As filed with the Securities and Exchange Commission on July 17, 1997
Registration No. 333-25073
811-08177
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 2
Post-Effective Amendment No. _____
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. _____
THE DRESHER FAMILY OF FUNDS
(Exact Name of Registrant as Specified in Charter)
715 Twining Road, Suite 202
Dresher, Pennsylvania 19025
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
(888) 980-7500
Jeffrey C. Brown, President
The Dresher Family of Funds
715 Twining Road, Suite 202, Dresher, Pennsylvania 19025
(Name and Address of Agent for Service)
Copies of communications to:
Stephen T. Burdumy, Esquire
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, Pennsylvania 19102
Approximate Date of Proposed General Offering: As soon as practical after the
effective date of this Registration Statement.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
1<PAGE>
DECLARATION PURSUANT TO RULE 24F-2: Pursuant to Rule 24f-2
under the Investment Company Act of 1940, as amended, Registrant is
registering an indefinite number or amount of its shares of beneficial interest
under the Securities Act of 1933, as amended. The Registrant has not filed a
Rule 24f-2 Notice because it has not sold any securities pursuant to this
declaration during the most recent fiscal year.
2<PAGE>
PART A
CROSS REFERENCE SHEET
THE DRESHER FAMILY OF FUNDS
THE DRESHER COMPREHENSIVE GROWTH FUND
THE DRESHER CLASSIC RETIREMENT FUND
Part A Item Prospectus Caption
Cover Page Cover Page
Synopsis Expenses
Condensed Financial Information Inapplicable
General Description of the Fund Cover Page; The Funds; Investment
Objectives and Management Techniques;
Investment Policies and Restrictions;
Risks and Other Considerations; Trust
Management -- Portfolio Turnover;
Appendix A; Appendix B
Management of the Fund Trust Management
Management's Discussion of Fund Inapplicable
Performance
Capital Stock and Other Securities Dividends, Distributions and Taxes;
General Information
Purchase of Securities Being Offered How to Purchase Shares; Trust
Management -- Distribution Plan
Redemption or Repurchase How to Redeem Shares
Pending Legal Proceedings Inapplicable
3<PAGE>
THE DRESHER COMPREHENSIVE GROWTH FUND
THE DRESHER CLASSIC RETIREMENT FUND
THE DRESHER COMPREHENSIVE GROWTH FUND (THE "COMPREHENSIVE GROWTH FUND") AND
THE DRESHER CLASSIC RETIREMENT FUND (THE "CLASSIC RETIREMENT FUND;" AND
TOGETHER WITH THE COMPREHENSIVE GROWTH FUND, THE "FUNDS") are two series of
shares (the "Shares") of The Dresher Family of Funds, an open-end investment
company (the "Trust"). The assets of each Fund are separately managed
portfolios consisting of shares of other mutual funds. The Funds are designed
to offer investors easy access to actively managed funds. Both Funds are
diversified by asset class and feature a core component of domestic and
international stock funds for growth potential, combined with bond funds and
money market funds for greater price stability. The Investment Manager has the
flexibility to take full advantage of changing markets and favorable asset
classes. The Investment Manager monitors hundreds of mutual funds, analyzing
the relative attractiveness of various funds to identify and select a mix of
underlying funds in order to achieve each Fund's goals. The Comprehensive
Growth Fund is a no-load aggressive growth fund which seeks capital
appreciation without regard to current income. The Classic Retirement Fund is
a no-load moderate growth fund which seeks moderate capital appreciation and
significant income. Both Funds pursue their investment objectives by investing
exclusively in shares of other mutual funds (except for holdings in cash or
cash equivalents). The level of diversification the Funds obtain from being
invested in a number of underlying funds is intended to reduce the risks
associated with an investment in a single underlying fund. By investing in
the Funds, you bear not only the Funds' expenses, but also the expenses of the
underlying funds. THE FUNDS' STRATEGY OF INVESTING IN OTHER MUTUAL FUNDS
RESULTS IN GREATER EXPENSES THAN YOU WOULD INCUR IF YOU WERE TO INVEST IN THE
SAME FUNDS DIRECTLY.
ABOUT THIS PROSPECTUS: THIS PROSPECTUS PROVIDES YOU WITH CONCISE INFORMATION
THAT YOU SHOULD KNOW BEFORE YOU DECIDE IF THE FUNDS PROVIDE THE INVESTMENT
OPPORTUNITIES YOU SEEK. READ IT CAREFULLY AND RETAIN IT FOR FUTURE REFERENCE.
You can find more detailed information in the Statement of Additional
Information (the "SAI") dated July 17, 1997 (as amended from time to time).
The SAI has been filed with the Securities and Exchange Commission (the "SEC")
and is incorporated in this Prospectus by reference (which means that it is
legally considered part of this Prospectus even though it is not printed here).
This Prospectus is available electronically by using the Trust's World Wide
Web address: http://www.national-advisory.com. To get a free paper copy of
this Prospectus or the SAI, call the Trust at (888) 980-7500. The SEC
maintains a Web site (http://www.sec.gov) that contains the SAI, material
incorporated by reference herein, and other information regarding registrants
that file electronically with the SEC.
Shares of the Funds are subject to investment risks, including possible loss of
principal. Shares of the Funds are not bank deposits and are not endorsed by,
insured by, guaranteed by, obligations of or otherwise supported by the U.S.
government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other governmental agency or bank.
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
1<PAGE>
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS: July 17, 1997
2<PAGE>
EXPENSES
The table below does not reflect any of the operating costs and investment
advisory fees of the underlying funds. By investing in the Funds, you bear not
only the Funds' expenses detailed below, but also the expenses of the
underlying funds. You would not incur the Funds' expenses detailed below
if you were to perform your own asset allocation, fund review and analysis
and invest in the underlying funds directly.
SHAREHOLDER TRANSACTION EXPENSES
Comprehensive Classic
Growth Retirement
Fund Fund
Sales charge on purchases None None
Sales charge on reinvested dividends None None
Deferred sales charge None None
Exchange fees None None
Redemption fee <F1> None None
<F1>.A wire transfer fee is charged by the Funds' Custodian in the case of
redemptions made by wire. Such fee is subject to change and is
currently $10.00.
ANNUAL FUND OPERATING EXPENSES (as a percentage of average daily net assets)
Comprehensive Classic
Growth Retirement
Fund Fund
Management fees (after fee waivers) <F1> 0.95% 0.95%
12b-1 fees <F2> 0.25% 0.25%
Other expenses <F3> 0.00% 0.00%
Total Fund operating expenses (after fee waivers) 1.20% 1.20%
<F1>.The management fees are paid to the Investment Manager for analyzing,
selecting and monitoring the underlying funds in each portfolio. Unlike
most other mutual funds, the management fees paid by the Funds include
transfer agency, pricing, custodial, auditing and legal services, taxes,
interest, redemption fees, expenses of non-interested Trustees and
general administrative and other operating expenses. The Distributor,
an affiliate of the Investment Manager, may receive remuneration from
certain underlying funds for services rendered to such funds in
connection with investments therein. See the discussion herein
3<PAGE>
under the caption "Fund Management -- Execution of Portfolio
Transactions." In light of this remuneration to the Distributor, the
Investment Manager will voluntarily reduce its management fees to keep
total Fund operating expenses no greater than 1.20% (not including
extraordinary expenses) until at least December 31, 1998. After
December 31, 1998, the management fee waiver may be terminated, modified
or continued. If there were no such fee waiver, the management fee paid
by each Fund would be 1.20% of its average daily net assets and each
Fund's total operating expenses would be 1.45% of its average daily net
assets.
<F2>.Based on average daily net assets. The 12b-1 fee is an asset-based
sales charge as defined in the Rules of Fair Practice of the National
Association of Securities Dealers (the "Rules"). See "Fund
Management -- Distribution Plan." The existence of this charge may
cause long-term shareholders to pay more in total sales charges than
the economic equivalent of the maximum front-end sales charges
permitted under the Rules.
<F3>.Does not include extraordinary expenses. The Funds are newly formed and
this amount is based on estimates for the current fiscal year for the
Funds after management fee waivers. See Footnote 1 above.
EXAMPLE
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual return
and (2) redemption at the end of each time period:
1 YEAR 3 YEARS
Comprehensive Growth Fund $ 12 $ 37
Classic Retirement Fund $ 12 $ 37
The purpose of the foregoing table is to assist you in understanding the
various costs and expenses that an investor in either Fund will bear, directly
or indirectly. See "Fund Management -- Advisory Fee -- Expenses Borne by
Each Fund." THE EXAMPLE SET FORTH IN THE FOREGOING TABLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE
GREATER OR LESSER THAN THOSE SHOWN.
THE FUNDS
The Dresher Family of Funds was organized as a Delaware business trust on
March 26, 1997. The Trust is registered as an open-end management
investment company under the Investment Company Act of 1940 (the "1940
Act"). The Trust is a diversified investment company for purposes of the
1940 Act because all of its assets will be represented by securities of other
investment companies or cash (or cash equivalents). Many of the underlying
funds in which the Funds invest will themselves be diversified investment
companies. The level of diversification the Funds obtain from being invested
in a number of underlying funds is intended to reduce the risks associated
with an investment in a single underlying fund. The Funds intend to qualify
as diversified investment companies for purposes of Subchapter M of the
Internal Revenue Code (the "Code"). The Trust
4<PAGE>
currently consists of two separate series portfolios: the Comprehensive Growth
Fund and the Classic Retirement Fund. Each Fund is managed separately and has
its own investment objectives and strategies designed to meet its respective
investment goals. Investment in Shares of one or more of the Funds involves
risks. There can be no assurance that the Funds' investment objectives will
be achieved. See "Risks and Other Considerations."
INVESTMENT OBJECTIVES AND MANAGEMENT TECHNIQUES
Each Fund seeks to achieve its investment objective by investing exclusively
(other than cash or cash equivalents) in a portfolio of other open-end "mutual
funds." (The mutual funds in which the Funds may invest are referred to in
this Prospectus as the "underlying funds.") The Funds will purchase securities
of other investment companies only as permitted under the 1940 Act,
including any exemptive relief granted by the SEC. A Fund will, under
normal circumstances, maintain its assets in a number of underlying funds.
However, for temporary defensive purposes when market conditions dictate,
up to 100% of the assets of either Fund may be invested in cash or cash
equivalents. Each Fund may invest in identical types of mutual funds. Of
course, the percentage of each Funds' assets will vary based upon the Fund's
investment objective.
THE DRESHER COMPREHENSIVE GROWTH FUND: This Fund is an aggressive growth
fund which seeks capital appreciation without regard to current income. Under
normal market conditions, at least 75% of its assets at the time of investment
will be invested in mutual funds that invest primarily in common stock or
securities convertible into or exchangeable for common stock. The allocation
of the assets of the Fund are expected to result in the Fund being exposed to
more risk than the Classic Retirement Fund.
THE DRESHER CLASSIC RETIREMENT FUND: This Fund is a moderate growth fund
which seeks moderate capital appreciation and significant income. The mutual
funds comprising this Fund will invest in common stocks, preferred stocks,
bonds and other fixed income securities. Under normal market conditions, no
more than 65% of its assets at the time of investment will be invested in
mutual funds that invest primarily in common stock or securities convertible
into or exchangeable for common stock.
Each Fund's investment objective is non-fundamental and may be changed
by the Board of Trustees of the Trust (the "Board of Trustees") without
approval by the shareholders of that Fund. You would be notified in writing
at least 30 days before a change in the investment objective of a Fund. If
there is a change in investment objective, you should consider whether the
particular Fund remains an appropriate investment in light of your then
current financial position and needs.
The underlying funds may, but need not, have the same investment objectives,
policies and limitations as the Fund. Each Fund can elect to redeem (subject
to the 1% limitation discussed under the caption "Risks and Other
Considerations") its investment in an underlying fund if that action is
considered necessary or appropriate.
5<PAGE>
ACTIVE MANAGEMENT
The Funds will be under the active management of an investment manager
and staff experienced in assessing mutual funds. See "Trust Management --
Investment Manager, Distributor, and Transfer Agent." The Investment
Manager will seek to take advantage of changing markets, economic
conditions and underlying fund management changes by relying on public
sources of information as well as proprietary techniques.
The Investment Manager selects underlying funds in which to invest based,
in part, upon an analysis of their past performance (absolute, relative and
risk-adjusted), management style, and investment objectives and policies. The
Investment Manager also considers other factors in the selection of underlying
funds, including, but not limited to, asset size, liquidity, expense ratios,
quality of shareholder services, reputation and tenure of portfolio managers,
industry classification represented in their portfolios, and specific portfolio
holdings.
ASSET ALLOCATION
The assets of the Funds will be invested in a mix of asset classes. This tactic
is usually referred to as "asset allocation." Since the performance of asset
types does not always move in the same direction at the same time, investing
in a mix of asset classes or types can help improve performance and reduce
volatility. Thus, the Investment Manager will manage the risk to a certain
extent by varying the ratio of Fund investments among different asset
categories. Each Fund seeks to meet its investment objectives by investing
in a different mix of stock funds, bond funds and money market funds. Both
Funds are designed to provide exposure to the growth potential of the stock
market in varying degrees and are suitable for intermediate or long-term
investing as well as retirement saving.
