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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M N-1A
Registration Statement Under the Securities Act of 1933 /x/
Pre-Effective Amendment No. __ / /
Post-Effective Amendment No. __ / /
and
Registration Statement Under the Investment Company Act of 1940 /x/
Amendment No. __ / /
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BERKELEY CAPITAL MANAGEMENT FUNDS
(Exact Name of Registrant as Specified in Charter)
650 California Street, Suite 2800, San Francisco, California 94108
(Address of Principal Executive Office)
(415) 393-0300
(Registrant's Telephone Number, Including Area Code)
DEBORAH A. KEMPER
650 California Street, Suite 2800, San Francisco, California 94108
(Name and Address of Agent for Service)
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Approximate Date of Proposed Public Offering: As soon as possible after this
Registration Statement becomes effective. In accordance with Rule 24f-2(a)(1)
under the Investment Company Act of 1940, Registrant hereby declares that an
indefinite number of shares of beneficial interest is being registered by this
Registration Statement.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
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Please Send Copy of Communications to:
MITCHELL E. NICHTER, ESQ.
STEPHANIE OWEN WOODWORTH, ESQ.
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, California 94104
(415) 772-6000
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BERKELEY CAPITAL MANAGEMENT FUNDS
BERKELEY CAPITAL MANAGEMENT MONEY MARKET FUND
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement of Berkeley Capital Management Funds contains the
following documents:
- Facing Sheet
- Contents of Registration Statement
- Cross-Reference Sheet for Berkeley Capital Management Money
Market Fund
- Part A: Prospectus for Berkeley Capital Management Money
Market Fund
- Part B: Statement of Additional Information for Berkeley Capital
Management Funds
- Part C: Other Information
- Signature Page
- Exhibits
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BERKELEY CAPITAL MANAGEMENT FUNDS
Berkeley Capital Management Money Market Fund
CROSS REFERENCE SHEET
FORM N-1A
N-1A Location in
ITEM NO. ITEM REGISTRATION STATEMENT
Part A: INFORMATION REQUIRED IN PROSPECTUS
1. Cover Page Cover Page
2. Synopsis "Key Features of the Fund" and
"Summary of Expenses"
3. Condensed Financial Information Not Applicable
4. General Description of Registrant "Key Features of the Fund,"
"Investment Objective and
Policies," and "Organization and
Management of the Fund"
5. Management of the Fund "Organization and Management of the
Fund"
5A. Management's Discussion of Not Applicable
Fund Performance
6. Capital Stock and Other
Securities "Organization and Management of the
Fund," "Distributions and Taxes,"
and "Other Important Information"
7. Purchase of Securities "Investing in Shares of the Fund"
Being Offered
8. Redemption or Repurchase "How to Sell Shares"
9. Pending Legal Proceedings Not Applicable
ii
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Part B: Information Required in Statement of
Additional Information
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History "General Information"
13. Investment Objectives and "Investment Techniques" and
Policies "Investment Restrictions"
14. Management of the Fund "Management of the Trust"
15. Control Persons and "Principal Holders of Securities"
Principal Holders of
Securities
16. Investment Advisory and "Management of the Trust"
Other Services
17. Brokerage Allocation and "Portfolio Transactions and
Other Practices Turnover"
18. Capital Stock and Other "General Information"
Securities
19. Purchase, Redemption and "Purchase and Redemption
Pricing of Securities Being of Shares"
Offered
20. Tax Status "Distributions and Taxes"
21. Underwriters "Management of the Trust"
22. Calculation of Performance Data "Yield"
23. Financial Statements Not Applicable
iii
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PART A
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PROSPECTUS
Berkeley Capital Management Money Market Fund
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BERKELEY CAPITAL MANAGEMENT MONEY MARKET FUND
PROSPECTUS
JANUARY __, 1997
TO PLACE ORDERS AND FOR ACCOUNT INFORMATION: Contact
__________________________________ (the "Transfer Agent") at [telephone number].
BERKELEY CAPITAL MANAGEMENT MONEY MARKET FUND (the "Fund") is designed for
investors who seek current income consistent with liquidity and stability of
capital. The Fund is a diversified investment portfolio of Berkeley Capital
Management Funds (the "Trust"), an open-end, management investment company. The
Fund's investment manager (the "Investment Manager") is Berkeley Capital
Management.
ABOUT THIS PROSPECTUS: THIS PROSPECTUS CONCISELY PRESENTS IMPORTANT INFORMATION
YOU SHOULD KNOW BEFORE INVESTING IN THE FUND. PLEASE READ IT CAREFULLY AND
RETAIN IT FOR FUTURE REFERENCE. You can find more detailed information about
the Fund in the Statement of Additional Information dated January __, 1997 (as
amended from time to time). The Statement of Additional Information has been
filed with the Securities and Exchange Commission ("SEC") and is incorporated by
reference into this Prospectus. To receive a free copy of this Prospectus or
the Statement of Additional Information, call the Transfer Agent at [telephone
number], or write the Fund at 650 California Street, 28th Floor, San Francisco,
California 94108.
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.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
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TABLE OF CONTENTS
PAGE
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Key Features of the Fund . . . . . . . . . . . . . . . . . . . . . . . .
Summary of Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . .
Matching the Fund to Your Investment Needs . . . . . . . . . . . . . . .
Investment Objective and Policies. . . . . . . . . . . . . . . . . . . .
Other Investment Techniques. . . . . . . . . . . . . . . . . . . . . . .
Organization and Management of the Fund. . . . . . . . . . . . . . . . .
Distributions and Taxes. . . . . . . . . . . . . . . . . . . . . . . . .
Share Price Calculation. . . . . . . . . . . . . . . . . . . . . . . . .
How the Fund Reports Performance . . . . . . . . . . . . . . . . . . . .
Investing in Shares of the Fund. . . . . . . . . . . . . . . . . . . . .
How to Sell Shares . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Important Information. . . . . . . . . . . . . . . . . . . . . . .
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KEY FEATURES OF THE FUND
CURRENT INCOME AND SAFETY. The Fund is designed for investors who seek current
income consistent with liquidity and stability of capital. The Fund invests in
high-quality, short-term debt securities. The Fund attempts to maintain a
stable net asset value of $1.00 per share. (See "Investment Objective and
Policies.")
LIQUIDITY. You can conveniently sell your shares of the Fund at any time. (See
"How to Sell Shares.")
LOW COST INVESTING. The Fund imposes no sales or transaction fees on purchases
or redemptions of shares of the Fund. (See "Matching the Fund to Your
Investment Needs" and "Organization and Management of the Fund.")
PROFESSIONAL MANAGEMENT. The Investment Manager currently provides investment
management services to institutional and other investors. As of September 30,
1996, the Investment Manager had approximately $ ___________ of total assets
under discretionary management under several investment strategies (including
approximately $ __________ invested in fixed income securities). (See
"Organization and Management of the Fund.")
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SUMMARY OF EXPENSES
SHAREHOLDER TRANSACTION EXPENSES: None
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fee ____
12b-1 Fees None
Other Expenses ____
TOTAL FUND OPERATING EXPENSES ____
EXAMPLE. You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each period:
1 Year $____
3 Years $____
The purpose of the preceding table is to assist investors in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. In the table above, "Other Expenses" is based on estimated amounts
for the current fiscal year. THE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. The example assumes a 5 % annual rate of return pursuant
to requirements of the SEC. This hypothetical rate of return is not intended to
be representative of past or future performance.
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MATCHING THE FUND TO YOUR INVESTMENT NEEDS
The Fund may be appropriate for a variety of investment programs which can be
long-term or short-term in nature. While the Fund is not a substitute for
building an investment portfolio tailored to an individual's investment needs
and risk tolerance, it can be used as a high-quality, conveniently liquid money
market investment for cash when it is not fully invested in other securities or
assets.
Because the Fund is designed to provide liquidity and stability of capital, it
may be especially suitable for investors with short-term investment objectives,
including those who are awaiting an opportune time to invest in the equity
and/or bond markets.
The Fund may also be appropriate for long-term investors seeking low-risk
investment alternatives which are designed to provide current income. The Fund
is newly formed and has no operating history.
INVESTMENT OBJECTIVE AND POLICIES
The Fund seeks current income consistent with liquidity and stability of
capital. The Fund pursues its objective by investing exclusively in the
following types of U.S. dollar-denominated money market instruments which are
deemed to mature in 397 days or less in accordance with federal securities
regulations and which the Investment Manager has determined present minimal
credit risk:
- Certificates of deposit, time deposits, notes and bankers' acceptances
of U.S. domestic banks (including their foreign branches), Canadian
chartered banks, U.S. branches of foreign banks and foreign branches
of foreign banks having total assets of $5 billion or greater.
- Commercial paper, including asset-backed commercial paper, rated in
one of the two highest rating categories by Moody's Investors Service
("Moody's"), Standard & Poor's Corporation ("S&P"), Duff & Phelps,
Inc. ("Duff"), Fitch Investors Service, Inc. ("Fitch"), or any other
nationally recognized statistical rating organization ("NRSRO"), or
commercial paper or notes of issuers with an unsecured debt issue
outstanding currently rated in one of the two highest rating
categories by any NRSRO where the obligation is on the same or a
higher level of priority and collateralized to the same extent as the
rated issue.
- The Fund may also invest in other corporate obligations such as
publicly traded bonds, debentures and notes rated in one of the two
highest rating categories by any NRSRO and other similar securities
which, if
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unrated by any NRSRO, are determined by the Investment Manager, using
guidelines approved by the Trust's Board of Trustees, to be at least
equal in quality to one or more of the above referenced securities.
- Obligations of, or guaranteed by, the U.S. or Canadian governments,
their agencies or instrumentalities.
- Repurchase agreements involving obligations that are suitable for
investment under the categories listed above.
EURODOLLAR CERTIFICATES OF DEPOSIT AND FOREIGN SECURITIES. To the extent the
Fund purchases Eurodollar certificates of deposit and other similar obligations,
consideration will be given to the fact that these issuers may not be subject to
the same regulatory requirements as U.S. issuers, including U.S. banks.
Investments in securities of foreign issuers or securities principally traded
overseas may involve certain special risks due to foreign economic, political
and legal developments. Furthermore, issuers of foreign securities are subject
to different, often less comprehensive, accounting, reporting and disclosure
requirements than domestic issuers. The securities of some foreign companies
and foreign securities markets are less liquid and at times more volatile than
securities of comparable U.S. companies and U.S. securities markets. Foreign
brokerage commissions and other fees are also generally higher than in the
United States. There are also special tax considerations which apply to
securities of foreign issuers and securities principally traded overseas. All
such securities will be U.S. dollar-denominated.
CONCENTRATION. The Fund will not invest more than 5% of its total assets in the
securities of a single issuer. The Fund will not invest 25% or more of the
value of its total assets in the securities of issuers conducting their
principal business activities in the same industry. However, this limitation
will not apply to certificates of deposit or bankers' acceptances issued by
domestic branches of U.S. banks and U.S. branches of certain foreign banks, or
to obligations of or guaranteed by the U.S. Government or its agencies or
instrumentalities. See "Investment Restrictions" in the Statement of Additional
Information.
ILLIQUID SECURITIES. The Fund will not purchase illiquid securities, including
time deposits and repurchase agreements maturing in more than 7 days, if, as a
result of the purchase, more than 10% of the Fund's net assets valued at the
time of the transaction are invested in such securities. The investment policy
on the purchase of illiquid securities, as set forth in the Statement of
Additional Information, is nonfundamental.
ASSET-BACKED COMMERCIAL PAPER. The Fund may invest in asset-backed commercial
paper. Repayment of this type of
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commercial paper is intended to be obtained from an identified pool of assets
including automobile receivables, credit-card receivables and other types of
assets. Asset-backed commercial paper is issued by a special purpose vehicle
(usually a corporation) that has been established for the purpose of issuing the
commercial paper and purchasing the underlying pool of assets. The issuer of
commercial paper bears the direct risk of prepayment on the receivables
constituting the underlying pool of assets. Credit support for asset-backed
securities may be based on the underlying assets or provided by a third party.
Credit enhancement techniques include letters of credit, insurance bonds,
limited guarantees and over-collateralization.
ASSET-BACKED SECURITIES. The Fund may invest in asset-backed securities,
including interests in pools of mortgages, loans, receivables, or other assets.
Payment of principal and interest may be largely dependent upon the cash flows
generated by the assets backing the securities.
For more information regarding the Fund's investments, see "Share Price
Calculation."
OTHER INVESTMENT TECHNIQUES
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Fund may purchase securities
on a "when-issued" or "delayed delivery" basis. When-issued or delayed delivery
securities are securities purchased for future delivery at a stated price and
yield. The Fund generally will not pay for such securities or start earning
interest on them until they are received. Securities purchased on a when-issued
or delayed delivery basis are recorded as an asset. The value of such
securities may change as the general level of interest rates changes.
The Fund will not invest more than 25% of its assets in when-issued or delayed
delivery securities. The Fund will not purchase these types of securities for
speculative purposes and will expect actually to acquire the securities when
purchased. However, the Fund reserves the right to sell any of these securities
before their settlement dates if the Investment Manager deems such a sale
advisable.
REPURCHASE TRANSACTIONS. The Fund may engage in repurchase agreements, which
are instruments under which the Fund acquires ownership of a security from a
broker-dealer or bank that agrees to repurchase the security at a mutually
agreed upon time and price (which price is higher than the purchase price),
thereby determining the yield during the Fund's holding period. Maturity of the
securities subject to repurchase may exceed one year.
If the seller of a repurchase agreement becomes bankrupt or otherwise defaults,
the Fund might incur expenses in enforcing its rights, and could experience
losses, including a decline in the value of the underlying securities and loss
of income. The Fund will enter into repurchase agreements only with banks and
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other recognized financial institutions that the Investment Manager deems
creditworthy.
VARIABLE RATE SECURITIES. The Fund may invest in instruments having rates of
interest that are adjusted periodically, or which "float" continuously according
to formulas intended to minimize any fluctuation in the values of the
instruments ("Variable Rate Securities"). The interest rate of Variable Rate
Securities ordinarily is determined by reference to, or is a percentage of, an
objective standard such as a bank's prime rate, the 90-day U.S. Treasury Bill
rate, or the rate of return on commercial paper or bank certificates of deposit.
As interest rates decrease or increase, Variable Rate Securities can be expected
to experience less appreciation or depreciation than fixed rate obligations.
Some Variable Rate Securities ("Variable Rate Demand Securities") have a demand
feature entitling the purchaser to resell the securities at an amount
approximately equal to amortized cost, or the principal amount thereof plus
accrued interest. As is the case for other Variable Rate Securities, the
interest rate on Variable Rate Demand Securities varies according to some
objective standard intended to minimize fluctuation in the values of the
instruments. The Fund determines the maturity of Variable Rate Securities in
accordance with SEC rules.
BORROWING POLICY. Pursuant to a fundamental policy as set forth in the
Statement of Additional Information, the Fund may not borrow money except as a
temporary measure for extraordinary or emergency purposes, and then only in an
amount up to one-third of the value of its total assets in order to meet
redemption requests. Any borrowings under this provision will not be
collateralized.
The Fund's portfolio will be affected by general changes in interest rates which
will result in increases or decreases in the market value of the obligations
held by the Fund. The market value of the obligations in the Fund's portfolio
can be expected to vary inversely to changes in prevailing interest rates.
Investors also should recognize that, in periods of declining interest rates,
the Fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates, the Fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net new
money to the Fund from the continuous sale of its shares will likely be invested
in portfolio instruments producing lower yields than the balance of its
portfolio, thereby reducing the Fund's current yield. In periods of rising
interest rates, the opposite can be expected to occur. In addition, securities
in which the Fund may invest may not yield as high a level of current income as
might be achieved by investing in securities with less liquidity and safety and
longer maturities. The Fund's performance may be affected by changes in market
or economic conditions and other circumstances affecting the financial services
industry. Government regulation of banks, savings and loan associations and
finance companies may limit both the amounts and types of loans
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and other financial commitments these entities can make and the interest rates
and fees they can charge. The profitability of the financial services industry,
which is largely dependent on the availability and cost of capital funds, has
fluctuated in response to volatility in interst rate levels. In addition, the
financial services industry is subject to risks resulting from general ecomonic
conditions and the potential exposure to credit losses.
ADDITIONAL INFORMATION. Please see the Statement of Additional Information for
further information regarding foreign securities, Section 4(2) paper, the
investment rating categories employed by various NRSROs, and other investment
techniques used by the Fund.
ORGANIZATION AND MANAGEMENT OF THE FUND
GENERAL OVERSIGHT. The Board of Trustees and officers of the Trust meet
regularly to review the Fund's investments, performance, expenses, and other
business affairs.
THE INVESTMENT MANAGER. Professional investment management for the Fund is
provided by the Investment Manager, Berkeley Capital Management, 650 California
Street, Suite 2800, San Francisco, California 94108. The Investment Manager
provides a continuous investment program including general investment and
economic advice regarding the Fund's investment strategies; manages the Fund's
investment portfolio and performs expense management, accounting, and
recordkeeping; and provides other services necessary to the operation of the
Fund and the Trust.
The Investment Manager has been engaged in the investment management business
since 1972 and currently provides investment management services to
institutional and other investors with respect to fixed income securities,
equity securities of small to large-cap issuers, and asset allocation
strategies. As of September 30, 1996, the Investment Manager had approximately
$__________ of total assets under discretionary management under several
investment strategies (including approximately $_________ invested in fixed
income securities).
TRANSFER AGENT AND SHAREHOLDER SERVICES. [Name and address] (the "Transfer
Agent") serves as shareholder services agent and transfer agent for the Fund.
The Transfer Agent provides information and services to shareholders which
include reporting share ownership, sales and dividend activity (and associated
tax consequences), responding to daily inquiries, and effecting the transfer of
Fund shares. It furnishes such office space and equipment, telephone
facilities, personnel and informational literature distribution as is necessary
or appropriate in providing shareholder and transfer agency information and
services.
[TO BE COMPLETED WITH A DESCRIPTION OF THE TRANSFER AGENT]
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THE PRINCIPAL DISTRIBUTOR. The Fund's principal distributor (the "Principal
Distributor") is Berkeley International Securities Corporation, 650 California
Street, Suite 2800, San Francisco, California 94108, an affiliate of the
Investment Manager. (See "Management of the Trust" in the Statement of
Additional Information for further information about the Principal Distributor.)
OPERATING FEES AND EXPENSES. Pursuant to its Investment Management Agreement
with the Trust, the Investment Manager receives from the Fund an annual fee,
payable monthly, of _______% of the Fund's average daily net assets.
For transfer agency services provided to the Fund, the Transfer Agent receives
an annual fee, payable monthly, of ___% of the average daily net assets of the
Fund. In addition, for shareholder services provided, the Transfer Agent
receives an annual fee, payable monthly, of ____% of the average daily net
assets of the Fund.
OTHER EXPENSES. The Trust pays the expenses of its operations, including: the
fees and expenses for independent accountants, legal counsel and the custodian
of its assets; the cost of maintaining books and records of account;
registration fees; the fees and expenses of qualifying the Trust and its shares
for distribution under federal and state securities laws; and industry
association membership dues.
OTHER INFORMATION
The Trust was organized as a business trust under the laws of Delaware on
October 28, 1996 and may issue an unlimited number of shares of beneficial
interest or classes of shares in one or more separate series. Currently, the
Trust offers shares of only one series (the Fund described in this Prospectus).
The Board of Trustees may authorize the issuance of shares of additional series
or classes of shares of beneficial interest if it deems it desirable.
SHAREHOLDER MEETINGS AND VOTING RIGHTS. The Trust is not required to hold
annual shareholders' meetings and does not intend to do so. It will, however,
hold special meetings as required or deemed desirable by the Board of Trustees
for such purposes as changing fundamental policies, electing or removing
Trustees, or approving or amending an investment advisory agreement. In
addition, a Trustee may be removed by shareholders at a special meeting called
upon written request of shareholders owning in the aggregate at least 10% of the
outstanding shares of the Trust.
As of the date of this Prospectus, _______________ owned all of the outstanding
shares of the Fund. It is contemplated that the public offering of shares of
the Fund will reduce _____________'s holdings to less than 5% of the total
shares outstanding.
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DISTRIBUTIONS AND TAXES
DIVIDENDS AND OTHER DISTRIBUTIONS. On each day that the net asset value per
share of the Fund is determined (a "Business Day"), the Fund's net investment
income is declared as of the close of trading on the New York Stock Exchange
(the "Exchange") (generally 4:00 p.m. Eastern time) as a dividend to
shareholders of record at that time. Dividends are normally paid (and, where
applicable, reinvested) on the 15th of each month, if a Business Day, otherwise
on the next Business Day, with the exception of the dividend paid in December,
which is scheduled to be paid on the last Business Day in December.
FEDERAL INCOME TAX INFORMATION. The Fund has elected and intends to qualify to
be treated as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"). In order to so qualify, the Fund will distribute
on a current basis substantially all of its investment company taxable income,
its net exempt-interest income (if any), and its net capital gains (if any), and
will seek to meet certain other requirements. Such qualification relieves the
Fund of liability for federal income taxes to the extent the Fund's earnings are
distributed.
Generally, all Fund distributions are taxable to shareholders as ordinary
income.
Records of dividends and other distributions, purchases, and redemptions will be
reflected on shareholders' account statements. The Fund will notify
shareholders at least annually as to the federal income tax consequences of
distributions made each year.
The foregoing is only a brief summary of some of the federal and state income
tax considerations affecting the Fund and its shareholders. Accordingly,
potential investors should consult their tax advisers with specific reference to
their own tax situations.
SHARE PRICE CALCULATION
The price of a share on any given day is its "net asset value" or "NAV." The
NAV is computed by taking total Fund assets, subtracting any liabilities of the
Fund and dividing the resulting amount by the number of shares of the Fund
outstanding. The net asset value per share of the Fund is determined on each
day both the Federal Reserve Bank of New York and the Exchange are open for
business as of the close of normal trading on the Exchange (generally 4:00 p.m.
Eastern time). Purchase or redemption orders will be executed at the net asset
value next determined after receipt of the order by the Fund, the Transfer Agent
or their authorized agents. While the Fund attempts to maintain its net asset
value at a constant $1.00 per share, there can be no assurance that the Fund
will be able to do so, and Fund shares are not insured against a reduction in
net asset value.
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The Fund values its portfolio securities at amortized cost, which means that
they are valued at their acquisition cost (as adjusted for amortization of
premium or discount) rather than at current market value. Calculations are made
to compare the value of the Fund's investments using the amortized cost method
with market values. Except as described below, market valuations are obtained
by using: (1) actual quotations provided by third-party pricing services or
market makers; (2) estimates of market value; or (3) values obtained from yield
data relating to comparable classes of money market instruments published by
reputable sources at the mean between the bid and asked prices for the
instruments. If a deviation of 1/2 of 1% or more were to occur between the net
asset value per share of the Fund calculated by reference to market values and
the $1.00 per share amortized cost value of the Fund, or if there were any other
deviation which the Board of Trustees believed may result in a material dilution
or other unfair result to investors or existing shareholders, the Board of
Trustees would cause the Fund to take such action as it deems appropriate to
eliminate or reduce to the extent reasonably practicable such dilution or unfair
results.
HOW THE FUND REPORTS PERFORMANCE
From time to time the Fund may advertise its yield and effective yield.
Performance figures are based upon historical results and are not intended to
indicate future performance.
