UNITED STATES File No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549File No. 811-
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post Effective Amendment No. [ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [ X ]
Amendment No. [ ]
Beacon Global Advisors Trust
(Exact name of Registrant as Specified in Charter)
8260 Greensboro Drive, Suite 250
McLean, Virginia 22102-3801
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code(703) 883-0865
Robert J. Henrich, Managing Partner
Beacon Global Advisors, Inc.
8260 Greensboro Drive, Suite 250
McLean, Virginia 22102-3801
(Name and Address of Agent for Service)
COPIES TO:
Arthur Brown, Esq. Joseph M. O'Donnell, Esq.
Kirkpatrick & Lockhart LLP Fund/Plan Services, Inc.
1800 Massachusetts Avenue, N.W. 2 West Elm Street
Washington, DC 20036 Conshohocken, PA 19428
Approximate date of proposed public offering:
As soon as practicable after the effective date of this Registration
Statement.
________________________________________________________________
Registrant hereby elects to register an indefinite number of shares
of its securities under this Registration Statement pursuant to Rule
24f-2 of the Investment Company Act of 1940, as amended. Registrant
will file a Notice pursuant to Rule 24f-2 within two months after its
fiscal year end.
________________________________________________________________
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
this Registration Statement shall become effective on such date as
the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
As filed with the U.S. Securities and Exchange
Commission on October 28, 1996<PAGE>
TABLE OF CONTENTS
Registration Statement of Beacon Global Advisors Trust
Page
1. Cross-Reference Sheet. . . . . . . . . . . . . .
2. The Cruelty Free Value Fund - Part A - Prospectus
3. The Cruelty Free Value Fund - Part B - Statement of
Additional Information . . . . . . . . . . . . .
4. The Cruelty Free Value Fund - Part C
Other Information. . . . . . . . . . . . . . . .
5. Signature Page . . . . . . . . . . . . . . . . .
6. Index to Exhibits. . . . . . . . . . . . . . . .
<PAGE>
BEACON GLOBAL ADVISORS TRUST
CROSS REFERENCE SHEET PURSUANT TO RULE 481a
Form N-1A Item Caption in Prospectus
Part A INFORMATION REQUIRE IN A PROSPECTUS
1. Cover Page Cover Page of Prospectus
2. Synopsis Expense Summary
3. Condensed Financial Information *
4. General Description of
Registrant Mission Statement;
Introduction;
Investment Objective;
Investment Policies;
Investment Practices and
Risk Factors; Investment
Process;General Information
5. Management of the Fund Management of the Fund;
Distribution Plan
5A. Management's Discussion of Fund
Performance *
6. Capital Stock and Other
Securities General Information; Dividends
and Taxes; Net Asset Value
7. Purchase of Securities Being
Offered How to Purchase Shares
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings *
Part B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL
INFORMATION
10. Cover Page Cover Page of the Statement of
Additional Information
11. Table of Contents Table of Contents
12. General Information and
History *
13. Investment Objectives and
Policies Investment Policies and
Techniques;Investment
Restrictions; Portfolio
Transactions
14. Management of the Fund Investment Advisory and Other
Services; Trustees and Officers
15. Control Persons and
Principal Holders of
Securities *
16. Investment Advisory and
Other Services Investment Advisory and Other
Services
17. Brokerage Allocation and
Other Practices Portfolio Transactions
18. Capital Stock and Other
Securities Other Information
19. Purchase, Redemption and
Pricing of Securities Being
Offered Purchases; Redemptions
20. Tax Status Taxes
21. Underwriters Distributor
22. Calculation of Performance
Data Performance Information
23. Financial Statements *
Part C OTHER INFORMATION
Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C of this Registration
Statement.
* Item is inapplicable at this time or answer is negative.
Information contained herein is subject to completion or amendment.
A registration statement relating to these securities has been filed
with the Securities and Exchange Commission. These securities may
not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of these securities in any State in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification
under the securities laws of any such state.
Subject to Completion
Preliminary Prospectus Dated October __, 1996
THE CRUELTY FREE VALUE FUND
8260 Greensboro Drive, Suite 250
McLean, Virginia 22102-3801
PROSPECTUS _____________, 1996
"The greatness of a nation and its moral progress can be judged by
the way its animals are treated."
Mahatma Ghandi
The Cruelty Free Value Fund (the "Fund") is a mutual fund which seeks
capital appreciation by investing in common stocks of companies which
meet the investment adviser's growth profile and its guidelines
regarding the humane treatment of animals.
While providing its shareholders with an investment seeking capital
growth, the Fund is also dedicated to providing an innovative way to
help end the suffering and abuse of animals and the extinction of
hundreds of species annually. All investments made by the Fund will
be screened by the investment adviser, Beacon Global Advisors, Inc.
(the "Advisor"), for their growth potential and further screened using
its guidelines concerning the humane treatment of animals. See "Animal
Policy."
The Fund is a separate series of shares of Beacon Global Advisors
Trust (the "Trust"), an open-end management investment company.
Dreman Value Advisors, Inc. ("Dreman" or the "Subadvisor") has been
retained by the Advisor to act as subadvisor and to manage the day-to-day
investment program of the Fund.
The Fund is designed for long-term investors and not as a trading
vehicle, and is not intended to present a complete investment
program. As an adjunct to Dreman's traditional "long" investment
strategy, however, the Fund will incorporate short-selling techniques
to hedge the portfolio in volatile market environments. There can be
no assurance that the Fund will achieve its investment objective.
This Prospectus sets forth concisely information about the Fund that
an investor should know before investing in the Fund. Please read
this Prospectus carefully and retain it for future reference. A
Statement of Additional Information, dated , 1996,
provides further discussion of certain areas which may be of interest
to some investors. It has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. The
Statement of Additional Information can be obtained without charge by
calling the Fund at (800) 662-9992, or writing to the Fund at the
address above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.<PAGE>
TABLE OF CONTENTS
Page
Expense Summary. . . . . . . . . . . . . . . . . . . . . .
Mission Statement. . . . . . . . . . . . . . . . . . . . .
Introduction . . . . . . . . . . . . . . . . . . . . . . .
Investment Objective . . . . . . . . . . . . . . . . . . .
Investment Policies. . . . . . . . . . . . . . . . . . . .
Animal Policy. . . . . . . . . . . . . . . . . . . . . . .
Investment Process . . . . . . . . . . . . . . . . . . . .
Investment Practices and Risk Factors. . . . . . . . . . .
Management of the Fund . . . . . . . . . . . . . . . . . .
Distribution Plan. . . . . . . . . . . . . . . . . . . . .
How to Purchase Shares . . . . . . . . . . . . . . . . . .
How to Redeem Shares . . . . . . . . . . . . . . . . . . .
Net Asset Value. . . . . . . . . . . . . . . . . . . . . .
Dividends and Taxes. . . . . . . . . . . . . . . . . . . .
Performance Information. . . . . . . . . . . . . . . . . .
General Information. . . . . . . . . . . . . . . . . . . .
Distributor: Investment Adviser:
Beacon Global Advisors, Inc. Beacon Global Advisors, Inc.
8260 Greensboro Drive, Suite 250 8260 Greensboro Drive, Suite 250
McLean, Virginia 33102-3801 McLean, Virginia 22102-3801
(800) 662-9992 (800) 662-9992
(703) 883-0865 (703) 883-0865
THIS PROSPECTUS IS NOT AN OFFERING OF THE SECURITIES HEREIN DESCRIBED IN
ANY JURISDICTION OR TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE FUND TO
MAKE SUCH AN OFFER OR SOLICITATION. NO SALES REPRESENTATIVE, DEALER, OR
OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS.
<PAGE>
Expense Summary
Shareholder Transaction Expenses:
Maximum sales charge imposed on purchases
(as a percentage of offering price) . . . . . . None
Maximum sales charge imposed on reinvested
dividends (as a percentage of offering price) . None
Deferred sales charge (as a percentage of
original purchase price). . . . . . . . . . . . None
Redemption fees (as a percentage of
amount redeemed) (1). . . . . . . . . . . . . . None
(1) If you want to redeem shares by wire transfer, the Fund's
transfer agent charges a fee (currently $9.00) for each wire
redemption. Purchases and redemptions may also be made through
broker-dealers and others who may charge a commission or other
transaction fee for their services.
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Advisory Fees (after fee waivers)(2) . . . . . 0.55%
12b-1 Fees . . . . . . . . . . . . . . . . . . 0.25%
Other Expenses (3) . . . . . . . . . . . . . . 1.70%
Total Fund Operating Expenses (after fee waivers)(3) 2.50%
(2) The above table reflects the Advisor's voluntary undertaking to
waive all or a portion of its fees and to reimburse certain
expenses to limit the total operating expenses of the Fund for
the first year of operations to 2.50% of the Fund's average
daily net assets. The Advisor reserves the right to terminate
this waiver or any reimbursement at any time, in its sole
discretion. Absent such waiver, advisory fees for the Fund
would be 1.25% and presuming first year assets at $10 million,
estimated total operating expenses would be 3.70% of the Fund's
average daily net assets on an annualized basis. See "Management
of the Fund" for advisory fee breakpoints. Although the Advisor
has not previously provided investment advisory services to U.S
registered investment companies, the Advisor has been engaged
in the investment advisory business and has provided investment
advice to individuals, offshore investment funds and
corporations since 1994.
(3) For purposes of this table and because the Fund has no
operating history, "Other Expenses" is based on estimated
amounts for the current fiscal year.
Example
Based on the level of expenses listed above, an investor would pay
the following expenses on a $1,000 investment assuming (i) 5% annual
return and (ii) redemption at the end of each time period:
1 Year $25
3 Years $78
The foregoing example should not be considered a representation of
past or future expenses. Actual expenses may be more or less than
those shown. The purpose of the expense tables and example is to
assist the investor in understanding the various costs and expenses
that may be directly or indirectly borne by shareholders of the Fund.
For more complete descriptions of the various costs and expenses, see
"Management of the Fund" and "Distribution Plan."
Mission Statement
The Advisor has created The Cruelty Free Value Fund as a means for
individuals or institutions to pool their assets and invest in
companies that satisfy the Advisor's growth profile and also do not
harm animals. Securities considered for investment by the Fund will
be screened by the Advisor and the Advisor will exclude for
investment those companies that, in its opinion, employ animal
testing in their product development, endanger or abuse animals,
sponsor inhumane animal events, or are subsidiaries of companies
involved in these activities.
Also, the Advisor has made a commitment to donate a percentage of its
management fees to fund projects that directly help animals and raise
public awareness of animal-related issues. The Advisor has
established a foundation that will be dedicated to these concerns and
has selected an outside advisory board of directors that will review
specific projects of animal welfare organizations. The board of
directors will review projects submitted by such animal welfare
organizations, then select and financially support those programs
deemed to have the greatest potential impact on improving the lives
of animals. The board of directors will be responsible for the
ongoing due diligence to insure that all donations are being used as
directed. Shareholders of the Fund will be provided with a
newsletter to keep them apprised of the foundation's progress.
Members of the advisory board of the foundation are some of the most
prominent people involved in the animal welfare community and
currently include Tippi Hedren, Linda Blair, and Rue McClanahan.
The Advisor has also selected Dreman Value Advisors, Inc. ("Dreman" or
the "Subadvisor") to provide the day-to-day management of the Fund's
portfolio. Dreman is well-known for their disciplined and
conservative value-oriented strategy for stock selection.
Introduction
This Prospectus provides the information which is needed for a
potential investor to make an informed decision before purchasing
shares of the Fund. The money that an investor uses to purchase
shares of the Fund will be pooled with other shareholders' money and
collectively invested, or "managed," by the Advisor in accordance with
the Fund's investment objective. Other parts of this Prospectus
provide information concerning an investment in the Fund such as the
risk factors involved, the companies which provide services to the
Fund, the expenses of managing the Fund and the procedures by which
shares of the Fund may be purchased or redeemed. Please read this
Prospectus carefully before you invest or send money and keep it for
your future reference.
Investment Objective
The investment objective of the Fund is capital appreciation. The
Advisor will seek to obtain this objective while maintaining the
Fund's commitment to encourage the humane treatment of animals. See
"Animal Policy."
This objective is fundamental and may not be changed without a vote
of the holders of the majority of the outstanding voting securities
of the Fund. The Fund's investment policies described below are not
fundamental and may be changed without shareholder approval.
Additional investment policies and investment restrictions are
described in the Statement of Additional Information. There can be
no assurance that the Fund will achieve its investment objective.
Any income received is secondary to the objective of capital
appreciation.
Investment Policies and Strategies
The Fund's assets will be invested primarily in common stock or
preferred stock. Under normal circumstances, however, the Fund
expects to be almost fully invested in common stocks. Dreman, on
behalf of the Advisor, generally follows a value-oriented investment
approach to the selection of individual securities. See "Investment
Process." The Fund may diversify its holdings among many different
companies and industries which not only pass the screening criteria
for growth described below under "Investment Process", but will also
meet the Advisor's guidelines for the humane treatment of animal.
See "Animal Policy."
The Fund may also engage in portfolio management techniques such as
selling short, selling short against-the-box, and lending securities.
See "Investmen Practices and Risk Factors."
If securities held by the Fund no longer satisfy the Animal Policy,
the Fund will seek to dispose of the securities as soon as is
economically practicable, which may cause the Fund to sell the
securities at a time not desirable from a purely financial
standpoint.
Animal Policy
The Fund is dedicated to providing an innovative investment program
to help end the suffering, abuse and extinction of animals. The
Advisor believes that sound investments may be made which are
compatible with a commitment to protect the well-being of animals.
All investments made by the Fund will be screened toward achieving
such policy and the following guidelines have been established for
such screening process. These guidelines will help to provide a
cruelty free portfolio of investments.
The Fund will not invest in companies that, in the opinion of the
Advisor, (1) employ animal testing in their product development; (2)
indiscriminately endanger and abuse animals; (3) sponsor inhumane
animal events; or (4) are subsidiaries of companies involved in these
activities. The Advisor may gather screening information through
publicly available sources such as corporate annual reports, newswire
services, animal welfare publications (i.e. Audubon Society, National
Wildlife Federation), and financial and business organization
reporting services such as Dun & Bradstreet and Bloomberg.
The Fund's Animal Policy limits the available investments compared
with other mutual funds which do not have such a policy. Under
certain economic conditions, this could cause the Fund's investment
performance to be better or worse than similar funds without an
Animal Policy.
The Board of Trustees will have the authority, without the vote of
shareholders, to determine the manner in which the Fund implements
its stated commitment to encourage the humane treatment of animals.
There can be no assurance that each investment of the Fund will
satisfy the Animal Policy, but only that the Advisor will seek to
screen each security contemplated for investment by the Fund for its
compliance with the Animal Policy. Further, information provided by
companies which the Advisor utilizes for screening purposes may be
incomplete or inaccurate.
Investment Process
The Subadvisor's investment approach for stock selection is centered
around value investing. Value investing refers to the process by
which an investment professional chooses certain stocks because that
professional believes that they are undervalued in the market place.
The initial criteria for stock selection is centered around a stock's
Price/Earnings Ratio ("P/E"). A low P/E value is important because,
in the opinion of the Advisor, it tends to be a historic indicator
of superior performance. After low P/E, the price-to-book ratio is
considered. Concentration is made on stocks whose market price is
low in relation to book value. The last criteria for stock selection
is an above-average dividend yield. Higher yielding stocks tend to
provide, in the Subadvisor's opinion, strong defensive features
during down market cycles. Further quantitative analysis focuses on
adequate trading liquidity, measuring financial strength, and testing
earnings against certain requirements.
The Subadvisor believes that this approach to stock selection is
conservative in nature and only companies that possess strong
financial characteristics be considered for investment. The
Subadvisor closely analyses the stocks and concentrates on those that
have shown above average growth on both a five-and ten-year basis,
exhibit sound finances and demonstrate above-average long term
earnings prospects.
If, in the Subadvisor's opinion, the market warrants the movement of
the assets of the Fund into cash, the Fund is permitted to purchase
and temporarily hold high-grade domestic money market instruments
including, but not limited to, U.S. government obligations,
certificates of deposit, bankers' acceptances, commercial paper, and
repurchase agreements.
Investment Practices and Risk Factors
There is no such thing as a guaranteed investment and no one can see
into the future. The risks inherent in investing in the Fund are
similar to those of equity securities, that is, its value may
fluctuate in response to a variety of situations and factors.
Accordingly, the value of an investment in the Fund will fluctuate
over time and may be valued higher or lower at the time of
redemption. The Fund is designed for long-term investors who can
accept the risks entailed in seeking capital appreciation through
investment primarily in common stocks. An investment in the Fund
should be only a part of an overall investment strategy. No
assurance can be given as to the success of the Advisor's investment
program. The Advisor attempts to reduce the overall risks by
investing in a diversified portfolio through the implementation of
its investment process. Although the Advisor has not previously
provided investment advisory services to registered investment
companies, the Advisor has been engaged in the investment advisory
business providing investment advice to individuals, corporations and
offshore investment funds since 1994. The Fund's Subadvisor, Dreman
Value Advisors, Inc., has eleven years of experience managing various
mutual funds.
Short Sales Against-the-Box
The Fund may make short sales against-the-box, in which it sells
securities short only if it owns or has the right to obtain without
payment of additional consideration an equal amount of the same type
of securities sold. Short selling against-the-box may defer
recognition of gains or losses into a later tax period. This
strategy is employed to protect the asset base in volatile markets.
Short Sales
The Fund may attempt to limit exposure to a possible decline in the
market value of portfolio securities through short sales of
securities which the Advisor believes possess volatility
characteristics similar to those being hedged. The Fund also may use
short sales in an attempt to realize gain. To effect a short sale,
the Fund borrows a security from a brokerage firm to make delivery to
the buyer. The Fund then is obligated to replace the borrowed
security by purchasing it at the market price at the time of
replacement. Until the security is replaced, the Fund is required to
pay the lender any accrued interest or dividends and may be required
to pay a premium.
The Fund will realize a gain if the security declines in price
between the date of the short sale and the date on which the Fund
replaces the borrowed security. The Fund will incur a loss if the
price of the security increases between those dates. The amount of
any gain will be decreased, and the amount of any loss increased, by
the amount of any premium or interest the Fund may be required to pay
in connection with a short sale. A short position may be adversely
affected by imperfect correlation between movements in the price of
the security sold short and the securities being hedged.
No short sale will be effected which will, at the time of making such
short sale transaction, cause the aggregate market value of all
securities sold short to exceed 25% of the value of the Fund's net
assets.
Management of the Fund
The Board of Trustees
The Trust has a Board of Trustees that establishes the Fund's
policies and oversees and reviews the management of the Fund. The
day-to-day operations of the Fund are administered by the officers of
the Trust and by the Advisor and Subadvisor pursuant to the terms of
the Investment Advisory Agreement and Subadvisory Agreement with the
Fund, respectively. The Trustees review the various services
provided by the Advisor to ensure that the Fund's general investment
policies and programs are being properly carried out and that
administrative services are being provided to the Fund in a
satisfactory manner. Information pertaining to the Trustees and
executive officers is set forth in the Statement of Additional
Information.
The Investment Adviser
Beacon Global Advisors, Inc. (the "Advisor") serves as the Fund's
investment adviser and manager, and is an investment adviser
registered as such under the Investment Advisers Act of 1940, as
amended. The Advisor is a subsidiary of Beacon Global Advisors, Ltd.
of Nassau, Bahamas, a company which designs and markets specialized
global asset management programs for pension funds, endowments and
foundations, and other institutional and high net worth individual
investors. Beacon Global Advisors, Ltd. specializes in establishing
offshore investment funds. The Advisor does not have any past
experience managing U.S. mutual funds. The principal business
address of the Advisor is 8260 Greensboro Drive, Suite 250, McLean,
Virginia 22102-3801. As of December 31, 1995, the Advisor had
discretionary authority with respect to $72 million.
