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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. 1 /x/
Post-Effective Amendment No. __ / /
and
Registration Statement Under the Investment Company Act of 1940 /x/
Amendment No. 1 /x/
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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)
ROBERT A. CORNMAN
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 PRE-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT
This Pre-Effective Amendment to the Registration Statement of Berkeley
Capital Management Funds contains the following documents:
- Facing Sheet
- Contents of Pre-Effective Amendment to 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 "Organization and Management of the
Securities Fund," "Distributions and Taxes,"
and "Other Important Information"
"Investing in Shares of the Fund"
7. Purchase of Securities
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 Financial Statement
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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
Firstar Trust Company (the "Transfer Agent") at (800) 889-0799.
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
(800) 889-0799, 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
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Key Features of the Fund . . . . . . . . . . . . . . . . . . . . . . . . 1
Summary of Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Matching the Fund to Your Investment Needs . . . . . . . . . . . . . . . 3
Investment Objective and Policies. . . . . . . . . . . . . . . . . . . . 3
Organization and Management of the Fund. . . . . . . . . . . . . . . . . 7
Distributions and Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 9
Share Price Calculation. . . . . . . . . . . . . . . . . . . . . . . . . 9
How the Fund Reports Performance . . . . . . . . . . . . . . . . . . . . 10
Investing in Shares of the Fund. . . . . . . . . . . . . . . . . . . . . 10
How to Sell Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Other Important Information. . . . . . . . . . . . . . . . . . . . . . . 14
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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 December 31,
1996, the Investment Manager had approximately $1.9 billion of total assets
under discretionary management under several investment strategies (including
approximately $1.03 billion invested in fixed-income securities). (See
"Organization and Management of the Fund.")
RISK CONSIDERATIONS. The value of securities in 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. 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 also be affected by
changes in market or economic conditions and other circumstances affecting the
financial services industry.
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SUMMARY OF EXPENSES
SHAREHOLDER TRANSACTION EXPENSES: None
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fee 0.25%
12b-1 Fees None
Other Expenses 0.13%
TOTAL FUND OPERATING EXPENSES 0.38%
EXAMPLE. You would pay the following expenses on a $1,000 investment, assuming
(1) a 5% annual return and (2) redemption at the end of each period:
1 Year $ 4
3 Years $12
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 an investor 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
Credit Rating Co. ("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, and 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 seven 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.
These types of securities represent a direct or indirect participation in, or
are secured by and payable from, pools of assets, such as motor vehicle
installment sales contracts, installment loan contracts, leases of various
types of real and personal property, and receivables from revolving credit
(e.g., credit card) agreements. Payments or distributions of principal and
interest on asset-backed securities may be supported by credit enhancements,
such as various forms of cash collateral accounts or letters of credit.
These securities are subject to the risk of prepayment. Prepayments of
principal of asset-backed securities affect the average life of the
asset-backed securities in the Fund's portfolio. Prepayments are affected by
the level of interest rates and other factors, including general economic
conditions. In periods of rising interest rates, the prepayment rate tends
to decrease, lengthening the average life of a pool of asset-backed
securities. In periods of falling interest rates, the prepayment rate tends
to increase, shortening the average life of a pool. Reinvestment of
prepayments may occur at higher or lower interest rates than the original
investment, affecting the Fund's yield. Thus, asset-backed securities may
have less potential for capital appreciation in periods of falling interest
rates than other fixed-income securities of comparable duration, although
they may have a comparable risk of decline in market value in periods of
rising interest rates. Payment of principal and interest may be largely
dependent upon the cash flows generated by the assets backing the securities.
SECTION 4(2) COMMERCIAL PAPER. The Fund may invest in commercial paper and
other securities that 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 (the "1933 Act") ("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 of Section 4(2) paper by the purchaser must be in an
exempt transaction and may be accomplished in accordance with Rule 144A.
Section 4(2) paper normally may be 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 monitor the Fund's investments in these
securities, focusing on such important factors, among others, as valuation,
liquidity, and availability of information.
RULE 144A SECURITIES. Rule 144A under the 1933 Act establishes a safe harbor
from the registration requirements of the 1933 Act for resales of certain
securities to qualified institutional buyers. Institutional markets for
restricted securities sold pursuant to Rule 144A in many cases provide both
readily ascertainable values for restricted securities and the ability to
liquidate an investment to satisfy share redemption orders. Such markets might
include automated systems for the trading, clearance, and settlement of
unregistered securities of domestic and foreign issuers, such as the PORTAL
System sponsored by the National Association of Securities Dealers, Inc. An
insufficient number of qualified buyers interested in purchasing Rule
144A-eligible restricted securities, however, could adversely affect the
marketability of such portfolio securities and result in a Fund's inability to
dispose of such securities promptly or at favorable prices.
The Board of Trustees has delegated the function of making day-to-day
determinations of liquidity to the Fund's Investment Manager, pursuant to
guidelines approved by the Board. The Investment Manager takes into account a
number of factors in reaching liquidity decisions, including, but not limited
to: (i) the frequency of trades for the security, (ii) the number of dealers
that quote prices for the security, (iii) the number of dealers that have
undertaken to make a market in the security, (iv) the number of other potential
purchasers, and (v) the nature of the security and how trading is effected
(e.g., the time needed to sell the security, how bids are solicited and the
mechanics of transfer). The Investment Manager monitors the liquidity of
restricted securities in the Fund's portfolio and reports periodically on such
decisions to the Board.
BANK NOTES. The Fund may invest in bank notes, which are unsecured promissory
notes representing debt obligations that are issued by banks in large
denominations.
It is not currently expected that the Fund will invest more than 5% of its net
assets in tax-exempt commercial paper.
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 agreements may exceed one year.
If the seller in 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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broker-dealers that the Investment Manager deems creditworthy.
It is not currently anticipated that the Fund will engage in reverse
repurchase agreements.
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 without immediately selling any portfolio securities. The
Fund will not borrow for leverage purposes or purchase securities or make
investments while borrowings are outstanding. If for any reason the current
value of the total assets of the Fund falls below an amount equal to three
times the amount of indebtedness for money borrowed, the Fund will within
three business days, reduce its indebtedness to the extent necessary. Any
borrowings under this provision will not be collateralized.
RISK CONSIDERATIONS. 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 also 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 interest rate levels. In addition, the
financial services industry is subject to risks resulting from general economic
conditions and the potential exposure to credit losses.
ADDITIONAL INFORMATION. Please see the Statement of Additional Information for
further information regarding foreign securities, 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 December 31, 1996, the Investment Manager had approximately
$1.9 billion of total assets under discretionary management under several
investment strategies (including approximately $1.3 billion invested in fixed
income securities).
TRANSFER AGENT AND SHAREHOLDER SERVICES. Firstar Trust Company, 615 E.
Michigan Street, Milwaukee, Wisconsin 53202 (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.
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THE PRINCIPAL UNDERWRITER. The Fund's principal underwriter (the "Principal
Underwriter") 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 Underwriter.)
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 0.25% of the Fund's average daily net assets.
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, Berkeley International Securities
Corporation owned all of the outstanding shares of the Fund. It is
contemplated that the public offering of shares of the Fund will reduce
Berkeley International Securities Corporation'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 last Business Day of each month.
FEDERAL INCOME TAX INFORMATION. The Fund intends to qualify and elect to
continue 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 NAV 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 their net asset value.
-9-
<PAGE>
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 seven-day period. This income is then annualized, which
means that the income generated during the seven-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
(800) 889-0799.
INVESTING IN SHARES OF THE FUND
SHAREHOLDER SERVICE. Once you have completed a purchase application form,
including all applicable bank information, which has been accepted by the
Transfer Agent, you automatically have the privilege to place Fund purchase
orders and orders to sell shares by calling the Transfer Agent at
-10-
<PAGE>
(800) 889-0799, where trained representatives are available to answer
questions about the Fund and your account.
The Fund and the Transfer Agent will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine. If the Fund and the
Transfer Agent follow telephone orders that they reasonably believe to be
genuine, they will not be liable for any losses a shareholder may experience.
If the Fund and the Transfer Agent do not follow reasonable procedures to
confirm that a telephone order is genuine, the Fund or the Transfer Agent 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. Payment for telephone
purchase orders placed by 1:30 p.m. Eastern time must be made on the same day,
and for telephone purchase orders placed after 1:30 p.m. Eastern time, on the
following day.
HOW TO BUY SHARES
The minimum initial investment in the Fund is $100,000, and subsequent
investments must be at least $1,000. Exceptions to the minimum investment
requirements may be made at the discretion of the Investment Manager
including, without limitation, for employees and affiliates of the Investment
Manager or investors who are, or are related to or affiliated with, clients of
the Investment Manager. The Fund will accept only investments in
cash in U.S. dollars.
All applications to purchase shares of the Fund are subject to acceptance or
rejection by authorized officers of the Fund and are not binding until
accepted. Applications will not be accepted unless accompanied by payment in
U.S. funds. Payment should be made by check drawn on a U.S. bank, savings and
loan, or credit union. The Fund will not accept payment in cash or third
party checks for the purchase of shares. The Custodian will charge a $20 fee
against a shareholder's account, in addition to any loss sustained by the
Fund, for any payment check returned to the Custodian for insufficient funds.
It is the policy of the Fund not to accept applications under circumstances
or in amounts considered disadvantageous to shareholders; for example, if an
individual previously tried to purchase shares with a bad check, or the
proper social security number or tax identification number is omitted, the
Fund reserves the right not to accept future applications from that person.
The Fund reserves the right to reject any application which does not include
a certified social security or tax identification number.
THROUGH A FINANCIAL INSTITUTION. If you are investing through a securities
dealer (including through the Fund's Principal Underwriter, 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:
Berkeley Capital Management Funds
c/o Firstar Trust Company
P.O. Box 701
Milwaukee, WI 53201-0701
Purchase orders mailed by overnight courier should be forwarded to:
Firstar Trust Company
615 East Michigan Street
Milwaukee, WI 53202
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 (800) 889-0799. 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.
Conditions which must be met in order to receive a dividend for a day on
which the order is received by the Transfer Agent are: (1) receipt of the
telephone order by 1:30 p.m. Eastern time and (2) payment in immediately
available funds wired to the Transfer Agent by the close of business the same
day.
Purchase orders received before 1:30 p.m. Eastern time on a business day when
payment is made in any form other than by same day wire of immediately
available funds, as well as orders received after 1:30 p.m. Eastern time and
before the close of regular trading hours on the New York Stock Exchange (the
"Exchange"), currently 4:00 p.m. Eastern time, will be executed as of the
close of regular trading hours on the Exchange, provided that payment is
received by the close of business. Purchase orders that are received after
the close of regular trading hours on the Exchange or on non-business days,
and orders for which payment is not received by the close of regular trading
hours on the Exchange on a business day, will be executed on the next
business day after receipt of both the order and payment in proper form by
the Transfer Agent.
All wires must be received by the transfer agent in good order at the 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 all wire transfers.
BY MAIL. Written purchase orders (along with a check made payable to
Berkeley Capital Management Money Market Fund) should be mailed to the
Transfer Agent, 615 East Michigan Street, Milwaukee, Wisconsin 53202 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 in additional shares of the Fund, 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
(800) 889-0799.
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
underwriter, 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 $20 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 12 days;
- - a check normally will be mailed to you within one or two Business Days,
but no later than the seventh Business Day after receipt by the Transfer
Agent of the redemption request in good order; and
- - we may suspend the right to sell shares or postpone payment for a sale of
shares when trading on the Exchange is restricted; when the Exchange is
closed for any reason other than its normal weekend or holiday closings,
emergency circumstances as determined by the SEC; or in any other
circumstances as the SEC may permit.
No redemption request will become effective until all documents have been
received in proper form by the Transfer Agent. The shareholder should contact
the Transfer Agent for further information concerning documentation required for
a redemption of Fund shares.
A signature guarantee is required on the written redemption request if (1)
the redemption proceeds are to be sent to a bank or brokerage account not
previously authorized by the shareholder in accordance with the instructions
on the account application, or (2) the address of record has changed within
the last 60 days. The guarantor must be a bank, member firm of a national
securities exchange, savings and loan association, credit union or other
entity authorized by state law to guarantee signatures. A notary public is
not an acceptable guarantor. Additional documentary evidence of authority is
required in the event redemption is requested by a corporation, partnership,
trust, fiduciary, executor or administrator. Checks to third parties other
than a bank or brokerage account as authorized above are not permitted.
Redemption checks will not be forwarded if the redeeming shareholder moves.
The redemption request should also indicate the change of address and include
a signature guarantee.
Shareholders who have an IRA or other retirement plan must indicate on their
redemption request whether or not to withhold federal income tax. Redemption
requests that fail to indicate an election not to have tax withheld will be
subject to withholding.
BY TELEPHONE. You can sell your shares by telephone by calling the Transfer
Agent at (800) 889-0799.
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<PAGE>
We need the following information in order to process your telephone sale:
- - your account number and your name for verification;
- - your name and social security number/tax indetification number; 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 name;
- - your account number;
- - the number of shares you want to sell; and
- - the signature of all 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 12.
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.
The Fund currently charges a $10 fee for wiring of redemption proceeds. If
you sell 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.
The Fund may be required to withhold federal income tax at a rate of 31%
(backup withholding) from dividend payments, distributions, and redemption
proceeds if a shareholder fails to furnish the Fund with his/her certified
social security or tax identification number. The shareholder also must
certify that the number is correct and that he/she is not subject to backup
withholding. The certification is included as part of the share purchase
application form. If the shareholder does not have a social security number,
he/she should indicate on the purchase form that an application to obtain a
number is pending. The Fund is required to withhold taxes if a number is not
delivered to the Fund within seven days.
OTHER IMPORTANT INFORMATION
MINIMUM BALANCE REQUIREMENTS. Due to the relatively high cost of maintaining
smaller accounts, the Fund reserves the right to redeem a shareholder's shares
if, as a result of redemptions, their aggregate value drops below the $100,000
minimum balance requirement for the Fund. The Fund will notify shareholders in
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<PAGE>
writing 30 days before taking such action to allow them to increase their
holdings to at least the minimum level.
Shareholder fees (billed to shareholders):
- - Outgoing Wire Transfer $10.00/wire
- - Qualified Plan Distribution $15.00/request
- - Qualified Plan Transfer Out $15.00/request
- - Refund of Excess Contribution $15.00/request
- - Annual Qualified Plan Maintenance $12.50/account
(Maximum $25.00 per social security number)
- - Returned Check $20.00/item
- - Stop Payment Request $20.00/request
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 Firstar Trust Company (the "Transfer Agent") at
(800) 889-0799.
TABLE OF CONTENTS
Page
INVESTMENT TECHNIQUES. . . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 3
MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . 7
PORTFOLIO TRANSACTIONS AND TURNOVER. . . . . . . . . . . . . . . . . . . 10
DISTRIBUTIONS AND TAXES. . . . . . . . . . . . . . . . . . . . . . . . . 12
SHARE PRICE CALCULATION. . . . . . . . . . . . . . . . . . . . . . . . . 15
YIELD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
PRINCIPAL HOLDERS OF SECURITIES. . . . . . . . . . . . . . . . . . . . . 17
PURCHASE AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . . 17
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
APPENDIX - RATINGS OF INVESTMENT SECURITIES. . . . . . . . . . . . . . . A-1
<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,
including withholding 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.
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)
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<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 unsecured promissory notes representing debt obligations
that are issued by banks in large denominations.
Tax-exempt commercial paper is 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 total 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
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<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) 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 seven 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.
(5) 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).
*(6) 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.
(7) Invest for the purpose of exercising control or management of another
issuer.
(8) 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.
*(9) Make loans to others (except through the purchase of debt obligations
or repurchase agreements in accordance with its investment objectives and
policies).
*(10) 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 borrowings are
outstanding. Any borrowings by the Fund will not be collateralized. If for
any reason the current value of the total assets of the Fund falls below an
amount equal to three times the amount of indebtedness for money
-4-
<PAGE>
borrowed, the Fund will within three business days, reduce its indebtedness to
the extent necessary.
(11) Write, purchase or sell puts, calls or combinations thereof.
(12) 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.
*(13) 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.
*(14) Issue senior securities as defined in the 1940 Act.
Except for restrictions (3) and (10), 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 or total assets will not be considered a violation of
that restriction.
