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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BERKSHIRE CAPITAL INVESTMENT TRUST
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(j)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or
the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing party:
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4) Date filed:
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BERKSHIRE CAPITAL INVESTMENT TRUST
475 MILAN DRIVE, SUITE #103
SAN JOSE, CALIFORNIA 95134
December __, 1998
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders
of The Berkshire Capital Growth & Value Fund (the "Fund") to be held on
December 30, 1998 at 10:00 a.m. at 1150 West El Camino Real, Mountain View,
California 95134.
The primary purpose of the Special Meeting is to approve the
investment advisory agreement with Berkshire Capital Holdings, Inc. for the
year 1999. The terms, conditions and fee of the investment advisory agreement
are identical to the existing investment advisory agreement except as to its
effective date and termination date. Shareholders are also being asked to
approve the selection of McCurdy & Associates CPA's, Inc. as independent
public accountants for the Fund for the fiscal year ending December 31, 1998.
The Board of Trustees has given full and careful consideration to each of the
matters submitted to shareholders and has concluded that the proposals are in
the best interests of the Fund and its shareholders. The Board of Trustees,
therefore, recommends that you vote "FOR" each of the proposals discussed
herein.
Regardless of the number of shares you own, it is important that they
are represented and voted. If you cannot personally attend the Special
Shareholders' Meeting, we would appreciate your promptly voting, signing and
returning the enclosed proxy in the postage-paid envelope provided.
Very truly yours,
/s/ Malcolm R. Fobes III
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Malcolm R. Fobes III
Chairman of the Board
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BERKSHIRE CAPITAL INVESTMENT TRUST
475 MILAN DRIVE, SUITE #103
SAN JOSE, CALIFORNIA 95134
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
THE BERKSHIRE CAPITAL GROWTH & VALUE FUND
TO BE HELD ON DECEMBER 30, 1998
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of The
Berkshire Capital Growth & Value Fund (the "Fund") will be held at 1150 West
El Camino Real, Mountain View, California 95134 on December 30, 1998 at 10:00
a.m. to consider and vote on the following matters:
1. To approve the investment advisory agreement (the "Advisory
Agreement") for the year 1999 with Berkshire Capital Holdings, Inc.
The terms, conditions and fee of the Advisory Agreement are identical
to the existing investment advisory agreement except as to its
effective date and termination date;
2. To approve the selection of McCurdy & Associates CPA's, Inc. as
independent public accountants for the fiscal year ending
December 31, 1998;
3. To transact any other business, not currently contemplated, that may
properly come before the meeting at the discretion of the proxies or
their substitutes.
The Board of Trustees has fixed the close of business on December 11, 1998 as
the record date for determination of the shareholders entitled to notice of
and to vote at the meeting.
By Order of the Board of Trustees,
/s/ Ronald G. Seger
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Ronald G. Seger
Secretary
November 22, 1998
Whether or not you expect to attend, we urge you to sign and date the enclosed
proxy and return it promptly in the envelope provided. No postage is required
if mailed in the United States. The proxy is revocable and will not affect
your right to vote in person if you attend the meeting.
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BERKSHIRE CAPITAL INVESTMENT TRUST
475 MILAN DRIVE, SUITE #103
SAN JOSE, CA 95134
SPECIAL MEETING OF SHAREHOLDERS OF
THE BERKSHIRE CAPITAL GROWTH & VALUE FUND
TO BE HELD ON DECEMBER 30, 1998
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation
by the Board of Trustees of the Fund of proxies for use at the special meeting
(the "Special Meeting") of shareholders or at any adjournment thereof. This
proxy statement and form of proxy were first mailed to shareholders on or
about December __, 1998.
The purposes of the Special Meeting of shareholders are: (1) to
approve an investment advisory agreement for the year 1999 with Berkshire
Capital Holdings, Inc. (the "Investment Adviser"); (2) to approve the
selection of McCurdy & Associates CPA's, Inc. as independent public
accountants for the fiscal year ending December 31, 1998.
