registrant's Trust
Instrument.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 26. Business and Other Connections of the Investment Adviser
- -------- --------------------------------------------------------
(a) George D. Bjurman & Associates is a registered investment adviser
providing investment advisory services to the Registrant. The
Adviser also provides investment advisory services to individual
and institutional clients.
(b) For information as to any other business, vocation or employment
of a substantial nature in which each Trustee or officer of the
Registrant's investment adviser has been engaged for his own
account or in the capacity of Trustee, officer, employee, partner
or trustee, reference is made to Form ADV for George D. Bjurman &
Associates (File #801-06776) filed under the Investment Advisers
-2-
<PAGE>
Act of 1940, and incorporated herein by reference.
Item 27. Principal Underwriters
- -------- ----------------------
(a) CW Fund Distributors, Inc. also acts as underwriter for the
following open-end investment companies: Atalanta/Sosnoff
Investment Trust, Brundage, Story and Rose Investment Trust, The
Caldwell & Orkin Funds, Inc., Profit Funds Investment Trust,
Firsthand Funds, the Lake Shore Family of Funds, UC Investment
Trust, The Winter Harbor Fund and The James Advantage Funds.
(b) The following list sets forth the directors and executive
officers of the Distributor. Unless otherwise noted with an
asterisk(*), the address of the persons named below is 312 Walnut
Street, Cincinnati, Ohio 45202.
*The address is 4500 Park Granada Boulevard, Calabasas,
California 91302.
-3-
<PAGE>
Position Position
with with
Name Distributor Registrant
---- ----------- ----------
*Angelo R. Mozilo Chairman of None
the Board/
Director
*Andrew S. Bielanski Director None
*Thomas H. Boone Director None
*Marshall M. Gates Director None
Robert H. Leshner President/ None
Vice Chairman/
Chief Executive
Officer/Director
Maryellen Peretzky Vice President, None
Secretary
Robert L. Bennett Vice President, Treasurer
Chief Operations
Officer
Terrie A. Wiedenheft Vice President, None
Chief Financial
Officer, Treasurer None
(c) Inapplicable
Item 28. Location of Accounts and Records
- -------- --------------------------------
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder will be maintained by the Registrant at its
principal office located at 312 Walnut Street, Cincinnati, Ohio 45202
as well as at the office of the Adviser located at 10100 Santa Monica
Boulevard, Los Angeles, California 90067.
Item 29. Management Services Not Discussed in Parts A or B
- -------- -------------------------------------------------
Inapplicable
Item 30. Undertakings
- -------- ------------
Inapplicable
- 5 -
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Registration Statement to be signed on its behalf, thereunto duly
authorized, in the City of Los Angeles and State of California, on the 2nd day
of June, 1999.
THE BJURMAN FUNDS
By: /s/ G. Andrew Bjurman
-------------------------
G. Andrew Bjurman
Co-President and Trustee
By: /s/ O. Thomas Barry, III
-------------------------
O. Thomas Barry, III
Co-President and Trustee
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ G. Andrew Bjurman Co-President June 2, 1999
- ----------------------------- and Trustee
G. Andrew Bjurman
/s/ O. Thomas Barry, III Co-President June 2, 1999
- ----------------------------- and Trustee
O. Thomas Barry, III
/s/ William Wallace Trustee June 2, 1999
- -----------------------------
William Wallace
/s/ Donald W. Hudson, Jr. Trustee June 2, 1999
- -----------------------------
Donald W. Hudson, Jr.
/s/ Joseph E. Maiolo Trustee June 2, 1999
- -----------------------------
Joseph E. Maiolo
-6-
<PAGE>
INDEX TO EXHIBITS
-----------------
(a) (i) Trust Instrument*
(ii) Certificate of Amendment of Certificate of Trust*
(b) Bylaws*
(c) Incorporated by reference to Trust Instrument and Bylaws
(d) (i) Investment Advisory Agreement*
(ii) Amendment No. 1 to Investment Advisory Agreement
(e) Underwriting Agreement
(f) Inapplicable
(g) Custody Agreement**
(h) (i) Administrative Services Agreement
(ii) Accounting Services Agreement
(iii) Transfer, Dividend Disbursing, Shareholder Service and Plan Agency
Agreement
(i) Opinion and Consent of Counsel*
(j) Consent of Independent Public Accountants
(k) Inapplicable
(l) Inapplicable
(m) Distribution Plan, as amended
(n) Inapplicable
(o) Inapplicable
- ----------------------------
* Incorporated by reference to the Trust's registration statement on Form
N-1A.
** To be filed by Amendment.
-7-
AMENDMENT NO. 1 TO THE
INVESTMENT ADVISORY AGREEMENT
This Amendment No. 1 (this "Amendment") is made as of November 19, 1998 and
is made to the Investment Advisory Agreement (the "Advisory Agreement") dated
March 5, 1997 by and between THE BJURMAN FUNDS, a Delaware business trust (the
"Trust"), on behalf of Bjurman Micro-Cap Growth Fund (the "Fund"), and GEORGE D.
BJURMAN AND ASSOCIATES, a California corporation (the "Adviser").
RECITALS
WHEREAS, the Trust and the Adviser desire to amend the Advisory Agreement
to (i) eliminate the Adviser's ability to recoup any voluntary reduction of any
portion of the compensation or reimbursement of expenses due to it pursuant to
the Advisory Agreement prior to the Fund's payment of current ordinary operating
expenses, and (ii) require that, in order for a waived fee or reimbursed expense
to be eligible for repayment, recouped amounts must relate to one of the
immediately preceding five fiscal years of the Fund and, in addition, in the
sixth full fiscal year of the Fund's operations, the look-back period shall be
reduced from five years to four years and in the seventh full fiscal year, and
thereafter the look-back period shall be reduced to three years before seeking
payment of fees and expenses for the then-current period.
WHEREAS, the disinterested Trustees of the Trust and the full Board of
Trustees have separately approved this Amendment in person at a regular
quarterly meeting of the Board of Trustees on November 19, 1998.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing promises, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Amendment of Section 3
The forth full paragraph of Section 3 of the Advisory Agreement is hereby
amended and replaced in its entire with the following:
"The Fund is responsible for its own operating expenses. Any fees withheld
or voluntarily reduced and any Fund expenses absorbed by the Adviser
voluntarily or pursuant to an agreed upon expense cap which are the Fund's
obligation are subject to reimbursement by the Fund to the Adviser, if so
requested by the Adviser, in subsequent fiscal years if the aggregate
amount actually paid by the Fund toward the operating expenses for such
fiscal year (taking into account the reimbursement) does not exceed the
applicable limitation on Fund expenses. The Adviser is permitted to be
reimbursed only for fee reductions and expense payments made in the
previous three fiscal years, except that it is permitted to look back up to
five years and four years, respectively, during the initial six years and
seventh year of the Fund's operations. Any such reimbursement is also
contingent upon the Board of Trustees' review and approval at the time the
reimbursement is made. Such reimbursement may not be paid prior to the
Fund's payment of current ordinary operating expenses."
2. No Other Modifications
Except as set forth in this Amendment, the Advisory Agreement remains
unmodified and in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
date first specified above.
THE BJURMAN FUNDS
By /s/ G. Andrew Bjurman
-----------------------------
Title Co-President
--------------------------
By /s/ O. Thomas Barry III
-----------------------------
Title Co-President
--------------------------
GEORGE D. BJURMAN AND ASSOCIATES
By /s/ G. Andrew Bjurman
-----------------------------
Title President
--------------------------
UNDERWRITING AGREEMENT
----------------------
This Agreement made as of December 18, 1998 by and between The Bjurman
Funds (the "Trust"), a Delaware business trust, and CW Fund Distributors, Inc.,
a Delaware corporation ("Underwriter").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, Underwriter is a broker-dealer registered with the Securities and
Exchange Commission and a member of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust and Underwriter are desirous of entering into an
agreement providing for the distribution by Underwriter of shares of beneficial
interest (the "Shares") of the Trust;
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:
1. Appointment.
------------
The Trust hereby appoints Underwriter as its exclusive agent for the
distribution of the Shares, and Underwriter hereby accepts such appointment
under the terms of this Agreement. While this Agreement is in force, the Trust
shall not sell any Shares except on the terms set forth in this Agreement.
Notwithstanding any other provision hereof, the Trust may terminate, suspend or
withdraw the offering of Shares whenever, in its sole discretion, it deems such
action to be desirable.
<PAGE>
2. Sale and Repurchase of Shares.
------------------------------
(a) Underwriter will have the right, as agent for the Trust, to enter into
dealer agreements with responsible investment dealers, and to sell Shares to
such investment dealers against orders therefor at the public offering price (as
defined in subparagraph 2(d) hereof) stated in the Trust's effective
Registration Statement on Form N-1A under the Securities Act of 1933, as
amended, including the then current prospectus and statement of additional
information (the "Registration Statement"). Upon receipt of an order to purchase
Shares from a dealer with whom Underwriter has a dealer agreement, Underwriter
will promptly cause such order to be filled by the Trust.
(b) Underwriter will also have the right, as agent for the Trust, to sell
such Shares to the public against orders therefor at the public offering price.
(c) Underwriter will also have the right to take, as agent for the Trust,
all actions which, in Underwriter's judgment, are necessary to carry into effect
the distribution of the Shares.
(d) The public offering price for the Shares of each Series shall be the
respective net asset value of the Shares of that Series then in effect, plus any
applicable sales charge determined in the manner set forth in the Registration
Statement or as permitted by the Act and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder. In no event shall any
applicable sales charge exceed the maximum sales charge permitted by the Rules
of the NASD.
- 2 -
<PAGE>
(e) The net asset value of the Shares of the Trust shall be determined in
the manner provided in the Registration Statement, and when determined shall be
applicable to transactions as provided for in the Registration Statement. The
net asset value of the Shares shall be calculated by the Trust or by another
entity on behalf of the Trust. Underwriter shall have no duty to inquire into or
liability for the accuracy of the net asset value per Share as calculated.
(f) On every sale, the Trust shall receive the applicable net asset value
of the Shares promptly, but in no event later than the third business day
following the date on which Underwriter shall have received an order for the
purchase of the Shares.