Yield refers to the income generated by a hypothetical investment in the Fund
over a specific 7-day period. This income is then annualized, which means that
the income generated during the 7-day period is assumed to be generated each
week over an annual period and is shown as a percentage of the hypothetical
investment.
Effective yield is calculated similarly, but the income earned by the investment
is assumed to be compounded weekly when annualized. Effective yield will be
slightly higher than yield due to this compounding effect.
The performance of the Fund may be compared to that of other mutual funds
tracked by mutual fund rating services, various indices of investment
performance, U.S. Government obligations, bank certificates of deposit, other
investments for which reliable performance data is available, interest rates,
and the consumer price index.
Additional performance information about the Fund will be available in the
Fund's Annual Report, which is sent to all shareholders. When available,
shareholders may request a free copy by calling the Transfer Agent at [telephone
number].
INVESTING IN SHARES OF THE FUND
SHAREHOLDER SERVICE. You may place Fund purchase orders and orders to sell
shares by calling the Transfer Agent at [telephone
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number], where trained representatives are available to answer questions about
the Fund and your account.
The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. If the Fund follows telephone orders
that it reasonably believes to be genuine, it will not be liable for any losses
a shareholder may experience. If the Fund does not follow reasonable procedures
to confirm that a telephone order is genuine, the Fund may be liable for any
losses a shareholder may suffer from unauthorized or fraudulent orders. These
procedures may include:
- - requiring a form of personal identification prior to acting upon
instructions received by telephone;
- - providing written confirmation of such instructions; and
- - tape recording telephone instructions.
Investors should remember that it may be difficult to complete transactions by
telephone during periods of drastic economic or market changes, when phone lines
may become very busy with calls from other investors. If you want to buy or
sell shares but have trouble reaching the Fund by telephone, you may want to use
one of the other ways offered for completing the transactions discussed below,
even though these procedures may mean that completing your transaction may take
longer.
To assist in minimizing administrative costs, share certificates will not be
issued. Records regarding share ownership are maintained by the Transfer Agent.
Telephone purchase or redemption orders received by the Fund, the Transfer
Agent, or their authorized agents, prior to the next net asset value
determination will be effected at that net asset value.
HOW TO BUY SHARES
The minimum initial investment in the Fund is $________, and subsequent
investments must be at least $___________. The Fund generally will accept only
investments in cash in U.S. dollars.
THROUGH A FINANCIAL INSTITUTION. If you are investing through a securities
dealer (including through the Fund's Principal Distributor, Berkeley
International Securities Corporation, an affiliate of the Investment Manager),
fiduciary, or a financial or other institution (each a "Financial Institution"),
you should contact that Financial Institution directly. Certain features of the
Fund may be modified when it is made available through a program of services
offered by a Financial Institution, and administrative charges may be imposed
for the services rendered. In particular, a broker may charge transaction fees
with respect to the purchase and sale of Fund shares. It is the responsibility
of your Financial Institution to submit purchases
-11-
<PAGE>
and redemptions in a timely manner in order for you to receive the next
determined NAV.
INITIAL INVESTMENTS. An initial investment must be preceded or accompanied by a
completed, signed application, which should be forwarded to:
[NAME AND ADDRESS OF TRANSFER AGENT]
If you already have money invested in the Fund, you can place a purchase order
and wire money into your account; or make additional purchases by mail.
BY WIRE. For wiring information and instructions, you should call the Financial
Institution through which you trade, or if you trade directly through the
Transfer Agent, call [telephone number]. There currently is no fee imposed by
the Fund for wire purchases. However, if you buy shares through a Financial
Institution, the Financial Institution may impose a fee for wire purchases.
All wires must be received by the transfer agent in good order at the applicable
fund's designated wire bank before the close of the Federal Reserve Wire System
on that day.
You are advised to wire funds as early in the day as possible and to provide
advance notice to the Transfer Agent for purchases over $10 million.
BY MAIL. Written purchase orders (along with a check made payable to
__________) should be mailed to the Transfer Agent, [address] and should:
- - reference your shareholder account number (inapplicable if a shareholder
Account Application is also enclosed);
- - specify the dollar amount of shares you would like to buy; and
- - for initial share purchases only, select one of the distribution options
listed below.
Once mailed, a purchase request is irrevocable and may not be modified or
cancelled.
DISTRIBUTION OPTIONS. The standing instructions that you selected in your
shareholder Account Application will determine which of the two distribution
options listed below will apply to you. Fund distributions will be
automatically reinvested, unless the Fund, the Transfer Agent, or their
authorized agents have received instructions that distributions are to be
mailed to you as they are paid.
-12-
<PAGE>
AUTOMATIC REINVESTMENT: Distributions will be reinvested in additional
full shares of the Fund at the net asset value next determined after their
payable date.
RECEIVE DIVIDENDS BY MAIL: All distributions will be credited to your
account as of the payable date. If your account is coded to have dividends
mailed immediately, checks will normally be mailed the Business Day after
distributions are credited.
To change the distribution option you have selected, call the Transfer Agent at
[telephone number].
OTHER PURCHASE INFORMATION. The minimum amounts required for automatic
investment or direct purchase may be reduced or waived on certain occasions.
The Fund may waive the required minimums for purchases by trustees, directors,
officers or employees of the Fund, the Investment Manager, the Fund's principal
distributor, or their affiliates. The Fund reserves the right, in its sole
discretion and without prior notice to shareholders, to withdraw or suspend all
or any part of the offering made by this Prospectus, to reject purchase orders
or to change the minimum investment requirements. All orders to buy shares of
the Fund are subject to acceptance by the Fund and are not binding until
confirmed or accepted in writing. The Transfer Agent will charge a $15 service
fee should a check be returned because of insufficient or uncollected funds or a
stop payment order.
HOW TO SELL SHARES
You may sell your shares at any time by telephone or by mail, subject to the
following terms and conditions:
- - if you bought your shares by check, we will send you your money as soon as
your check clears your bank, which may take up to 15 days;
- - your money may earn interest during any holding period;
- - you will receive the dividends declared for the day on which you sell your
shares;
- - a check normally will be mailed to you on the Business Day following the
sale of your shares; and
- - we may suspend the right to sell shares or postpone payment for a sale of
shares when trading on the Exchange is restricted; the Exchange is closed
for any reason other than its normal weekend or holiday closings, emergency
circumstances as determined by the SEC; or any other circumstances as the
SEC may permit.
BY TELEPHONE. You can sell your shares by telephone by calling the Transfer
Agent at [telephone number].
-13-
<PAGE>
We need the following information in order to process your telephone sale:
- - your account number and your name for verification; and
- - the number of shares you want to sell.
BY MAIL. You can also sell shares by writing to the address on the cover of
this Prospectus. We need the following information in order to process your
mail sale:
- - your account number;
- - the number of shares you want to sell; and
- - the signature of at least one of the registered account holders in the
exact form specified in the account.
Once mailed, a sale is irrevocable and may not be modified or cancelled.
Redemption proceeds may be wired to your bank account of record at your
election. To choose this option, you must designate on your Account Application
the U.S. commercial bank account(s) into which you wish the redemption proceeds
to be deposited. You may change the bank account designated to receive
redemption proceeds at any time prior to making a redemption request. You
should send a letter of instruction, including a signature guarantee, to the
Transfer Agent at the address shown on page ____.
You should be able to obtain a signature guarantee from a bank, broker, dealer,
credit union (if authorized under state law), securities exchange or
association, clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
There currently is no fee imposed by the Fund for wiring of redemption proceeds.
However, if you buy shares through a Financial Institution, the Financial
Institution may impose a fee for wire redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire System to your
bank account of record.
Alternatively, you may elect to have redemption proceeds mailed to you at your
address of record.
OTHER IMPORTANT INFORMATION
MINIMUM BALANCE REQUIREMENTS. Due to the relatively high cost of maintaining
smaller holders, the Fund reserves the right to redeem a shareholder's shares
if, as a result of redemptions, their aggregate value drops below the $________
minimum balance requirement for the Fund. The Fund will notify shareholders in
-14-
<PAGE>
writing 30 days before taking such action to allow them to increase their
holdings to at least the minimum level.
READING THIS PROSPECTUS. References to "you" and "your" in this Prospectus
refer to prospective investors and/or current shareholders, while references to
"we," "us," "our," or "our Fund" refer to the Fund generally.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS DISTRIBUTOR.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE FUND OR BY THE
DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE.
-15-
<PAGE>
PART B
------------------
STATEMENT OF
ADDITIONAL INFORMATION
Berkeley Capital Management Funds
------------------
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
BERKELEY CAPITAL MANAGEMENT FUNDS
650 California Street, Suite 2800, San Francisco, CA 94108
BERKELEY CAPITAL MANAGEMENT MONEY MARKET FUND
JANUARY __, 1997
This Statement of Additional Information is not a prospectus. It
should be read in conjunction with the Prospectus dated January __, 1997, which
may be amended from time to time, for Berkeley Capital Management Money Market
Fund (the "Fund"), a separately managed investment portfolio of Berkeley Capital
Management Funds (the "Trust"). To obtain a free copy of the above-referenced
Prospectus, please contact (the "Transfer Agent") at
[telephone number].
TABLE OF CONTENTS
Page
INVESTMENT TECHNIQUES. . . . . . . . . . . . . . . . . . . . . . . . . .
INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . .
MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . .
PORTFOLIO TRANSACTIONS AND TURNOVER. . . . . . . . . . . . . . . . . . .
DISTRIBUTIONS AND TAXES. . . . . . . . . . . . . . . . . . . . . . . . .
SHARE PRICE CALCULATION. . . . . . . . . . . . . . . . . . . . . . . . .
YIELD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . .
PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . . . . . . . . . . . . .
PURCHASE AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . .
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX - RATINGS OF INVESTMENT SECURITIES. . . . . . . . . . . . . . .
<PAGE>
INVESTMENT TECHNIQUES
EURODOLLAR CERTIFICATES OF DEPOSIT AND FOREIGN SECURITIES
Before investing in Eurodollar certificates of deposit, the Fund will
consider their marketability, possible restrictions on international currency
transactions, and any regulations imposed by the domicile country of the foreign
issuer. Eurodollar certificates of deposit may not be subject to the same
regulatory requirements as certificates of deposit issued by U.S. banks and
associated income may be subject to the imposition of foreign taxes.
Investments in securities of foreign issuers or securities principally
traded overseas may involve certain special risks due to foreign economic,
political and legal developments, including expropriation of assets or
nationalization, imposition of withholding taxes on dividend or interest
payments, and possible difficulty in obtaining and enforcing judgments against
foreign entities.
SECTION 4(2) PAPER
Commercial Paper and other securities are issued in reliance on the
so-called "private placement" exemption from registration afforded by Section
4(2) of the Securities Act of 1933, as amended ("Section 4(2) paper"). Federal
securities laws restrict the disposition of Section 4(2) paper. Section 4(2)
paper generally is sold to institutional investors such as the Fund who agree
that they are purchasing the paper for investment and not for public
distribution. Any resale by the purchaser must be in an exempt transaction and
may be accomplished in accordance with Rule 144A. Section 4(2) paper normally
is resold to other institutional investors such as the Fund through or with the
assistance of the issuer or investment dealers who make a market in the Section
4(2) paper, thus providing liquidity. Because it is not possible to predict
with assurance exactly how this market for Section 4(2) paper sold and offered
under Rule 144A will continue to develop, Berkeley Capital Management (the
"Investment Manager"), pursuant to guidelines approved by the Trust's Board of
Trustees, will carefully monitor the Fund's investments in these securities,
focusing on such important factors, among others, as valuation, liquidity, and
availability of information.
ASSET-BACKED COMMERCIAL PAPER AND OTHER SECURITIES
The Fund can invest a portion of its assets in asset-backed commercial
paper and other money market fund Eligible Securities (as that term is defined
below). The credit quality of most asset-backed commercial paper depends
primarily on the credit quality of the assets underlying such securities, how
well the entity issuing the security is insulated from the credit risk of the
originator (or any other affiliated entities)
<PAGE>
and the amount and quality of any credit support provided to the securities.
Asset-backed commercial paper is often backed by a pool of assets
representing the obligations of a number of different parties. To lessen the
effect of failures by obligors on these underlying assets to make payments, such
securities may contain elements of credit support.
Such credit support falls into two classes: liquidity protection and
protection against ultimate default on the underlying assets. Liquidity
protection refers to the provision of advances, generally by the entity
administering the pool of assets, to ensure that scheduled payments on the
underlying pool are made in a timely fashion. Protection against ultimate
default ensures payment on at least a portion of the assets in the pool. This
protection may be provided through guarantees, insurance policies or letters of
credit obtained from third parties, through various means of structuring the
transaction or through a combination of such approaches. The degree of credit
support provided on each issue is based generally on historical information
respecting the level of credit risk associated with such payments. Delinquency
or loss in excess of that anticipated could adversely affect the return on an
investment in an asset-backed security.
Bank notes are notes used to represent debt obligations issued by banks
in large denominations.
Tax-exempt commercial paper are unsecured short-term obligations issued
by a government or political sub-division thereof.
INVESTMENT RESTRICTIONS
EXCEPT AS OTHERWISE NOTED WITH AN *, THE RESTRICTIONS BELOW ARE NONFUNDAMENTAL
AND CAN BE CHANGED WITHOUT APPROVAL OF THE HOLDERS OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES (AS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED, HEREINAFTER THE "1940 ACT") OF THE FUND. THE FUND MAY NOT:
*(1) Purchase securities of any issuer (other than obligations of, or
guaranteed by, the U.S. Government, its agencies or instrumentalities) if, as a
result thereof, more than 5% of the value of its assets would be invested in the
securities of such issuer.
(2) Purchase more than 10% of any class of securities of any issuer. All
debt securities and all preferred stocks are each considered as one class.
*(3) Concentrate 25% or more of the value of its assets in any one
industry; provided, however, that it reserves the freedom of action to invest up
to 100% of its assets in certificates of deposit or bankers' acceptances issued
by domestic branches of
-3-
<PAGE>
U.S. banks and U.S. branches of foreign banks (which the Fund has determined
to be subject to the same regulation as U.S. banks), or obligations of, or
guaranteed by, the U.S. Government, its agencies or instrumentalities in
accordance its investment objective and policies.
(4) Invest more than 5% of its total net assets in securities of issuers
(other than obligations of, or guaranteed by, the U.S. Government, its agencies
or instrumentalities) that, with their predecessors, have a record of less than
three years of continuous operation.
(5) Enter into repurchase agreements if, as a result thereof, more than
10% its net assets valued at the time of the transaction would be subject to
repurchase agreements maturing in more than 7 days and invested in securities
restricted as to disposition under the federal securities laws (except
commercial paper issued under Section 4(2) of the Securities Act of 1933). The
Fund will invest no more than 10% of its net assets in illiquid securities.
(6) Invest more than 5% of its total assets in securities restricted as to
disposition under the federal securities laws (except commercial paper issued
under Section 4(2) of the Securities Act of 1933).
*(7) Invest in commodities or commodity contracts, futures contracts, real
estate or real estate limited partnerships, although it may invest in securities
which are secured by real estate and securities of issuers which invest or deal
in real estate.
(8) Invest for the purpose of exercising control or management of another
issuer.
(9) Purchase securities of other investment companies, except in
connection with a merger, consolidation, reorganization or acquisition of
assets, or as may otherwise be permitted by the 1940 Act.
*(10) Make loans to others (except through the purchase of debt obligations
or repurchase agreements in accordance with its investment objectives and
policies).
*(11) Borrow money, except as a temporary measure for extraordinary or
emergency purposes, and then only in an amount up to one-third of the value of
its total assets in order to meet redemption requests without immediately
selling any portfolio securities. The Fund will not borrow for leverage
purposes or purchase securities or make investments while reverse repurchase
agreements or borrowings are outstanding. Any borrowings by the Fund will not
be collateralized. If for any reason the current value of the total net assets
of the Fund falls below an amount equal to three times the amount of
indebtedness from money
-4-
<PAGE>
borrowed, the Fund will within three business days, reduce its indebtedness to
the extent necessary.
(12) Write, purchase or sell puts, calls or combinations thereof.
(13) Make short sales of securities, or purchase any securities on margin,
except to obtain such short-term credits as may be necessary for the clearance
of transactions.
*(14) Underwrite securities issued by others except to the extent it may be
deemed to be an underwriter under the federal securities laws, in connection
with the disposition of securities from its investment portfolio.
*(15) Issue senior securities as defined in the 1940 Act.
Except for restrictions (3) and (11), if a percentage restriction is adhered to
at the time of investment, a later increase in percentage resulting from a
change in values or net assets will not be considered a violation.
The Fund will only purchase securities that present minimal credit risk and
which are First Tier or Second Tier Securities (otherwise referred to as
"Eligible Securities"). An Eligible Security is:
(1) a security with a remaining maturity of 397 days or less: (a) that is rated
by the requisite nationally recognized statistical rating organizations
("NRSROs") designated by the Securities and Exchange Commission (the "SEC")
(currently Moody's Investors Service ("Moody's"), Standard & Poor's Corporation
("S&P"), Duff and Phelps Credit Rating Co. ("Duff"), Fitch Investors Service,
Inc. ("Fitch"), Thomson Bankwatch, and, with respect to debt issued by banks,
bank holding companies, United Kingdom building societies, broker-dealers and
broker-dealers' parent companies, and bank-supported debt, IBCA Limited and its
affiliate, IBCA, Inc.) in one of the two highest rating categories for
short-term debt obligations (two NRSROs are required but one rating suffices if
only one NRSRO rates the security), or (b) that itself was unrated by any NRSRO,
but was issued by an issuer that has outstanding a class of short-term debt
obligations (or any security within that class) meeting the requirements of
subparagraph 1(a) above that is of comparable priority and security;
(2) a security that at the time of issuance was a long-term security but has a
remaining maturity of 397 days or less, and whose issuer received a rating
within one of the two highest rating categories from the requisite NRSROs for
short-term debt obligations with respect to a class of short-term debt
obligations (or any security within that class) that is now comparable in
priority and security with the subject security; or
-5-
<PAGE>
(3) a security not rated by an NRSRO but deemed by the Investment Manager,
pursuant to guidelines adopted by the Trust's Board of Trustees, to be of
comparable quality to securities described in (1) and (2) above and to represent
minimal credit risk.
A First Tier Security is any Eligible Security that carries (or other relevant
securities issued by its issuer carry) top NRSRO ratings from at least two
NRSROs (a single top rating suffices if only one NRSRO rates the security), that
has been determined by the Investment Manager, pursuant to guidelines adopted by
the Trust's Board of Trustees, to be of comparable quality to such a security,
that is a security issued by a registered investment company that is a money
market fund, or that is a U.S. government security (a "Government security"). A
Second Tier Security is any other Eligible Security.
The Fund will limit its investments in the First Tier Securities of any one
issuer to no more than 5% of its assets. (Repurchase agreements collateralized
by non-Government securities will be taken into account when making this
calculation.) Moreover, the Fund's total holdings of Second Tier Securities
will not exceed 5% of its assets, with investment in the Second Tier Securities
of any one issuer being limited to the greater of 1% of the Fund's assets or $1
million. In addition, the underlying securities involved in repurchase
agreements collateralized by non-Government securities will be First Tier
Securities at the time the repurchase agreements are executed.
-6-
<PAGE>
MANAGEMENT OF THE TRUST
OFFICERS AND TRUSTEES
The officers and trustees of the Trust, their principal occupations during the
past five years and their affiliations, if any, with the Investment Manager or
Berkeley International Securities Corporation are as follows:
[to be completed by amendment]
Position with the Principal
Name Age Trust Occupation
- ----------------- --- ----------------- ----------
Deborah A. Kemper 37 Trustee Senior Vice
President, Marketing
of Berkeley Capital
Management
The address of each individual listed above, unless otherwise indicated, is 650
California Street, Suite 2800, San Francisco, California 94108.
-7-
<PAGE>
COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
Total
Pension or Compensation
Aggregate Retirement Benefits Estimated Annual From Registrant
Compensation Accrued As Part of Benefits Upon and Fund Complex
Name, Position From Registrant Fund Expenses Retirement Paid to Directors
- -------------- --------------- ------------------- ---------------- -----------------
<S> <C> <C> <C> <C>
None None
- -------------------
(1) Estimated for current fiscal year.
</TABLE>
-8-
<PAGE>
INVESTMENT MANAGER
Berkeley Capital Management serves as the Fund's discretionary
investment manager pursuant to an Investment Management Agreement dated
January __, 1997 between it and the Trust on behalf of the Fund. The Investment
Manager is registered as an investment adviser under the Investment Advisers Act
of 1940, as amended, and currently provides investment management services to
institutional and other investors. As of September 30, 1996, the Investment
Manager had approximately $_____ of total assets under management under several
investment strategies (including approximately $_____ invested in fixed income
securities).
The Investment Management Agreement will be in effect for a two-year
term from its effective date, and thereafter will continue in effect for
one-year terms, subject to annual approval by: (1) the Trust's Board of Trustees
or (2) a vote of the majority (as defined in the 1940 Act) of the outstanding
voting securities of the Fund. In either event, the continuance must also be
approved by a majority of the Trust's Board of Trustees who are not parties to
the Agreement, or interested persons (as defined in the 1940 Act) of any such
party, by vote cast in person at a meeting called for the purpose of voting on
such approval. The Investment Management Agreement may be terminated at any
time upon 60 days notice by either party, or by a majority vote of the
outstanding shares of the Fund, and will terminate automatically upon assignment
(as defined in the 1940 Act).
Pursuant to the Investment Management Agreement, the Investment Manager
is entitled to receive from the Fund an annual fee, payable monthly, of ___% of
the Fund's average daily net assets. The Investment Management Agreement allows
the Investment Manager voluntarily to waive its fees payable under the Agreement
and to reimburse all or a portion of the Fund's expenses. The Investment
Management Agreement further provides that the Investment Manager may seek
reimbursement of any reductions made to its management fee and any payments by
the Investment Manager of operating expenses that the Fund is obligated to pay
within the three-year period following such reduction or payment, subject to the
Fund's ability to effect such reimbursement and remain in compliance with any
applicable expense limitations. The Investment Manager will generally seek
reimbursement for the oldest of any reductions and/or waivers before payment by
the Fund for fees and expenses for the current year. Such reimbursement may be
paid prior to the Fund's payment of current expenses if so requested by the
Investment Manager even if such payment may require the Investment Manager to
waive or reduce its fees under the Investment Management Agreement or to pay
current Fund expenses.
EXPENSES
The Trust pays the expenses of its operations, including: the fees and
expenses of independent accountants,
-9-
<PAGE>
counsel and the custodian; the cost of reports and notices to shareholders; the
cost of calculating net asset value; registration fees; the fees and expenses of
qualifying the Trust and its shares for distribution under federal and state
securities laws; and membership dues in the Investment Company Institute or any
similar organization.
PRINCIPAL DISTRIBUTOR
Pursuant to a Distribution Agreement, Berkeley International Securities
Corporation (the "Distributor") is the principal underwriter for shares of the
Trust and is the Trust's agent for the purpose of the continuous offering of the
Fund's shares. The Distributor is an affiliate of the Investment Manager. The
Fund pays the cost for the prospectuses and shareholder reports to be prepared
and delivered to existing shareholders. The Distributor pays such costs when
the described materials are used in connection with the offering of shares to
prospective investors and for supplementary sales literature and advertising.