The Advisor makes the investment decisions concerning the assets of
the Fund and continuously reviews, supervises and administers the
Fund's investment programs, subject to the supervision of, and
policies established by, the Trustees of the Fund.
For its services as investment adviser, the Fund pays the Adviser a
monthly fee which is calculated daily by applying an annual rate of
1.25% on the first $100 million of average daily net assets, 1.00%
on average net assets from $100 million to $500 million, and 0.75% of
average daily net assets over $500 million. The investment advisory
fee is higher than that paid by most investment companies, although
the Advisor believes the fee to be comparable to that paid by
investment companies with similar investment objectives and policies.
From time to time, the Advisor may voluntarily waive all or a portion
of its management fee and/or absorb certain expenses of the Fund
without further notification of the commencement or termination of
any such waiver or absorption. Any such waiver or absorption will
have the effect of lowering the overall expense ratio of the Fund and
increasing the Fund's overall return to investors at the time any
such amounts are waived and/or absorbed. The Advisor has voluntarily
agreed to waive all or a portion of its fee, and/or to reimburse
expenses of the Fund to the extent necessary in order to limit net
operating expenses for the first year of operations to an annual rate
of not more than 2.50% of the Fund's average daily net assets. The
Advisor reserves the right to terminate its voluntary fee waiver and
reimbursement at any time, and at its sole discretion. Any
reductions in its fee that are made by the Advisor are subject to
reimbursement by the Fund within the following three years, provided
that the Fund is able to effect such reimbursement and remain in
compliance with the expense limitations stated herein.
The Subadvisor
Dreman Value Advisors, Inc. ("Dreman" or the "Subadvisor"), 280 Park
Avenue, 40th Floor, New York, New York 10017-1216, is a wholly-owned
subsidiary of Zurich Kemper Investments, Inc. (formerly named Kemper
Financial Services, Inc.)("ZKI"), which is one of the largest
investment managers in the country and has been engaged in the
management of investment funds for more than forty-six years.
ZKI and its affiliates, including Dreman, provide investment advice
and manage investment portfolios for the Kemper Funds, affiliated
insurance companies and other corporate, pension, profit-sharing and
individual accounts representing approximately $79 billion under
management.
Under the Subadvisory Agreement, Dreman provides the Fund and the
Advisor with investment research, advice, information and
recommendations concerning securities to be acquired, held or sold by
the Fund. Dreman is a registered investment adviser.
Dreman has been retained by the Advisor pursuant to the Subadvisory
Agreement to provide an investment program for the Fund, subject to
the supervision of the Advisor, in accordance with the objective and
policies of the Fund. For its services, Dreman receives from the
Advisor an annual fee of 0.50% of the first $50 million of average
daily net assets; 0.35% of average daily net assets from $50 million
to $100 million; and 0.25% of average daily net assets over $100
million.
While the Advisor has no previous experience managing U.S. registered
investment companies, Dreman has managed mutual funds since 1985 and
is currently responsible for investments with a market value over
$2.3 billion.
The investment management team at Dreman responsible for overseeing
all investments made by the Fund includes William F. Coughlin, CFA,
James R. Neel, CFA, Christian C. Bertelsen, and Thomas F. Sassi.
Their respective biographies follow.
William F. Coughlin, CFA, 39, Managing Director and Portfolio
Manager, Dreman Value Advisors, Inc. Before joining Dreman Value
Advisors, Inc. in 1988 and serving as a Portfolio Manager since that
time, Mr. Coughlin spent seven years working for NYNEX Corporation, [
Address ]. From 1980 to 1983 he was responsible for the financial
planning and corporate finance activities at New England Telephone in
Boston. Through 1986, he served as Investment Director for NYNEX's
$12 billion pension fund. In that capacity he headed investment
research, asset allocation and quantitative equity analysis, and
managed the fund's $650 million in-house portfolio. He also served
as Director of Investments for the NYNEX Foundation during his
tenure.
[Undergraduate and graduate degrees]
James R. Neel, CFA, 53, President and Chief Executive Officer, Dreman
Value Advisors, Inc. from 19__ to present. Most recently, Mr. Neel
was an Executive Vice President and equity portfolio manager for
Kemper Financial Services institutional accounts. Mr. Neel joined
Kemper Financial Services in 1989 as chief equity portfolio
strategist and was responsible for managing various equity mutual
funds including Kemper Blue Chip Fund, Kemper Growth Fund and the
Retirement Fund Series.
[Undergraduate and graduate degrees]
Christian C. Bertelsen, 53, Chief Investment Officer, Dreman Value
Advisors, Inc. from 19__ to present. Mr. Bertelsen is Portfolio
Manager of the Contrarian Fund. Most recently, Mr. Bertelsen was
Senior Vice President of Eagle Asset Management, [ address ], a
subsidiary of Raymond James Financial Inc., where he managed
institutional assets, a variable annuity for Bankers Trust, The
Heritage Value Trust Mutual Fund, as well as assets for private
individuals.
Before joining Eagle Asset Management, Mr. Bertelsen was a Senior
Vice President at Colonial Management Associates in Boston where he
managed the Colonial Fund and headed Colonial Advisory Services. Mr.
Bertelsen previously was a Senior Vice President and portfolio
manager for Batterymarch Financial Management.
Mr. Bertelsen is a member of the Investment Analysts Society of
Boston and the AIMR. He received his BA in History and Economics
from Boston University.
Thomas F. Sassi, 53, Director of Research and a Portfolio Manager at
Dreman Value Advisors, Inc. from 19__ to present. Prior to rejoining
Dreman Value Advisors, Inc., where he served as a Managing Director
and Director of Research from 19__ to 19__, Mr. Sassi was a
consultant to Omega Advisers, [ Address ] and a Senior Vice President
at Dillon Read Investment Management [ Address]. Previously, he was
a Vice President and Portfolio Manager of Met-Life State Street in
Boston and had served for five years as Chief Equity Officer at
Metropolitan Life where he began his career as a security analyst.
Mr. Sassi received a BBA in Management and an MBA in Finance from
Hofstra University.
The Administrator, Transfer Agent and Fund Accountant
FPS Services, Inc. ("FPS"), which has its principal business address
at 3200 Horizon Drive, P.O. Box 61503, King of Prussia, PA 19406-0903,
serves as the Administrator pursuant to an agreement with the
Fund. Under this agreement, FPS provides the Fund with
administrative services including regulatory reporting, compliance
filings, dissmination of certain information to the Fund's
shareholders, and financial and management reporting. FPS also
provides all necessary office space, equipment, personnel and
facilities. FPS receives an annual administrative fee, accrued daily
and paid monthly, of 0.15% of the average daily net assets. The
minimum fee to be paid by the Fund under this agreement is $55,000
annually.
In addition, FPS serves as the Fund's transfer agent. As Transfer
Agent, it maintains the records of each shareholder's account,
answers shareholder inquiries concerning accounts, processes
purchases and redemptions of the Fund's shares, acts as dividend and
distribution disbursing agent and performs other shareholder service
functions.
FPS also serves as fund accountant and performs certain accounting
and pricing services for the Fund, including the daily calculation of
the Fund's net asset value per share.
The Custodian
The Bank of New York, 48 Wall Street, New York, New York 10286,
serves as custodian for the safekeeping of securities, cash and other
assets of the Fund.
Fund Expenses
The Fund is responsible for all of its own expenses. Such expenses
may include, but are not limited to: management fees; legal expenses;
audit fees; printing costs (e.g. costs of printing annual reports,
semi-annual reports and prospectuses which are distributed to
existing shareholders); brokerage commissions for portfolio trades;
the expenses of registering and qualifying shares of the Fund for
sale with the Securities and Exchange Commission and with various
state securities commissions; expenses of the organization of the
Fund; transfer agent, custodian and administrator fees; the expenses
of obtaining quotations of portfolio securities and pricing the
Fund's shares; trade association dues; all costs associated with
shareholder meetings and the preparation and dissemination of proxy
materials (although the Fund is not required to hold annual
shareholder meetings); costs of liability insurance and fidelity
bonds; fees for Trustees who are not officers, directors or employees
of the Advisor; and any extraordinary and nonrecurring expenses which
are not expressly assumed by the Advisor.
Portfolio Transactions and Brokerage
The Advisor will use its best efforts to obtain the best available
price and most favorable execution with respect to all transactions
of the Fund. Subject to policies established by the Board of
Trustees, however, the Fund may pay a broker-dealer (other than the
Advisor) a commission for effecting a portfolio transaction for the
Fund in excess of the amount of commission another broker-dealer
would have charged if the Advisor determines in good faith that the
commission paid was reasonable in relation to the brokerage or
research services provided by such broker-dealer. In selecting and
monitoring broker-dealers and negotiating commissions, consideration
will be given to a broker-dealer's reliability, the quality of its
execution services on a continuing basis and its financial condition.
All commissions paid are reviewed quarterly by the Board of Trustees
of the Trust.
Portfolio Turnover
The Fund may purchase and sell securities without regard to the
length of time the security is intended to be or has been held. A
100% turnover rate occurs, for example, if all of the Fund's
portfolio securities are replaced during one year. High portfolio
activity increases the Fund's transaction costs, including brokerage
commissions. The Fund anticipates that the portfolio turnover
generally will not exceed 100% annually.
Distribution Plan
The Board of Trustees of the Fund has adopted a distribution plan for
the shares pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (the "Distribution Plan"). As provided in the
Distribution Plan, the Fund will pay an annual fee up to 0.25% of the
average daily net assets to the Distributor. From this amount, the
Distributor may make payments to financial institutions and
intermediaries such as banks, savings and loan associations,
insurance companies, investment counselors, and broker-dealers who
assist in the distribution of the shares of the Fund or provide
services with respect to shares of the Fund, pursuant to service
agreements with the Fund. The Distribution Plan is characterized as
a compensation plan because the distribution fee will be paid to the
Distributor without regard to the distribution or shareholder service
expenses incurred by the Distributor or the amount of payments made
to financial institutions and intermediaries. The Fund intends to
operate the Distribution Plan in accordance with its terms and within
NASD rules concerning sales charges.
The fees paid to the Distributor under the Distribution Plan are
subject to review and approval by the Trust's independent Trustees
who have the authority to reduce the fees or terminate the
Distribution Plan at any time. All payments made pursuant to the
Distribution Plan shall be made for the purpose of selling shares
issued by the Fund or servicing shareholder accounts.
How to Purchase Shares
General
Shares of the Fund may be purchased from the Fund at the net asset
value next determined after receipt by the Transfer Agent of a
purchase order in proper form. There is no sales load in connection
with the purchase of shares. Shares of the Fund are offered only to
residents of states in which the shares are registered or qualified
for sale.
Purchase orders for shares of the Fund that are received by FPS in
proper form by the close of the New York Stock Exchange
("NYSE")(currently 4:00 p.m. Eastern time), on any day that the NYSE
is open for trading, will be purchased at the Fund's next determined
net asset value. Orders for Fund shares received after 4:00 p.m.
Eastern time will be purchased at the net asset value determined on
the following business day.
The Fund reserves the right to reject any purchase order or suspend
the offering of shares of the Fund. The Fund also reserves the right
to vary the initial and subsequent investment minimums, or to waive
the minimum investment requirements for any investor. Please note
that the Fund willnot accept a check endorsed by a third party for a
purchase order.
Purchases By Mail
Before shares of the Fund may be purchased for the first time, please
complete the application accompanying this Prospectus and mail it to
the Transfer Agent, together with a check payable to "The Cruelty Free
Value Fund." The check or money order and application should be
mailed to FPS Services, Inc, 3200 Horizon Drive, P.O. Box 61503, King
of Prussia, PA 19406-0903. If this is an initial purchase, please
send a minimum of $1,000 (or $2,000 for IRA and SEP accounts).
Purchases By Wire Transfer
Before making an initial investment by wire, an investor must first
telephone the Transfer Agent at (800) 892-9626 or (610) 239-4600 in
order to be assigned an account number. The investor's name, account
number, taxpayer identification number or Social Security number and
address must be specified in the wire. In addition, an account
application should be promptly forwarded to: FPS Services, Inc., 3200
Horizon Drive, P.O. Box 61503, King of Prussia, PA 19406-0903.
Shareholders having an account with a commercial bank that is a
member of the Federal Reserve System may purchase shares of the Fund
by requesting their bank to transmit funds by wire to: United
Missouri Bank KC N.A., ABA #10-10-00695/Attention: FPS Services,
Inc., A/C 98-7037-071-9/FBO "The Cruelty Free Value Fund", along with
the shareholder's name and account number as specified on the
shareholder's account registration.
Additional investments may be made at any time through the wire
procedures described above, which must include a shareholder's name
and account number. The shareholder's bank may impose a fee for
investments by wire. The Fund will not be responsible for the
consequence of delays, including delays in the banking or Federal
Reserve wire systems.
Purchases Through Broker-Dealers
The Fund may accept telephone orders only from brokers, financial
institutions or service organizations that have been previously
approved by the Fund. It is the responsibility of such brokers,
financial institutions or service organizations to promptly forward
purchase orders and payments for the same to the Fund. Brokers,
financial institutions, service organizations, banks and bank trust
departments through which an investor purchases shares of the Fund,
may charge the shareholder a transaction fee or other fee for its
services at the time of purchase.
Wire orders for shares of the Fund received by dealers prior to 4:00
p.m. Eastern time, and received by the Fund's Distributor before 5:00
p.m. Eastern time on the same day, are confirmed at that day's net
asset value. Dealers may place orders with the Fund's Distributor by
calling (800) 662-9992 or (703) 883-0865. Orders received by dealers
after 4:00 p.m. Eastern time are confirmed at the net asset value on
the following business day. It is the dealer's obligation to place
the order with FPS before 5:00 p.m. Eastern time.
Subsequent Investments
Once an account has been opened, subsequent purchases may be made by
mail, bank wire, automatic investing or direct deposit. The minimum
for subsequent investments is $____for all accounts.
When making subsequent investments by mail, please return the bottom
portion of a previous confirmation with your investment in the
envelope that is provided with each confirmation statement. Your
check should be made payable to "The Cruelty Free Value Fund" and
mailed to FPS Services, Inc., P.O. Box 412797, Kansas City, Missouri
64141-2797. Orders to purchase shares are effective on the day FPS
receives your check or money order.
All investments must be made in U.S. dollars and, to avoid fees and
delays, checks must be drawn only on banks located in the United
States. A charge (minimum of $20) will be imposed if any check used
for the purchase of shares is returned. Investors who puchase Fun
shares by check or money order may not receive redemption proceeds
until there is reasonable belief that thecheck cleared, which may
take up to fifteen calendar days after payment is received. The Fund
and FPS each reserve the right to reject any purchase order in whole
or in part. The Fund and FPS will not accept checks which have been
endorsed by a third party.
Automatic Investment Plan
Once an account has been opened, a shareholder can make additional
purchases of shares of the Fund through an automatic investment plan.
An investor may authorize the automatic withdrawal of funds from his
or her bank account by opening his or her account with a minimum of
$1,000 and completing the appropriate section on the new account
application enclosed with this Prospectus. Subsequent monthly
investments are subject to a minimum required amount of $50. The
automatic deductions may be made on the 10th, 15th or 20th of the
month and may be made monthly, quarterly, semi-annually or annually.
How to Redeem Shares
Shareholders may redeem their shares of the Fund without being
subject to any redemption charge on any business day that the NYSE is
open for business. Redemptions will be effective at the current net
asset value per share next determined after the receipt by the
Transfer Agent of a redemption request meeting the requirements
described below.
Redemption By Mail
Shareholders may redeem their shares by submitting a written request
for redemption to FPS Services, Inc., 3200 Horizon Drive, P.O. Box
61503, King of Prussia, PA 19406-0903.
A written redemption request to the Transfer Agent must be in good
order, which means that it must: (i) identify the shareholder's
account name and account number; (ii) state the number of shares or
dollar amount to be redeemed and (iii) be signed by each registered
owner exactly as the shares are registered. To prevent fraudulent
redemptions, a signature guarantee for the signature of each person
in whose name an account is registered is required for all written
redemption requests exceeding $10,000 or where proceeds are to be
mailed to an address other than the address of record. A guarantee
may be obtained from any commercial bank, credit union, member firm
of a national securities exchange, registered securities association,
clearing agency and savings and loan association. A credit union
must be authorized to issue signature guarantees; notary public
endorsement will not be accepted. Signature guarantees will be
accepted from any eligible guarantor institution that participates in
a signature guarantee program. The Transfer Agent may require
additional supporting documents for redemptions made by corporations,
executors, administrators, trustees or guardians and retirement
plans.
A redemption request will not be deemed to be properly received until
the Transfer Agent receives all required documents in proper form.
Questions with respect to the proper form for redemption requests
should be directed to the Transfer Agent at (800) 892-9626 or (610)
239-4600.
Redemption By Telephone
Shareholders who have so indicated on the application, or have
subsequently arranged in writing to do so, may redeem shares by
calling the Transfer Agent at (800) 892-9626 or (610) 239-4600 during
normal business hours. In order to arrange for redemption by wire or
telephone after an account has been opened, or to change the bank or
account designated to receive redemption proceeds, a written request
with a signature guarantee must be sent to the Tansfer Agent at the
address listed above, under the caption "Redemption By Mail."
The Fund reserves the right to refuse a wire or telephone redemption
if it is believed advisable to do so. Procedures for redeeming Fund
shares by wire or telephone may be modified or terminated at any
time.
During periods of unusual economic or market changes, telephone
redemptions may be difficult to implement. In such event,
shareholders should follow the procedures for redemption by mail.
General Redemption Information
A redemption request will not be deemed to be properly received until
the Transfer Agent receives all required documents in proper form.
If you have any questions with respect to the proper form for
redemption requests you should contact the Transfer Agent at (800)
892-962 or (610) 239-4600.
Redemptions will be processed only on a business day during which the
NYSE is open for business. Redemptions will be effective at the
current net asset value per share next determined after the receipt
by the Transfer Agent of a redemption request meeting the
requirements described above. The Fund will not mail redemption
proceeds until it has been assured that checks received for the
purchase of any shares being redeemed have, or will be, cleared.
Accordingly, redemptions may not be processed until the shares being
redeemed have been on the Fund's books for at least fifteen business
days measured from the date the redemption request is received by the
Fund. Payment may also be made by wire directly to any bank
previously designated by an investor on his or her new account
application. There is a $9.00 charge for redemptions made by wire to
domestic banks. Wires to foreign or overseas banks may be charged at
higher rates. It should also be noted that banks may impose a fee
for wire services. In addition, there may be fees for redemptions
made through brokers, financial institutions and service
organizations.
Except as noted below, redemption requests received in proper form by
the Transfer Agent prior to the close of regular trading hours on the
NYSE on any business day on which the Fund calculates its net asset
value are effective as of that day. Redemption requests received
after the close of the NYSE will be effected at the net asset value
per share determined on the next business day following receipt. No
redemption request will be processed until the Transfer Agent has
received a completed application with respect to the account.
The Fund will satisfy redemption requests for cash to the fullest
extent feasible, as long as such payments would not, in the opinion
of the Board of Trustees, result in the necessity of the Fund to sell
assets under disadvantageous conditions or to the detriment of the
remaining shareholders of the Fund.