(g) Upon receipt of purchase instructions, Underwriter will transmit such
instructions to the Trust or its transfer agent for registration of the Shares
purchased.
(h) Nothing in this Agreement shall prevent Underwriter or any affiliated
person (as defined in the Act) of Underwriter from acting as underwriter or
distributor for any other person, firm or corporation (including other
investment companies) or in any way limit or restrict Underwriter or any such
affiliated person from buying, selling or trading any securities for its or
their own account or for the accounts of others for whom it or they may be
acting; provided, however, that Underwriter expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
- 3 -
<PAGE>
(i) Underwriter, as agent of and for the account of the Trust, may
repurchase the Shares at such prices and upon such terms and conditions as shall
be specified in the Registration Statement.
3. Sale of Shares by the Trust.
----------------------------
The Trust reserves the right to issue any Shares at any time directly to
the holders of Shares ("Shareholders"), to sell Shares to its Shareholders or to
other persons at not less than net asset value and to issue Shares in exchange
for substantially all the assets of any corporation or trust or for the shares
of any corporation or trust.
4. Basis of Sale of Shares.
------------------------
Underwriter does not agree to sell any specific number of Shares.
Underwriter, as agent for the Trust, undertakes to sell Shares on a best efforts
basis only against orders therefor.
5. Rules of NASD, etc.
-------------------
(a) Underwriter will conform to the Rules of the NASD and the securities
laws of any jurisdiction in which it sells, directly or indirectly, any Shares.
(b) Underwriter will require each dealer with whom Underwriter has a dealer
agreement to conform to the applicable provisions hereof and the Registration
Statement with respect to the public offering price of the Shares, and neither
Underwriter nor any such dealers shall withhold the placing of purchase orders
so as to make a profit thereby.
- 4 -
<PAGE>
(c) Underwriter agrees to furnish to the Trust sufficient copies of any
agreements, plans or other materials it intends to use in connection with any
sales of Shares in adequate time for the Trust to file and clear them with the
proper authorities before they are put in use, and not to use them until so
filed and cleared.
(d) Underwriter, at its own expense, will qualify as dealer or broker, or
otherwise, under all applicable state or federal laws required in order that
Shares may be sold in such States as may be mutually agreed upon by the parties.
(e) Underwriter shall not make, or permit any representative, broker or
dealer to make, in connection with any sale or solicitation of a sale of the
Shares, any representations concerning the Shares except those contained in the
then current prospectus and statement of additional information covering the
Shares and in printed information approved by the Trust as information
supplemental to such prospectus and statement of additional information. Copies
of the then effective prospectus and statement of additional information and any
such printed supplemental information will be supplied by the Trust to
Underwriter in reasonable quantities upon request.
6. Records to be Supplied by Trust.
--------------------------------
The Trust shall furnish to Underwriter copies of all information, financial
statements and other papers which Underwriter may reasonably request for use in
connection with the distribution of the Shares, and this shall include, but
shall not
- 5 -
<PAGE>
be limited to, one certified copy, upon request by Underwriter, of all financial
statements prepared for the Trust by independent public accountants.
7. Fees and Expenses.
------------------
For performing its services under this Agreement, Underwriter will receive
from the Trust a fee of $500 per month. Fees shall be paid monthly in arrears.
The Trust shall promptly reimburse Underwriter for any expenses which are to be
paid by the Trust in accordance with the following paragraph.
In the performance of its obligations under this Agreement, Underwriter
will pay only the costs incurred in qualifying as a broker or dealer under state
and federal laws and in establishing and maintaining its relationships with the
dealers selling the Shares. All other reasonable costs in connection with the
offering of the Shares will be paid by the Trust in accordance with agreements
between them as permitted by applicable law, including the Act and rules and
regulations promulgated thereunder. These costs include, but are not limited to,
licensing fees, filing fees, travel and such other expenses as may be incurred
by Underwriter on behalf of the Trust. Licensing of representatives, who also
are employees of the investment adviser to the Trust, shall be done by mutual
consent.
8. Indemnification of Trust.
-------------------------
Underwriter agrees to indemnify and hold harmless the Trust and each person
who has been, is, or may hereafter be a trustee, officer, employee, shareholder
or control person of the
- 6 -
<PAGE>
Trust against any loss, damage or expense (including the reasonable costs of
investigation) reasonably incurred by any of them in connection with any claim
or in connection with any action, suit or proceeding to which any of them may be
a party, which arises out of or is alleged to arise out of or is based upon any
untrue statement or alleged untrue statement of a material fact, or the omission
or alleged omission to state a material fact necessary to make the statements
not misleading, on the part of Underwriter or any agent or employee of
Underwriter or any other person for whose acts Underwriter is responsible,
unless such statement or omission was made in reliance upon written information
furnished by the Trust. Underwriter likewise agrees to indemnify and hold
harmless the Trust and each such person in connection with any claim or in
connection with any action, suit or proceeding which arises out of or is alleged
to arise out of Underwriter's failure to exercise reasonable care and diligence
with respect to its services, if any, rendered in connection with investment,
reinvestment, automatic withdrawal and other plans for Shares. The term
"expenses" for purposes of this and the next paragraph includes amounts paid in
satisfaction of judgments or in settlements which are made with Underwriter's
consent. The foregoing rights of indemnification shall be in addition to any
other rights to which the Trust or each such person may be entitled as a matter
of law.
- 7 -
<PAGE>
9. Indemnification of Underwriter.
-------------------------------
The Trust agrees to indemnify and hold harmless Underwriter and each person
who has been, is, or may hereafter be a director, officer, employee, shareholder
or control person of Underwriter against any loss, damage or expense (including
the reasonable costs of investigation) reasonably incurred by any of them in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
any of such persons in the performance of Underwriter's duties or from the
reckless disregard by any of such persons of Underwriter's obligations and
duties under this Agreement. The Trust will advance attorneys' fees or other
expenses incurred by any such person in defending a proceeding, upon the
undertaking by or on behalf of such person to repay the advance if it is
ultimately determined that such person is not entitled to indemnification.
In order that the indemnification provisions contained in this Paragraph 9
shall apply, it is understood that if in any case the Trust may be asked to
indemnify Underwriter or any other person or hold Underwriter or any other
person harmless, the Trust shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further understood that
Underwriter will use all reasonable care to identify and notify the Trust
promptly concerning any situation which presents or appears likely to present
the probability of
- 8 -
<PAGE>
such a claim for indemnification against the Trust. The Trust shall have the
option to defend Underwriter and any such person against any claim which may be
the subject of this indemnification, and in the event that the Trust so elects
it will so notify Underwriter, and thereupon the Trust shall take over complete
defense of the claim, and neither Underwriter nor any such person shall in such
situation initiate further legal or other expenses for which it shall seek
indemnification under this Paragraph 9. Underwriter shall in no case confess any
claim or make any compromise in any case in which the Trust will be asked to
indemnify Underwriter or any such person except with the Trust's written
consent.
Notwithstanding any other provision of this Agreement, Underwriter shall be
entitled to receive and act upon advice of counsel (who may be counsel for the
Trust or its own counsel) and shall be without liability for any action
reasonably taken or thing reasonably done pursuant to such advice, provided that
such action is not in violation of applicable federal or state laws or
regulations.
10. Termination and Amendment of this Agreement.
--------------------------------------------
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment. This Agreement may be amended only if
such amendment is approved (i) by Underwriter, (ii) either by action of the
Board of Trustees of the Trust or at a meeting of the Shareholders of the Trust
by the affirmative vote of a majority of the outstanding Shares, and
- 9 -
<PAGE>
(iii) by a majority of the Trustees of the Trust who are not interested persons
of the Trust or of Underwriter by vote cast in person at a meeting called for
the purpose of voting on such approval.
Either the Trust or Underwriter may at any time terminate this Agreement on
ninety (90) days' written notice delivered or mailed by registered mail, postage
prepaid, to the other party.
11. Effective Period of this Agreement.
-----------------------------------
This Agreement shall take effect upon its execution and shall remain in
full force and effect for a period of two (2) years from the date of its
execution (unless terminated automatically as set forth in Section 10), and from
year to year thereafter, subject to annual approval (i) by Underwriter, (ii) by
the Board of Trustees of the Trust or a vote of a majority of the outstanding
Shares, and (iii) by a majority of the Trustees of the Trust who are not
interested persons of the Trust or of Underwriter by vote cast in person at a
meeting called for the purpose of voting on such approval.
12. New Series.
-----------
The terms and provisions of this Agreement shall become automatically
applicable to any additional series of the Trust established during the initial
or renewal term of this Agreement.
13. Successor Investment Trust.
---------------------------
Unless this Agreement has been terminated in accordance with Paragraph 10,
the terms and provisions of this Agreement shall become automatically applicable
to any investment company
- 10 -
<PAGE>
which is a successor to the Trust as a result of reorganization,
recapitalization or change of domicile.
14. Limitation of Liability.
------------------------
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust. The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an officer of the Trust, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust.
15. Severability.
-------------
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
16. Questions of Interpretation.
----------------------------
(a) This Agreement shall be governed by the laws of the State of Ohio.
(b) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Act shall be resolved by reference to such term or provision of the Act
and to
- 11 -
<PAGE>
interpretation thereof, if any, by the United States courts or in the absence of
any controlling decision of any such court, by rules, regulations or orders of
the Securities and Exchange Commission issued pursuant to said Act. In addition,
where the effect of a requirement of the Act, reflected in any provision of this
Agreement is revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
17. Notices.
--------
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Trust for this purpose
shall be 10100 Santa Monica Boulevard, Suite 1200, Los Angeles, California
90677, and that the address of Underwriter for this purpose shall be 312 Walnut
Street, 21st Floor, Cincinnati, Ohio 45202.
18. Counterparts.
-------------
This Agreement may be executed in one or more counterparts, and by the
parties hereto on separate counterparts, each of which shall be deemed an
original but all of which together shall constitute but one and the same
instrument.
19. Year 2000 Readiness.
--------------------
Countrywide represents and warrants that it has taken reasonable steps to
make its transaction processing and recordkeeping and other systems and
- 12 -
<PAGE>
equipment compatible with the change in the year 1999 to 2000 without any
related errors in reports or material disruption to services provided hereunder
and Countrywide expects full compatibility before December 31, 1999.