A proxy, if properly executed, duly returned and not revoked, will be
voted in accordance with the specifications thereon. A proxy which is properly
executed that has no voting instructions to a proposal will be voted for that
proposal, as in the case of broker non-votes as described below. A shareholder
may revoke a proxy at any time prior to use by filing with the Secretary of
the Fund an instrument revoking the proxy, by submitting a proxy bearing a
later date, or by attending and voting at the Special Meeting.
The Investment Adviser has retained Mutual Shareholder Services
("MSS") to solicit proxies for the Special Meeting. MSS is responsible for
soliciting brokers, custodians, nominees and fiduciaries, tabulating the
returned proxies, and performing other proxy solicitation services. The
anticipated cost of such services is expected not to exceed $500 and all costs
associated with the soliciting of proxies are borne by the Investment Adviser.
In addition to solicitation through the mails, proxies may be
solicited by officers, employees and agents of the Fund at the expense of the
Investment Adviser, without cost to the Fund. Such solicitation may be by
telephone, facsimile or otherwise. The Investment Adviser will reimburse MSS,
brokers, custodians, nominees and fiduciaries for the reasonable expenses
incurred by them in connection with forwarding solicitation materials to the
beneficial owners of shares held of record by such persons.
The Fund's Annual Report for the fiscal year ended December 31, 1997 is
available at no charge by writing to the Trust at 475 Milan Drive, Suite #103,
San Jose, CA 95134, or by calling the Trust nationwide (toll-free) at
1-877-526-0707.
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OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Board of Trustees has fixed the close of business on December 11,
1998 (the "Record Date") as the record date for the determination of
shareholders entitled to notice of, and to vote at, the Special Meeting of
shareholders or any adjournment thereof. The Fund is the sole series of the
Berkshire Capital Investment Trust, a Delaware business trust. As of the
Record Date there were 16,854.899 shares of beneficial interest, $1 par value,
of the Fund outstanding. All full shares of the Fund are entitled to one vote,
with proportionate voting for fractional shares.
On the Record Date, Malcolm R. Fobes III, 475 Milan Drive, Suite
#103, San Jose, CA 95134 owned of record 45.00% of the Fund and Ronald G.
Seger, 715 Glenborough Drive, Mountain View, CA 94041 owned of record 31.81%
of the Fund. No other persons owned of record and, according to information
available to the Fund, no other persons owned beneficially 5% or more of the
Fund's outstanding shares.
The vote of a majority of the outstanding shares of the Fund is
required for approval of each of the proposals being submitted to shareholders
at the Special Meeting. The vote of a majority of the outstanding shares means
the vote of the lesser of (1) 67% or more of the shares present or represented
by proxy at the Special Meeting, if the holders of more than 50% of the
outstanding shares are present or represented by proxy, or (2) more than 50%
of the outstanding shares. If a quorum is present at the Special Meeting but
sufficient votes to approve any of the proposals are not received, the persons
named as proxies may propose one or more adjournments of the Special Meeting
to permit further solicitation of proxies. Any such adjournment will require
the affirmative vote of a majority of those shares represented at the Special
Meeting in person or by proxy. A shareholder vote may be taken on one of the
proposals in this proxy statement prior to any such adjournment if sufficient
votes have been received and it is otherwise appropriate. Abstentions and
"broker non-votes" are counted for purposes of determining whether a quorum is
present but do not represent votes cast with respect to a proposal. "Broker
non-votes" are shares held by a broker or nominee for which an executed proxy
is received by the Fund, but are not voted as to one or more proposals because
instructions have not been received from the beneficial owners or persons
entitled to vote and the broker or nominee does not have discretionary voting
power.
If any of the proposals in this proxy statement are not approved by
shareholders, the Board of Trustees will consider such alternatives as may be
appropriate and in the best interests of the Fund.
The Trustees of the Fund intend to vote all of their shares in favor
of the proposals described herein. All Trustees and officers as a group owned
of record or beneficially 84.77% of the Fund's outstanding shares on the
Record Date.
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I. APPROVAL OF INVESTMENT ADVISORY AGREEMENT FOR THE YEAR 1999 BETWEEN
THE FUND AND THE INVESTMENT ADVISER.