Each Fund will allocate its assets among a number of general types of mutual
funds, including, without limitation: aggressive growth, growth and income,
equity income, small company, sector/speciality, foreign stock, global stock,
balanced, income, convertible bond, high yield bond, corporate bond,
government bond, foreign bond, global bond, municipal bond, short-term
world income and money market. The underlying funds may, among other
things, seek capital growth and appreciation by investing primarily in
common stock or securities convertible into or exchangeable for common
stock (such as convertible preferred stock, convertible debentures or
warrants); seek a combination of capital appreciation and current income
(including income from dividends, income from interest, growth of income
or any combination thereof) by investing primarily in common stocks,
preferred stocks, bonds and other fixed income securities (including
convertible preferred stock and convertible debentures); seek high current
income by investing primarily in long- or short-term bonds and other fixed
income securities (such as securities issued, guaranteed or insured by the U.S.
government, commercial paper, preferred stock, convertible preferred stock
or convertible debentures); and seek as high a level of current income as is
consistent with preservation of capital and liquidity by investing in a broad
range of high quality, short-term money market instruments which have
remaining maturities not exceeding one year (including U.S. government
securities, bank obligations, commercial paper, corporate debt securities and
repurchase agreements). (Certain additional investments which the
underlying funds may make, and certain risks associated with the underlying
funds' investments, are described in Appendix B to this Prospectus.)
6<PAGE>
It is unlikely that at any particular time either Fund will have all of its
assets invested in only one of these general types of underlying funds, and
each Fund may maintain at least some nominal investment in many of these fund
types on an ongoing basis. The Investment Manager will vary the portfolio
of each type of underlying fund based on the mix of such funds that, in the
Investment Manager's view, is most likely to achieve each Fund's investment
objective. All investments involved risk, and there is no assurance that the
investment objectives of the Funds will be achieved.
In allocating assets among general types of underlying funds, the Investment
Manager will employ both fundamental and technical analyses to assess
relative risk and reward potential in the financial markets, with the goal of
achieving each Fund's investment objective. The allocation process goes
beyond the basic determination of the degree to which the Funds' assets would
be invested in equity funds versus bond funds. The Investment Manager
engages in continuous research with regard to evolving opportunities in
various asset subclasses, including investment discipline (e.g., "growth
investment" vs. "value investing"), market capitalization (e.g., "small
company" vs. "blue chip") geo-economic considerations (i.e., "domestic" vs.
foreign"), fixed-income security maturities (i.e., "short-term" vs.
"long-term") and sector/industry relation (e.g., "basic materials" vs.
"consumer non-durables" or "aerospace/defense" vs. "electric utilities").
Generally, in seeking the Funds' objectives, the Investment Manager will alter
the composition of each Fund's portfolio as economic and market trends
change. Subject to the investment policies set forth on page 5 above, each
Fund's portfolio may vary considerably among equity, bond, and money
market mutual funds as these changes occur.
Each Fund may also deposit cash representing up to the following percentage
of each Fund's net assets in a money market deposit account maintained by
the Fund's Custodian: (i) up to 100% for temporary defensive purposes when
and to the extent that, in the judgment of the Investment Manager, other
investments involve unreasonable risk, or (ii) approximately 5% in order to
meet anticipated redemptions. To the extent that such balances exceed
$100,000, such deposits are not protected by federal insurance.
INVESTMENT POLICIES AND RESTRICTIONS
Each Fund has adopted certain fundamental investment policies. These
policies may not be changed without the vote of a majority of that Fund's
outstanding votes, as defined under "General Information -- Voting Rights."
Each Fund has also adopted certain investment policies that are not
fundamental and therefore may be changed by the Board of Trustees without
shareholder approval. Under each Fund's fundamental investment policies,
each Fund (1) may purchase securities of any issuer only when consistent with
the maintenance of such Fund's status as a diversified company under the
1940 Act, (2) may not invest 25% or more of its total assets in the securities
of mutual funds that concentrate themselves (i.e., invest 25% or more of their
total assets) in any one industry, provided that the Fund (a) may indirectly
invest 25% or more of its total assets in one industry if the underlying funds
invest their assets in the same industry and (b) will invest more than 25% of
its total assets in mutual funds, and (3) may purchase or sell commodities,
commodities contracts, or real estate, lend or borrow money, issue senior
securities, underwrite securities, or pledge, mortgage or hypothecate any of
its assets only to the extent permitted under the 1940 Act, including any
exemptive relief granted by the SEC.
7<PAGE>
Under each Fund's non-fundamental investment policies, each Fund may not
(1) invest more than 15% of its net assets in illiquid securities, (2) invest
for the purpose of exercising control or management of another issuer, (3)
purchase securities of other investment companies, except as permitted under
the 1940 Act, including any exemptive relief granted by the SEC, or (4)
purchase securities of any closed-end investment company or any investment
company the shares of which are not registered in the United States.
RISKS AND OTHER CONSIDERATIONS
Any investment in a mutual fund involves risk. Although the Funds will
invest in a number of underlying funds, this practice does not eliminate
investment risk. Some of the underlying funds in which the Funds invest may
involve more risk than others. For example, the underlying funds may invest
some or all of their assets in a broad array of corporate bonds some which are
not considered investment grade bonds by Standard & Poor's Corporation or
Moody's Investor Services, Inc. or which are unrated; foreign securities and
foreign currency transactions; convertible and debt securities, including,
without limitation, master demand notes, illiquid securities and warrants; and
the investments described in Appendix B to this Prospectus. The underlying
funds may also lend their portfolio securities; sell securities short; borrow
money in amounts up to some designated percentage of their assets for
investment purposes; write (sell) or purchase call or put options on securities
or on stock indexes; concentrate 25% or more of their total assets in assets in
one industry; enter into futures contracts or repurchase agreements; and write
(sell) or purchase options on futures contracts. Some of the risks associated
with these investment policies are described in Appendix B to this Prospectus.
Through its investment in underlying funds, each Fund indirectly may invest
more than 25% of its total assets in one industry. Such indirect concentration
of the Fund's assets may subject the Shares of that Fund to greater fluctuation
in value than would be the case in the absence of such concentration.
Each Fund, together with any "affiliated persons" (as defined in the 1940 Act)
may purchase only up to 3% of the total outstanding securities of any
underlying fund. For this purpose, shares of underlying funds held by private
discretionary investment advisory accounts managed by the Investment
Manager will be aggregated with those held by the Fund. Accordingly, when
affiliated persons and other accounts managed by the Investment Manager
hold shares of any of the underlying funds, the Funds' ability to invest fully
in shares of those funds is restricted, and the Investment Manager must then
in some instances select alternative investments that would not have been its
first preference.
Under certain circumstances, an underlying fund may determine to make a
payment for redemption of its shares to the Fund wholly or partly by a
distribution "in kind" of securities from its portfolio in lieu of cash, in
conformity with the rules of the SEC. In such cases, the Fund may hold
securities distributed by an underlying fund until the Investment Manager
determines that it is appropriate to dispose of such securities. Such
disposition may entail additional costs to the affected Fund.
Investment decisions by the investment advisers of the underlying funds are
made independently of the Funds and the Investment Manager. Therefore, the
investment adviser of an underlying fund
8<PAGE>
may be purchasing securities of the same issuer whose securities are being sold
by the investment adviser of another underlying fund. The result of this would
be an indirect expense to the Funds without accomplishing any investment
purpose.
An investor in either Fund will bear not only its proportionate share of the
expenses of such Fund but also, indirectly, similar expenses of the underlying
funds. These expenses consist of advisory fees, expenses related to the
distribution of shares, brokerage commissions, accounting, pricing and
custody expenses, printing, legal and audit expenses and other miscellaneous
expenses. The Funds intend to arrange to be included within a class of
investors entitled not to pay sales charges by purchasing load fund shares
under letters of intent, rights of accumulation, cumulative purchase privileges
and other quantity discount programs. The Funds will not, however, invest
in shares of a mutual fund that is sold with a contingent deferred sales load.
In addition, as a result of the Funds' policies of investing in other mutual
funds, an investor may receive taxable capital gains distributions to a greater
extent than would be the case if the investor invested directly in the
underlying funds. See "Dividends, Distributions and Taxes."
The underlying funds in which the Funds invest may incur distribution and
shareholder service expenses in the form of "Rule 12b-1 fees" or service fees.
In the event a Fund purchases shares of an underlying fund that imposes Rule
12b-1 or service fees, such fees will be paid by such underlying funds to the
Distributor because portfolio transactions for the Funds will generally be
placed through the Distributor. The Distributor is entitled to retain service
fees in an amount equal to the fair market value of the services provided by
it to the underlying funds. The Distributor will reimburse to the funds any
Rule 12b-1 fees it receives from underlying funds for effecting purchases of
the underlying funds' shares. For a description of such arrangements, please
see the discussion under the caption "Trust Management -- Execution of
Portfolio Transactions."
Because of the compensation the Distributor, an affiliate of the Investment
Manager, may receive from the underlying funds in connection with the
Funds' investments in such underlying funds, the Investment Manager may
have conflicts of interest in rendering advice to the Funds. The Investment
Manager will at all times fulfill its obligations to act in the best interests
of the Funds. In addition, because the Distributor will reimburse to the Funds
any Rule 12b-1 fees received by it, the Trust and the Investment Manager
believe that the incentive to the Investment Manager to make investments in
underlying funds which pay such fees is greatly reduced.
The 1940 Act currently provides that any underlying fund is not required to
redeem any shares held by the Funds in excess of 1% of the underlying fund's
outstanding shares in any 30-day period, and any of the Funds' holdings in
excess of that amount may be considered illiquid. However, since the Funds
have elected to reserve the right to pay redemption requests in investment
securities, these positions may be treated as liquid.
The Investment Manager and/or its affiliates have been providing financial
services to individuals, qualified retirement programs, estates and other
business entities since 1984. Although the Investment Manager has
substantial experience and expertise in assessing mutual funds for its clients,
the Investment Manager has no previous experience in advising a mutual
fund. In addition, the Funds are newly formed and have no operating history
upon which an investor may assess investment performance.
9<PAGE>
TRUST MANAGEMENT
TRUSTEES AND OFFICERS
The business and affairs of the Trust, and thus of each Fund, are managed under
the direction of the Board of Trustees. By virtue of the responsibilities
assumed by NFA as Investment Manager (see below), the Trust has no
executive employees other than its officers, each of whom is employed by
NFA or its affiliates and none of whom devotes full time to the affairs of the
Trust. No officer, director or employee of NFA or any of its affiliates
receives any compensation from the Trust for serving as a Trustee or officer
of the Trust. The Trust pays each Trustee who is not an officer, director or
employee of NFA or any of its affiliates a fee of $100 per meeting attended
and reimburses each such Trustee for travel and out-of-pocket expenses.
These costs and expenses of "non-interested" Trustees are, in turn, reimbursed
to the Trust by the Investment Manager pursuant to the Investment Advisory
Agreement. See "Investment Manager, Distributor, and Transfer Agent" below.
INVESTMENT MANAGER, DISTRIBUTOR, AND TRANSFER AGENT
The Trust has retained as its investment adviser National Financial Advisors,
Inc. ("NFA" or the "Investment Manager"), 715 Twining Road, Suite 202,
Dresher, Pennsylvania 19025, an investment management organization
founded in 1992. NFA is actively engaged in providing investment
management services to trusts, institutions and high-income individuals and
is registered under the Investment Advisers Act of 1940. The Investment
Manager has not been sponsored, recommended or approved, nor have its
abilities or qualifications been passed upon, by the SEC or any other
governmental agency.
NFA is a wholly owned subsidiary of The National Advisory Group, Inc.
("The Group"), a Pennsylvania corporation with interests primarily in the
financial services industry. The Group also owns all of the shares of NFA
Brokerage Services, Inc. (the "NFA Brokerage" or the "Distributor"), the
NASD mutual funds only broker/dealer through which Shares of each Fund
are being offered. The Trust has entered into a Distribution Agreement with
NFA Brokerage under which each Fund will pay NFA Brokerage for
distribution services as permitted under the Trust's Distribution Plan. See
"Distribution Plan." The Group also owns all of the shares of National
Shareholder Services, Inc., a Pennsylvania corporation ("NSS" or the
"Transfer Agent"), which will serve as the Fund's transfer agent, dividend
paying agent and shareholder service agent. Jeffrey C. Brown (President of
The Group and President of NFA) and Larissa N. Patrylak (Vice President of
The Group and Controller of NFA) each own 50% of the outstanding capital
stock of The Group and therefore each is deemed to be in control of NFA,
NFA Brokerage and NSS.
Subject to the supervision and direction of the Board of Trustees, NFA, as
Investment Manager, manages each Fund's portfolio in accordance with the
stated policies of that Fund. NFA makes investment decisions for each Fund
and places the purchase and sale orders for portfolio transactions. In
addition, NFA furnishes office facilities and clerical and administrative
services, pays the salaries of all officers and employees who are employed by
both it and the Trust and, subject to the direction of the Board of Trustees,
is responsible for the overall management of the business affairs of each Fund,
including the provision of personnel for recordkeeping, the preparation of
governmental reports and responding to shareholder communications.