IN WITNESS WHEREOF, the Trust and Underwriter have each caused this
Agreement to be signed in duplicate on their behalf, all as of the day and year
first above written.
ATTEST: THE BJURMAN FUNDS
By: /s/ G. Andrew Bjurman
- ------------------------------- --------------------------------
Its: Co-President
By: /s/ O. Thomas Barry
- ------------------------------- --------------------------------
Its: Co-President
ATTEST: CW FUND DISTRIBUTORS, INC.
By: /s/ Robert G. Dorsey
- ------------------------------- --------------------------------
Its: President
- 13 -
ADMINISTRATION AGREEMENT
------------------------
AGREEMENT dated as of December 18, 1998 between The Bjurman Funds, a
Delaware business trust (the "Trust"), and Countrywide Fund Services, Inc.
("Countrywide"), an Ohio corporation.
WHEREAS, the Trust is an investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust wishes to employ the services of Countrywide to serve as
its administrative agent; and
WHEREAS, Countrywide wishes to provide such services under the conditions
set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and Countrywide agree as follows:
1. APPOINTMENT.
------------
The Trust hereby appoints and employs Countrywide as agent to perform those
services described in this Agreement for the Trust. Countrywide shall act under
such appointment and perform the obligations thereof upon the terms and
conditions hereinafter set forth.
2. DOCUMENTATION.
--------------
The Trust will furnish from time to time the following documents:
A. Each resolution of the Board of Trustees of the Trust authorizing the
original issue of its shares;
B. Each Registration Statement filed with the Securities and Exchange
Commission (the "SEC") and amendments thereof;
C. A certified copy of each amendment to the Agreement and Declaration of
Trust and the Bylaws of the Trust;
D. Certified copies of each resolution of the Board of Trustees
authorizing officers to give instructions to Countrywide;
E. Specimens of all new forms of share certificates accompanied by Board
of Trustees' resolutions approving such forms;
- 1 -
<PAGE>
F. Such other certificates, documents or opinions which Countrywide may,
in its discretion, deem necessary or appropriate in the proper
performance of its duties;
G. Copies of all Underwriting and Dealer Agreements in effect;
H. Copies of all Investment Advisory Agreements in effect; and
I. Copies of all documents relating to special investment or withdrawal
plans which are offered or may be offered in the future by the Trust
and for which Countrywide is to act as plan agent.
3. TRUST ADMINISTRATION.
---------------------
Subject to the direction and control of the Trustees of the Trust,
Countrywide shall supervise the Trust's business affairs not otherwise
supervised by other agents of the Trust. To the extent not otherwise the primary
responsibility of, or provided by, other agents of the Trust, Countrywide shall
supply (i) office facilities, (ii) internal auditing and regulatory services,
and (iii) executive and administrative services. Countrywide shall coordinate
the preparation of (i) tax returns, (ii) reports to shareholders of the Trust,
(iii) reports to and filings with the SEC and state securities authorities
including preliminary and definitive proxy materials, post-effective amendments
to the Trust's registration statement, and the Trust's Form N-SAR, and (iv)
necessary materials for Board of Trustees' meetings unless prepared by other
parties under agreement with the Trust. Countrywide shall provide personnel to
serve as officers of the Trust if so elected by the Board of Trustees; provided,
however, that the Trust shall reimburse Countrywide for the reasonable
out-of-pocket expenses incurred by such personnel in attending Board of
Trustees' meetings and shareholders' meetings of the Trust, provided that
Countrywide shall use those hotels included on a list of business class hotels
provided by the Trust and shall, to the extent practicable, purchase
advance-purchase discount airfare.
4. RECORDKEEPING AND OTHER INFORMATION.
------------------------------------
Countrywide shall create and maintain all records required by applicable
laws, rules and regulations, including but not limited to records required by
Section 31(a) of the 1940 Act and the rules thereunder, as the same may be
amended from time to time, pertaining to the various functions performed by it
and not otherwise created and maintained by another party pursuant to contract
with the Trust. All such records shall be the property of the Trust at all times
and shall be available for inspection and use by the Trust. Where applicable,
such records shall be
- 2 -
<PAGE>
maintained by Countrywide for the periods and in the places required by Rule
31a-2 under the 1940 Act. The retention of such records shall be at the expense
of the Trust. Countrywide shall make available during regular business hours all
records and other data created and maintained pursuant to this Agreement for
reasonable audit and inspection by the Trust, any person retained by the Trust,
or any regulatory agency having authority over the Trust.
5. FURTHER ACTIONS.
----------------
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
6. COMPENSATION.
-------------
For the performance of Countrywide's obligations under this Agreement, each
series of the Trust shall pay Countrywide, on the first business day following
the end of each month, a monthly fee at the annual rate of .150% of such series'
average daily net assets up to $25,000,000 million; .125% of such assets from
$25,000,000 to $50,000,000 million; and .100% of such assets in excess of $50
million; provided, however, that the minimum fee shall be $2,000 per month for
each series.
7. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.
---------------------------------------------------
The parties hereto acknowledge and agree that nothing contained herein
shall be construed to require Countrywide to perform any services for the Trust
which services could cause Countrywide to be deemed an "investment adviser" of
the Trust within the meaning of Section 2(a)(20) of the 1940 Act or to supersede
or contravene the Trust's prospectus or statement of additional information or
any provisions of the 1940 Act and the rules thereunder. Except as otherwise
provided in this Agreement and except for the accuracy of information furnished
to it by Countrywide, the Trust assumes full responsibility for complying with
all applicable requirements of the 1940 Act, the Securities Act of 1933, as
amended, and any other laws, rules and regulations of governmental authorities
having jurisdiction.
8. REFERENCES TO COUNTRYWIDE.
--------------------------
The Trust shall not circulate any printed matter which contains any
reference to Countrywide without the prior written approval of Countrywide,
excepting solely such printed matter as merely identifies Countrywide as
Administrative Services Agent, Transfer, Shareholder Servicing and Dividend
Disbursing Agent and Accounting Services Agent. The Trust will submit printed
matter requiring approval to Countrywide in draft form, allowing sufficient time
for review by Countrywide and its counsel prior to any deadline for printing.
- 3 -
<PAGE>
9. INDEMNIFICATION OF COUNTRYWIDE.
-------------------------------
A. Countrywide may rely on information reasonably believed by it to be
accurate and reliable. Except as may otherwise be required by the 1940 Act and
the rules thereunder, neither Countrywide nor its shareholders, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under or
payments made pursuant to this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or
negligence on the part of any such persons in the performance of the duties of
Countrywide under this Agreement or by reason of reckless disregard by any of
such persons of the obligations and duties of Countrywide under this Agreement.
B. Any person, even though also a director, officer, employee, shareholder
or agent of Countrywide, or any of its affiliates, who may be or become an
officer, trustee, employee or agent of the Trust, shall be deemed, when
rendering services to the Trust or acting on any business of the Trust, to be
rendering such services to or acting solely as an officer, trustee, employee or
agent of the Trust and not as a director, officer, employee, shareholder or
agent of or one under the control or direction of Countrywide or any of its
affiliates, even though paid by one of these entities.
C. Notwithstanding any other provision of this Agreement, the Trust shall
indemnify and hold harmless Countrywide, its directors, officers, employees,
shareholders, agents, control persons and affiliates from and against any and
all claims, demands, expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which Countrywide may sustain or incur or
which may be asserted against Countrywide by any person by reason of, or as a
result of: (i) any action taken or omitted to be taken by Countrywide in good
faith in reliance upon any certificate, instrument, order or share certificate
reasonably believed by it to be genuine and to be signed, countersigned or
executed by any duly authorized person, upon the oral instructions or written
instructions of an authorized person of the Trust or upon the opinion of legal
counsel for the Trust or its own counsel; or (ii) any action taken or omitted to
be taken by Countrywide in connection with its appointment in good faith in
reliance upon any law, act, regulation or interpretation of the same even though
the same may thereafter have been altered, changed, amended or repealed.
However, indemnification under this subparagraph shall not apply to actions or
omissions of Countrywide or its directors, officers, employees, shareholders or
agents in cases of its or their own negligence, willful misconduct, bad faith,
or reckless disregard of its or their own duties hereunder.
- 4 -
<PAGE>
10. TERMINATION
-----------
A. The provisions of this Agreement shall be effective on the date first
above written, shall continue in effect for two years from that date and shall
continue in force from year to year thereafter, but only so long as such
continuance is approved (1) by Countrywide, (2) by vote, cast in person at a
meeting called for the purpose, of a majority of the Trust's trustees who are
not parties to this Agreement or interested persons (as defined in the 1940 Act)
of any such party, and (3) by vote of a majority of the Trust's Board of
Trustees or a majority of the Trust's outstanding voting securities.
B. Either party may terminate this Agreement on any date by giving the
other party at least ninety (90) days' prior written notice of such termination
specifying the date fixed therefor. Upon termination of this Agreement, the
Trust shall pay to Countrywide such compensation as may be due as of the date of
such termination, and shall likewise reimburse Countrywide for any out-of-pocket
expenses and disbursements reasonably incurred by Countrywide to such date.
C. In the event that in connection with the termination of this Agreement a
successor to any of Countrywide's duties or responsibilities under this
Agreement is designated by the Trust by written notice to Countrywide,
Countrywide shall, promptly upon such termination and at the reasonable expenses
of the terminating party (unless the other party has breached this Agreement, in
which case that other party shall incur and pay the expenses), transfer all
records maintained by Countrywide under this Agreement and shall cooperate in
the transfer of such duties and responsibilities, including provision for
assistance from Countrywide's cognizant personnel in the establishment of books,
records and other data by such successor.
D. At termination, Countrywide shall release all toll-free telephone
numbers back to the Trust that have been used by shareholders of the Trust
during the term of this Agreement.
11. SERVICES FOR OTHERS.
--------------------
Nothing in this Agreement shall prevent Countrywide or any affiliated
person (as defined in the 1940 Act) of Countrywide from providing services for
any other person, firm or corporation (including other investment companies);
provided, however, that Countrywide expressly represents that it will undertake
no activities which, in its judgment, will adversely affect the performance of
its obligations to the Trust under this Agreement.