GENERAL. The Fund's present investment advisory agreement (the
"Current Advisory Agreement") is dated June 26, 1997 and was last approved by
the Board of Trustees, including a majority of the Trustees who are not
interested persons, as defined in the Investment Company Act of 1940 (the
"1940 Act"), of the Investment Adviser or the Fund (the "Independent
Trustees"), on November 22, 1998.
The Fund's shareholders are being asked to approve the investment
advisory agreement (the "Advisory Agreement") for the year 1999. The Advisory
Agreement, the form of which is attached to this Proxy Statement as Exhibit A,
is identical to the Current Advisory Agreement, except as to its effective
date and termination date. The Advisory Agreement is to become effective upon
its approval by the shareholders of the Fund.
TERMS OF THE ADVISORY AGREEMENT. Under the Advisory Agreement, as
under the Current Advisory Agreement, the Investment Adviser serves as the
discretionary portfolio manager of the Fund, subject to the supervision of the
Board of Trustees.
The Advisory Agreement, like the Current Advisory Agreement, requires
the Investment Adviser to give primary consideration to securing the most
favorable price and efficient execution in the selection of brokers and
dealers to execute portfolio transactions for the Fund. The Advisory Agreement
further provides that, consistent with this policy, the Adviser may consider
the financial responsibility, research and investment information and other
services provided by the broker or dealer and in particular may select brokers
who also provide brokerage and research services to the Fund and/or the other
accounts over which the Investment Adviser exercises investment discretion and
may pay a broker who provides such brokerage and research services a
commission for executing a portfolio transaction which is in excess of the
amount of commission another broker would charge for effecting that
transaction. The Investment Adviser may select such brokers if the Investment
Adviser determines in good faith that the amount of the commission is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker. However, since the inception of the Fund,
the Investment Adviser has not received any "soft dollar" research from
brokers in connection with the Fund's portfolio transactions, and the
Investment Adviser has no current intention of doing so.
Under the Advisory Agreement, as under the Current Advisory
Agreement, the Investment Adviser is responsible for the compensation of any
of the Fund's trustees, officers and employees who are interested persons of
the Investment Adviser, for the compensation of the Investment Adviser's
personnel and for other expenses incurred in connection with the provisions of
portfolio management services under the Advisory Agreement. In addition, the
Investment Adviser will pay, out of the legitimate profits it realizes from
the management fee, the expenses of printing and distributing the Fund's
prospectuses and sales and advertising materials to prospective clients and
other expenses incurred in connection with the sale or distribution of the
Fund's shares.
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The Advisory Agreement will remain in force for an initial term of
one year and from year to year thereafter, subject to annual approval by (a)
the Board of Trustees or (b) a vote of the majority (as defined in the 1940
Act) of the outstanding voting securities of the Fund; provided that in either
event continuance is also approved by a majority of the Independent Trustees,
by a vote cast in person at a meeting called for the purpose of voting such
approval. The Advisory Agreement may be terminated at any time, on sixty days'
written notice, without the payment of any penalty, by the Board of Trustees,
by a vote of the majority of the outstanding voting securities of the Fund, or
by the Investment Adviser. The Advisory Agreement automatically terminates in
the event of its assignment, as defined by the 1940 Act and the rules
thereunder. The provisions in the Advisory Agreement with respect to term and
termination are the same as those in the Current Advisory Agreement, which was
one year.
FACTORS CONSIDERED BY THE TRUSTEES. The Trustees determined that the
terms of the Advisory Agreement are fair and reasonable and that approval of
the Advisory Agreement on behalf of the Fund is in the best interests of the
Fund. The Trustees reviewed a variety of information relating to the nature,
quality and scope of the services provided by the Investment Adviser and the
reasonableness of the advisory fees for the Fund. Among other things, the
Trustees considered the following: the short-term and long-term performance of
the Fund relative to the performance of other funds with comparable objectives
and policies as well as relative to standardized indices; the fees charged by
other managers of mutual funds with comparable objectives and policies for
comparable services and the total expense ratios of such funds; the
profitability of the Investment Adviser's relationship with the Fund; and
other organizational information relating to the Investment Adviser, its
advisory personnel and its investment processes.