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
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<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 if 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 total 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 total assets, with investment in the
Second Tier Securities of any one issuer being limited to the greater of 1%
of the Fund's total 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.
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<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:
Position with the Principal Occupation
Name Age Trust for the Past Five Years
- ----------------- --- ----------------- -----------------------
Deborah A. Kemper* 37 Trustee, President, Senior Vice
and Principal President, Marketing,
Executive Officer Berkeley Capital
Management
(1991 - present)
Cindee Beechwood* 41 Trustee, Treasurer, Assistant Group
Principal Accounting Financial Controller,
Officer, and Principal London Pacific Group
Financial Officer Limited and Controller,
Berkeley Capital
Management (1993 -
present); formerly,
Controller, Govett Asset
Management (formerly
Associated Capital
Management) (1990-1993)
Donald O. Dempster* 31 Vice President and Director of Compliance,
Secretary Berkeley Capital Manage-
ment (1996-present);
formerly, Director of
Compliance, Robertson
Stephens (1994-1996);
prior thereto, Assistant
Vice President,
Compliance, BA Secur-
ities (1994); prior
thereto, Staff
Accountant, Securities
and Exchange Commission
(1990-1994)
Bryan W. Brown 51 Trustee Financial and
950 Hayman Place technological systems
Los Altos, CA 94024 consultant (1992-
present); formerly,
Chief Financial Officer,
Bailard, Biehl & Kaiser,
Inc. (1980-1992)
William R. Sweet 59 Trustee Retired; formerly,
81 Mt. Tiburon Road Executive Vice
Tiburon, CA 94920 President, The Bank of
California (1985-1996)
Barnett Teich 72 Trustee Retired; formerly,
3136 Ptarmigan consultant (1987-1989);
Drive No. 6 prior thereto, First
Walnut Creek, Vice-President, Lehman
CA 94595 Management Co., Inc.
(1958-1986)
Joseph Neuberger* 34 Assistant Secretary Vice President and
Manager of Fund
Administration and
Compliance, Firstar
Trust Company (1994-
present); formerly,
Manager, Arthur
Andersen LLP.
Nancy E. Frohna* 29 Assistant Secretary Trust Officer and
Compliance
Administrator, Firstar
Trust Company (1994-
present); formerly,
accountant, Strong
Funds.
*These individuals are interested persons of the Trust as defined in Section
2(a)(19) of the 1940 Act. Ms. Kemper, Ms. Beechwood, and Mr. Dempster are
employed by the Investment Manager. Ms. Kemper is also Sales Manager and Mr.
Dempster is Compliance Officer of Berkeley International Securities
Corporation, the fund's Principal Underwriter.
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
Compensation
Aggregate From Registrant
Compensation and Fund Complex
Name, Position From Registrant Paid to Directors
- -------------- --------------- -----------------
<S> <C> <C>
Deborah A. Kemper, None None
Trustee
Cindee Beechwood, None None
Trustee
Barnett Teich, $2,000 $2,000
Trustee
Bryan W. Brown, $2,000 $2,000
Trustee
William R. Sweet, $2,000 $2,000
Trustee
- -------------------
(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 December 31, 1996, the Investment
Manager had approximately $1.9 billion of total assets under management under
several investment strategies (including approximately $1.03 billion 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 0.25% 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 current 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,
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<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 UNDERWRITER
Pursuant to an Underwriting Agreement, Berkeley International
Securities Corporation (the "Principal Underwriter") 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 Pricipal Underwriter 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 Principal Underwriter 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
Principal Underwriter receives no fee under the Underwriting Agreement.
Terms of continuation, termination and assignment under the Underwriting
Agreement are identical to those described above with respect to the
Investment Management Agreement.
CUSTODIAN AND FUND ACCOUNTANT
Pursuant to a Custodian Agreement, Firstar Trust Company, the Fund's
transfer agent (the "Custodian"), also serves as the Custodian of the
Fund's assets. Under the terms of the Custodian Agreement, the Custodian
holds and administers the securities and cash in the Fund's portfolio.
Pursuant to a Fund Accounting Servicing Agreement, Firstar Trust
Company also provides fund accounting services to the Trust and the Fund.
INDEPENDENT ACCOUNTANTS AND REPORTS TO SHAREHOLDERS
The Trust's independent accountants, Price Waterhouse LLP, audit and
report on the annual financial statements of the Fund and review the Fund's
federal income tax return. Price Waterhouse LLP may also perform 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 Price Waterhouse LLP is
100 East Wisconsin Avenue, Suite 1500, Milwaukee, Wisconsin 53202.
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
other 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.
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. On occasions when the Investment Manager determines the
purchase or sale of a security to be in the best interest of the Fund as well
as of other clients, the Investment Manager, to the extent permitted by
applicable laws and regulations, may aggregate the securities to be so
purchased or sold in an attempt 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 Investment Manager in the
manner it considers to be the most equitable under the circumstances and
consistent with its fiduciary obligations to the Fund and to its other
participating clients. 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 Fund's net asset value per share 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 purchase
order is received by the Transfer Agent or its authorized agent are: (1)
receipt by the Transfer Agent before 1:30 p.m. Eastern time; and (2) payment
in immediately available funds wired to the Transfer Agent by the close of
business the same day. 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
last Business Day of each month. 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 seven days after the redemption.
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 daily. 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, and to elect
to be taxed, 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, annually (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 annually 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) at least 98 percent of its (i)
ordinary income for such year; and (ii) capital gain net income for the
one-year period ending on October 31 of that calendar year (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 by the Fund of
-13-
<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 for failure to properly report to
the Internal Revenue Service 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.
As described in the Prospectus, the Fund may invest in some Variable
Rate Demand Securities which have a feature entitling the purchaser to resell
the securities at a specified amount (a "put option"). The Internal
Revenue Service (the "IRS") has issued a revenue ruling to the effect that,
under specified circumstances, a regulated investment company will be the
owner of tax-exempt municipal obligations acquired with a put option. The
IRS subsequently announced that it will not ordinarily issue advance ruling
letters as to the identity of the true owner of property in cases involving
the sale of securities (or participation interests therein) if the purchaser
has the right to cause the security (or participation interest therein) to be
purchased by the seller or a third party. The Fund intends to take the
position that it is the owner of any securities with respect to which it also
holds a put option.
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 U.S. federal income tax treatment.
-14-
<PAGE>
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 dividends 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
-15-
<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 its
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 Agreement and 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 the
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
Agreement and Declaration of Trust, and except that where any provision of
law, of the Agreement and Declaration of Trust or of the 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 Agreement and 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
As of the date of this Statement of Additional Information, Berkeley
International Securities Corporation, 650 California Street, San Francisco,
California 94108, owned 100% of the outstanding shares of the Fund. By
virtue of its ownership of all of the Fund's outstanding voting securities,
Berkeley International Securities Corporation is deemed to control the Fund.
It is contemplated that the public offering of shares of the Fund will reduce
Berkeley International Securities Corporation's holdings to less than 5% of
the total shares outstanding.
PURCHASE AND REDEMPTION OF SHARES
The Fund's minimum initial investment is $100,000 and subsequent
investments of $1,000 or more may be made. These minimum requirements may be
changed at any time and are not applicable to certain types of investors.
Exceptions to the minimum investment requirements may be made at the
discretion of the Investment Manager including, without limitation, for
employees or affiliates of the Investment Manager or investors who are, or
are related to or affiliated with, clients of the Investment Manager. The
Fund will accept investments in cash only in U.S. dollars. The Trust has
elected to commit itself to pay in cash all requests for redemption by any
Shareholder of record, limited in amount with respect to each Shareholder
during any 90-day period to the lesser of: (i) $250,000, or (ii) one percent
of the net asset value of the Trust at the beginning of such period.
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 PRINCIPAL UNDERWRITER 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
A-1
<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.
A-2
<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.
A-3
<PAGE>
BERKELEY CAPITAL MANAGEMENT FUNDS
Berkeley Capital Management Money Market Fund
Statement of Assets and Liabilities
January 10, 1997
ASSETS
Cash $100,000
Unamortized organizational costs $27,340
-------
Total Assets $127,340
--------
LIABILITIES
Accrued expenses $27,340
-------
Total Liabilities $27,340
-------
NET ASSETS $100,000
--------
--------
Capital Shares, $0.01 par value; Unlimited
number of shares authorized; 100,000 shares
outstanding
Net asset value, offering and redemption price
per share (net assets/shares outstanding) $1.00
-----
-----
The accompanying notes to the financial statement
are an integral part of this statement.
<PAGE>
BERKELEY CAPITAL MANAGEMENT FUNDS
BERKELEY CAPITAL MANAGEMENT MONEY MARKET FUND
NOTES TO THE FINANCIAL STATEMENT
JANUARY 10, 1997
1. ORGANIZATION
Berkeley Capital Management Funds (the "Company") was organized as a
Delaware Business Trust on October 25, 1996, and is in the process of
registering under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end, diversified management investment company. Berkeley
Capital Management Money Market Fund is a diversified mutual fund series of
the Company. The Company has had no operations other than those relating
to organizational matters and the sale of 100,000 shares of its common
stock to its original shareholder, Berkeley International Securities
Corporation, for cash in the amount of $100,000.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) ORGANIZATION COSTS
Costs incurred by the Company in connection with the organization,
registration and the initial public offering of shares, are being deferred
and amortized over the period of benefit, but not to exceed sixty months
from the Company's commencement of operations. These costs were advanced by
Berkeley Capital Management (the "Adviser") and will be reimbursed by the
Company. The proceeds of any redemption of the initial shares by the
original shareholder will be reduced by a pro-rata portion of any then
unamortized organizational expenses in the same proportion as the number of
initial shares being redeemed bears to the number of initial shares
outstanding at the time of such redemption.
(b) FEDERAL INCOME TAXES
The Company intends to comply with the requirements of the Internal Revenue
Code necessary to qualify as a regulated investment company and to make the
requisite distributions of income and capital gains to their shareholders
sufficient to relieve it from all or substantially all Federal income
taxes.
3. INVESTMENT ADVISER
Berkeley Capital Management Funds has an agreement with the Adviser, with
whom certain officers and Trustees of Berkeley Capital Management Funds are
affiliated, to furnish investment advisory services to the Fund. Under the
terms of this agreement, the Adviser will receive an annual fee of 0.25% of
the Money Market Fund's average daily net assets. The Investment
Management Agreement (the "Agreement") allows the
<PAGE>
Adviser to voluntarily waive its management fee under the Agreement and to
reimburse all or a portion of the Fund's expenses. The Agreement permits
the Adviser to seek reimbursement of any reductions made to its management
fee and payments made to limit expenses which are the responsibility of the
Fund within the three-year period following such reduction, subject to the
Fund's ability to effect such reimbursement and remain in compliance with
applicable expense limitations. At such time as it appears probable that
the Adviser will seek such reimbursement, the amount of reimbursement that
the Fund is able to effect will be accrued as an expense of the Fund for
that current period.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholder and Board of Trustees of
Berkeley Capital Management Funds
In our opinion, the accompanying statement of assets and liabilities presents
fairly, in all material respects, the financial position of the Berkeley Capital
Management Money Market Fund (constituting Berkeley Capital Management Funds,
hereafter referred to as the "Fund") at January 10, 1997, in conformity with
generally accepted accounting principles. This financial statement is the
responsibility of the Fund's management; our responsibility is to express an
opinion on this financial statement based on our audit. We conducted our audit
of this financial statement in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Milwaukee, Wisconsin
January 10, 1997
<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 Statement
(b) Exhibits:
(1) Agreement and Declaration of Trust(1)
(2) By-Laws(1)
(3) Voting Trust Agreement -- Not Applicable
(4) Specimen Share Certificate -- Not Applicable
(5) Investment Management Agreement
(6) Underwriting Agreement with Berkeley International Securities
Corporation
(7) Bonus, Profit Sharing, Pension and Other Similar Arrangements
-- Not Applicable
(8) Custodian Agreement
(9)(A)Fund Administration Servicing Agreement
(9)(B)Fund Accounting Servicing Agreement
(9)(C)Transfer Agent Agreement
(10) Opinion and Consent of Counsel
(11) Consent of Independent Accountants
(12) Financial Statements Omitted from Item 23 -- Not Applicable
(13) Subscription Agreement
(14) Model Retirement Plan
(15) Rule 12b-1 Plan -- Not Applicable
(16) Performance Calculations
(17) Financial Data Schedule
(18) Multiple Class Plan -- Not Applicable
- --------------
(1) Previously filed and incorporated herein by reference.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
C-1
<PAGE>
Item 26. NUMBER OF HOLDERS OF SECURITIES.
Berkeley Capital Management
Money Market Fund: 1
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 Vice President and Secretary
Deborah A. Kemper Sales Manager Trustee, President, and
Principal Executive 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. Firstar Trust Company, 615 E. Michigan
Street, Milwaukee, Wisconsin 53202 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 Pre-Effective Amendment to the 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 __ day of January,
1997.
BERKELEY CAPITAL MANAGEMENT FUNDS
By: /s/ Deborah A. Kemper
-----------------------------
Deborah A. Kemper, President,
Principal Executive Officer, and Sole
Trustee
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment to the Registration Statement has been signed below
by the following persons in the capacities and on the dates indicated.
/s/ Deborah A. Kemper
- ------------------------ Sole Trustee, President, and January 15, 1997
Deborah A. Kemper Principal Executive
Officer
/s/ Cindy Beechwood
- ------------------------ Treasurer, Principal January 15, 1997
Cindy Beechwood Financial Officer, and
Principal Accounting
Officer
C-5
<PAGE>
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
<PAGE>
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.
-2-
<PAGE>
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.
-3-
<PAGE>
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
-4-
<PAGE>
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
-5-
<PAGE>
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.
-6-
<PAGE>
(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:
------------------------- -------------------------
Deborah A. Kemper Michael J. Mayer
President and Principal Chairman
Executive Officer
-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 0.25%
Date: January __, 1997.
<PAGE>
BERKELEY CAPITAL MANAGEMENT FUNDS
650 California Street, Suite 2800
San Francisco, California 94108
Berkeley International Securities Corporation
650 California Street, Suite 2800
San Francisco, California 94108
Date: January __, 1997
Re: Underwriting Agreement
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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
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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
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Berkeley International Securities Corporation
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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, Custodian, or other
authorized agent 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
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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.
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Berkeley International Securities Corporation
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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
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Berkeley International Securities Corporation
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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
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Berkeley International Securities Corporation
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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.
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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:
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Deborah A. Kemper
President and Principal
Executive Officer
Accepted:
Berkeley International Securities Corporation
By:
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Michael J. Mayer
Chairman
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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
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Deborah A. Kemper
President and Principal
Executive Officer
Accepted:
Berkeley International Securities Corporation
By
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Michael J. Mayer
Chairman
Date: January __, 1997.
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CUSTODIAN AGREEMENT
THIS AGREEMENT made on _______________________, 1997, between Berkeley
Capital Management Funds, a Delaware Business Trust (the "Trust"), on behalf of
Berkeley Capital Management Money Market Fund (hereinafter called the
"Fund"), and FIRSTAR TRUST COMPANY, a corporation organized under the laws of
the State of Wisconsin (hereinafter called "Custodian"),
WHEREAS, the Trust desires that the Fund's securities and cash shall
be hereafter held and administered by Custodian pursuant to the terms of this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust, on behalf of the Fund, and Custodian agree as follows:
1. DEFINITIONS
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive,
purchase, or subscribe for the same, or evidencing or representing any other
rights or interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Trust or the Fund by any two
of the President, a Vice President, the Secretary, and the Treasurer of the
Trust, or any other persons duly authorized to sign by the Board of Trustees.
The word "Board" shall mean Board of Trustees of the Trust.
2. NAMES, TITLES, AND SIGNATURES OF THE TRUST'S OFFICERS
An officer of the Trust will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board of
Trustees, together with any changes which may occur from time to time.
ADDITIONAL SERIES. The Trust is authorized to issue separate classes of
shares of beneficial interest representing interests in separate investment
portfolios. The parties intend that each portfolio established by the Trust,
now or in the future, be covered by the terms and conditions of this agreement.