The Distributor receives no fee under the Distribution Agreement. Terms of
continuation, termination and assignment under the Distribution Agreement are
identical to those described above with respect to the Investment Management
Agreement.
CUSTODIAN AND FUND ACCOUNTANT
[TO BE COMPLETED]
INDEPENDENT ACCOUNTANTS AND REPORTS TO SHAREHOLDERS
The Trust's independent accountants, _________________, audit and
report on the annual financial statements of each series of the Trust and review
certain regulatory reports and the Fund's federal income tax return.
________________ also performs other professional accounting, auditing, tax and
advisory services when engaged to do so by the Trust. Shareholders will be sent
audited annual and unaudited semi-annual financial statements. The address of
___________________ is ________________________________________.
LEGAL COUNSEL
The validity of the shares of beneficial interest offered hereby will
be passed upon by Heller Ehrman White & McAuliffe, 333 Bush Street, San
Francisco, California 94104.
PORTFOLIO TRANSACTIONS AND TURNOVER
PORTFOLIO TRANSACTIONS
Portfolio transactions are undertaken principally to: pursue the
objective of the Fund in relation to movements in the general level of interest
rates; invest money obtained from the
-10-
<PAGE>
sale of Fund shares; reinvest proceeds from maturing portfolio securities; and
meet redemptions of Fund shares. Portfolio transactions may increase or
decrease the yield of the Fund depending upon management's ability correctly to
time and execute them.
The Investment Manager, in effecting purchases and sales of portfolio
securities for the account of the Fund, seeks to obtain best price and
execution. Subject to the supervision of the Board of Trustees, the Investment
Manager generally selects broker-dealers for the Fund primarily on the basis of
the quality and reliability of services provided, including execution capability
and financial responsibility.
When the execution and price offered by two or more broker-dealers are
comparable, the Investment Manager may, in its discretion, utilize the services
of broker-dealers that provide it with investment information and other research
resources. Such resources may also be used by the Investment Manager when
providing advisory services to other investment advisory clients, including
mutual funds.
The Trust expects that purchases and sales of portfolio securities will
usually be principal transactions. Securities will normally be purchased
directly from the issuer or from an underwriter or market maker for the
securities.
Purchases from underwriters will include a commission or concession
paid by the issuer to the underwriter, and purchases from dealers serving as
market makers will include the spread between the bid and asked prices.
The investment decisions for the Fund are reached independently from
those for other accounts managed by the Investment Manager. Such other accounts
may also make investments in instruments or securities at the same time as the
Fund. When two or more accounts managed by the Investment Manager have funds
available for investment in similar instruments, available instruments are
allocated as to amount in a manner considered equitable to each account. In
some cases this procedure may affect the size or price of the position
obtainable for the Fund.
PORTFOLIO TURNOVER
Because securities with maturities of less than one year are
excluded from required portfolio turnover rate calculations, the Fund's
portfolio turnover rate for reporting purposes is expected to be zero.
-11-
<PAGE>
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS
On each day that the net asset value per share of the Fund is
determined (each a "Business Day"), the Fund's net investment income will be
declared as of the close of trading on the New York Stock Exchange (normally
4:00 p.m. Eastern time) as a daily dividend to shareholders of record as of the
last calculation of net asset value prior to the declaration. Conditions which
must be met in order to receive a dividend for the day on which the order is
received by the Transfer Agent or its authorized agent are: (1) a minimum
investment of $_______; (2) receipt by the Transfer Agent before 1:30 p.m.
Eastern time; and (3) payment in immediately available funds. Shareholders will
receive dividends in additional shares unless they elect to receive cash.
Dividends will normally be reinvested monthly in full shares of the Fund at the
net asset value on the 15th day of each month, if a Business Day, otherwise on
the next Business Day. If cash payment is requested, checks will normally be
mailed on the Business Day following the reinvestment date. The Fund will pay
shareholders who redeem all of their shares all dividends accrued to the time of
the redemption within 7 days.
The Fund calculates its dividends based on its daily net investment
income. For this purpose, the net investment income of the Fund consists of:
(1) accrued interest income, plus or minus amortized discount or premium, minus
(2) accrued expenses allocated to the Fund. If the Fund realizes any capital
gains, they will be distributed at least once during the year as determined by
the Board of Trustees. Any realized capital losses to the extent not offset by
realized capital gains will be carried forward. It is not anticipated that the
Fund will realize any long-term capital gains. Expenses of the Trust are
accrued each day. Should the net asset value of the Fund deviate significantly
from market value, the Board of Trustees could decide to value the investments
at market value and any unrealized gains and losses could affect the amount of
the Fund's distributions.
FEDERAL INCOME TAXES
It is the policy of the Fund to qualify for taxation as a "regulated
investment company" by meeting the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). By following this policy, the
Fund expects to eliminate or reduce to a nominal amount the federal income tax
to which it is subject.
In order to qualify as a regulated investment company, the Fund must,
among other things, (1) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans and gains from the sale or
other disposition of stocks, securities, foreign currencies or other income
(including
-12-
<PAGE>
gains from options, futures or forward contracts) derived with respect to its
business of investing in stocks, securities or currencies; (2) derive less than
30% of its gross income from gains from the sale or other disposition of certain
assets (including stocks and securities) held for less than three months; and
(3) diversify its holdings so that at the end of each quarter of its taxable
year (i) at least 50% of the market value of the Fund's total assets is
represented by cash or cash items, U.S. Government securities, securities of
other regulated investment companies and other securities limited, in respect of
any one issuer, to a value not greater than 5% of the value of the Fund's total
assets and 10% of the outstanding voting securities of such issuer, and (ii) not
more than 25% of the value of its assets is invested in the securities of any
one issuer (other than U.S. Government securities or securities of any other
regulated investment company) or of two or more issuers that the Fund controls,
within the meaning of the Code, and that are engaged in the same, similar or
related trades or businesses. These requirements may restrict the degree to
which the Fund may engage in short-term trading and certain hedging transactions
and may limit the range of the Fund's investments. If the Fund qualifies as a
regulated investment company, it will not be subject to federal income tax on
the part of its net investment income and net realized capital gains, if any,
which it distributes to shareholders, provided that the Fund meets certain
minimum distribution requirements. To comply with these requirements, the Fund
must distribute at least (a) 90% of its "investment company taxable income" (as
that term is defined in the Code) and (b) 90% of the excess of its (i)
tax-exempt interest income over (ii) certain deductions attributable to that
income (with certain exceptions), for its taxable year. The Fund intends to
make sufficient distributions to shareholders to meet these requirements.
If the Fund fails to distribute in a calendar year (regardless of
whether it has a non-calendar taxable year) substantially all of its (i)
ordinary income for such year; and (ii) capital gain net income for the year
ending October 31 (or later if the Fund is permitted so to elect and so elects),
plus any retained amount from the prior year, the Fund will be subject to a
nondeductible 4% excise tax on the undistributed amounts. The Fund intends
generally to make distributions sufficient to avoid imposition of this excise
tax.
Any distributions declared by the Fund in October, November or December
to shareholders of record during those months and paid during the following
January are treated, for tax purposes, as if they were received by each
shareholder on December 31 of the year declared. The Fund may adjust its
schedule for the reinvestment of distributions for the month of December to
assist in complying with the reporting and minimum distribution requirements of
the Code.
The Fund does not expect to realize any significant amount of long-term
capital gain. However, any distributions of
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<PAGE>
long-term capital gain will be taxable to the shareholders as long-term capital
gain, regardless of how long a shareholder has held the Fund's shares. If a
shareholder disposes of shares at a loss before holding such shares for longer
than six months, the loss will be treated as a long-term capital loss to the
extent the shareholder received a capital gain dividend on the shares.
The Fund will be required in certain cases to withhold and remit to the
U.S. Treasury 31% of taxable dividends paid to any shareholder (1) who fails to
provide a correct taxpayer identification number certified under penalty of
perjury; (2) who provides an incorrect taxpayer identification number; (3) who
is subject to withholding by the Internal Revenue Service for failure to
properly report all payments of interest or dividends; or (4) who fails to
provide a certified statement that he or she is not subject to "backup
withholding." This "backup withholding" is not an additional tax and any
amounts withheld may be credited against the shareholder's ultimate U.S. tax
liability.
The Fund may engage in investment techniques that may alter the timing
and character of the Fund's income. The Fund may be restricted in its use of
these techniques by rules relating to its qualification as a regulated
investment company.
The foregoing discussion relates only to federal income tax law as
applicable to U.S. citizens or residents. Foreign shareholders (i.e.,
nonresident alien individuals and foreign corporations, partnerships, trusts and
estates) generally are subject to U.S. withholding tax at the rate of 30% (or a
lower tax treaty rate) on distributions derived from net investment income and
short-term capital gains. Distributions to foreign shareholders of long-term
capital gains and any gains from the sale or disposition of shares of the Fund
generally are not subject to U.S. taxation, unless the recipient is an
individual who meets the Code's definition of "resident alien." Different tax
consequences may result if the foreign shareholder is engaged in a trade or
business within the U.S. In addition, the tax consequences to a foreign
shareholder entitled to claim the benefits of a tax treaty may be different than
those described above. Distributions by the Fund may also be subject to state,
local and foreign taxes, and their treatment under applicable tax laws may
differ from the federal income tax treatment.
All or part of interest on indebtedness incurred or continued by a
shareholder to purchase or carry shares of the Fund will not be deductible by
the shareholder. The portion of interest that is not deductible is equal to the
total interest paid or accrued on the indebtedness multiplied by the percentage
of the Fund's total distributions (excluding distributions of the excess of net
long-term capital gains over net short-term capital losses) paid to the
shareholder that are exempt-interest dividends. Under rules used by the
Internal Revenue Service, the purchase of shares of the Fund may be considered
to have been
-14-
<PAGE>
made with borrowed funds even though such funds are not directly traceable to
the purchase of the shares.
The information above is only a summary of some of the tax
considerations generally affecting the Fund and its shareholders. No attempt
has been made to discuss individual tax consequences and this discussion should
not be construed as applicable to all shareholders' tax situations. Investors
should consult their own tax advisors to determine the suitability of the Fund
and the applicability of any state, local, or foreign taxation. Heller Ehrman
White & McAuliffe has expressed no opinion in respect thereof. Foreign
shareholders should consider, in particular, the possible application of U.S.
withholding taxes on certain taxable distributions from the Fund at rates up to
30% (subject to reduction under certain income tax treaties).
SHARE PRICE CALCULATION
The Fund values its portfolio instruments at amortized cost, which means
they are valued at their acquisition cost, as adjusted for amortization of
premium or discount, rather than at current market value. Calculations are made
to compare the value of the Fund's investments at amortized cost with market
values. Market valuations are obtained by using actual quotations provided by
market makers, estimates of market value or values obtained from yield data
relating to classes of money market instruments published by reputable sources
at the mean between the bid and asked prices for the instruments. The amortized
cost method of valuation seeks to maintain a stable $1.00 per share net asset
value even where there are fluctuations in interest rates that affect the value
of portfolio instruments. Accordingly, this method of valuation can in certain
circumstances lead to a dilution of a shareholder's interest.
If a deviation of 1/2 of 1% or more were to occur between the net asset
value per share calculated by reference to market values and the Fund's $1.00
per share net asset value, or if there were any other deviation that the Board
of Trustees of the Trust believed may result in a material dilution or other
unfair results to investors or existing shareholders, the Board of Trustees is
required to cause the Fund to take such action as it deems appropriate to
eliminate or reduce to the extent reasonably practicable such dilution or unfair
results. If the Fund's net asset value per share (computed using market values)
declined, or were expected to decline, below $1.00 (computed using amortized
cost), the Board of Trustees might temporarily reduce or suspend dividend
payments in an effort to maintain the net asset value at $1.00 per share. As a
result of such reduction or suspension of dividends or other action by the Board
of Trustees, an investor would receive less income during a given period than if
such a reduction or suspension had not taken place. Such action could result in
investors receiving no dividend for the period during which they hold their
shares and receiving, upon redemption, a price per share lower than that which
they paid. On the other
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<PAGE>
hand, if the Fund's net asset value per share (computed using market values)
were to increase, or were anticipated to increase above $1.00 (computed using
amortized cost), the Board of Trustees might supplement dividends in an effort
to maintain the net asset value at $1.00 per share.
YIELD
The historical performance of the Fund may be shown in the form of
yield and effective yield. These measures of performance are described below.
YIELD
Yield refers to the net investment income generated by a hypothetical
investment in the Fund over a specific 7-day period. This net investment income
is then annualized, which means that the net investment income generated during
the 7-day period is assumed to be generated in each 7-day period over an annual
period, and is shown as a percentage of the investment.
EFFECTIVE YIELD
Effective yield is calculated similarly, but the net investment income
earned by the investment is assumed to be compounded weekly when annualized.
The effective yield will be slightly higher than the yield due to this
compounding effect.
GENERAL INFORMATION
The Trust is generally not required to hold shareholder meetings.
However, as provided in its Agreement and Declaration of Trust and Bylaws,
shareholder meetings may be called by the Trustees for the purpose of electing
Trustees and for such other purposes as may be prescribed by law, the
Declaration of Trust or the Bylaws, or for the purpose of taking action upon any
other matter deemed by the Trustees to be necessary or desirable.
Each Trustee serves until the next meeting of shareholders, if any,
called for the purpose of electing trustees and until the election and
qualification of his or her successor or until death, resignation, declaration
of bankruptcy or incompetence by a court of competent jurisdiction, or removal
by a majority vote of the shares entitled to vote (as described below) or of a
majority of the Trustees. In accordance with the 1940 Act (i) the Trust will
hold a shareholder meeting for the election of trustees when less than a
majority of the trustees have been elected by shareholders, and (ii) if, as a
result of a vacancy in the Board of Trustees, less than two-thirds of the
trustees have been elected by the shareholders, that vacancy will be filled by a
vote of the shareholders.
The Agreement and Declaration of Trust provides that one third of
shares entitled to vote shall be a quorum for the transaction of business at a
shareholders' meeting, except when a
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<PAGE>
larger quorum is required by applicable law, by the Bylaws or by the Declaration
of Trust, and except that where any provision of law, of the Declaration of
Trust or of these Bylaws permits or requires that (i) holders of any series
shall vote as a series, then a majority of the aggregate number of shares of
that series entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that series; or (ii) holders of any class shall vote
as a class, then a majority of the aggregate number of shares of that class
entitled to vote shall be necessary to constitute a quorum for the transaction
of business by that class. Any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a
reasonable time after the date set for the original meeting, without the
necessity of further notice. The Declaration of Trust specifically authorizes
the Board of Trustees to terminate the Trust (or any of its investment
portfolios) by notice to the shareholders without shareholder approval.
For further information, please refer to the registration statement and
exhibits for the Trust on file with the SEC in Washington, D.C. and available
upon payment of a copying fee. The statements in the Prospectus and this
Statement of Additional Information concerning the contents of contracts or
other documents, copies of which are filed as exhibits to the registration
statement, are qualified by reference to such contracts or documents.
PRINCIPAL HOLDERS OF SECURITIES
[TO BE COMPLETED]
PURCHASE AND REDEMPTION OF SHARES
The Fund's minimum initial investment is $_____ and subsequent
investments of $___ or more may be made. These minimum requirements may be
changed at any time and are not applicable to certain types of investors. The
Trust may waive the minimums for purchases by trustees, directors, officers or
employees of the Trust, the Investment Manager, or the Distributor, and their
affiliates. The Fund generally will accept investments in cash only in U.S.
dollars.
OTHER INFORMATION
The Prospectus of the Fund and this Statement of Additional Information
do not contain all the information included in the Registration Statement filed
with the SEC under the Securities Act of 1933, as amended, with respect to the
securities offered by the Prospectus.
Certain portions of the Registration Statement have been omitted from
the Prospectus and this Statement of Additional Information pursuant to the
rules and regulations of the SEC.
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<PAGE>
The Registration Statement including the exhibits filed therewith may be
examined at the office of the SEC in Washington, D.C.
Statements contained in the Prospectus or in this Statement of
Additional Information as to the contents of any contract or other document
referred to are not necessarily complete, and, in each instance, reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement of which the Prospectus and this Statement of Additional
Information form a part, each such statement being qualified in all respects by
such reference.
THIS STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE AN
OFFERING BY THE TRUST, THE FUND, OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE.
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<PAGE>
APPENDIX - RATINGS OF INVESTMENT SECURITIES
COMMERCIAL PAPER
MOODY'S INVESTORS SERVICE
Prime-1 is the highest commercial paper rating assigned by Moody's.
Issuers (or related supporting institutions) of commercial paper with this
rating are considered to have a superior ability to repay short-term promissory
obligations. Issuers (or related supporting institutions) of securities rated
Prime-2 are viewed as having a strong capacity to repay short-term promissory
obligations. This capacity will normally be evidenced by many of the
characteristics of issuers whose commercial paper is rated Prime-1 but to a
lesser degree.
STANDARD & POOR'S CORPORATION
An S&P A-1 commercial paper rating indicates either an overwhelming or
very strong degree of safety regarding timely payment of principal and interest.
Issues determined to possess overwhelming safety characteristics are denoted
A-1+. Capacity for timely payment on commercial paper rated A-2 is strong, but
the relative degree of safety is not as high as for issues designated A-1.
DUFF & PHELPS CREDIT RATING CO.
Duff-1+ is the highest commercial paper rating assigned by Duff &
Phelps Credit Rating Co. ("Duff"). Three gradations exist within this rating
category: a Duff-1+ rating indicates the highest certainty of timely payment
(issuer short-term liquidity is found to be outstanding and safety is deemed to
be just below that of risk-free short-term U.S. Treasury obligations), a Duff-1
rating signifies a very high certainty of timely payment (issuer liquidity is
determined to be excellent and risk factors are considered minor) and a Duff-1-
rating denotes high certainty of timely payment (issuer liquidity factors are
strong and risk is very small). A Duff-two rating indicates a good certainty of
timely payment; liquidity factors and company fundamentals are sound and risk
factors are small.
FITCH INVESTORS SERVICE, INC.
F-1+ is the highest category, and indicates the strongest degree of
assurance for timely payment. Issues rated F-1 reflect an assurance of timely
payment only slightly less than issues rated F-1+. Issues assigned an F-2
rating have a satisfactory degree of assurance for timely payment, but the
margin of safety is not as great as for issues in the first two rating
categories.
SHORT-TERM NOTES AND VARIABLE RATE DEMAND OBLIGATIONS
MOODY'S INVESTORS SERVICE
Short-term notes/variable rate demand obligations bearing the
designations MIG-1/VMIG-1 are considered to be of the
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<PAGE>
best quality, enjoying strong protection from established cash flows, superior
liquidity support or demonstrated broad-based access to the market for
refinancing. Obligations rated MIG-2/VMIG-2 are of high quality and enjoy ample
margins of protection although not as large as those of the top rated
securities.
STANDARD & POOR'S CORPORATION
An S&P SP-1 rating indicates that the subject securities' issuer has a
very strong capacity to pay principal and interest. Issues determined to
possess overwhelming safety characteristics are given a plus (+) designation.
S&P's determination that an issuer has a satisfactory capacity to pay principal
and interest is denoted by an SP-2 rating.
IBCA
Obligations supported by the highest capacity for timely repayment are
rated A1+. An A1 rating indicates that the obligation is supported by a very
strong capacity for timely repayment. Obligations rated A2 are supported by a
strong capacity for timely repayment, although adverse changes in business,
economic, or financial conditions may affect this capacity.
BONDS
MOODY'S INVESTORS SERVICE
Moody's rates the bonds it judges to be of the best quality Aaa. These
bonds carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or extraordinarily
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of these issues. Bonds carrying an Aa
designation are deemed to be of high quality by all standards. Together with
Aaa rated bonds, they comprise what are generally known as high grade bonds. Aa
bonds are rated lower than the best bonds because they may enjoy relatively
lower margins of protections, fluctuations of protective elements may be of
greater amplitude or there may be other factors present which make them appear
to be subject to somewhat greater long-term risks.
STANDARD & POOR'S CORPORATION
AAA is the highest rating assigned by S&P to a bond and indicates the
issuer's extremely strong capacity to pay interest and repay principal. An AA
rating denotes a bond whose issuer has a very strong capacity to pay interest
and repay principal and differs from an AAA rating only in small degree.
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<PAGE>
DUFF & PHELPS CREDIT RATING CO.
Duff confers an AAA designation to bonds of issuers with the highest
credit quality. The risk factors associated with these bonds are negligible,
being only slightly more than for risk-free U.S. Treasury debt. AA rated bonds
are of high credit quality and have strong protection factors. The risks
associated with them are modest but may vary slightly from time to time because
of economic conditions.
COMMERCIAL PAPER, SHORT-TERM OBLIGATIONS AND DEPOSIT
OBLIGATIONS ISSUED BY BANKS
THOMSON BANKWATCH (TBW)
TBW-1 is the highest category and indicates the degree of safety
regarding timely repayment of principal and interest is very strong. TBW-2 is
the second highest category and while the degree of safety regarding timely
repayment of principal and interest is strong, the relative degree of safety is
not as high as for issues rated TBW-1.
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<PAGE>
PART C
------------------
OTHER INFORMATION
------------------
<PAGE>
BERKELEY CAPITAL MANAGEMENT FUNDS
F O R M N-1A
PART C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements(1)
(b) Exhibits:
(1) Agreement and Declaration of Trust
(2) By-Laws
(3) Voting Trust Agreement -- Not Applicable
(4) Specimen Share Certificate -- Not Applicable
(5)(A)Form of Investment Management Agreement
(5)(B)Administration Agreement(1)
(6) Underwriting Agreement with Berkeley International Securities
Corporation
(7) Bonus, Profit Sharing, Pension and Other Similar Arrangements
-- Not Applicable
(8) Custodian Agreement(1)
(9) Other Material Contracts -- Not Applicable
(10) Opinion and Consent of Counsel(1)
(11) Consent of Certified Public Accountants(1)
(12) Financial Statements Omitted from Item 23 -- Not Applicable
(13) Letter of Understanding relating to initial capital(1)
(14) Model Retirement Plans -- Not Applicable
(15) Rule 12b-1 Plan -- Not Applicable
(16) Performance Calculations(1)
(17) Financial Data Schedule(1)
(18) Multiple Class Plan -- Not Applicable
- --------------
(1) To be filed by subsequent amendment.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
C-1
<PAGE>
Item 26. NUMBER OF HOLDERS OF SECURITIES.
None.
Item 27. INDEMNIFICATION.
Please see Article VI of the Registrant's By-Laws, previously filed as an
Exhibit. Pursuant to Rule 484 under the Securities Act of 1933, as amended, the
Registrant furnishes the following undertaking:
"Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
trustee, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the 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."
Notwithstanding the provisions contained in the Registrant's By-Laws, in
the absence of authorization by the appropriate court on the merits pursuant to
Sections 4 and 5 of Article VI of said By-Laws, any indemnification under said
Article shall be made by Registrant only if authorized in the manner provided in
either subsection (a) or (b) of Section 6 of said Article VI.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Please see Parts A and B of this Registration Statement for discussion of
the Investment Adviser.
Item 29. PRINCIPAL UNDERWRITERS.
(a) Not Applicable.