Pursuant to the Fund's Trust Instrument, however, payment for shares
redeemed may also be made in kind, or partly in cash and partly in-kind.
The Fund has elected, pursuant to Rule 18f-1 under the 1940
Act to redeem its shares solely in cash up to the lesser of $250,000
or 1% of the net asset value of the Fund, during any 90 day period
for any one shareholder. Any portfolio securities paid or
distributed in-kind would be in readily marketable securities and
valued in the manner described below. See "Net Asset Value." In the
event that an in-kind distribution is made, a shareholder may incur
additional expenses, such as brokerage commissions, on the sale or
other disposition of the securities received from the Fund. In-kind
payments need not constitute a cross-section of the Fund's portfolio.
The Fund may suspend the right of redemption or postpone the date of
payment for more than seven days during any period when (1) trading
on the NYSE is restricted or the NYSE is closed, other than customary
weekend and holiday closings; (2) the Securities and Exchange
Commission has, by order, permitted such suspension; (3) an emergency
exists, as defined by rules of the Securities and Exchange
Commission, making disposal of portfolio investments or determination
of the value of the net assets of the Fund not reasonably
practicable.
Shares of the Fund may be redeemed through certain brokers, financial
institutions, service organizations, banks, and bank trust
departments who may charge the investor a transaction or other fee
for their services at the time of redemption. Such additional
transaction fees would not otherwise be charged if the shares were
redeemed directly from the Fund.
Telephone Transactions
Shareholders who wish to redeem their shares by telephone must first
elect the option, as described above. Neither the Fund nor any of
its service contractors will be liable for any loss or expense in
acting upon telephone instructions that are reasonably believed to be
genuine. In this regard, the Fund and its Transfer Agent require
personal identification information before accepting a telephone
redemption. To the extent that the Fund or the Transfer Agent fail
to use reasonable procedures to verify the genuineness of telephone
instructions, the Fund may be liable for losses due to fraudulent or
unauthorized instructions. The Fund reserves the right to refuse a
telephone redemption if it is believed advisable to do so. Written
confirmation will be provided for all redemption transactions
initiated by telephone. Proceeds from a telephone redemption shall
only be sent to the shareholder's address of record or wired to the
shareholder's bank account on file with the Transfer Agent.
No purchases of shares may be made by telephone.
Minimum Balances
Due to the relatively high cost of maintaining smaller accounts, the
Fund reserves the right to involuntarily redeem shares in any account
at its then current net asset value (which will be promptly paid to
the shareholder) if at any time the total investment does not have a
value of at least $500 as a result of redemptions, but not market
fluctuations. A shareholder will be notified that the value of his
or her account is less than the required minimum and such shareholder
will be allowed at least 60 days to bring the value of his or her
account up to the minimum before the redemption is processed.
NET ASSET VALUE
The net asset value per share is calculated as of the date of this
Prospectus, once daily as of the close of regular trading on the
NYSE, currently 4:00 p.m. Eastern time. Currently, the NYSE is
closed on the following holidays or days on which the following
holidays are observed: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas.
The net asset value per share is computed by adding the value of all
securities and other assets in the portfolio, deducting any
liabilities, and dividing by the total number of outstanding shares.
Expenses are accrued daily and applied when determining the net asset
value. The Fund's equity securities are valued based on market
quotations or, when no market quotations are available, at fair value
as determined in good faith by, or under the direction of, the Board
of Trustees. Market quotations are generally the last reported sales
price on the principal exchange on which the security trades, or if
no sale price is reported, the mean of the latest bid and asked
prices is used. Securities traded over-the-counter are priced at the
mean of the latest bid and asked prices. When market quotations are
not readily available, securities and other assets are valued at fair
value as determined in good faith by the Board of Trustees.
Securities are valued through valuations obtained from a commercial
pricing service or at the most recent mean of the bid and asked
prices provided by investment dealers in accordance with procedures
established by the Board of Trustees.
Short-term investments having a maturity of 60 days or less are
valued at amortized cost, which the Board of Trustees believes
represents fair value. When a security is valued at amortized cost,
it is valued at its cost when purchased, and thereafter by assuming a
constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market
value of the instrument. All other securities and other assets are
valued at their fair value as determined in good faith under
procedures established by and under the supervision of the Board of
Trustees.
DIVIDENDS AND TAXES
Dividends
The Fund will distribute its net investment income annually. Any net
gain realized from the sale of portfolio securities also will be
distributed at least annually unless they are used to offset losses
carried forward from prior years, in which case no such gain will be
distributed. Such income dividends and capital gain distributions
are reinvested automatically in additional shares at net asset value,
unless a shareholder elects to receive them in cash. Distribution
options may be changed by writing to the Fund any time prior to the
dividend record date.
Any check tendered in payment of dividends or other distributions
which cannot be delivered by the post office or which remains
uncashed for a period of more than one year may be reinvested in the
shareholder's account at the then current net asset value, and the
dividend option may be changed from cash to reinvest. Dividends are
reinvested on the ex-dividend date at the net asset value determined
at the close of business on that date. Dividends and distributions
are treated the same for tax purposes whether received in cash or
reinvested in additional shares. Please note that shares purchased
shortly before the record date for a dividend or distribution may
have the effect of returning capital although such dividends and
distributions are subject to taxes.
Taxes
The Fund intends to conduct its operations so as to qualify as a
"regulated investment company" for purposes of the Internal Revenue
Code of 1986, as amended (the "Code"), which will relieve the Fund of
any liability for federal income tax to the extent that its earnings
and net realized capital gains are distributed to shareholders. To
so qualify, the Fund will, among other things, limit its investments
so that, at the close of each quarter of its taxable year, (i) not
more than 25% of the market value of the Fund's total assets will be
invested in the securities of any single issuer and (ii) with respect
to at least 50% of the market value of its total assets, not more
than 5% of the market value of its total assets will be invested in
the securities of any single issuer, and the Fund will not own more
than 10% of the outstanding voting securities of any single issuer.
An investment in the Fund has certain tax consequences, depending on
the type of account. The Fund will distribute all of its net
investment income to shareholders. Distributions are subject to
federal income tax and may also be subject to state and local income
taxes. Distributions are generally taxable when they are paid,
whether in cash or by reinvestment in additional shares, except that
distributions declared in October, November or December and paid in
the following January are taxable as if they were paid on December
31. If you have a qualified retirement account, taxes are generally
deferred until distributions are made from the retirement account.
For federal income tax purposes, income dividends and short-term
capital gain distributions are taxed as ordinary income.
Distributions of net capital gains (the excess of net long-term
capital gain over net short-term capital loss) are usually taxed as
long-term capital gains, regardless of how long a shareholder has
held the Fund's shares. The tax treatment of distributions of
ordinary income or capital gains will be the same whether the
shareholder reinvests the distributions or elects to receive them in
cash.
Shareholders may be subject to a 31 percent back-up withholding on
reportable dividend and redemption payments if a certified taxpayer
identification number is not on file with the Fund, or if to the
Fund's knowledge, an incorrect number has been furnished. An
individual's taxpayer identification number is his/her social
security number.
Shareholders will be advised annually of the source and tax status of
all distributions for federal income tax purposes. Information
accompanying a shareholder's statement will show the portion of those
distributions that are not taxable in certain states. Further
information regarding the tax consequences of investing in the Fund
is included in the Statement of Additional Information. The above
discussion is intended for general information only. Investors
should consult their own tax advisers for more specific information
on the tax consequences of particular types of distributions.
The Fund intends to make sufficient distributions prior to the end of
each calendar year in order to avoid liability for federal excise
tax.
Sale, exchange or redemption of the Fund's shares is a taxable event
to the shareholder.
PERFORMANCE INFORMATION
Performance information such as total return for the Fund may be
quoted in advertisements or in communications to shareholders. Such
performance information may be useful in reviewing the performance of
the Fund and for providing a basis for comparison with other
investment alternatives. However, because the net investment return
of the Fund changes in response to fluctuations in market conditions,
interest rates and Fund expenses, any given performance quotation
should not be considered representative of the Fund's performance for
any future period. The value of an investment in the Fund will
fluctuate and an investor's shares, when redeemed, may be worth more
or less than their original cost.
The Fund's total return is the change in value of an investment in
the Fund over a particular period, assuming that all distributions
have been reinvested. Thus, total return reflects not only income
earned, but also variations in share prices at the beginning and end
of the period. Average annual return reflects the average percentage
change per year in the value of an investment in the Fund. Aggregate
total return reflects the total percentage change over the stated
period. Please refer to the Statement of Additional Information for
more information on performance.
GENERAL INFORMATION
The Trust
The Trust is an open-end management investment company organized as a
business trust under the laws of the State of Delaware. The Trust is
organized to offer separate series of shares and is currently
offering a single series of shares called The Cruelty Free Value
Fund.
Trustees and Officers of the Fund
The Trustees of the Fund oversee the operation of the Fund. The
officers of the Fund who are employees or officers of the Advisor
serve without compensation from the Fund.
Description of Shares
The Trust is authorized to issue an unlimited number of shares of
beneficial interest with no par value. Shares of the Fund represent
equal proportionate interests in the assets of the Fund only, and
have identical voting, dividend, redemption, liquidation and other
rights. All shares issued are fully paid and non-assessable, and
shareholders have no preemptive or other right to subscribe to any
additional shares. Currently, there is one class of shares issued by
the Fund. The validity of the shares of beneficial interest offered
by this prospectus will be passed on by Kirkpatrick & Lockhart LLP,
1800 Massachusetts Avenue, N.W., Washington, DC 20036-1800. All
accounts will be maintained in book entry form and no share
certificates will be issued.
Voting Rights
A shareholder is entitled to one vote for each full share held and a
fractional vote for each fractional share held. All shares of the
Fund participate equally in regard to dividends, distributions, and
liquidations with respect to the Fund. Shareholders do not have
preemptive, conversion or cumulative voting rights.
Shareholder Meetings
The Trustees are not required, and do not intend, to hold annual
meetings of shareholders. The Trustees have undertaken to the SEC,
however, that they will promptly call a meeting of shareholders for
the purpose of voting upon the question of removal of any Trustee
when requested to do so by holders of not less than 10% of the
outstanding shares of the Fund. In addition, subject to certain
conditions, shareholders of the Fund may apply to the Fund to
communicate with other shareholders to request a shareholders'
meeting to vote upon the removal of a Trustee or Trustees.
Shareholder Reports and Inquiries
The Fund issues unaudited financial information semiannually and
audited financial statements annually. Shareholder inquiries should
be addressed to the Fund c/o Beacon Global Advisors, Inc., 8260
Greensboro Drive, Suite 250, McLean, Virginia 22102-3801 (800) 662-9992
or (703) 883-0865. Purchase and redemption transactions should
be made through the Transfer Agent by calling (800) 892-9626 or (610)
239-4600.
<PAGE>
INVESTMENT ADVISER
Beacon Global Advisors, Inc.
8260 Greensboro Drive, Suite 250
McLean, Virginia 22102-3801
(703) 883-0865
UNDERWRITER
Beacon Global Advisors, Inc.
8260 Greensboro Drive, Suite 250
McLean, Virginia 22102-3801
(703) 883-0865
SHAREHOLDER SERVICES
FPS Services, Inc.
3200 Horizon Drive
King of Prussia, Pennsylvania 19406
(800) 892-9626
(610) 239-4600
CUSTODIAN
The Bank of New York
48 Wall Street
New York, New York
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036-1800
AUDITORS
Ernst & Young LLP
1225 Connecticut Avenue N.W.
Washington, DC 20036
For Additional Information about The Cruelty Free Value Fund
call:
(800) 662-9992
<PAGE>
Subject to Completion - October , 1996
Information contained herein is subject to completion or amendment.
A registration statement relating to these securities has been filed
with the Securities and Exchange Commission. These securities may
not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This Statement of
Additional Information does not constitute a prospectus.
THE CRUELTY FREE VALUE FUND
STATEMENT OF ADDITIONAL INFORMATION
______________, 1996
This Statement of Additional Information dated __________, 1996 is
not a prospectus but should be read in conjunction with the
Prospectus describing The Cruelty Free Value Fund (the "Fund") dated
, 1996. The Prospectus may be amended or supplemented
from time to time. No investment in shares should be made without
first reading the Prospectus. This Statement of Additional
Information is intended to provide additional information regarding
the activities and operations of the Fund, and should be read in
conjunction with the Prospectus. A copy of the Prospectus may be
obtained without charge from Beacon Global Advisors, Inc. (the
"Advisor") at the address and telephone number below.
Distributor: Investment Adviser:
Beacon Global Advisors, Inc. Beacon Global Advisors, Inc.
8260 Greensboro Drive, Suite 250 8260 Greensboro Drive, Suite 250
McLean, Virginia 22102-3801 McLean, Virginia 22102-3801
(703) 883-0865 (703) 883-0865
No person has been authorized to give any information or to make any
representations not contained in this Statement of Additional
Information or in the Prospectus in connection with the offering made
by the Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by
the Trust or its distributor. The Prospectus does not constitute an
offering by the Trust or by the distributor in any jurisdiction in
which such offering may not lawfully be made.
<PAGE>
TABLE OF CONTENTS
Page
The Trust and the Fund . . . . . . . . . . . . . . . . . .
Investment Policies and Techniques . . . . . . . . . . . .
Bankers' Acceptances. . . . . . . . . . . . . . . . . .
Certificates of Deposit . . . . . . . . . . . . . . . .
Commerical Paper. . . . . . . . . . . . . . . . . . . .
Common Stock. . . . . . . . . . . . . . . . . . . . . .
Preferred Stock . . . . . . . . . . . . . . . . . . . .
Time Deposits . . . . . . . . . . . . . . . . . . . . .
U.S. Government Securities. . . . . . . . . . . . . . .
Securities Lending. . . . . . . . . . . . . . . . . . .
Illiquid Securities . . . . . . . . . . . . . . . . . .
Short Sales . . . . . . . . . . . . . . . . . . . . . .
Rule 144A Securities. . . . . . . . . . . . . . . . . .
Borrowing . . . . . . . . . . . . . . . . . . . . . . .
Other Investments . . . . . . . . . . . . . . . . . . .
Investment Restrictions. . . . . . . . . . . . . . . . . .
Investment Advisory and Other Services
Investment Advisory Agreement . . . . . . . . . . . . .
Sub-Advisory Agreement. . . . . . . . . . . . . . . . .
Administrator . . . . . . . . . . . . . . . . . . . . .
Distributor . . . . . . . . . . . . . . . . . . . . . .
Trustees and Officers. . . . . . . . . . . . . . . . . . .
Net Asset Value. . . . . . . . . . . . . . . . . . . . . .
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Income Tax. . . . . . . . . . . . . . . . . . .
Portfolio Transactions . . . . . . . . . . . . . . . . . .
Performance Information
In General. . . . . . . . . . . . . . . . . . . . . . .
Total Return Calculation. . . . . . . . . . . . . . . .
Performance and Advertisements . . . . . . . . . . . .
Other Information. . . . . . . . . . . . . . . . . . . . .
Shareholder Liability . . . . . . . . . . . . . . . . .
Limitations on Trustees' Liability. . . . . . . . . . .
<PAGE>
THE TRUST AND THE FUND
This Statement of Additional Information relates to The Cruelty Free
Value Fund (the "Fund"), a separate series of Beacon Global Advisors
Trust (the "Trust"), a diversified, open-end management company
established on August 29, 1996 under Delaware law as a Delaware
business trust. The Trust Instrument permits the Trust to offer
separate series of shares of beneficial interest. The Trust
currently is comprised of one series, which offers its shares through
one class of shares. To the extent that the Trust is a newly formed
entity, it has no prior history.
Much of the information contained in this Statement of Additional
Information expands upon subjects discussed in the Prospectus. No
investment in shares of the Fund should be made without first reading
the Prospectus.
INVESTMENT POLICIES AND TECHNIQUES
The following supplements the information contained in the Prospectus
for the Fund regarding the permitted investments and risk factors and
the investment objective and policies of the Fund.
Bankers' Acceptances
Negotiable bills of exchange or time drafts drawn on and accepted by
a commercial bank, meaning, in effect, that the bank unconditionally
agrees to pay the face value of the instrument on maturity. Bankers'
acceptances are used by corporations to finance the shipment and
storage of goods and to furnish dollar exchanges. Maturities are
generally six months or less.
Certificates of Deposit
Certificates of deposit are a negotiable interest bearing instrument
with a specific maturity. Certificates of deposit are issued by U.S.
commercial banks and savings and loan institutions in exchange for
the deposit of funds and normally can be traded in the secondary
market prior to maturity. Certificates of deposit generally carry
penalties for early withdrawal.
Commercial Paper
Commercial paper represents short-term unsecured promissory notes
issued in bearer form by banks or bank holding companies,
corporations and finance companies.
Common Stock
Common stock is defined as shares of a corporation that entitle the
holder to a pro rata share of the profits of the corporation, if any,
without a preference over any other shareholder or class of
shareholders, including holders of the corporation's preferred stock
and other senior equity. Common stock usually carries with it the
right to vote, and frequently, an exclusive right to do so. Holders
of common stock also have the right to participate in the remaining
assets of the corporation after all other claims, including those of
debt securities and preferred stock, are paid.
Preferred Stock
Generally, preferred stock receives dividends prior to distributions
on common stock and usually has a priority of claim over common
stockholders if the issuer of the stock is liquidated. Unlike common
stock, preferred stock does not usually have voting rights; preferred
stock, in some instances, is convertible into common stock. In order
to be payable, dividends on preferred stock must be declared by the
issuer's Board of Trustees. Dividends on the typical preferred stock
are cumulative, causing dividends to accrue even if not declared by
the issuer. There is, however, no assurance that dividends will be
declared by the issuers of the preferred stocks in which the Fund
invests.
Time Deposits
Time deposits are a non-negotiable receipt issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it
earns a specified rate of interest over a definite period of time;
however, it cannot be traded in the secondary market. Time deposits
in excess of seven days with a withdrawal penalty are considered to
be illiquid securities. The Fund will not invest more than 15% of
its net assets in illiquid securities, including such time deposits.
U.S. Government Securities
The Fund may invest in U.S. Government obligations including bills,
notes, bonds and other debt securities issued by the U.S. Treasury
and backed by the "full faith and credit" of the U.S. Government.
These securities are direct obligations of the U.S. Government and
differ mainly in their interest rates and the length of their
maturities.
Securities Lending
The Fund may lend portfolio securities to broker-dealers and
financial institutions provided that (1) the loan is secured
continuously by collateral marked-to-market daily, and maintained in
an amount at least equal to the current market value of the
securities loaned; (2) the Fund may call the loan at any time and
receive the securities loaned; (3) the Fund will receive any interest
or dividends paid on the loaned securities and (4) the aggregate
market value of securities loaned by the Fund will not at any time
exceed 33% of the total assets of the Fund.
Collateral will consist of U.S. government securities, cash
equivalents or irrevocable letters of credit. Loans of securities
involve a risk that the borrower may fail to return the securities or
may fail to maintain the proper amount of collateral. Therefore, the
Fund will only enter into portfolio loans after a review by the
Advisor, under the supervision of the Board of Trustees, including a
review of the creditworthiness of the borrower. Such reviews will be
monitored on an ongoing basis.