10<PAGE>
Under the Investment Advisory Agreement between the Trust and the
Investment Manager, the Investment Manager is entitled to receive from each
Fund as compensation for its services an annual fee of 1.20% on each Fund's
average daily net assets. However, the Investment Manager is contractually
obligated to reduce its management fee to keep total operating expenses for
each Fund at no greater than 1.20% (not including extraordinary expenses)
until at least December 31, 1998. The fee is paid monthly and calculated on
the basis of the month's net assets. Unlike most mutual funds, the
management fees paid by the Funds to NFA include transfer agency, pricing,
custodial, auditing and legal services, taxes, interest, redemption fees,
expenses of non-interested Trustees and general administrative and other
operating expenses of each Fund except as noted below under "Expenses
Borne by Each Fund."
Jeffrey C. Brown is the person primarily responsible for the management of
the portfolio of each of the Funds. Mr. Brown has been President of The
Group since 1984 and of The Group's affiliated entities since each of their
formation. Mr. Brown has been a Trustee of the Trust since its inception.
EXPENSES BORNE BY EACH FUND
Each Fund pays all expenses not assumed by the Investment Manager,
including extraordinary expenses and costs pursuant to the Distribution Plan
described below. Until at least December 31, 1998, the Investment Manager
is contractually obligated to reduce its management fee to keep total operating
expenses of each Fund at no greater than 1.20% of average daily net assets
(not including extraordinary) expenses.
An investor in either of the Funds should recognize that it may invest directly
in mutual funds and that, by investing in mutual funds indirectly through
either Fund, the investor will bear not only its proportionate share of the
expenses of the Fund but also indirectly similar expenses paid by underlying
funds. See "Risks and Other Considerations."
DISTRIBUTION PLAN
Rule 12b-1 ("Rule 12b-1") under the 1940 Act regulates the circumstances
under which an investment company may, directly or indirectly, bear the
expenses of distributing its shares. Rule 12b-1 defines such distribution
expenses to include the costs of "any activity which is primarily intended to
result in the sale of fund shares." Rule 12b-1 provides, among other things,
that an investment company may bear such expenses only pursuant to a plan
adopted in accordance with Rule 12b-1.
The Trust has adopted a Distribution Plan (the "Distribution Plan") with
respect to the distribution of each Fund's Shares. The Distribution Plan
permits, among other things, payments in the form of (a) compensation to
securities brokers and dealers for selling Shares; (b) compensation to
securities brokers and dealers, accountants, attorneys, investment advisors,
pension actuaries, non-profit entities not advised by the Investment Manager
or its affiliates and service organizations for services rendered by them to
their clients or members in reviewing, explaining or interpreting the Funds'
prospectus and other selling materials; (c) advertising costs; (d) costs of
telephone, mail, or other direct solicitation of prospective investors and of
responding to inquiries, as well as the compensation of persons who do the
soliciting or respond to inquiries; (e) preparing and printing
11<PAGE>
prospectuses and other selling materials and the cost of distributing them
(including postage); (f) reimbursement of travel, entertainment and like
expenditures made by the Trustees in promoting the Funds and their investment
objective and policies; (g) fees of public relations consultants and
(h) awards. The fees payable under the Distribution Plan are payable without
regard to actual expenses incurred. Each Fund may expend as much as, but not
more than, 0.25% of its average net assets annually pursuant to the
Distribution Plan.
A report of the amounts expended by each Fund under the Distribution Plan
and the purpose of the expenditure must be made to and reviewed by the
Board of Trustees at least quarterly. In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
each Fund will bear for distribution without shareholder approval of the
relevant Fund and that other material amendments of the Distribution Plan
must be approved by the Board of Trustees, and by the Trustees who are not
"interested persons" (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of the Distribution Plan or in any
agreements related to the Distribution Plan, by vote cast in person at a
meeting called for the purpose of voting on the Distribution Plan. The
Distribution Plan is terminable at any time by vote of a majority of the
Trustees who are not "interested persons" and who have no direct or indirect
financial interest in the operation of the Distribution Plan or in any related
service agreement or by vote of the majority of the relevant Fund's Shares.
Any dealer or service agreement related to the Distribution Plan terminates
upon assignment and is terminable at any time, without penalty, upon not
more than 60 days' written notice to any other party to the agreement, by a
vote of a majority of the Trustees who are not "interested persons" and who
have no direct or indirect financial interest in the operation of the
Distribution Plan or in any of the related service agreements or by vote of a
majority of the relevant Fund's Shares.
NFA Brokerage, Inc. is a wholly-owned subsidiary of The Group and is located
at the same address as the Investment Manager. The Distributor serves as the
exclusive agent for the distribution of the Trust's Shares based on a
Distribution Agreement between it and the Trust.
The Distribution Agreement with the Distributor provides for the payment by
each Fund to the Distributor of a distribution fee (the "Distribution Fee") in
an amount equal to 0.25% of average daily net assets. The Distributor
determines the amount, if any, to be paid to service agents and the basis on
which such payments are made. Certain employees of The Group, NFA Brokerage
and the Investment Manager may receive compensation under the Distribution
Plan.
EXECUTION OF PORTFOLIO TRANSACTIONS
Orders for portfolio transactions of the Funds generally will be placed through
NFA Brokerage. NFA Brokerage will receive orders from the Investment
Manager, place them with the underlying fund's distributor, transfer agent or
other person, as appropriate, confirm the trades, prices and numbers of shares
purchased or sold, and assure prompt payment by or to the Fund and proper
completion of the order.
Each Fund has authority to purchase shares of underlying funds that impose
Rule 12b-1 or service fees. Such underlying funds will sign agreements with
the Distributor pursuant to which the Distributor will provide certain services
to such underlying funds in consideration of the payment of such fees. Such
services may include: sub-accounting, account status information, forwarding
12<PAGE>
of communications from such underlying funds to a Fund, and share purchase
processing, exchange, and redemption assistance. In the absence of such an
agreement, an underlying fund would retain the Rule 12b-1 or service fees.
The Distributor is entitled to retain fees for services provided by it to an
underlying fund. Such fees will not exceed the fair market value of the
services provided.
In the event an underlying fund pays a Rule 12b-1 fee to the Distributor, the
Distributor will reimburse all such fees to the relevant Fund. Reimbursement
will be made by the Distributor to a Fund as soon as administratively possible.
PORTFOLIO TURNOVER
Each Fund is actively managed and has no restrictions upon portfolio turnover.
However, it is anticipated that each Fund's rate of portfolio turnover
generally will not exceed 200%. A 100% annual portfolio turnover rate
would be achieved if each security in a Fund's portfolio (other than securities
with less than one year remaining to maturity) were replaced once during the
year. A portfolio turnover rate of 100% or more is considered high and each
Fund's rate of portfolio turnover may be greater than that of many other
mutual funds. Trading also may result in realization of net short-term capital
gains that would not otherwise be realized. Shareholders are taxed on such
gains when distributed from a Fund at ordinary income tax rates. High
portfolio turnover increases the possibility that the Funds would not qualify
as regulated investment companies under Subchapter M of the Code. A Fund
will not qualify as a regulated investment company if it derives more than
30% of its gross income from gains (without offset for losses) from the sale
or other disposition of securities held for less than three months. See
"Dividends, Distributions and Taxes." There is no limit on the portfolio
turnover rates of the underlying funds.
HOW TO PURCHASE SHARES
Shares of the Funds are offered as an investment vehicle for individuals,
institutions, corporations and fiduciaries. Each Fund may invest in underlying
funds which are sold with a sales charge; however, the Funds intend to use
various quantity discount programs and/or applicable waivers to avoid
imposition of any sales loads. Prospectuses, sales material and applications
can be obtained from NSS, the Transfer Agent for each Fund, at the address
and telephone number set forth below. NSS is a subsidiary of The Group, the
parent company of the Investment Manager and the Distributor.
INITIAL PURCHASE
The minimum initial investment in a Fund is $10,000, except that the Trust
reserves the right, in its sole discretion, to waive or reduce the minimum
initial investment amount for certain investors or to waive or reduce the
minimum initial investment for tax-deferred retirement plans. The minimum
investment is waived for purchases by Trustees, officers and employees of the
Trust and of The Group, as well as for private clients of The Group, including
members of such persons' immediate families. The Trust also reserves the
right to waive the minimum initial investment for financial intermediaries.
The Trust is authorized to reject any purchase order.
PRICE OF SHARES
13<PAGE>
Shares of each Fund are sold on a continuous basis, without a sales charge, at
the net asset value (the "Net Asset Value") next determined after receipt of
a purchase order by the Transfer Agent. The Net Asset Value per Share of
each Fund is calculated on each day that the New York Stock Exchange (the
"NYSE") is open for trading. The Net Asset Value per Share of each Fund is
calculated by dividing the sum of the value of the securities held by the Fund
plus cash or other assets minus all liabilities (including estimated accrued
expenses) by the total number of outstanding Shares of the Fund, rounded to
the nearest cent.
Shares of the underlying funds are valued at their respective net asset values
under the 1940 Act. The underlying funds value securities in their portfolios
for which market quotations are readily available at their current market value
(generally the last reported sale price) and all other securities and assets at
fair value pursuant to methods established in good faith by the board of
trustees or directors of the underlying mutual fund. Money market funds with
portfolio securities with deemed maturities of 397 days or less may use the
amortized cost or penny-rounding methods to value their securities.
Securities having 60 days or less remaining to maturity generally are valued
at their amortized cost, which approximates market value.
Other assets of each Fund are valued at their current market value if market
quotations are readily available and, if market quotations are not available,
they are valued at fair value pursuant to methods established in good faith by
the Board of Trustees.
Investors should note that, due to time constraints involved in the pricing of
shares of mutual funds such as the Funds, the Net Asset Value of Fund Shares
reported in newspapers will lag behind the Funds' actual Net Asset Value by
one business day. Purchase orders received by dealers prior to 4:00 p.m. EST
on any business day, and transmitted to the Transfer Agent by 5:00 p.m. EST
that day, are confirmed at the Net Asset Value determined as of the close of
the regular sessions of trading on the NYSE on that day. It is the
responsibility of dealers to transmit properly completed orders so that they
will be received by the Transfer Agent by 5:00 p.m. EST. Broker-dealers or
other agents may charge an investor a fee for effecting transactions. Direct
purchase orders received by the Transfer Agent by 4:00 p.m. EST are
confirmed at that day's Net Asset Value. Direct investments received by the
Transfer Agent after 4:00 p.m. and orders received from dealers after 5:00
p.m. are confirmed at the Net Asset Value determined on the next following
business day.
SHAREHOLDER ACCOUNTS
When an investor invests in a Fund, NSS will establish an open account to which
all full and fractional Shares (to three decimal places) will be credited,
together with any dividends and capital gains distributions, which are paid in
additional Shares unless the shareholder otherwise instructs the Transfer
Agent. No stock certificates representing Shares will be issued.
An investor may open an account and make an initial investment in either
Fund by sending a check and completed account application form to NSS at
Twining Office Center, 715 Twining Road, Suite 202, Dresher, Pennsylvania
19025. Checks should be made payable to The Dresher Comprehensive
Growth Fund or The Dresher Classic Retirement Fund, as appropriate. An
account application kit is included with this Prospectus. Each Fund reserves
the rights to limit the amount of investments and to refuse to sell to any
person.
14<PAGE>
The Transfer Agent mails to shareholders confirmation of all purchases or
redemptions of Shares of the Funds. With a shareholder's prior consent, the
Funds will transmit confirmations and other statements to such shareholder
by e-mail or other electronic media in compliance with SEC guidelines. A
consent to receive such confirmations and statements electronically may be
revoked at any time, whereupon the shareholder will be provided with hard
copies of all such confirmations and statements. In addition, a shareholder
who has consented to electronic delivery may request hard copies at any time.
The Funds' account application contains certain provisions limiting the
liability of the Trust, NSS and certain of their affiliates for certain claims
and costs (including among others, losses resulting from unauthorized
shareholder transactions) relating to the various services (for example,
telephone redemptions and exchanges) made available to investors.
If an order to purchase Shares is canceled because an investor's check does
not clear, the investor will be responsible for any resulting losses or fees
incurred by the Fund or NSS in the transaction.
An investor may also purchase Shares of the Funds by wire. Please call NSS
at (888) 980-7500 for instructions. The investor should be prepared to give
the name in which the account is to be established, the address, telephone
number, and taxpayer identification number for the account, and the name of
the bank that will wire the money.
Investments in a Fund will be made at the Fund's Net Asset Value next
determined after a wire is received together with the account information
outlined above. If the Trust does not receive timely and completed account
information, there may be a delay in the investment of money and any accrual
of dividends. To make an initial wire purchase, an investor must mail a
completed account application to NSS. Banks may impose a charge for
sending a wire. There is presently no fee for receipt of wired funds, but NSS
reserves the right to charge shareholders for this service upon thirty days'
prior notice to shareholders.