C-2
<PAGE>
(b) The following information is furnished with respect to the
officers and directors of Berkeley International Securities
Corporation, the Registrant's principal underwriter:
Name Positions and Offices Positions and Offices
with Underwriter with Registrant
- ------------------ --------------------- ---------------------
Robert A. Cornman President None
Diane E. Worthington Financial/Operations None
Principal
Donald O. Dempster Compliance Officer None
Deborah A. Kemper Sales Manager Sole Trustee, Principal
Executive Officer, Principal
Financial Officer, and
Principal Accounting Officer
Michael J. Mayer Director None
The principal business address of each individual named above is 650
California Street, Suite 2800, San Francisco, California 94108.
(c) Not Applicable.
Item 30. LOCATIONS OF ACCOUNTS AND RECORDS.
The accounts, books or other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder are
kept by the Registrant at its offices, 650 California Street, Suite 2800, San
Francisco, California 94108. [Name and address] is the Registrant's transfer
agent, and maintains records relating to such activities.
Item 31. MANAGEMENT SERVICES.
There are no management-related service contracts not discussed in Part A
or Part B of this Registration Statement.
Item 32. UNDERTAKINGS.
(a) Not applicable.
(b) Registrant hereby undertakes to file a post-effective amendment, using
financial statements which need not be certified, within four to six months from
the effective date of Registrant's 1933 Act Registration Statement with respect
to shares of Berkeley Capital Management Money Market Fund.
C-3
<PAGE>
(c) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's latest annual report to
shareholders, once such report becomes available, upon request and without
charge.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Francisco, the State of
California, on the 13th day of November, 1996.
BERKELEY CAPITAL MANAGEMENT FUNDS
By: /s/ Deborah A. Kemper
-----------------------------
Deborah A. Kemper
Sole 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.
/s/ Deborah A. Kemper
- ------------------------ Sole Trustee, November 13, 1996
Deborah A. Kemper Principal Executive
Officer, Principal
Financial Officer, and
Principal Accounting
Officer
C-5
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
of
BERKELEY CAPITAL MANAGEMENT FUNDS
a Delaware Business Trust
Principal Place of Business:
650 California Street
Suite 2800
San Francisco, California 94108
Formed:
October 25, 1996
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I Name and Definitions. . . . . . . . . . . . . . . . . . . . . 1
1. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(b) Trust Property . . . . . . . . . . . . . . . . . . . . . . . 1
(c) Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(d) Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(e) Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . 2
(f) Person . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(g) Investment Company Act . . . . . . . . . . . . . . . . . . . 2
(h) Commission and Principal Underwriter. . . . . . . . . . . . . 2
(i) Declaration of Trust . . . . . . . . . . . . . . . . . . . . 2
(j) By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(k) Interested Person . . . . . . . . . . . . . . . . . . . . . . 2
(l) Investment Adviser or Manager . . . . . . . . . . . . . . . . 2
(m) Series . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(n) Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(o) Voting Interests . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II Purpose of Trust. . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1. Division of Beneficial Interest. . . . . . . . . . . . . . . . . 3
2. Ownership of Shares. . . . . . . . . . . . . . . . . . . . . . . 4
3. Investments in the Trust. . . . . . . . . . . . . . . . . . . . . 4
4. Status of Shares and Limitation of Personal Liability. . . . . . . 4
5. Power of Board of Trustees to Change Provisions Relating to Shares. 5
6. Establishment and Designation of Series and Classes. . . . . . . . 5
(a) Assets Held with Respect to a Particular Series. . . . . . . 5
(b) Liabilities Held With Respect to a Particular Series or Class 6
(c) Dividends, Distributions, Redemptions and Repurchases . . . . 6
(d) Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Equality. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(f) Fractions. . . . . . . . . . . . . . . . . . . . . . . . . . 7
(g) Exchange Privilege. . . . . . . . . . . . . . . . . . . . . 8
(h) Combination of Series. . . . . . . . . . . . . . . . . . . . 8
(i) Elimination of Series. . . . . . . . . . . . . . . . . . . . 8
7. Indemnification of Shareholders. . . . . . . . . . . . . . . . . 8
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<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE IV The Board of Trustees . . . . . . . . . . . . . . . . . . . . . 8
1. Number, Election and Tenure. . . . . . . . . . . . . . . . . . . . . 8
2. Effect of Death, Resignation, etc. of a Trustee. . . . . . . . . . . 9
3. Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. Payment of Expenses by the Trust.. . . . . . . . . . . . . . . . . 12
5. Payment of Expenses by Shareholders. . . . . . . . . . . . . . . . 13
6. Ownership of Assets of the Trust.. . . . . . . . . . . . . . . . . 13
7. Service Contracts. . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V Shareholders' Voting Powers and Meetings . . . . . . . . . . 15
1. Voting Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2. Voting Power and Meetings. . . . . . . . . . . . . . . . . . . . . 15
3. Quorum and Required Vote.. . . . . . . . . . . . . . . . . . . . . 16
4. Action by Written Consent. . . . . . . . . . . . . . . . . . . . . 16
5. Record Dates.. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6. Additional Provisions. . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VI Net Asset Value, Distributions and Redemptions. . . . . . . . 17
1. Determination of Net Asset Value, Net Income and Distributions.. . 17
2. Redemptions and Repurchases. . . . . . . . . . . . . . . . . . . . 17
3. Redemptions at the Option of the Trust.. . . . . . . . . . . . . . 18
ARTICLE VII Compensation and Limitation of Liability of Trustees. . . . . 18
1. Compensation.. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2. Indemnification and Limitation of Liability. . . . . . . . . . . . 18
3. Trustee's Good Faith Action, Expert Advice, No Bond or Surety. . . 19
4. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 19
1. Liability of Third Persons Dealing with Trustees.. . . . . . . . . 19
2. Termination of Trust, Series or Class. . . . . . . . . . . . . . . 20
3. Merger and Consolidation.. . . . . . . . . . . . . . . . . . . . . 20
4. Amendments.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5. Filing of Copies, References, Headings.. . . . . . . . . . . . . . 21
6. Applicable Law.. . . . . . . . . . . . . . . . . . . . . . . . . . 21
7. Provisions in Conflict with Law or Regulations.. . . . . . . . . . 22
8. Business Trust Only. . . . . . . . . . . . . . . . . . . . . . . . 22
9. Use of the Identifying Words "Berkeley Capital Management" and
"Berkeley Capital Management Funds" . . . . . . . . . . . . . . . 22
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AGREEMENT AND DECLARATION OF TRUST
OF
BERKELEY CAPITAL MANAGEMENT FUNDS
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered
into as of the date set forth below by the sole Trustee (the "Sole Trustee")
named hereunder for the purpose of forming a Delaware business trust in
accordance with the provisions hereinafter set forth,
NOW, THEREFORE, the Sole Trustee hereby directs that a Certificate of
Trust be filed with Office of the Secretary of State of the State of Delaware
and hereby declares that the Trustees will hold IN TRUST all cash, securities
and other assets which the Trust now possesses or may hereafter acquire from
time to time in any manner and manage and dispose of the same upon the following
terms and conditions for the pro rata benefit of the holders of Shares in this
Trust.
ARTICLE I
Name and Definitions
SECTION 1. NAME. This Trust shall be known as BERKELEY CAPITAL
MANAGEMENT FUNDS, and the Trustees shall conduct the business of the Trust under
that name or any other name as they may from time to time determine.
SECTION 2. DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "Trust" refers to the Delaware business trust established by
this Agreement and Declaration of Trust, as amended from time to time;
(b) The "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for the account
of the Trust, including without limitation the rights referenced in Article
VIII, Section 9 hereof;
(c) "Trustees" refers to the person who has signed this Agreement and
Declaration of Trust, so long as she continues in office in accordance with the
terms hereof, and all other persons who may from time to time be duly elected or
appointed to serve on the Board of Trustees in accordance with the provisions
hereof, and reference herein to a Trustee or the Trustees shall refer to such
person or persons in their capacity as Trustees hereunder;
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(d) "Shares" means the shares of beneficial interest into which the
beneficial interest in the Trust shall be divided from time to time and includes
fractions of Shares as well as whole Shares, and if the Shares of any Series
shall be divided into Classes, "Shares" means the Shares belonging to a
particular Class (as the context may require);
(e) "Shareholder" means a record owner of outstanding Shares;
(f) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other entities,
whether or not legal entities, and governments and agencies and political
subdivisions thereof, whether domestic or foreign;
(g) The "Investment Company Act" refers to the Investment Company Act
of 1940 and the Rules and Regulations thereunder, all as amended from time to
time;
(h) The terms "Commission" and "Principal Underwriter" shall have the
meanings given them in the Investment Company Act;
(i) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust, as amended or restated from time to time;
(j) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time and incorporated herein by reference;
(k) The term "Interested Person" has the meaning given it in Section
2(a)(19) of the Investment Company Act;
(l) "Investment Adviser" or "Manager" means a party furnishing
services to the Trust pursuant to any contract described in Article IV, Section
7(a) hereof;
(m) "Series" refers to each Series of Shares established and
designated under or in accordance with the provisions of Article III;
(n) "Class" means a Class of Shares established and designated under
or in accordance with the provisions of Article III; and
(o) "Voting Interests" shall mean (i) the number of Shares
outstanding times net asset value per Share where two or more Series or Classes
of Shares of the Trust are voted in the aggregate or (ii) the number of Shares
of each Series or Class where Shareholders vote by separate Series or Classes.
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ARTICLE II
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the
business of a management investment company registered under the Investment
Company Act through one or more Series investing primarily in securities.
ARTICLE III
Shares
SECTION 1. DIVISION OF BENEFICIAL INTEREST. The beneficial interest
in the Trust shall at all times be divided into an unlimited number of Shares,
with a par value of $ .01 per Share. The Trustees may authorize the division of
Shares into separate Series and the division of Series into separate Classes of
Shares. The different Series and Classes shall be established and designated,
and the variations in the relative rights and preferences as between the
different Series and Classes shall be fixed and determined, by the Trustees. If
only one or no Series or Classes shall be established, the Shares shall have the
rights and preferences provided for herein and in Article III, Section 6 hereof
to the extent relevant and not otherwise provided for herein, and all references
to Series (and Classes) shall be construed (as the context may require) to refer
to the Trust.
Subject to the provisions of Section 6 of this Article III, each Share
shall have voting rights as provided in Article V hereof, and holders of the
Shares of any Series shall be entitled to receive dividends and distributions
when, if and as declared with respect thereto in the manner provided in Article
VI, Section 1 hereof. No Shares shall have any priority or preference over any
other Share of the same Series and Class with respect to dividends or
distributions upon termination of the Trust or of such Series or such Class made
pursuant to Article VIII, Section 2 hereof. All dividends and distributions
shall be made ratably among all Shareholders of a particular Class of a
particular Series and, if no Classes, of a particular Series from the assets
held with respect to such Series according to the number of Shares of such Class
of such Series or of such Series held of record by such Shareholders on the
record date for any dividend or distribution or on the date of termination, as
the case may be. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust or
any Series, although the Trustees may provide for the automatic conversion of
one Class of Shares of a Series into another Class of Shares of the same Series
upon the occurrence of certain specific events. The Trustees may from time to
time divide or combine the Shares of any particular Series or Class into a
greater or lesser number of Shares of that
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Series or Class without thereby materially changing the proportionate beneficial
interest of the Shares of that Series or Class in the assets held with respect
to that Series or materially affecting the rights of Shares of any other Series
or Class.
SECTION 2. OWNERSHIP OF SHARES. The ownership of Shares shall be
recorded on the books of the Trust or a transfer or similar agent for the Trust,
which books shall be maintained separately for the Shares of each Series or
Class of each Series. No certificates certifying the ownership of Shares shall
be issued except as the Board of Trustees may otherwise determine from time to
time. The Trustees may make such rules as they consider appropriate for the
transfer of Shares of each Series or Class of each Series and similar matters.
The record books of the Trust as kept by the Trust or any transfer or similar
agent, as the case may be, shall be conclusive as to the identity of the
Shareholders of each Series or Class of each Series and as to the number of
Shares of each Series or Class held from time to time by each.
SECTION 3. INVESTMENTS IN THE TRUST. Investments may be accepted by
the Trust from such Persons, at such times, on such terms, and for such
consideration as the Trustees from time to time may authorize.
SECTION 4. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder, by virtue of having become a
Shareholder, shall be held to have expressly assented and agreed to the terms
hereof and to have become a party hereto. The death of a Shareholder during the
existence of the Trust shall not operate to terminate the Trust, nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but entitles
such representative only to the rights of said deceased Shareholder under this
Trust. Ownership of Shares shall not entitle the Shareholder to any title in or
to the whole or any part of the Trust Property or right to call for a partition
or division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders as partners. Neither the Trust nor the Trustees,
nor any officer, employee or agent of the Trust, shall have any power to bind
personally any Shareholder, nor, except as specifically provided herein, to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
SECTION 5. POWER OF BOARD OF TRUSTEES TO CHANGE PROVISIONS RELATING
TO SHARES. Notwithstanding any other provision of this Declaration of Trust and
without limiting the
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power of the Board of Trustees to amend the Declaration of Trust as provided
elsewhere herein, the Board of Trustees shall have the power to amend this
Declaration of Trust, at any time and from time to time, in such manner as the
Board of Trustees may determine in their sole discretion, without the need for
Shareholder action, so as to add to, delete, replace or otherwise modify any
provisions relating to the Shares contained in this Declaration of Trust,
provided that before adopting any such amendment without Shareholder approval
the Board of Trustees shall determine that it is consistent with the fair and
equitable treatment of all Shareholders or that Shareholder approval is not
otherwise required by the Investment Company Act or other applicable law. If
Shares have been issued, Shareholder approval shall be required to adopt any
amendments to this Declaration of Trust that would adversely affect to a
material degree the rights and preferences of the Shares of any Series or Class
of any Series or to increase or decrease the par value of the Shares of any
Series or Class of any Series.
Subject to the foregoing Paragraph, the Board of Trustees may amend
this Declaration of Trust to amend any of the provisions set forth in paragraphs
(a) through (i) of Section 6 of this Article III.
SECTION 6. ESTABLISHMENT AND DESIGNATION OF SERIES AND CLASSES. The
establishment and designation of any Series or Class of Shares shall be
effective upon the resolution by a majority of the then Trustees, adopting a
resolution that sets forth such establishment and designation and the relative
rights and preferences of such Series or Class. Each such resolution shall be
incorporated herein by reference upon adoption.
Shares of each Series or Class established pursuant to this Section 6,
unless otherwise provided in the resolution establishing such Series, shall have
the following relative rights and preferences:
(a) ASSETS HELD WITH RESPECT TO A PARTICULAR SERIES. All
consideration received by the Trust for the issue or sale of Shares of a
particular Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds thereof from
whatever source derived, including, without limitation, any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may be,
shall irrevocably be held with respect to that Series for all purposes, subject
only to the rights of creditors respecting such Series, and shall be so recorded
upon the books of account of the Trust. Such consideration, assets, income,
earnings, profits and proceeds thereof, from whatever source derived, including,
without limitation, any proceeds derived from the sale, exchange or
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liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may be, are herein
referred to as "assets held with respect to" that Series. In the event that
there are any assets, income, earnings, profits and proceeds thereof, funds or
payments which are not readily identifiable as assets held with respect to any
particular Series (collectively "General Assets"), the Trustees shall allocate
such General Assets to, between or among any one or more of the Series in such
manner and on such basis as the Trustees, in their sole discretion, deem fair
and equitable, and any General Asset so allocated to a particular Series shall
be held with respect to that Series. Each such allocation by the Trustees shall
be conclusive and binding upon the Shareholders and creditors of all Series for
all purposes.
(b) LIABILITIES HELD WITH RESPECT TO A PARTICULAR SERIES OR CLASS.
The assets of the Trust held with respect to each particular Series shall be
charged against the liabilities of the Trust held with respect to that Series
and all expenses, costs, charges and reserves attributable to that Series.
Specific Classes within each Series shall be charged with the liabilities,
expenses, costs, charges and reserves attributable to that Class. Any general
liabilities of the Trust which are not readily identifiable as being held with
respect to any particular Series, or within a Series, to any particular Class
shall be allocated and charged by the Trustees to and among any one or more of
the Series or Classes in such manner and on such basis as the Trustees in their
sole discretion deem fair and equitable. The liabilities, expenses, costs,
charges, and reserves so charged to a Series or Class are herein referred to as
"liabilities held with respect to" that Series or Class. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders and creditors of all Series and
Classes for all purposes. All Persons who have extended credit which has been
allocated to a particular Series, or who have a claim or contract which has been
allocated to any particular Series, shall look, and shall be required by
contract to look exclusively, to the assets of that particular Series for
payment of such credit, claim, or contract. In the absence of an express
contractual agreement so limiting the claims of such creditors, claimants and
contract providers, each creditor, claimant and contract provider will be deemed
nevertheless to have impliedly agreed to such limitation unless an express
provision to the contrary has been incorporated in the written contract or other
document establishing the claimant relationship.
(c) DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES.
Notwithstanding any other provisions of this Declaration of Trust, including,
without limitation, Article VI, no dividend or distribution including, without
limitation, any distribution paid upon termination of the Trust or of any Series
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or Class with respect to, nor any redemption or repurchase of, the Shares of any
Series or Class shall be effected by the Trust other than from the assets held
with respect to such Series, nor, except as specifically provided in Section 7
of this Article III, shall any Shareholder of any particular Series or Class
within such Series otherwise have any right or claim against the assets held
with respect to any other Series except to the extent that such Shareholder has
such a right or claim hereunder as a Shareholder of such other Series. The
Trustees shall have full discretion, to the extent not inconsistent with the
Investment Company Act, to determine which items shall be treated as income and
which items as capital; and each such determination and allocation shall be
conclusive and binding upon the Shareholders.
(d) VOTING. All Shares of the Trust entitled to vote on a matter
shall vote separately by Series (and, if applicable, by Class): that is, the
Shareholders of each Series or Class shall have the right to approve or
disapprove matters affecting the Trust and each respective Series or Class as if
the Series or Classes were separate companies. There are, however, two
exceptions to voting by separate Series or Classes. First, if the Investment
Company Act requires all Shares of the Trust to be voted in the aggregate
without differentiation between the separate Series or Classes, then all the
Trust's Shares shall be entitled to vote based on the dollar value of their
Shares as described below in Article V, Section 1. Second, if any matter
affects only the interests of some but not all Series or Classes, then only the
Shareholders of such affected Series or Classes shall be entitled to vote on the
matter.
(e) EQUALITY. All the Shares of each particular Series shall
represent an equal proportionate interest in the assets held with respect to
that Series (subject to the liabilities held with respect to particular Classes
within that Series and such rights and preferences as may have been established
and designated with respect to Classes of Shares within such Series), and,
except for rights and preferences among Classes, each Share of any particular
Series shall be equal to each other Share of that Series.
(f) FRACTIONS. Any fractional Share of a Series or Class shall carry
proportionately all the rights and obligations of a whole share of that Series,
including rights with respect to voting, receipt of dividends and distributions,
redemption of Shares and termination of the Trust.
(g) EXCHANGE PRIVILEGE. The Trustees shall have the authority to
provide that the holders of Shares of any Series and Class shall have the right
to exchange said Shares for Shares of one or more other Series of Shares or
Classes of the same Series in accordance with such requirements and procedures
as may be established by the Trustees.
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(h) COMBINATION OF SERIES. The Trustees shall have the authority,
without the approval of the Shareholders of any Series unless otherwise required
by applicable law, to combine the assets and liabilities held with respect to
any two or more Series or Classes into assets and liabilities held with respect
to a single Series or Class.
(i) ELIMINATION OF SERIES. At any time that there are no Shares
outstanding of any particular Series or Class previously established and
designated, the Trustees may by resolution of a majority of the then Trustees
abolish that Series or Class and rescind the establishment and designation
thereof.
SECTION 7. INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder or
former Shareholder shall be exposed to liability by reason of a claim or demand
relating to his or her being or having been a Shareholder, and not because of
his or her acts or omissions, the Shareholder or former Shareholder (or his or
her heirs, executors, administrators, or other legal representatives or in the
case of a corporation or other entity, its corporate or other general successor)
shall be entitled to be held harmless from and indemnified out of the assets of
the applicable Series of the Trust against all loss and expense arising from
such claim or demand.
ARTICLE IV
The Board of Trustees
SECTION 1. NUMBER, ELECTION AND TENURE. The number of Trustees
constituting the Board of Trustees shall be fixed from time to time by a written
instrument signed, or by resolution approved at a duly constituted meeting, by a
majority of the Board of Trustees, provided, however, that the number of
Trustees shall in no event be less than one (1) nor more than fifteen (15). The
Board of Trustees, by action of a majority of the then Trustees at a duly
constituted meeting, may fill vacancies in the Board of Trustees or remove
Trustees with or without cause. Each Trustee shall serve during the continued
lifetime of the Trust until he or she dies, resigns, is declared bankrupt or
incompetent by a court of appropriate jurisdiction, or is removed, or, if
sooner, until the next meeting of Shareholders called for the purpose of
electing Trustees and until the election and qualification of his or her
successor. Any Trustee may resign at any time by written instrument signed by
him or her and delivered to any officer of the Trust or to a meeting of the
Trustees. Such resignation shall be effective upon receipt unless specified to
be effective at some other time. Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following his or her
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resignation or removal, or any right to damages on account of such removal. The
Shareholders may fix the number of Trustees and elect Trustees at any meeting of
Shareholders called by the Trustees for that purpose. Any Trustee may be
removed at any meeting of Shareholders by a vote of two-thirds of the Voting
Interests of the Trust as defined in Article I, Section 2(o). A meeting of
Shareholders for the purpose of electing or removing one or more Trustees may be
called (i) by the Trustees upon their own vote, or (ii) upon the demand of
Shareholders owning 10% or more of the Voting Interests of the Trust as defined
in Article I, Section 2(o).
SECTION 2. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The
death, declination, resignation, retirement, removal, or incapacity of one or
more Trustees, or all of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration of Trust.
Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is
filled as provided in Article IV, Section l, the Trustees in office, regardless
of their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by this Declaration of Trust.
As conclusive evidence of such vacancy, a written instrument certifying the
existence of such vacancy may be executed by an officer of the Trust or by a
majority of the Board of Trustees. In the event of the death, declination,
resignation, retirement, removal, or incapacity of all the then Trustees within
a short period of time and without the opportunity for at least one Trustee
being able to appoint additional Trustees to fill vacancies, the Trust's
Investment Adviser(s) are empowered to appoint new Trustees subject to the
provisions of Section 16(a) of the Investment Company Act.
SECTION 3. POWERS. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the Board of Trustees, and
such Board shall have all powers necessary or convenient to carry out that
responsibility, including the power to engage in securities transactions of all
kinds on behalf of the Trust. Without limiting the foregoing, the Trustees may:
adopt By-Laws not inconsistent with this Declaration of Trust providing for the
regulation and management of the affairs of the Trust and may amend and repeal
them to the extent that such By-Laws do not reserve that right to the
Shareholders; fill vacancies in or remove from their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; appoint from their own number and establish and terminate one or
more committees consisting of one or more Trustees, which may exercise the
powers and authority of the Board of Trustees to the extent that the Trustees
determine; employ one or more custodians of the assets of the Trust and may
authorize such custodians to employ subcustodians and to deposit all or any part
of such assets in a
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system or systems for the central handling of securities or with a Federal
Reserve Bank; retain an administrator and a portfolio adviser for each Series
of Shares; retain a transfer agent or a shareholder servicing agent, or both;
provide for the issuance and distribution of Shares by the Trust directly or
through one or more Principal Underwriters or otherwise; redeem, repurchase
and transfer Shares pursuant to applicable law; set record dates for the
determination of Shareholders with respect to various matters; declare and
pay dividends and distributions to Shareholders of each Series from the
assets of such Series; and, in general, delegate such authority as they
consider desirable to any officer of the Trust, to any committee of the
Trustees and to any agent or employee of the Trust or to any such custodian,
transfer or shareholder servicing agent, or Principal Underwriter. Any
determination as to what is in the interests of the Trust made by the
Trustees in good faith shall be conclusive. In construing the provisions of
this Declaration of Trust, the presumption shall be in favor of a grant of
power to the Trustees. Unless otherwise specified or required by law, any
action by the Board of Trustees shall be deemed effective if approved or
taken by a majority of the Trustees then in office.