The Trustees determined that the Investment Adviser has provided
quality services with respect to the Fund. In particular, the Trustees noted
that, for the periods ended June 30, 1998 and September 30, 1998 the Fund was
ranked by Lipper Analytical Services, Inc., an independent organization that
ranks mutual funds, as the number one performing growth and income fund. The
Fund had a total return of 32.06% and 29.17% respectively for such periods. In
addition, for the same periods, the Fund was ranked 16th and 13th respectively
out of all U.S. equity funds.
The Trustees examined the effective advisory fees of the Fund against
comparable mutual funds under both the Current Advisory Agreement and Advisory
Agreement. The Trustees noted that the advisory fee for the Fund is above the
median and average of funds with comparable objectives and policies but that
the advisory fee compares much more favorably with that of other funds
operating under a fee structure comparable to that of the Fund. The Trustees
also concluded that the relative position of the Fund was justified by its
superior performance against comparable funds.
Based upon its evaluation of the materials presented, the Board of
Trustees, including all of the Independent Trustees, concluded that the
Advisory Agreement was fair and reasonable and in the best interests of the
Fund's shareholders. By a vote cast at a meeting held in person on November
22, 1998, the Trustees unanimously approved, and voted to recommend to the
shareholders of the Fund that they approve, the Advisory Agreement.
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If the Advisory Agreement is approved by shareholders, the Advisory
Agreement will go into effect on January 1, 1999. If the Advisory Agreement is
not approved by shareholders, the Investment Adviser will continue to manage
the Fund pursuant to the Current Advisory Agreement and the Board of Trustees
may consider other alternatives.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE
ADVISORY AGREEMENT.
OWNERSHIP AND MANAGEMENT OF THE INVESTMENT ADVISER AND RELATED
MATTERS. The Investment Adviser is a California corporation controlled by
Malcolm R. Fobes III and Ronald G. Seger. Mr. Fobes and Mr. Seger are both
officers and Directors of the Investment Adviser and are officers and Trustees
of the Trust. The address of the Investment Adviser, and its executive
officers, is 475 Milan Drive, Suite #103, San Jose, California 95134.
The principal executive officers and directors of the Investment
Adviser are as follows:
Name and Position with
the Fund Principal Occupation
- ----------------------- --------------------
Malcolm R. Fobes III Chairman & CEO of the
President Investment Adviser
Ronald G. Seger Secretary of the Investment
Secretary Adviser
II. APPROVAL OF MCCURDY & ASSOCIATES CPA'S, INC. AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998.
The Board of Trustees has selected, subject to shareholder approval,
McCurdy & Associates CPA's, Inc., to audit and certify the financial
statements of the Fund for the year ending December 31, 1998. McCurdy &
Associates will replace Meredith, Cardozo, Lanz & Chiu, which served as the
Fund's independent public accountants for the year ended December 31, 1997. In
connection with the audit function, McCurdy & Associates will review the
Fund's Annual Report to Shareholders, review certain filings with the
Securities and Exchange Commission and advise the Fund as to certain
accounting matters. Neither McCurdy & Associates nor any of its partners have
any direct or material indirect financial interest in the Fund. A
representative of McCurdy & Associates will not be present at the meeting
unless requested by a shareholder (either in writing or by telephone) in
advance of the meeting. Such requests should be directed to Ronald G. Seger,
Secretary of the Trust.
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III. OTHER BUSINESS
The proxy holders have no present intention of bringing any matters
before the Special Meeting other than those specifically referred to above or
matters in connection with or for the purpose of effecting the same. Neither
the proxy holders nor the Board of Trustees are aware of any matters which may
be presented by others. If any other business shall properly come before the
Special Meeting, the proxy holders intend to vote thereon in accordance with
their best judgment.
Any shareholder proposal intended to be presented at the next
shareholder meeting must be received by the Trust for inclusion in its proxy
statement and form of proxy relating to such meeting at a reasonable time
before the solicitation of proxies for the meeting is made.