SUBSEQUENT PURCHASES
An investor may purchase and add Shares to its account ($100 minimum)
directly by mail or by bank wire or through a dealer. Checks should be sent
to NSS, Twining Office Center, 715 Twining Road, Suite 202, Dresher,
Pennsylvania 19025. Checks should be made payable or endorsed to The
Dresher Comprehensive Growth Fund or The Dresher Classic Retirement
Fund, as appropriate. Bank wires should be sent as outlined above. Each
additional purchase request must contain the account name and number to
permit proper crediting.
SHAREHOLDER SERVICES
Contact NSS at (888) 980-7500 for additional information about the
shareholder services described below.
Tax-Deferred Retirement Plans
15<PAGE>
Shares of the Funds are available for purchase in connection with the
following tax-deferred retirement plans offered by National Actuarial
Consultants, Ltd., a wholly-owned subsidiary of The Group:
- Keogh Plans for self-employed individuals.
- Individual retirement account (IRA) plans for individuals and
their non-employed spouses.
- Qualified pension and profit-sharing plans for employees,
including those profit-sharing plans with 401(k) provision.
- 403(b)(7) custodial accounts for employees of public school
systems, hospitals, colleges and other non-profit organizations
meeting certain requirements of the Code.
HOW TO REDEEM SHARES
Shares of the Funds may be redeemed on each day that the Trust is open for
business. Redeeming shareholders will receive the Net Asset Value per Share
next determined after receipt by NSS of a redemption request in the form
described below. Payment is ordinarily sent by mail or by wire within three
business days after tender in such form. However, payment in redemption of
Shares purchased by check will be based on the Net Asset Value next
determined after receipt by NSS of a properly executed redemption request
(as described above) but will be effected only after the check has been
collected, which may take up to fifteen days from the purchase date. A
shareholder may eliminate this delay by purchasing Shares of the Funds by
certified check or wire.
BY MAIL
Shares may be redeemed by mail by writing directly to the Transfer Agent,
National Shareholder Services, Inc., Twining Office Center, 715 Twining
Road, Suite 202, Dresher, Pennsylvania 19025. The redemption request must
be signed exactly as the shareholder's name appears on the application form,
with the signature guaranteed, and must include the account number. If
Shares are owned by more than one person, the redemption request must be
signed by all owners exactly as the names appear on the registration. A
signature guarantee may generally be obtained from a bank, broker, dealer,
credit union (if authorized under state law), securities exchange or
association, clearing agency or savings association. A notary public is not an
acceptable guarantor. The Trust may waive the signature guarantee
requirement in its discretion.
A request for redemption will not be processed until all of the necessary
documents have been received in proper form by the Transfer Agent. A
shareholder in doubt as to what documents are required should contact NSS
at (888) 980-7500
THROUGH BROKER-DEALERS
Shares may also be redeemed by placing a wire redemption request through
a securities broker or dealer. Broker-dealers or other agents may impose a fee
for this service. A redeeming shareholder
16<PAGE>
will receive the Net Asset Value per Share next determined after receipt by NSS
of its wire redemption request. It is the responsibility of broker-dealers to
promptly and properly transmit wire redemption orders.
BY TELEPHONE
Shares of the Funds may also be redeemed by telephone. The proceeds will
be sent by mail to the address designated on the redeeming shareholder's
account or wired directly to the redeeming shareholder's existing account at
any commercial bank or brokerage firm in the United States as designated on
the application. To redeem by telephone, call NSS at (888) 980-7500. The
redemption proceeds will usually be sent by mail or by wire within three
business days after receipt of telephone instructions. IRA accounts are not
redeemable by telephone.
The telephone redemption privilege is automatically available to all
shareholders. A shareholder may change the bank or brokerage account
designated under this procedure at any time by writing to NSS with the
signature guaranteed by any eligible guarantor institution or by completing a
supplemental telephone redemption authorization form. Contact NSS to
obtain this form. Further documentation will be required to change the
designated account if Shares are held by a corporation, fiduciary or other
organization.
Neither the Trust nor NSS, nor their respective affiliates, will be liable for
complying with telephone instructions they reasonably believe to be genuine
or for any loss, damage, costs or expense in acting on such telephone
instructions. The investor will bear the risk of any such loss. The Trust or
NSS, or both, will employ reasonable procedures to determine that telephone
instructions are genuine. If the Trust and/or NSS do not employ such
procedures, they may be liable for losses due to unauthorized or fraudulent
instructions. Such procedures may include, among others, requiring forms of
personal identification prior to acting upon telephone instructions, providing
written confirmation by mail or, if the shareholder has given its consent to
receipt of confirmation by such means, by e-mail (in compliance with SEC
guidelines) of the transactions and/or tape recording telephone instructions.
OTHER INFORMATION CONCERNING REDEMPTION
Each Fund reserves the right to take up to seven days to make payment if, in
the judgment of the Investment Manager, such Fund could be affected
adversely by immediate payment. In addition, the right of redemption may
be suspended or the date of payment postponed (a) for any period during
which the NYSE is closed (other than for customary weekend and holiday
closings), (b) when trading in the markets that the Fund normally utilizes is
restricted, or when an emergency, as defined by the rules and regulations of
the SEC, exists, making disposal of that Fund's investments or determination
of its Net Asset Value not reasonably practicable, or (c) for any other periods
as the SEC by order may permit. In the case of any such suspension, a
shareholder may either withdraw such shareholder's request for redemption
or receive payment based on the Net Asset Value per Share next determined
after the termination of the suspension. Although the Funds normally expect
to make all redemption requests in cash, under certain circumstances the
Funds may elect to make redemptions "in kind" by distributing underlying
fund shares rather than cash.
17<PAGE>
The Funds reserve the right to redeem Shares and close an account if, as a
result of redemptions, the aggregate value of a shareholder's account drops
below the applicable Fund's $10,000 minimum balance requirement.
Shareholders will be given 30 days' advance written notice and a chance to
increase their account balance to the minimum requirement before the Fund
redeems their Shares.
EXCHANGE PRIVILEGE
Shares of the Funds may be exchanged for each other at Net Asset Value. A
shareholder may request an exchange by sending a written request to NSS.
The request must be signed exactly as the shareholder's name appears on the
Trust's account records. Exchanges may also be requested by telephone. A
shareholder who is unable to execute a transaction by telephone (for example
during times of unusual market activity) should consider requesting that the
exchange be made by mail. An exchange will be effected at the next
determined Net Asset Value after receipt of a request by NSS.
Exchanges may only be made for Shares of Funds then offered for sale in the
shareholder's state of residence and are subject to the applicable minimum
initial investment requirements. The exchange privilege may be modified or
terminated by the Board of Trustees upon 60 days' prior notice to the
shareholders. An exchange results in a sale of the Fund Shares, which may
cause a shareholder to recognize a capital gain or loss.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund will declare and pay, at least annually, dividends to shareholders
of substantially all of its net investment income, if any, earned during the
year from investments, and will distribute net realized capital gains, if any,
once each year. All dividends and distributions will be reinvested
automatically at Net Asset Value in additional Shares of a Fund unless the
shareholder has notified such Fund in writing of the shareholder's election to
receive distributions in cash.
Each Fund intends to qualify continually as a regulated investment company
under Subchapter M of the Code. Such qualification removes from the Fund
any liability for federal income taxes upon the portion of its income
distributed to shareholders and makes federal income tax upon such
distributed income generated by such Fund's investments the sole
responsibility of the shareholders. Continued qualification requires each Fund
to distribute to its shareholders each year substantially all of its income and
capital gains. In addition, amounts not distributed on a timely basis in
accordance with a calendar year distribution requirement are subject to a
nondeductible 4% excise tax. To prevent imposition of the excise tax each
Fund must distribute for each calendar year an amount equal to the sum of (1)
at least 98% of its calendar year net ordinary income, (2) at least 98% of the
excess of its capital gains over capital losses (adjusted for certain ordinary
losses) realized during the one-year period ending December 31 of such year,
and (3) 100% of any undistributed net ordinary income and net capital gains
for previous years. A distribution will be treated as paid on December 31 of
the calendar year if it is declared by the Fund in December of that year with
a record date in December and paid by the Fund during January of the
following calendar year. Such distributions will be taxable to shareholders in
the calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received. Each year the Trust
will notify shareholders of the tax status of dividends and distributions.
18<PAGE>
In addition to the distribution requirements outlined above, each Fund must
meet several additional requirements of Subchapter M, including the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of securities and certain other
income; (2) the Fund must derive less than 30% of its gross income each taxable
year from the sale or other disposition of securities held for less than
three months; (3) 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 regulated investment
companies and other securities, with those other securities limited, in respect
of any issuer, to an amount that does not exceed 5% of the value of the Fund's
total assets and that does not represent more than 10% of the outstanding
voting securities of the issuer; and (4) at the close of each quarter of the
Fund's taxable year, not more than 25% of the value of its total assets may be
invested in securities (other than U.S. government securities and securities of
other regulated investment companies) of any one issuer.
Any dividend or distribution paid by a Fund has the effect of reducing the Net
Asset Value per Share on the ex-dividend date by the amount of the dividend
or distribution. Therefore, a dividend or distribution paid shortly after a
purchase of Shares by an investor would represent, in substance, a return of
capital to the shareholder, even though subject to income taxes.
Each Fund may also, from time to time, pay dividends in excess of net income
and net realized capital gains. Any such excess dividends would constitute
a non-taxable return of capital to the shareholder.
Depending on the residence of the shareholder for tax purposes, distributions
also may be subject to state and local taxes, including withholding taxes.
Investors should consult their own tax advisers as to the tax consequences of
ownership of Shares of a Fund in their particular circumstances.
In accordance with the Code, each Fund may be required to withhold a
portion of dividends, redemptions or capital gains paid to a shareholder and
remit such amount to the Internal Revenue Service if the shareholder fails to
furnish the Fund with a correct taxpayer identification number, if the
shareholder fails to supply the Fund with a tax identification number
altogether, if the investor fails to make a required certification that its
taxpayer identification number is correct and that it is not subject to backup
withholding, or if the Internal Revenue Service notifies the Fund to withhold
a portion of such distributions from a shareholder's account.
Income received from a mutual fund in that Fund's portfolio (including
dividends and distributions of short-term capital gains), as well as interest
received on cash held in the Custodian's money market deposit account and
net short-term capital gains received by the Fund on the sale of mutual fund
shares, will be distributed by the Fund (net of expenses incurred by the Fund)
and will be taxable to shareholders as ordinary income. Because each Fund
is actively managed and can realize taxable net short-term capital gains by
selling shares of an underlying fund with unrealized portfolio appreciation,
investing in the Fund rather than directly in the underlying funds may result
in increased tax liability to the shareholder because the Fund must distribute
its gain in accordance with the rules of the Code.
Distributions of net capital gains received from underlying mutual funds, as
well as net long-term capital gains realized by the Fund from the purchase and
sale of underlying mutual fund shares held
19<PAGE>
by the Fund for more than one year, will be distributed by the Fund and will be
taxable to shareholders as long-term capital gains (even if the shareholder has
held the Shares for less than one year). However, if a shareholder who has
received a capital gains distribution suffers a loss on the sale of its Shares
not more than six months after purchase, the loss will be treated as a
long-term capital loss to the extent of the capital gains distribution
received.
For purposes of determining the character of income received by the Fund when
an underlying fund distributes net capital gains to the Fund, the Fund will
treat the distribution as a long-term capital gain, even if it has held shares
of the mutual fund for less than one year. However, any loss incurred by the
Fund on the sale of that underlying fund's shares held for six months or less
will be treated as a long-term capital loss only to the extent of the gain
distribution. The tax treatment of distributions from the Fund is the same
whether the distributions are received in additional Shares or in cash.
Shareholders receiving distributions in the form of additional Shares will have
a cost basis for federal income tax purposes in each Share received equal to
the Net Asset Value of a Share of the Fund on the reinvestment date.
Either Fund may invest in underlying funds with capital loss carry-forwards. If
such an underlying fund realizes capital gains, it will be able to offset the
gains to the extent of its loss carry-forwards in determining the amount of
capital gains which must be distributed to its shareholders.
GENERAL INFORMATION
The Trust is a business trust formed under the laws of Delaware on March 26,
1997. It may issue an unlimited number of shares of beneficial interest in one
or more series or classes. Currently it offers Shares of two series. The
Board of Trustees may authorize the issuance of shares of additional series or
classes, if it deems it desirable. Shares within each series have equal,
noncumulative voting rights, and have equal rights as to distributions, assets
and liquidation of such series except to the extent that such voting rights or
rights as to distributions, assets and liquidation vary among classes of a
series.
Upon issuance and sale in accordance with the terms of this Prospectus, each
Share will be fully paid and non-assessable. Shares of the Fund have no
preemptive, subscription or conversion rights and are redeemable as set forth
under "How to Redeem Shares." Under Delaware law, shareholders of a
Delaware business trust are not subject to personal liability for the acts and
obligations of the Trust.
SHAREHOLDERS MEETINGS
The Trust is not required to hold annual shareholders' meetings and does not
intend to do so. The Trust may, however, hold special meetings in connection
with certain matters. These include changing a Fund's fundamental policies,
electing or removing Trustees, or approving or amending any investment
advisory agreement or distribution plan.