Illiquid Securities
The Board of Trustees has delegated the function of making day-to-day
determinations of liquidity to the Advisor pursuant to guidelines
reviewed by the Board of Trustees. The Advisor will monitor the
liquidity of securities held by the Fund, and report periodically on
such determinations to the Board of Trustees. The Fund will not
invest more than 15% of its assets in illiquid securities (securities
that may not be sold within seven days at approximately the price
used in determining the net asset valueof Fund shares), including
restricted securities. See "Rule 144A Securities" below.
Short Sales
To secure the Fund's obligation to replace any borrowed security, it
will place in a segregated account, an amount of cash or U.S.
Government securities equal to the difference between the market
value of the securities sold short at the time of the short sale, and
any cash or U.S. Government securities originally deposited with the
broker in connection with the short sale (excluding the proceeds of
the short sale). The Fund will thereafter maintain daily the
segregated amount at such a level that the amount deposited in it
plus the amount originally deposited with the broker as collateral
will equal the greater of the current market value of the securities
sold short, or the market value of the securities at the time they
were sold short.
Rule 144A Securities
The Fund may invest in securities that are exempt from the
registration requirements of the Securities Act of 1933 pursuant to
Securities Exchange Commission ("SEC") Rule 144A. Those securities,
purchased pursuant to Rule 144A, are traded among qualified
institutional buyers, and are subject to the Fund's limitation on
illiquid investment.
Investing in securities under Rule 144A could have the effect of
increasing the levels of the Fund's illiquidity to the extent that
qualified institutional buyers become, for a time, uninterested in
purchasing these securities. The Fund will limit its investments in
securities of issuers which the Fund is restricted from selling to
the public without registration under the Securities Act of 1933 to
no more than 15% of the Fund's net assets, excluding restricted
securities eligible for resale pursuant to Rule 144A that have been
determined to be liquid by the Fund's Board of Trustees.
Borrowing
The Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund will not purchase
securities while its borrowings exceed 5% of its total assets. The
Fund has no intention of increasing its net income through borrowing.
Any borrowing will be done from a bank with the required asset
coverage of at least 300%.
Other Investments
Subject to prior disclosure to shareholders, the Board of Trustees
may, in the future, authorize the Fund to invest in securities other
than those listed here and in the prospectus, provided that such
investment would be consistent with the Fund's investment objective,
and that it would not violate any fundamental investment policies or
restrictions applicable to the Fund.
INVESTMENT RESTRICTIONS
The investment restrictions set forth below are fundamental
restrictions and may not be changed without the approval of a
majority of the outstanding voting shares (as defined in the 1940
Act) of the Fund. Unless otherwise indicated, all percentage
limitations listed below apply only at the time of the transaction.
Accordingly, if a percentage restriction is adhered to at the time of
investment, a later increase or decrease in the percentage which
results from a relative change in values or from a change in the
Fund's total assets will not be considered a violation.
Except as set forth under "INVESTMENT OBJECTIVE AND POLICIES" and
"DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS" in the
Prospectus, the Fund may not:
1. as to 75% of the Fund's total assets, invest more than 5%
of its total assets in the securities of any one issuer.
(This limitation does not apply to cash and cash items,
securities of investment companies, and obligations
issued or guaranteed by the U.S. government, its agencies
or instrumentalities);
2. invest more than 25% of the value of the Fund's total
assets in one particular industry, except for temporary
defensive purposes. For this purpose, "industry" does not
include the U.S. Government, its agencies and
instrumentalities;
3. issue senior securities or borrow money, except the Fund
may borrow from banks (i) for temporary or emergency
purposes in an amount not exceeding 5% of the Fund's
assets or (ii) to meet redemption requests that might
otherwise require the untimely disposition of portfolio
securities, in an amount up to 33 % of the value of the
Fund's total assets (including the amount borrowed)
valued at market less liabilities (not including the
amount borrowed) at the time the borrowing was made.
While borrowing exceeds 5% of the value of the Fund's
total assets, the Fund will not purchase securities.
Interest paid on borrowing will reduce net income.
4. pledge, hypothecate, mortgage or otherwise encumber its
assets, except in an amount up to 33 % of the value of
its net assets but only to secure borrowing for temporary
or emergency purposes, such as to effect redemptions;
5. make loans, except through loans of securities or through
repurchase agreements, provided that, for purposes of
this restriction, the acquisition of bonds, debentures,
other debt securities or instruments, or participations
or other interest therein and investments in government
obligations, commercial paper, certificates of deposit,
bankers' acceptances or similar instruments will not be
considered the making of a loan;
6. engage in the business of underwriting the securities of
others, except to the extent that the Fund might be
considered an underwriter under the Federal securities
laws in connection with its disposition of securities;
7. purchase or sell real estate (except that investments in
securities of issuers that invest in real estate or other
instruments supported by interests in real estate are not
subject to this limitation, and except that the Fund may
exercise rights under agreements relating to such
securities, including the right to enforce security
interests to hold real estate acquired by reason of such
enforcement until that real estate can be liquidated in
an orderly manner);
8. purchase or sell commodities or commodity futures
contracts unless acquired as a result of owning
securities or other instruments.
The following investment limitations are not fundamental and may be
changed by the Fund's Board of Trustees without shareholder approval:
(i) The Fund does not currently intend to purchase securities
on margin, except for short-term credit necessary for
clearance of portfolio transactions.
(ii) The Fund does not currently intend to purchase securities
of other investment companies except as permitted by the
1940 Act and the rules and regulations thereunder.
(iii) The Fund does not currently intend to invest in oil, gas
or mineral exploration or development programs or leases,
except that investment in securities of issuers that
invest in such programs or leases and investments in
asset-backed securities supported by receivables
generated by such programs or leases are not subject to
this prohibition.
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Advisory Agreement
The Fund and the Advisor have entered into an investment advisory
agreement (the "Investment Advisory Agreement"). The Investment
Advisory Agreement provides that the Advisor shall not be protected
against any liability to the Fund or its shareholders if it has
engaged in conduct constituting willful misfeasance, bad faith or
gross negligence on its part in the performance of its duties or from
reckless disregard of its obligations or duties thereunder.
The Investment Advisory Agreement provides that if, for any fiscal
year, any ratio of expenses of the Fund (including amounts payable to
the Advisor but excluding interest, taxes, brokerage, litigation and
other extraordinary expenses) exceeds limitations established by any
state in which the shares of the Fund are registered, the Advisor
will bear the amount of such excess.
The continuance of the Investment Advisory Agreement and Investment
Subadvisory Agreement, after the first two years, must be
specifically approved at least annually (i) by the vote of the
Trustees or by a vote of the shareholders of Fund, and (ii) by the
vote of a majority of the Trustees who are not parties to the
Investment Advisory Agreement or "interested persons" of any party
thereto, cast in person at a meeting called for the purpose of voting
on such approval. The Investment Advisory Agreement and Investment
Subadvisory Agreement will each terminate if assigned, and each is
terminable at any time without penalty by the Trustees of the Fund,
or by a majority of the outstanding shares of the Fund on not less
than 30 days' nor more than 60 days' written notice to the Advisor,
or by the Advisor on 90 days' written notice to the Fund.
Subadvisory Agreement
The Advisor has entered into an Investment Subadvisory Agreement with
Dreman Value Advisors, Inc. ("Dreman" or the "Subadvisor") to assist in
the selection and management of the Fund's investment securities.
It is the responsibility of the Subadvisor, under the direction of
the Advisor, to make the day-to-day investment decisions for the
Fund, to place the purchase and sale orders for the portfolio
transactions of the Fund consistent with the Animal Policy
established by the Advisor, and subject to the general direction of
the Advisor. The Advisor will review the portfolio to ensure
compliance with the Fund's guidelines regarding the humane treatment
of animals and will instruct the Subadvisor as to how to implement
these guidelines.
For its services, Dreman is paid an annual fee by the Advisor equal
to 0.50% of the first $50 million of average net assets, 0.35% of
average net assets from $50 million to $100 million, and 0.25% of
average net assets in excess of $100 million..
Administrator
FPS Services, Inc., 3200 Horizon Drive, P.O. Box 61503, King of
Prussia, PA 19406-0903 (the "Administrator") provides certain
administrative services to the Fund pursuant to an Administrative
Services Agreement.
Under the Administrative Services Agreement, the Administrator: (1)
coordinates with the Custodian and Transfer Agent and monitors the
services they provide to the Fund; (2) coordinates with and monitors
any other third parties furnishing services to the Fund; (3) provides
the Fund with necessary office space, telephones and other
communications facilities and personnel competent to perform
administrative and clerical functions; (4) supervises the maintenance
by third parties of such books and records of the Fund as may be
required by applicable federal or state law; (5) supervises the
preparation by third parties of all federal, state and local tax
returns and reports of the Fund required by applicable law; (6)
prepares and, after approval by the Fund, files and arranges for the
distribution of proxy materials and periodic reports to shareholders
of the Fund as required by applicable law; (7) prepares and, after
approval by the Fund, arranges for the filing of such registration
statements and other documents with the SEC and other federal and
state regulatory authorities as may be required by applicable law;
(8) reviews and submits to the officers of the Fund for their
approval invoices or other requests for payment of the Fund's
expenses and instructs the Custodian to issue checks in payment
thereof and (9) takes such other action with respect to the Fund as
may be necessary in the opinion of the Administrator to perform its
duties under the agreement.
Pursuant to this Administrative Services Agreement, FPS receives a
fee computed at the annual rate of 0.15% of the first $50 million of
total average net assets, 0.10% of the next $50 million of total average
net assets and 0.05% of total net assets in excess of $100 million.
Pursuant to the Administrative Services Agreement, aggregate administration
fees shall not be less than $55,000.
Distributor
Beacon Global Advisors, Inc. serves as the Fund's Distributor
pursuant to a Distribution Agreement (the "Distribution Agreement").
Shares of the Fund are subject to a distribution plan (the
"Distribution Plan") pursuant to Rule 12b-1 under the 1940 Act. As
provided in the Distribution Plan, the Fund will pay an annual fee of
0.25% of the Fund's average daily net assets to Beacon Global
Advisors, Inc. as compensation for its services. From this amount,
Beacon Global Advisors, Inc. may make payments to financial
institutions and intermediaries such as banks, savings and loan
associations, insurance companies, investment counselors and
broker-dealers as compensation for services, reimbursement of expenses
incurred in connection with distribution assistance or provision of
shareholder services. The Distribution Plan is characterized as a
compensation plan because the distribution fee will be paid to the
distributor without regard to the distribution or shareholder service
expenses incurred by Beacon Global Advisors, Inc. or the amount of
payments made to financial institutions and intermediaries. The Fund
intends to operate the Distribution Plan in accordance with its terms
and within the rules of the National Association of Securities
Dealers, Inc. concerning sales charges. Pursuant to such rules, the
distributor is required to limit aggregate initial sales charges and
asset-based sales charges to 6.25% of total gross sales.
The Distribution Plan will continue in effect from year to year,
provided that each such continuance is approved at least annually by
a vote of the Board of Trustees, including a majority vote of the
Rule 12b-1 trustees, cast in person at a meeting called for the
purpose of voting on such continuance. The Distribution Plan may be
terminated at any time, without penalty, by vote of a majority of the
Rule 12b-1 trustees or by vote of the holders of a majority of the
outstanding shares of the applicable class on not more than 60 days',
nor less than 30 days' written notice to any other party to the
Distribution Plan. The Distribution Plan may not be amended to
increase materially the amounts to be spent for the services
described herein without approval by the shareholders, and all
material amendments are required to be approved by the Board of
Trustees. The Distribution Plan will automatically terminate in the
event of its assignment. Pursuant to the Distribution Plan, the
Board of Trustees will review at least quarterly a written report of
the distribution expenses incurred on behalf of the Fund. The report
will include an itemization of the distribution expenses and the
purpose of such expenditures.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Fund and their principal
occupations for the last five years are set forth below. Each Trustee
who is an "interested person" of the Fund, as that term is defined in the
1940 Act, is indicated by an asterisk.
[ TRUSTEE INFORMATION TO BE INCLUDED AT THE NEXT FILING]
NET ASSET VALUE
A more complete discussion of the Fund's determination of net asset
value is contained in the Prospectus. The net asset value per share
is computed by dividing the value of the assets of the Fund, less its
liabilities, by the number of shares outstanding.
The net asset value of all outstanding shares will be computed on a
pro-rata basis for each outstanding share based on the proportionate
participation in the Fund represented by the value of shares. All
income earned and expenses incurred by the Fund will be borne on a
pro-rata basis by each outstanding share.
Portfolio securities are valued and net asset value per share is
determined as of the close of regular trading on the New York Stock
Exchange ("NYSE") which currently is 4:00 p.m. (Eastern Time), on
each day the NYSE is open for trading. The NYSE is open for trading
every day except Saturdays, Sundays and the following holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. Additionally, if any of
the aforementioned holidays falls on a Saturday, the NYSE will not be
open for trading on the preceding Friday and when such holiday falls
on a Sunday, the NYSE will not be open for trading on the succeeding
Monday, unless unusual business conditions exist, such as the ending
of a monthly or the yearly accounting period.
TAXES
The following is only a summary of certain federal tax considerations
generally affecting the Fund and its shareholders that are not
described in the Prospectus, and is not intended as a substitute for
careful tax planning. Shareholders are urged to consult their tax
advisors with specific reference to their own tax situations,
including their state and local tax liabilities. Non-U.S. investors
should consult their tax advisors concerning the tax consequences of
ownership of shares of the Fund, including the possibility that
distributions may be subject to a 30% United States withholding tax.
Federal Income Tax
The following discussion of federal income tax consequences is based
on the Code and the regulations issued thereunder as in effect on the
date of this Statement of Additional Information. New legislation,
as well as administrative changes or court decisions, may
significantly change the conclusions expressed herein, and may have a
retroactive effect with respect to the transactions contemplated
herein.
The Fund intends to qualify as a "regulated investment company"
("RIC") as defined under Subchapter M of the Code. By following such
a policy, the Fund expects to eliminate or reduce to a nominal amount
the federal income taxes to which it may be subject. In order to
qualify for treatment as a RIC under the Code, the Fund generally
must distribute annually to its shareholders at least 90% of its
investment company taxable income (generally, net investment income
plus net short-term capital gain) (the "Distribution Requirement")
and also must meet several additional requirements. Among these
requirements are the following: (i) at least 90% of the Fund's gross
income each taxable year must be derived from dividends, interest,
payments with respect to securities loans, and gains from the sale or
other disposition of stock or securities, or certain other income;
(ii) the Fund must derive less than 30% of its gross income each
taxable year from the sale or other disposition of stocks or
securities held for less than three months; (iii) at the close of
each quarter of the Fund's taxable year, at least 50% of the value of
its total assets must be represented by cash and cash items, U.S.
Government securities, securities of other RICs and other securities,
with such other securities limited, in respect to any one issuer, to
an amount that does not exceed 5% of the value of the Fund's assets
and that does not represent more than 10% of the outstanding voting
securities of such issuer and (iv) at the close of each quarter of
the Fund's taxable year, not more than 25% of the value of its assets
may be invested in securities (other than U.S. Government securities
or the securities of other RICs) of any one issuer or of two or more
issuers which the Fund controls and which are engaged in the same,
similar or related trades or businesses. Notwithstanding the
Distribution Requirement described above, which requires only that
the Fund distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net
capital gain (the excess of net long-term capital gain over net
short-term capital loss), the Fund will be subject to a nondeductible
4% federal excise tax to the extent that it fails to distribute by
the end of any calendar year 98% of its ordinary income for that year
and 98% of its capital gain net income (the excess of short- and
long-term capital gains over short- and long-term capital losses) for
the one-year period ending on October 31 of that year, plus certain
other amounts. The Fund intends to make sufficient distributions of
its ordinary income and capital gain net income prior to the end of
each calendar year to avoid liability for federal excise tax.
Any gain or loss recognized on a sale, redemption or exchange of
shares of the Fund by a non-exempt shareholder who is not a dealer in
securities generally will be treated as a long-term capital gain or
loss if the shares have been held for more than twelve months and
otherwise generally will be treated as a short-term capital gain or
loss. If shares of the Fund on which a net capital gain distribution
has been received are subsequently sold, redeemed or exchanged and
such shares have been held for six months or less, any loss
recognized will be treated as a long-term capital loss to the extent
of the long-term capital gain distribution.
In certain cases, the Fund will be required to withhold, and remit to
the United States Treasury, 31% of any distributions paid to a
shareholder who (1) has failed to provide a correct taxpayer
identification number, (2) is subject to backup withholding by the
Internal Revenue Service or (3) has not certified to the Fund that
such shareholder is not subject to backup withholding.
If the Fund fails to qualify as a RIC for any taxable year, it will
be subject to tax on its taxable income at regular corporate rates.
In such an event, all distributions from the Fund generally would be
eligible for the corporate dividend received deduction for corporate
shareholders.
PORTFOLIO TRANSACTIONS
The Fund does not have an obligation to deal with any broker/dealer
or group of broker/dealers in the execution of transactions in
portfolio securities.
Subject to policies established by the Trustees, the Advisor is
responsible for placing the orders to execute transactions for the
Fund. In placing orders, it is the policy of the Fund to seek to
obtain the best net results taking into account such factors as price
(including the applicable dealer spread), the size, type and
difficulty of the transaction involved, the firm's general execution
and operational facilities, and the firm's risk in positioning the
securities involved. While the Advisor generally seeks reasonably
competitive spreads, the Fund will not necessarily be paying the
lowest spread available.
It is not the Fund's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made
through brokers or dealers. However, the Advisor may place portfolio
orders with qualified broker/dealers who recommend the Fund to
clients, and may, when a number of brokers and dealers can provide
best net results on a particular transaction, consider such
recommendations by a broker or dealer in selecting among
broker/dealers.
PERFORMANCE INFORMATION
In General
From time to time, the Fund may include general comparative
information, such as statistical data regarding inflation, securities
indices or the features or performance of alternative investments, in
advertisements, sales literature and reports to shareholders. The
Fund may also include calculations, such as hypothetical compounding
examples or tax-free compounding examples, which describe
hypothetical investment results in such communications. Such
performance examples will be based on an express set of assumptions
and are not indicative of the performance of the Fund.
From time to time, the total return of the Fund may be quoted in
advertisements, shareholder reports or other communications to
shareholders.
Total Return Calculation
The Fund computes average annual total return by determining the
average annual compounded rate of return during specified periods
that equate the initial amount invested to the ending redeemable
value of such investment. This is done by dividing the ending
redeemable value of a hypothetical $1,000 initial payment by $1,000
and raising the quotient to a power equal to one divided by the
number of years (or fractional portion thereof) covered by the
computation and subtracting one from the result. This calculation
can be expressed as follows:
Average Annual Total Return = P (1 + T)n = ERV
Where: ERV = ending redeemable value at the end of
the period covered by the computation of
a hypothetical $1,000 payment made at the
beginning of the period.
P = hypothetical initial payment of $1,000.
n = period covered by the computation,
expressed in terms of years.
T = average annual total return.
The Fund computes the aggregate total return by determining the
aggregate compounded rate of return during specified period that
likewise equate the initial amount invested to the ending redeemable
value of such investment. The formula for calculating aggregate
total return is as follows:
Aggregate Total Return = [ ERV - 1 ]
P
Where: ERV = ending redeemable value at the end of
the period covered by the computation of
hypothetical $1,000 payment made at the
beginning of the period.
P = hypothetical initial payment of $1,000.
The calculations of average annual total return and aggregate total
return assume the reinvestment of all dividends and capital gain
distributions on the reinvestment dates during the period. The
ending redeemable value (variable "ERV" in each formula) is
determined by assuming complete redemption of the hypothetical
investment and the deduction of all nonrecurring charges at the end
of the period covered by the computations.