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3. RECEIPT AND DISBURSEMENT OF MONEY
A. Custodian shall open and maintain a separate account or accounts
in the name of the Fund, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement. Custodian shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it from or
for the account of the Fund. Custodian shall make payments of cash to, or for
the account of, the Fund from such cash only:
(a) for the purchase of securities for the portfolio of the Fund upon
the delivery of such securities to Custodian, registered in the
name of the Fund or of the nominee of Custodian referred to in
Section 7 or in proper form for transfer;
(b) for the purchase or redemption of shares of the common stock of
the Fund upon delivery thereof to Custodian, or upon proper
instructions from the Trust;
(c) for the payment of interest, dividends, taxes, investment
adviser's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing, and
custodian services and expenses for printing and postage);
(d) for payments in connection with the conversion, exchange, or
surrender of securities owned or subscribed to by the Trust on
behalf of the Fund held by or to be delivered to Custodian; or
(e) for other proper corporate purposes certified by resolution of
the Board of Trustees of the Trust.
Before making any such payment, Custodian shall receive (and may rely
upon) an officers' certificate requesting such payment and stating that it is
for a purpose permitted under the terms of items (a), (b), (c), or (d) of this
Subsection A, and also, in respect of item (e), upon receipt of an officers'
certificate specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made, provided, however, that an officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a money market instrument, or
any other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Trust issues appropriate oral
or facsimile instructions to Custodian and an appropriate officers' certificate
is received by Custodian within two business day thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for the
account of the Fund.
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C. Custodian shall, upon receipt of proper instructions, make federal
funds available to the Fund as of specified times agreed upon from time to time
by the Trust on behalf of the Fund and the custodian in the amount of checks
received in payment for shares of the Fund which are deposited into the
Fund's account.
4. SEGREGATED ACCOUNTS
Upon receipt of proper instructions, the Custodian shall establish and
maintain a segregated account(s) for and on behalf of the Fund, into which
account(s) may be transferred cash and/or securities.
5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
Custodian shall have sole power to release or deliver any securities
of the Fund held by it pursuant to this Agreement. Custodian agrees to release,
transfer, exchange or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of the Fund upon
receipt by Custodian of payment therefore;
(b) when such securities are called, redeemed or retired or otherwise
become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities alone
or other securities and cash whether pursuant to any plan of
merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise;
(e) upon conversion of such securities pursuant to their terms into
other securities;
(f) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
(h) for the purpose of redeeming in kind shares of common stock of
the Fund upon delivery thereof to Custodian; or
(i) for other proper corporate purposes.
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As to any deliveries made by Custodian pursuant to items (a), (b),
(d), (e), (f), and (g), securities or cash receivable in exchange therefore
shall be deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian shall
receive (and may rely upon) an officers' certificate requesting such transfer,
exchange or delivery, and stating that it is for a purpose permitted under the
terms of items (a), (b), (c), (d), (e), (f), (g), or (h) of this Section 5 and
also, in respect of item (i), upon receipt of an officers, certificate
specifying the securities to be delivered, setting forth the purpose of which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made, provided, however, that an officers' certificate need not precede
any such transfer, exchange or delivery of a money market instrument, or any
other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Trust issues appropriate oral
or facsimile instructions to Custodian and an appropriate officers' certificate
is received by Custodian within two business days thereafter.
6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall; (a) present for payment all coupons and other income
items held by it for the account of the Fund, which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of the Fund; (b) collect interest and cash dividends received, with notice to
the Trust on behalf of the Fund; (c) hold for the account of the Fund hereunder
all stock dividends, rights, and similar securities issued with respect to any
securities held by it hereunder; and (d) execute, as agent on behalf of the
Fund, all necessary ownership certificates required by the Internal Revenue Code
or the Income Tax Regulations of the United States Treasury Department or under
the laws of any state then in effect, inserting the Fund's name on such
certificates as the owner of the securities covered thereby, to the extent it
may lawfully do so.
7. REGISTRATION OF SECURITIES
Except as otherwise directed by an officers' certificate, Custodian
shall register all securities, except such as are in bearer form, in the name of
a registered nominee of Custodian as defined in the Internal Revenue Code and
any Regulations of the Treasury Department issued hereunder or in any provision
of any subsequent federal tax law exempting such transaction from liability for
stock transfer taxes, and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state. Custodian shall cause the specific securities held by it
hereunder to be at all times identifiable in its records as held for the account
of the Fund.
The Trust, on behalf of the Fund, shall from time to time furnish to
Custodian appropriate instruments to enable Custodian to hold or deliver in
proper form for transfer, or to register in the name of its registered nominee,
any securities which it may hold for the account of the Fund and which may from
time to time be registered in the name of the Fund.
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8. VOTING AND OTHER ACTION
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall deliver, or cause to be executed and delivered, to the
Corporation all notices, proxies, and proxy soliciting materials with relation
to such securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
9. TRANSFER TAX AND OTHER DISBURSEMENTS
The Trust on behalf of the Fund shall pay or reimburse Custodian from
time to time for any transfer taxes payable upon transfers of securities made
hereunder, and for all other necessary and proper disbursements and expenses
made or incurred by Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any state, to exempt
from taxation any exemptable transfer and/or deliveries of any such securities.
10. CONCERNING CUSTODIAN
Custodian shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in writing, such compensation
shall be as set forth in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith upon
any certificate herein described or certified copy of any resolution of the
Board, and may rely on the genuineness of any such document which it may in good
faith believe to have been validly executed.
The Trust on behalf of the Fund agrees to indemnify and hold harmless
Custodian and its nominee from all taxes, charges, expenses, assessments, claims
and liabilities (including counsel fees) incurred or assess against it or by its
nominee in connection with the performance of this Agreement, except such as may
arise from its or its nominee's breach of this Agreement or their own negligent
action, negligent failure to act or willful misconduct, and except for taxes on
the income or property of Custodian, Custodian is authorized to charge any
account of the Fund for such items.
In the event of any advance of cash for any purpose made by Custodian resulting
from orders or instructions of the Trust on behalf of the Fund, or in the event
that Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims, or liabilities in connection
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with the performance of this Agreement, except such as may arise from its or its
nominee's breach of this Agreement or their own negligent action, negligent
failure to act or willful misconduct, and except for taxes on the income or
property of Custodian, any property at any time held for the account of the Fund
shall be security therefore.
Custodian agrees to indemnify and hold harmless the Trust and the Fund, and the
Trust's officers, trustees, and agents, from all charges, expenses, assessments,
and claims/liabilities (including counsel fees) incurred or assessed against and
of the forgoing in connection with Custodian's performance or attempted
performance of this Agreement, except such as may arise from the Trust's own
negligent action, negligent failure to act, or willful misconduct.
11. SUBCUSTODIANS
Custodian is hereby authorized to engage another bank or trust
company as a Subcustodian for all or any part of the Fund's assets, so long as
any such bank or trust company is a bank or trust company organized under the
laws of any state of the United States, having an aggregate capital, surplus and
undivided profit, as shown by its last published report, of not less than Two
Million Dollars ($2,000,000) and is qualified to act as a Custodian or
Subcustodian of the Fund under Section 17 of the Investment Company Act of 1940,
as amended, and the rules promulgated thereunder, and provided further that, if
the Custodian utilizes the services of a Subcustodian, the Custodian shall
remain fully liable and responsible for any losses and expenses incurred by the
Trust or the Fund resulting from the acts or omissions of the Subcustodian as
fully as if the Custodian was directly responsible for any such losses and
expenses under the terms of the Custodian Agreement.
Notwithstanding anything contained herein, if the Trust on behalf of
the Fund requires the Custodian to engage specific Subcustodians for the
safekeeping and/or clearing of assets, the Trust agrees to indemnify and hold
harmless Custodian from all claims, expenses and liabilities incurred or
assessed against it in connection with the use of such Subcustodian in regard to
the Fund's assets, except as may arise from the Custodian's own negligent
action, negligent failure to act or willful misconduct.
12. REPORTS BY CUSTODIAN
Custodian shall furnish the Trust periodically as agreed upon with a
statement summarizing all transactions and entries for the account of the Fund.
Custodian shall furnish to the Trust, at the end of every month, a list of the
portfolio securities showing the aggregate cost of each issue. The books and
records of Custodian pertaining to its actions under this Agreement shall be
open to inspection and audit at reasonable times by officers of, and by auditors
employed by, the Trust.
13. TERMINATION OR ASSIGNMENT
This Agreement may be terminated by the Trust on behalf of the Fund,
or by Custodian, on at least ninety (90) days' notice, given in writing and sent
by registered mail to
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Custodian at P.O. Box 2054, Milwaukee, Wisconsin 53201, or to the Trust at 650
California Street, Suite 2800, San Francisco, CA 94108, or by facsimile
transmission to Custodian at ___________ or to the Fund at (415) 249-0553, as
the case may be. Upon any termination of this Agreement, pending appointment of
a successor to Custodian or a vote of the shareholders of the Fund to dissolve
or to function without a custodian of its cash, securities and other property,
Custodian shall not deliver cash, securities or other property of the Fund to
the Fund, but may deliver them to a bank or trust company of its own selection,
having an aggregate capital, surplus and undivided profits, as shown by its last
published report of not less than Two Million Dollars ($2,000,000) and qualified
to act as a Custodian of the Fund under Section 17 of the Investment Company Act
of 1940 and the rules promulgated thereunder as a Custodian for the Fund to be
held under terms similar to those of this Agreement, provided, however, that
Custodian shall not be required to make any such delivery or payment until full
payment shall have been made by the Trust on behalf of the Fund of all
liabilities constituting a charge on or against the properties then held by
Custodian or on or against Custodian, and until full payment shall have been
made to Custodian of all its fees, compensation, costs and expenses, subject to
the provisions of Section 10 of this Agreement.
This Agreement may not be assigned by Custodian without the consent of
the Trust on behalf of the Fund, authorized or approved by a resolution of the
Trust's Board of Trustees.
14. DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
No provision of this Agreement shall be deemed to prevent the use by
Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing agency or
securities depository comply with all applicable federal and state laws and
regulations, and the Board of Trustees of the Trust approves by resolution the
use of such central securities clearing agency or securities depository.
15. RECORDS
To the extent that Custodian in any capacity prepares or maintains any
records required to be maintained and preserved by the Trust pursuant to the
provisions of the Investment Company Act of 1940, as amended, or the rules and
regulations promulgated thereunder, Custodian agrees to make any such records
available to the Trust upon request and to preserve such records for the periods
prescribed in Rule 31a-2 under the Investment Company Act of 1940, as amended.
16. REPRESENTATIONS, WARRANTIES, AND COVENANTS
Custodian represents, warrants, and covenants:
(a) that it will comply in all materials respects with all applicable
laws and regulations, including but not limited to the Investment Company Act of
1940, as amended, and the rules and regulations thereunder, in performing its
duties under this Agreement;
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(b) that it is and will remain throughout the term of this Agreement
qualified to act as a custodian of the Fund under Section 17 of the Investment
Company Act of 1940, as amended, and the rules and regulations promulgated
thereunder; and
(c) that it will maintain, in confidence, all information relating to
the Trust's and the Fund's business which Custodian receives during the course
of rendering any service hereunder.
17. CHOICE OF LAW
This Agreement shall be construed in accordance with the laws of the State
of California. Custodian hereby consents to the exclusive jurisdiction, venue,
and forum of any state or federal court in San Francisco, California with
respect to any action, whether commenced by the Trust or any other party, which,
in whole or in part, in any way arises under or relates to this Agreement.
Custodian hereby authorizes and accepts service of process sufficient for
personal jurisdiction in any action against it as contemplated by this paragraph
by registered or certified mail, return receipt requested, postage prepaid, to
its address for the giving of notices as set forth in this Agreement, or in the
manner set forth in Section 19 of this Agreement for the giving of notice.
18. ATTORNEYS' FEES
If any party to this Agreement seeks to enforce its rights under this
Agreement or construe any provision of this Agreement by legal proceedings or
otherwise, the non-prevailing party in such proceedings shall pay all reasonable
costs and expenses incurred by the prevailing party (who shall be the party who
obtains substantially the relief sought by such party, whether by settlement,
compromise, or judgment), including without limitation court costs and all
reasonable attorneys' fees.
19. NOTICES
Notices of any kind to be given by either party to the other party shall be
in writing and shall be duly given if mailed or delivered to Custodian at
________________ or to the Trust or the Fund at 650 California Street, Suite
2800, San Francisco, California 94108 or sent by facsimile transmission to
Custodian at ______________ or to the Trust or the Fund at (415) 249-0553.
20. NOTICE OF DECLARATION OF TRUST
Custodian agrees that the Trust's obligations under this Agreement shall be
limited to the Fund and its assets, and that Custodian shall not seek
satisfaction of any such obligation from the shareholders of the Trust nor from
any Trustee, officer, employee, or agent of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and their respective corporate seals to be affixed hereto as of the
date first above-written by their respective officers thereunto duly authorized.
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Executed in several Counterparts, each of which is an original.
Attest: FIRSTAR TRUST COMPANY
________________________ By ________________________________
Assistant Secretary Vice President
Attest: Berkeley Capital Management Funds
________________________ By ________________________________
Deborah A. Kemper
President and Principal Executive
Officer
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EXHIBIT A
BERKELEY CAPITAL MANAGEMENT MONEY MARKET FUND
CUSTODY SERVICE
MONEY MARKET FUND ANNUAL FEE SCHEDULE
Annual fee based upon market value
1/2 basis points per year
Minimum annual fee - $3,000 per year
Investment transactions (purchase, sale, exchange, tender, redemption,
maturity, receipt, delivery):
$12.00 per book entry security (depository or Federal Reserve system)
$25.00 per definitive security (physical)
$25.00 per mutual fund trade
$75.00 per Euroclear
$ 8.00 per principal reduction on pass-through certificates
$35.00 per option/futures contract
$10.00 per variation margin
$15.00 per Fed wire deposit or withdrawal
Variable Amount Demand Notes: Used as a short-term investment, variable
amount notes offer safety and prevailing high interest rates. Our charge,
which is 1/4 of 1%, is deducted from the variable amount note income at the
time it is credited to your account.
Plus out-of-pocket expenses, and extraordinary expenses based upon
complexity
Fees are billed monthly, based upon market value at the beginning of the
month
<PAGE>
EXHIBIT 9(A)
FUND ADMINISTRATION SERVICING AGEEMENT
This Agreement is made and entered into on this day of , 1997,
by and between Berkeley Capital Management Funds, a Delaware Business Trust (the
"Trust"), on behalf of Berkeley Capital Management Money Market Fund
(hereinafter referred to as the "Fund") and Firstar Trust Company, a corporation
organized under the laws of the State of Wisconsin (hereinafter referred to as
"FTC").
WHEREAS, The Trust is an open-ended management investment company which is
registered under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, FTC is a trust company and, among other things, is in the business of
providing fund administration services for the benefit of its customers;
NOW, THEREFORE, the Trust on behalf of the Fund and FTC do mutually promise and
agree as follows:
I. Appointment of Administrator
The Trust hereby appoints FTC as Administrator of the Trust and the Fund on
the terms and conditions set forth in this Agreement, and FTC hereby
accepts such appointment and agrees to perform the services and duties set
forth in this Agreement in consideration of the compensation provided for
herein.
II. Duties and Responsibilities of FTC
A. General Trust Management
1. Act as liaison among all Trust service providers
2. Coordinate timely Board communication by:
a. Assisting Trust counsel in establishing Board and Board
Committee meeting agendas, and preparing Board and Board
Committee materials
b. Preparing board reports based on financial and
administrative data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director and
officers liability coverage, and making the necessary SEC
filings relating thereto
3. Audits
a. Prepare appropriate schedules and assist independent
auditors
<PAGE>
b. Provide information to SEC and facilitate audit process
c. Provide office facilities
4. Assist in overall operations of the Trust and the Fund
B. Compliance
1. Regulatory Compliance
a. Periodically monitor compliance with applicable Investment
Company Act of 1940 requirements, including
1) Asset diversification tests
2) Total return and SEC yield calculations
3) Maintenance of books and records under Rule 31a-3
4) Rule 2a7 compliance
b. Periodically monitor Fund's compliance with the policies and
investment limitations of the Fund as set forth in its
prospectus and statement of additional information
2. Blue Sky Compliance
a. Timely prepare and file with the appropriate state
securities authorities any and all required compliance
filings relating to the registration of the securities of
the Trust so as to enable the Trust to make a continuous
offering of its shares
b. Monitor status and maintain registrations in each state
3. SEC Registration and Reporting
a. Assisting Trust's counsel in updating prospectus and
statement of additional information; and in preparing proxy
statements, and Rule 24f-2 notice,
b. Annual and semiannual reports
4. IRS Compliance
a. Periodically monitor Fund's status as a regulated investment
company under Subchapter M through review of the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Monitor short short testing
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c. Calculate required distributions (including excise tax
distributions)
d. Prepare and file state and federal tax returns
C. Financial Reporting
1. Provide financial data required by Fund prospectus and statement
of additional information
2. Prepare financial reports for shareholders, the board, the SEC,
and independent auditors
3. Supervise the Trust's Custodian and Fund Accountants in the
maintenance of the Trust's general ledger and in the preparation
of the Trust's financial statements including oversight of
expense accruals and payments, of the determination of net asset
value of the Fund's net assets and of the Fund's shares, and of
the declaration and payment of dividends and other distributions
to shareholders
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and state
tax returns including forms 1120/8610 with any necessary
schedules
2. Prepare state income breakdowns where relevant
3. File 1099 Miscellaneous for payments to directors and other
service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate shareholders
III. Compensation
The Trust on behalf of the Fund agrees to pay FTC for performance of the
duties listed in this Agreement and the fees and reasonable out-of-pocket
expenses as set forth in the attached Schedule A.