Without limiting the foregoing, the Trust shall have power and
authority:
(a) To invest and reinvest cash, to hold cash uninvested, and to
subscribe for, invest in, reinvest in, purchase or otherwise acquire, own, hold,
pledge, sell, assign, transfer, exchange, distribute, write options on, lend or
otherwise deal in or dispose of contracts for the future acquisition or delivery
of fixed income or other securities, and securities of every nature and kind,
including, without limitation, all types of bonds, debentures, stocks,
negotiable or non-negotiable instruments, obligations, evidences of
indebtedness, certificates of deposit or indebtedness, commercial paper,
repurchase agreements, bankers' acceptances, and other securities of any kind,
issued, created, guaranteed, or sponsored by any and all Persons, including,
without limitation, states, territories, and possessions of the United States
and the District of Columbia and any political subdivision, agency, or
instrumentality thereof, any foreign government or any political subdivision of
the U.S. Government or any foreign government, or any international
instrumentality, or by any bank or savings institution, or by any corporation or
organization organized under the laws of the United States or of any state,
territory, or possession thereof, or by any corporation or organization
organized under any foreign law, or in "when issued" contracts for any such
securities, to change the investments of the assets of the Trust; and to
exercise any and all rights, powers, and privileges of ownership or interest in
respect of any and all such investments of every kind and description,
including, without limitation, the right to consent and otherwise act with
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respect thereto, with power to designate one or more Persons, to exercise any of
said rights, powers, and privileges in respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or
write options with respect to or otherwise deal in any property rights relating
to any or all of the assets of the Trust or any Series;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
(d) To exercise powers and right of subscription or otherwise which
in any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in its own
name or in the name of a custodian or subcustodian or a nominee or nominees or
otherwise;
(f) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;
(g) To join with other security holders in acting through a
committee, depositary, voting trust or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or trust, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depositary or trust as the Trustees
shall deem proper;
(h) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(i) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(j) To borrow funds or other property in the name of the Trust
exclusively for Trust purposes;
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(k) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof;
(l) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct of
the Trust's business, including, without limitation, insurance policies insuring
the assets of the Trust or payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, principal
underwriters, or independent contractors of the Trust, individually against all
claims and liabilities of every nature arising by reason of holding Shares,
holding, being or having held any such office or position, or by reason of any
action alleged to have been taken or omitted by any such Person as Trustee,
officer, employee, agent, investment adviser, principal underwriter, or
independent contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such Person against liability; and
(m) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust.
The Trust shall not be limited to investing in obligations maturing
before the possible termination of the Trust or one or more of its Series. The
Trust shall not in any way be bound or limited by any present or future law or
custom in regard to investment by fiduciaries. The Trust shall not be required
to obtain any court order to deal with any assets of the Trust or take any other
action hereunder.
SECTION 4. PAYMENT OF EXPENSES BY THE TRUST. The Trustees are
authorized to pay or cause to be paid out of the principal or income of the
Trust, or partly out of the principal and partly out of income, as they deem
fair, all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with the Trust, or in connection with the management thereof,
including, but not limited to, the Trustees' compensation and such expenses and
charges for the services of the Trust's officers, employees, investment adviser
or manager, principal underwriter, auditors, counsel, custodian, transfer agent,
Shareholder servicing agent, and such other agents or independent contractors
and such other expenses and charges as the Trustees may deem necessary or proper
to incur.
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SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Trustees shall
have the power, as frequently as they may determine, to cause each Shareholder,
or each Shareholder of any particular Series, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, Shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by reducing the number of shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such Shareholder.
SECTION 6. OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the
assets of the Trust shall at all times be considered as vested in the Trust,
except that the Trustees shall have the power to cause legal title to any Trust
Property to be held by or in the name of one or more of the Trustees, or in the
name of the Trust, or in the name of any other Person as nominee, on such terms
as the Trustees may determine. The right, title and interest of the Trustees in
the Trust Property shall vest automatically in each Person who may hereafter
become a Trustee. Upon the resignation, removal or death of a Trustee, he or
she shall automatically cease to have any right, title or interest in any of the
Trust Property, and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
SECTION 7. SERVICE CONTRACTS.
(a) Subject to such requirements and restrictions as may be set forth
in the By-Laws, the Trustees may, at any time and from time to time, contract
for exclusive or nonexclusive advisory, management, administrative and/or any
other services for the Trust or for any Series with any corporation, trust,
association or other organization; and any such contract may contain such other
terms as the Trustees may determine, including, without limitation, authority
for the Investment Adviser or administrator to determine from time to time
without prior consultation with the Trustees what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
the Trust shall be held uninvested and to make changes in the Trust's
investments, or such other activities as may specifically be delegated to such
party.
(b) The Trustees may also, at any time and from time to time,
contract with any corporation, trust, association or other organization,
appointing it exclusive or nonexclusive distributor or Principal Underwriter for
the Shares of one or more of the Series or Classes or other securities to be
issued by
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the Trust. Every such contract shall comply with such requirements and
restrictions as may be set forth in the By-Laws; and any such contract may
contain such other terms as the Trustees may determine.
(c) The Trustees are also empowered, at any time and from time to
time, to contract with any corporations, trusts, associations or other
organizations, appointing it or them the custodian, transfer agent and/or
shareholder servicing agent for the Trust or one or more of its Series. Every
such contract shall comply with such requirements and restrictions as may be set
forth in the By-Laws or stipulated by resolution of the Trustees.
(d) The Trustees are further empowered, at any time and from time to
time, to contract with any entity to provide such other services to the Trust or
one or more of the Series, as the Trustees determine to be in the best interests
of the Trust and the applicable Series.
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee, investment
adviser, manager, principal underwriter, distributor, or affiliate or agent of
or for any corporation, trust, association, or other organization, or for any
parent or affiliate of any organization with which an advisory, management or
administration contract, or principal underwriter's or distributor's contract,
or transfer, shareholder servicing or other type of service contract may have
been or may hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the Trust, or
(ii) any corporation, trust, association or other organization
with which an advisory, management or administration contract or principal
underwriter's or distributor's contract, or transfer, shareholder servicing or
other type of service contract may have been or may hereafter be made also has
an advisory, management or administration contract, or principal underwriter's
or distributor's contract, or transfer, shareholder servicing or other service
contract with one or more other corporations, trusts, associations, or other
organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon
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or executing the same, or create any liability or accountability to the Trust or
its Shareholders, provided approval of each such contract is made pursuant to
the requirements of the Investment Company Act.
ARTICLE V
Shareholders' Voting Powers and Meetings
SECTION 1. VOTING POWERS. Subject to the provisions of Article III,
Section 6(d), the Shareholders shall have power to vote only (a) for the
election or removal of Trustees as provided in Article IV, Section 1, and (b)
with respect to such additional matters relating to the Trust as may be required
by this Declaration of Trust, the By-Laws or any registration of the Trust with
the Commission (or any successor agency) or any state, or as the Trustees may
consider necessary or desirable. As appropriate, voting may be by Series or
Class. A Shareholder of each Series shall be entitled to one vote for each
dollar of net asset value (number of Shares owned times net asset value per
Share) per Share of such Series, on any matter on which such Shareholder is
entitled to vote and each fractional dollar amount shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them.
A proxy purporting to be executed by or on behalf of a Shareholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. The Trustees may allow the use
of electronic, telegraph and facsimile proxies to the fullest extent consistent
with applicable law.
SECTION 2. VOTING POWER AND MEETINGS. Meetings of the Shareholders
may be called by the Trustees for the purpose of electing Trustees as provided
in Article IV, Section l and for such other purposes as may be prescribed by
law, by this Declaration of Trust, or by the By-Laws. Meetings of the
Shareholders may also be called by the Trustees from time to time for the
purpose of taking action upon any other matter deemed by the Trustees to be
necessary or desirable. A meeting of Shareholders may be held at any place
designated by the Trustees. Written notice of any meeting of Shareholders shall
be given or caused to be given by the Trustees by mailing such notice at least
seven (7) days before such meeting, postage prepaid, stating the time and place
of the meeting, to each Shareholder at the Shareholder's address as it appears
on the records of the Trust. Whenever notice of a meeting is required to be
given to a Shareholder under this Declaration of Trust or the By-Laws, a
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written waiver thereof, executed before or after the meeting by such Shareholder
or his or her attorney thereunto authorized and filed with the records of the
meeting, shall be deemed equivalent to such notice.
SECTION 3. QUORUM AND REQUIRED VOTE. Except when a larger quorum is
required by applicable law, by the By-Laws or by this Declaration of Trust, one
third of the Voting Interests, as defined in Article I, Section 2(o), entitled
to vote shall constitute a quorum at a Shareholders' meeting. When any one or
more Series or Classes is to vote as a single Series or Class separate from any
other Shares, one third of the Shares of each such Series or Class entitled to
vote shall constitute a quorum at a Shareholder's meeting of that Series. Any
meeting of Shareholders may be adjourned from time to time by a majority of the
Voting Interests, as defined in Article I, Section 2(o), properly cast upon the
question of adjourning a meeting to another date and time, whether or not a
quorum is present, and the meeting may be held as adjourned within a reasonable
time after the date set for the original meeting without further notice.
Subject to the provisions of Article III, Section 6(d), when a quorum is present
at any meeting, a majority of the Voting Interests, as defined in Article I,
Section 2(o), voted shall decide any questions, and a plurality shall elect a
Trustee, except when a larger vote is required by any provision of this
Declaration of Trust or the By-Laws or by applicable law.
SECTION 4. ACTION BY WRITTEN CONSENT. Any action taken by
shareholders may be taken without a meeting if Shareholders holding a majority
of the Voting Interests, as defined in Article I, Section 2(o), entitled to vote
on the matter (or such larger proportion thereof as shall be required by any
express provision of this Declaration of Trust or by the By-Laws or by
applicable law) and holding a majority (or such larger proportion as aforesaid)
of the Shares of any Series or Class entitled to vote separately on the matter
consent to the action in writing and such written consents are filed with the
records of the meetings of Shareholders. Such consent shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
SECTION 5. RECORD DATES. For the purpose of determining the
Shareholders of any Series or Class who are entitled to vote or act at any
meeting or any adjournment thereof, the Trustees may from time to time fix a
time, which shall be not more than ninety (90) days before the date of any
meeting of Shareholders, as the record date for determining the Shareholders of
such Series or Class having the right to notice of and to vote at such meeting
and any adjournment thereof, and in such case only Shareholders of record on
such record date shall have such right, notwithstanding any transfer of shares
on the books of the Trust after the record date. For the purpose of determining
the Shareholders of any Series or Class who are
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entitled to receive payment of any dividend or of any other distribution, the
Trustees may from time to time fix a date, which shall be before the date for
the payment of such dividend or such other payment, as the record date for
determining the Shareholders of such Series or Class having the right to receive
such dividend or distribution. Without fixing a record date the Trustees may,
for voting and/or distribution purposes, close the register or transfer books
for one or more Series for all or any part of the period between a record date
and a meeting of Shareholders or the payment of a distribution. Nothing in this
Section shall be construed as precluding the Trustees from setting different
record dates for different Series or Classes.
SECTION 6. ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI
Net Asset Value, Distributions and Redemptions
SECTION 1. DETERMINATION OF NET ASSET VALUE, NET INCOME AND
DISTRIBUTIONS. Subject to Article III, Section 6 hereof, the Trustees, in their
absolute discretion, may prescribe and shall set forth in the By-laws or in a
duly adopted vote of the Trustees such bases and time for determining the per-
Share net asset value of the Shares of any Series and Class or net income
attributable to the Shares of any Series and Class, or the declaration and
payment of dividends and distributions on the Shares of any Series and Class, as
they may deem necessary or desirable.
SECTION 2. REDEMPTIONS AND REPURCHASES. The Trust shall purchase
such Shares as are offered by any Shareholder for redemption, upon the
presentation of a proper instrument of transfer together with a request directed
to the Trust or a Person designated by the Trust that the Trust purchase such
Shares or in accordance with such other procedures for redemption as the
Trustees may from time to time authorize; and the Trust will pay therefor the
net asset value thereof, in accordance with the By-Laws and applicable law.
Payment for said Shares shall be made by the Trust to the Shareholder within
such time period after the date on which the request is made in proper form as
may be required by applicable law or regulation. The obligation set forth in
this Section 2 is subject to the provision that in the event that any time the
New York Stock Exchange (the "Exchange") is closed for other than weekends or
holidays, or if permitted by the Rules of the Commission during periods when
trading on the Exchange is restricted or during any emergency which makes it
impracticable for the Trust to dispose of the investments of the applicable
Series or to determine fairly the value of the net
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assets held with respect to such Series or during any other period permitted by
order of the Commission for the protection of investors, such obligations may be
suspended or postponed by the Trustees.
The redemption price may in any case or cases be paid wholly or partly
in kind if the Trustees determine that such payment is advisable in the interest
of the remaining Shareholders of the relevant Series. Subject to the foregoing,
the fair value, selection and quantity of securities or other property so paid
or delivered as all or part of the redemption price may be determined by or
under authority of the Trustees. In no case shall the Trust be liable for any
delay of any corporation or other Person in transferring securities selected for
delivery as all or part of any payment in kind.
SECTION 3. REDEMPTIONS AT THE OPTION OF THE TRUST. The Trust shall
have the right, at its option and at any time, to redeem Shares of any
Shareholder at the net asset value thereof as described in Section 1 of this
Article VI: (a) if at such time such Shareholder owns Shares of any Series
having an aggregate net asset value of less than an amount determined from time
to time by the Trustees prior to the acquisition of said Shares; or (b) to the
extent that such Shareholder owns Shares of a particular Series equal to or in
excess of a percentage of the outstanding Shares of that Series determined from
time to time by the Trustees; or (c) to the extent that such Shareholder owns
Shares equal to or in excess of a percentage, determined from time to time by
the Trustees, of the outstanding Shares of the Trust or of any Series.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
SECTION 1. COMPENSATION. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
SECTION 2. INDEMNIFICATION AND LIMITATION OF LIABILITY. The Trustees
shall not be responsible or liable in any event for any neglect or wrong-doing
of any officer, agent, employee, Investment Adviser or principal underwriter of
the Trust, nor shall any Trustee be responsible for the act or omission of any
other Trustee, and the Trust out of its assets, to the fullest extent permitted
by law, shall indemnify and hold harmless each and every Trustee from and
against any and all claims and demands whatsoever arising out of or related to
each
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Trustee's performance of his or her duties as a Trustee of the Trust; provided
that nothing herein contained shall indemnify, hold harmless or protect any
Trustee from or against any liability to the Trust or any Shareholder to which
he or she would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever issued, executed or done by or on behalf of
the Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
SECTION 3. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretion hereunder
shall be binding upon everyone interested. A Trustee shall be liable to the
Trust and to any Shareholder solely for his or her own wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and shall not be liable for errors of judgment
or mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust,
and shall be under no liability for any act or omission in accordance with such
advice nor for failing to follow such advice. The Trustees shall not be
required to give any bond as such, nor any surety if a bond is required.
SECTION 4. INSURANCE. The Trustees shall be entitled and empowered
to the fullest extent permitted by law to purchase with Trust assets insurance
for liability and for all expenses reasonably incurred or paid or expected to be
paid by a Trustee or officer in connection with any claim, action, suit or
proceeding in which he or she becomes involved by virtue of his or her capacity
or former capacity with the Trust.
ARTICLE VIII
Miscellaneous
SECTION 1. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No
Person dealing with the Trustees shall be bound to make any inquiry concerning
the validity of any transaction made or to be made by the Trustees or to see to
the application of any payments made or property transferred to the Trust or
upon its order.
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SECTION 2. TERMINATION OF TRUST, SERIES OR CLASS. Unless terminated
as provided herein, the Trust shall continue without limitation of time. The
Trust may be terminated at any time by vote of a majority of the Shares of each
Series entitled to vote, voting separately by Series, or by the Trustees by
written notice to the Shareholders without a vote of such Shareholders. Any
Series or Class (in the case of a proposed termination of a Class) may be
terminated at any time by vote of a majority of the Shares of that Series, or by
the Trustees by written notice to the Shareholders of that Series or Class
without a vote of such Shareholders.
Upon termination of the Trust (or any Series or Class, as the case may
be), after paying or otherwise providing for all charges, taxes, expenses and
liabilities held, severally, with respect to each Series and Class (or the
applicable Series or Class, as the case may be), whether due or accrued or
anticipated as may be determined by the Trustees, the Trust shall, in accordance
with such procedures as the Trustees consider appropriate, reduce the remaining
assets held, severally, with respect to each Series and Class (or the applicable
Series or Class, as the case may be), to distributable form in cash or shares or
other securities, or any combination thereof, and distribute the proceeds held
with respect to each Series and Class (or the applicable Series or Class, as the
case may be), to the Shareholders of that Series or Class, as a Series or Class,
ratably according to the number of Shares of that Series or Class held by the
several Shareholders on the date of termination.
SECTION 3. MERGER AND CONSOLIDATION. The Trustees may cause (a) the
Trust or one or more of its Series or Classes to the extent consistent with
applicable law to be merged into or consolidated with another trust or company,
(b) the Shares of the Trust or any Series to be converted into beneficial
interests in another business trust (or series thereof) created pursuant to this
Section 3 of Article VIII, or (c) the Shares to be exchanged under or pursuant
to any state or federal statute to the extent permitted by law. Such merger or
consolidation, Share conversion or Share exchange must be authorized by vote of
a majority of the Voting Interests of the Trust, as defined in Article I,
Section 2(o), as a whole, or any affected Series, as may be applicable; provided
that in all respects not governed by statute or applicable law, the Trustees
shall have the power to prescribe the procedure necessary or appropriate to
accomplish a sale of assets, merger or consolidation including the power to
create one or more separate business trusts to which all or any part of the
assets, liabilities, profits or losses of the Trust may be transferred and to
provide for the conversion of Shares of the Trust or any Series into beneficial
interests in such separate business trust or trusts (or series thereof).
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SECTION 4. AMENDMENTS. This Declaration of Trust may be restated
and/or amended at any time by an instrument in writing signed by a majority of
the then Trustees and, if required, by approval of such amendment by
Shareholders in accordance with Article V, Section 3 hereof. Any such
restatement and/or amendment hereto shall be effective immediately upon
execution and approval. The Certificate of Trust of the Trust may be restated
and/or amended by a similar procedure, and any such restatement and/or amendment
shall be effective immediately upon filing with the Office of the Secretary of
State of the State of Delaware or upon such future date as may be stated
therein.
SECTION 5. FILING OF COPIES, REFERENCES, HEADINGS. The original or a
copy of this instrument and of each restatement and/or amendment hereto shall be
kept at the office of the Trust where it may be inspected by any Shareholder.
Anyone dealing with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such restatements and/or amendments have been
made and as to any matters in connection with the Trust hereunder; and, with the
same effect as if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any such restatements
and/or amendments. In this instrument and in any such restatements and/or
amendment, references to this instrument, and all expressions like "herein,"
"hereof," and "hereunder," shall be deemed to refer to this instrument as
amended or affected by any such restatements and/or amendments. Headings are
placed herein for convenience of reference only and shall not be taken as a part
hereof or control or affect the meaning, construction or effect of this
instrument. Whenever the singular number is used herein, the same shall include
the plural; and the neuter, masculine and feminine genders shall include each
other, as applicable. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
SECTION 6. APPLICABLE LAW. This Agreement and Declaration of Trust
is created under and is to be governed by and construed and administered
according to the laws of the State of Delaware and the Delaware Business Trust
Act, as amended from time to time (the "Act"). The Trust shall be a Delaware
business trust pursuant to such Act, and without limiting the provisions hereof,
the Trust may exercise all powers which are ordinarily exercised by such a
business trust.
SECTION 7. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
(a) The provisions of the Declaration of Trust are severable,
and if the Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the Investment Company Act, the regulated
investment company
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provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of the Declaration of Trust; provided, however, that such determination
shall not affect any of the remaining provisions of the Declaration of Trust or
render invalid or improper any action taken or omitted prior to such
determination.
(b) If any provision of the Declaration of Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or any
other provision of the Declaration of Trust in any jurisdiction.
SECTION 8. BUSINESS TRUST ONLY. It is the intention of the Trustees
to create a business trust pursuant to the Delaware Business Trust Act, as
amended from time to time (the "Act"), and thereby to create only the
relationship of trustee and beneficial owners within the meaning of such Act
between the Trustees and each Shareholder. It is not the intention of the
Trustees to create a general partnership, limited partnership, joint stock
association, corporation, bailment, or any form of legal relationship other than
a business trust pursuant to such Act. Nothing in this Declaration of Trust
shall be construed to make the Shareholders, either by themselves or with the
Trustees, partners or members of a joint stock association.
SECTION 9. USE OF THE IDENTIFYING WORDS "BERKELEY CAPITAL MANAGEMENT"
AND "BERKELEY CAPITAL MANAGEMENT FUNDS". The identifying words "Berkeley
Capital Management" and "Berkeley Capital Management Funds" and all rights to
the use of such identifying words belong to Berkeley Capital Management, the
proposed Investment Adviser of the Trust. Berkeley Capital Management has
licensed the Trust to use the identifying words "Berkeley Capital Management
Funds" in the Trust's name and to use the identifying words "Berkeley Capital
Management" in the name of any series of the Trust. In the event that Berkeley
Capital Management or an affiliate of Berkeley Capital Management is not
appointed or ceases to be the Investment Adviser of the Trust, the non-exclusive
license may be revoked by Berkeley Capital Management, and the Trust and any
series thereof shall respectively cease using the identifying words "Berkeley
Capital Management Funds" and "Berkeley Capital Management," unless otherwise
consented to by Berkeley Capital Management or any successor to Berkeley Capital
Management's interest.
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IN WITNESS WHEREOF, the sole Trustee named below does hereby make and
enter into this Declaration of Trust as of the 25th day of October, 1996.