- 5 -
<PAGE>
12. LIMITATION OF LIABILITY.
------------------------
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust. The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an officer of the Trust, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust.
13. SEVERABILITY.
-------------
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
14. QUESTIONS OF INTERPRETATION.
----------------------------
This Agreement shall be governed by the laws of the State of Ohio. Any
question of interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the 1940 Act
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to said 1940 Act. In addition, where the effect of a
requirement of the 1940 Act, reflected in any provision of this Agreement, is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
15. NOTICES.
--------
All notices, requests, consents and other communications required or
permitted under this Agreement shall be in writing (including telex and
telegraphic communication) and shall be (as elected by the person giving such
notice) hand delivered by messenger or courier service, telecommunicated, or
mailed (airmail if international) by registered or certified mail (postage
prepaid), return receipt requested, addressed to:
To the Trust: The Bjurman Funds
10100 Santa Monica Boulevard
Suite 1200
Los Angeles, California 90677
Attention: G. Andrew Bjurman
- 6 -
<PAGE>
To Countrywide: Countrywide Fund Services, Inc.
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Attention: Robert G. Dorsey
or to such other address as any party may designate by notice complying with the
terms of this Section 15. Each such notice shall be deemed delivered (a) on the
date delivered if by personal delivery; (b) on the date telecommunicated if by
telegraph; (c) on the date of transmission with confirmed answer back if by
telex, telefax or other telegraphic method; and (d) on the date upon which the
return receipt is signed or delivery is refused or the notice is designated by
the postal authorities as not deliverable, as the case may be, if mailed.
16. AMENDMENT.
----------
This Agreement may not be amended or modified except by a written agreement
executed by both parties.
17. BINDING EFFECT.
---------------
Each of the undersigned expressly warrants and represents that he has the
full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
18. COUNTERPARTS.
-------------
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
19. FORCE MAJEURE.
--------------
If Countrywide shall be delayed in its performance of services or prevented
entirely or in part from performing services due to causes or events beyond its
control, including and without limitation, acts of God, interruption of power or
other utility, transportation or communication services, acts of civil or
military authority, sabotages, national emergencies, explosion, flood, accident,
earthquake or other catastrophe, fire, legal action, present or future law,
governmental order, rule or regulation, or shortages of suitable parts,
materials, or transportation, such delay or non-performance shall be excused and
a reasonable time for performance in connection with this Agreement shall be
extended to include the period of such delay or non-performance.
- 7 -
<PAGE>
20. YEAR 2000 READINESS
-------------------
Countrywide represents and warrants that it has taken reasonable steps to
make its transaction processing and recordkeeping and other systems and
equipment compatible with the change in the year 1999 to 2000 without any
related errors in reports or material disruption to services provided hereunder
and Countrywide expects full compatibility before December 31, 1999.
21. MISCELLANEOUS.
--------------
The captions in this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE BJURMAN FUNDS
By: /s/ G. Andrew Bjurman
----------------------------
Its: Co-President
By: /s/ O. Thomas Barry
----------------------------
Its: Co-President
COUNTRYWIDE FUND SERVICES, INC.
By: /s/ Robert G. Dorsey
----------------------------
Its: President
- 8 -
ACCOUNTING SERVICES AGREEMENT
-----------------------------
AGREEMENT dated as of December 18, 1998 between The Bjurman Funds, a
Delaware business trust (the "Trust"), on behalf of each series of the Trust
(each series, a "Fund") and Countrywide Fund Services, Inc. ("Countrywide"), an
Ohio corporation.
WHEREAS, the Trust is an investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust wishes to employ the services of Countrywide to provide
the Trust with certain accounting and pricing services; and
WHEREAS, Countrywide wishes to provide such services under the conditions
set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and Countrywide agree as follows:
1. APPOINTMENT.
------------
The Trust hereby appoints and employs Countrywide as agent to perform those
services described in this Agreement for the Trust. Countrywide shall act under
such appointment and perform the obligations thereof upon the terms and
conditions hereinafter set forth.
2. CALCULATION OF NET ASSET VALUE.
-------------------------------
Countrywide will calculate the net asset value of each Fund and the per
share net asset value of the Fund, in accordance with the Fund's current
prospectus and statement of additional information, once daily as of the time
selected by the Trust's Board of Trustees. Countrywide will prepare and maintain
a daily valuation of all securities and other assets of each Fund in accordance
with instructions from a designated officer of the Trust or its investment
adviser and in the manner set forth in the Fund's current prospectus and
statement of additional information. In valuing securities of the Trust,
Countrywide may contract with, and rely upon market quotations provided by,
outside services. Countrywide will use its best efforts to track corporate
actions and promptly notify adviser on receipt and promptly value shares based
on available information. Countrywide will be responsible for reimbursement of
pricing errors of 1(cent) or more per share resulting from its own actions
subject to the provisions of Section 12 below.
<PAGE>
3. BOOKS AND RECORDS.
------------------
Countrywide will maintain and keep current the general ledger for each
Fund, recording all income and expenses, capital share activity and security
transactions of the Fund. Countrywide will maintain such further books and
records as are necessary to enable it to perform its duties under this
Agreement, and will periodically provide reports to the Trust and its authorized
agents regarding share purchases and redemptions and trial balances of the
Trust. Countrywide will prepare and maintain complete, accurate and current all
records with respect to the Trust required to be maintained by the Trust under
the Internal Revenue Code of 1986, as amended (the "Code"), and under the rules
and regulations of the 1940 Act, and will preserve said records in the manner
and for the periods prescribed in the Code and the 1940 Act. The retention of
such records shall be at the expense of the relevant Fund.
All of the records prepared and maintained by Countrywide pursuant to this
Section 3 which are required to be maintained by the Trust under the Code and
the 1940 Act will be the property of the Trust. In the event this Agreement is
terminated, all such records shall be delivered to the Trust at the Trust's
expense, and Countrywide shall be relieved of responsibility for the preparation
and maintenance of any such records delivered to the Trust.
4. PAYMENT OF TRUST EXPENSES.
--------------------------
Countrywide shall process each request received from the Trust or its
authorized agents for payment of the Trust's expenses. Upon receipt of written
instructions signed by an officer or other authorized agent of the Trust,
Countrywide shall prepare checks in the appropriate amounts which shall be
signed by an authorized officer of Countrywide and mailed to the appropriate
party.
5. FORM N-SAR.
-----------
Countrywide shall maintain such records within its control and shall be
requested by the Trust to assist the Trust in fulfilling the requirements of
Form N-SAR.
6. COOPERATION WITH ACCOUNTANTS.
-----------------------------
Countrywide shall cooperate with the Trust's independent public accountants
and shall take all reasonable action in the performance of its obligations under
this Agreement to assure that the necessary information is made available to
such accountants for the expression of their unqualified opinion where required
for any document for the Trust.
7. FURTHER ACTIONS.
----------------
Each party agrees to perform such further acts and
- 2 -
<PAGE>
execute such further documents as are necessary to effectuate the purposes
hereof.
8. FEES.
-----
For the performance of the services under this Agreement, each Fund shall
pay Countrywide a monthly fee in accordance with the schedule attached hereto as
Schedule A. The fees with respect to any month shall be paid to Countrywide on
the last business day of such month. Each Fund shall also promptly reimburse
Countrywide for the cost of external pricing services utilized by Countrywide,
per security, provided that Countrywide will proportionately share these costs
with its other clients pricing these same securities to the extent reasonably
possible.
9. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.
---------------------------------------------------
The parties hereto acknowledge and agree that nothing contained herein
shall be construed to require Countrywide to perform any services for the Trust
which services could cause Countrywide to be deemed an "investment adviser" of
the Trust within the meaning of Section 2(a)(20) of the 1940 Act or to supersede
or contravene the Trust's prospectus or statement of additional information or
any provisions of the 1940 Act and the rules thereunder. Except as otherwise
provided in this Agreement and except for the accuracy of information furnished
to it by Countrywide, the Trust assumes full responsibility for complying with
all applicable requirements of the 1940 Act, the Securities Act of 1933, as
amended, and any other laws, rules and regulations of governmental authorities
having jurisdiction.
10. REFERENCES TO COUNTRYWIDE.
--------------------------
The Trust shall not circulate any printed matter which contains any
reference to Countrywide without the prior written approval of Countrywide,
excepting solely such printed matter as merely identifies Countrywide as
Administrative Services Agent, Transfer, Shareholder Servicing and Dividend
Disbursing Agent and Accounting Services Agent. The Trust will submit printed
matter requiring approval to Countrywide in draft form, allowing sufficient time
for review by Countrywide and its counsel prior to any deadline for printing.
11. EQUIPMENT FAILURES.
-------------------
A. Countrywide shall take all steps necessary to minimize or avoid service
interruptions, and has entered into one or more agreements making provision for
emergency use of electronic data processing equipment. Countrywide shall have no
liability with respect to equipment failures beyond its control.
B. Countrywide represents and warrants that it has taken reasonable steps
to make its transaction processing and
- 3 -
<PAGE>
recordkeeping and other systems and equipment compatible with the change in the
year 1999 to 2000 without any related errors in reports or material disruption
to services provided hereunder and Countrywide expects full compatibility before
December 31, 1999.
12. INDEMNIFICATION OF COUNTRYWIDE.
-------------------------------
A. Countrywide may rely on information reasonably believed by it to be
accurate and reliable. Except as may otherwise be required by the 1940 Act and
the rules thereunder, neither Countrywide nor its shareholders, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under or
payments made pursuant to this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or
negligence on the part of any such persons in the performance of the duties of
Countrywide under this Agreement or by reason of reckless disregard by any of
such persons of the obligations and duties of Countrywide under this Agreement.
B. Any person, even though also a director, officer, employee, shareholder,
or agent of Countrywide, or any of its affiliates, who may be or become an
officer, trustee, employee or agent of the Trust, shall be deemed, when
rendering services to the Trust or acting on any business of the Trust, to be
rendering such services to or acting solely as an officer, trustee, employee or
agent of the Trust and not as a director, officer, employee, shareholder or
agent of or one under the control or direction of Countrywide or any of its
affiliates, even though paid by one of those entities.