VOTING RIGHTS
Shareholders of each Fund have the right to vote on any matters which by law
or the provisions of the Declaration of Trust they may be entitled to vote
upon.
20<PAGE>
Shareholders of each Fund are entitled to one vote for each dollar of Net Asset
Value (number of Shares owned times Net Asset Value per Share) of such Fund.
Unless otherwise permitted by the 1940 Act, shareholders will vote by series
and not in the aggregate. In addition, shareholders will vote exclusively
as a class on any matters relating solely to their arrangement as a class and
on any matter in which the interests of that class differs from the interests
of any other class in that Fund. As used in this Prospectus, the term "vote
of a majority of the outstanding votes" of a Fund (or of the Trust) means the
vote of the lesser of: (1) 67% of the votes of the Fund (or of the Trust)
present at a meeting of shareholders if the holders of more than 50% of the
outstanding votes of the Fund (or the Trust) are present in person or by proxy
or (2) more than 50% of the outstanding votes of the Fund (or the Trust). In
compliance with applicable provisions of the 1940 Act, each Fund intends to
vote the shares of the underlying funds held by it in the same proportion as
the vote of all other holders of such underlying fund's securities. The effect
of such "mirror" voting will be to neutralize the Fund's influence on corporate
governance matters regarding the underlying funds in which the Fund invests.
SHARE CERTIFICATES
To assist in minimizing administrative costs, share certificates will not be
issued. Records regarding Share ownership are maintained by the Transfer
Agent.
SHAREHOLDER INQUIRIES
All Shareholder inquiries should be directed to the Trust at the telephone
number and address shown on the back cover of this Prospectus for National
Shareholder Services.
CUSTODIAN
Firstrust Savings Bank, 1931 Cottman Avenue, Philadelphia, Pennsylvania
19111, is the custodian (the "Custodian") for each Fund's securities and cash.
AUDITORS
Sanville & Company, 1514 Old York Road, Abington, Pennsylvania 19001
have been appointed as independent accountants for the Funds.
LEGAL COUNSEL
Klehr, Harrison, Harvey, Branzburg & Ellers, 1401 Walnut Street,
Philadelphia, Pennsylvania 19102, is legal counsel to the Trust and to the
Investment Manager, the Distributor and the Transfer Agent.
HOW THE FUNDS REPORT PERFORMANCE
From time to time a Fund may advertise its "average annual total return" in
advertisements or reports to shareholders or prospective shareholders.
Quotations of "average annual total return" will be expressed in terms of the
average annual compounded rate of return of a hypothetical investment
21<PAGE>
in a Fund over periods of 1, 5, and 10 years (up to the life of the Fund).
A Fund may also advertise total return (a "nonstandardized quotation") which is
calculated differently from "average annual total return." A nonstandardized
quotation of total return may be a cumulative return which measures the
percentage change in the value of an account between the beginning and end
of a period, assuming no activity in the account other than reinvestment of
dividends and capital gains distributions. A nonstandardized return may also
indicate average annual compounded rates of return over periods other than
those specified for "average annual total return." A nonstandardized
quotation of total return will always be accompanied by a Fund's "average
annual total return" as described above.
All total return figures will reflect the deduction of a proportionate share of
Fund expenses on an annual basis, and will assume that all dividends and
distributions are reinvested when paid. Quotations of total return reflect
only the performance of a hypothetical investment in the Funds during the
particular time period on which the calculations are based.
Total return for a Fund will vary based upon changes in market conditions and
the level of the Fund's expense and should not be considered an indication of
future performance.
The Funds may also compare their performance with that of other mutual
funds as listed in the rankings prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc., or similar independent services that monitor mutual fund
performance, and with appropriate securities indices, which may assume
reinvestment of dividends but usually do not reflect deductions for
administrative and management costs and expenses. Additional information
about the Funds' performance will be contained in the Funds' annual report to
shareholders, which may be obtained without charge from NSS at the address
or telephone number listed on the back cover of this Prospectus.
ANNUAL AND SEMI-ANNUAL REPORT MAILINGS
Twice a year, each Fund provides shareholders with a report showing its
performance and outlining its investments. To reduce mailing costs, the Trust
will combine these mailings by household. If a household has multiple
accounts and the same record address for all the accounts, the Trust will send
mailings for all accounts at that address in a single package. A shareholder
who does not want to combine mailings for its account should write to NSS
at the address on the back of this Prospectus. With a shareholder's prior
consent, the Funds will transmit their annual and semi-annual reports
electronically to such shareholder by e-mail or by posting such reports on the
Trust's World Wide Web site. If such reports are posted on the Trust's World
Wide Web site, shareholders will receive prior notice, in compliance with
SEC guidelines, that reports will be delivered in this manner. A consent to
receive such reports electronically may be revoked at any time, whereupon the
shareholder will be provided with hard copies of all such reports. In
addition, a shareholder who has consented to electronic delivery may request a
hard copy of any report at any time.
______________________________
No dealer, salesman, or other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus, and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Trust or the
22<PAGE>
Investment Manager. This Prospectus does not constitute an offering in any
state in which such offering may not lawfully be made.
23<PAGE>
APPENDIX A
DESCRIPTION OF BOND AND COMMERCIAL PAPER RATING*
STANDARD & POOR'S CORPORATION
BONDS
AAA: Bonds rated AAA have the highest rating assigned by Standards &
Poor's to a debt obligation. Capacity to pay interest and repay
principal is extremely strong.
AA: Bonds rated AA have very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A: Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
bonds in the higher rated categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than the bonds
in higher rated categories.
BB, B, CCC AND
CC: Bonds rated BB, B, CCC and CC are regarded on balance as
predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and CC the highest degree
of speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.
COMMERCIAL PAPER
A-1: Commercial paper rated A-1 indicates that the degree of safety
regarding timely payment is very strong.
A-2: Commercial paper rated A-2 indicates that the capacity for timely
payment is strong. However, the relative degree of safety is not as
overwhelming as for issues designated A-1.
________________________
*As described by Standard & Poor's Corporation
A-1<PAGE>
APPENDIX B
DESCRIPTION OF VARIOUS SECURITIES INVESTED IN,
AND TECHNIQUES EMPLOYED BY,
UNDERLYING FUNDS IN WHICH THE FUNDS MAY INVEST
As described in this Prospectus under "Investment Objectives and
Management Techniques" and under "Risks and Other Consideration," the
Funds will invest in the shares of open-end investment companies (or "mutual
funds"). These mutual funds (collectively referred to in this Appendix as
"underlying funds") may incur risks, certain of which are described in this
Appendix B. The underlying funds may invest in a variety of investment
securities and instruments. This Appendix B is not an exhaustive list of such
investment products.
FOREIGN SECURITIES
An underlying fund may invest some or all of its assets in securities of
foreign issuers. Investments in foreign securities involve risks relating to
political and economic developments abroad as well as those that may result
from the difference between the regulation to which U.S. issuers are subject
and that applicable to foreign issuers. These risks may include expropriation,
confiscatory taxation, withholding taxes on dividends and interest, limitations
on the use or transfer of an underlying fund's assets and political or social
instability or diplomatic developments. Foreign issuers are not generally
subject to accounting, auditing and financial reporting standards and practices
comparable to those in the United States. There is often less information
publicly available about a foreign issuer than about a U.S. issuer.
Individual foreign economies may differ favorably or unfavorably from the
U.S. economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position. Securities of foreign companies may be less liquid and
their prices more volatile than securities of comparable U.S. companies.
Moreover, the underlying funds generally calculate their net asset values and
complete orders to purchase, exchange or redeem shares only on days when
the New York Stock Exchange is open. However, foreign securities in which
the underlying funds may invest may be listed primarily on foreign stock
exchanges that may trade on other days (such as U.S. holidays and weekends).
As a result, the net asset value of an underlying fund's portfolio may be
significantly affected by trading on days when the Investment Manager does
not have access to the underlying funds and shareholders do not have access
to the Funds.
Additionally, because foreign securities ordinarily are denominated in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect an underlying fund's net asset value, the value of dividends
and interest earned, gains and losses realized on the sale of securities and
net investment income and capital gain, if any, to be distributed to
shareholders by the underlying fund. If the value of a foreign currency rises
against the U.S. dollar, the value of the underlying fund's assets denominated
in that currency will decrease. The exchange rates between the U.S. dollar
and other currencies are determined by supply and demand in the currency
exchange markets, international balance of payments, governmental intervention,
speculation and other economic and political conditions. The costs
attributable to foreign investment that an underlying fund must bear
frequently are higher that those attributable to domestic investing. For
example, the costs of maintaining custody of foreign securities are generally
higher than custodian costs relating to domestic securities.
B-1<PAGE>
Income received by an underlying fund from sources within foreign countries
may be reduced by withholding and other taxes imposed by such countries.
Tax conventions between certain countries and the United States may reduce
or eliminate such taxes. Any such taxes paid by an underlying fund will
reduce the net income of the underlying fund available for distribution to the
Funds. Special tax considerations apply to foreign securities.
Risks may be intensified in the case of investments by an underlying fund in
emerging markets or countries with limited or developing capital markets.
Securities prices in emerging markets can be significantly more volatile than
those in more developed nations, reflecting the greater uncertainties of
investment in less established markets and economies. In particular, countries
with emerging markets may have relatively unstable governments, present the
risk of nationalization of businesses, restrictions on foreign ownership, or
prohibitions on repatriation of assets, and may have less protection of
property rights than more developed countries. The economies of countries
with emerging markets may be predominately based on only a few industries,
may be highly vulnerable to changes in local or global trade conditions, and
may suffer from extreme and volatile debt or inflation rates. Local securities
markets may trade a small number of securities and may be unable to respond
effectively to increases in trading volume, potentially making prompt
liquidation of substantial holdings difficult or impossible at times.
Securities of issuers located in countries with emerging markets may have
limited marketability and may be subject to more abrupt or erratic price
movements. Debt obligations of developing countries may involve a high degree
of risk, and may be in default or present the risk of default. Governmental
entities responsible for repayment of the debt may be unwilling to repay
principal and interest when due, and may require renegotiation of rescheduling
of debt payments. In addition, prospects for repayment of principal and
interest may depend on political as well as economic factors.
FOREIGN CURRENCY TRANSACTIONS
In connection with its portfolio transactions in securities traded in a foreign
currency, an underlying fund may enter into forward contracts to purchase or
sell an agreed upon amount of a specific currency at a future date that may be
any fixed number of days from the date of the contract agreed upon by the
parties at a price set at the time of the contract. Under such an arrangement,
concurrently with the entry into a contract to acquire a foreign security for a
specified amount of currency, the underlying fund would purchase with U.S.
dollars the required amount of foreign currency for delivery at the settlement
date of the purchase. The underlying fund would enter into similar forward
currency transaction in connection with the sale of foreign securities. The
effect of such transactions would be to fix a U.S. dollar price for the
security to protect against a possible loss resulting from an adverse change
in the relationship between the U.S. dollar and the subject foreign currency
during the period between the date the security purchased or sold and the date
on which payment is made or received, the normal range of which is three to
fourteen days. These contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades. Although such contracts
tend to minimize the risk of loss due to a decline in the value of the subject
currency, they tend to limit commensurately any potential gain that might
result should the value of such currency increase during the contract period.
B-2<PAGE>
BONDS AND FIXED INCOME SECURITIES
Underlying funds may invest in long or short-term bonds and various other
types of fixed income securities (such as securities issued, guaranteed or
insured by the U.S. government, its agencies or instrumentalities, commercial
paper, preferred stock and convertible debentures). These mutual funds may
invest in investment grade bonds (bonds rated in the four highest ratings
categories by Standard & Poor's Corporation ("S&P") (AAA, AA, A and
BBB) or Moody's Investors Services, Inc. ("Moody's") (Aaa, Aa, A and Baa)
or similar nationally recognized ratings services or in bonds that are not
considered investment grade (for example, bonds rated BB or below by S&P
or Ba or below by Moody's). A description of ratings assigned to commercial
paper and corporate debt obligations by S&P can be found in Appendix A to
this Prospectus. In general, the current value of bonds varies inversely with
changes in prevailing interest rates. If interest rates increase after a bond
is purchased, the value of that security will normally decline. If prevailing
interest rates decrease after a bond is purchased, the bond's market price will
normally rise. Non-investment grade bonds are higher yielding, high risk
securities commonly known as "junk bonds."
HIGH-YIELD SECURITIES
The Funds may, from time to time, invest in shares of underlying funds which
invest in lower-rated securities or in unrated securities, when, in view of the
Investment Manager, such investments are consistent with the Fund's
investment objective. Certain risk factors that investors should recognize as
being associated the Investment Manager's discretion to invest in such
underlying funds are set forth below.
Youth and Growth of the High Yield Bond Market. The high yield,
high risk market is relatively new and at times is subject to substantial
volatility. An economic downturn or increase in interest rates may have a
significant effect on the high yield, high risk securities in an underlying
fund's portfolio and the markets for such securities, as well as on the ability
of securities' issuers to repay principal and interest. Issuers of high yield,
high risk securities may be of low credit worthiness and the high yield, high
risk securities may be subordinated to the claims of senior lenders. During
periods of economic downturn or rising interest rates, the issuers of high
yield, high risk securities may have greater potential for insolvency and a
higher incidence of high yield, high risk bond defaults may be experienced.