These fees may be changed from time to time, subject to mutual written
Agreement between the Trust on behalf of the Fund and FTC.
The Trust, on behalf of the Fund, agrees to pay all fees and reimbursable
expenses within ten (10) business days following its receipt of the billing
notice.
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IV. Additional Series
In the event that the Trust establishes one or more series of shares with
respect to which it desires to have FTC render fund administration
services, under the terms hereof, it shall so notify FTC in writing, and if
FTC agrees in writing to provide such services, such series will be subject
to the terms and conditions of this Agreement, and shall be maintained and
accounted for by FTC on a discrete basis. The fund currently covered by
this Agreement is: Berkeley Capital Management Money Market Fund.
V. Performance of Service; Limitation of Liability
A. FTC shall exercise reasonable care in the performance of its
duties under this Agreement and shall comply in all material respects
with all applicable laws and regulations. FTC shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the
Trust or the Fund in connection with matters to which this Agreement
relates, including losses resulting from mechanical breakdowns or the
failure of communication or power supplies beyond FTC's control, except a
loss resulting from FTC's refusal or failure to comply with the terms of
this Agreement or from bad faith, negligence, or willful misconduct on
its part in the performance or non-performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement, the
Trust shall indemnify and hold harmless FTC from and against any and all
claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including
reasonable attorneys' fees ("Losses") which FTC may sustain or incur or
which may be asserted against FTC by any person arising out of any action
taken or omitted to be taken by it in performing the services hereunder,
and against any and all Losses resulting from FTC's reasonable and good
faith reliance upon any written or oral instruction provided to FTC by
any duly authorized officer of the Trust, such duly authorized officer to
be included in a list of authorized officers furnished to FTC and as
amended from time to time in writing by resolution of the Board of
Directors of the Trust; provided that this indemnification provision
shall not apply to any claim, demand, loss, expense, or liability that is
a result of FTC's willful misfeasance, bad faith, or negligence in the
performance of its duties hereunder, or FTC's reckless disregard of its
obligations and duties under this Agreement.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, FTC shall promptly take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond FTC's control. FTC will make every
reasonable effort promptly to restore any lost or damaged data and correct
any errors resulting from such a breakdown at the expense of FTC. FTC
agrees that it shall, at all times, have reasonable contingency plans with
appropriate parties, making reasonable provision for emergency use of
electrical data processing equipment to the extent appropriate equipment is
available. Representatives of the Trust shall be entitled to inspect FTC's
premises and operating capabilities at any time during regular business
hours of FTC, upon reasonable notice to FTC.
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<PAGE>
Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense; provided that FTC
provides notice to the Trust of all such errors, other than de minimus
errors, and its intent to reprocess and correct such errors, and the
Trust provides its prior approval in writing.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case a party to this
Agreement (the "Indemnifying Party") may be asked to indemnify or hold
the other party (the "Indemnified Party") harmless, the Indemnifying
Party shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood that
the Indemnified Party will use all reasonable care to notify the
Indemnifying Party promptly concerning any situation which presents or
appears likely to present the probability of such a claim for
indemnification against the Indemnifying Party. The Indemnifying Party
shall have the option to defend the Indemnifying Party against any claim
which may be the subject of this indemnification. In the event that the
Indemnifying Party so elects, it will so notify the Indemnified Party and
thereupon the Indemnifying Party shall take over complete defense of the
claim, and the Indemnified Party shall in such situation initiate no
further legal or other expenses for which it shall seek indemnification
under this section. The Indemnified Party shall in no case confess any
claim or make any compromise in any case in which the Indemnifying Party
will be asked to indemnify the Indemnified Party except with the
Indemnifying Party's prior written consent.
C. FTC shall indemnify and hold the Trust and the Fund, and the
Trust's trustees, officers, and agents, harmless from and against any and
all Losses which the Trust or the Fund may sustain or incur or which may
be asserted against the Trust or the Fund by any person arising out of
any action taken or omitted to be taken by FTC as a result of FTC's
refusal or failure to comply with the terms of this Agreement, its bad
faith, negligence, willful misconduct, or violation of applicable laws or
regulations.
VI. Confidentiality
FTC shall handle, in confidence, all information relating to the Trust's
and the Fund's business which is received by FTC during the course of
rendering any service hereunder.
VII. Data Necessary to Perform Service
The Trust or its agent, which may be FTC, shall furnish to FTC the data
necessary to perform the services described herein at times and in such
form as mutually agreed upon.
VIII. Terms of Agreement
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue automatically in
effect for successive annual periods. The Agreement may be terminated by
either party upon giving ninety (90) days
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<PAGE>
prior written notice to the other party or such shorter period as is
mutually agreed upon by the parties.
IX. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any of
FTC's duties or responsibilities hereunder is designated by the Trust by
written notice to FTC, FTC will promptly, upon such termination and at
the expense of the Trust, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by FTC
under this Agreement in a form reasonably acceptable to the Trust (if
such form differs from the form in which FTC has maintained, the Trust
shall pay any expenses associated with transferring the data to such
form), and will cooperate in the transfer of such duties and
responsibilities, including provision for assistance from FTC's personnel
in the establishment of books, records, and other data by such successor.
X. Choice of Law
This Agreement shall be construed in accordance with the laws of the
State of California. FTC hereby consents to the exclusive jurisdiction,
venue, and forum of any state or federal court in San Francisco,
California with respect to any action, whether commenced by the Trust or
any other party, which, in whole or in part, in any way arises under or
relates to this Agreement. FTC hereby authorizes and accepts service of
process sufficient for personal jurisdiction in any action against it as
contemplated by this paragraph by registered or certified mail, return
receipt requested, postage prepaid, to its address for the giving of
notices as set forth in this Agreement, or in the manner set forth in
Section XI of this Agreement for the giving of notice.
XI. Notices
Notices of any kind to be given by either party to the other party shall
be in writing and shall be duly given if mailed or delivered to FTC at
__________________ or to the Trust or the Fund at 650 California Street,
Suite 2800, San Francisco, California 94108 or sent by facsimile
transmission to FTC at __________________________ or to the Trust or the
Fund at (415)249-0553.
XII. Records
FTC shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Trust but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the Investment Company Act of 1940 as amended
(the "Investment Company Act"), and the rules thereunder. FTC agrees
that all such records prepared or maintained by FTC relating to the
services to be performed by FTC hereunder are the property of the Trust
and will be preserved, maintained, and made
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<PAGE>
available with such section and rules of the Investment Company Act and
will be promptly surrendered to the Trust on and in accordance with
its request.
XIII.Notice of Declaration of Trust.
FTC agrees that the Trust's obligations under this Agreement shall be
limited to the Fund and its assets, and that FTC shall not seek
satisfaction of any such obligation from the shareholders of the Trust
nor from any Trustee, officer, employee, or agent of the Trust.
XIV. Compliance with Applicable Law.
FTC represents, warrants, and covenants that it will comply in all
material respects with all applicable laws and regulations, including
but not limited to the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder, in performing its duties under this
Agreement.
XV. Attorneys' Fees
If any party to this Agreement seeks to enforce its rights under this
Agreement or construe any provision of this Agreement by legal
proceedings or otherwise, the non-prevailing party in such proceedings
shall pay all reasonable costs and expenses incurred by the prevailing
party (who shall be the party who obtains substantially the relief sought
by such party, whether by settlement, compromise, or judgment), including
without limitation court costs and all reasonable attorneys' fees.
BERKELEY CAPITAL MANAGEMENT FIRSTAR TRUST COMPANY
FUNDS
By: By:
------------------------- ----------------------------
Deborah A. Kemper
President and
Principal Executive Officer
Attest: Attest:
--------------------- ----------------------------
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<PAGE>
EXHIBIT A
BERKELEY CAPITAL MANAGEMENT MONEY MARKET FUND
FUND ADMINISTRATION AND COMPLIANCE SERVICE
MONEY MARKET FUND FEE SCHEDULE
Fund Administration Annual Fee (based upon fund assets)
$80,000 up to $500 million
3 basis points on the balance
Plus out-of-pocket expenses, including but not limited to:
Postage
Programming
Stationery
Proxies
Retention of records
Special reports
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of directors meetings
Auditing and legal expenses
All other out-of-pocket expenses
Fees are billed monthly
<PAGE>
FUND ACCOUNTING SERVICING AGREEMENT
This contract between Berkeley Capital Management Funds, a Delaware Business
Trust (the "Trust"), on behalf of Berkeley Capital Management Money Market Fund,
(hereinafter called the "Fund"), and Firstar Trust Company, a Wisconsin
corporation, hereinafter called "FTC," is entered into on this _______ day
of _______, 1997.
WHEREAS, the Trust is an open-ended management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, Firstar Trust Company ("FTC") is in the business of providing,
among other things, mutual fund accounting services to investment companies;
NOW, THEREFORE, the parties do mutually promise and agree as follows:
1. SERVICES. FTC agrees to provide the following mutual fund accounting
services to the Trust and the Fund:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date +1 basis using
security trade information communicated from the investment manager on
a timely basis.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Trustees and apply those prices to the
portfolio positions. For those securities where market quotations are
not readily available, the Board of Trustees shall approve, in good
faith, the method for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of each
valuation date and calculate gross earnings on investments for the
accounting period.
(4) Determine gain/loss on security sales and identify them as
to short-short, short- or long-term status; account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Trust on behalf of the Fund as to
methodology, rate or dollar amount.
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<PAGE>
(2) Record payments for Fund expenses upon receipt of written
authorization from the Trust on behalf of the Fund.
(3) Account for Fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by FTC and
the Trust.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales, exchanges,
redemptions, transfers, dividend reinvestments, and other Fund share
activity as reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the Trust on
behalf of the Fund.
(3) Determine net investment income (earnings) for the Fund as
of each valuation date. Account for periodic distributions of
earnings to shareholders and maintain undistributed net investment
income balances as of each valuation date.
(4) Maintain a general ledger for the Fund in the form as agreed
upon.
(5) For each day the Fund is open as defined in the prospectus,
determine the net asset value of the according to the accounting
policies and procedures set forth in the prospectus. Calculate
deviation between amortized cost net asset value and market value net
asset value as required by Rule 2a-7 under the Act.
(6) Calculate per share net asset value, per share net earnings,
and other per share amounts reflective of Fund operation at such time
as required by the nature and characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share price for
each valuation date to parties as agreed upon from time to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment portfolio of
the Fund to support the tax reporting required for IRS-defined
regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
2
<PAGE>
(3) Calculate taxable gain/loss on security sales using the tax
lot relief method designated by the Trust on behalf of the Fund.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to the
transfer agent to support tax reporting to the shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support
financial statement preparation by making the Fund accounting records
available to the Trust, the Securities and Exchange Commission, and
the outside auditors.
(2) Maintain accounting records according to the Act and
regulations provided thereunder.
2. PRICING OF SECURITIES. Pricing of securities in the Fund's portfolio
shall be performed in accordance with the procedures described in the Fund's
current prospectus and statement of additional information, or if such
standard valuation procedures cannot be executed, then in accordance with
such pricing procedures as may be developed from time to time by the Trust's
Board of Trustees and communicated to FTC.
3. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by the Board
of Trustees that affects accounting practices and procedures under this
agreement shall be effective upon written receipt and acceptance by the FTC.
4. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC. FTC reserves the right
to make changes from time to time, as it deems advisable, relating to its
services, systems, programs, rules, operating schedules and equipment, so long
as such changes do not adversely affect the service provided to the Trust and
the Fund under this Agreement.
5. COMPENSATION. FTC shall be compensated for providing the services
set forth in this Agreement in accordance with the Fee Schedule attached hereto
as Exhibit A and as mutually agreed upon and amended from time to time.
6. PERFORMANCE OF SERVICE.
A. FTC shall exercise reasonable care in the performance of its
duties under this Agreement and shall comply in all material respects
with all applicable laws and regulations. FTC shall not be liable for
any error of judgment or mistake of law or for any loss suffered by
the Trust or the Fund in connection with matters to which this
Agreement relates, including losses resulting from mechanical
breakdowns or the failure of communication or power supplies beyond
FTC's control, except a loss resulting from FTC's refusal or failure to
comply with the terms of this Agreement or from bad faith, negligence,
or willful misconduct on its
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<PAGE>
part in the performance or non-performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement,
the Trust shall indemnify and hold harmless FTC from and against any
and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which FTC may sustain or incur
or which may be asserted against FTC by any person arising out of any
action taken or omitted to be taken by it in performing the services
hereunder, and against any and all losses resulting from FTC's
reliance upon any written or oral instruction provided to FTC by any
duly authorized officer of the Trust, such duly authorized officer to
be included in a list of authorized officers furnished to FTC and as
amended from time to time in writing by resolution of the Board of
Directors of the Trust; provided that this indemnification provision
shall not apply to any claim, demand, loss, expense, or liability
that is a result of FTC's willful misfeasance, bad faith, or
negligence in the performance of its duties hereunder, or FTC's
reckless disregard of its obligations and duties under this Agreement.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FTC shall take
all reasonable steps to minimize service interruptions for any period
that such interruption continues beyond FTC's control. FTC will make
every reasonable effort to restore any lost or damaged data and
correct any errors resulting from such a breakdown at the expense of
FTC. FTC agrees that it shall, at all times, have reasonable
contingency plans with appropriate parties, making reasonable
provision for emergency use of electrical data processing equipment
to the extent appropriate equipment is available. Representatives of
the Trust shall be entitled to inspect FTC's premises and operating
capabilities at any time during regular business hours of FTC, upon
reasonable notice to FTC.
Regardless of the above, FTC reserves the right to reprocess
and correct administrative errors at its own expense, provided that
FTC notifies the Trust of all such errors, other than de minimus
errors, and the Trust approves in advance in writing FTC's proposal to
reprocess and correct such errors.
B. In order that the indemnification provisions contained in
this section shall apply, it is understood that if in any case a
party (the "Indemnifying Party") may be asked to indemnify or hold
the other party (the "Indemnified Party") harmless, the Indemnifying
Party shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood
that the Indemnified Party will use all reasonable care to notify
the Indemnifying Party promptly concerning any situation which
presents or appears likely to present the probability of such a
claim for indemnification against the Indemnifying Party. The
Indemnifying Party shall have the option to defend the Indemnified
Party against any claim which may be the subject of this
indemnification. In the event that the Indemnifying Party so
elects, it will so notify the Indemnified Party and thereupon the
Indemnifying Party shall take over complete defense of the claim,
and the Indemnified party shall in such situation initiate no
further legal or other expenses
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for which it shall seek indemnification under this section. The
Indemnified Party shall in no case confess any claim or make any
compromise in any case in which the Indemnifying Party will be asked
to indemnify the Indemnified Party except with the Indemnifying
Party's prior written consent.
C. FTC shall indemnify and hold the Trust and the Fund
harmless from and against any and all claims, demands, losses,
expenses, and liabilities (whether with or without basis in fact or
law) of any and every nature (including reasonable attorney's fees)
which the Trust or the Fund may sustain or incur or which may be
asserted against the Trust or the Fund by any person arising out of
any actions taken or omitted to be taken by FTC as a result of FTC's
refusal or failure to comply with the terms of this Agreement, its
bad faith, negligence, willful misconduct, or violation of
applicable laws or regulations.