/s/ Deborah A. Kemper
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Deborah A. Kemper, Sole Trustee
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS 650 CALIFORNIA STREET, SUITE
2800, SAN FRANCISCO, CALIFORNIA 94108
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BY-LAWS
for the regulation, except as
otherwise provided by statute or
the Agreement and Declaration of Trust of
BERKELEY CAPITAL MANAGEMENT FUNDS
a Delaware Business Trust
(as of October 25, 1996)
<PAGE>
TABLE OF CONTENTS
BY-LAWS
BERKELEY CAPITAL MANAGEMENT FUNDS
PAGE
----
ARTICLE I OFFICES . . . . . . . . . . . . . . . . . . . . . . 1
1. Principal Office . . . . . . . . . . . . . . . . . . . . 1
2. Delaware Office. . . . . . . . . . . . . . . . . . . . . 1
3. Other Offices. . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II Meetings Of Shareholders. . . . . . . . . . . . . . 1
1. Place Of Meetings. . . . . . . . . . . . . . . . . . . . 1
2. Call Of Meeting. . . . . . . . . . . . . . . . . . . . . 1
3. Notice Of Shareholders' Meeting. . . . . . . . . . . . . 1
4. Manner Of Giving Notice; Affidavit Of Notice . . . . . . 2
5. Adjourned Meeting; Notice. . . . . . . . . . . . . . . . 2
6. Voting . . . . . . . . . . . . . . . . . . . . . . . . . 3
7. Waiver Of Notice By Consent Of Absent Shareholders . . . 3
8. Shareholder Action By Written Consent Without A
Meeting. . . . . . . . . . . . . . . . . . . . . . . . . 4
9. Record Date For Shareholder Notice, Voting And Giving
Consents . . . . . . . . . . . . . . . . . . . . . . . . 4
10. Proxies. . . . . . . . . . . . . . . . . . . . . . . . . 5
11. Inspectors Of Election . . . . . . . . . . . . . . . . . 5
ARTICLE III Trustees . . . . . . . . . . . . . . . . . . . . . . . . 6
1. Powers . . . . . . . . . . . . . . . . . . . . . . . . . 6
2. Number Of Trustees . . . . . . . . . . . . . . . . . . . 6
3. Vacancies. . . . . . . . . . . . . . . . . . . . . . . . 6
4. Place Of Meetings And Meetings By Telephone. . . . . . . 7
5. Regular Meetings . . . . . . . . . . . . . . . . . . . . 7
6. Special Meetings . . . . . . . . . . . . . . . . . . . . 7
7. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . 8
8. Waiver Of Notice . . . . . . . . . . . . . . . . . . . . 8
9. Adjournment. . . . . . . . . . . . . . . . . . . . . . . 8
10. Notice Of Adjournment. . . . . . . . . . . . . . . . . . 8
11. Action Without A Meeting . . . . . . . . . . . . . . . . 8
12. Fees And Compensation Of Trustees. . . . . . . . . . . . 9
13. Delegation Of Power To Other Trustees. . . . . . . . . . 9
ARTICLE IV Committees. . . . . . . . . . .. . . . . . . . . . . . . 9
1. Committees Of Trustees . . . . . . . . . . . . . . . . . 9
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2. Meetings And Action Of Committees. . . . . . . . . . . . 10
ARTICLE V Officers . . . . . . . . . . . . . . . . . . . . . . . . 10
1. Officers . . . . . . . . . . . . . . . . . . . . . . . . 10
2. Election Of Officers . . . . . . . . . . . . . . . . . . 10
3. Subordinate Officers . . . . . . . . . . . . . . . . . . 11
4. Removal And Resignation Of Officers. . . . . . . . . . . 11
5. Vacancies In Offices . . . . . . . . . . . . . . . . . . 11
6. Chairman Of The Board. . . . . . . . . . . . . . . . . . 11
7. President. . . . . . . . . . . . . . . . . . . . . . . . 11
8. Vice Presidents. . . . . . . . . . . . . . . . . . . . . 12
9. Secretary. . . . . . . . . . . . . . . . . . . . . . . . 12
10. Treasurer. . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VI Indemnification Of Trustees, Officers, Employees,
And Other Agents. . . . . . . . . . . . . . . . . . 13
1. Agents, Proceedings, And Expenses. . . . . . . . . . . . 13
2. Actions Other Than By Trust. . . . . . . . . . . . . . . 13
3. Actions By The Trust . . . . . . . . . . . . . . . . . . 14
4. Exclusion Of Indemnification . . . . . . . . . . . . . . 14
5. Successful Defense By Agent. . . . . . . . . . . . . . . 15
6. Required Approval. . . . . . . . . . . . . . . . . . . . 15
7. Advance Of Expenses. . . . . . . . . . . . . . . . . . . 15
8. Other Contractual Rights . . . . . . . . . . . . . . . . 16
9. Limitations. . . . . . . . . . . . . . . . . . . . . . . 16
10. Insurance. . . . . . . . . . . . . . . . . . . . . . . . 16
11. Fiduciaries Of Employee Benefit Plan . . . . . . . . . . 16
ARTICLE VII Records And Reports. . . . . . . . . . . . . . . . . . . 16
1. Maintenance And Inspection Of Share Register . . . . . . 16
2. Maintenance And Inspection Of By-laws. . . . . . . . . . 17
3. Maintenance And Inspection Of Other Records. . . . . . . 17
4. Inspection By Trustees . . . . . . . . . . . . . . . . . 17
5. Financial Statements . . . . . . . . . . . . . . . . . . 17
ARTICLE VIII General Matters. . . . . . . . . . . . . . . . . . . . . 18
1. Checks, Drafts, and Evidences Of Indebtedness. . . . . . 18
2. Contracts And Instruments; How Executed. . . . . . . . . 18
3. Certificates For Shares. . . . . . . . . . . . . . . . . 18
4. Lost Certificates. . . . . . . . . . . . . . . . . . . . 18
5. Representation Of Shares Of Other Entities Held By
Trust. . . . . . . . . . . . . . . . . . . . . . . . . . 19
6. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . 19
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ARTICLE IX Amendments. . . . . . . . . . . . . . . . . . . . . . . . 19
1. Amendment By Shareholders. . . . . . . . . . . . . . . . 19
2. Amendment By Trustees. . . . . . . . . . . . . . . . . . 19
3. Incorporation By Reference Into Agreement And
Declaration Of Trust Of The Trust. . . . . . . . . . . . 19
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BY-LAWS
OF
BERKELEY CAPITAL MANAGEMENT FUNDS
A Delaware Business Trust
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The Board of Trustees shall fix and, from
time to time, may change the location of the principal executive office of
BERKELEY CAPITAL MANAGEMENT FUNDS (the "Trust") at any place within or outside
the State of Delaware.
Section 2. DELAWARE OFFICE. The Board of Trustees shall establish a
registered office in the State of Delaware and shall appoint as the Trust's
registered agent for service of process in the State of Delaware an individual
resident of the State of Delaware or a Delaware corporation or a corporation
authorized to transact business in the State of Delaware; in each case the
business office of such registered agent for service of process shall be
identical with the registered Delaware office of the Trust.
Section 3. OTHER OFFICES. The Board of Trustees may at any time establish
branch or subordinate offices at any place or places where the Trust intends to
do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held at
any place designated by the Board of Trustees. In the absence of any such
designation, shareholders' meetings shall be held at the principal executive
office of the Trust.
Section 2. CALL OF MEETING. A meeting of the shareholders may be called
at any time by the Board of Trustees or by the Chairman of the Board or by the
President.
Section 3. NOTICE OF SHAREHOLDERS' MEETING. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with Section 4 of
this Article II not less than seven (7) nor more than seventy-five (75) days
before the date of the meeting. The notice shall specify (i) the place, date
and hour of the meeting, and (ii) the general nature of the business to be
transacted. The notice of any meeting at which Trustees are to be elected also
shall include the name of any nominee or nominees
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who at the time of the notice are intended to be presented for election.
If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a Trustee has a direct or indirect financial
interest, (ii) an amendment of the Trust's Agreement and Declaration of Trust,
(iii) a reorganization of the Trust, or (iv) a voluntary dissolution of the
Trust, the notice shall also state the general nature of that proposal.
Section 4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any
meeting of shareholders shall be given either personally or by first-class mail
or telegraphic or other written communication, charges prepaid, addressed to the
shareholder at the address of that shareholder appearing on the books of the
Trust or its transfer agent or given by the shareholder to the Trust for the
purpose of notice. If no such address appears on the Trust's books or is given,
notice shall be deemed to have been given if sent to that shareholder by first-
class mail or telegraphic or other written communication to the Trust's
principal executive office, or if published at least once in a newspaper of
general circulation in the county where that office is located. Notice shall be
deemed to have been given at the time when delivered personally or deposited in
the mail or sent by telegram or other means of written communication.
If any notice addressed to a shareholder at the address of that shareholder
appearing on the books of the Trust is returned to the Trust by the United
States Postal Service marked to indicate that the Postal Service is unable to
deliver the notice to the shareholder at that address, all future notices or
reports shall be deemed to have been duly given without further mailing if these
shall be available to the shareholder on written demand of the shareholder at
the principal executive office of the Trust for a period of one year from the
date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
shareholder's meeting shall be executed by the Secretary, Assistant Secretary or
any transfer agent of the Trust giving the notice and shall be filed and
maintained in the minute book of the Trust.
Section 5. ADJOURNED MEETING; NOTICE. Any shareholder's meeting, whether
or not a quorum is present, may be adjourned from time to time by the vote of
the majority of the Voting Interests, as defined in Article I, Section 2(o) of
the Trust's Agreement and Declaration of Trust, represented at that meeting,
either in person or by proxy.
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When any meeting of shareholders is adjourned to another time or place,
notice need not be given of the adjourned meeting at which the adjournment is
taken, unless a new record date of the adjourned meeting is fixed or unless the
adjournment is for more than sixty (60) days from the date set for the original
meeting, in which case the Board of Trustees shall set a new record date.
Notice of any such adjourned meeting shall be given to each shareholder of
record entitled to vote at the adjourned meeting in accordance with the
provisions of Sections 3 and 4 of this Article II. At any adjourned meeting,
the Trust may transact any business which might have been transacted
at the original meeting.
Section 6. VOTING. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of the
Agreement and Declaration of Trust of the Trust, as in effect at such time. The
shareholders' vote may be by voice vote or by ballot, provided, however, that
any election for Trustees must be by ballot if demanded by any shareholder
before the voting has begun. On any matter other than elections of Trustees,
any shareholder may vote part of the shares in favor of the proposal and refrain
from voting the remaining shares or vote them against the proposal, but if the
shareholder fails to specify the number of shares which the shareholder is
voting affirmatively, it will be conclusively presumed that the shareholder's
approving vote is with respect to the total shares that the shareholder is
entitled to vote on such proposal.
Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT SHAREHOLDERS. The
transactions of the meeting of shareholders, however called and noticed and
wherever held, shall be as valid as though had at a meeting duly held after
regular call and notice if a quorum be present either in person or by proxy and
if either before or after the meeting, each person entitled to vote who was not
present in person or by proxy signs a written waiver of notice or a consent to a
holding of the meeting or an approval of the minutes. The waiver of notice or
consent need not specify either the business to be transacted or the purpose of
any meeting of shareholders.
Attendance by a person at a meeting shall also constitute a waiver of
notice of that meeting, except when the person objects at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened and except that attendance at a meeting is not a waiver of
any right to object to the consideration of matters not included in the notice
of the meeting if that objection is expressly made at the beginning of the
meeting.
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Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any
action which may be taken at any meeting of shareholders may be taken without a
meeting and without prior notice if a consent in writing setting forth the
action so taken is signed by the holders of the Voting Interests, as defined in
Article I, Section 2(o) in the Agreement and Declaration of Trust of the Trust,
having not less than the minimum number of votes that would be necessary to
authorize or take that action at a meeting at which all shares entitled to vote
on that action were present and voted. All such consents shall be filed with
the Secretary of the Trust and shall be maintained in the Trust's records. Any
shareholder giving a written consent or the shareholder's proxy holder or a
transferee of the shares or a personal representative of the shareholder or
their respective proxy holders may revoke the consent by a writing received by
the Secretary of the Trust before written consents of the number of shares
required to authorize the proposed action have been filed with the Secretary.
If the consents of all shareholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
shareholders shall not have been received, the Secretary shall give prompt
notice of the action approved by the shareholders without a meeting. This
notice shall be given in the manner specified in Section 4 of this Article II.
In the case of approval of (i) contracts or transactions in which a Trustee has
a direct or indirect financial interest, (ii) indemnification of agents of the
Trust, and (iii) a reorganization of the Trust, the notice shall be given at
least ten (10) days before the consummation of any action authorized by that
approval.
Section 9. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING CONSENTS.
For purposes of determining the shareholders entitled to notice of any meeting
or to vote or entitled to give consent to action without a meeting, the Board of
Trustees may fix in advance a record date which shall not be more than ninety
(90) days nor less than seven (7) days before the date of any such meeting as
provided in the Agreement and Declaration of Trust of the Trust.
If the Board of Trustees does not so fix a record date:
(a) The record date for determining shareholders entitled to
notice of or to vote at a meeting of shareholders shall be at the
close of business on the business day next preceding the day on which
notice is given or if notice is waived, at the close of business on
the business day next preceding the day on which the meeting is held.
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(b) The record date for determining shareholders entitled to
give consent to action in writing without a meeting, (i) when no prior
action by the Board of Trustees has been taken, shall be the day on
which the first written consent is given, or (ii) when prior action of
the Board of Trustees has been taken, shall be at the close of
business on the day on which the Board of Trustees adopt the
resolution relating to that action or the seventy-fifth day before the
date of such other action, whichever is later.
Section 10. PROXIES. Every person entitled to vote for Trustees or on any
other matter shall have the right to do so either in person or by one or more
agents authorized by a written proxy signed by the person and filed with the
Secretary of the Trust. A proxy shall be deemed signed if the shareholder's
name is placed on the proxy (whether by manual signature, typewriting,
telegraphic or facsimile transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. The Trustees may allow the use of electronic,
telegraphic and facsimile proxies to the fullest extent consistent with
applicable law. A validly executed proxy which does not state that it is
irrevocable shall continue in full force and effect unless (i) revoked by the
person executing it before the vote pursuant to that proxy by a writing
delivered to the Trust stating that the proxy is revoked or by a subsequent
proxy executed or attendance at the meeting and voting in person by the person
executing that proxy; or (ii) written notice of the death or incapacity of the
maker of that proxy is received by the Trust before the vote pursuant to that
proxy is counted; provided however, that no proxy shall be valid after the
expiration of eleven (11) months from the date of the proxy unless otherwise
provided in the proxy.
Section 11. INSPECTORS OF ELECTION. Before any meeting of shareholders,
the Board of Trustees may appoint any persons other than nominees for office to
act as inspectors of election at the meeting or its adjournment. If no
inspectors of election are so appointed, the chairman of the meeting may and on
the request of any shareholder or a shareholder's proxy shall, appoint
inspectors of election at the meeting. The number of inspectors shall be either
one (1) or three (3). If inspectors are appointed at a meeting on the request
of one or more shareholders or proxies, the holders of a majority of shares or
their proxies present at the meeting shall determine whether one (1) or three
(3) inspectors are to be appointed. If any person appointed as inspector fails
to appear or fails or refuses to act, the Chairman of the meeting may and on the
request of any shareholder or a shareholder's proxy, shall appoint a person to
fill the vacancy.
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These inspectors shall:
(a) Determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the
existence of a quorum and the authenticity, validity and
effect of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way
arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election
or vote with fairness to all shareholders.
ARTICLE III
TRUSTEES
Section 1. POWERS. Subject to the applicable provisions of the Agreement
and Declaration of Trust of the Trust and these By-Laws relating to action
required to be approved by the shareholders or by the outstanding shares, the
business and affairs of the Trust shall be managed and all powers shall be
exercised by or under the direction of the Board of Trustees.
Section 2. NUMBER OF TRUSTEES. The exact number of Trustees within the
limits specified in the Agreement and Declaration of Trust of the Trust shall be
fixed from time to time by a written instrument signed or a resolution approved
at a duly constituted meeting by a majority of the Board of Trustees.
Section 3. VACANCIES. Vacancies in the Board of Trustees may be filled by
a majority of the remaining Trustees, though less than a quorum, or by a sole
remaining Trustee, unless the Board of Trustees calls a meeting of shareholders
for the purpose of electing Trustees. In the event that at any time less than a
majority of the Trustees holding office at that time were so elected by the
holders of the Voting Interests of the Trust as defined in Article I, Section
2(o) of the Agreement and Declaration of Trust of the Trust, the Board of
Trustees shall forthwith cause to be held as promptly as possible, and in any
event within sixty (60) days, a meeting of such holders for the purpose of
electing Trustees to fill any existing vacancies in the Board of Trustees,
unless such period is extended by order of, or other relief granted by, the
United States Securities and Exchange Commission or its staff.
Notwithstanding the above, whenever and for so long as the Trust is a
participant in or otherwise has in effect a Plan under
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which the Trust may be deemed to bear expenses of distributing its shares as
that practice is described in Rule 12b-1 under the Investment Company Act of
1940, then the selection and nomination of the Trustees who are not interested
persons of the Trust (as that term is defined in the Investment Company Act of
1940) shall be, and is, committed to the discretion of such disinterested
Trustees.
Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. All meetings of
the Board of Trustees may be held at any place that has been designated from
time to time by resolution of the Board. In the absence of such a designation,
regular meetings shall be held at the principal executive office of the Trust.
With the exception of meetings at which an investment management agreement,
portfolio advisory agreement or any distribution plan adopted pursuant to Rule
12b-1 is approved by the Board, any meeting, regular or special, may be held by
conference telephone or similar communication equipment, so long as all Trustees
participating in the meeting can hear one another and all such Trustees shall be
deemed to be present in person at the meeting.
Section 5. REGULAR MEETINGS. Regular meetings of the Board of Trustees
shall be held without call at such time as shall from time to time be fixed by
the Board of Trustees. Such regular meetings may be held without notice.
Section 6. SPECIAL MEETINGS. Special meetings of the Board of Trustees
for any purpose or purposes may be called at any time by the Chairman of the
Board or the President or any Vice President or the Secretary or any two (2)
Trustees.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each Trustee or sent by first-class mail or
telegram, charges prepaid, addressed to each Trustee at that Trustee's address
as it is shown on the records of the Trust. In case the notice is mailed, it
shall be deposited in the United States mail at least seven (7) calendar days
before the time of the holding of the meeting. In case the notice is delivered
personally or by telephone or to the telegraph company or by express mail or
similar service, it shall be given at least forty-eight (48) hours before the
time of the holding of the meeting. Any oral notice given personally or by
telephone may be communicated either to the Trustee or to a person at the office
of the Trustee whom the person giving the notice has reason to believe will
promptly communicate it to the Trustee. The notice need not specify the purpose
of the meeting or the place if the meeting is to be held at the principal
executive office of the Trust.
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Section 7. QUORUM. A majority of the authorized number of Trustees shall
constitute a quorum for the transaction of business, except to adjourn as
provided in Section 9 of this Article III. Every act or decision done or made
by a majority of the Trustees present at a meeting duly held at which a quorum
is present shall be regarded as the act of the Board of Trustees, subject to the
provisions of the Trust's Agreement and Declaration of Trust. A meeting at
which a quorum is initially present may continue to transact business
notwithstanding the withdrawal of Trustees if any action taken is approved by a
least a majority of the required quorum for that meeting.
Section 8. WAIVER OF NOTICE. Notice of any meeting need not be given to
any Trustee who either before or after the meeting signs a written waiver of
notice, a consent to holding the meeting, or an approval of the minutes. The
waiver of notice or consent need not specify the purpose of the meeting. All
such waivers, consents, and approvals shall be filed with the records of the
Trust or made a part of the minutes of the meeting. Notice of a meeting shall
also be deemed given to any Trustee who attends the meeting without protesting
before or at its commencement the lack of notice to that Trustee.
Section 9. ADJOURNMENT. A majority of the Trustees present, whether or
not constituting a quorum, may adjourn any meeting to another time and place.
Section 10. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given unless the meeting is adjourned
for more than forty-eight (48) hours, in which case notice of the time and place
shall be given before the time of the adjourned meeting in the manner specified
in Section 6 of this Article III to the Trustees who were present at the time of
the adjournment.
Section 11. ACTION WITHOUT A MEETING. With the exception of the approval
of an investment management agreement, portfolio advisory agreement, or any
distribution plan adopted pursuant to Rule 12b-1, any action required or
permitted to be taken by the Board of Trustees may be taken without a meeting if
a majority of the members of the Board of Trustees shall individually or
collectively consent in writing to that action. Such action by written consent
shall have the same force and effect as a majority vote of the Board of
Trustees. Such written consent or consents shall be filed with the minutes of
the proceedings of the Board of Trustees.
Section 12. FEES AND COMPENSATION OF TRUSTEES. Trustees and members of
committees may receive such compensation, if any, for their services and such
reimbursement of expenses as may be
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fixed or determined by resolution of the Board of Trustees. This Section 12
shall not be construed to preclude any Trustee from serving the Trust in any
other capacity as an officer, agent, employee or otherwise and receiving
compensation for those services.
Section 13. DELEGATION OF POWER TO OTHER TRUSTEES. Any Trustee may, by
power of attorney, delegate his or her power for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees; provided that in no
case shall fewer than two (2) Trustees personally exercise the powers granted to
the Trustees under the Trust's Agreement and Declaration of Trust except as
otherwise expressly provided herein or by resolution of the Board of Trustees.
Except where applicable law may require a Trustee to be present in person, a
Trustee represented by another Trustee pursuant to such power of attorney shall
be deemed to be present for purposes of establishing a quorum and satisfying the
required majority vote.
ARTICLE IV
COMMITTEES
Section 1. COMMITTEES OF TRUSTEES. The Board of Trustees may by
resolution adopted by a majority of the authorized number of Trustees designate
one or more committees, each consisting of one (1) or more Trustees, to serve at
the pleasure of the Board. The Board may designate one or more Trustees as
alternate members of any committee who may replace any absent member at any
meeting of the committee. Any committee to the extent provided in the
resolution of the Board, shall have the authority of the Board, except with
respect to:
(a) the approval of any action which under applicable law also
requires shareholders' approval or approval of the
outstanding shares, or requires approval by a majority of
the entire Board or certain members of said Board;
(b) the filling of vacancies on the Board of Trustees or in any
committee;
(c) the fixing of compensation of the Trustees for serving on
the Board of Trustees or on any committee;
(d) the amendment or repeal of the Trust's Agreement and
Declaration of Trust or of the By-Laws or the adoption of
new By-Laws;
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(e) the amendment or repeal of any resolution of the Board of
Trustees which by its express terms is not so amendable or
repealable;
(f) a distribution to the shareholders of the Trust, except at a
rate or in a periodic amount or within a designated range
determined by the Board of Trustees; or
(g) the appointment of any other committees of the Board of
Trustees or the members of these committees.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
committees shall be governed by and held and taken in accordance with the
provisions of Article III of these By-Laws, with such changes in the context
thereof as are necessary to substitute the committee and its members for the
Board of Trustees and its members, except that the time of regular meetings of
committees may be determined either by resolution of the Board of Trustees or by
resolution of the committee. Special meetings of committees may also be called
by resolution of the Board of Trustees. Alternate members shall be given notice
of meetings of committees and shall have the right to attend all meetings of
committees. The Board of Trustees may adopt rules for the government of any
committee not inconsistent with the provisions of these By-Laws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the Trust shall be a President, a
Secretary and a Treasurer. The Trust may also have, at the discretion of the
Board of Trustees, a Chairman of the Board, one or more Vice Presidents, one or
more Assistant Secretaries, one or more Assistant Treasurers, and such other
officers as may be appointed in accordance with the provisions of Section 3 of
this Article V. Any number of offices may be held by the same person.
Section 2. ELECTION OF OFFICERS. The officers of the Trust, except such
officers as may be appointed in accordance with the provisions of Section 3 or
Section 5 of this Article V, shall be chosen by the Board of Trustees, and each
shall serve at the pleasure of the Board of Trustees, subject to the rights, if
any, of an officer under any contract of employment.