Sensitivity of Interest Rate and Economic Changes. Prices of high yield,
high risk securities have been found to be less sensitive to interest rate
changes than higher-rated investments, but more sensitive to adverse economic
changes or individual corporate developments. During an economic downturn or
substantial period of rising interest rates, highly leveraged issuers may
experience financial stress that would adversely affect their ability to
service their principal and interest payment obligations, to meet projected
business goals, and to obtain additional financing. If the issuer of a high
yield, high risk security owned by an underlying fund defaults, the fund
may incur additional expenses in seeking recovery. Periods of economic
uncertainty and changes can be expected to result in increased volatility of
market prices in high yield, high risk securities. Yields on high yield, high
risk securities will fluctuate over time.
Payment Expectations. Certain securities held by an underlying fund,
including high yield, high risk securities, may contain redemption or call
provisions. If an issuer exercises these provisions in a declining interest
rate market, the underlying fund would have to replace the security with a
lower yielding security, resulting in a decreased return for the investor.
Conversely, a high
B-3<PAGE>
yield, high risk security's value will decrease in a rising interest rate
market, as will the value of the underlying fund's assets.
Liquidity and Valuation. High yield, high risk securities may tend to
trade in markets that are relatively less liquid than the market for
higher-rated securities. It is thus possible that the underlying fund's
ability to dispose of such securities, when its investment adviser deems it
desirable to do so, may be limited. The lack of a liquid secondary market may
also have an adverse impact on market price and the underlying fund's ability
to dispose of particular issues when necessary to meet the underlying fund's
liquidity needs or in response to a specific economic event, such as a
deterioration in the creditworthiness of the issuer. In addition, a less
liquid market may interfere with the ability of the underlying fund to value
lower-rated securities accurately and, consequently, value the fund's assets
accurately. Furthermore, adverse publicity and investor perceptions, whether
or not based on fundamental analysis, may decrease the values and liquidity
of lower-rated securities, especially in a thinly-traded market.
Credit Ratings. Credit ratings evaluate the safety of principal and
interest payments, not the market value risk of securities. Since credit
ratings agencies may fail to change the credit ratings in a timely manner to
reflect subsequent events, the investment adviser to an underlying fund should
monitor the issuers of high yield, high risk securities in the fund's portfolio
to determine if the issuers will have sufficient cash flow and profits to meet
required principal and interest payment obligations, and to attempt to assure
the securities' liquidity so the fund can meet redemption requests. To the
extent that an underlying fund invests in high yield, high risk securities, the
achievement of the fund's investment objective may be more dependent on the
underlying fund's own credit analysis than is the case for higher quality
bonds. Subsequent to its purchase by an underlying fund, an issue of securities
may cease to be rated or its rating may be reduced below the minimum rating
required for purchase by an underlying fund.
CONVERTIBLE PREFERRED STOCKS AND DEBT SECURITIES
Certain preferred stocks and debt securities that may be held by an underlying
fund have conversion features allowing the holder to convert securities into
another specified security (usually common stock) of the same issuer at a
specified conversion ratio (e.g., two shares of preferred for one share of
common stock) at some specified future date or within a specified period.
The market value of convertible securities generally includes a premium that
reflects the conversion right. That premium may be negligible or substantial.
To the extent that any preferred stock or debt security remains unconverted
after the expiration of the conversion period, the market value will fall to
the extent represented by the premium.
ILLIQUID SECURITIES
An underlying fund may invest in securities for which no readily available
market exists ("illiquid securities") or securities the disposition of which
would be subject to legal restrictions (so-called "restricted securities") and
repurchase agreements maturing in more than seven days. A considerable
period may elapse between an underlying fund's decision to sell securities and
the time when the fund is able to sell such securities. If, during such a
period, adverse market conditions were to develop, the underlying fund might
obtain a less favorable price than prevailed when it decided to sell.
All mutual funds are subject to restrictions on the percentage of their assets
which may be composed of illiquid securities. Subject to these limitations,
an underlying fund may invest in restricted
B-4<PAGE>
securities when such investment is consistent with its investment objectives,
and such securities may be considered to be liquid to the extent the fund's
investment adviser determines that there is a liquid institutional or other
market for such securities. In determining whether a restricted security is
properly considered a liquid security, the fund's investment adviser, under the
direction of the fund's Board of Trustees, will take into account relevant
factors, including the following: (i) the frequency of trades and quotes for
the security; (ii) the number of dealers willing to purchase or sell the
security and the number of potential purchasers; (iii) dealer undertakings to
make a market in the security; and (iv) the nature of the security and
marketplace trades (e.g., the time needed to dispose of the security, the
method of soliciting offers and the mechanics of transfer). An underlying
fund's investment in such restricted securities could have the effect of
increasing the level of the fund's illiquidity to the extent that qualified
institutional buyers become, for a time, uninterested in purchasing these
securities.
INDUSTRY CONCENTRATION
An underlying fund may concentrate its investments within one industry.
Because the scope of investment alternatives within an industry is limited, the
value of the shares of such an underlying fund may be subject to greater
market fluctuation than an investment in a fund that invests in a broader range
of securities.
OPTION ACTIVITIES
An underlying fund may write (i.e., sell) call options ("calls") if the calls
are "covered" throughout the life of the option. A call is "covered" if the
fund owns the options securities. When a fund writes a call, it receives a
premium and gives the purchaser the right to buy the underlying security at
any time during the call period (usually not more than nine months in the case
of common stock) at a fixed exercise price regardless of market price changes
during the call period. If the call is exercised, the fund will forego any
gain from an increase in the market price of the underlying security over the
exercise price.
An underlying fund may purchase a call on securities only to effect a "closing
transaction," which is the purchase of a call covering the same underlying
security and having the same exercise price and expiration date as a call,
previously written by the fund, on which it wishes to terminate its obligation.
If the underlying fund is unable to effect a closing transaction, it will not
be able to sell the underlying security until the call previously written by
the fund expires (or until the call is exercised and the fund delivers the
underlying security).
An underlying fund also may write and purchase put options ("puts"). When
a fund writes a put, it receives a premium and gives the purchaser of the put
the right to sell the underlying security to the fund at the exercise price at
any time during the option period. When a fund purchases a put, it pays a
premium in return for the right to sell the underlying security at the exercise
price at any time during the option period. An underlying fund also may
purchase stock index puts, which differ from puts on individual securities in
that they are settled in cash based on the values of the securities in the
underlying index rather than by delivery of the underlying securities.
Purchase of a stock index put is designed to protect against a decline in the
value of the portfolio generally rather than an individual security in the
portfolio. If any put is not exercised or sold, it will become worthless on
its expiration date.
An underlying fund's option positions may be closed out only on an exchange
that provides a secondary market for options of the same series, but there can
be no assurance that a liquid
B-5<PAGE>
secondary market will exist at any given time for any particular option. In
this regard, trading in options on certain securities (such as U.S. government
securities) is relatively new, so that it is impossible to predict to what
extent liquid markets will develop or continue.
An underlying fund's custodian, or a securities depository acting for it,
generally acts as escrow agent as to the securities on which the fund has
written puts or calls, or as to other securities acceptable for such escrow so
that no margin deposit is required of the fund. Until the underlying
securities are released from escrow, they cannot be sold by the fund.
In the event of a shortage of the underlying securities deliverable on exercise
of an option, the Options Clearing Corporation ("OCC") has the authority to
permit other, generally comparable securities to be delivered in fulfillment of
option exercise obligations. If the OCC exercises its discretionary authority
to allow such other securities to be delivered, it may also adjust the exercise
prices of the affected options by setting different prices at which otherwise
ineligible securities may be delivered. As an alternative to permitting such
substitute deliveries, the OCC may impose special exercise settlement
procedures. (See "Leverage" below for a discussion of how options trading
activities involve potential leveraging.)
OPTIONS TRADING MARKETS
Options in which the underlying funds will invest are generally listed on
exchanges. Exchanges on which such options currently are traded are the
Chicago Board Options Exchange and the American, New York, Pacific, and
the Philadelphia Stock Exchanges. Options on some securities may not,
however, be listed on any exchange but traded in the over-the-counter market.
Options traded in the over-the-counter market involve the additional risk that
securities dealers participating in such transactions will fail to meet their
obligations to the underlying fund. The use of options traded in the
over-the-counter market may be subject to limitations imposed by certain state
securities authorities. In addition to the limits on the use of options
discussed herein, a mutual fund is subject to the investment restrictions
described in its prospectus and statement of additional information.
The staff of the SEC currently is of the view that the premiums that a mutual
fund pays for the purchase of unlisted options, and the value of securities
used to cover unlisted options written by the underlying fund, are considered
to be invested in illiquid securities or assets for the purpose of calculating
whether a mutual fund is in compliance with any fundamental investment
restriction prohibiting it from investing more than 15% (or, in many cases,
10%) of its net assets (taken at current value) in any combination of illiquid
assets and securities.
FUTURES CONTRACTS
An underlying fund may enter into futures contracts for the purchase or sale
of debt securities and stock indexes. A futures contract is an agreement
between two parties to buy and sell a security or an index for a set price on a
future date. Futures contracts are traded on designated "contract markets"
that, through their clearing corporations, guarantee performance of the
contracts.
A financial futures contract sale creates an obligation by the seller to
deliver the type of financial instrument called for in the contract in a
specified delivery month for a stated price. A financial futures contract
purchase creates an obligation by the purchaser to take delivery of the type of
financial instrument called for in the contract in a specified delivery month
at a stated price. The specific instruments delivered or taken, respectively,
at settlement date are not determined until on or near such date. The
determination is made in accordance with the rules of the exchange on which
B-6<PAGE>
the futures contract sale or purchase was made. Futures contracts are traded
in the United States only on commodity exchanges or boards of trade (known as
"contract markets") approved for such trading by the Commodity Futures Trading
Commission (the "CFTC), and must be executed through a futures commission
merchant or brokerage firm that is a member of the relevant contract market.
Although futures contracts by their terms call for actual delivery or
acceptance of commodities or securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery.
Closing out a futures contract sale is effected by purchasing a futures
contract for the same aggregate amount of the specific type of financial
instrument or commodity with the same delivery date. If the price of the
initial sale of the futures contract exceeds the price of the offsetting
purchase, the seller is paid the difference and realizes a gain. On the other
hand, if the price of the offsetting purchase exceeds the price of the initial
sale, the seller realizes a loss. A purchaser closes out a futures contract
purchase by entering a futures contract sale. If the offsetting sale price
exceeds the purchase price, the purchaser realizes a gain, and if the purchase
price exceeds the offsetting sale price, the purchaser realizes a loss. An
underlying fund may sell financial futures contracts in anticipation of an
increase in the general level of interest rates. Generally, as interest rates
rise, the market value of the securities held by an underlying fund will fall,
thus reducing its net asset value. This interest rate risk may be reduced
without the use of futures as a securities with shorter maturities or by
holding assets in cash. This strategy, however, entails increased transaction
costs in the form of dealer spreads and brokerage commissions and will
typically reduce the fund's average yield as a result of the shortening of
maturities.
The sale of financial futures contracts serves as a means of hedging against
rising interest rates. As interest rates increase, the value of an underlying
fund's short position in the futures contracts will also tend to increase, thus
offsetting all or a portion of the depreciation in the market value of the
fund's investment being hedged. While an underlying fund will incur commission
expenses in selling and closing out futures positions (by taking an opposite
position in the futures contract), commissions on futures transactions tend to
be lower than transaction costs incurred in the purchase and sale of portfolio
securities.
An underlying fund may purchase interest rate futures contracts in anticipation
of a decline in interest rates when it is not fully invested. As such
purchases are made, an underlying fund would probably expect that an equivalent
amount of futures contracts will be closed out. Unlike when an underlying fund
purchases or sells a security, no price is paid or received by the fund upon
the purchase or sale of a futures contract. Upon entering into a contract, the
underlying fund is required to deposit with its custodian in a segregated
account in the name of the futures broker an amount of cash and/or U.S.
government securities. This is known as "initial margin." Initial margin
is similar to a performance bond or good faith deposit which is returned to an
underlying fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied. Futures contracts also involve
brokerage costs.
Subsequent payments, called "variation margin" or "maintenance margin," to
and from the broker (or the custodian) are made on a daily basis as the price
of the underlying security or commodity fluctuates, making the long and short
positions in the futures contract more or less valuable. This is known as
"marking to the market." An underlying fund may elect to close some or all
of its futures positions at any time prior to their expiration in order to
reduce or eliminate a hedge position then currently held by the fund. The
underlying fund may close its positions by taking opposite positions that will
operate to terminate the fund's position in the futures contracts. Final
determinations of variation margin are then made, additional cash is required
to be paid by a release
B-7<PAGE>
to the underlying fund, and the fund realizes a loss or a gain. Such closing
transactions involve additional commission costs.