By Order of the Board of Trustees,
/s/ Ronald G. Seger
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Ronald G. Seger
Secretary
Date: November 22, 1998
Please complete, date and sign the enclosed Proxy and return it promptly in
the enclosed reply envelope. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
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BERKSHIRE CAPITAL INVESTMENT TRUST
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 30, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The Berkshire Capital Growth & Value Fund
The undersigned hereby appoints Malcolm R. Fobes III and Ronald G. Seger as
proxies to vote for and in the name, place and stead of the undersigned at the
Special Meeting of Shareholders of the Berkshire Capital Growth & Value Fund
(the "Fund") to be held at 1150 West El Camino Real, Mountain View, California
95134, on December 30, 1998 at 10:00 a.m., Pacific Time, and at any
adjournment thereof, according to the number of votes and as fully as if
personally present.
PLEASE INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOX BELOW, AS SHOWN,
USING BLUE OR BLACK INK OR DARK PENCIL.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE PROPOSALS DESCRIBED
HEREIN.
1. With respect to the approval of the investment advisory agreement (the
"Advisory Agreement") for the year 1999 with Berkshire Capital Holdings,
Inc. of which the terms, conditions and fee of the Advisory Agreement are
identical to the existing investment advisory agreement except as to its
effective date and termination date.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. With respect to the approval of McCurdy & Associates CPA's, Inc. as
independent public accountants for the Fund for the fiscal year ending
December 31, 1998.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, the Proxyholder is authorized to vote upon
such other matters which may legally come before the Special
Meeting or any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy when properly executed will be voted in the manner (or not voted)
as specified. If no specification is made, the Proxy will be voted in Favor of
Proposal No. 1 and Proposal No. 2, and within the discretion of the
Proxyholder as to Proposal No. 3. Please sign exactly as your name appears on
this proxy. If signing for an estate, trust or corporation, title or capacity
should be stated. If the shares are registered in more than one name, each
joint owner or each fiduciary should sign personally.
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The undersigned acknowledges receipt of the Notice of Special Meeting and
Proxy Statement dated December __, 1998.
Dated:
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Signature:
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Signature:
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Please check the appropriate box below as to whether or not you plan to attend
the meeting:
[ ] Yes, I plan to attend the meeting.
[ ] No, I do not plan to attend the meeting.
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EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT ("Agreement"), is made and entered
into this ____ day of December, 1998 by and between Berkshire Capital
Investment Trust, a Delaware business trust (the "Fund"), and Berkshire
Capital Holdings, Inc., a California corporation (the "Investment Adviser").
W I T N E S S E T H:
WHEREAS, the Fund, and open-end, non-diversified investment company
registered under the Investment Company Act of 1940 (the "1940 Act"), wishes
to retain the Investment Adviser to provide investment advisory services to
the Fund; and
WHEREAS, the Investment Adviser is willing to furnish such services on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. Employment of the Investment Adviser. The Fund hereby appoints the
Investment Adviser to manage the investment and reinvestment of assets of the
Berkshire Capital Growth & Value Fund and any other portfolio of the Fund
which may be hereafter designated as a separate series for the period and on
the terms set forth in this Agreement. The Investment Adviser accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Obligations of the Fund. The Fund shall at all times inform the
Investment Adviser as to the securities owned by it, the funds available or to
become available for investment by it, and generally as to the condition of
its affairs. It shall furnish the Investment Adviser with such other documents
and information with regard to its affairs as the Investment Adviser may from
time to time reasonably request.