Section 3. SUBORDINATE OFFICERS. The Board of Trustees may appoint and
may empower the President to appoint such other officers as the business of the
Trust may require, each of whom
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shall hold office for such period, have such authority and perform such duties
as are provided in these By-Laws or as the Board of Trustees may from time to
time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if
any, of an officer under any contract of employment, any officer may be removed,
either with or without cause, by the Board of Trustees at any regular or special
meeting of the Board of Trustees or by the principal executive officer or by
such other officer upon whom such power of removal may be conferred by the Board
of Trustees.
Any officer may resign at any time by giving written notice to the Trust.
Any resignation shall take effect at the date of the receipt of that notice or
at any later time specified in that notice; and unless otherwise specified in
that notice, the acceptance of the resignation shall not be necessary to make it
effective. Any resignation is without prejudice to the rights, if any, of the
Trust under any contract to which the officer is a party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office because of
death, resignation, removal, disqualification or other cause shall be filled in
the manner prescribed in these By-Laws for regular appointment to that office.
The President may make temporary appointments to a vacant office pending action
by the Board of Trustees.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
Officer is elected, shall, if present, preside at meetings of the Board of
Trustees, subject to the control of the Board of Trustees, have general
supervision, direction and control of the business and the Officers of the Trust
and exercise and perform such other powers and duties as may be from time to
time assigned to him or her by the Board of Trustees or prescribed by the By-
Laws. The Chairman of the Board shall serve as chief executive officer in the
chief executive officer's absence.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as may
be given by the Board of Trustees to the Chairman of the Board, if there be such
an officer, the President shall, subject to the control of the Board of Trustees
and the Chairman, have general supervision, direction and control of the
business and the officers of the Trust. He or she shall preside at all meetings
of the shareholders and, in the absence of the Chairman of the Board or if there
be none, at all meetings of the Board of Trustees. He or she shall have the
general powers and duties of management usually vested in the offices of
president, chief executive officer and chief operating officer of a corporation
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and shall have such other powers and duties as may be prescribed by the Board of
Trustees or these By-Laws.
Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents, if any, in order of their rank as fixed by the
Board of Trustees or if not ranked, the Executive Vice President (who shall be
considered first ranked) and such other Vice Presidents as shall be designated
by the Board of Trustees, shall perform all the duties of the President and,
when so acting, shall have all powers of and be subject to all the restrictions
upon the President. The Vice Presidents shall have such other powers and
perform such other duties as from time to time may be prescribed for them
respectively by the Board of Trustees or the President or the Chairman of the
Board or by these By-Laws.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept at the
principal executive office of the Trust or such other place as the Board of
Trustees may direct a book of minutes of all meetings and actions of Trustees,
committees of Trustees and shareholders with the time and place of holding,
whether regular or special, and if special, how authorized, the notice given,
the names of those present at Trustees' meetings or committee meetings, the
number of shares present or represented at shareholders' meetings, and the
proceedings.
The Secretary shall keep or cause to be kept at the principal executive
office of the Trust or at the office of the Trust's transfer agent or registrar,
a share register or a duplicate share register showing the names of all
shareholders and their addresses, the number and classes of shares held by each,
the number and date of certificates issued for the same and the number and date
of cancellation of every certificate surrendered for cancellation.
The Secretary shall give or cause to be given notice of all meetings of the
shareholders and of the Board of Trustees required to be given by these By-Laws
or by applicable law and shall have such other powers and perform such other
duties as may be prescribed by the Board of Trustees or by these By-Laws.
Section 10. TREASURER. The Treasurer shall be the chief financial officer
and chief accounting officer of the Trust and shall keep and maintain or cause
to be kept and maintained adequate and correct books and records of accounts of
the properties and business transactions of the Trust, including accounts of its
assets, liabilities, receipts, disbursements, gains, losses, capital, retained
earnings and shares. The books of account shall at all reasonable times be open
to inspection by any Trustee.
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The Treasurer shall deposit all monies and other valuables in the name and
to the credit of the Trust with such depositaries as may be designated by the
Board of Trustees. The Treasurer shall disburse the funds of the Trust as may
be ordered by the Board of Trustees, shall render to the President and Trustees,
whenever they request it, an account of all of his or her transactions as chief
financial officer and of the financial condition of the Trust and shall have
other powers and perform such other duties as may be prescribed by the Board of
Trustees or these By-Laws.
ARTICLE VI
INDEMNIFICATION OF TRUSTEES, OFFICERS,
EMPLOYEES, AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS, AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a Trustee, officer, employee or
other agent of the Trust or is or was serving at the request of the Trust as a
Trustee, director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise or was a
Trustee, director, officer, employee or agent of a foreign or domestic
corporation that was a predecessor of another enterprise at the request of such
predecessor entity; "proceeding" means any threatened, pending or completed
action or proceeding, whether civil, criminal, administrative or investigative;
and "expenses" includes, without limitation, attorney's fees and any expenses of
establishing a right to indemnification under this Article.
Section 2. ACTIONS OTHER THAN BY TRUST. The Trust shall indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of the Trust) by reason of
the fact that such person is or was an agent of the Trust, against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with such proceeding, if it is determined that such person acted
in good faith and reasonably believed: (a) in the case of conduct in his or her
official capacity as a Trustee of the Trust, that his or her conduct was in the
Trust's best interests and (b) in all other cases, that his or her conduct was
at least not opposed to the Trust's best interests, and (c) in the case of a
criminal proceeding, that he or she had no reasonable cause to believe the
conduct of that person was unlawful. The termination of any proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not of itself create a presumption that the person did not act
in good faith and in a manner which the person reasonably believed to be in the
best interests of the Trust or
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that the person had reasonable cause to believe that the person's conduct was
unlawful.
Section 3. ACTIONS BY THE TRUST. The Trust shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that such person is or was an agent of the Trust,
against expenses actually and reasonably incurred by that person in connection
with the defense or settlement of that action if that person acted in good
faith, in a manner that person believed to be in the best interests of the Trust
and with such care, including reasonable inquiry, as an ordinarily prudent
person in a like position would use under similar circumstances.
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to
the contrary contained herein, there shall be no right to indemnification for
any liability arising by reason of willful misfeasance, bad faith, gross
negligence, or the reckless disregard of the duties involved in the conduct of
the agent's office with the Trust.
No indemnification shall be made under Sections 2 or 3 of this Article:
(a) In respect of any claim, issue or matter as to which that person shall
have been adjudged to be liable on the basis that personal benefit was
improperly received by him or her, whether or not the benefit resulted
from an action taken in the person's official capacity; or
(b) In respect of any claim, issue or matter as to which that person shall
have been adjudged to be liable in the performance of that person's
duty to the Trust, unless and only to the extent that the court in
which that action was brought shall determine upon application that in
view of all the circumstances of the case, that person was not liable
by reason of the disabling conduct set forth in the preceding
paragraph and is fairly and reasonably entitled to indemnity for the
expenses which the court shall determine; or
(c) Of amounts paid in settling or otherwise disposing of a threatened or
pending action, with or without court approval, or of expenses
incurred in defending a threatened or pending action that is settled
or otherwise disposed of without court approval, unless the required
approval set forth in Section 6 of this Article is obtained.
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Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of
the Trust has been successful on the merits in defense of any proceeding
referred to in Sections 2 or 3 of this Article or in defense of any claim, issue
or matter therein, before the court or other body before whom the proceeding was
brought, the agent shall be indemnified against expenses actually and reasonably
incurred by the agent in connection therewith, provided that the Board of
Trustees, including a majority who are disinterested, non-party Trustees, also
determines that, based upon a review of the facts, the agent was not liable by
reason of the disabling conduct referred to in Section 4 of this Article.
Section 6. REQUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by the Trust only
if authorized in the specific case on a determination that indemnification of
the agent is proper in the circumstances because the agent has met the
applicable standard of conduct set forth in Sections 2 or 3 of this Article and
is not prohibited from indemnification because of the disabling conduct set
forth in Section 4 of this Article, by:
(a) a majority vote of a quorum consisting of Trustees who are not
parties to the proceeding and are not interested persons of the
Trust (as defined in the Investment Company Act of 1940); or
(b) a written opinion by an independent legal counsel.
Section 7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by the Trust before the final disposition of the
proceeding upon a written undertaking by or on behalf of the agent, to repay the
amount of the advance if it is ultimately determined that he or she is not
entitled to indemnification, together with at least one of the following as a
condition to the advance: (i) security for the undertaking; or (ii) the
existence of insurance protecting the Trust against losses arising by reason of
any lawful advances; or (iii) a determination by a majority of a quorum of
Trustees who are not parties to the proceeding and are not interested persons of
the Trust, or by an independent legal counsel in a written opinion, based on a
review of readily available facts, that there is reason to believe that the
agent ultimately will be found entitled to indemnification. Determinations and
authorizations of payments under this Section must conform to the standards set
forth in Section 6 of this Article for determining that the indemnification is
permissible.
Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which
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persons other than Trustees and officers of the Trust or any subsidiary hereof
may be entitled by contract or otherwise.
Section 9. LIMITATIONS. No indemnification or advance shall be made under
this Article, except as provided in Sections 5 or 6 in any circumstances where
it appears:
(a) that it would be inconsistent with a provision of the Trust's
Agreement and Declaration of Trust, a resolution of the shareholders
of the Trust, or an agreement in effect at the time of accrual of the
alleged cause of action asserted in the proceeding in which the
expenses were incurred or other amounts were paid which prohibits or
otherwise limits indemnification; or
(b) that it would be inconsistent with any condition expressly imposed by
a court in approving a settlement.
Section 10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees of the Trust to purchase such insurance, the Trust shall
purchase and maintain insurance on behalf of any agent of the Trust against any
liability asserted against or incurred by the agent in such capacity or arising
out of the agent's status as such, but only to the extent that the Trust would
have the power to indemnify the agent against that liability under the
provisions of this Article and the Trust's Agreement and Declaration of Trust.
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article VI does
not apply to any proceeding against any Trustee, investment manager or other
fiduciary of an employee benefit plan in that person's capacity as such, even
though that person may also be an agent of the Trust as defined in Section l of
this Article VI. Nothing contained in this Article VI shall limit any right to
indemnification to which such a Trustee, investment manager, or other fiduciary
may be entitled by contract or otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article VI.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. The Trust shall
keep at its principal executive office or at the office of its transfer agent or
registrar, if either be appointed and as determined by resolution of the Board
of Trustees, a record of its shareholders, giving the names and addresses of all
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shareholders and the number, series and, where applicable, class of shares held
by each shareholder.
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS. The Trust shall keep at
its principal executive office the original or a copy of these By-Laws as
amended from time to time, which shall be open to inspection by the shareholders
at all reasonable times during office hours.
Section 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS. The accounting
books and records and minutes of proceedings of the shareholders and the Board
of Trustees and any committee or committees of the Board of Trustees shall be
kept at such place or places designated by the Board of Trustees or in the
absence of such designation, at the principal executive office of the Trust.
The minutes shall be kept in written form, and the accounting books and records
shall be kept either in written form or in any other form capable of being
converted into written form. The minutes and accounting books and records shall
be open to inspection upon the written demand of any shareholder or holder of a
voting trust certificate at any reasonable time during the usual business hours
of the Trust for a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. The inspection may
be made in person or by an agent or attorney and shall include the right to copy
and make extracts.
Section 4. INSPECTION BY TRUSTEES. Every Trustee shall have the absolute
right at any reasonable time to inspect all books, records and documents of
every kind as well as the physical properties of the Trust. This inspection by
a Trustee may be made in person or by an agent or attorney, and the right of
inspection includes the right to copy and make extracts of documents.
Section 5. FINANCIAL STATEMENTS. A copy of any financial statements and
any income statement of the Trust for each quarterly period of each fiscal year
and accompanying balance sheet of the Trust as of the end of each such period
that has been prepared by the Trust shall be kept on file in the principal
executive office of the Trust for at least twelve (12) months, and each such
statement shall be exhibited at all reasonable times to any shareholder
demanding an examination of any such statement or a copy shall be mailed to any
such shareholder.
The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of any independent
accountants engaged by the Trust or the certificate of an authorized officer of
the Trust that the
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financial statements were prepared without audit from the books and records of
the Trust.
ARTICLE VIII
GENERAL MATTERS
Section 1. CHECKS, DRAFTS, AND EVIDENCES OF INDEBTEDNESS. All checks,
drafts or other orders for payment of money, notes or other evidences of
indebtedness issued in the name of or payable to the Trust shall be signed or
endorsed in such manner and by such person or persons as shall be designated
from time to time in accordance with the resolution of the Board of Trustees.
Section 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of
Trustees, except as otherwise provided in these By-Laws, may authorize any
officer or officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the Trust, and this authority may be
general or confined to specific instances; and unless so authorized or ratified
by the Board of Trustees or within the agency power of an officer, no officer,
agent or employee shall have any power or authority to bind the Trust by any
contract or engagement, to pledge its credit, or to render it liable for any
purpose or for any amount.
Section 3. CERTIFICATES FOR SHARES. A certificate or certificates for
shares of beneficial interest in any series of the Trust may be issued to a
shareholder upon the shareholder's request when such shares are fully paid. All
certificates shall be signed in the name of the Trust by the Chairman of the
Board or the President or Vice President and by the Treasurer or an Assistant
Treasurer or the Secretary or any Assistant Secretary, certifying the number of
shares and the series of shares owned by the shareholders. Any or all of the
signatures on the certificate may be facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
on a certificate shall have ceased to be that officer, transfer agent or
registrar before that certificate is issued, it may be issued by the Trust with
the same effect as if that person were an officer, transfer agent or registrar
at the date of issue. Notwithstanding the foregoing, the Trust may adopt and
use a system of issuance, recordation and transfer of its shares by electronic
or other means.
Section 4. LOST CERTIFICATES. Except as provided in this Section 4, no
new certificate for shares shall be issued to replace an old certificate unless
the latter is surrendered to the Trust and cancelled at the same time. The
Board of Trustees may in case any share certificate or certificate for any other
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security is lost, stolen or destroyed, authorize the issuance of a replacement
certificate on such terms and conditions as the Board of Trustees may require,
including a provision for indemnification of the Trust secured by a bond or
other adequate security sufficient to protect the Trust against any claim that
may be made against it, including any expense or liability on account of the
alleged loss, theft or destruction of the certificate or the issuance of the
replacement certificate.
Section 5. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD BY TRUST. The
Chairman of the Board, the President, any Vice President, or any other person
authorized by resolution of the Board of Trustees or by any of the foregoing
designated officers, is authorized to vote or represent on behalf of the Trust
any and all shares of any corporation, partnership, trust, or other entity,
foreign or domestic, standing in the name of the Trust. The authority granted
may be exercised in person or by a proxy duly executed by such designated
person.
Section 6. FISCAL YEAR. The fiscal year of the Trust, and of the several
Series thereof, shall be fixed and refixed or changed from time to time by
resolution of the Trustees. The fiscal year of the Trust shall be the taxable
year of each Series of the Trust, unless otherwise provided by the Trustees.
ARTICLE IX
AMENDMENTS
Section l. AMENDMENT BY SHAREHOLDERS. These By-Laws may be amended or
repealed by the affirmative vote or written consent of a majority of the Voting
Interests, as defined in Article I, Section 2(o) of the Agreement and
Declaration of Trust of the Trust, entitled to vote, except as otherwise
provided by applicable law or by the Trust's Agreement and Declaration of Trust
or these By-Laws.
Section 2. AMENDMENT BY TRUSTEES. Subject to the right of shareholders as
provided in Section l of this Article IX to adopt, amend or repeal By-Laws, and
except as otherwise provided by applicable law or by the Trust's Agreement and
Declaration of Trust, these By-Laws may be adopted, amended or repealed by the
Board of Trustees.
Section 3. INCORPORATION BY REFERENCE INTO AGREEMENT AND DECLARATION OF
TRUST OF THE TRUST. These By-Laws and any amendments thereto shall be
incorporated by reference to the Trust's Agreement and Declaration of Trust.
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INVESTMENT MANAGEMENT AGREEMENT
THIS INVESTMENT MANAGEMENT AGREEMENT made as of the _____ day of
January, 1997, by and between BERKELEY CAPITAL MANAGEMENT FUNDS, a Delaware
business trust (hereinafter called the "Trust"), on behalf of each series of the
Trust listed in APPENDIX A hereto, as such Appendix may be amended from time to
time (each series hereinafter referred to individually as a "Fund" and
collectively as the "Funds") and BERKELEY CAPITAL MANAGEMENT, a California
corporation (hereinafter called the "Manager").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company,
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Manager is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is engaged in the business of
supplying investment advice and investment management services, as an
independent contractor; and
WHEREAS, the Trust desires to retain the Manager to render advice and
services to the Funds pursuant to the terms and provisions of this Agreement,
and the Manager is interested in furnishing said advice and services;
NOW, THEREFORE, in consideration of the covenants and the mutual
promises hereinafter set forth, the parties hereto, intending to be legally
bound hereby, mutually agree as follows:
1. APPOINTMENT OF MANAGER. The Trust hereby employs the Manager,
and the Manager hereby accepts such employment, to render investment advice and
management services with respect to the assets of the Funds for the period and
on the terms set forth in this Agreement, subject to the supervision and
direction of the Trust's Board of Trustees.
2. DUTIES OF MANAGER.
(a) GENERAL DUTIES. The Manager shall act as investment manager
to the Funds and shall supervise investments of the Funds on behalf of the Funds
in accordance with the investment objectives, programs and restrictions of the
Funds as provided in the Trust's governing documents, including, without
limitation, the Trust's Agreement and Declaration of Trust, By-Laws, Prospectus,
and Statement of Additional Information, and such other limitations as the
Trustees may impose from time to time in writing to the Manager. Without
limiting the generality of the foregoing, the Manager shall: (i) furnish the
Funds with advice and recommendations with respect to the investment of each
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Fund's assets and the purchase and sale of portfolio securities for the Funds,
including the taking of such other steps as may be necessary to implement such
advice and recommendations; (ii) furnish the Funds with reports, statements and
other data on securities, economic conditions and other pertinent subjects which
the Trust's Board of Trustees may reasonably request; (iii) manage the
investments of the Funds, subject to the ultimate supervision and direction of
the Trust's Board of Trustees; (iv) provide persons satisfactory to the Trust's
Board of Trustees to act as officers and employees of the Trust (such officers
and employees, as well as certain Trustees, may be trustees, directors,
officers, partners, or employees of the Manager or its affiliates), but not
including personnel to provide administrative services to the Funds; and (v)
render to the Trust's Board of Trustees such periodic and special reports with
respect to each Fund's investment activities as the Board may reasonably
request.
(b) BROKERAGE. The Manager shall place orders for the purchase
and sale of securities either directly with the issuer or with a broker or
dealer selected by the Manager. In placing each Fund's securities trades, it is
recognized that the Manager will give primary consideration to securing the most
favorable price and efficient execution, in a reasonable effort to ensure that
each Fund's total cost or proceeds in each transaction will be the most
favorable under all the circumstances. Within the framework of this policy, the
Manager may consider the financial responsibility, research and investment
information, and other services provided by brokers or dealers who may effect or
be a party to any such transaction or other transactions to which other clients
of the Manager may be a party.
It is also understood that it is desirable for the Funds that the
Manager have access to investment and market research and securities and
economic analyses provided by brokers and others. It is also understood that
brokers providing such services may execute brokerage transactions at a higher
cost to the Funds than might result from the allocation of brokerage to other
brokers on the basis of seeking the most favorable price and efficient
execution. Therefore, the purchase and sale of securities for the Funds may be
made with brokers who provide such research and analysis, subject to review by
the Trust's Board of Trustees from time to time. It is understood by both
parties that the Manager may select broker-dealers for the execution of the
Funds' portfolio transactions who provide research and analysis which the
Manager may lawfully and appropriately use in its investment management and
advisory capacities, whether or not such research and analysis may also be
useful to the Manager in connection with its services to other clients.
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On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of one or more of the Funds as well as of other
clients, the Manager, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be so purchased or sold in order to
obtain the most favorable price or lower brokerage commissions and the most
efficient execution. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be made by
the Manager in the manner it considers to be the most equitable under the
circumstances and consistent with its fiduciary obligations to the Funds and to
such other clients.
3. BEST EFFORTS AND JUDGMENT. The Manager shall use its best
judgment and efforts in rendering the advice and services to the Funds as
contemplated by this Agreement.
4. INDEPENDENT CONTRACTOR. The Manager shall, for all purposes
herein, be deemed to be an independent contractor, and shall, unless otherwise
expressly provided and authorized to do so, have no authority to act for or
represent the Trust or the Funds in any way, or in any way be deemed an agent
for the Trust or for the Funds. It is expressly understood and agreed that the
services to be rendered by the Manager to the Funds under the provisions of this
Agreement are not to be deemed exclusive, and the Manager shall be free to
render similar or different services to others so long as its ability to render
the services provided for in this Agreement shall not be materially impaired
thereby.
5. MANAGER'S PERSONNEL. The Manager shall, at its own expense,
maintain such staff and employ or retain such personnel and consult with such
other persons as it shall from time to time determine to be necessary to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Manager shall be
deemed to include persons employed or retained by the Manager to furnish
statistical information, research, and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as
the Manager or the Trust's Board of Trustees may desire and reasonably request.
6. REPORTS BY FUNDS TO MANAGER. Each Fund will from time to time
furnish to the Manager detailed statements of its investments and assets, and
information as to its investment objective or objectives and needs, and will
make available to the Manager such financial reports, proxy statements, legal
and other information relating to its investments as may be in its possession or
available to it, together with such other information as the Manager may
reasonably request.
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7. EXPENSES.
(a) With respect to the operation of each Fund, the Manager is
responsible for (i) the compensation of any of the Trust's Trustees, officers,
and employees who are affiliates of the Manager (but not the compensation of
employees performing services in connection with expenses which are the Fund's
responsibility under Subparagraph 7(b) below) and (ii) providing office space
and equipment reasonably necessary for the operation of the Funds.
(b) Each Fund is responsible for and has assumed the obligation
for payment of all of its expenses, other than as stated in Subparagraph 7(a)
above, including but not limited to: fees and expenses incurred in connection
with the issuance, registration and transfer of its shares; brokerage and
commission expenses; all expenses of transfer, receipt, safekeeping, servicing
and accounting for the cash, securities and other property of the Trust for the
benefit of the Fund including all fees and expenses of its custodian,
shareholder services agent and accounting services agent; interest charges on
any borrowings; costs and expenses of pricing and calculating its daily net
asset value and of maintaining its books of account required under the 1940 Act;
taxes, if any; expenditures in connection with meetings of each Fund's
Shareholders and the Trust's Board of Trustees that are properly payable by the
Fund; salaries and expenses of officers and fees and expenses of members of the
Trust's Board of Trustees or members of any advisory board or committee who are
not members of, affiliated with or interested persons of the Manager; insurance
premiums on property or personnel of each Fund which inure to its benefit,
including liability and fidelity bond insurance; the cost of preparing and
printing reports, proxy statements, prospectuses and statements of additional
information of the Fund or other communications for distribution to existing
shareholders; legal, auditing and accounting fees; trade association dues; fees
and expenses (including legal fees) of registering and maintaining registration
of its shares for sale under federal and applicable state and foreign securities
laws; all expenses of maintaining and servicing shareholder accounts, including
all charges for transfer, shareholder recordkeeping, dividend disbursing,
redemption, and other agents for the benefit of the Funds (including, without
limitation, fund accounting and administration agents), if any; and all other
charges and costs of its operation plus any extraordinary and non-recurring
expenses, except as herein otherwise prescribed.