Since performance will fluctuate, performance data for the Fund
should not be used to compare an investment in the Fund's shares with
bank deposits, savings accounts and similar investment alternatives
which often provide an agreed-upon or guaranteed fixed yield for a
stated period of time. Shareholders should remember that performance
is generally a function of the kind and quality of the instruments
held in a portfolio, portfolio maturity, operating expenses and
market conditions.
Performance and Advertisements
From time to time, in marketing and other fund literature, the Fund's
performance may be compared to the performance of other mutual funds
in general or to the performance of particular types of mutual funds
with similar investment goals, as tracked by independent
organizations. Among these organizations, Lipper Analytical
Services, Inc. ("Lipper"), a widely used independent research firm
which ranks mutual funds by overall performance, investment
objectives and assets, may be cited. Lipper performance figures are
based on changes in net asset value, with all income and capital
gains dividends reinvested. Such calculations do not include the
effect of any sales charges imposed by other funds. The Fund will be
compared to Lipper's appropriate fund category, that is, by fund
objective and portfolio holdings. The Fund's performance may also be
compared to the average performance of its Lipper category.
The Fund's performance may also be compared to the performance of
other mutual funds by Morningstar, Inc. ("Morningstar") which ranks
funds on the basis of historical risk and total return.
Morningstar's rankings range from five stars (highest) to one star
(lowest) and represent Morningstar's assessment of the historical
risk level and total return of a fund as a weighted average for
three, five and ten year periods. Ranks are not absolute or
necessarily predictive of future performance. The Fund may also
compare its performance to a wide variety of indices.
In assessing such comparisons of yield, return or volatility, an
investor should keep in mind that the composition of the investments
in the reported indices and averages is not identical to those of the
Fund, that the averages are generally unmanaged, and that the items
included in the calculations of such averages may not be identical to
the formula used by the Fund to calculate its figures.
OTHER INFORMATION
Shareholder Liability
The Trust is an entity of the type commonly known as a "Delaware
business trust." Under Delaware law, shareholders of such a trust
could, under certain circumstances, be held personally liable as
partners for the obligations of the trust. Even if, however, the
Fund were held to be a partnership, the possibility of the
shareholders incurring financial loss for that reason appears remote
because the Trust Instrument contains an express disclaimer of
shareholder liability for obligations of the Trust and requires that
notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by or on behalf of the Trust or
the Trustees, and because the Trust Instrument provides for
indemnification out of the Trust property for any shareholder held
personally liable for the obligations of the Trust.
Limitation of Trustees' Liability
The Trust Instrument provides that a Trustee shall be liable only for
his own willful defaults and, if reasonable care has been exercised
in the selection of officers, agents, employees or investment
advisers, shall not be liable for any neglect or wrongdoing of any
such person. The Trust Instrument also provides that the Trust will
indemnify its Trustees and officers against liabilities and expenses
incurred in connection with actual or threatened litigation in which
they may be involved because of their offices with the Trust unless
it is determined in the manner provided in the Trust Instrument that
they have not acted in good faith in the reasonable belief that their
actions were in the best interests of the Trust. However, nothing in
the Trust Instrument shall protect or indemnify a Trustee against any
liability for his willful misfeasance, bad faith, gross negligence or
reckless disregard of his duties.
Custodian
The Bank of New York, 48 Wall Street, New York, New York 10286 is
custodian of the Fund's assets pursuant to a custody agreement.
Under the custody agreement, The Bank of New York (i) maintains a
separate account or accounts in the name of the Fund, (ii) holds and
transfers portfolio securities on account of the Fund, (iii) accepts
receipts and makes disbursements of money on behalf of the Fund, (iv)
collects and receives all income and other payments and distributions
on account of the Fund's securities, and (v) makes periodic reports
to the Board of Trustees concerning the Fund's operations.
Independent Accountants
Ernst & Young LLP, 1225 Connecticut Avenue, N.W., Washington, DC
20036 has been selected as the independent accountants for the Fund.
Ernst & Young LLP provides audit and tax services. The books of the
Fund will be audited at least once a year by Ernst & Young LLP.
Reports to Shareholders
Shareholders will receive unaudited semi-annual reports describing
the Fund's investment operations and annual financial statements
audited by independent accountants.
Shareholder Inquiries
Inquiries regarding the Fund may be directed to the Advisor by
calling (800) 662-9992.
<PAGE>
BEACON GLOBAL ADVISORS TRUST
Form N-1A
Part C -- Other Information
Part C. Other Information
Item 24. Financial Statements and Exhibits.
(a) Financial Statements.
(To be filed by amendment.)
(b) Exhibits:
Exhibits filed pursuant to Form N-1A:
(1) Trust Instrument filed herewith.
(2) By-Laws are filed herewith.
(3) Voting Trust Agreement -- None
(4) All Instruments Defining the Rights of Holders --
None
(5) Investment Advisory Contracts -- (To be filed by
Amendment.)
(6) Underwriting Agreement -- (To be filed by
Amendment.)
(7) Bonus, Profit Sharing, Pension or Other Similar
Contracts -- None
(8) Custodian Agreements -- (To be filed by
Amendment.)
(9) (a) Transfer Agent Services Agreement -- (To
be filed by Amendment.)
(b) Administration Agreement -- (To be filed
by Amendment.)
(c) Accounting Services Agreement -- (To be
filed by Amendment.)
(10) (a) Opinion and Consent of Kirkpatrick &
Lockhart LLP regarding the legality of
the securities being issued -- (To be
filed by Amendment.)
(11) Consent of Independent Auditors -- (To be filed
by Amendment.)
(12) Financial Statements Omitted from Item 23.-- None
(13) Agreements or Understandings Made inConsideration
for Providing the Initial Capital -- None
(14) Model Plan -- None
(15) Plan of Distribution pursuant to Rule 12b-1 --
(To be filed by Amendment.)
(16) Schedule for Computation of Performance
Quotations -- None.
(17) Financial Data Schedule -- None.
(18) Plan of Distribution pursuant to Rule 18f-3 with
respect to Multiple Class Shares -- None.
(19) Trustees' Powers of Attorney -- (To be filed by
Amendment.)
Item 25. Persons Controlled by or Under Common Control with
Registrant.
None.
Item 26. Number of Holders of Securities.
None.
Item 27. Indemnification.
Reference is made to Article X of the Registrant's Trust
Instrument (filed herewith as Exhibit 1.)
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to trustees,
officers and controlling persons of the Registrant by the
Registrant pursuant to the Trust's Trust Instrument, its
By-Laws or otherwise, the Registrant is aware that in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in
the Act and, therefore, is 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 trustees, officers or controlling
persons of the Registrant in connection with the
successful defense of any act, suit or proceeding) is
asserted by such trustees, officers or controlling
persons in connection with shares 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 issues.
Item 28. Business and Other Connections of Investment Adviser.
Beacon Global Advisors, Inc., 8260 Greensboro Drive,
Suite 250, McLean, Virginia 22102-380 provides investment
advisory services to individual and institutional
investors, and as of September 30, 1996 had approximately
$____ million in assets under management.
For information as to any other business, vocation or
employment of a substantial nature in which each Trustee
or officer of the Registrant's investment adviser has
been engaged for his own account or in the capacity of
Trustee, officer, employee, partner or trustee, reference
is made to Form ADV (File #801-_____) filed by it under
the Investment Advisers Act of 1940.
Item 29. Principal Underwriter.
(a) Beacon Global Advisors, Inc., the principal
underwriter for the Registrant's securities,
currently acts as principal underwriter for the
following entities:
[ NEED INFORMATION ]
(b) The table below sets forth certain information as to
the Underwriter's Directors, Officers and Control
Persons:
Position Position and
Name and Principal and Offices Offices with
Business Address with Underwriter Registrant
[ NEED INFORMATION ]
(c) Not Applicable.
tem 30. Location of Accounts and Records.
All records described in Section 31(a) of the 1940 Act and
the Rules 17 CFR 270.31a-1 to 31a-3 promulgated thereunder,
are maintained by the Trust's Investment Adviser, Beacon
Global Advisors, Inc., 8260 Greensboro Drive, Suite 250,
McLean, Virginia 22102, except for those maintained by the
Fund's Custodian, The Bank of New York, 48 Wall Street, New
York, New York 10172 and the Trust's Administrator, Transfer
Agent and Fund Accounting Services Agent, FPS Services Inc.,
3200 Horizon Drive, P.O. Box 61503, King of Prussia, PA
19406-0903.
Item 31. Management Services.
There are no management-related service contracts not
discussed in Part A or Part B.
Item 32. Undertakings.
(a) Registrant hereby undertakes to file an amendment to
this Registration Statement with certified financial
statements showing the initial capital received
before accepting subscriptions from any person in
excess of 25 if Registrant proposes to raise its
initial capital pursuant to Section 14(a)(3) of the
1940 Act.
(b) Registrant hereby undertakes to file a post-effective
amendment within four to six months from the
effective date of this Registration Statement under
the Securities Act of 1933. Registrant understands
that such post-effective amendment will contain
reasonably current financial statements which need
not be certified by independent public accountants.
(c) Registrant hereby undertakes to furnish each person
to whom a prospectus is delivered with a copy of the
Registrant's latest Annual Report to Shareholders
upon request and without charge.
(d) The Registrant hereby undertakes to promptly call a
meeting of shareholders for the purpose of voting
upon the question of removal of any director or
directors when requested in writing to do so by the
record holders of not less than 10 percent of the
Registrant's outstanding shares and to assist its
shareholders in accordance with the requirements of
Section 16(c) of the Investment Company Act of 1940
relating to shareholder communications.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of McLean, and State of
Virginia on the 28th day of October, 1996.
Beacon Global Advisors Trust
Registrant
By /s/ Robert J. Henrich
Robert J. Henrich
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement of Beacon Global Advisors Trust has been
signed below by the following persons in the capacities and on the
date indicated.
Signature Capacity Date
/s/ Robert J. Henrich As Sole Trustee 10/28/96
Robert J. Henrich
/s/ Robert J. Henrich As President and 10/28/96
Robert J. Henrich Principal Executive Officer
/s/ Robert J. Henrich As Treasurer and 10/28/96
Robert J. Henrich Principal Accounting and
Financial Officer
<PAGE>
BEACON GLOBAL ADVISORS TRUST
Index to Exhibits to Form N-1A
Exhibit Page
99.B1 Trust Instrument
99.B2 By-Laws
Beacon Global Advisors Trust
Trust Instrument Dated: August 29, 1996
Principal Place of Business:
8260 Greensboro Drive, Suite 250
McLean, Virginia 22102
<PAGE>
Table of Contents
Page
Article I - Name and Definitions 1
Section 1.1 Name 1
Section 1.2 Definitions 1
ARTICLE II - Beneficial Interest 2
Section 2.1 Shares of Beneficial Interest 2
Section 2.2 Issuance of Shares 2
Section 2.3 Register of Shares and Share Certificates 2
Section 2.4 Transfer of Shares 2
Section 2.5 Treasury Shares 2
Section 2.6 Establishment of Series 2
Section 2.7 Investment in the Trust 3
Section 2.8 Assets and Liabilities of Series 3
Section 2.9 No Preemptive Rights 4
Section 2.10 Personal Liability of Shareholders 4
Section 2.11 Assent to Trust Instrument 4
ARTICLE III - The Trustees 4
Section 3.1 Management of the Trust 4
Section 3.2 Initial Trustee 4
Section 3.3 Term of Office of Trustees 4
Section 3.4 Vacancies and Appointment of Trustees 5
Section 3.5 Temporary Absence of Trustee 5
Section 3.6 Number of Trustees 5
Section 3.7 Effect of Death, Resignation, Etc.
of a Trustee 5
Section 3.8 Ownership of Assets of the Trust 5
ARTICLE IV - Powers of the Trustees 5
Section 4.1 Powers 5
Section 4.2 Issuance and Repurchase of Shares 7
Section 4.3 Trustees and Officers as Shareholders 7
Section 4.4 Action by the Trustees and Committees 8
Section 4.5 Chairman of the Trustees 8
Section 4.6 Principal Transactions 8
ARTICLE V - Expenses of the Trust 8
Section 5.1 General 8
Section 5.2 Expenses of Series 8
Section 5.3 Trustee Reimbursement 8
ARTICLE VI - Investment Adviser, Principal Underwriter,
Administrator and Transfer Agent 9
Section 6.1 Investment Adviser 9
Section 6.2 Principal Underwriter 9
Section 6.3 Administrator 9
Section 6.4 Transfer Agent 9
Section 6.5 Parties to Contract 9
ARTICLE VII - Shareholders' Voting Powers and Meetings 10
Section 7.1 Voting Powers 10
Section 7.2 Meetings 10
Section 7.3 Quorum and Required Vote 10
Section 7.4 Action by Written Consent 11
ARTICLE VIII - Custodian 11
Section 8.1 Appointment and Duties 11
Section 8.2 Central Certificate System 11
ARTICLE IX - Distributions and Redemptions 11
Section 9.1 Distributions 11
Section 9.2 Redemptions 12
Section 9.3 Determination of Net Asset Value and
Valuation of Portfolio Assets 12
Section 9.4 Suspension of the Right of Redemption 12
Section 9.5 Redemption of Shares in Order to Qualify as
Regulated Investment Company 13
ARTICLE X - Limitation of Liability and Indemnification 13
Section 10.1 Limitation of Liability 13
Section 10.2 Indemnification 13
Section 10.3 Shareholders 13
ARTICLE XI - Miscellaneous 14
Section 11.1 Trust Not a Partnership 14
Section 11.2 Trustees' Good Faith Action, Expert Advice,
No Bond or Surety 14
Section 11.3 Establishment of Record Dates 14
Section 11.4 Termination of Trust or Series 14
Section 11.5 Reorganization 15
Section 11.6 Filing of Copies, References, Headings 15
Section 11.7 Applicable Law 15
Section 11.8 Amendments 16
Section 11.9 Fiscal Year 16
Section 11.1 Use of Name "Beacon Global Advisors Trust" 16
Section 11.11 Provisions in Conflict with Law 16
<PAGE>
Beacon Global Advisors Trust
TRUST INSTRUMENT, made this 29th day of August, 1996 by
Robert J. Henrich ("Trustee").
WHEREAS, the Trustee desires to establish a business trust
under the Delaware Business Trust Act for the investment and
reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustee declares that all money and
property contributed to the trust hereunder shall be held and managed
in trust under this Trust Instrument as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1 Name. The name of the trust created hereby is the
"Beacon Global Advisors Trust".
Section 1.2 Definitions. Wherever used herein, unless otherwise
required by the context or specifically provided:
(a) "By-laws" means the by-laws referred to in Article
IV, Section 4.1(e) hereof, as from time to time amended;
(b) The "1940 Act" refers to the Investment Company Act
of 1940, as amended from time to time.
(c) The terms "Affiliated Person," "Assignment,"
"Commission," "Interested Person" and "Principal Underwriter" shall
have the meanings given them in the 1940 Act. "Majority Shareholder
Vote" shall have the same meaning as the term "vote of a majority of
the outstanding voting securities" is given in the 1940 Act;
(d) "Net Asset Value" means the net asset value of each
Series of the Trust determined in the manner provided in Article IX,
Section 9.3 hereof;
(e) "Outstanding Shares" means those Shares recorded from
time to time in the books of the Trust or its Transfer Agent as then
issued and outstanding, but shall not include Shares which have been
redeemed or repurchased by the Trust and which are at the time held
in the treasury of the Trust;
(f) "Series" or "Class" mean a separate series or Class of
Shares of the Trust established in accordance with the provisions of
Article II, Section 2.6 hereof;
(g) "Shareholder" means a record owner of Outstanding
Shares of the Trust;
(h) "Shares" means the equal proportionate transferable
units of beneficial interest into which the beneficial interest of
each Series of the Trust or Class thereof shall be divided and may
include fractions of Shares as well as whole Shares;
(i) The "Trust" refers to Beacon Global Advisors Trust
and reference to the Trust, when applicable to one or more Series of
the Trust, shall refer to any such Series;
(j) The "Trustee" or "Trustees" means the person or
persons who has or have signed this Trust Instrument, so long as such
person or persons shall continue in office in accordance with the
terms hereof, and all other persons who may from time to time be duly
qualified and serving as Trustees in accordance with the provisions
of Article III hereof and reference herein to a Trustee or to the
Trustees shall refer to the individual Trustees in their capacity as
Trustees hereunder;
(k) "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for
the account of one or more of the Trust or any Series, or the
Trustees on behalf of the Trust or any Series.
ARTICLE II
BENEFICIAL INTEREST
Section 2.1 Shares of Beneficial Interest. The beneficial
interest in the Trust shall be divided into such transferable Shares
of one or more separate and distinct Series or Classes of a Series as
the Trustees shall from time to time create and establish. The number
of Shares of each Series, and Class thereof, authorized hereunder is
unlimited. Each Share shall have no par value. All Shares issued
hereunder, including, without limitation, Shares issued in connection
with a dividend in Shares or a split or reverse split of Shares,
shall be fully paid and nonassessable.
Section 2.2 Issuance of Shares. The Trustees in their
discretion may, from time to time, without vote of the Shareholders,
issue Shares to such party or parties and for such amount and type of
consideration, subject to applicable law, including cash or
securities (including Shares of a different Series), at such time or
times and on such terms as the Trustees may deem appropriate, and may
in such manner acquire other assets (including the acquisitions of
assets subject to, and in connection with, the assumption of
liabilities). In connection with any issuance of Shares, the Trustees
may issue fractional Shares and Shares held in the treasury. The
Trustees may from time to time divide or combine the Shares of any
Series or Class into a greater or lesser number without thereby
changing the proportionate beneficial interests in the Trust.
Section 2.3 Register of Shares and Share Certificates. A
register shall be kept at the principal office of the Trust or an
office of the Trust's transfer agent which shall contain the names
and addresses of the Shareholders of each Series, the number of
Shares of that Series (or any Class or Classes thereof) held by them
respectively and a record of all transfers thereof. As to Shares for
which no certificate has been issued, such register shall be
conclusive as to who are the holders of the Shares and who shall be
entitled to receive dividends or other distributions or otherwise to
exercise or enjoy the rights of Shareholders. No Shareholder shall be
entitled to receive payment of any dividend or other distribution,
nor to have notice given to him as herein or in the By-laws provided,
until he has given his address to the transfer agent or such other
officer or agent of the Trustees as shall keep the said register for
entry thereon. The Trustees, in their discretion, may authorize the
issuance of share certificates and promulgate appropriate rules and
regulations as to their use. In the event that one or more
certificates are issued, whether in the name of a shareholder or a
nominee, such certificate or certificates shall constitute evidence
of ownership of Shares for all purposes, including transfer,
assignment or sale of such Shares, subject to such limitations as the
Trustees may, in their discretion, prescribe.
Section 2.4 Transfer of Shares. Except as otherwise provided by
the Trustees, Shares shall be transferable on the records of the
Trust only by the record holder thereof or by his agent thereunto
duly authorized in writing, upon delivery to the Trustees or the
Trust's transfer agent of a duly executed instrument of transfer,
together with a Share certificate, if one is outstanding, and such
evidence of the genuineness of each such execution and authorization
and of such other matters as may be required by the Trustees. Upon
such delivery the transfer shall be recorded on the register of the
Trust. Until such record is made, the Shareholder of record shall be
deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor the Trust, nor any transfer agent or
registrar nor any officer, employee or agent of the Trust shall be
affected by any notice of the proposed transfer.