A stock index futures contract may be used to hedge an underlying fund's
portfolio with regard to market risk as distinguished from risk relating to a
specific security. A stock index futures contract does not require the
physical delivery of securities, but merely provides for profits and losses
resulting from changes in the market value of the contract to be credited or
debited at the close of each trading day to the respective accounts of the
parties to the contract. On the contract's expiration date, a final cash
settlement occurs. Changes in the market value of a particular stock index
futures contract reflect changes in the specified index of equity securities
on which the contract is based.
There are several risks in connection with the use of futures contracts. In the
event of an imperfect correlation between the futures contract and the
portfolio position that is intended to be protected, the desired protection may
not be obtained and the underlying fund may be exposed to risk of loss.
Further, unanticipated changes in interest rates or stock price movements may
result in a poorer overall performance for the fund than if it had not entered
into futures contracts on debt securities or stock indexes.
In addition, the market price of futures contracts may be affected by certain
factors. First, all participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting additional
margin deposit requirements, investors may close future contracts through
offsetting transactions that could distort the normal relationship between the
securities and futures markets. Second, from the point of view of speculators,
the deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore, increased participation by
speculators in the futures market may also cause temporary price distortions.
Positions in futures contracts may be closed out only on an exchange or board
of trade that provides a secondary market for such futures. There is no
assurance that a liquid secondary market on an exchange or board of trade
will exist at any particular time. In order to assure that mutual funds have
sufficient assets to satisfy their obligations under their futures contracts,
the underlying funds are required to establish segregated accounts with their
custodians. Such segregated accounts are required to contain an amount of
cash, U.S. government securities and other liquid, high-grade debt securities
equal in value to the current value of the underlying instrument less the
margin deposit. (Also see "Leverage" below.)
The risk to an underlying fund from investing in futures is potentially
unlimited. Gains and losses on investments in options and futures depend
upon the underlying fund's investment adviser's ability to predict correctly
the direction of stock prices, interest rates and other economic factors.
OPTIONS ON FUTURES CONTRACTS
An underlying fund may purchase and write (sell) put and call options on
futures contracts. An option on a futures contract gives the purchaser the
right, in return for the premium paid, to assume a position in a futures
contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the option
period. When an option on a futures contract is exercised, delivery of the
futures position is accompanied by cash representing the difference between the
current market price of the futures contract and the exercise price of the
option. A fund may purchase put options on futures contracts in lieu of, and
for the same purpose as, a sale of a futures contract. It also may purchase
such put options in order to hedge a long
B-8<PAGE>
position in the underlying futures contract in the same manner as it purchases
"protective puts" on securities.
As with options on securities, the holder of an option on a futures contract
may terminate its position by selling an option of the same series. There is
no guarantee that such closing transactions can be effected. An underlying
fund is required to deposit initial margin and variation margin with respect
to put and call options on futures contracts written by it pursuant to brokers'
requirements similar to those applicable to futures contracts described above
and, in addition, net option premiums received will be included as initial
margin deposits.
In addition to the risks that apply to all options transactions, there are
several special risks relating to options on futures contracts. The ability to
establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. There can be no
certainty that liquid secondary markets for all options on futures contracts
will develop. Compared to the use of futures contracts, the purchase of options
on futures contracts involves less potential risk to an underlying fund because
the maximum amount of risk is the premium paid for the options (plus
transaction costs). However, there may be circumstances when the use of an
option on a futures contract would result in a loss to the fund when the use of
a futures contract would not, such as when there is no movement in the prices
of the underlying securities. Writing an option on a futures contract involves
risks similar to those arising in the sale of futures contracts, as described
above.
SHORT SALES
An underlying fund may sell securities short. In a short sale, the fund sells
securities that it does not own, making delivery with securities "borrowed"
from a broker. The fund is then obligated to replace the borrowed securities
by purchasing them at the market price at the time of replacement. This price
may or may not be less than the price at which the securities were sold by the
fund. Until the securities are replaced, the fund is required to pay to the
lender any dividends or interest that accrue during the period of the loan. In
order to borrow the securities, the fund may also have to pay a premium that
would increase the cost of the securities sold. The proceeds of the short sale
will be retained by the broker, to the extent necessary to meet margin
requirements, until the short position is closed out.
The fund also must deposit in a segregated account an amount of cash or U.S.
government securities equal to the difference between (a) the market value of
the securities sold short at the time they were sold short and (b) the value of
the collateral deposited with the broker in connection with the sale (not
including the proceeds from the short sale). Each day the short position is
open, the fund must maintain the segregated account at such a level that the
amount deposited in it plus the amount deposited with the broker as collateral
(1) equals the current market value of the securities sold short and (2) is not
less than the market value of the securities at the time they were sold short.
Depending upon market conditions, up to 80% of the value of a fund's net
assets may be deposited as collateral for the obligation to replace securities
borrowed to effect short sales and allocated to a segregated account in
connection with short sales. As is the case with all secured transactions, the
possibility exists that the collateral will be called to satisfy the underlying
obligations.
An underlying fund will incur a loss as a result of a short sale if the price of
the security increases between the date of the short sale and the date on which
the fund replaces the borrowed security. The fund will realize a gain if the
security declines in price between those dates. The amounts of
B-9<PAGE>
any gain will be decreased and the amount of any loss increased by the amount
of any premium, dividends or interest the fund may be required to pay in
connection with the short sale.
A short sale is "against the box" if at all times when the short position is
open the fund owns an equal amount of the securities or securities convertible
into, or exchangeable without further consideration for, securities of the
same issue as the securities sold short. Such a transaction serves to defer a
gain or loss for federal income tax purposes.
WARRANTS
An underlying fund may invest in warrants, which are options to purchase a
specified security, usually an equity security such as common stock, at a
specified price (usually representing a premium over the applicable market
value of the underlying equity security at the time of the warrant's issuance)
and usually during a specified period of time. Moreover, they are usually
issued by the issuer of the security to which they relate. While warrants may
be traded, there is often no secondary market for them. The prices of the
warrants do not necessary move parallel to the prices of the underlying
securities. Holders of warrants have no voting rights, receive no dividends
and have no rights with respect to the assets of the issuer. To the extent that
the market value of the security that may be purchased upon exercise of the
warrant rises above the exercise price, the value of the warrant will tend to
rise. To the extent that the exercise price equals or exceeds the market value
of such security, or if the warrant is not exercised within the specified time
period, it will become worthless and the fund will lose the purchase price paid
for the warrant and the right to purchase the underlying security.
MASTER DEMAND NOTES
Although the Funds themselves will not do so, underlying funds (particularly
money market mutual funds) may invest some or all of their assets in master
demand notes. Master demand notes are unsecured obligations of U.S.
corporations, redeemable upon notice, that permit investment by a fund of
fluctuating amounts at varying rates of interest pursuant to direct
arrangements between the fund and the issuing corporation. Because they are
direct arrangements between the fund and the issuing corporation, there is no
secondary market for the notes. However, they are redeemable at face value,
plus accrued interest, at any time.
REPURCHASE AGREEMENTS
Underlying funds, particularly money market funds, may enter into
repurchase agreements with banks and broker-dealers under which they
acquire securities subject to an agreement with the seller to repurchase the
securities at an agreed upon time and price. These agreements are considered
under the 1940 Act to be loans by the purchaser collateralized by the
underlying securities. If the seller should default on its obligation to
repurchase the securities, the underlying fund may experience delay or
difficulties in exercising its rights to realize upon the securities held as
collateral and might incur a loss if the value of the securities should
decline.
LOANS OF PORTFOLIO SECURITIES
An underlying fund may lend its portfolio securities provided (1) the loan is
secured continuously by collateral of U.S. government securities or cash or
cash equivalent maintained on a daily market-to-market basis in an amount at
least equal to the current market value of the securities loaned; (2) the fund
may at any time call the loan and obtain the return of the securities loaned;
(3) the fund will
B-10<PAGE>
receive any interest or dividends paid on the loaned securities; and (4) the
aggregate market value of securities loaned will not at any time exceed
one-third of the total assets of the fund. Loans of securities involve a risk
that the borrower may fail to return the securities or may fail to provide
additional collateral.
HEDGING
An underlying fund may employ many of the investment techniques described
in this section not only for investment purposes, but also for hedging
purposes. For example, an underlying fund may purchase or sell put and call
options on common stocks to hedge against movements in individual common
stock prices, or purchase and sell stock index futures and related options to
hedge against marketwide movements in common stock prices. Although such
hedging techniques generally tend to minimize the risk of loss that is hedged
against, they also limit commensurately the potential gain that might have
resulted had the hedging transaction not occurred. Also, the desired
protection generally resulting from hedging transactions may not always be
achieved.
LEVERAGE
An underlying fund may borrow up to 25% of the value of its net assets on an
unsecured basis from banks to increase its holdings of portfolio securities.
The practice of leveraging means that a Fund could lose more than the amount
it has invested in an underlying fund. Under the 1940 Act, the fund is
required to maintain continuous asset coverage of 300% with respect to such
borrowings and to sell (within three days) sufficient portfolio holdings to
restore such coverage if it should decline to less than 300% due to market
fluctuations or otherwise, even if disadvantageous from an investment
standpoint. Leveraging will exaggerate the effect of any increase or decrease
in value of portfolio securities on the fund's net asset value, and money
borrowed will be subject to interest costs (which may include commitment
fees and/or the cost of maintaining minimum average balances) which may or
may not exceed the interest and option premiums received from the securities
purchased with borrowed funds.
The staff of the SEC is currently of the view that certain types of securities
transactions, including selling securities short, purchasing or selling futures
contracts, purchasing and selling options on specific securities, stock
indexes, or interest rate futures contracts, and purchasing and selling forward
contracts on currencies also involve potential leveraging. An underlying fund
may engage in these types of transactions subject to the 300% asset coverage
requirement. In the alternative, an underlying fund may engage in these types
of transactions if it segregates assets with respect to such transactions or
"covers" such transactions.
An underlying fund may segregate assets with respect to such transactions as
follows. A fund with a long position in a futures or forward contract, or that
sells a put option, may establish a segregated account (not with a futures
commission merchant or broker) containing cash or certain liquid assets equal
to the purchase price of the contract or the strike price of the put option
(less any margin on deposit). For short positions in futures or forward
contracts, sales of call options, and short sales of securities, a fund may
establish a segregated account (not with a futures commission merchant or
broker) with cash and certain liquid securities that, when added to the amounts
deposited with a futures commission merchant or broker as margin, equal the
market value of the instruments or currency underlying the futures or forward
contracts, call options and short sales (but are not less than the strike price
of the call option or the market price at which the short positions or short
sales were established).
B-11<PAGE>
An underlying fund may "cover" such transactions in various ways depending
on the type transaction involved. For example, a fund that has a long position
in a futures or forward contract could purchase a put option on the same
futures or forward contract with a strike price as high or higher than the price
of the contract held by the fund. A fund that has sold a put option could sell
short the instruments or currency underlying the put option at the same or
higher price than the strike price of the put option. Similarly, the fund could
purchase a put option, if the strike price of the purchased put option is the
same or higher than the strike price of the put option sold by the fund.
B-12<PAGE>
TABLE OF CONTENTS
THE DRESHER COMPREHENSIVE GROWTH FUND. . . . . . . . . . . . . .1
THE DRESHER CLASSIC RETIREMENT FUND. . . . . . . . . . . . . . .1
EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
THE FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . .3
INVESTMENT OBJECTIVES AND MANAGEMENT TECHNIQUES . . . . . . . .4
INVESTMENT POLICIES AND RESTRICTIONS . . . . . . . . . . . . . .6
RISKS AND OTHER CONSIDERATIONS . . . . . . . . . . . . . . . . .7
TRUST MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . .9
HOW TO PURCHASE SHARES . . . . . . . . . . . . . . . . . . . . 13
HOW TO REDEEM SHARES . . . . . . . . . . . . . . . . . . . . . 15
DIVIDENDS, DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . . 18
GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . 20
HOW THE FUNDS REPORT PERFORMANCE . . . . . . . . . . . . . . . 21
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
APPENDIX B . . . . . . . . . . . . . . . . . . . . . . . . . .B-1
B-13<PAGE>
CROSS REFERENCE SHEET
THE DRESHER FAMILY OF FUNDS
Statement of Additional
Part B Item Information Caption
- -------------- -----------------------------
Cover Page Cover Page
Table of Contents Table of Contents
General Information and History General Information and History
Investment Objectives and Policies Investment Objectives, Policies and
Restrictions
Management of the Fund Management of the Trust
Control Persons and Principal Principal Holders of Securities
Holders of Securities
Investment Advisory and Other Investment Manager, Distributor, and
Services Transfer Agent; Custodian; Auditor
Brokerage Allocation and Other Portfolio Transactions
Practices
Capital Stock and Other Securities Capital Stock and Other Securities
Purchase, Redemption and Pricing Purchase, Redemption and Pricing of
of Securities Being Offered Securities Being Offered;
Determination of Net Asset Value
Tax Status Tax Status
Underwriters The Distributor
Calculation of Performance Data Not Applicable
Financial Statements Not Applicable
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE DRESHER FAMILY OF FUNDS
75 Twining Road, Suite 202
Dresher, Pennsylvania 19025
(888) 980-7500
This Statement of Additional Information relating to The Dresher
Family of Funds (the "Trust") is not a prospectus and should be read in
conjunction with the Trust's prospectus (the "Prospectus") as supplemented
from time to time. A copy of the Prospectus can be obtained from the Trust's
distributor, National Shareholder Services, Inc., 715 Twining Road, Suite 202,
Dresher, Pennsylvania 19025, telephone number (888) 980-7500. The date
of the Prospectus to which this Statement of Additional Information relates
is July 17, 1997.