(c) To the extent the Manager incurs any costs by assuming
expenses which are an obligation of a Fund as set forth herein, such Fund shall
promptly reimburse the Manager for such costs and expenses, except to the extent
the Manager has otherwise agreed to bear such expenses. To the extent the
services for which a Fund is obligated to pay are performed by
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the Manager, the Manager shall be entitled to recover from such Fund to the
extent of the Manager's actual costs for providing such services.
8. INVESTMENT ADVISORY AND MANAGEMENT FEE.
(a) Each Fund shall pay to the Manager, and the Manager agrees
to accept, as full compensation for all investment management and advisory
services furnished or provided to such Fund pursuant to this Agreement, a
management fee as set forth in the Fee Schedule attached hereto as APPENDIX B,
as may be amended in writing from time to time by the Trust and the Manager.
(b) The management fee shall be accrued daily by each Fund and
paid to the Manager monthly.
(c) The initial fee under this Agreement shall be payable
monthly following the effective date of this Agreement and shall be prorated as
set forth below. If this Agreement is terminated prior to the end of any month,
the fee to the Manager shall be prorated for the portion of any month in which
this Agreement is in effect which is not a complete month according to the
proportion which the number of calendar days in the month during which the
Agreement is in effect bears to the number of calendar days in the month, and
shall be payable within ten (10) days after the date of termination.
(d) The Manager voluntarily may reduce any portion of the
compensation or reimbursement of expenses due to it pursuant to this Agreement
and may agree to make payments to limit the expenses which are the
responsibility of a Fund under this Agreement. Any such reduction or payment
shall be applicable only to such specific reduction or payment and shall not
constitute an agreement to reduce any future compensation or reimbursement due
to the Manager hereunder or to continue future payments. Any such reduction
will be agreed upon prior to accrual of the related expense or fee and will be
estimated daily. Any fee withheld shall be voluntarily reduced and any Fund
expense paid by the Manager voluntarily or pursuant to an agreed expense
limitation shall be reimbursed by the appropriate Fund to the Manager in the
first, second or third (or any combination thereof) fiscal year next succeeding
the fiscal year of the withholding, reduction, or payment to the extent
permitted by applicable law if the aggregate expenses for the next succeeding
fiscal year, second succeeding fiscal year or third succeeding fiscal year do
not exceed any limitation to which the Manager has agreed. Such reimbursement
may be paid prior to the Fund's payment of current expenses if so requested by
the Manager even if such payment may require the Manager to waive or reduce its
fees hereunder or to pay current Fund expenses.
(e) The Manager may agree not to require payment of any portion
of the compensation or reimbursement of expenses
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otherwise due to it pursuant to this Agreement prior to the time such
compensation or reimbursement has accrued as a liability of the Fund. Any such
agreement shall be applicable only with respect to the specific items covered
thereby and shall not constitute an agreement not to require payment of any
future compensation or reimbursement due to the Manager hereunder.
9. FUND SHARE ACTIVITIES OF MANAGER'S OFFICERS AND EMPLOYEES. The
Manager agrees that neither it nor any of its officers or employees shall take
any short position in the shares of the Funds. This prohibition shall not
prevent the purchase of such shares by any of the officers or bona fide
employees of the Manager or any trust, pension, profit-sharing or other benefit
plan for such persons or affiliates thereof, at a price not less than the net
asset value thereof at the time of purchase, as allowed pursuant to rules
promulgated under the 1940 Act.
10. CONFLICTS WITH TRUST'S GOVERNING DOCUMENTS AND APPLICABLE LAWS.
Nothing herein contained shall be deemed to require the Trust or the Funds to
take any action contrary to the Trust's Agreement and Declaration of Trust, By-
Laws, or any applicable statute or regulation, or to relieve or deprive the
Board of Trustees of the Trust of its responsibility for and control of the
conduct of the affairs of the Trust and Funds.
11. MANAGER'S LIABILITIES.
(a) In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties hereunder on the
part of the Manager, the Manager shall not be subject to liability to the Trust
or the Funds or to any shareholder of the Funds for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security or other
asset or instrument by the Funds.
(b) Each Fund shall severally indemnify and hold harmless the
Manager and the shareholders, directors, officers and employees of the Manager
(any such person, an "Indemnified Party") against any loss, liability, claim,
damage or expense (including the reasonable cost of investigating and defending
any alleged loss, liability, claim, damage or expense and reasonable legal fees
incurred in connection therewith) arising out of the Indemnified Party's
performance or non-performance of any duties under this Agreement, provided,
however, that nothing herein shall be deemed to protect any Indemnified Party
against any liability to which such Indemnified Party would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder or by reason of reckless disregard of its
obligations and duties under this Agreement.
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(c) No provision of this Agreement shall be construed to protect
any Trustee or officer of the Trust, or officer of the Manager, from liability
in violation of Sections 17(h) or (i) of the 1940 Act.
12. NON-EXCLUSIVITY. The Trust's employment of the Manager is not an
exclusive arrangement, and the Trust may from time to time employ other
individuals or entities to furnish it with the services provided for herein. In
the event this Agreement is terminated with respect to any Fund, this Agreement
shall remain in full force and effect with respect to any and all other Funds
listed on APPENDIX A hereto, as the same may be amended.
13. TERM. This Agreement shall become effective at the time the
Trust's initial Registration Statement under the Securities Act of 1933 with
respect to the shares of the Trust is declared effective by the Securities and
Exchange Commission and shall remain in effect for a period of two (2) years,
unless sooner terminated as hereinafter provided. This Agreement shall continue
in effect as to each Fund after such initial two-year period for additional
periods not exceeding one (l) year so long as such continuation is approved with
respect to such Fund at least annually by (i) the Board of Trustees of the Trust
or by the vote of a majority of the outstanding voting securities of such Fund
and (ii) the vote of a majority of the Trustees of the Trust who are not parties
to this Agreement nor interested persons thereof, cast in person at a meeting
called for the purpose of voting on such approval.
14. TERMINATION. This Agreement may be terminated by the Trust on
behalf of any one or more of the Funds, without payment of any penalty, by the
Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities of a Fund, upon sixty (60) days' prior written notice to the
Manager, and by the Manager upon sixty (60) days' prior written notice to a
Fund.
15. TERMINATION BY ASSIGNMENT. This Agreement shall terminate
automatically in the event of any transfer or assignment thereof, as defined in
the 1940 Act.
16. TRANSFER, ASSIGNMENT. This Agreement may not be transferred,
assigned, sold, or in any manner hypothecated or pledged without the affirmative
vote or written consent of the holders of a majority of the outstanding voting
securities of each Fund.
17. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, or rule, or shall be otherwise
rendered invalid, the remainder of this Agreement shall not be affected thereby.
-7-
<PAGE>
18. DEFINITIONS. The terms "majority of the outstanding voting
securities" and "interested persons" shall have the meanings as set forth in the
1940 Act.
19. NOTICE OF DECLARATION OF TRUST. The Manager agrees that the
Trust's obligations under this Agreement shall be limited to the Funds and to
their respective assets, and that the Manager shall not seek satisfaction of any
such obligation from the shareholders of the Funds nor from any Trustee,
officer, employee or agent of the Trust or the Funds.
20. CAPTIONS. 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.
21. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California without giving
effect to the conflict of laws principles thereof; provided that nothing herein
shall be construed to preempt, or to be inconsistent with, any federal law,
regulation or rule, including the 1940 Act and the Investment Advisors Act of
1940 and any rules and regulations promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested by their duly authorized officers, all on the day
and year first above written.
BERKELEY CAPITAL MANAGEMENT FUNDS BERKELEY CAPITAL MANAGEMENT
By: By:
------------------------- -------------------------
Title: Title:
------------------------ ------------------------
-8-
<PAGE>
BERKELEY CAPITAL MANAGEMENT FUNDS
APPENDIX A
to the Investment Management Agreement
The provisions of the Investment Management Agreement between the Trust and the
Manager apply to the following series of the Trust:
1. Berkeley Capital Management Money Market Fund
Date: January __, 1997.
<PAGE>
BERKELEY CAPITAL MANAGEMENT FUNDS
APPENDIX B
to the Investment Management Agreement
Each Fund shall pay to the Manager, as full compensation for all investment
management and advisory services furnished or provided to such Fund pursuant to
the Investment Management Agreement, a management fee based upon each Fund's
average daily net assets at the following per annum rates:
1. Berkeley Capital Management Money Market Fund ____%
Date: January __, 1997.
<PAGE>
BERKELEY CAPITAL MANAGEMENT FUNDS
650 California Street, Suite 2800
San Francisco, California 94108
Berkeley Financial Services
650 California Street, Suite 2800
San Francisco, California 94108
Date: January __, 1997
Re: Underwriting Agreement
----------------------
Ladies and Gentlemen:
We are a Delaware business trust operating as an open-end management
investment company (hereinafter referred to as the "Trust"). As such, the Trust
is registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and its shares are or will be registered under the Securities Act of
1933, as amended (the "1933 Act"). Each series of shares of beneficial interest
(individually a "Fund" and collectively the "Funds") authorized for issuance by
the Trust and for sale pursuant to this Agreement is listed in APPENDIX A
hereto, as such Appendix may be amended from time to time. Each series
constitutes a distinct and separate investment portfolio for shareholders of
such shares. We desire to offer and sell shares of the Funds (the "Shares") to
the public in accordance with the applicable federal and state securities laws.
A registration statement on Form N-1A (as amended from time to time, the
"Registration Statement") has been filed with the Securities and Exchange
Commission ("SEC") with respect to the shares we currently desire to be offered
and sold, and such Registration Statement with respect to such Shares has been
declared effective under the 1933 Act and 1940 Act by the SEC. The Registration
Statement contains a form of prospectus and statement of additional information
which, in the form such documents have been or will be filed with the SEC
pursuant to Rule 497 under the 1933 Act, are referred to herein, respectively,
as the "Prospectus" and the "Statement of Additional Information". The
Prospectus and Statement of Additional Information for each Fund are intended to
be the primary documents used in the offer and sale of Shares of such Fund.
You have informed us that your company is registered as a broker-dealer
under the provisions of the Securities Exchange Act of 1934, as amended, and
that your company is a member of the
<PAGE>
Berkeley Financial Services, Inc.
Page 2
National Association of Securities Dealers, Inc. You have indicated your desire
to act as the exclusive selling agent and principal distributor for Shares of
each Fund. We have been authorized to execute and deliver this Agreement to you
on behalf of each Fund by consent of our Trustees, given at a meeting at which a
majority of our Trustees, including a majority of our Trustees who are not
otherwise interested persons of the Trust and who are not interested persons of
your company, were present and voted in favor of approving this Agreement.
1. APPOINTMENT OF UNDERWRITER. Upon the execution of this Agreement and
in consideration of the agreements on your part herein expressed and upon the
terms and conditions set forth herein and in our Registration Statement, as it
will be amended from time to time, we hereby appoint you as the exclusive sales
agent for the Shares of the Funds and agree that we will deliver such Shares as
you may sell. You agree to use your best efforts to promote the sale of Shares
of the Funds, but are not obligated to sell any specific number of Shares.
2. INDEPENDENT CONTRACTOR. You will undertake and discharge your
obligations hereunder as an independent contractor and shall have no authority
or power to obligate or bind us by your actions, conduct or contracts except
that you are authorized to accept orders for the purchase or repurchase of the
Shares as our agent. You may appoint sub-agents or distribute through dealers
(pursuant to a Master Selling Group Agreement that may be entered into in the
future) your own sales representatives or otherwise as you may determine from
time to time, but this Agreement shall not be construed as authorizing any
dealer or other person to accept orders for sale or repurchase of Shares of the
Funds on our behalf or otherwise act as our agent for any purpose.
3. PUBLIC OFFERING. The Shares of each Fund shall be offered for sale to
the public at (i) a price equal to their respective net asset value per Share
(without a sales load), or (ii) at a public offering price that includes the
applicable sales load, if any, as set forth in the then current Prospectus of
such Fund. On each business day that the New York Stock Exchange is open for
business, we will furnish you with the net asset value of the Shares, which
shall be determined and become effective on that day as set forth in the then
current effective Prospectus of each Fund. The net asset value so determined
shall apply to all orders for the purchase of our Shares received by dealers and
you prior to such determination, and you are authorized as our agent to accept
orders and confirm sales at such net asset value plus your sales commission as
may be applicable, provided that such dealers notify you of the time
<PAGE>
Berkeley Financial Services, Inc.
Page 3
when they received the particular order and that the order is placed with you
prior to your close of business on the day that the applicable net asst value is
determined. To the extent that the Transfer Agent or Custodian for the Funds
receives payments on behalf of investors, such Agent shall be required to record
the time of such receipt with respect to each payment, and the applicable net
asset value and public offering price shall be that which is next determined and
effective after the time of receipt by them. In all events, you shall forthwith
notify such Agent (and any dealers comprising a selling group, if applicable) of
the effective net asset value as received from us. Should we at any time
calculate the net asset value more frequently than once each business day, you
and we will follow procedures with respect to such additional price or prices
comparable to those set forth above in this Section 3.
4. SALES LOAD OR COMMISSION. You shall be entitled to charge a sales
commission on the sale of the Shares of each Fund in the amount, if any, set
forth in the then current effective Prospectus for such Fund. Such commission
(subject to any quantity or other discounts or eliminations of commission as set
forth in the Fund's then current effective Prospectus) shall be an amount
mutually agreed upon between us and equal to the difference between the net
asset value and the public offering price of the Shares. You may allow such
sub-agents (or dealers, if applicable) such commissions or discounts, including
payments exceeding the total sales commission, as you shall deem advisable so
long as any such commissions or discounts are set forth in the then current
effective Prospectus of such Fund to the extent required by all applicable
securities laws. Unless otherwise agreed to as provided herein, Shares will be
offered at net asset value without any sales load.
5. PAYMENT FOR SHARES. At or prior to the time of delivery of any of the
Shares, you will pay or cause to be paid to the Fund's Custodian, for the
applicable Fund's account, an amount in cash equal to the net asset value of
such Shares. In the event that you pay for Shares sold by you prior to your
receipt of payment from purchasers, you are authorized to reimburse yourself for
the net asset value of such Shares when received by you.
6. TRANSFER AGENT REGISTRATION OF SHARES. No Shares of any Fund shall be
registered on the books of such Fund until (i) receipt by us of your written
request therefor; (ii) receipt by the Fund's Transfer Agent of a certificate
signed by an officer of the Trust stating the amount to be received therefor;
and (iii) receipt of payment of that amount by the Fund's Custodian. We will
provide for the recording of all Shares purchased in
<PAGE>
Berkeley Financial Services, Inc.
Page 4
uncertificated form in "book accounts." Share certificates will not be issued.
7. PURCHASES FOR YOUR OWN ACCOUNT. You shall not purchase the Shares for
your own account for purposes of resale to the public, but you may purchase
shares for your own investment account upon written assurance that the purchase
is for investment purposes only and that the Shares will not be resold except
through redemption by us.
8. FURNISHING AND USE OF INFORMATION. We will furnish to you such
information with respect to each Fund and its Shares, in such form and signed by
such of our officers as you may reasonably request, and we warrant that the
statements therein contained when so signed will be true and correct. We will
also furnish you with such information and will take such action as you may
reasonably request in order to qualify the Shares for sale to the public under
the securities laws of jurisdictions in which you may wish to offer them. We
will furnish you at least annually with audited financial statements of our
books and accounts certified by independent public accountants, and, from time
to time, with such additional information regarding our financial condition as
you may reasonably request. We or each Fund's investment manager will furnish
you with as many copies of each Fund's current Prospectus, Statement of
Additional Information and Annual and Semi-Annual Reports to Shareholders as you
shall reasonably request; we hereby undertake that each such prospectus,
Statement of Additional Information and Annual and Semi-Annual Report to
Shareholders will be current, accurate and complete in all material respects and
that any supplements to or revised versions of a Prospectus or Statement of
Additional Information will be promptly furnished to you. You agree that, in
distributing a Fund's Shares, you will only use the most current versions of the
Prospectus and Statement of Additional Information, and the most current Annual
and Semi-Annual Reports to Shareholders, each as supplied, supplemented or
revised by us.
9. MARKETING MATERIALS. Other than each Fund's current Prospectus,
Statement of Additional Information, and Annual and Semi-Annual Report or other
periodic Reports to Shareholders, you will not disseminate to the public any
information about the Fund without prior approval. You agree that all
advertising, sales, and marketing materials or other statements about a Fund
that are disseminated to the public will conform to the requirements of all
applicable securities laws and regulations and will be or will have been filed,
where necessary, with the appropriate regulatory authorities. We must approve
all such marketing materials prior to use and no such materials shall be
published or distributed if we shall reasonably and promptly object.
<PAGE>
Berkeley Financial Services, Inc.
Page 5
10. CONDUCT OF BUSINESS. You shall comply with the applicable securities
laws and regulations of the jurisdiction where the Shares are offered for sale
and conduct your affairs with us and with dealers, brokers or investors in
accordance with the Conduct Rules of the National Association of Securities
Dealers, Inc.
11. ALLOCATION OF EXPENSES.
(a) We or each Fund's investment manager will pay all expenses which are
typically associated with the operation of our business and the business of the
Fund including without limitation (i) all costs associated with the preparation,
printing and distribution of current Prospectuses, Statements of Additional
Information, Annual and Semi-Annual Reports to Shareholders and, to the extent
legally permitted, any marketing materials relating to the Funds (except such
materials as you shall separately request and agree to pay for) and (ii) the
filing and other fees to federal, state and other securities regulatory
authorities necessary to register and maintain registration of the Shares.
(b) You will be responsible for (i) the costs of preparing, printing,
filing and distributing marketing materials which you specifically request and
wish to use in distributing a Fund's Shares, which materials are in addition to
any advertising, sales and marketing materials made available to you by each
Fund's investment manager, (ii) the costs and fees associated with filing of
copies of all advertising, sales and marketing material used by you with respect
to a Fund with the appropriate federal, state and securities regulatory
authorities and obtain the approval of the appropriate regulatory authorities of
such marketing materials if any such approval is required, and (iii) all costs
incurred by you in carrying out your responsibilities under this Agreement.
12. OTHER ACTIVITIES. Your services pursuant to this Agreement shall not
be deemed to be exclusive, and you may render similar services and act as an
underwriter, distributor, or dealer for other investment companies in the
offering of their shares.
13. TERM OF AGREEMENT.
(a) This Agreement shall become effective on the date of its execution
written below and shall remain in effect for a period of two (2) years from the
date of its execution. This Agreement shall continue thereafter for periods not
exceeding one (1) year if approved at least annually (i) by a vote of a majority
of the outstanding voting securities of each Fund or by
<PAGE>
Berkeley Financial Services, Inc.
Page 6
a vote of the Trustees of the Trust, and (ii) by a vote of a majority of the
Trustees of the Trust who are not interested persons or parties to this
Agreement (other than as Trustees of the Trust), cast in person at a meeting
called for the purpose of voting on such approval.
(b) This Agreement: (i) may at any time be terminated without the payment
of any penalty, either by vote of the Trustees of the Trust or by a vote of a
majority of the outstanding voting securities of each Fund with respect to such
Fund, on sixty (60) days' written notice to you; (ii) shall immediately
terminate in the event of its assignment; and (iii) may be terminated by you on
sixty (60) days' written notice to us with respect to any Fund.
14. SUSPENSION OF SALES. We reserve the right at all times to suspend or
limit the public offering of the Shares upon written notice to you and to reject
any order for the purchase of the Shares in whole or in part.
15. LIABILITY. Nothing herein shall be deemed to protect you against any
liability to us or to our securities holders to which you would otherwise be
subject by reason of your willful misfeasance, bad faith or gross negligence in
the performance of your duties hereunder, or by reason of your reckless
disregard of your obligations and duties hereunder.
16. INDEMNIFICATION. We agree to indemnify and hold you harmless from and
against any and all losses, claims, damages or liabilities to which you may
become subject under the 1933 Act, the 1940 Act or any state securities statute,
and to reimburse you for any legal or other expenses reasonably incurred by you
in connection with any claim or litigation, whether or not resulting in any
liability, insofar as such losses, claims, damages, liabilities, or litigation
arise out of or are based upon any untrue statement or omission or alleged
untrue statement or omission of a material fact contained in the Registration
Statement of the Trust; provided, however, that this indemnity shall not apply
to any such losses, claims, damages, liabilities, or litigation arising out of
or based upon any untrue statement or omission or alleged untrue statement or
omission of a material fact contained in the Registration Statement, which
statement or omission was made in reliance upon information furnished to us by
you for inclusion in the Registration Statement.
You agree to indemnify and hold us harmless from and against any and all
losses, claims, damage or liabilities to which we may become subject under the
1933 Act, the 1940 Act or any state securities statute, and reimburse us for any
legal or other
<PAGE>
Berkeley Financial Services, Inc.
Page 7
expenses reasonably incurred by us in connection with any claim or litigation,
whether or not resulting in any liability, insofar as such losses, claims,
damages, liabilities, or litigation arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission of a material fact
contained in the Registration Statement; provided, however, that this indemnity
shall not apply to any such losses, claims, damages, liabilities, or litigation
arising out of or based upon any untrue statement or omission or alleged untrue
statement or omission of a material fact contained in the Registration
Statement, where such statement or omission was not made in reliance upon
information furnished to us by you for inclusion in the Registration Statement.
17. DISCLAIMER OF LIABILITY. You acknowledge that you have received
notice of and accept the limitations on the Trust's liability set forth in its
Agreement and Declaration of Trust, as amended from time to time. In accordance
therewith, you agree that the Trust's obligations hereunder shall be limited to
each Fund and the assets of each Fund, and no party shall seek satisfaction of
any such obligation from any shareholders of the Trust, nor from any Trustee,
officer, employee or agent of the Trust.
18. MISCELLANEOUS. This Agreement shall be subject to the laws of the
State of California and shall be interpreted and construed to further and
promote the operation of the Trust as an open-end investment company. As used
herein the terms "net asset value," "offering price," "investment company,"
"open-end investment company," "assignment," "principal underwriter,"
"interested person," "parents," and "majority of the outstanding voting
securities," shall have the meanings set forth in the 1933 Act and the 1940 Act
and the Rules and Regulations thereunder.
<PAGE>
Berkeley Financial Services, Inc.
Page 8
If the foregoing meets with your approval, please acknowledge your
acceptance by signing each of the enclosed counterparts hereof and returning two
such counterparts to us, whereupon this shall constitute a binding agreement as
of the date first above written.
Very truly yours,
Berkeley Capital Management Funds on behalf
of the Funds set forth in APPENDIX A (as may
be amended)
By:
------------------------------------------
Title:
---------------------------------------
Accepted:
Berkeley Financial Services
By:
--------------------------
Title:
-----------------------
<PAGE>
BERKELEY CAPITAL MANAGEMENT FUNDS
APPENDIX A
TO
UNDERWRITING AGREEMENT
1. This Agreement applies to Berkeley Capital Management Money Market Fund.
BERKELEY CAPITAL MANAGEMENT FUNDS
By
----------------------------------
Accepted:
BERKELEY FINANCIAL SERVICES
By
--------------------------