7. RECORDS. FTC shall keep records relating to the services to be
performed hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Trust but not inconsistent with the rules and
regulations of appropriate government authorities, in particular Section 31 of
the Act and the rules thereunder. FTC agrees that all such records
prepared or maintained by FTC relating to the services to be performed by FTC
hereunder are the property of the Trust and will be preserved, maintained, and
made available with such section and rules of the Investment Company Act and
will be promptly surrendered to the Trust on and in accordance with its request.
8. CONFIDENTIALITY. FTC shall handle in confidence all information
relating to the Trust's or the Fund's business, which is received by FTC during
the course of rendering any service hereunder.
9. DATA NECESSARY TO PERFORM SERVICES. The Trust, on behalf of the Fund,
or its agent, which may be FTC, shall furnish to FTC the data necessary to
perform the services described herein at times and in such form as mutually
agreed upon.
10. NOTIFICATION OF ERROR. The Trust on behalf of the Fund will notify
FTC of any balancing or control error caused by FTC as soon as practicable
after receipt of any reports rendered by FTC to the Trust, or as soon as
practicable after discovery of any error or omission not covered in the
balancing or control procedure, or as soon as practicable after receiving
notice from any shareholder.
11. ADDITIONAL SERIES. In the event that the Trust establishes one or
more series of shares with respect to which it desires to have FTC render
accounting services, under the terms hereof, it shall so notify FTC in writing,
and if FTC agrees in writing to provide such services, such series will be
subject to the terms and conditions of this Agreement, and shall be maintained
and accounted for by FTC on a discrete basis. The portfolio currently covered
by this Agreement is: Berkeley Capital Management Money Market Fund.
5
<PAGE>
12. TERM OF AGREEMENT. This Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties. However, this
Agreement may be replaced or modified by a subsequent agreement between the
parties.
13. DUTIES IN THE EVENT OF TERMINATION. In the event that in connection
with termination a Successor to any of FTC's duties or responsibilities
hereunder is designated by the Trust by written notice to FTC, FTC will
promptly, upon such termination and at the expense of the Trust, transfer to
such Successor all relevant books, records, correspondence and other data
established or maintained by FTC under this Agreement in a form reasonably
acceptable to the Trust (if such form differs from the form in which FTC has
maintained the same, the Trust shall pay any expenses associated with
transferring the same to such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for assistance from FTC's
personnel in the establishment of books, records and other data by such
successor.
14. NOTICES. Notices of any kind to by given by either party to the other
party shall be in writing and shall be duly given if mailed or delivered to FTC
at _______________ or to the Trust or the Fund at 650 California Street, Suite
2800, San Francisco, California 94108 or sent by facsimile transmission to FTC
at ______ or to the Trust or the Fund at (415) 249-0553.
15. CHOICE OF LAW. This Agreement shall be construed in accordance with
the laws of the State of California. FTC hereby consents to the exclusive
jurisdiction, venue, and forum of any state or federal court in San Francisco,
California with respect to any action, whether commenced by the Trust or any
other party, which, in whole or in part, in any way arises under or relates to
this Agreement. FTC hereby authorizes and accepts service of process sufficient
for personal jurisdiction in any action against it as contemplated by this
paragraph by registered or certified mail, return receipt requested, postage
prepaid, to its address for the giving of notices as set forth in this
Agreement, or in the manner set forth in Section 14 of this Agreement for the
giving of notice.
16. ATTORNEY'S FEES. If any party to this Agreement seeks to enforce
its rights under this Agreement or to construe any provision of this
Agreement by legal proceedings or otherwise, the non-prevailing party in such
proceedings shall pay all reasonable costs and expenses incurred by the
prevailing party (who shall be the party who obtains substantially the relief
sought by such party, whether by settlement, compromise, or judgment),
including without limitation court costs and all reasonable attorneys' fees.
17. NOTICE OF DECLARATION OF TRUST. FTC agrees that the Trust's
obligations under this Agreement shall be limited to the Fund and its assets,
and that FTC shall not seek satisfaction of any such obligation from the
shareholders of the Trust nor from any Trustee, officer, employee, or agent of
the Trust.
6
<PAGE>
18. COMPLIANCE WITH APPLICABLE LAW. FTC represents, warrants, and
covenants that it will comply in all materials respects with all applicable laws
and regulations, including but not limited to the Investment Company Act of
1940, as amended, and the rules and regulations thereunder, in performing its
duties under this Agreement.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
ATTEST: Firstar Trust Company
By
- ------------------------------ ------------------------------
ATTEST: Berkeley Capital Management Funds
By
- ------------------------------ ------------------------------
Deborah A. Kemper
President and Principal
Executive Officer
7
<PAGE>
EXHIBIT A
BERKELEY CAPITAL MANAGEMENT MONEY MARKET FUND
FUND ACCOUNTING SERVICE
MONEY MARKET FUND FEE SCHEDULE
Fund Accounting Annual Fee (based upon fund assets)
$45,000 up to $500 million
3/4 basis point on the balance
Plus out-of-pocket expenses, including daily pricing service
Domestic and Canadian Equities $.15
Options $.15
Corp/Gov/Agency Bonds $.50
CMO's $.80
International Equities and Bonds $.50
Municipal Bonds $.80
Money Market Instruments $.80
Fees are billed monthly
<PAGE>
TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into on this ____ day of
____________, 1997, by and between Berkeley Capital Management Funds, a
Delaware business trust (the "Trust") on behalf of Berkeley Capital
Management Money Market Fund (hereinafter referred to as the "Fund"), and
Firstar Trust Company, a corporation organized under the laws of the State of
Wisconsin (hereinafter referred to as the "Agent").
WHEREAS, the Trust is an open-ended management investment company which
is registered under the Investment Company Act of 1940; and
WHEREAS, the Agent is a trust company and, among other things, is in the
business of administering transfer and dividend disbursing agent functions
for the benefit of its customers;
NOW, THEREFORE, the Trust, on behalf of the Fund, and the Agent do
mutually promise and agree as follows:
1. TERMS OF APPOINTMENT; DUTIES OF THE AGENT
Subject to the terms and conditions set forth in this Agreement, the
Trust, on behalf of the Fund, hereby employs and appoints the Agent to act as
transfer agent and dividend disbursing agent.
The Agent shall perform all of the customary services of a transfer
agent and dividend disbursing agent, and as relevant, agent in connection
with accumulation, open account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal program),
including but not limited to:
A. Receive orders for the purchase of shares;
B. Process purchase orders and issue the appropriate number of
certificated or uncertificated shares with such uncertificated shares
being held in the appropriate shareholder account;
C. Process redemption requests received in good order;
D. Pay monies in accordance with the instructions of redeeming
shareholders;
E. Process transfers of shares in accordance with the shareowner's
instructions;
F. Process exchanges between funds within the same family of funds;
G. Issue and/or cancel certificates as instructed; replace lost, stolen
or destroyed certificates upon receipt of satisfactory
indemnification or surety bond;
H. Prepare and transmit payments for dividends and distributions
declared by the Fund;
<PAGE>
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (i.e., systematic withdrawal, automatic
investment, dividend reinvestment, etc.);
J. Record the issuance of shares of the Fund and maintain, pursuant to
Securities Exchange Act of 1934 Rule 17Ad-10(e), a record of the
total number of shares of the Fund which are authorized, issued and
outstanding;
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies;
L. Mail shareholder reports and prospectuses to current shareholders;
M. Prepare and timely file U.S. Treasury Department forms 1099 and
other appropriate information returns required with respect to
dividends and distributions for all shareholders;
N. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all
purchases, redemptions and other confirmable transactions as agreed
upon with the Trust on behalf of the Fund; and
O. Provide a Blue Sky System which will enable the Trust on behalf of
the Fund to monitor the total number and dollar amounts of shares sold
in each state. In addition, the Trust on behalf of the Fund shall
identify to the Agent in writing those transactions and assets to be
treated as exempt from the Blue Sky reporting to the Fund for each
state. The responsibility of the Agent for the Fund's Blue Sky state
registration status is solely limited to the initial compliance by
the Trust and the reporting of such transactions to the Trust.
2. COMPENSATION
The Trust, on behalf of the Fund, agrees to pay the Agent for
performance of the duties listed in this Agreement; the fees and reasonable
out-of-pocket expenses include, but are not limited to the following:
printing, postage, forms, stationery, record retention, mailing, insertion,
programming, labels, shareholder lists, and proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Trust and the Agent.
The Trust, on behalf of the Fund, agrees to pay all fees and reimbursable
expenses within ten (10) business days following its receipt of the billing
notice.
3. REPRESENTATIONS OF AGENT
The Agent represents, warrants, and covenants to the Trust and the Fund
that as of the date hereof and throughout the term of this agreement:
A. It is a trust company duly organized, existing and in good standing
under the laws of Wisconsin;
B. It is a registered transfer agent under the Securities Exchange Act
of 1934 as amended;
C. It is duly qualified to carry on its business in the state of
Wisconsin;
2
<PAGE>
D. It is empowered under applicable laws and by its charter and bylaws
to enter into and perform this Agreement;
E. All requisite corporate proceedings have been taken to authorize it
to enter and perform this Agreement;
F. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement; and
G. It will comply with all applicable requirements of all applicable
laws and regulations including, but not limited to the Securities
Act of 1933 and the Securities Exchange Act of 1934, as amended, the
Investment Company Act of 1940, as amended, and any laws, rules, and
regulations of governmental authorities having jurisdiction.
4. REPRESENTATIONS OF THE TRUST
The Trust represents and warrants to the Agent that:
A. The Trust is an open-ended diversified investment company under the
Investment Company Act of 1940;
B. The Trust is a business trust organized, existing, and in good
standing under the laws of Delaware;
C. The Trust is empowered under applicable laws and by its Declaration
of Trust and bylaws to enter into and perform this Agreement;
D. All necessary proceedings required by the Declaration of Trust have
been taken to authorize it to enter into and perform this Agreement;
E. The Trust will comply with all applicable requirements of the
Securities and Exchange Acts of 1933 and 1934, as amended, the
Investment Company Act of 1940, as amended, and any laws, rules and
regulations of governmental authorities having jurisdiction; and
F. A registration statement under the Securities Act of 1933 is
currently effective and will remain effective.
5. COVENANTS OF TRUST AND AGENT
The Trust shall furnish the Agent a certified copy of the resolution of
the Board of Trustees of the Trust authorizing the appointment of the Agent
and the execution of this Agreement. The Trust shall provide to the Agent a
copy of the Declaration of Trust, and all amendments.
3
<PAGE>
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable and consistent
with all applicable laws and regulations. To the extent required by Section
31 of the Investment Company Act of 1940, as amended, and the rules
thereunder, the Agent agrees that all such records prepared or maintained by
the Agent relating to the services to be performed by the Agent hereunder are
the property of the Trust and will be preserved, maintained and made
available in accordance with such section and rules and will be surrendered
to the Trust on and in accordance with its request.
6. INDEMNIFICATION; REMEDIES UPON BREACH
The Agent shall exercise reasonable care in the performance of its
duties under this Agreement and shall comply with all applicable laws and
regulations. The Agent shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust or the Fund in
connection with matters to which this Agreement relates, including losses
resulting from mechanical breakdowns or the failure of communication or power
supplies beyond the Agent's control, except a loss resulting from the Agent's
refusal or failure to comply with the terms of this Agreement or from bad
faith, negligence, or willful misconduct on its part in the performance of
its duties under this Agreement. Notwithstanding any other provision of this
Agreement, the Trust shall indemnify and hold harmless the Agent from and
against any and all claims, demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which the Agent may sustain or incur
or which may be asserted against the Agent by any person arising out of any
action taken or omitted to be taken by it in performing the services
hereunder, and against any and all losses resulting from the Agent's reliance
upon any written or oral instruction provided to the Agent by any duly
authorized officer of the Trust, such duly authorized officer to be included
in a list of authorized officers furnished to the Agent and as amended from
time to time in writing by resolution of the Board of Trustees of the Trust;
provided that this indemnification provision shall not apply to any claim,
demand, loss, expense, or liability that is a result of Agent's willful
misfeasance, bad faith, or negligence in the performance of its duties
hereunder, or Agent's disregard of its obligations and duties under this
Agreement.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, the Agent shall take all reasonable steps
to minimize service interruptions for any period that such interruption
continues beyond the Agent's control. The Agent will make every reasonable
effort to restore any lost or damaged data and correct any errors resulting
from such a breakdown at the expense of the Agent. The Agent agrees that it
shall, at all times, have reasonable contingency plans with appropriate
parties, making reasonable provision for emergency use of electrical data
processing equipment to the extent appropriate equipment is available.
Representatives of the Trust shall be entitled to inspect the Agent's
premises and operating capabilities at any time during regular business hours
of the Agent, upon reasonable notice to the Agent.
Regardless of the above, the Agent reserves the right to reprocess and
correct administrative errors at its own expense provided that the Agent
notifies the Trust of all such errors, other than de minimus errors, and the
Trust approves in writing in advance FTC's proposed reprocessing and
correction of such errors.
In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case a party to this Agreement
(the "Indemnifying Party") may be asked to indemnify or hold the other party
(the "Indemnified Party") harmless, the Indemnifying Party shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the Indemnified Party will use all
reasonable care to notify the Indemnifying Party promptly
4
<PAGE>
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification against the Indemnifying
Party. The Indemnifying Party shall have the option to defend the Indemnified
Party against any claim which may be the subject of this indemnification. In
the event that the Indemnifying Party so elects, it will so notify the
Indemnified Party and thereupon the Indemnifying Party shall take over
complete defense of the claim, and the Indemnifying Party shall in such
situation initiate no further legal or other expenses for which it shall seek
indemnification under this section. The Indemnified Party shall in no case
confess any claim or make any compromise in any case in which the
Indemnifying Party will be asked to indemnify the Indemnified Party except
with the Indemnifying Party's prior written consent.
The Agent shall indemnify and hold the Trust and the Fund harmless from
and against any and all claims, demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which may be asserted against the
Trust or the Fund by any person arising out of any action taken or omitted to
be taken by the Agent as a result of the Agent's refusal or failure to comply
with the terms of this Agreement, its bad faith, negligence, willful
misconduct, or violation of applicable law.
7. CONFIDENTIALITY
The Agent agrees on behalf of itself and its employees to treat
confidentiality all records and other information relative to the Trust, the
Fund, and the Fund's shareholders and shall not be disclosed to any other
party, except after prior notification to and approval in writing by the
Trust on behalf of the Fund, which approval shall not be unreasonably
withheld and may not be withheld where the Agent may be exposed to civil or
criminal contempt proceedings for failure to comply after being requested to
divulge such information by duly constituted authorities.
ADDITIONAL SERIES. The Trust is authorized to issue separate classes of
shares of beneficial interest representing interests in separate investment
portfolios. The parties intend that each portfolio established by the trust,
now or in the future, be covered by the terms and conditions of this
agreement.
8. RECORDS
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Trust but not inconsistent with the rules
and regulations of appropriate government authorities, in particular, Section
31 of The Investment Company Act of 1940 as amended (the "Investment Company
Act"), and the rules thereunder. The Agent agrees that all such records
prepared or maintained by The Agent relating to the services to be performed
by the Agent hereunder are the property of the Trust and will be preserved,
maintained, and made available with such section and rules of the Investment
Company Act and will be promptly surrendered to the Trust on and in
accordance with its request.
9. CALIFORNIA LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the state of California. The Agent
hereby consents to the exclusive jurisdiction, venue, and forum of any state
or federal court in San Francisco, California with respect to any action,
whether commenced by the Trust or any other party, which, in whole or in
part, in any way arises under or relates to this Agreement. The Agent hereby
authorizes and accepts service of process sufficient for personal
jurisdiction in any action against it as contemplated by this paragraph by
registered or certified mail,
5
<PAGE>
return receipt requested, postage prepaid, to its address for the giving of
notices as set forth in this Agreement, or in the manner set forth in Section
10 of this Agreement for the giving of notice.
10. AMENDMENT, ASSIGNMENT, TERMINATION AND NOTICE
A. This Agreement may be amended by the mutual written consent of the
parties.
B. This Agreement may be terminated upon ninety (90) day's written
notice given by one party to the other.