Section 2.5 Treasury Shares. Shares held in the treasury shall,
until reissued pursuant to Section 2.2 hereof, not confer any voting
rights on the Trustees, nor shall such Shares be entitled to any
dividends or other distributions declared with respect to the Shares.
Section 2.6 Establishment of Series and Classes. The Trust
created hereby shall consist of one or more Series and, within each
Series, one or more Classes of shares. All references herein to
Series shall be deemed to apply to Classes as appropriate if more
than one Class is established for any Series. Separate and distinct
records shall be maintained by the Trust for each Series and the
assets associated with any such Series shall be held and accounted
for separately from the assets of the Trust or any other Series. The
Trustees shall have full power and authority, in their sole
discretion, and without obtaining any prior authorization or vote of
the Shareholders of any Series of the Trust, to establish and
designate and to change in any manner any such Series of Shares or
any Classes of initial or additional Series and to fix such
preferences, voting powers, rights and privileges of such Series or
Classes thereof as the Trustees may from time to time determine, to
divide or combine the Shares or any Series or Classes thereof into a
greater or lesser number, to classify or reclassify any issued Shares
or any Series or Classes thereof into one or more Series or Classes
of Shares, and to take such other action with respect to the Shares
as the Trustees may deem desirable. The establishment and designation
of any Series shall be effective upon the adoption of a resolution by
the Trustees setting forth such establishment and designation and the
relative rights and preferences of the Shares of such Series. A
Series may issue any number of Shares and need not issue shares.
All references to Shares in this Trust Instrument shall be
deemed to be Shares of any or all Series, or Classes thereof, as the
context may require. All provisions herein relating to the Trust
shall apply equally to each Series of the Trust, and each Class
thereof, except as the context otherwise requires.
Each Share of a Series of the Trust shall represent an equal
beneficial interest in the net assets of such Series. Each holder of
Shares of a Series shall be entitled to receive distributions of
income and capital gains, if any, which are made with respect to such
Series and which are attributable to such Shares. Upon redemption of
Shares, such Shareholder shall be paid solely out of the funds and
property of such Series of the Trust.
Section 2.7 Investment in the Trust. The Trustees shall accept
investments in any Series of the Trust from such persons and on such
terms as they may from time to time authorize. At the Trustees'
discretion, such investments, subject to applicable law, may be in
the form of cash or securities in which the affected Series is
authorized to invest, valued as provided in Article IX, Section 9.3
hereof. Investments in a Series shall be credited to each
Shareholder's account in the form of full or fractional Shares at the
Net Asset Value per Share next determined after the investment is
received; provided, however, that the Trustees may, in their sole
discretion, (a) fix the Net Asset Value per Share of the initial
capital contribution, or (b) impose sales or other charges upon
investments in the Trust.
Section 2.8 Assets and Liabilities of Series. All consideration
received by the Trust for the issue or sale of Shares of a particular
Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be,
shall be held and accounted for separately from the other assets of
the Trust and of every other Series and may be referred to herein as
"assets belonging to" that Series. The assets belonging to a
particular Series shall belong to that Series for all purposes, and
to no other Series, subject only to the rights of creditors of that
Series. In addition, any assets, income, earnings, profits or funds,
or payments and proceeds with respect thereto, which are not readily
identifiable as belonging to any particular Series shall be allocated
by the Trustees between and among one or more of the Series in such
manner as the Trustees, in their sole discretion, deem fair and
equitable. Each such allocation shall be conclusive and binding upon
the Shareholders of all Series for all purposes, and such assets,
income, earnings, profits or funds, or payments and proceeds with
respect thereto shall be assets belonging to that Series. The assets
belonging to a particular Series shall be so recorded upon the books
of the Trust, and shall be held by the Trustees in trust for the
benefit of the holders of Shares of that Series. The assets belonging
to each particular Series shall be charged with the liabilities of
that Series and all expenses, costs, charges and reserves
attributable to that Series. Any general liabilities, expenses,
costs, charges or reserves of the Trust which are not readily
identifiable as belonging to any particular Series shall be allocated
and charged by the Trustees between or among any one or more of the
Series in such manner as the Trustees in their sole discretion deem
fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series for all purposes. Without
limitation of the foregoing provisions of this Section 2.8, but
subject to the right of the Trustees in their discretion to allocate
general liabilities, expenses, costs, charges or reserves as herein
provided, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular
Series shall be enforceable against the assets of such Series only,
and not against the assets of the Trust generally. Notice of this
contractual limitation on inter-Series liabilities shall be set forth
in the certificate of trust of the Trust (whether originally or by
amendment) as filed or to be filed in the Office of the Secretary of
State of the State of Delaware pursuant to the Delaware Business
Trust Act (the "Act"), and upon the giving of such notice in the
certificate of trust, the statutory provisions of the Act relating to
limitations on inter-Series liabilities (and the statutory effect
under the Act of setting forth such notice in the certificate of
trust) shall become applicable to the Trust and each Series. Any
person extending credit to, contracting with or having any claim
against any Series may satisfy or enforce any debt, liability,
obligation or expense incurred, contracted for or otherwise existing
with respect to that Series from the assets of that Series only. No
Shareholder or former Shareholder of any Series shall have a claim on
or any right to any assets allocated or belonging to any other
Series.
Section 2.9 No Preemptive Rights. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares or
other securities issued by the Trust or the Trustees, whether of the
same or other Series.
Section 2.10 Personal Liability of Shareholders. Each
Shareholder of the Trust and of each Series shall not be personally
liable for the debts, liabilities, obligations and expenses incurred
by, contracted for, or otherwise existing with respect to, the Trust
or by or on behalf of any Series. The Trustees shall have no power to
bind any Shareholder personally or to call upon any Shareholder for
the payment of any sum of money or assessment whatsoever other than
such as the Shareholder may at any time personally agree to pay by
way of subscription for any Shares or otherwise. Every note, bond,
contract or other undertaking issued by or on behalf of the Trust or
the Trustees relating to the Trust or to a Series shall include a
recitation limiting the obligation represented thereby to the Trust
or to one or more Series and its or their assets (but the omission of
such a recitation shall not operate to bind any Shareholder or
Trustee of the Trust).
Section 2.11 Assent to Trust Instrument. Every Shareholder, by
virtue of having purchased or otherwise acquired a Share, shall
become a Shareholder and shall be held to have expressly assented and
agreed to be bound by the terms hereof.
ARTICLE III
THE TRUSTEES
Section 3.1 Management of the Trust. The Trustees shall have
exclusive and absolute control over the Trust Property and over the
business of the Trust to the same extent as if the Trustees were the
sole owners of the Trust Property and business in their own right,
but with such powers of delegation as may be permitted by this Trust
Instrument. The Trustees shall have power to conduct the business of
the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware,
in any and all states of the United States of America, in the
District of Columbia, in any and all commonwealths, territories,
dependencies, colonies, or possessions of the United States of
America, and in any foreign jurisdiction and to do all such other
things and execute all such instruments as they deem necessary,
proper or desirable in order to promote the interests of the Trust
although such things are not herein specifically mentioned. Any
determination as to what is in the interests of the Trust made by the
Trustees in good faith shall be conclusive. In construing the
provisions of this Trust Instrument, the presumption shall be in
favor of a grant of power to the Trustees.
The enumeration of any specific power in this Trust Instrument
shall not be construed as limiting the aforesaid power. The powers of
the Trustees may be exercised without order of or resort to any
court.
Except for the Trustee named herein or Trustees appointed to
fill vacancies pursuant to Section 3.4 of this Article III, the
Trustees shall be elected by the Shareholders owning of record a
plurality of the Shares voting at a meeting of Shareholders.
Section 3.2 Initial Trustee. The initial Trustee shall be the
person named herein.
Section 3.3 Term of Office of Trustees. The Trustees shall hold
office during the existence of this Trust, and until its termination
as herein provided; except (a) that any Trustee may resign his trust
by written instrument signed by him and delivered to the Chairman,
President, Secretary, or other Trustees of the Trust, which shall
take effect upon such delivery or upon such later date as is
specified therein; (b) that any Trustee may be removed at any time by
written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) that any Trustee who requests in writing
to be retired or who has died, become physically or mentally
incapacitated by reason of disease or otherwise, or is otherwise
unable to serve, may be retired by written instrument signed by a
majority of the other Trustees, specifying the date of his
retirement; and (d) that a Trustee may be removed at any meeting of
the Shareholders of the Trust by a vote of Shareholders owning at
least two-thirds of the outstanding Shares.
Section 3.4 Vacancies and Appointment of Trustees. In case of
the declination to serve, death, resignation, retirement, removal,
physical or mental incapacity by reason of disease or otherwise of a
Trustee, or a Trustee is otherwise unable to serve, or an increase in
the number of Trustees, a vacancy shall occur. Whenever a vacancy in
the Board of Trustees shall occur, until such vacancy is filled, the
other Trustees shall have all the powers hereunder and the
certificate of the other Trustees of such vacancy shall be
conclusive. In the case of an existing vacancy, the remaining
Trustees shall fill such vacancy by appointing such other person as
they in their discretion shall see fit consistent with the
limitations under the 1940 Act.
An appointment of a Trustee may be made by the Trustees then in
office in anticipation of a vacancy to occur by reason of retirement,
resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at
or after the effective date of said retirement, resignation or
increase in number of Trustees. As soon as any Trustee appointed
pursuant to this Section 3.4 shall have accepted this trust, he shall
be deemed a Trustee hereunder.
Section 3.5 Temporary Absence of Trustee. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six
months at any one time to any other Trustee or Trustees, provided
that in no case shall less than two Trustees personally exercise the
other powers hereunder except as herein otherwise expressly provided.
Section 3.6 Number of Trustees. The number of Trustees shall be
one, or such other number as shall be fixed from time to time by the
Trustees.
Section 3.7 Effect of Death, Resignation, Etc. of a Trustee.
The declination to serve, death, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall
not operate to terminate the Trust or to revoke any existing agency
created pursuant to the terms of this Trust Instrument.
Section 3.8 Ownership of Assets of the Trust. Legal title in
and beneficial ownership of all of the assets of the Trust shall at
all times be considered as vested in the Trust, except that the
Trustees may cause legal title in and beneficial ownership of any
Trust Property to be held by, or in the name of one or more of the
Trustees acting for and on behalf of the Trust, or in the name of any
person as nominee acting for and on behalf of the Trust. No
Shareholder shall be deemed to have a severable ownership interest in
any individual asset of the Trust or of any Series or any right of
partition or possession thereof, but each Shareholder shall have,
except as otherwise provided for herein, a proportionate undivided
beneficial interest in the Trust or Series. The Shares shall be
personal property giving only the rights specifically set forth in
this Trust Instrument. The Trust, or at the determination of the
Trustees one or more of the Trustees or a nominee acting for and on
behalf of the Trust, shall be deemed to hold legal title and
beneficial ownership of any income earned on securities of the Trust
issued by any business entities formed, organized, or existing under
the laws of any jurisdiction, including the laws of any foreign
country.
ARTICLE IV
POWERS OF THE TRUSTEES
Section 4.1 Powers. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust. The Trustees shall have
full authority and power to make any and all investments which they,
in their sole discretion, shall deem proper to accomplish the purpose
of this Trust. Subject to any applicable limitation in this Trust
Instrument, the Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and
to hold cash or other property uninvested, and to sell, exchange,
lend, pledge, mortgage, hypothecate, write options on and lease any
or all of the assets of the Trust;
(b) To operate as and carry on the business of an
investment company, and exercise all the powers necessary and
appropriate to the conduct of such business;
(c) To borrow money and in this connection issue notes or
other evidence of indebtedness; to secure borrowings by mortgaging,
pledging or otherwise subjecting as security the Trust Property; to
endorse, guarantee, or undertake the performance of an obligation or
engagement of any other person and to lend Trust Property;
(d) To provide for the distribution of interests of the
Trust either through a Principal Underwriter in the manner
hereinafter provided for or by the Trust itself, or both, or
otherwise pursuant to a plan of distribution of any kind;
(e) To adopt By-laws not inconsistent with this Trust
Instrument providing for the conduct of the business of the Trust and
to amend and repeal them to the extent that they do not reserve that
right to the Shareholders, which By-laws shall be deemed a part of
this Trust Instrument and are incorporated herein by reference;
(f) To elect and remove such officers and appoint and
terminate such agents as they consider appropriate;
(g) To appoint custodians of any assets of the Trust,
subject to the 1940 Act and to any conditions set forth in this Trust
Instrument;
(h) To retain one or more transfer agents and shareholder
servicing agents, or both;
(i) To set record dates in the manner provided herein or
in the By-laws;
(j) To delegate such authority (which delegation may
include the power to subdelegate) as they consider desirable to any
officers of the Trust and to any investment adviser, manager,
administrator, custodian, underwriter or other agent or independent
contractor;
(k) To purchase and pay for entirely out of Trust
Property such insurance as they may deem necessary or appropriate for
the conduct of the business of the Trust, including insurance
policies insuring the Trust Property and payment of distributions and
principal on its investments, and insurance policies insuring the
Shareholders, Trustees, officers, representatives, employees, agents,
investment advisers, managers, administrators, custodians,
underwriters, or independent contractors of the Trust individually
against all claims and liabilities of every nature arising by reason
of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any
such person in such capacity, including any action taken or omitted
that may be determined to constitute negligence, whether or not the
Trust would have the power to indemnify such person against such
liability.
(l) To sell or exchange any or all of the assets of the
Trust or terminate and liquidate any Series of the Trust, subject to
the provisions of Article XI, Section 11.4(b) hereof;
(m) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property; and
to execute and deliver powers of attorney to such person or persons
as the Trustees shall deem proper, granting to such person or persons
such power and discretion with relation to securities or property as
the Trustees shall deem proper;
(n) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities;
(o) To hold any security or property in a form not
indicating any trust, whether in bearer, book entry, unregistered or
other negotiable form; or either in the name of the Trust or in the
name of a custodian or a nominee or nominees;
(p) To establish separate and distinct Series (and
Classes), with separately defined investment objectives and policies
and distinct investment purposes in accordance with the provisions of
Article II hereof and to establish Classes of such Series having
relative rights, powers and duties as they may provide consistent
with applicable law;
(q) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or
concern, any security of which is held in the Trust; to consent to
any contract, lease, mortgage, purchase, or sale of property by such
corporation or concern, and to pay calls or subscriptions with
respect to any security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims
in favor of or against the Trust or any matter in controversy
including, but not limited to, claims for taxes;
(s) To make distributions of income and of capital gains
to Shareholders in the manner hereinafter provided;
(t) To establish, from time to time, a minimum investment
for Shareholders in the Trust or in one or more Series or Class, and
to require the redemption of the Shares of any Shareholders whose
investment is less than such minimum upon giving notice to such
Shareholder;
(u) To establish one or more committees composed of one
or more of the Trustees, and to delegate any of the powers of the
Trustees to said committees, subject to the provisions of the 1940
Act. Notwithstanding the provisions of this Article IV, and in
addition to such provisions or any other provision of this Trust
Instrument or of the Bylaws, the Trustees may by resolution appoint a
committee consisting of less than the whole number of Trustees then
in office, which committee may be empowered to act for and bind the
Trustees and the Trust, as if the acts of such committee were the
acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review or
investigation of any action, suit or proceeding which shall be
pending or threatened to be brought before any court, administrative
agency or other adjudicative body;
(v) To interpret the investment policies, practices or
limitations of any Series;
(w) To establish a registered office and have a
registered agent in the state of Delaware; and
(x) In general to carry on any other business in
connection with or incidental to any of the foregoing powers, to do
everything necessary, suitable or proper for the accomplishment of
any purpose or the attainment of any object or the furtherance of any
power hereinbefore set forth, either alone or in association with
others, and to do every other act or thing incidental or appurtenant
to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and
powers, and the foregoing enumeration of specific powers shall not be
held to limit or restrict in any manner the general powers of the
Trustees. Any action by one or more of the Trustees in their capacity
as such hereunder shall be deemed an action on behalf of the Trust or
the applicable Series, and not an action in an individual capacity.
No one dealing with the Trustees shall be under any obligation
to make any inquiry concerning the authority of the Trustees, or to
see to the application of any payments made or property transferred
to the Trustees or upon their order.
Section 4.2 Issuance and Repurchase of Shares. The Trustees
shall have the power to issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of, exchange, and
otherwise deal in Shares and, subject to the provisions set forth in
Article II and Article IX, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any
funds or property of the Trust, or the particular Series of the
Trust, with respect to which such Shares are issued.
Section 4.3 Trustees and Officers as Shareholders. Any Trustee,
officer or other agent of the Trust may acquire, own and dispose of
Shares to the same extent as if such person were not a Trustee,
officer or agent; and the Trustees may issue and sell or cause to be
issued and sold Shares to and buy such Shares from any such person or
any firm or company in which such person is interested, subject to
the general limitations herein contained as to the sale and purchase
of such Shares.
Section 4.4 Action by the Trustees and Committees. The Trustees
(and any committee thereof) may act at a meeting held in person or in
whole or in part by conference telephone equipment or other
communications technology. One-third, but (except at such times as
there is only one Trustee) no less than two, of the Trustees shall
constitute a quorum at any meeting. Except as the Trustees may
otherwise determine, one-third of the members of any committee shall
constitute a quorum at any meeting. The vote of a majority of the
Trustees (or committee members) present at a meeting at which a
quorum is present shall be the act of the Trustees (or any committee
thereof). The Trustees (and any committee thereof) may also act by
written consent signed by a majority of the Trustees (or committee
members). Regular meetings of the Trustees may be held at such places
and at such times as the Trustees may from time to time determine.
Special meetings of the Trustees (and meetings of any committee
thereof) may be called orally or in writing by the Chairman of the
Board of Trustees (or the chairman of any committee thereof) or by
any two other Trustees. Notice of the time, date and place of all
meetings of the Trustees (or any committee thereof) shall be given by
the party calling the meeting to each Trustee (or committee member)
by telephone, telefax, or telegram sent to the person's home or
business address at least twenty-four hours in advance of the meeting
or by written notice mailed to the person's home or business address
at least seventy-two hours in advance of the meeting. Notice of all
proposed written consents of Trustees (or committees thereof) shall
be given to each Trustee (or committee member) by telephone, telefax,
telegram, or first Class mail sent to the person's home or business
address. Notice need not be given to any person who attends a meeting
without objecting to the lack of notice or who executes a written
consent or a written waiver of notice with respect to a meeting.
Written consents or waivers may be executed in one or more
counterparts. Execution of a written consent or waiver and delivery
thereof may be accomplished by telefax.
Section 4.5 Chairman of the Trustees. The Trustees shall
appoint one of their number to be Chairman of the Board of Trustees.
The Chairman shall preside at all meetings of the Trustees at which
he is present and may be (but is not required to be) the chief
executive officer of the Trust.
Section 4.6 Principal Transactions. Except to the extent
prohibited by applicable law, the Trustees may, on behalf of the
Trust, buy any securities from or sell any securities to, or lend any
assets of the Trust to, any Trustee or officer of the Trust or any
firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser,
distributor or transfer agent for the Trust or with any Interested
Person of such person; and the Trust may employ any such person, or
firm or company in which such person is an Interested Person, as
broker, legal counsel, registrar, investment adviser, distributor,
transfer agent, dividend disbursing agent, custodian or in any other
capacity upon customary terms.