C. Notwithstanding any other provision of this Agreement, the Trust shall
indemnify and hold harmless Countrywide, its directors, officers, employees,
shareholders, agents, control persons and affiliates from and against any and
all claims, demands, expenses and liabilities (whether with or without basis in
fact or law) of any and every nature which Countrywide may sustain or incur or
which may be asserted against Countrywide by any person by reason of, or as a
result of: (i) any action taken or omitted to be taken by Countrywide in good
faith in reliance upon any certificate, instrument, order or share certificate
reasonably believed by it to be genuine and to be signed, countersigned or
executed by any duly authorized person, upon the oral instructions or written
instructions of an authorized person of the Trust or upon the opinion of legal
counsel for the Trust or its own counsel; or (ii) any action taken or omitted to
be taken by Countrywide in connection with its appointment in good faith in
reliance upon any law, act,
- 4 -
<PAGE>
regulation or interpretation of the same even though the same may thereafter
have been altered, changed, amended or repealed. However, indemnification under
this subparagraph shall not apply to actions or omissions of Countrywide or its
directors, officers, employees, shareholders or agents in cases of its or their
own negligence, willful misconduct, bad faith, or reckless disregard of its or
their own duties hereunder.
13. TERMINATION.
------------
A. The provisions of this Agreement shall be effective on the date first
above written, shall continue in effect for two years from that date and shall
continue in force from year to year thereafter, but only so long as such
continuance is approved (1) by Countrywide, (2) by vote, cast in person at a
meeting called for the purpose, of a majority of the Trust's trustees who are
not parties to this Agreement or interested persons (as defined in the 1940 Act)
of any such party, and (3) by vote of a majority of the Trust's Board of
Trustees or a majority of the Trust's outstanding voting securities.
B. Either party may terminate this Agreement on any date by giving the
other party at least ninety (90) days' prior written notice of such termination
specifying the date fixed therefor. Upon termination of this Agreement, the
Trust shall pay to Countrywide such compensation as may be due as of the date of
such termination, and shall likewise reimburse Countrywide for any out-of-pocket
expenses and disbursements reasonably incurred by Countrywide to such date.
C. In the event that in connection with the termination of this Agreement a
successor to any of Countrywide's duties or responsibilities under this
Agreement is designated by the Trust by written notice to Countrywide,
Countrywide shall, promptly upon such termination and at the reasonable expenses
of the terminating party (unless the other party has breached this Agreement, in
which case that other party shall incur and pay the expenses), transfer all
records maintained by Countrywide under this Agreement and shall cooperate in
the transfer of such duties and responsibilities, including provision for
assistance from Countrywide's cognizant personnel in the establishment of books,
records and other data by such successor.
14. SERVICES FOR OTHERS.
--------------------
Nothing in this Agreement shall prevent Countrywide or any affiliated
person (as defined in the 1940 Act) of Countrywide from providing services for
any other person, firm or corporation (including other investment companies);
provided, however, that Countrywide expressly represents that it will undertake
no activities which, in its judgment, will adversely affect the performance of
its obligations to the Trust under this Agreement.
- 5 -
<PAGE>
15. LIMITATION OF LIABILITY.
------------------------
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust. The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an officer of the Trust, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust.
16. SEVERABILITY.
-------------
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
17. QUESTIONS OF INTERPRETATION.
----------------------------
This Agreement shall be governed by the laws of the State of Ohio. Any
question of interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the 1940 Act
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the Securities and Exchange Commission issued pursuant to said 1940 Act. In
addition, where the effect of a requirement of the 1940 Act, reflected in any
provision of this Agreement, is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
- 6 -
<PAGE>
18. NOTICES.
--------
All notices, requests, consents and other communications required or
permitted under this Agreement shall be in writing (including telex and
telegraphic communication) and shall be (as elected by the person giving such
notice) hand delivered by messenger or courier service, telecommunicated, or
mailed (airmail if international) by registered or certified mail (postage
prepaid), return receipt requested, addressed to:
To the Trust: The Bjurman Funds
10100 Santa Monica Boulevard
Suite 1200
Los Angeles, California 90677
Attention: G. Andrew Bjurman
To Countrywide: Countrywide Fund Services, Inc.
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Attention: Robert G. Dorsey
or to such other address as any party may designate by notice complying with the
terms of this Section 18. Each such notice shall be deemed delivered (a) on the
date delivered if by personal delivery; (b) on the date telecommunicated if by
telegraph; (c) on the date of transmission with confirmed answer back if by
telex, telefax or other telegraphic method; and (d) on the date upon which the
return receipt is signed or delivery is refused or the notice is designated by
the postal authorities as not deliverable, as the case may be, if mailed.
19. AMENDMENT.
----------
This Agreement may not be amended or modified except by a written agreement
executed by both parties.
20. BINDING EFFECT.
---------------
Each of the undersigned expressly warrants and represents that he has the
full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
21. COUNTERPARTS.
-------------
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
- 7 -
<PAGE>
22. FORCE MAJEURE.
--------------
If Countrywide shall be delayed in its performance of services or prevented
entirely or in part from performing services due to causes or events beyond its
control, including and without limitation, acts of God, interruption of power or
other utility, transportation or communication services, acts of civil or
military authority, sabotages, national emergencies, explosion, flood, accident,
earthquake or other catastrophe, fire, legal action, present or future law,
governmental order, rule or regulation, or shortages of suitable parts,
materials, transportation, such delay or non-performance shall be excused and a
reasonable time for performance in connection with this Agreement shall be
extended to include the period of such delay or non-performance.
23. MISCELLANEOUS.
--------------
The captions in this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE BJURMAN FUNDS
By: /s/ G. Andrew Bjurman
---------------------------
Its: Co-President
By: /s/ O. Thomas Barry
---------------------------
Its: Co-President
COUNTRYWIDE FUND SERVICES, INC.
By: /s/ Robert G. Dorsey
---------------------------
Its: President
- 8 -
<PAGE>
Schedule A
COMPENSATION
------------
Each series of the Trust will pay Countrywide a monthly fee, according to
the average monthly net assets of such series during such month, as follows:
MONTHLY FEE AVERAGE MONTHLY NET ASSETS
----------- --------------------------
$2,500 $ 0 - 100,000,000
3,500 100 - 200,000,000
4,500 200 - 300,000,000
5,500 + .001% Over - 300,000,000
of such assets
over $300,000,000
- 9 -
TRANSFER, DIVIDEND DISBURSING, SHAREHOLDER SERVICE
--------------------------------------------------
AND PLAN AGENCY AGREEMENT
-------------------------
AGREEMENT dated as of December 18, 1998 between The Bjurman Funds, a
Delaware business trust (the "Trust"), and Countrywide Fund Services, Inc.
("Countrywide"), an Ohio corporation.
WHEREAS, the Trust is an investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust wishes to employ the services of Countrywide to serve as
its transfer, dividend disbursing, shareholder service and plan agent; and
WHEREAS, Countrywide wishes to provide such services under the conditions
set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement, the Trust and Countrywide agree as follows:
1. APPOINTMENT.
------------
The Trust hereby appoints and employs Countrywide as agent to perform those
services described in this Agreement for the Trust. Countrywide shall act under
such appointment and perform the obligations thereof upon the terms and
conditions hereinafter set forth.
2. DOCUMENTATION.
--------------
The Trust will furnish from time to time the following documents:
A. Each resolution of the Board of Trustees of the Trust authorizing the
original issue of its shares;
B. Each Registration Statement filed with the Securities and Exchange
Commission (the "SEC") and amendments thereof;
C. A certified copy of each amendment to the Agreement and Declaration of
Trust and the Bylaws of the Trust;
D. Certified copies of each resolution of the Board of Trustees
authorizing officers to give instructions to Countrywide;
E. Specimens of all new forms of share certificates accompanied by Board
of Trustees' resolutions approving such forms;
- 1 -
<PAGE>
F. Such other certificates, documents or opinions which Countrywide may,
in its discretion, deem necessary or appropriate in the proper
performance of its duties;
G. Copies of all Underwriting and Dealer Agreements in effect;
H. Copies of all Investment Advisory Agreements in effect; and
I. Copies of all documents relating to special investment or withdrawal
plans which are offered or may be offered in the future by the Trust
and for which Countrywide is to act as plan agent.
3. COUNTRYWIDE TO RECORD SHARES.
-----------------------------
Countrywide shall record the issuance of shares of the Trust and maintain
pursuant to applicable rules of the SEC a record of the total number of shares
of the Trust which are authorized, issued and outstanding, based upon data
provided to it by the Trust. Countrywide shall also provide the Trust on a
regular basis or upon reasonable request the total number of shares which are
authorized, issued and outstanding, but shall have no obligation when recording
the issuance of the Trust's shares, except as otherwise set forth herein, to
monitor the issuance of such shares or to take cognizance of any laws relating
to the issue or sale of such shares, which functions shall be the sole
responsibility of the Trust.
4. COUNTRYWIDE TO VALIDATE TRANSFERS.
----------------------------------
Upon receipt of a proper request for transfer and upon surrender to
Countrywide of certificates, if any, in proper form for transfer, Countrywide
shall approve such transfer and shall take all necessary steps to effectuate the
transfer as indicated in the transfer request. Upon approval of the transfer,
Countrywide shall notify the Trust in writing of each such transaction and shall
make appropriate entries on the shareholder records maintained by Countrywide.
5. SHARE CERTIFICATES.
-------------------
If the Trust authorizes the issuance of share certificates and an investor
requests a share certificate, Countrywide will countersign and mail, by insured
first class mail, a share certificate to the investor at his address as set
forth on the transfer books of the Trust, subject to any other instructions for
delivery of certificates representing newly purchased shares and subject to the
limitation that no certificates representing newly purchased shares shall be
mailed to the investor until the cash purchase price of such shares has
- 2 -
<PAGE>
been collected and credited to the account of the Trust maintained by the
Custodian. The Trust shall supply Countrywide with a sufficient supply of blank
share certificates and from time to time shall renew such supply upon request of
Countrywide. Such blank share certificates shall be properly signed, manually
or, if authorized by the Trust, by facsimile; and notwithstanding the death,
resignation or removal of any officers of the Trust authorized to sign share
certificates, Countrywide may continue to countersign certificates which bear
the manual or facsimile signature of such officer until otherwise directed by
the Trust. In case of the alleged loss or destruction of any share certificate,
no new certificates shall be issued in lieu thereof, unless there shall first be
furnished an appropriate bond satisfactory to Countrywide and the Trust, and
issued by a surety company satisfactory to Countrywide and the Trust.