C. This Agreement and any right or obligation hereunder may not be
assigned by either party without the signed, written consent of the
other party.
D. Notices of any kind to be given by either party to the other party
shall be in writing and shall be duly given if mailed or delivered to
the Agent at ______________________ or to the Trust or the Fund at
650 California Street, Suite 2800, San Francisco, California 94108
or sent by facsimile transmission to the Agent at ____________________
or to the Trust or the Fund at (415) 249-0553.
E. In the event that the Trust gives to the Agent its written intention
to terminate and appoint a successor transfer agent, the Agent agrees
to cooperate in the transfer of its duties and responsibilities to
the successor, including any and all relevant books, records and
other data established or maintained by the Agent under this
Agreement.
F. Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will
be paid by the Trust.
11. ATTORNEYS' FEES.
If any part to this Agreement seeks to enforce its rights under this
Agreement or to construe any provision of this Agreement by legal proceedings
or otherwise, the non-prevailing party in such proceedings shall pay all
reasonable costs and expenses incurred by the prevailing party (who shall be
the party who obtains substantially the relief sought by such party, whether
by settlement, compromise, or judgement), including without limitation court
costs and all reasonable attorneys' fees.
12. NOTICE OF DECLARATION OF TRUST.
FTC agrees that the Trust's obligations under this Agreement shall be
limited to the Fund and its assets, and that FTC shall not seek satisfaction
of any such obligation from the shareholders of the Trust nor from any
Trustee, officer, employee, or agent of the Trust.
Berkeley Capital Management Funds Firstar Trust Company
By: By:
------------------------------ --------------------------------
Deborah A. Kemper
President and Principal
Executive Officer
Attest: Attest:
-------------------------- ----------------------------
Assistant Secretary
6
<PAGE>
EXHIBIT A
BERKELEY CAPITAL MANAGEMENT MONEY MARKET FUND
TRANSFER AGENT AND SHAREHOLDER SERVICING
MONEY MARKET FUND FEE SCHEDULE
$20.00 per shareholder account per year
Minimum annual fee $15,000
Plus out-of-pocket expenses, including but not limited to:
Telephone - toll free lines
Postage
Programming
Stationery/envelopes
Mailing
Insurance
Proxies
Retention of records
Microfilm/fiche of records (beyond Firstar copies)
Special reports
ACH fees
All other out-of-pocket expenses
Fund Group Initialization/Programming
Fees are billed monthly
Qualified Plan Fees (Billed to Investors)
Annual maintenance fee per $12.50/acct
account (Cap at $25.00 per SSN)
Transfer to successor trustee $15.00/trans.
Distribution to participant $15.00/trans.
(Exclusive of SWP)
Refund of excess contribution $15.00/trans.
Additional Shareholder Fees (Billed to Investors)
Any outgoing wire transfer $10.00/wire
Return check fee $20.00/item
Stop payment $20.00/stop
(Liquidation, dividend, draft check)
Research fee $ 5.00/item
(For requested items of the second calendar
year [or previous] to the request)(Cap at $25.00)
<PAGE>
January 14, 1997
23191-0001
Berkeley Capital Management Funds
650 California Street, Suite 2800
San Francisco, CA 94108
REGISTRATION STATEMENT ON FORM N-1A
Ladies and Gentlemen:
We have acted as counsel to Berkeley Capital Management Funds, a
Delaware business trust (the "Trust"), in connection with the Trust's
Registration Statement on Form N-1A filed with the Securities and Exchange
Commission on November 14, 1996 (the "Registration Statement") and relating to
the issuance by the Trust of an indefinite number of $0.01 par value shares of
beneficial interest of one series of the Trust, Berkeley Capital Management
Money Market Fund (the "Shares"), pursuant to Rule 24f-2 under the Investment
Company Act of 1940, as amended (the "Act").
In connection with this opinion, we have assumed the authenticity of
all records, documents and instruments submitted to us as originals, the
genuineness of all signatures, the legal capacity of all natural persons, and
the conformity to the originals of all records, documents, and instruments
submitted to us as copies. We have based our opinion on the following:
(a) the Trust's Agreement and Declaration of Trust dated as of
October 25, 1996 (the "Declaration of Trust"), and the Trust's
Certificate of Trust as filed with the Secretary of State of
Delaware on October 28, 1996;
(b) the By-laws of the Trust;
(c) resolutions of the initial Trustee of the Trust adopted by
written consent dated December 31, 1996 authorizing the issuance
of the Shares;
<PAGE>
Berkley Capital Management Funds
January 14, 1997 Page 2
(d) the Registration Statement; and
(e) a certificate of an officer of the Trust as to certain factual
matters relevant to this opinion.
Our opinion below is limited to the federal law of the United States
of America and the business trust law of the State of Delaware. We are not
licensed to practice law in the State of Delaware, and we have based our opinion
below solely on our review of Chapter 38 of Title 12 of the Delaware Code and
the case law interpreting such Chapter as reported in Delaware Code Annotated
(Michie Co. 1995 and 1996 Supplement) and updated on LEXIS. We have not
undertaken a review of other Delaware law or of any administrative or court
decisions in connection with rendering this opinion. We disclaim any opinion as
to any law other than that of the United States of America and the business
trust law of the State of Delaware as described above, and we disclaim any
opinion as to any statute, rule, regulation, ordinance, order or other
promulgation of any regional or local governmental authority.
Based on the foregoing and our examination of such questions of law as
we have deemed necessary and appropriate for the purpose of this opinion, and
assuming that (i) all of the Shares will be issued and sold for cash or
securities at the per-share public offering price on the date of their issuance
in accordance with statements in the Trust's Prospectus included in the
Registration Statement and in accordance with the Declaration of Trust, (ii) all
consideration for the Shares will be actually received by the Trust, (iii) such
consideration will be at least equal in value to the par value of the Shares,
and (iv) all applicable securities laws will be complied with, it is our opinion
that, when issued and sold by the Trust, the Shares will be legally issued,
fully paid and nonassessable.
This opinion is rendered to you in connection with the Registration
Statement and is solely for your benefit. This opinion may not be relied upon
by you for any other purpose or relied upon by any other person, firm,
corporation or other entity for any purpose, without our prior written consent.
We disclaim any obligation to advise you of any developments in areas covered by
this opinion that occur after the date of this opinion.
<PAGE>
Berkley Capital Management Funds
January 14, 1997 Page 3
We hereby consent to (i) the reference to our firm under the caption
"Legal Counsel" in the Prospectus of the Trust included in the Registration
Statement, and (ii) the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ HELLER EHRMAN WHITE & McAULIFFE
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Pre-Effective Amendment No. 1 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
January 10, 1997, relating to the statement of assets and liabilities of the
Berkeley Capital Management Money Market Fund (constituting Berkeley Capital
Management Funds) which appears in such Statement of Additional Information, and
to the incorporation by reference of our report into the Prospectus which
constitutes part of this Registration Statement. We also consent to the
reference to us under the heading "Independent Accountants and Reports to
Shareholders" in such Statement of Additional Information.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Milwaukee, Wisconsin
January 10, 1997
<PAGE>
BERKELEY CAPITAL MANAGEMENT FUNDS
SUBSCRIPTION AGREEMENT
To the Board of Directors of the Berkeley Capital Management Funds:
The undersigned purchaser (the "Purchaser") hereby subscribes to the number
of shares (the "Shares") of beneficial interest of Berkeley Capital Management
Funds (the "Company") as follows:
Number Purchase
Series of Shares Price
------ --------- ------
Berkeley Capital Management Money Market Fund 100,000 100,000
It is understood that a certificate representing the Shares shall not be
issued to the undersigned, but such ownership shall be recorded on the books and
records of the Company's transfer agent. Notwithstanding the fact that a
certificate representing ownership will not be issued, the Shares will be deemed
fully paid and nonassessable.
The purchaser agrees that the Shares are being purchased for investment
with no present intention to resell or redeem the shares.
There are no agreements or arrangements between the undersigned and the
Trust, or any of its officers, trustees, employees, or the investment manager of
the Trust, or any affiliated persons thereof with respect to the resale, future
distribution or redemption of the Shares.
The sale of Shares will only be made by redemption to the Trust and not by
a transfer to any third party without the consent of the Trust.
The undersigned is aware that in issuing and selling these Shares, the Fund
and the Trust are relying on the aforementioned representations.
The Purchaser acknowledges that costs incurred by the company in connection
with its organization, registration and initial public offering of Shares of the
company have been deferred and are being amortized over a period of five years
from the date upon which the Company commences its investment activities.
The Purchaser agrees that in the event any of the Shares purchased under
this Subscription Agreement are redeemed during this five year period, the
Company is authorized to reduce the redemption proceeds to cover any unamortized
organizational expenses in the same proportion as the number of Shares being
redeemed bears to the number of Shares outstanding at the time of redemption.
If, for any reason, the reduction of redemption proceeds is not in fact made by
the Company in the event of such a redemption, the Purchaser agrees to reimburse
the Company immediately for any unamortized organizational expenses in
proportion stated above.
<PAGE>
BERKELEY CAPITAL MANAGEMENT FUNDS
SUBSCRIPTION AGREEMENT
Dated and effective as of the 8th day of January, 1997
Purchaser: Berkeley International Securities Corporation
By:
----------------------------------------------------
Its:
----------------------------------------------------
ACCEPTANCE
The foregoing subscription is hereby accepted.
Dated and effective as of the 8th day of January, 1997
Berkeley Capital Management Funds
---------------------------------------------------------
By: Deborah A. Kemper, President
---------------------------------------------------------
Attest: By: Donald O. Dempster, Secretary
<PAGE>
LOGO
BERKELEY CAPITAL
MANAGEMENT
MONEY MARKET FUND
INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT &
CUSTODIAL ACCOUNT AGREEMENT
BERKELEY CAPITAL MANAGEMENT
MONEY MARKET FUND
650 California St. Ste. 2800
San Francisco, CA 94108-2609
Mutual Fund Services
615 East Michigan Street
P.O. Box 701
Milwaukee, WI 53201-0701
1-888-889-0799
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INDIVIDUAL RETIREMENT ACCOUNT DISCLOSURE STATEMENT
Please read the following information together with the Individual Retirement
Account Custodial Agreement and the Prospectus(es) for the fund(s) you select
for investment of your IRA contributions.
You may revoke this account any time within seven calendar days after it is
established by mailing or delivering a written request for revocation to:
Berkeley Capital Management Money Market Fund, c/o Firstar Trust Company, 615
East Michigan Street, 3rd Floor, Milwaukee, WI 53202, Attention: Mutual Fund
Services. If your revocation is mailed, the date of the postmark (or the date
of certification if sent by certified or registered mail) will be considered
your revocation date. Upon proper revocation, you will receive a full refund of
your initial contribution, without any adjustments for items such as
administrative fees or fluctuations in market value.
1. GENERAL
Your IRA is a custodial account created for your exclusive benefit, and Firstar
Trust Company serves as custodian. Your interest in the account is
nonforfeitable.
2. INVESTMENTS
Contributions made to your IRA will be invested in one or more of the regulated
investment companies for which Berkeley Capital Management serves as investment
advisor or any other regulated investment company designated by Berkeley Capital
Management Money Market Fund. No part of your account may be invested in life
insurance contracts; further, the assets of your account may not be commingled
with other property.
3. ELIGIBILITY
Employees and self-employed individuals are eligible to contribute to an IRA.
Employers may also contribute to employer-sponsored IRAs established for the
benefit of their employees. You may also establish an IRA to receive rollover
contributions and transfers from another IRA custodian or trustee or from
certain other retirement plans.
4. TIME OF CONTRIBUTION
You may make regular contributions to your IRA any time up to and including the
due date for filing your tax return for the year, not including extensions. You
may continue to make regular contributions to your IRA up to (but not including)
the calendar year in which you reach 70-1/2. Employer contributions to a SEP-IRA
plan may be continued after you attain age 70-1/2. Rollover contributions and
transfers may be made at any time, including after you reach age 70-1/2.
5. AMOUNT OF CONTRIBUTION
You may make annual regular contributions to an IRA in any amount up to 100% of
your compensation for the year or $2,000, whichever is less. Qualifying rollover
contributions and transfers are not subject to this limitation.
6. SPOUSAL IRA
If you are married and your spouse is not employed (or if your employed spouse
elects to be treated as having no compensation), you may make contributions to a
spousal IRA in addition to your own IRA. The maximum amount contributed to both
your own and to your spouse's IRA may not exceed 100% of your compensation or
$2,250, whichever is less. In no event, however, may the annual contribution to
either your account or your spouse's account exceed $2,000.
7. ROLLOVERS AND TRANSFERS
You are allowed to "rollover" a distribution or transfer your assets from one
individual retirement account to another without any tax liability. Rollovers
between IRAs may be made once per year and must be accomplished within 60 days
after the distribution. Also, under certain conditions, you may roll over (tax
free) all or a portion of a distribution received from a qualified plan or
tax-sheltered annuity in which you participate or in which your deceased spouse
participated. However, strict limitations apply to such rollovers, and you
should seek competent advice in order to comply with all of the rules governing
rollovers.
Most distributions from qualified retirement plans will be subject to a 20%
withholding requirement. The 20% withholding can be avoided by directly
transferring the amount of the distribution to an individual retirement account
or to certain other types of retirement plans. You should receive more
information regarding these withholding rules and whether your distribution can
be transferred to an IRA from the plan administrator prior to receiving your
distribution.
8. TAX DEDUCTIBILITY OF ANNUAL CONTRIBUTIONS
Although you may make an IRA contribution within the limitations described
above, all or a portion of your contribution may be nondeductible. No deduction
is allowed for a rollover contribution or transfer. If you are not married and
are not an "active participant" in an employer-sponsored retirement plan, you
may make a fully deductible IRA contribution in any amount up to $2,000 or 100%
of your compensation for the year, whichever is less. The same limits apply if
you are married and file a joint return with your spouse and neither you nor
your spouse is an "active participant" in an employer-sponsored retirement plan.
An employer-sponsored retirement plan includes any of the following types of
retirement plans:
- - a qualified pension, profit-sharing, or stock bonus plan established in
accordance with IRC 401(a) or 401(k),
- - a Simplified Employee Pension Plan (SEP) (IRC 408(k)),
- - a deferred compensation plan maintained by a governmental unit or agency,
- - tax-sheltered annuities and custodial accounts (IRC 403(b) and 403(b)(7)),
- - a qualified annuity plan under IRC Section 403(a).
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Distributions from the types of plans listed above are eligible to be rolled
over or transferred to your IRA.
Generally, you are considered an "active participant" in a defined contribution
plan if an employer contribution or forfeiture was credited to your account
during the year. You are considered an "active participant" in a defined benefit
plan if you are eligible to participate in a plan, even though you elect not to
participate. You are also treated as an "active participant" if you make a
voluntary or mandatory contribution to any type of plan, even if your employer
makes no contribution to the plan.
If you (or your spouse, if filing a joint tax return) are covered by an
employer-sponsored retirement plan, your IRA contribution is fully deductible if
your adjusted gross income (or combined income if you file a joint tax return)
does not exceed certain limits. For this purpose adjusted gross income is not
modified to take into account any deduction for IRA contributions, but does take
into account the passive loss limitations under Code Section 86 and any taxable
benefits under the Social Security Act and the Railroad Retirement Act.
If you (or your spouse, if filing a joint tax return) are covered by an
employer-sponsored retirement plan, the deduction for your IRA contribution is
reduced proportionately for adjusted gross income which exceeds the applicable
dollar amount. The applicable dollar amount for an individual is $25,000 and
$40,000 for married couples filing a joint tax return. The applicable dollar
limit for married individuals filing separate returns is $0. If your adjusted
gross income exceeds the applicable dollar amount by $10,000 or less, you may
make a deductible IRA contribution. The deductible amount, however, will be
less than $2,000.
To determine the amount of your deductible contribution, use the following
calculations:
1) Subtract the applicable dollar amount from your adjusted gross income. If
the result is $10,000 or more, you can only make a nondeductible
contribution to your IRA.
2) Divide the above figure by $10,000, and multiply that percentage by $2,000.
3) Subtract the dollar amount (result from #2 above) from $2,000 to determine
the amount which is deductible.
If the deduction limit is not a multiple of $10, then it should be rounded up to
the next $10. There is a $200 minimum floor on the deduction limit if your
adjusted gross income does not exceed $35,000 (for a single taxpayer), $50,000
(for married taxpayers filing jointly) or $10,000 (for a married taxpayer filing
separately).