ARTICLE V
EXPENSES OF THE TRUST
Section 5.1 General. The Trustees shall have the power to incur
and pay or be reimbursed from the assets of the Trust or the assets
of the appropriate Series any expenses which in the opinion of the
Trustees are necessary or incidental to carry out any of the purposes
of the Trust or such Series, and to pay reasonable compensation from
the funds of the Trust to themselves as Trustees. The Trustees shall
fix the compensation of all officers, employees and Trustees, and
shall be reimbursed from the assets of the Trust or the assets of the
appropriate Series for expenses reasonably incurred by themselves on
behalf of the Trust.
Section 5.2 Expenses of Series. The Trustees shall have the
power to allocate and charge all expenses which are not readily
identifiable as belonging to any particular Series (or Class) between
or among any one or more of the Series (or Class) as set forth in
Article II, Section 2.8 of this Trust Instrument.
Section 5.3 Trustee Reimbursement. Subject to the provisions
of Article II, Section 2.8 hereof, the Trustees shall be reimbursed
from the Trust estate or the assets belonging to the appropriate
Series (or Class) for their expenses and disbursements, including,
without limitation, fees and expenses of Trustees who are not
Interested Persons of the Trust, interest expense, taxes, fees and
commissions of every kind, expenses of pricing Trust portfolio
securities, expenses of issue, repurchase and redemption of shares,
including expenses attributable to a program of periodic repurchases
or redemptions, expenses of registering and qualifying the Trust and
its Shares under Federal and State laws and regulations or under the
laws of any foreign jurisdiction, charges of third parties, including
investment advisers, managers, custodians, transfer agents, portfolio
accounting and/or pricing agents, and registrars, expenses of
preparing and setting up in type prospectuses and statements of
additional information and other related Trust documents, expenses of
printing and distributing prospectuses sent to existing Shareholders,
auditing and legal expenses, reports to Shareholders, expenses of
meetings of Shareholders and proxy solicitations therefor, insurance
expenses, association membership dues and for such non-recurring
items as may arise, including litigation to which the Trust (or a
Trustee acting as such) is a party, and for all losses and
liabilities by them incurred in administering the Trust, and for the
payment of such expenses, disbursements, losses and liabilities the
Trustees shall have a lien on the assets belonging to the appropriate
Series, or in the case of and expense allocable to more than one
Series, on the assets of each such Series, prior to any rights or
interests of the Shareholders thereto. This section shall not
preclude the Trust from directly paying any of the aforementioned
fees and expenses.
ARTICLE VI
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER, ADMINISTRATOR
AND TRANSFER AGENT
Section 6.1 Investment Adviser. The Trustees may in their
discretion, from time to time, enter into an investment advisory or
management contract or contracts with respect to the Trust or any
Series whereby the other party or parties to such contract or
contracts shall undertake to furnish the Trust with such management,
investment advisory, statistical and research facilities and services
and such other facilities and services, if any, and all upon such
terms and conditions, as the Trustees may in their discretion
determine; provided, however, that the initial approval and entering
into of such contract or contracts shall be subject to a Majority
Shareholder Vote. Notwithstanding any other provision of this Trust
Instrument, the Trustees may authorize any investment adviser
(subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales or exchanges of
portfolio securities, other investment instruments of the Trust, or
other Trust Property on behalf of the Trustees, or may authorize any
officer, agent, or Trustee to effect such purchases, sales or
exchanges pursuant to recommendations of the investment adviser (and
all without further action by the Trustees). Any such purchases,
sales and exchanges shall be deemed to have been authorized by the
Trustees.
The Trustees may authorize, subject to applicable requirements
of the 1940 Act, the investment adviser to employ, from time to time,
one or more sub-advisers to perform such of the acts and services of
the investment adviser, and upon such terms and conditions, as may be
agreed upon between the investment adviser and sub-adviser. Any
reference in this Trust Instrument to the investment adviser shall be
deemed to include such sub-advisers, unless the context otherwise
requires.
Section 6.2 Principal Underwriter. The Trustees may in their
discretion from time to time enter into an exclusive or non-exclusive
underwriting contract or contracts providing for the sale of Shares,
whereby the Trust may either agree to sell Shares to the other party
to the contract or appoint such other party its sales agent for such
Shares. In either case, the contract may also provide for the
repurchase or sale of Shares by such other party as principal or as
agent of the Trust.
Section 6.3 Administrator. The Trustees may in their discretion
from time to time enter into one or more contracts whereby the other
party or parties shall undertake to furnish the Trust with
administrative services. The contract or contracts shall be on such
terms and conditions as the Trustees may in their discretion
determine.
Section 6.4 Transfer Agent. The Trustees may in their
discretion from time to time enter into one or more transfer agency
and Shareholder service contracts whereby the other party or parties
shall undertake to furnish the Trustees with transfer agency and
Shareholder services. The contract or contracts shall be on such
terms and conditions as the Trustees may in their discretion
determine.
Section 6.5 Parties to Contract. Any contract described in this
Article VI or any contract described in Article VIII hereof may be
entered into with any corporation, firm, partnership, trust or
association, although one or more of the Trustees or officers of the
Trust may be an officer, director, trustee, shareholder, or member of
such other party to the contract, and no such contract shall be
invalidated or rendered void or voidable by reason of the existence
of any relationship, nor shall any person holding such relationship
be disqualified from voting on or executing the same in his capacity
as Shareholder and/or Trustee, nor shall any person holding such
relationship be liable merely by reason of such relationship for any
loss or expense to the Trust under or by reason of said contract or
accountable for any profit realized directly or indirectly therefrom,
provided that the contract when entered into was not inconsistent
with the provisions of this Article VI or Article VIII hereof. The
same person (including a firm, corporation, partnership, trust, or
association) may be the other party to contracts entered into
pursuant to this Article VI or pursuant to Article VIII hereof, and
any individual may be financially interested or otherwise affiliated
with persons who are parties to any or all of the contracts mentioned
in this Section 6.5.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 7.1 Voting Powers. The Shareholders shall have power to
vote only (i) for the election of Trustees as provided in Article
III, Section 3.1 hereof, (ii) for the removal of Trustees as provided
in Article III, Section 3.3(d) hereof, and (iii) with respect to such
additional matters relating to the Trust as may be required by law,
by this Trust Instrument, or as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted separately by individual Series, except (i) when
required by the 1940 Act, Shares shall be voted in the aggregate and
not by individual Series; and (ii) when the Trustees have determined
that the matter affects the interests of more than one Series, then
the Shareholders of all such Series shall be entitled to vote
thereon. The Trustees may also determine that a matter affects only
the interests of one or more Classes of a Series, in which case any
such matter shall be voted on by such Class or Classes. Each whole
Share shall be entitled to one vote as to any matter on which it is
entitled to vote, and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in
the election of Trustees. Shares may be voted in person or by proxy
or in any manner provided for in the By-laws. A proxy may be given in
writing, by telefax, or in any other manner provided for in the
By-laws. Anything in this Trust Instrument to the contrary
notwithstanding, in the event a proposal by anyone other than the
officers or Trustees of the Trust is submitted to a vote of the
Shareholders of one or more Series or of the Trust, or in the event
of any proxy contest or proxy solicitation or proposal in opposition
to any proposal by the officers or Trustees of the Trust, Shares may
be voted only in person or by written proxy. Until Shares are issued,
the Trustees may exercise all rights of Shareholders and may take any
action required or permitted by law, this Trust Instrument or any of
the By-laws of the Trust to be taken by Shareholders.
Section 7.2 Meetings. Meetings of Shareholders may be held
within or without the State of Delaware. Special meetings of the
Shareholders of any Series may be called by the Trustees and shall be
called by the Trustees upon the written request of Shareholders
owning at least one-tenth of the Outstanding Shares entitled to vote.
Whenever ten or more Shareholders meeting the qualifications set
forth in Section 16(c) of the 1940 Act seek the opportunity of
furnishing materials to the other Shareholders with a view to
obtaining signatures on such a request for a meeting, the Trustees
shall comply with the provisions of said Section 16(c) with respect
to providing such Shareholders access to the list of the Shareholders
of record of the Trust or the mailing of such materials to such
Shareholders of record, subject to any rights provided to the Trust
or any Trustees provided by said Section 16(c). Notice shall be sent,
by mail or such other means determined by the Trustees, at least 15
days prior to any such meeting.
Section 7.3 Quorum and Required Vote. One-third of Shares
entitled to vote in person or by proxy shall be a quorum for the
transaction of business at a Shareholders' meeting, except that where
any provision of law or of this Trust Instrument permits or requires
that holders of any Series shall vote as a Series (or that holders of
a Class shall vote as a Class), then one-third of the aggregate
number of Shares of that Series (or that Class) entitled to vote
shall be necessary to constitute a quorum for the transaction of
business by that Series (or that Class). Any lesser number shall be
sufficient for adjournments. Any adjourned session or sessions may be
held without the necessity of further notice. Except when a larger
vote is required by law or by any provision of this Trust Instrument,
a majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Trust Instrument permits or requires
that the holders of any Series shall vote as a Series (or that the
holders of any Class shall vote as a Class), then a majority of the
Shares present in person or by proxy of that Series or, if required
by law, a Majority Shareholder Vote of that Series (or Class), voted
on the matter in person or by proxy shall decide that matter insofar
as that Series (or Class) is concerned.
Section 7.4 Action by Written Consent. Any action which may be
taken by the Shareholders of the Trust or of a Series may be taken
without a meeting if Shareholders holding more than a majority of the
Shares entitled to vote, except when a larger vote is required by law
or by any provision of this Trust Instrument, shall consent to the
action in writing. If the consents of all Shareholders entitled to
vote have not been solicited in writing and if the unanimous written
consent of all such Shareholders shall not have been received, the
Secretary shall give prompt notice to all Shareholders of actions
approved by the Shareholders without a meeting.
ARTICLE VIII
CUSTODIAN
Section 8.1 Appointment and Duties. The Trustees shall at all
times employ a bank, a company that is a member of a national
securities exchange, or a trust company, each having capital, surplus
and undivided profits of at least two million dollars ($2,000,000) as
custodian with authority as its agent:
(1) to hold the securities owned by the Trust and deliver the
same upon written order or oral order confirmed in writing;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the
Trustees may direct; and
(3) to disburse such funds upon orders or vouchers; and the
Trust may also employ such custodian as its agent:
(4) to keep the books and accounts of the Trust or of any
Series or Class and furnish clerical and accounting services; and
(5) to compute, if authorized to do so by the Trustees, the Net
Asset Value of any Series, or Class thereof, in accordance with the
provisions hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian.
In accordance with the 1940 Act, the Trustees may also
authorize the custodian to employ one or more sub-custodians from
time to time to perform such of the acts and services of the
custodian, and upon such terms and conditions, as may be agreed upon
between the custodian and such sub-custodian and approved by the
Trustees.
Section 8.2 Central Certificate System. Subject to the 1940
Act, the Trustees may direct the custodian to deposit all or any part
of the securities owned by the Trust in a system for the central
handling of securities established by a national securities exchange
or a national securities association, pursuant to which system all
securities of any particular Class or series of any issuer deposited
within the system are treated as fungible and may be transferred or
pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to
withdrawal only upon the order of the Trust or its custodians,
sub-custodians or other agents.
ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
Section 9.1 Distributions.
(a) The Trustees may from time to time declare and pay
dividends or other distributions with respect to any Series, or Class
thereof. The amount of such dividends or distributions and the
payment of them and whether they are in cash or any other Trust
property shall be wholly in the discretion of the Trustees.
(b) Dividends and other distributions may be paid or made
to the Shareholders of record at the time of declaring a dividend or
other distribution or among the Shareholders of record at such other
date or time or dates or times as the Trustees shall determine, which
dividends or distributions, at the election of the Trustees, may be
paid pursuant to a standing resolution or resolutions adopted only
once or with such frequency as the Trustees may determine. All
dividends and other distributions on Shares of a particular Series
shall be distributed pro rata to the Shareholders of that Series in
proportion to the number of Shares of that Series they held on the
record date established for such payment, except that such dividends
and distributions shall reflect expenses allocated to a particular
Class of such Series. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout
plans or related plans as the Trustees shall deem appropriate.
(c) Anything in this Trust Instrument to the contrary
notwithstanding, the Trustees may at any time declare and distribute
a stock dividend pro rata among the Shareholders of a particular
Series, or Class thereof, as of the record date of that Series fixed
as provided in Section (b) hereof.
Section 9.2 Redemptions. In case any holder of record of Shares
of a particular Series desired to dispose of his Shares or any
portion thereof, he may deposit at the office of the transfer agent
or other authorized agent of that Series a written request or such
other form of request as the Trustees may from time to time
authorize, requesting that the Series purchase the Shares in
accordance with this Section 9.2; and the Shareholder so requesting
shall be entitled to require the Series to purchase, and the Series
or the Principal Underwriter of the Series shall purchase his said
Shares, but only at the Net Asset Value thereof (as described in
Section 9.3 of this Article IX). The Series shall make payment for
any such Shares to be redeemed, as aforesaid, in cash or property
from the assets of that Series and payment for such Shares shall be
made by the Series or the Principal Underwriter of the Series to the
Share-holder of record within seven (7) days after the date upon
which the request is effective. Upon redemption, shares shall become
Treasury shares and may be re-issued from time to time.
Section 9.3 Determination of Net Asset Value and Valuation of
Portfolio Assets. The term "Net Asset Value" of any Series shall mean
that amount of which the assets of that Series exceeds its
liabilities, all as determined by or under the direction of the
Trustees. Such value shall be determined separately for each Series
and shall be determined on such days and at such times as the
Trustees may determine. Such determination shall be made with respect
to securities for which market quotations are readily available, at
the market value of such securities; and with respect to other
securities and assets, at the fair value as determined in good faith
by the Trustees; provided, however, that the Trustees, without
Shareholder approval, may alter the method of valuing portfolio
securities consistent with the 1940 Act. The Trustees may delegate
any of their powers and duties under this Section 9.3 with respect to
valuation of assets and liabilities. The resulting amount, which
shall represent the total Net Asset Value of the particular Series,
shall be divided by the total number of shares of that Series
outstanding at the time and the quotient so obtained shall be the Net
Asset Value per Share of that Series. At any time the Trustees may
cause the Net Asset Value per Share last determined to be determined
again in similar manner and may fix the time when such redetermined
value shall become effective. If, for any reason, the net income of
any Series, determined at any time, is a negative amount, the
Trustees shall have the power with respect to that Series (i) to
offset each Shareholder's pro rata share of such negative amount from
the accrued dividend account of such Shareholder, or (ii) to reduce
the number of Outstanding Shares of such Series by reducing the
number of Shares in the amount of each Shareholder by a pro rata
portion of that number of full and fractional Shares which represents
the amount of such excess negative net income, or (iii) to cause to
be recorded on the books of such Series an asset account in the
amount of such negative net income (provided that the same shall
thereupon become the property of such Series and shall not be paid to
any Shareholder), which account may be reduced by the amount, of
dividends declared thereafter upon the Outstanding Shares of such
Series on the day such negative net income is experienced, until such
asset account is reduced to zero; (iv) to combine the methods
described in clauses (i) and (ii) and (iii) of this sentence; or (iv)
to take any other action they deem appropriate, in order to cause (or
in order to assist in causing) the Net Asset Value per Share of such
Series to remain at a constant amount per Outstanding Share
immediately after each such determination and declaration. The
Trustees shall also have the power not to declare a dividend out of
net income for the purpose of causing the Net Asset Value per Share
to be increased. The Trustees shall not be required to adopt, but may
at any time adopt, discontinue or amend the practice of maintaining
the Net Asset Value per Share of the Series at a constant amount.
Section 9.4 Suspension of the Right of Redemption. The Trustees
may declare a suspension of the right of redemption or postpone the
date of payment as permitted under the 1940 Act. Such suspension
shall take effect at such time as the Trustees shall specify but not
later than the close of business on the business day next following
the declaration of suspension, and thereafter there shall be no right
of redemption or payment until the Trustees shall declare the
suspension at an end. In the case of a suspension of the right of
redemption, a Shareholder may either withdraw his request for
redemption or receive payment based on the Net Asset Value per Share
next determined after the termination of the suspension. In the event
that any Series is divided into Classes, the provisions of this
Section 9.4, to the extent applicable as determined in the discretion
of the Trustees and consistent with applicable law, may be equally
applied to each such Class.
Section 9.5 Redemption of Shares in Order to Qualify as
Regulated Investment Company. If the Trustees shall be of the opinion
that direct or indirect ownership of Shares of any Series has or may
become concentrated in any Person to an extent which would disqualify
any Series as a regulated investment company under the Internal
Revenue Code, then the Trustees shall have the power (but not the
obligation) by lot or other means deemed equitable by them (i) to
call for redemption by any such person of a number, or principal
amount, of Shares sufficient to maintain or bring the direct or
indirect ownership of Shares into conformity with the requirements
for such qualification and (ii) to refuse to transfer or issue Shares
to any person whose acquisition of the Shares in question would
result in such disqualification. The redemption shall be effected at
the redemption price and in the manner provided in this Article IX.
The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect
ownership of Shares as the Trustees deem necessary to comply with the
provisions of the Internal Revenue Code, or to comply with the
requirements of any other taxing authority.
ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 10.1 Limitation of Liability. A Trustee, when acting in
such capacity, shall not be personally liable to any person other
than the Trust or a beneficial owner for any act, omission or
obligation of the Trust or any Trustee. A Trustee shall not be liable
for any act or omission in his capacity as Trustee, or for any act or
omission of any officer or employee of the Trust or of any other
person or party, provided that nothing contained herein or in the
Delaware Business Trust Act shall protect any Trustee against any
liability to the Trust or to Shareholders to which he would otherwise
be subject by reason willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of the
office of Trustee hereunder.
Section 10.2 Indemnification. The Trust shall indemnify each of
its Trustees to the full extent permitted by law against all
liabilities and expenses (including amounts paid in satisfaction of
judgments, in settlement, as fines and penalties, and as counsel
fees) reasonably incurred by such Trustee in connection with the
defense or disposition of any action, suit or other proceeding,
whether civil or criminal, in which such Trustee may be involved or
with which such Trustee may be threatened, while as a Trustee or
thereafter, by reason of being or having been such a Trustee except
with respect to any matter as to which such Trustee shall have been
adjudicated to have acted in bad faith, willful misfeasance, gross
negligence or reckless disregard of such Trustee's duties. In the
event of a settlement, no indemnification shall be provided unless
there has been a determination that such Trustee did not engage in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office, (i) by
the court or other body approving the settlement; (ii) by at least a
majority of those Trustees who are neither interested persons of the
Trust nor are parties to the matter based upon a review of readily
available facts (as opposed to a full trial-type inquiry); or (iii)
by written opinion of independent legal counsel based upon a review
of readily available facts (as opposed to a full trial-type inquiry).
The rights accruing to any person under these provisions shall not
exclude any other right to which such Trustee may be lawfully
entitled, provided that no person may satisfy any right of indemnity
or reimbursement hereunder except out of the property of the Trust.
The Trustees may authorize advance payments in connection with the
indemnification under this Section 10.2, provided that the
indemnified person shall have given a written undertaking to
reimburse the Trust in the event it is subsequently determined that
such Trustee is not entitled to such indemnification.
The Trust shall indemnify officers, and shall have the power to
indemnify representatives and employees of the Trust, to the same
extent that Trustees are entitled to indemnification pursuant to this
Section 10.2.