6. RECEIPT OF FUNDS.
-----------------
Upon receipt of any check or other instrument drawn or endorsed to it as
agent for, or identified as being for the account of, the Trust or CW Fund
Distributors, Inc. as underwriter of the Trust (the "Underwriter"), Countrywide
shall stamp the check or instrument with the date of receipt, determine the
amount thereof due the Trust and shall forthwith process the same for
collection. Upon receipt of notification of receipt of funds eligible for share
purchases in accordance with the Trust's then current prospectus and statement
of additional information, Countrywide shall notify the Trust, at the close of
each business day, in writing of the amount of said funds credited to the Trust
and deposited in its account with the Custodian, and shall similarly notify the
Underwriter of the amount of said funds credited to the Underwriter and
deposited in its account with its designated bank.
7. PURCHASE ORDERS.
----------------
Upon receipt of an order for the purchase of shares of the Trust,
accompanied by sufficient information to enable Countrywide to establish a
shareholder account, Countrywide shall, as of the next determination of net
asset value after receipt of such order in accordance with the Trust's then
current prospectus and statement of additional information, compute the number
of shares due to the shareholder, credit the share account of the shareholder,
subject to collection of the funds, with the number of shares so purchased,
shall notify the Trust in writing or by computer report at the close of each
business day of such transactions and shall mail to the shareholder and/or
dealer of record a notice of such credit when requested to do so by the Trust.
- 3 -
<PAGE>
8. RETURNED CHECKS.
----------------
In the event that Countrywide is notified by the Trust's Custodian that any
check or other order for the payment of money is returned unpaid for any reason,
Countrywide will:
A. Give prompt notification to the Trust and the Underwriter of the
non-payment of said check;
B. In the absence of other instructions from the Trust or the Underwriter,
take such steps as may be necessary to redeem any shares purchased on the basis
of such returned check and cause the proceeds of such redemption plus any
dividends declared with respect to such shares to be credited to the account of
the Trust and to request the Trust's Custodian to forward such returned check to
the person who originally submitted the check; and
C. Notify the Trust and Underwriter of such actions and correct the Trust's
records maintained by Countrywide pursuant to this Agreement.
9. SALES CHARGE.
-------------
In computing the number of shares to credit to the account of a
shareholder, Countrywide will calculate the total of the applicable sales
charges with respect to each purchase as set forth in the Trust's current
prospectus and statement of additional information and in accordance with any
notification filed with respect to combined and accumulated purchases.
Countrywide will also determine the portion of each sales charge payable by the
Underwriter to the dealer of record participating in the sale in accordance with
such schedules as are from time to time delivered by the Underwriter to
Countrywide; provided, however, that Countrywide shall have no liability
hereunder arising from the incorrect selection by Countrywide of the gross rate
of sales charges except that this exculpation shall not apply in the event the
rate is specified by the Underwriter or the Trust and Countrywide fails to
select the rate specified.
10. DIVIDENDS AND DISTRIBUTIONS.
----------------------------
The Trust shall furnish Countrywide with appropriate evidence of trustee
action authorizing the declaration of dividends and other distributions.
Countrywide shall establish procedures in accordance with the Trust's then
current prospectus and statement of additional information and with other
authorized actions of the Trust's Board of Trustees under which it will have
available from the Custodian or the Trust any required information for each
dividend and other distribution. After deducting any amount required to be
withheld by any applicable laws, Countrywide shall, as agent for each
shareholder who so
- 4 -
<PAGE>
requests, invest the dividends and other distributions in full and fractional
shares in accordance with the Trust's then current prospectus and statement of
additional information. If a shareholder has elected to receive dividends or
other distributions in cash, then Countrywide shall disburse dividends to
shareholders of record in accordance with the Trust's then current prospectus
and statement of additional information. Countrywide shall, on or before the
mailing date of such checks, notify the Trust and the Custodian of the estimated
amount of cash required to pay such dividend or distribution, and the Trust
shall instruct the Custodian to make available sufficient funds therefor in the
appropriate account of the Trust. Countrywide shall mail to the shareholders
periodic statements, as requested by the Trust, showing the number of full and
fractional shares and the net asset value per share of shares so credited. When
requested by the Trust, Countrywide shall prepare and file with the Internal
Revenue Service, and when required, shall address and mail to shareholders, such
returns and information relating to dividends and distributions paid by the
Trust as are required to be so prepared, filed and mailed by applicable laws,
rules and regulations.
11. UNCLAIMED DIVIDENDS AND UNCLAIMED REDEMPTION PROCEEDS.
------------------------------------------------------
Countrywide shall, at least annually, furnish in writing to the Trust the
names and addresses, as shown in the shareholder accounts maintained by
Countrywide, of all shareholders for which there are, as of the end of the
calendar year, dividends, distributions or redemption proceeds for which checks
or share certificates mailed in payment of distributions have been returned.
Countrywide shall use its best efforts to contact the shareholders affected and
to follow any other written instructions received from the Trust concerning the
disposition of any such unclaimed dividends, distributions or redemption
proceeds.
12. REDEMPTIONS AND EXCHANGES.
--------------------------
A. Countrywide shall process, in accordance with the Trust's then current
prospectus and statement of additional information, each order for the
redemption of shares accepted by Countrywide. Upon its approval of such
redemption transactions, Countrywide, if requested by the Trust, shall mail to
the shareholder and/or dealer of record a confirmation showing trade date,
number of full and fractional shares redeemed, the price per share and the total
redemption proceeds. For each such redemption, Countrywide shall either: (a)
prepare checks in the appropriate amounts for approval and verification by the
Trust and signature by an authorized officer of Countrywide and mail the checks
to the appropriate person, or (b) in the event redemption proceeds are to be
wired through the Federal Reserve Wire System or by bank wire, cause such
proceeds to be wired in
- 5 -
<PAGE>
federal funds to the bank account designated by the shareholder, or (c)
effectuate such other redemption procedures which are authorized by the Trust's
Board of Trustees or its then current prospectus and statement of additional
information. The requirements as to instruments of transfer and other
documentation, the applicable redemption price and the time of payment shall be
as provided in the then current prospectus and statement of additional
information, subject to such supplemental instructions as may be furnished by
the Trust and accepted by Countrywide. If Countrywide or the Trust determines
that a request for redemption does not comply with the requirements for
redemptions, Countrywide shall promptly notify the shareholder indicating the
reason therefor.
B. If shares of the Trust are eligible for exchange with shares of any
other investment company, Countrywide, in accordance with the then current
prospectus and statement of additional information and exchange rules of the
Trust and such other investment company, or such other investment company's
transfer agent, shall review and approve all exchange requests and shall, on
behalf of the Trust's shareholders, process such approved exchange requests.
C. Countrywide shall notify the Trust, the Custodian and the Underwriter on
each business day of the amount of cash required to meet payments made pursuant
to the provisions of this Paragraph 12, and, on the basis of such notice, the
Trust shall instruct the Custodian to make available from time to time
sufficient funds therefor in the appropriate account of the Trust. Procedures
for effecting redemption orders accepted from shareholders or dealers of record
by telephone or other methods shall be established by mutual agreement between
Countrywide and the Trust consistent with the Trust's then current prospectus
and statement of additional information.
D. The authority of Countrywide to perform its responsibilities under
Paragraph 7, Paragraph 10, and this Paragraph 12 shall be suspended with respect
to any series of the Trust upon receipt of notification by it of the suspension
of the determination of such series' net asset value.
13. AUTOMATIC WITHDRAWAL PLANS.
---------------------------
Countrywide will process automatic withdrawal orders pursuant to the
provisions of the withdrawal plans duly executed by shareholders and the current
prospectus and statement of additional information of the Trust. Payments upon
such withdrawal order shall be made by Countrywide from the appropriate account
maintained by the Trust with the Custodian on approximately the last business
day of each month in which a payment has been requested, and Countrywide will
withdraw from a shareholder's account and present for repurchase or redemption
as
- 6 -
<PAGE>
many shares as shall be sufficient to make such withdrawal payment pursuant to
the provisions of the shareholder's withdrawal plan and the current prospectus
and statement of additional information of the Trust. From time to time on new
automatic withdrawal plans a check for payment date already past may be issued
upon request by the shareholder.
14. LETTERS OF INTENT.
------------------
Countrywide will process such letters of intent for investing in shares of
the Trust as are provided for in the Trust's current prospectus and statement of
additional information. Countrywide will make appropriate deposits to the
account of the Underwriter for the adjustment of sales charges as therein
provided and will currently report the same to the Underwriter.
15. WIRE-ORDER PURCHASES.
---------------------
Countrywide will send written confirmations to the dealers of record
containing all details of the wire-order purchases placed by each such dealer by
the close of business on the business day following receipt of such orders by
Countrywide or the Underwriter, with copies to the Underwriter. Upon receipt of
any check drawn or endorsed to the Trust (or Countrywide, as agent) or otherwise
identified as being payment of an outstanding wire-order, Countrywide will stamp
said check with the date of its receipt and deposit the amount represented by
such check to Countrywide's deposit accounts maintained with the Custodian.
Countrywide will compute the respective portions of such deposit which represent
the sales charge and the net asset value of the shares so purchased, will cause
the Custodian to transfer federal funds in an amount equal to the net asset
value of the shares so purchased to the Trust's account with the Custodian, and
will notify the Trust and the Underwriter before noon of each business day of
the total amount deposited in the Trust's deposit accounts, and in the event
that payment for a purchase order is not received by Countrywide or the
Custodian on the tenth business day following receipt of the order, will prepare
an NASD "notice of failure of dealer to make payment" and forward such
notification to the Underwriter.