Even if your income exceeds the limits described above, you may make a
contribution to your IRA up to the contribution limitations described in Section
5 above. To the extent that your contribution exceeds the deductible limits, it
will be nondeductible. However, earnings on all IRA contributions are tax
deferred until distribution.
9. EXCESS CONTRIBUTIONS
Contributions which exceed the allowable maximum for federal income tax purposes
are treated as excess contributions. A nondeductible penalty tax of 6% of the
excess amount contributed will be added to your income tax for each year in
which the excess contribution remains in your account.
10. CORRECTION OF EXCESS CONTRIBUTION
If you make a contribution in excess of your allowable maximum, you may correct
the excess contribution and avoid the 6% penalty tax for that year by
withdrawing the excess contribution and its earnings on or before the date,
including extensions, for filing your tax return. Any earnings on the withdrawn
excess contribution will be taxable in the year the excess contribution was made
and may be subject to a 10% early distribution penalty tax if you are under age
59 1/2. In addition, in certain cases an excess contribution may be withdrawn
after the time for filing your tax return. Finally, excess contributions for one
year may be carried forward and applied against the contribution limitation in
succeeding years.
11. SIMPLIFIED EMPLOYEE PENSION PLAN
Your IRA may be used as part of a Simplified Employee Pension Plan established
by your employer. Your employer may contribute to your IRA/SEP up to a maximum
of 15% of your compensation or $30,000, whichever is less. If your SEP Plan
permits, you may also elect to have your employer make salary reduction
contributions of up to $9,500 for 1996 (adjusted periodically for cost of living
increases) per year to your IRA. However, the combination of the employer's
contributions and your salary reduction contributions may not exceed the lesser
of 15% of your compensation or $30,000. It is your responsibility and that of
your employer to see that contributions in excess of normal IRA limits are made
under a valid Simplified Employee Pension Plan and are, therefore, proper.
12. FORM OF DISTRIBUTIONS
Distributions may be made in any one of three methods:
(a) a lump-sum distribution,
(b) installments over a period not extending beyond your life expectancy (as
determined by actuarial tables), or
(c) installments over a period not extending beyond the joint life expectancy
of you and your designated beneficiary (as determined by actuarial tables).
You may also use your account balance to purchase an annuity contract, in which
case your custodial account will terminate.
13. LATEST TIME TO WITHDRAW
You must begin receiving the assets in your account no later than April 1
following the calendar year in which you reach age 70-1/2 (your "required
beginning date"). In general, the minimum amount that must be distributed each
year is equal to the amount obtained by dividing the balance in your IRA on the
last day of the prior year (or the last day of the year prior to the year in
which you attain age 70-1/2) by your life expectancy, the joint life expectancy
of you and your beneficiary, or the specified payment term, whichever is
applicable. A
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federal tax penalty may be imposed against you if the required minimum
distribution is not made for the year you reach age 70-1/2 and for each year
thereafter. The penalty is equal to 50% of the amount by which the actual
distribution is less than the required minimum.
Unless you or your spouse elects otherwise, your life expectancy and/or the life
expectancy of your spouse will be recalculated annually. An election not to
recalculate life expectancy(ies) is irrevocable and will apply to all subsequent
years. The life expectancy of a nonspouse beneficiary may not be recalculated.
If you have two or more IRAs, you may satisfy the minimum distribution
requirements by receiving a distribution from one of your IRAs in an amount
sufficient to satisfy the minimum distribution requirements for your other IRAs.
You must still calculate the required minimum distribution separately for each
IRA, but then such amounts may be totalled and the total distribution taken from
one or more of your individual IRAs.
Distribution from your IRA must satisfy the special "incidental death benefit"
rules of the Internal Revenue Code. These provisions set forth certain
limitations on the joint life expectancy of you and your beneficiary. If your
beneficiary is not your spouse, your beneficiary will be generally considered to
be no more than 10 years younger than you for the purpose of calculating the
minimum amount that must be distributed.
14. DISTRIBUTION OF ACCOUNT ASSETS AFTER DEATH
If you die before receiving the balance of your account, distribution of your
remaining account balance is subject to several special rules. If you die on or
after your required beginning date, distribution must continue in a method at
least as rapid as under the method of distribution in effect at your death. If
you die before your required beginning date, your remaining interest will, at
the election of your beneficiary or beneficiaries, (i) be distributed by
December 31 of the year in which occurs the fifth anniversary of your death, or
(ii) commence to be distributed by December 31 of the year following your death
over a period not exceeding the life or life expectancy of your designated
beneficiary or beneficiaries.
Two additional distribution options are available if your spouse is the
beneficiary: (i) payments to your spouse may commence as late as December 31 of
the year you would have attained age 70-1/2 and be distributed over a period not
exceeding the life or life expectancy of your spouse, or (ii) your spouse can
simply elect to treat your IRA as his or her own, in which case distributions
will be required to commence by April 1 following the calendar year in which
your spouse attains age 70-1/2.
15. TAX TREATMENT OF DISTRIBUTIONS
Amounts distributed to you are generally includable in your gross income in the
taxable year you receive them and are taxable as ordinary income. To the extent,
however, that any part of a distribution constitutes a return of your
nondeductible contributions, it will not be included in your income. The amount
of any distribution excludable from income is the portion that bears the same
ratio as your aggregate nondeductible contributions bear to the balance of your
IRA at the end of the year (calculated after adding back distributions during
the year). For this purpose, all of your IRAs are treated as a single IRA.
Furthermore, all distributions from an IRA during a taxable year are to be
treated as one distribution. The aggregate amount of distributions excludable
from income for all years cannot exceed the aggregate nondeductible
contributions for all calendar years.
No distribution to you or anyone else from your account can qualify for capital
gains treatment under the federal income tax laws. Similarly, you are not
entitled to the special five- or ten-year averaging rule for lump-sum
distributions available to persons receiving distributions from certain other
types of retirement plans. All distributions are taxed to the recipient as
ordinary income except the portion of a distribution which represents a return
of nondeductible contributions.
Any distribution which is properly rolled over will not be includable in your
gross income.
16. EARLY DISTRIBUTIONS
Distributions from your IRA made before age 59-1/2 will be subject to a 10%
nondeductible penalty tax unless the distribution is a return of nondeductible
contributions or is made because of your death, disability, as part of a series
of substantially equal periodic payments over your life expectancy or the joint
life expectancy of you and your beneficiary, or the distribution is an exempt
withdrawal of an excess contribution. The penalty tax may also be avoided if
the distribution is rolled over to another individual retirement account.
17. QUALIFICATION OF PLAN
Your Individual Retirement Account Plan has been approved as to form by the
Internal Revenue Service. The Internal Revenue Service approval is a
determination only as to the form of the Plan and does not represent a
determination of the merits of the Plan as adopted by you. You may obtain
further information with respect to your Individual Retirement Account from any
district office of the Internal Revenue Service.
18. PROHIBITED TRANSACTIONS
If you engage in a "prohibited transaction," as defined in section 4975 of the
Internal Revenue Code, your account will be disqualified, and the entire balance
in your account will be treated as if distributed to you and will be taxable to
you as ordinary income. Examples of prohibited transactions are:
(a) the sale, exchange, or leasing of any property between you and your
account,
(b) the lending of money or other extensions of credit between you and your
account,
(c) the furnishing of goods, services, or facilities between you and your
account.
If you are under age 59-1/2, you may also be subject to the 10% penalty tax on
early distributions.
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19. PENALTY FOR PLEDGING ACCOUNT
If you use (pledge) all or part of your IRA as security for a loan, then the
portion so pledged will be treated as if distributed to you and will be taxable
to you as ordinary income during the year in which you make such pledge. The 10%
penalty tax on early distributions may also apply.
20. REPORTING FOR TAX PURPOSES
Deductible contributions to your IRA may be claimed as a deduction on your IRS
Form 1040 for the taxable year contributed. If any nondeductible contributions
are made by you during a tax year, such amounts must be reported on Form 8606
and attached to your Federal Income Tax Return for the year contributed. If you
report a nondeductible contribution to your IRA and do not make the
contribution, you will be subject to a $100 penalty for each overstatement
unless a reasonable cause is shown for not contributing. Other reporting will be
required by you in the event that special taxes or penalties described herein
are due.
You must also file Treasury Form 5329 with the IRS for each taxable year in
which the contribution limits are exceeded, a premature distribution takes
place, or less than the required minimum amount is distributed from your IRA.
21. ALLOCATION OF EARNINGS
The method of computing and allocating annual earnings is set forth in Article
VIII, Section 1 of the Individual Retirement Account Custodial Agreement. The
growth in value of your IRA is neither guaranteed or projected.
22. INCOME TAX WITHHOLDING
You must indicate on distribution requests whether or not federal income taxes
should be withheld. Redemption requests not indicating an election not to have
federal income tax withheld will be subject to withholding.
23. OTHER INFORMATION
Information about the shares of each mutual fund available for investment by
your IRA must be furnished to you in the form of a prospectus governed by rules
of the Securities and Exchange Commission. Please refer to the prospectus for
detailed information concerning your mutual fund. You may obtain further
information concerning IRAs from any District Office of the Internal Revenue
Service.
Fees and other expenses of maintaining your account may be charged to you or
your account. The Custodian's fee schedule as of the date you establish the IRA
is included below.
Annual maintenance fee per account . . . . . . . . . . . . . $ 12.50*
Transfer to successor trustee. . . . . . . . . . . . . . . . . 15.00
Distribution to a participant. . . . . . . . . . . . . . . . . 15.00
(exclusive of systematic withdrawal plans)
Refund of excess contribution. . . . . . . . . . . . . . . . . 15.00
*capped at $25.00 per social security number.
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INDIVIDUAL RETIREMENT
CUSTODIAL ACCOUNT
The following constitutes an agreement establishing an Individual Retirement
Account (under Section 408(a) of the Internal Revenue Code) between the
Depositor and the Custodian.
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in Section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified
employee pension plan as described in Section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in Section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer
contribution to a simplified employee pension plan as described in Section
408(k).
ARTICLE II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE III
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with
other property except in a common trust fund or common investment fund
(within the meaning of Section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of Section 408(m)) except as otherwise permitted by Section
408(m)(3) which provides an exception for certain gold and silver coins
and coins issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Depositor's interest in the custodial account shall
be made in accordance with the following requirements and shall otherwise
comply with Section 408(a)(6) and Proposed Regulations Section 1.408-8,
including the incidental death benefit provisions of Proposed Regulations
Section 1.401(a)(9)-2, the provisions of which are herein incorporated by
reference.
2. Unless otherwise elected by the time distributions are required to begin
to the Depositor under Paragraph 3, or to the surviving spouse under
Paragraph 4, other than in the case of a life annuity, life expectancies
shall be recalculated annually. Such election shall
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be irrevocable as to the Depositor and the surviving spouse and shall apply
to all subsequent years. The life expectancy of a nonspouse beneficiary
may not be recalculated.
3. The Depositor's entire interest in the custodial account must be, or
begin to be, distributed by the Depositor's required beginning date,
April 1 following the calendar year end in which the Depositor reaches
age 70-1/2. By that date, the Depositor may elect, in a manner
acceptable to the Custodian, to have the balance in the custodial account
distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last
survivor lives of the Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor
expectancy of the Depositor and his or her designated beneficiary.
4. If the Depositor dies before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of his or her interest
has begun, distribution must continue to be made in accordance with
Paragraph 3.
(b) If the Depositor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election of
the beneficiary or beneficiaries, either:
(i) Be distributed by the December 31 of the year containing the
fifth anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over
the life or life expectancy of the designated beneficiary or
beneficiaries starting by December 31 of the year following the
year of the Depositor's death. If, however, the beneficiary is
the Depositor's surviving spouse, then this distribution is not
required to begin before December 31 of the year in which the
Depositor would have turned age 70-1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of Section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on
the Depositor's required beginning date, even though payments may
actually have been made before that date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse,
no additional cash contributions or rollover contributions may be
accepted in the account.
5. In the case of a distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual
payment for each year, divide the Depositor's entire interest in the
custodial account as of the close of business on December 31 of the
preceding year by the life expectancy of the Depositor (or the joint life
and last survivor expectancy of the Depositor and the Depositor's
designated beneficiary, or the life expectancy of the designated
beneficiary, whichever applies). In the case of distributions under
Paragraph 3, determine the initial life expectancy (or joint life and
last survivor expectancy) using the attained ages of the Depositor and
designated beneficiary as of their birthdays in the year the Depositor
reaches age 70-1/2. In the case of a distribution in accordance with
Paragraph 4(b)(ii), determine life expectancy using the attained age of
the designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to
satisfy the minimum distribution requirements described above. This
method permits an individual to satisfy these requirements by taking from
one individual retirement account the amount required to satisfy the
requirement for another.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under Section 408(i)
and Regulations Section 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service and
the Depositor prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with Section 408(a) and related
regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time to comply with the provisions
of the Code and related regulations. Other amendments may be made with the
consent of the persons whose signatures appear below.
ARTICLE VIII
1. INVESTMENT OF ACCOUNT ASSETS
(a) All contributions to the custodial account shall be invested in the
shares of the Berkeley Capital Management Money Market Fund or, if
available, any other series of Berkeley Capital Management Money
Market Fund or other regulated investment companies for which Berkeley
Capital Management serves as investment advisor or designates as
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being eligible for investment ("Investment Company"). Shares of stock
of an Investment Company shall be referred to as "Investment Company
Shares." To the extent that two or more funds are available for
investment, contributions shall be invested in accordance with the
Depositor's investment election.
(b) Each contribution to the custodial account shall identify the
Depositor's account number and be accompanied by a signed statement
directing the investment of that contribution. The Custodian may
return to the Depositor, without liability for interest thereon, any
contribution which is not accompanied by adequate account
identification or an appropriate signed statement directing investment
of that contribution.
(c) Contributions shall be invested in whole and fractional Investment
Company Shares at the price and in the manner such shares are offered
to the public. All distributions received on Investment Company
Shares, including both dividend and capital gain, distributions, held
in the custodial account shall be reinvested in like shares. If any
distribution of Investment Company Shares may be received in
additional like shares or in cash or other property, the Custodian
shall elect to receive such distribution in additional like Investment
Company Shares.
(d) All Investment Company Shares acquired by the Custodian shall be
registered in the name of the Custodian or its nominee. The Depositor
shall be the beneficial owner of all Investment Company Shares held in
the custodial account and the Custodian shall not vote any such
shares, except upon written direction of the Depositor, timely
received, in a form acceptable to the Custodian. The Custodian agrees
to forward to the Depositor each prospectus, report, notice, proxy and
related proxy soliciting materials applicable to Investment Company
Shares held in the custodial account received by the Custodian.
(e) The Depositor may, at any time, by written notice to the Custodian, in
a form acceptable to the Custodian, redeem any number of shares held
in the custodial account and reinvest the proceeds in the shares of
any other Investment Company upon the terms and within the limitations
imposed by then current prospectus of such other Investment Company in
which the Depositor elects to invest. By giving such instructions, the
Depositor will be deemed to have acknowledged receipt of such
prospectus. Such redemptions and reinvestments shall be done at the
price and in the manner such shares are then being redeemed or offered
by the respective Investment Companies.
2. AMENDMENT AND TERMINATION
(a) Berkeley Capital Management, the investment advisor for Berkeley
Capital Management Money Market Fund, may amend the Custodial Account
(including retroactive amendments) by delivering to Custodian and to
the Depositor written notice of such amendment setting forth the
substance and effective date of the amendment. The Custodian and the
Depositor shall be deemed to have consented to any such amendment not
objected to in writing by the Custodian or Depositor as applicable
within thirty (30) days of receipt of the notice, provided that no
amendment shall cause or permit any part of the assets of the
custodial account to be diverted to purposes other than for the
exclusive benefit of the Depositor or his or her beneficiaries.
(b) The Depositor may terminate the custodial account at any time by
delivering to the Custodian a written notice of such termination.
(c) The custodial account shall automatically terminate upon distribution
to the Depositor or his or her beneficiaries of its entire balance.