Section 10.3 Shareholders. In case any Shareholder or former
Shareholder of any Series shall be held to be personally liable
solely by reason of his being or having been a Shareholder of such
Series and not because of his acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his heirs,
executors, administrators or other legal representatives, or, in the
case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against
all loss and expense arising from such liability. The Trust, on
behalf of the affected Series, shall, upon request by the
Shareholder, assume the defense of any claim made against the
Shareholder for any act or obligation of the Series and satisfy any
judgment thereon from the assets of the Series.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Trust Not a Partnership. It is hereby expressly
declared that a trust and not a partnership is created hereby. No
Trustee hereunder shall have any power to bind personally either the
Trust's officers or any Shareholder. All persons extending credit to,
contracting with or having any claim against the Trust or the
Trustees may satisfy or enforce any debt, liability, obligation or
expense incurred, contracted for or otherwise existing with respect
to the Trust from the assets of the Trust only; and neither the
Shareholders nor the Trustees, nor any of their agents, whether past,
present or future, shall be personally liable therefor.
Section 11.2 Trustees' Good Faith Action, Expert Advice, No
Bond or Surety. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under
the circumstances then prevailing shall be binding upon everyone
interested. Subject to the provisions of Article X hereof, the
Trustees shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts
with respect to the meaning and operation of this Trust Instrument,
and subject to the provisions of Article X hereof, shall be under no
liability for any act or omission in accordance with such advice or
for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is obtained.
Section 11.3 Establishment of Record Dates. The Trustees may
close the Share transfer books of the Trust for a period not
exceeding ninety (90) days preceding the date of any meeting of
Shareholders, or the date for the payment of any dividends or other
distributors, or the date for the allotment of rights, or the date
when any change or conversion or exchange of Shares shall go into
effect; or in lieu of closing the stock transfer books as aforesaid,
the Trustees may fix in advance a date, not exceeding ninety (90)
days preceding the date of any meeting of Shareholders, or the date
for payment of any dividend or other distribution, or the date for
the allotment of rights, or the date when any change or conversion or
exchange of Shares shall into effect, as a record date for the
determination of the Shareholders entitled to notice of, and to vote
at, any such meeting, or entitled to receive payment of any such
dividend or other distribution, or to any such allotment of rights,
or to exercise the rights in respect of any such change, conversion
or exchange of Shares, and in such case such Shareholders and only
such Shareholders as shall be Shareholders of record on the date so
fixed shall be entitled to such notice of, and to vote at, such
meeting, or to receive payment of such dividend or other
distribution, or to receive such allotment or rights, or to exercise
such rights, as the case may be, notwithstanding any transfer of any
Shares on the books of the Trust after any such record date fixed as
aforesaid.
Section 11.4 Termination of Trust or Series.
(a) This Trust shall continue without limitation of time
but subject to the provisions of sub-section (b) of this Section
11.4.
(b) The Trustees may
(i) sell and convey all or substantially all of the
assets of the Trust or any Series to another trust,
partnership, association or corporation, or to a separate
series of shares thereof, organized under the laws of any
state, for adequate consideration which may include the
assumption of all outstanding obligations, taxes and
other liabilities, accrued or contingent, of the Trust or
any Series, and which may include shares of beneficial
interest, stock or other ownership interests of such
trust, partnership, association or corporation or of a
series thereof; or
(ii) at any time sell and convert into money all of
the assets of the Trust or any Series and provide for the
termination and liquidation of the Trust or any Series.
Upon making reasonable provision, in the determination of the
Trustees, for the payment of all such liabilities in either (i) or
(ii), by such assumption or otherwise, the Trustees shall distribute
the remaining proceeds or assets (as the case may be) of each Series
(or Class) ratably among the holders of Shares of that Series then
outstanding.
(c) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in subsection (b), the
Trust or any affected Series shall terminate and the Trustees and the
Trust shall be discharged of any and all further liabilities and
duties hereunder and the right, title and interest of all parties
with respect to the Trust or Series shall be canceled and discharged.
Upon termination of the Trust, following completion of winding
up of its business, the Trustees shall cause a certificate of
cancellation of the Trust's certificate of trust to be filed in
accordance with the Delaware Business Trust Act, which certificate of
cancellation may be signed by any one Trustee.
Section 11.5 Reorganization. Anything in this Trust Instrument
to the contrary notwithstanding, the Trustees, in order to change the
form of organization and/or domicile of the Trust, may, without prior
Shareholder approval, (i) cause the Trust to merge or consolidate
with or into one or more trusts, partnerships, associations or
corporations which is formed, organized or existing under the laws of
a state, commonwealth possession or colony of the United States or
(ii) cause the Trust to incorporate under the laws of Delaware. Any
agreement of merger or consolidation or certificate of merger may be
signed by a majority of the Trustees. Pursuant to and in accordance
with the provisions of Section 3815(f) of the Delaware Business Trust
Act, and notwithstanding anything to the contrary contained in this
Trust Instrument, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 11.5 may effect any
amendment to the Trust Instrument or effect the adoption of a new
trust instrument of the Trust if it is the surviving or resulting
trust in the merger or consolidation. Any merger or consolidation of
the Trust other than as described in the foregoing provisions of this
Section 11.5 shall, in addition to the approval of the Trustees,
require the approval of the holders of a majority of the Outstanding
Shares.
Section 11.6 Filing of Copies, References, Headings. The
original or a copy of this Trust Instrument and of each amendment
hereof or Trust Instrument supplemental hereto shall be kept at the
office of the Trust where it may be inspected by any Shareholder.
Anyone dealing with the Trust may rely on a certificate by an officer
or Trustee of the Trust as to whether or not any such amendments or
supplements have been made and as to any matters in connection with
the Trust hereunder, and with the same effect as if it were the
original, may rely on a copy certified by an officer or Trustee of
the Trust to be a copy of this Trust Instrument or of any such
amendment or supplemental Trust Instrument. In this Trust Instrument
or in any such amendment or supplemental Trust Instrument, references
to this Trust Instrument, and all expressions like "herein," "hereof"
and "hereunder," shall be deemed to refer to this Trust Instrument as
amended or affected by any such supplemental Trust Instrument. All
expressions like "his", "he" and "him", shall be deemed to include
the feminine and neuter, as well as masculine, genders. Headings are
placed herein for convenience of reference only and in case of any
conflict, the text of this Trust Instrument rather than the headings,
shall control. This Trust Instrument may be executed in any number of
counterparts each of which shall be deemed an original.
Section 11.7 Applicable Law. The trust set forth in this
instrument is made in the State of Delaware, and the Trust and this
Trust Instrument, and the rights and obligations of the Trustees and
Shareholders hereunder, are to be governed by and construed and
administered according to the Delaware Business Trust Act and the
laws of said State; provided, however, that there shall not be
applicable to the Trust, the Trustees or this Trust Instrument (a)
the provisions of Section 3540 of Title 12 of the Delaware Code or
(b) any provisions of the laws (statutory or common) of the State of
Delaware (other than the Delaware Business Trust Act) pertaining to
trusts which relate to or regulate (i) the filing with any court or
governmental body or agency of trustee accounts or schedules of
trustee fees and charges, (ii) affirmative requirements to post bonds
for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval
concerning the acquisition, holding or disposition of real or
personal property, (iv) fees or other sums payable to trustees,
officers, agents or employees of a trust, (v) the allocation of
receipts and expenditures to income or principal, (vi) restrictions
or limitations on the permissible nature, amount or concentration of
trust investments or requirements relating to the titling, storage or
other manner of holding of trust assets, or (vii) the establishment
of fiduciary or other standards or responsibilities or limitations on
the acts or powers of trustees, which are inconsistent with the
limitations or liabilities or authorities and powers of the Trustees
set forth or referenced in this Trust Instrument. The Trust shall be
of the type commonly called a "business trust", and without limiting
the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust under Delaware law. The Trust
specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Business Trust Act, and the absence of a
specific reference herein to any such power, privilege or action
shall not imply that the Trust may not exercise such power or
privilege or take such actions.
Section 11.8 Amendments. Except as specifically provided
herein, the Trustees may, without shareholder vote, amend or
otherwise supplement this Trust Instrument by making an amendment, a
Trust Instrument supplemental hereto or an amended and restated trust
instrument. Shareholders shall have the right to vote (i) on any
amendment which would affect their right to vote granted in Section
7.1 of Article VII hereof, (ii) on any amendment to this Section
11.8, (iii) on any amendment as may be required by law and (iv) on
any amendment submitted to them by the Trustees. Any amendment
required or permitted to be submitted to Shareholders which, as the
Trustees determine, shall affect the Shareholders of one or more
Series shall be authorized by vote of the Shareholders of each Series
affected and no vote of shareholders of a Series not affected shall
be required. Anything in this Trust Instrument to the contrary
notwithstanding, any amendment to Article X hereof shall not limit
the rights to indemnification or insurance provided therein with
respect to action or omission of Covered Persons prior to such
amendment.
Section 11.9 Fiscal Year. The fiscal year of the Trust shall
end on a specified date as determined from time to time by the
Trustees.
Section 11.10 Use of the Name "Beacon Global Advisors Trust".
The name "Beacon Global Advisors Trust," and all rights to the use
thereof belong to Beacon Global Advisors, Inc., the investment
adviser of the Trust. Beacon Global Advisors, Inc. has consented to
the use by the Trust of such name.
Section 11.11 Provisions in Conflict with Law. The provisions
of this Trust Instrument are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is
in conflict with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws
and regulations, the conflicting provision shall be deemed never to
have constituted a part of this Trust Instrument; provided, however,
that such determination shall not affect any of the remaining
provisions of this Trust Instrument or render invalid or improper any
action taken or omitted prior to such determination. If any provision
of this Trust Instrument shall be held invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall attach
only to such provision in such jurisdiction and shall not in any
manner affect such provisions in any other jurisdiction or any other
provision of this Trust Instrument in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being the initial Trustee
of the Trust, has executed this Trust Instrument this 29th day of
August, 1996.
/s/ Robert J. Henrich
Robert J. Henrich, Trustee
Beacon Global Advisors Trust
By-Laws Dated: August 29, 1996
Principal Place of Business:
8260 Greensboro Drive, Suite 250
McLean, Virginia 22102
<PAGE>
BEACON GLOBAL ADVISORS TRUST
BY-LAWS
These By-laws of Beacon Global Advisors Trust (the "Trust"),
a Delaware Business Trust, are subject to the Trust Instrument of the
Trust dated August 29, 1996, as from time to time amended, supplemented
or restated (the "Trust Instrument"). Capitalized terms used herein
which are defined in the Trust Instrument are used as therein defined.
ARTICLE I
PRINCIPAL OFFICE
The principal office of the Trust shall be located in such
location as the Trustees may from time to time determine. The Trust may
establish and maintain such other offices and places of business as the
Trustees may from time to time determine.
ARTICLE II
OFFICERS AND THEIR ELECTION
Section 2.1 Officers. The officers of the Trust shall be
a President, a Treasurer, a Secretary, and such other officers as the
Trustees may from time to time elect. It shall not be necessary for any
Trustee or other officer to be a holder of Shares in the Trust.
Section 2.2 Election of Officers. Two or more offices may
be held by a single person. Subject to the provisions of Section 2.3
hereof, the officers shall hold office until their successors are chosen
and qualified and serve at the pleasure of the Trustees.
Section 2.3 Resignations. Any officer of the Trust may
resign by filing a written resignation with the President, the Secretary
or the Trustees, which resignation shall take effect on being so filed
or at such later time as may be therein specified.
ARTICLE III
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
Section 3.1 Chief Executive Officer. Unless the Trustees
have designated the Chairman as the chief executive officer of the
Trust, the President shall be the chief executive officer of the Trust.
Subject to the direction of the Trustees, the chief executive officer
shall have general administration of the business and policies of the
Trust. Except as the Trustees may otherwise order, the chief executive
officer shall have the power to grant, issue, execute or sign such
powers of attorney, proxies, agreements or other documents as may be
deemed advisable or necessary in the furtherance of the interests of the
Trust or any Series thereof. He shall also have the power to employ
attorneys, accountants and other advisers and agents and counsel for the
Trust. If the President is not the chief executive officer, he shall
perform such duties as the Trustees or the chief executive officer may
from time to time designate and, at the request or in the absence or
disability of the chief executive officer, may perform all the duties
of the chief executive officer and, when so acting, shall have all the
powers of and be subject to all the restrictions upon the chief
executive officer.
Section 3.2 Treasurer. The Treasurer shall be the
principal financial and accounting officer of the Trust. He shall
deliver all funds and securities of the Trust which may come into his
hands to such company as the Trustees shall employ as Custodian in
accordance with the Trust Instrument and applicable provisions of law.
He shall make annual reports regarding the business and condition of the
Trust, which reports shall be preserved in Trust records, and he shall
furnish such other reports regarding the business and condition of the
Trust as the Trustees may from time to time require. The Treasurer
shall perform such additional duties as the Trustees or the chief
executive officer may from time to time designate.
Section 3.3 Secretary. The Secretary shall record in books
kept for the purpose all votes and proceedings of the Trustees and the
Shareholders at their respective meetings. He shall have the custody
of the seal of the Trust. The Secretary shall perform such additional
duties as the Trustees or the chief executive officer may from time to
time designate.
Section 3.4 Vice President. Any Vice President of the
Trust shall perform such duties as the Trustees or the chief executive
officer may from time to time designate. At the request or in the
absence or disability of the President, the most senior Vice President
present and able to act may perform all the duties of the President and,
when so acting, shall have all the powers of and be subject to all the
restrictions upon the President.
Section 3.5 Assistant Treasurer. Any Assistant Treasurer
of the Trust shall perform such duties as the Trustees or the Treasurer
may from time to time designate, and, in the absence of the Treasurer,
the most senior Assistant Treasurer present and able to act may perform
all the duties of the Treasurer.
Section 3.6 Assistant Secretary. Any Assistant Secretary
of the Trust shall perform such duties as the Trustees or the Secretary
may from time to time designate, and, in the absence of the Secretary,
the most senior Assistant Secretary present and able to act may perform
all the duties of the Secretary.
Section 3.7 Subordinate Officers. The Trustees from time
to time may appoint such other officers or agents as they may deem
advisable, each of whom shall have such title, hold office for such
period, have such authority and perform such duties as the Trustees may
determine.
Section 3.8 Surety Bonds. The Trustees may require any
officer or agent of the Trust to execute a bond (including, without
limitation, any bond required by the Investment Company Act of 1940
("1940 Act") in such sum and with such surety or sureties as the
Trustees may determine, conditioned upon the faithful performance of his
duties to the Trust including responsibility for negligence and for the
accounting of any of the Trust's property, funds or securities that may
come into his hands.
Section 3.9 Removal. Any officer may be removed from
office at any time by the Trustees.
Section 3.10 Remuneration. The salaries or other
compensation, if any, of the officers of the Trust shall be fixed from
time to time by resolution of the Trustees.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 4.1 Notices. Notices of any meeting of the
Shareholders shall be given by the Secretary by delivering or mailing,
postage prepaid, to each Shareholder entitled to vote at said meeting,
written or printed notification of such meeting at least fifteen days
before the meeting, to such address as may be registered with the Trust
by the Shareholder. Notice of any Shareholder meeting need not be given
to any Shareholder if a written waiver of notice, executed before or
after such meeting, is filed with the record of such meeting, or to any
Shareholder who shall attend such meeting in person or by proxy. Notice
of adjournment of a Shareholders' meeting to another time or place need
not be given, if such time and place are announced at the meeting or
reasonable notice is given to persons present at the meeting.
Section 4.2 Voting-Proxies. Subject to the provisions of
the Trust Instrument, Shareholders entitled to vote may vote either in
person or by proxy, provided that either (i) an instrument authorizing
such proxy to act is executed by the Shareholder in writing and dated
not more than eleven months before the meeting, unless the instrument
specifically provides for a longer period or (ii) the Trustees adopt by
resolution an electronic, telephonic, computerized or other alternative
to execution of a written instrument authorizing the proxy to act, which
authorization is received not more than eleven months before the
meeting. Proxies shall be delivered to the Secretary of the Trust or
other person responsible for recording the proceedings before being
voted. A proxy with respect to Shares held in the name of two or more
persons shall be valid if executed by one of them unless at or prior to
exercise of such proxy the Trust receives a specific written notice to
the contrary from any one of them. Unless otherwise specifically
limited by their terms, proxies shall entitle the holder thereof to vote
at any adjournment of a meeting. A proxy purporting to be exercised by
or on behalf of a Shareholder shall be deemed valid unless challenged
at or prior to its exercise and the burden of proving invalidity shall
rest on the challenger. At all meetings of the Shareholders, unless the
voting is conducted by inspectors, all questions relating to the
qualifications of voters, the validity of proxies, and the acceptance
or rejection of votes shall be decided by the Chairman of the meeting.
Except as otherwise provided herein or in the Trust Instrument, all
matters relating to the giving, voting or validity of proxies shall be
governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Shareholders were shareholders
of a Delaware corporation.
Section 4.5 Place of Meeting. All meetings of the
Shareholders shall be held at such places as the Trustees may designate.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1 Share Certificate. No certificates certifying
the ownership of Shares shall be issued except as the Trustees may
otherwise authorize. The Trustees may issue certificates to a
Shareholder of any Series or class thereof for any purpose and the
issuance of a certificate to one or more Shareholders shall not require
the issuance of certificates generally. In the event that the Trustees
authorize the issuance of Share certificates, such certificates shall
be in the form prescribed from time to time by the Trustees and shall
be signed by the President or a Vice President and by the Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary. Such signatures
may be facsimiles if the certificate is signed by a transfer or
shareholder services agent or by a registrar, other than a Trustee,
officer or employee of the Trust. In case any officer who has signed
or whose facsimile signature has been placed on such certificate shall
have ceased to be such officer before such certificate is issued, it may
be issued by the Trust with the same effect as if he or she were such
officer at the time of its issue.
Section 5.2 Loss of Certificate. In case of the alleged
loss or destruction or the mutilation of a Share certificate, a
duplicate certificate may be issued in place thereof, upon such terms
as the Trustees may prescribe.
Section 5.3 Discontinuance of Issuance of Certificates.
The Trustees may at any time discontinue the issuance of Share
certificates and may, by written notice to each Shareholder, require the
surrender of Share certificates to the Trust for cancellation. Such
surrender and cancellation shall not affect the ownership of Shares of
the Trust.
ARTICLE VI
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and
to what extent, and at what times and places, and under what conditions
and regulations the accounts and books of the Trust or any of them shall
be open to the inspection of the Shareholders; and no Shareholder shall
have any right to inspect any account or book or document of the Trust
except as conferred by law or otherwise by the Trustees.
ARTICLE VII
SEAL
The seal of the Trust shall be circular in form bearing the
inscription:
"BEACON GLOBAL ADVISORS TRUST -- 1996
THE STATE OF DELAWARE"
The form of the seal shall be subject to alteration by the
Trustees and the seal may be used by causing it or a facsimile to be
impressed or affixed or printed or otherwise reproduced.
Any officer or Trustee of the Trust shall have authority to
affix the seal of the Trust to any document, instrument or other paper
executed and delivered by or on behalf of the Trust; however, unless
otherwise required by the Trustees, the seal shall not be necessary to
be placed on and its absence shall not impair the validity of, any
document, instrument, or other paper executed by or on behalf of the
Trust.
ARTICLE VIII
AMENDMENTS
These By-laws may be amended from time to time by the
Trustees.
ARTICLE IX
HEADINGS
Headings are placed in these By-laws for convenience of
reference only and, in case of any conflict, the text of these By-laws
rather than the headings shall control.