16. OTHER PLANS.
------------
Countrywide will process such accumulation plans, group programs and other
plans or programs for investing in shares of the Trust as are now provided for
in the Trust's current prospectus and statement of additional information and
will act as plan agent for shareholders pursuant to the terms of such plans and
programs duly executed by such shareholders.
- 7 -
<PAGE>
17. RECORDKEEPING AND OTHER INFORMATION.
------------------------------------
Countrywide shall create and maintain all records required by applicable
laws, rules and regulations, including but not limited to records required by
Section 31(a) of the 1940 Act and the rules thereunder, as the same may be
amended from time to time, pertaining to the various functions performed by it
and not otherwise created and maintained by another party pursuant to contract
with the Trust. All such records shall be the property of the Trust at all times
and shall be available for inspection and use by the Trust. Where applicable,
such records shall be maintained by Countrywide for the periods and in the
places required by Rule 31a-2 under the 1940 Act. The retention of such records
shall be at the expense of the Trust. Countrywide shall make available during
regular business hours all records and other data created and maintained
pursuant to this Agreement for reasonable audit and inspection by the Trust, any
person retained by the Trust, or any regulatory agency having authority over the
Trust.
18. SHAREHOLDER RECORDS.
--------------------
Countrywide shall maintain records for each shareholder account showing the
following:
A. Names, addresses and tax identifying numbers;
B. Name of the dealer of record, if any;
C. Number of shares held of each series;
D. Historical information regarding the account of each shareholder,
including dividends and distributions in cash or invested in shares;
E. Information with respect to the source of all dividends and
distributions allocated among income, realized short-term gains and
realized long-term gains;
F. Any instructions from a shareholder including all forms furnished by
the Trust and executed by a shareholder with respect to (i) dividend
or distribution elections and (ii) elections with respect to payment
options in connection with the redemption of shares;
G. Any correspondence relating to the current maintenance of a
shareholder's account;
H. Certificate numbers and denominations for any shareholder holding
certificates;
I. Any stop or restraining order placed against a shareholder's account;
- 8 -
<PAGE>
J. Information with respect to withholding in the case of a foreign
account or any other account for which withholding is required by the
Internal Revenue Code of 1986, as amended; and
K. Any information required in order for Countrywide to perform the
calculations contemplated under this Agreement.
19. TAX RETURNS AND REPORTS.
------------------------
Countrywide will prepare in the appropriate form, file with the Internal
Revenue Service and appropriate state agencies and, if required, mail to
shareholders of the Trust such returns for reporting dividends and distributions
paid by the Trust as are required to be so prepared, filed and mailed and shall
withhold such sums as are required to be withheld under applicable federal and
state income tax laws, rules and regulations.
20. OTHER INFORMATION TO THE TRUST.
-------------------------------
Subject to such instructions, verification and approval of the Custodian
and the Trust as shall be required by any agreement or applicable law,
Countrywide will also maintain such records as shall be necessary to furnish to
the Trust the following: annual shareholder meeting lists, proxy lists and
mailing materials, shareholder reports and confirmations and checks for
disbursing redemption proceeds, dividends and other distributions or expense
disbursements.
21. ACCESS TO SHAREHOLDER INFORMATION.
----------------------------------
Upon request, Countrywide shall arrange for the Trust's investment adviser
to have direct access to shareholder information contained in Countrywide's
computer system, including account balances, performance information and such
other information which is available to Countrywide with respect to shareholder
accounts. No third parties shall be permitted this access (including, but not
limited to broker-dealers) except with those precautions and limits approved by
the Trust.
22. COOPERATION WITH ACCOUNTANTS.
-----------------------------
Countrywide shall cooperate with the Trust's independent public accountants
and shall take all reasonable action in the performance of its obligations under
this Agreement to assure that the necessary information is made available to
such accountants for the expression of their unqualified opinion where required
for any document for the Trust.
- 9 -
<PAGE>
23. SHAREHOLDER SERVICE AND CORRESPONDENCE.
---------------------------------------
Countrywide will provide and maintain adequate personnel, records and
equipment to receive and answer all shareholder and dealer inquiries relating to
account status, share purchases, redemptions and exchanges and other investment
plans available to Trust shareholders. Countrywide will answer written
correspondence from shareholders relating to their share accounts and such other
written or oral inquiries as may from time to time be mutually agreed upon, and
Countrywide will notify the Trust of any correspondence or inquiries which may
require an answer from the Trust. Countrywide shall furnish the investment
adviser to the Trust with copies of all such correspondence, except for routine
inquiries or account transactions, unless instructed otherwise in writing.
24. PROXIES.
--------
Countrywide shall assist the Trust in the mailing of proxy cards and other
material in connection with shareholder meetings of the Trust, shall receive,
examine and tabulate returned proxies and shall, if requested by the Trust,
provide at least one inspector of election to attend and participate as required
by law in shareholder meetings of the Trust.
25. FURTHER ACTIONS.
----------------
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
26. COMPENSATION.
-------------
For the performance of Countrywide's obligations under this Agreement, each
series of the Trust shall pay Countrywide, on the first business day following
the end of each month, a monthly fee in accordance with the schedule attached
hereto as Schedule A. The Trust shall promptly reimburse Countrywide for any
out-of-pocket expenses and advances which are to be paid by the Trust in
accordance with Paragraph 27.
27. EXPENSES.
---------
Countrywide shall furnish, at its expense and without cost to the Trust (i)
the services of its personnel to the extent that such services are required to
carry out its obligations under this Agreement and (ii) the use of data
processing equipment. All costs and expenses not expressly assumed by
Countrywide under this Paragraph 27 shall be paid by the Trust, including, but
not limited to, costs and expenses of officers and employees of Countrywide in
attending meetings of the Board of
- 10 -
<PAGE>
Trustees and shareholders of the Trust, as well as costs and expenses for
postage, envelopes, checks, drafts, continuous forms, reports, communications,
statements and other materials, telephone, telegraph and remote transmission
lines, use of outside pricing services, use of outside mailing firms, necessary
outside record storage, media for storage of records (e.g., microfilm,
microfiche, computer tapes), printing, confirmations and any other shareholder
correspondence and any and all assessments, taxes or levies assessed on
Countrywide for services provided under this Agreement. Postage for mailings of
dividends, proxies, reports and other mailings to all shareholders shall be
advanced to Countrywide three business days prior to the mailing date of such
materials (in a manner similar to the Trust's payment of other expenses).
28. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.
---------------------------------------------------
The parties hereto acknowledge and agree that nothing contained herein
shall be construed to require Countrywide to perform any services for the Trust
which services could cause Countrywide to be deemed an "investment adviser" of
the Trust within the meaning of Section 2(a)(20) of the 1940 Act or to supersede
or contravene the Trust's prospectus or statement of additional information or
any provisions of the 1940 Act and the rules thereunder. Except as otherwise
provided in this Agreement and except for the accuracy of information furnished
to it by Countrywide, the Trust assumes full responsibility for complying with
all applicable requirements of the 1940 Act, the Securities Act of 1933, as
amended, and any other laws, rules and regulations of governmental authorities
having jurisdiction.
29. REFERENCES TO COUNTRYWIDE.
--------------------------
The Trust shall not circulate any printed matter which contains any
reference to Countrywide without the prior written approval of Countrywide,
excepting solely such printed matter as merely identifies Countrywide as
Administrative Services Agent, Transfer, Shareholder Servicing and Dividend
Disbursing Agent and Accounting Services Agent. The Trust will submit printed
matter requiring approval to Countrywide in draft form, allowing sufficient time
for review by Countrywide and its counsel prior to any deadline for printing.
30. EQUIPMENT FAILURES.
-------------------
(a) Countrywide shall take all steps necessary to minimize or avoid service
interruptions, and has entered into on or more agreements making provision for
emergency use of electronic data processing equipment. Countrywide shall have no
liability with respect to equipment failures beyond its control.
- 11 -
<PAGE>
(b) Countrywide represents and warrants that it has taken reasonable steps
to make its transaction processing and recordkeeping and other systems and
equipment compatible with the change in the year 1999 to 2000 without any
related errors in reports or material disruption to services provided hereunder
and Countrywide expects full compatibility before December 31, 1999.
31. INDEMNIFICATION OF COUNTRYWIDE.
-------------------------------
A. Countrywide may rely on information reasonably believed by it to be
accurate and reliable. Except as may otherwise be required by the 1940 Act and
the rules thereunder, neither Countrywide nor its shareholders, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under or
payments made pursuant to this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or
negligence on the part of any such persons in the performance of the duties of
Countrywide under this Agreement or by reason of reckless disregard by any of
such persons of the obligations and duties of Countrywide under this Agreement.
B. Any person, even though also a director, officer, employee, shareholder
or agent of Countrywide, or any of its affiliates, who may be or become an
officer, trustee, employee or agent of the Trust, shall be deemed, when
rendering services to the Trust or acting on any business of the Trust, to be
rendering such services to or acting solely as an officer, trustee, employee or
agent of the Trust and not as a director, officer, employee, shareholder or
agent of or one under the control or direction of Countrywide or any of its
affiliates, even though paid by one of these entities.
C. The Trust shall indemnify and hold harmless Countrywide, its directors,
officers, employees, shareholders, agents, control persons and affiliates from
and against any and all claims, demands, expenses and liabilities (whether with
or without basis in fact or law) of any and every nature which Countrywide may
sustain or incur or which may be asserted against Countrywide by any person by
reason of, or as a result of: (i) any action taken or omitted to be taken by
Countrywide in good faith in reliance upon any certificate, instrument, order or
share certificate reasonably believed by it to be genuine and to be signed,
countersigned or executed by any duly authorized person, upon the oral
instructions or written instructions of an authorized person of the Trust or
upon the opinion of legal counsel for the Trust or its own counsel; or (ii) any
action
- 12 -
<PAGE>
taken or omitted to be taken by Countrywide in connection with its appointment
in good faith in reliance upon any law, act, regulation or interpretation of the
same even though the same may thereafter have been altered, changed, amended or
repealed. However, indemnification under this subparagraph shall not apply to
actions or omissions of Countrywide or its directors, officers, employees,
shareholders or agents in cases of its or their own negligence, willful
misconduct, bad faith, or reckless disregard of its or their own duties
hereunder.