3. Obligations of the Investment Adviser. Subject to the direction and
control of the Fund's Board of Trustees, the Investment Adviser shall
regularly provide the Fund with investment research, advice, management and
supervision and shall furnish a continuous investment program for the Fund's
portfolio of securities consistent with the Fund's investment objective,
policies, and limitations as stated in the Fund's current Prospectus and
Statement of Additional Information. The Investment Adviser shall determine
from time to time what securities will be purchased, retained or sold by the
Fund, and shall implement those decisions, all subject to the provisions of
the Fund's Declaration of Trust, the 1940 Act, the applicable rules and
regulations of the Securities and Exchange Commission, and other applicable
federal and state laws, as well as the investment objectives, policies, and
limitations of the Fund. In placing orders for the Fund with brokers and
dealers with respect to the execution of the Fund's securities transactions,
the Investment Adviser shall attempt to obtain the best net results. In doing
so, the Investment Adviser may consider such factors which it deems relevant
to the Fund's best interest, such as price, the size of the transaction, the
nature of the market for the security, the amount of the commission, the
<PAGE>
timing of the transaction, the reputation, experience and financial stability
of the broker-dealer involved and the quality of service rendered by the
broker-dealer in other transactions. The Investment Adviser shall have the
discretionary authority to utilize certain broker-dealers even though it may
result in the payment by the Fund of an amount of commission for effecting a
securities transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, providing,
however, that the Investment Adviser had determined that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by the broker-dealer effecting the transaction. In
no instance will portfolio securities be purchased from or sold to the
Investment Adviser or any affiliated person thereof except in accordance with
the rules and regulations promulgated by the Securities and Exchange
Commission pursuant to the 1940 Act. The Investment Adviser shall also provide
advice and recommendations with respect to other aspects of the business and
affairs of the Fund and shall perform such other functions of management and
supervision as may be directed by the Board of Trustees of the Fund, provided
that in no event shall the Investment Adviser be responsible for any expense
occasioned by the performance of such functions.
4. Expenses of the Fund. The Investment Adviser is responsible for (i)
the compensation of any of the Fund's trustees, officers and employees who are
interested persons of the Investment Adviser, (ii) compensation of the
Investment Adviser's personnel and other expenses in connection with the
provisions of portfolio management services under this Agreement, and (iii)
expenses of printing and distributing the Fund's prospectus and sales and
advertising materials to prospective clients. Other than as herein
specifically indicated, the Investment Adviser shall not be responsible for
the Funds expenses. Specifically, the Investment Adviser will not be
responsible, except to the extent of the reasonable compensation of employees
of the Fund whose services may be used by the Investment Adviser hereunder,
for any of the following expenses of the Fund, which expenses shall be borne
by Fund: legal and audit expenses, organizational expenses; interest; taxes;
governmental fees; industry association fees; the cost (including brokerage
commissions or charges, if any) of securities purchased or sold by the Fund
and any losses incurred in connection herewith; fees, if any, of custodians,
transfer agents, registrars or other agents; distribution fees; expenses of
preparing share certificates; expenses relating to the redemption or
repurchase of the Fund's shares; fees and expenses of registering the Fund's
shares under the federal securities laws and of qualifying its shares under
applicable state Blue Sky laws, including expenses attendant upon renewing
such registrations and qualifications; expenses of preparing, setting in
print, printing and distributing prospectuses, proxy statements, reports,
notices, and dividends to fund shareholders; cost of stationary; costs of
shareholders and other meetings of the Fund; compensation and expenses of the
independent trustees of the Fund; fidelity bond and other insurance covering
the Fund and its officers and trustees.
5. Limitations on Salaries. No trustee, officer or employee of the Fund
shall receive from the Fund any salary or other compensation as such trustee,
officer or employee while he is at the same time director, officer or employee
of the Investment Adviser or any affiliated company of the Investment Adviser.
This paragraph shall not apply to trustees, executive committee members,
consultants and other persons who are not regular members of the Investment
Adviser's or any affiliated company's staff.
<PAGE>
6. Compensation. As compensation for the services performed by the
Investment Adviser, the Fund shall pay the Investment Adviser, as promptly as
possible after the last day of each month, a fee, accrued each calendar day
(including weekends and holidays) at a rate of 1.5% per annum of the daily net
assets of the Fund. The Investment Adviser shall reduce such fee or, if
necessary, make payments to the Fund to the extent required to satisfy any
limitations with respect thereto imposed by the securities laws or regulations
thereunder of any state in which the Fund's shares are qualified for sale. The
daily net assets of the Funds shall be computed as of the time of the regular
close of business of the New York Stock Exchange, or such other time as may be
determined by the Board of Trustees of the Fund. Any of such payments as to
which the Investment Adviser may so request shall be accompanied by a report
of the Fund prepared either by the Fund or by a reputable firm of independent
accountants which shall show the amount properly payable to the Investment
Adviser under this Agreement and detailed computation thereof.