3. TAXES AND CUSTODIAL FEES
Any income taxes or other taxes levied or assessed upon or in respect of the
assets or income of the custodial account and any transfer taxes incurred shall
be paid from the custodial account. All administrative expenses incurred by the
Custodian in the performance of its duties, including fees for legal services
rendered to the Custodian, in connection with the custodial account, and the
Custodian's compensation shall be paid from the custodial account, unless
otherwise paid by the Depositor or his or her beneficiaries. Sufficient shares
will be liquidated from the custodial account to pay such fees and expenses.
The Custodian's fees are set forth in a schedule provided to the Depositor.
Extraordinary charges resulting from unusual administrative responsibilities not
contemplated by the schedule will be subject to such additional charges as will
reasonably compensate the Custodian. Fees for refund of excess contributions,
transferring to a successor trustee or custodian, or redemption/reinvestment of
Investment Company Shares will be deducted from the refund or redemption
proceeds and the remaining balance will be remitted to the Depositor, or
reinvested or transferred in accordance with the Depositor's instructions.
4. REPORTS AND NOTICES
(a) The Custodian shall keep adequate records of transactions it is
required to perform hereunder. After the close of each calendar year,
the Custodian shall provide to the Depositor or his or her legal
representative a written report or reports reflecting the transactions
effected by it during such year and the assets and liabilities of the
Custodial Account at the close of the year.
(b) All communications or notices shall be deemed to be given upon receipt
by the Custodian at: Firstar Trust Company, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701 or the Depositor at his or her most recent
address shown in the Custodian's records. The Depositor agrees to
advise the Custodian promptly, in writing, of any change of address.
5. DESIGNATION OF BENEFICIARY
The Depositor may designate a beneficiary or beneficiaries to receive benefits
from the custodial account in the event of the Depositor's death. In the event
the Depositor has not designated a beneficiary, or if all beneficiaries shall
predecease the Depositor, the following
6
<PAGE>
persons shall take in the order named:
(a) The spouse of the Depositor;
(b) If the spouse shall predecease the Depositor or if the Depositor does
not have a spouse, then to the Depositor's estate.
The Depositor may also change or revoke any previously made designation of
beneficiary. An designation or change or revocation of a designation shall be
made by written notice in a form acceptable to and filed with the Custodian,
prior to the complete distribution of the balance in the custodial account. The
last such designation on file at the time of the Depositor's death shall govern.
If a beneficiary dies after the Depositor, but prior to receiving his or her
entire interest in the custodial account, the remaining interest in the
custodial account shall be paid to the beneficiary's estate.
6. MULTIPLE INDIVIDUAL RETIREMENT ACCOUNTS
In the event the Depositor maintains more than one individual retirement account
(as defined in Section 408(a)) and elects to satisfy his or her minimum
distribution requirements described in Article IV above by making a distribution
for another individual retirement account in accordance with Paragraph 6
thereof, the Depositor shall be deemed to have elected to calculate the amount
of his or her minimum distribution under this custodial account in the same
manner as under the individual retirement account from which the distribution is
made.
7. INALIENABILITY OF BENEFITS
The benefits provided under this custodial account nor the assets held therein
shall be subject to alienation, assignment, garnishment, attachment, execution
or levy of any kind and any attempt to cause such benefits or assets to be so
subjected shall not be recognized except to the extent as may be required by
law.
8. ROLLOVER CONTRIBUTIONS AND TRANSFERS
The Custodian shall have the right to receive rollover contributions and to
receive direct transfers from other custodians or trustees. All contributions
must be made in cash or check.
9. CONFLICT IN PROVISIONS
To the extent that any provisions of this Article VIII shall conflict with the
provisions of Articles IV, V and/or VII, the provisions of this Article VIII
shall govern.
10. APPLICABLE STATE LAW
This custodial account shall be construed, administered and enforced according
to the laws of the State of Wisconsin.
11. RESIGNATION OR REMOVAL OF CUSTODIAN
The Custodian may resign at any time upon thirty (30) days notice in writing to
the Investment Company. Upon such resignation, the Investment Company shall
notify the Depositor, and shall appoint a successor custodian under this
Agreement. The Depositor or the Investment Company at any time may remove the
Custodian upon 30 days written notice to that effect in a form acceptable to and
filed with the Custodian. Such notice must include designation of a successor
custodian. The successor custodian shall satisfy the requirements of section
408(h) of the Code. Upon receipt by the Custodian of written acceptance of such
appointment by the successor custodian, the Custodian shall transfer and pay
over to such successor the assets of and records relating to the Custodial
Account. The Custodian is authorized, however, to reserve such sum of money as
it may deem advisable for payment of all its fees, compensation, costs and
expenses, or for payment of any other liability constituting a charge on or
against the assets of the Custodial Account or on or against the Custodian, and
where necessary may liquidate shares in the Custodial Account for such payments.
Any balance of such reserve remaining after the payment of all such items shall
be paid over to the successor Custodian. The Custodian shall not be liable for
the acts or omissions of any predecessor or successor custodian or trustee.
12. LIMITATION ON CUSTODIAN RESPONSIBILITY
The Custodian will not under any circumstances be responsible for the timing,
purpose or propriety of any contribution or of any distribution made hereunder,
nor shall the Custodian incur any liability or responsibility for any tax
imposed on account of any such contribution or distribution. Further, the
custodian shall not incur any liability or responsibility in taking or omitting
to take any action based on any notice, election, or instruction or any written
instrument believed by the Custodian to be genuine and to have been properly
executed. The Custodian shall be under no duty of inquiry with respect to any
such notice, election, instruction, or written instrument, but in its discretion
may request any tax waivers, proof of signatures or other evidence which it
reasonably deems necessary for its protection. The Depositor and the successors
of the Depositor including any executor or administrator of the Depositor shall,
to the extent permitted by law, indemnify the Custodian and its successors and
assigns against any and all claims, actions or liabilities of the Custodian to
the Depositor or the successors or beneficiaries of the Depositor whatsoever
(including without limitation all reasonable expenses incurred in defending
against or settlement of such claims, actions or liabilities) which may arise in
connection with this Agreement or the Custodial Account, except those due to the
Custodian's own bad faith, gross negligence or willful misconduct. The Custodian
shall not be under any duty to take any action not specified in this Agreement,
unless the Depositor shall furnish it with instructions in proper form and such
instructions shall have been specifically agreed to by the Custodian, or to
defend or engage in any suit with respect hereto unless it shall have first
agreed in writing to do so and shall have been fully indemnified to its
satisfaction.
7
<PAGE>
LOGO
BERKELEY CAPITAL MANAGEMENT
MONEY MARKET FUND
IRA APPLICATION
<TABLE>
<S><C>
Mail To: Berkeley Capital Management Money Market Fund Overnight Express Mail To: Berkeley Capital Management Money Market Fund
c/o Firstar Trust Company c/o Firstar Trust Company
Mutual Fund Services Mutual Fund Services
P.O.Box 701 615 E. Michigan St., 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202-5207
Please use this form only for registration of a new IRA or SEP/IRA account. To obtain additional forms or for help in completing
this application please call 1-888-889-0799.
____________________________________________________________________________________________________________________________________
A. REGISTRATION ______________________________________ ______________________________________________________________
FIRST NAME M.I. LAST NAME
________________________________ ___________________________________________
SOCIAL SECURITY # BIRTHDATE (Mo/Dy/Yr) (MUST BE OF LEGAL AGE)
____________________________________________________________________________________________________________________________________
B. MAILING ADDRESS / / Duplicate Confirmation to:
___________________________________ __________ ______________________ _______ _____________________________________
STREET APT/SUITE FIRST NAME M.I. LAST NAME
___________________________ _____ __________ __________________________________________ ___________________________
CITY STATE ZIP STREET APT/SUITE
__________________________ ___________________ ________________________________ _______ ___________________________
DAYTIME PHONE # EVENING PHONE # CITY STATE ZIP
____________________________________________________________________________________________________________________________________
C. TYPE OF IRA / / Individual Retirement Account ($1,000 minimum, $2,000 maximum).
(Please select only ONE of / / Spousal IRA Account for non-working spouse. ($1,000 minimum, one application must be
following account types) completed for each individual)
/ / Rollover IRA.
/ / SEP IRA.
____________________________________________________________________________________________________________________________________
D. TYPE OF CONTRIBUTION / / Yearly Contribution for Tax Year _________ (If prior year, must be mailed on or before April
15th).
(Please select ONE of the / / Transfer (assets are a direct transfer from previous custodian). Please attach transfer form.
following types of
contributions) / / Rollover assets (You had PHYSICAL RECEIPT of assets for less than 60 DAYS) from previous IRA.
/ / Direct Rollover of Assets from your employer sponsored plan (you DID NOT have receipt of
assets). Please indicate previous account type.
___ Corporate ___ Pension Plan ___ Profit Sharing Plan ___ 401(k) ___ 403 (b)
___ Other (please specify)_________________
____________________________________________________________________________________________________________________________________
E. INVESTMENT / / By check or made payable to Berkeley Capital Management Money Market Fund. Amount $ _________
/ / By wire: Call 1-888-889-0799. Indicate total amount and date of wire $ _______Date __________
[2920] See reverse side of form
<PAGE>
____________________________________________________________________________________________________________________________________
F. BENEFICIARY
PRIMARY SECONDARY
____________________________________ _______________ ____________________________________ _______________
NAME RELATIONSHIP NAME RELATIONSHIP
_______________________________________________________ _______________________________________________________
ADDRESS ADDRESS
______________________________ _______ ______________ ______________________________ _______ ______________
CITY STATE ZIP CITY STATE ZIP
_______________________________________ ______________ _______________________________________ ______________
SOCIAL SECURITY # BIRTHDATE SOCIAL SECURITY # BIRTHDATE
____________________________________________________________________________________________________________________________________
G. SIGNATURES I adopt the Berkeley Capital Management Money Market Fund Individual Retirement Account and
appoint Firstar Trust Company to perform custodial and other administrative services specified in
the IRA Custodial Account Agreement. I have received and read the Prospectus for the Fund and have
read and understood the IRA Disclosure Statement and Custodial Account Agreement. I certify under
penalties of perjury that my social security number above is correct, and that I am of legal age.
If I am opening this IRA with a distribution from an employer-sponsored retirement plan or another
individual retirement account, I certify that the distribution qualifies as a rollover
contribution. I understand that the fees relating to my IRA may be collected by redeeming
sufficient shares from my Fund account balance. I agree to provide the Internal Revenue Service
with information as required. I further agree to follow all of the terms and conditions of the IRA
Custodial Account Agreement.
_____________________________________________________________ ___________________________________
SIGNATURE DATE
Appointment as custodian accepted:
_____________________________________________________________ ___________________________________
FIRSTAR TRUST COMPANY DATE
____________________________________________________________________________________________________________________________________
H. DEALER INFORMATION
________________________________________________
(Please be sure to complete REPRESENTATIVE'S LAST NAME FIRST NAME MI
representative's first name
and middle initial.) REPRESENTATIVE'S BRANCH OFFICE
________________________________________________
ADDRESS
________________________________________________
CITY/STATE/ZIP
________________________________________________
TELEPHONE NUMBER REP'S A.E. NUMBER
[2920]
</TABLE>
<PAGE>
LOGO
BERKELEY CAPITAL MANAGEMENT
MONEY MARKET FUND
IRA TRANSFER FORM
<TABLE>
<S><C>
Mail To: Berkeley Capital Management Money Market Fund Overnight Express Mail To: Berkeley Capital Management Money Market Fund
c/o Firstar Trust Company c/o Firstar Trust Company
Mutual Fund Services Mutual Fund Services
P.O.Box 701 615 E. Michigan St., 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202-5207
IMPORTANT PHONE NUMBER FOR THE BERKELEY CAPITAL MANAGEMENT MONEY MARKET FUND: for fund information, prices and literature,
1-888-889-0799.
____________________________________________________________________________________________________________________________________
INSTRUCTIONS Use this form when transferring funds from an EXISTING IRA to a Berkeley Capital Management Money
Market Fund IRA. If you are establishing a new account, you must also complete a Berkeley Capital
Management Money Market Fund IRA Application.
INVESTORS ARE REMINDED THAT:
- Your current custodian/trustee may require that you obtain a signature guarantee to process this
transfer.
- A signature guarantee may be obtained by a domestic commercial bank, trust company, a member
firm of a national securities exchange, or a savings & loan association. A signature guarantee
by a notary public will NOT be accepted.
- If share certificates were issued for your current investment, they must be duly endorsed and
accompany this Form. For your protection, you are encouraged to send them by registered mail.
____________________________________________________________________________________________________________________________________
1. INVESTOR ____________________________________________________ _______________________________________________
INFORMATION NAME SOCIAL SECURITY NUMBER
______________________________________________________________________________________________________
ADDRESS
______________________________________________________________________________________________________
CITY/STATE/ZIP
( ) ( )
____________________________________________________ _______________________________________________
DAYTIME PHONE NUMBER EVENING PHONE NUMBER
____________________________________________________________________________________________________________________________________
2. PLEASE TRANSFER MY ______________________________________________________________________________________________________
IRA FROM: NAME OF CURRENT CUSTODIAN (BANK, SAVINGS AND LOAN, MUTUAL FUND, ETC.)
______________________________________________________________________________________________________
ADDRESS
______________________________________________________________________________________________________
CITY/STATE/ZIP
_____________________________________________________ _______________________________________________
ACCOUNT NUMBER OR CERTIFICATE OF DEPOSIT (CD)* MATURITY DATE (IF APPLICABLE)
* Transfer / / immediately / / at maturity
____________________________________________________________________________________________________________________________________
3. PLEASE CHECK ONE: / / Invest in my existing Berkeley Capital Management Money Market Fund IRA, account number _________
/ / Open a new* Berkeley Capital Management Money Market Fund _____ IRA _____SEP-IRA.
*If you are opening a new account, this form must be accompanied by a completed IRA Application.
____________________________________________________________________________________________________________________________________
4. SIGNATURE To current Custodian:
(Exactly as Registered) Please consider this your authority to sell / / all of my assets / / $ _________________ of my assets
in the account identified in Number 2 above and prepare a check to Berkeley Capital Management Money
Market Fund. It is my intention to transfer these assets to the above-named fund, for which Firstar
Trust Company acts as Custodian.
Please send the check representing the assets, along with a copy of this form to the address below.
Send check to:
Firstar Trust Company
P.O. Box 701
Milwaukee, WI 53201-0701
I certify that I have received and read the prospectus for the Fund into which I am transferring my
IRA. Thank you for your prompt handling.
_________________________________________________________ _____________________________________
YOUR SIGNATURE DATE
______________________________________________________________________________________________________
SIGNATURE GUARANTEE (IF REQUIRED BY CURRENT CUSTODIAN)
____________________________________________________________________________________________________________________________________
5. ACCEPTANCE Custodian Authorization: Firstar Trust Company hereby accepts its appointment as Custodian of the
above IRA account and upon receipt of assets, will deposit such assets in a Berkeley Capital
Management Money Market Fund IRA on behalf of the Depositor authorizing this transfer or direct
rollover.
FIRSTAR TRUST COMPANY
[2921]
</TABLE>
<PAGE>
_______________________________________ ______________
SOCIAL SECURITY # BIRTHDATE
_______________________________________________________
ADDRESS
_______________________________________________________
CITY/STATE/ZIP
By selecting the option in Section [section letter], I hereby authorize the Fund
to initiate credits and debits to my account at the bank indicated and for the
bank to credit or debit the same to such account through the Automated Clearing
House ("ACH") system.
THIS STATEMENT MUST BE INCLUDED IN THE "SIGNATURES" SECTION ONLY IF THE
"AUTOMATIC INVESTMENT PLAN" SECTION IS USED
[2921]
<PAGE>
BERKELEY CAPITAL MANAGEMENT FUNDS
Berkeley Capital Management Money Market Fund
Schedule of Computation of Performance Quotations
YIELD
SEVEN-DAY CURRENT YIELD
Formula: (Base Period Return/1*365/7)
Where the Base Period Return equals the sum of the previous seven daily
dividend rates
SEVEN-DAY EFFECTIVE YIELD
Formula: (Base Period Return + 1)^365/7-1
Where the Base Period Return equals the sum of the previous seven daily
dividend rates
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0001026977
<NAME> BERKELEY CAPITAL MANAGEMENT FUNDS
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> JAN-10-1997
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 127,340
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 127,340
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 27,340
<TOTAL-LIABILITIES> 27,340
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 99,000
<SHARES-COMMON-STOCK> 100,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 100,000
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 100,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