32. TERMINATION
-----------
A. The provisions of this Agreement shall be effective on the date first
above written, shall continue in effect for two years from that date and shall
continue in force from year to year thereafter, but only so long as such
continuance is approved (1) by Countrywide, (2) by vote, cast in person at a
meeting called for the purpose, of a majority of the Trust's trustees who are
not parties to this Agreement or interested persons (as defined in the 1940 Act)
of any such party, and (3) by vote of a majority of the Trust's Board of
Trustees or a majority of the Trust's outstanding voting securities.
B. Either party may terminate this Agreement on any date by giving the
other party at least ninety (90) days' prior written notice of such termination
specifying the date fixed therefor. Upon termination of this Agreement, the
Trust shall pay to Countrywide such compensation as may be due as of the date of
such termination, and shall likewise reimburse Countrywide for any out-of-pocket
expenses and disbursements reasonably incurred by Countrywide to such date.
C. In the event that in connection with the termination of this Agreement a
successor to any of Countrywide's duties or responsibilities under this
Agreement is designated by the Trust by written notice to Countrywide,
Countrywide shall, promptly upon such termination and at the reasonable expenses
of the terminating party (unless the other party has breached this Agreement, in
which case that other party shall incur and pay the expenses)(for reasonable
expenses only), transfer all records maintained by Countrywide under this
Agreement and shall cooperate in the transfer of such duties and
responsibilities, including provision for assistance from Countrywide's
cognizant personnel in the establishment of books, records and other data by
such successor.
33. SERVICES FOR OTHERS.
--------------------
Nothing in this Agreement shall prevent Countrywide or any affiliated
person (as defined in the 1940 Act) of Countrywide from providing services for
any other person, firm or corporation (including other investment companies);
provided, however, that Countrywide expressly represents that it will undertake
no
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<PAGE>
activities which, in its judgment, will adversely affect the performance of its
obligations to the Trust under this Agreement.
34. LIMITATION OF LIABILITY.
------------------------
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust. The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an officer of the Trust, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust.
35. SEVERABILITY.
-------------
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
36. QUESTIONS OF INTERPRETATION.
----------------------------
This Agreement shall be governed by the laws of the State of Ohio. Any
question of interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the 1940 Act
shall be resolved by reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC issued pursuant to said 1940 Act. In addition, where the effect of a
requirement of the 1940 Act, reflected in any provision of this Agreement, is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
37. NOTICES.
--------
All notices, requests, consents and other communications required or
permitted under this Agreement shall be in writing (including telex and
telegraphic communication) and shall be (as elected by the person giving such
notice) hand delivered by messenger or courier service, telecommunicated, or
mailed (airmail if international) by registered or certified mail
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<PAGE>
(postage prepaid), return receipt requested, addressed to:
To the Trust: The Bjurman Funds
10100 Santa Monica Boulevard
Suite 1200
Los Angeles, California 90677
Attention: G. Andrew Bjurman
To Countrywide: Countrywide Fund Services, Inc.
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Attention: Robert G. Dorsey
or to such other address as any party may designate by notice complying with the
terms of this Section 37. Each such notice shall be deemed delivered (a) on the
date delivered if by personal delivery; (b) on the date telecommunicated if by
telegraph; (c) on the date of transmission with confirmed answer back if by
telex, telefax or other telegraphic method; and (d) on the date upon which the
return receipt is signed or delivery is refused or the notice is designated by
the postal authorities as not deliverable, as the case may be, if mailed.
38. AMENDMENT.
----------
This Agreement may not be amended or modified except by a written agreement
executed by both parties.
39. BINDING EFFECT.
---------------
Each of the undersigned expressly warrants and represents that he has the
full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
40. COUNTERPARTS.
-------------
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
41. FORCE MAJEURE.
--------------
If Countrywide shall be delayed in its performance of services or prevented
entirely or in part from performing services due to causes or events beyond its
control, including and without limitation, acts of God, interruption of power or
other utility, transportation or communication services, acts of civil or
military authority, sabotages, national emergencies, explosion, flood, accident,
earthquake or other catastrophe, fire, legal action, present or future law,
governmental order,
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<PAGE>
rule or regulation, or shortages of suitable parts, materials, transportation,
such delay or non-performance shall be excused and a reasonable time for
performance in connection with this Agreement shall be extended to include the
period of such delay or non-performance.
42. MISCELLANEOUS.
--------------
The captions in this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE BJURMAN FUNDS
By: /s/ G. Andrew Bjurman
-------------------------
Its: Co-President
By: /s/ O. Thomas Barry
-------------------------
Its: Co-President
COUNTRYWIDE FUND SERVICES, INC.
By: /s/ Robert G. Dorsey
-------------------------
Its: President
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<PAGE>
Schedule A
- ----------
COMPENSATION
------------
Services FEE
- -------- ---
As Transfer Agent, (Per Account)
Dividend Disbursing Agent
and Shareholder Servicing Agent Payable monthly at
rate of $20.00 per
account per year;
subject to a minimum
of $2,000 per month
- 17 -
CONSENT OF INDEPENDENT AUDITORS
Bjurman Micro-Cap Growth Fund:
We consent to incorporation by reference in this Post-Effective Amendment No. 3
to Registration Statement No. 333-16033 on Form N-1A of our report dated May 12,
1999 appearing in the Bjurman Micro-Cap Growth Fund Annual Report and
incorporated by reference in the Statement of Additional Information of such
Registration Statement, (b) the references to us under the heading "Other
Information" in such Statement of Additional Information and (c) the reference
to us under the heading "Financial Highlights" in the Prospectus, which is a
part of such Registration Statement.
DELOITTE & TOUCHE LLP
June 1, 1999
Los Angeles, California
DISTRIBUTION PLAN OF
THE BJURMAN FUNDS
AS AMENDED NOVEMBER 19, 1998
The following Distribution Plan (the "Plan") has been adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "Act"), by
The Bjurman Funds (the "Trust") on behalf of Bjurman Micro-Cap Growth Fund (the
AFund") and any separate series of the Trust hereinafter organized. The Plan has
been approved by a majority of the Trust's Board of Trustees, including a
majority of the trustees who are not interested persons of the Trust and who
have no direct or indirect financial interest in the operation of the Plan (the
"non-interested trustees"), cast in person at a meeting called for the purpose
of voting on such Plan.
In reviewing the Plan, the Board of Trustees determined that the adoption
of the Plan would be prudent and in the best interests of the Trust and its
shareholders. Such approval included a determination that in the exercise of
their reasonable business judgment and in light of their fiduciary duties, there
is a reasonable likelihood that the Plan will benefit the Trust and its
shareholders. The Plan has also been approved by a vote of the initial
shareholders of the Fund.
The Provisions of the Plan are:
1. The Fund shall reimburse the Adviser, the Distributor or others for all
expenses incurred by such parties in the promotion and distribution of shares of
the Fund of the Trust, including but not limited to, the printing of
prospectuses and reports used for sales purposes, expenses of preparation of
sales literature and related expenses, advertisements, and other
distribution-related expenses, as well as any distribution or service fees paid
to securities dealers or others who have executed a servicing agreement with the
Trust on behalf of the Fund or the Distributor, which form of agreement has been
approved by the Trustees, including the non-interested trustees. The monies to
be paid pursuant to any such servicing agreement shall be used to pay dealers or
others for, among other things, furnishing personal services and maintaining
shareholder accounts, which services include, among other things, assisting in
establishing and maintaining customer accounts and records; assisting with the
purchase and redemption requests; arranging for bank wires; monitoring dividend
payments from the Trust on behalf of customers; forwarding certain shareholder
communications from the Trust to customers; receiving and answering
correspondence; and aiding in maintaining the investment of their respective
customers in the Fund.
2. The maximum aggregate amount which may be reimbursed by the Fund to such
parties pursuant to paragraph 1 shall be 0.25% per annum of the average daily
net assets of the Fund.
3. The Adviser and the Distributor shall collect and monitor the
documentation of payments made under paragraph 1, and shall furnish to the Board
of Trustees of the Trust, for their review, on a quarterly basis, a written
report of the monies reimbursed to them and others under the Plan as to the
Fund, and shall furnish the Board of Trustees of the Trust with such other
information as the Board may reasonably request in connection with the payments
made under the Plan as to the Fund in order to enable the Board to make an
informed determination of whether the Plan should be continued.
1
<PAGE>
4. The Plan shall continue in effect for a period of more than one year
only so long as such continuance is specifically approved at least annually by
the Trust's Board of Trustees, including the non-interested trustees, cast in
person at a meeting called for the purpose of voting on the Plan.
5. The Plan, or any agreements entered into pursuant to this Plan, may be
terminated at any time, without penalty, by vote of a majority of the
outstanding voting securities of the Trust, or by vote of a majority of the
non-interested Trustees, on not more than sixty (60) days' written notice, and
shall terminate automatically in the event of any act that constitutes an
assignment of the management agreement between the Trust and the Manager.
6. The Plan and any agreements entered into pursuant to this Plan may not
be amended to increase materially the amount to be spent by the Fund for
distribution pursuant to Paragraph 1 hereof without approval by a majority of
the Fund's outstanding voting securities.
7. All material amendments to the Plan, or any agreements entered into
pursuant to this Plan, shall be approved by the non-interested trustees cast in
person at a meeting called for the purpose of voting on any such amendment.
8. So long as the Plan is in effect, the selection and nomination of the
Trust's non-interested trustees shall be committed to the discretion of such
non-interested trustees.
9. This Plan shall take effect on the 18th day of December, 1998
This Plan and the terms and provisions therof are hereby accepted and
agreed to by the Trust, the Adviser and the Distributor as evidenced by their
execution hereof.
The Bjurman Funds George D. Bjurman & Associates
By: /s/ G. Andrew Bjurman By: /s/ G. Andrew Bjurman
----------------------------- ---------------------------
G. Andrew Bjurman G. Andrew Bjurman
Co-President Co-President
CW Fund Distributors, Inc.
By: /s/ O. Thomas Barry, III By: /s/ Robert G. Dorsey
----------------------------- ---------------------------
O. Thomas Barry, III Robert G. Dorsey
Co-President President