7. Limitation of Liability. The Investment Adviser assumes no
responsibility under this Agreement other than to render the services called
for hereunder in good faith, and shall not be responsible for any action of
the Board of Trustees of the Fund in the following or declining to follow any
advice or recommendation of the Investment Adviser; provided that nothing in
this Agreement shall protect the Investment Adviser against any liability to
the Fund or its stockholders to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of
its duties or by reason of its reckless disregard of its obligations and
duties hereunder.
8. Independent Contractor. The Investment Adviser shall be an independent
contractor and shall have no authority to act for or represent the Fund in its
investment commitments unless otherwise provided. No agreement, bib, offer,
commitment, contract or other engagement entered into by the Investment
Adviser whether on behalf of the Investment Adviser or whether purporting to
have been entered unto on behalf of the Fund shall be binding upon the Fund,
and all acts authorized to be done by the Investment Adviser under this
Agreement shall be done by it as an independent contractor and not as an
agent.
9. Activities of the Investment Adviser. Nothing in this Agreement shall
limit or restrict the right of any director, officer, or employee of the
Investment Adviser who may also be a trustee, officer, or employee of the
Fund, to engage in any other business or to devote his time and attention in
part to the management or other aspects of any other business, whether of a
similar nature or dissimilar nature, nor to limit or restrict the right of the
Investment Adviser to engage in any other business or to render services of
any kind, including investment advisory services, to any other corporation,
firm, individual or association.
10. Definitions. As used in this Agreement, the terms "assignment,"
"interested person," and "majority of the outstanding voting securities" shall
have meanings given to them by Section 2(a) of the 1940 Act, subject to such
exemptions as may be granted by the Securities and Exchange Commission by any
rule, regulation or order.
<PAGE>
11. Termination. This Agreement shall terminate automatically in the
event of its assignment by the Investment Adviser and shall not be assignable
by the Fund without consent of the Investment Adviser. This Agreement may also
be terminated at any time, without payment of penalty (i) by the Fund either
by vote of the Board of Trustees of the Fund or by vote of a majority of the
outstanding voting securities of the Fund, on 60 days written notice to the
Investment Adviser, or (ii) by the Investment Adviser on 60 days written
notice to the Fund. Upon the termination of this agreement, the obligations of
all the parties hereunder shall cease and terminate as of the date of such
termination, except for any obligation to respond for a breach of this
Agreement committed prior to such termination and except or the obligation of
the Fund to pay to the Investment Adviser the fee provided in Paragraph 6
hereof, prorated to the date of termination.
12. Term. This Agreement shall become effective on January 1, 1999, and
shall continue in effect for one year and from year to year thereafter only so
long as specifically approved annually, (i) the Fund's Board of Trustees and
by a vote of the holders of a majority of the outstanding voting securities of
the Fund, or (ii) a majority of the Trustees who are not parties to the
Agreement or "interested persons" (as defined in the Act) of any such party
cast in person at a meeting called for the purpose of voting on such approval.
13. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought, and no material amendment of this agreement shall be
effective until approved by vote of the holders of a majority of the Fund's
outstanding voting securities.
14. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and sealed by their officers thereunto duly authorized on the day and
year first above written.
ATTEST: BERKSHIRE CAPITAL INVESTMENT TRUST
By: By:
- ------------------------------ --------------------------------
Ronald G. Seger, Malcolm R. Fobes III,
Secretary President
ATTEST: BERKSHIRE CAPITAL HOLDINGS, INC.
By: By:
- ------------------------------ --------------------------------
Ronald G. Seger, Malcolm R. Fobes III,
Secretary Chairman & CEO
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