The date of this Statement of Additional Information is July 17, 1997.
<PAGE>
TABLE OF CONTENTS
CAPTION PAGE LOCATION OF PROSPECTUS
General Information 1 General Information
and History
Investment Objectives, 1 Investment Objectives and Management
Policies and Restrictions Techniques; Investment Policies and
Restrictions; Trust Management --
Portfolio Turnover
Management of the Trust 2 Trust Management
Principal Holders of 4 Not Applicable
Securities
The Investment Manager 4 Trust Management
The Distributor 5 Trust Management
The Transfer Agent 6 Trust Management
The Custodian 6 Trust Management
The Auditor 6 Trust Management
Portfolio Transactions 6 Trust Management -- Execution of
Portfolio Transactions
Capital Stock and Other 7 General Information
Securities
Purchases, Redemptions 7 How to Purchase Shares; How to Redeem
and Pricing of Securities Shares
Being Offered
Determination of Net 7 How to Purchase Shares -- Price of Shares
Asset Value
Tax Status 7 Dividends, Distributions and Taxes
Additional Information 7 Not Applicable
<PAGE>
GENERAL INFORMATION AND HISTORY
The Trust is a diversified, open-end management investment company
comprised of two portfolios of shares of other open-end registered investment
companies: The Dresher Comprehensive Growth Fund (the "Comprehensive
Growth Fund") and The Dresher Classic Retirement Fund (the "Classic
Retirement Fund;" and together with the Comprehensive Growth Fund, the
"Funds"). The Trust was organized as a trust under the laws of the State of
Delaware on March 26, 1997 and has no operating history.
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The Trust is an open-end, diversified management investment
company, registered as such under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust currently consists of two separate
portfolios (series), each with different investment objectives. The Funds seek
to achieve their investment objectives by investing in shares of other open-end
investment companies ("mutual funds"). As of the date of this Statement of
Additional Information, the Trust's series are:
THE DRESHER COMPREHENSIVE GROWTH FUND is an aggressive growth fund which
seeks capital appreciation without regard to current income.
THE DRESHER CLASSIC RETIREMENT FUND is a moderate growth fund which seeks
moderate capital appreciation and significant income.
The investment objectives of the Funds are described in the Prospectus
under the heading "Investment Objectives and Management Techniques." In
addition, each Fund has adopted certain fundamental investment policies.
These fundamental investment policies cannot be changed unless the change
is approved by the lesser of (1) 67% or more of the votes of the Fund (or the
Trust) present at a meeting, if the holders of more than 50% of the outstanding
votes of the Fund (or the Trust) are present or represented by proxy, or (2)
more than 50% of the outstanding votes of the Fund (or the Trust). These
fundamental policies are set forth in the Prospectus under the heading
"Investment Policies and Restrictions."
The Funds' fundamental investment policies have been adopted to
avoid wherever possible the necessity of shareholder meetings otherwise
required under the 1940 Act. This recognizes the need to react quickly to
changes in the law or new investment opportunities in the securities markets
and the cost and time involved in obtaining shareholder approvals for
diversely held investment companies. The Funds have also adopted
non-fundamental investment policies, set forth in the Prospectus. The Funds'
non-fundamental investment policies may be changed by a vote of the Board of
Trustees. Any changes in either Fund's non-fundamental investment policies
will be communicated to such Fund's shareholders prior to the effectiveness
of the changes.
1940 ACT RESTRICTIONS. Under the 1940 Act and the rules, regulations
and interpretations thereunder, a "diversified company," as to 75% of its total
assets, may not purchase securities of any issuer (other than obligations of,
or guaranteed by, the U.S. government or its agencies or instrumentalities or
securities of other investment companies) if, as a result, more than 5% of the
value of its total assets would be invested in the securities of such issuer or
more than 10% of the issuer's voting securities would be held by the Fund.
"Concentration" is generally interpreted under the 1940 Act as investing 25% or
more of total assets in an industry or group of industries. The 1940 Act
limits that ability of investment companies to borrow and lend money and to
B-1<PAGE>
underwrite securities. The 1940 Act currently prohibits an open-end fund from
issuing senior securities, as defined in the 1940 Act, except under very
limited circumstances.
The mutual funds in which each of the Funds may invest may, but
need not, have the same investment objectives, policies and limitations as the
relevant Fund. Although each of the Funds may from time to time invest in
shares of the same underlying mutual funds, the percentage of each Fund's
assets so invested may vary, and the Investment Manager will determine that
such investments are consistent with the investment objectives and policies
of such Fund. The investments that may, in general, be made by underlying
funds in which the Funds may invest, as well as certain of the risks associated
with such investments, are described in the Prospectus and in Appendix B to
the Prospectus.
The Funds have no restrictions on portfolio turnover. However, it is
anticipated that each Fund's rate of portfolio turnover generally will not
exceed 200% annually. A portfolio turnover rate of 100% or more is
considered high.
MANAGEMENT OF THE TRUST
The following table provides biographical information with respect to
each current Trustee and officer of the Trust. Each Trustee who is an
"interested person" of the Trust, as defined in the 1940 Act, is indicated by
an asterisk.
Name and Address Position Held with Principal Occupation(s)
the Trust During Past 5 Years
Jeffrey C. Brown* Trustee, President President of National
715 Twining Road, Suite 202 Advisory Group, National
Dresher, PA 19025 (Age: 39) Financial Advisors, Inc.
(investment advisor),
National Actuarial
Consultants, Ltd.
(pension recordkeeping), and
National Shareholder
Services, Inc.
(shareholder services agent);
President and licensed
registered representative of
NFA Brokerage Services, Inc.
(NASD broker-dealer).
Brother-in-law of Kathryn A.
Brown and son of Alvin Brown.
Stephen Patrylak* Trustee, Treasurer Vice President, National
715 Twining Road, Suite 202 Financial Advisors, Inc. and
Dresher, PA 19025 (Age: 44) National Shareholder
Services, Inc.; Consultant to
National Actuarial
Consultants, Ltd.; Vice
President of NFA Brokerage
Services, Inc. Married to
Larissa N. Patrylak.
B-2<PAGE>
Larissa N. Patrylak* Trustee, Secretary Secretary/Treasurer and
715 Twining Road, Suite 202 Controller of National
Dresher, PA 19025 (Age: 42) Financial Advisors, Inc.,
National Shareholder
Services, Inc., and NFA
Brokerage Services, Inc.;
Vice President of National
Actuarial Consultants, Ltd.
Married to Stephen Patrylak.
Alvin Brown* Trustee Retired. Formerly Marketing
715 Twining Road, Suite 202 Manager of Ethyl Corporation.
Dresher, PA 19025 (Age: 70) Father of Jeffrey C. Brown.
Kathryn A. Brown Trustee Founder of The Diet Center
715 Twining Road, Suite 202 (weight loss franchisor).
Dresher, PA 19025 (Age: 33) Sister-in-law of Jeffrey C.
Brown.
Howard S. Lubin Trustee Physician.
715 Twining Road, Suite 202
Dresher, PA 19025 (Age: 68)
Leonid D. Rudnytzsky Trustee Professor of Foreign
715 Twining Road, Suite 202 Languages and Literature
Dresher, PA 19025 (Age: 60) at the University of
Pennsylvania and Lasalle
University.
Daniel Nyschit Vice President Director of Computer
715 Twining Road, Suite 202 Operations for The National
Dresher, PA 19025 (Age: 30) Advisory Group, Inc., Vice
President of National
Financial Advisors, Inc.,
NFA Brokerage Services, Inc.
and National Actual
Consultants, Ltd.
The following table provides compensation information with respect
to each current Trustee who is not an "interested person" of the Trust. No
officer, director or employee of National Financial Advisors, Inc., the
Investment Manager of the Trust receives any compensation from the Trust
for serving as an officer or Trustee of the Trust.
Pension or
Retirement
Benefits
Aggregate Accrued as Estimated Total
Name of Compensation Part of Annual Compensation
Person, from Registrant's Benefits Upon from
Position Registrant<F1> Expenses Retirement Registrant
Kathryn A. Brown $600 0 0 $600
B-3<PAGE>
Pension or
Retirement
Benefits
Aggregate Accrued as Estimated Total
Name of Compensation Part of Annual Compensation
Person, from Registrant's Benefits Upon from
Position Registrant<F1> Expenses Retirement Registrant
Howard S. Lubin $600 0 0 $600
Leonid D. $600 0 0 $600
Rudnytzsky
<F1> Amounts shown are estimated for Registrant's first fiscal year.
PRINCIPAL HOLDERS OF SECURITIES
As of July 14, 1997, Jeffrey C. Brown and Larissa N. Patrylak each own 50%
of the outstanding shares of each of the Funds.
THE INVESTMENT MANAGER
National Financial Advisers, Inc. ("NFA" or the "Investment
Manager") serves as investment manager to the Trust and its Funds pursuant
to a written investment management agreement. NFA is a Pennsylvania
corporation organized in 1994, and is a registered investment adviser under
the Investment Advisers Act of 1940, as amended. Jeffrey C. Brown, Trustee
and President of the Trust, is President of NFA. Larissa Patrylak and Stephen
Patrylak, officers of NFA, also serve as Trustees of the Trust and as the
Trust's Secretary and Treasurer, respectively. Daniel Nyschit, Vice President
of NFA, also serves as Vice President of the Trust.
NFA is a wholly owned subsidiary of The National Advisory Group,
Inc. (The "Group"), a Pennsylvania corporation formed in 1984 which
provides non-discretionary investment advisory and retirement services to
trusts, institutions and high-income individuals. Jeffrey C. Brown and Larissa
N. Patrylak are the sole shareholders of The Group. In addition, to NFA, The
Group also owns all of the outstanding shares of the following:
NFA Brokerage Services, Inc., the NASD mutual funds only broker/dealer
through which the shares of each Fund are being offered.
National Shareholder Services, Inc., which will serve as the Funds'
transfer agent, dividend paying agent and shareholder service agent.
National Actuarial Consultants, Ltd., a pension recordkeeper.
Certain services provided by NFA under the investment management
agreement are described in the Prospectus. As compensation for its services,
each Fund pays NFA a fee based upon such Fund's average daily net asset
value. This fee is computed daily and paid monthly. The rate at which the fee
is paid is described in the Prospectus.
B-4<PAGE>
NFA pays, out of the investment management fees it receives from the
Funds, all the expenses of the Funds except expenses incurred under the
Trust's Distribution Plan and extraordinary expenses. Until at least December
31, 1998, NFA is contractually obligated to reduce its management fee to
keep total operating expenses for each Fund at no greater than 1.20% of
average daily net assets (not including extraordinary expenses).
By its terms, the Trust's investment management agreement will
remain in effect through 1999 and from year to year thereafter, subject to
annual approval by (a) the Board of Trustees or (b) a vote of the majority of
a Fund's outstanding votes (as defined in the 1940 Act); provided that in
either event continuance is also approved by a majority of the Trustees who
are not interested persons of the Trust, by a vote cast in person at a meeting
called for the purpose of voting such approval. The Trust's investment
management 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 Fund's outstanding votes, or by NFA. The
investment management agreement automatically terminates in the event of
its assignment, as defined by the 1940 Act and the rules thereunder.
THE DISTRIBUTOR
NFA Brokerage Services, Inc. ("NFA Brokerage" or the
"Distributor"), a wholly-owned subsidiary of The Group, with its principal
offices at 715 Twining Road, Suite 218, Dresher, Pennsylvania 19025, serves
as the distributor of the Funds' shares. The Distributor is obligated to sell
shares of the Funds on a best efforts basis only against purchase orders for
the shares. Shares of the Funds are offered to the public on a continuous
basis.
The Trust has a Plan of Distribution (the "Distribution Plan") pursuant
to Rule 12b-1 under the 1940 Act ("Rule 12b-1"), pursuant to which the
Funds may expend up to .25% of their respective average net assets annually
for the costs of activities intended to result in the sale of Fund shares. The
Trust's Distribution Agreement with NFA Brokerage (i) provides for the
payment by each Fund to NFA Brokerage of a distribution fee of .25% of
average net assets and (ii) authorizes NFA Brokerage to make payments for
activities and expenditures permitted by the Distribution Plan.
In addition, the underlying funds in which the Funds invest may
impose such Rule 12b-1 fees. Rule 12b-1 fees imposed by an underlying fund
could be as high as .75% of an underlying fund's net assets and service fees
could be as high as .25% of an underlying fund's net assets. In the aggregate,
such combined fees could be as high as 1.00% of an underlying fund's net
assets. For a description of the arrangements pursuant to which underlying
funds imposing Rule 12b-1 or service fees pay service fees to the Distributor
in connection with services rendered by the Distributor and the process by
which the Distributor will reimburse any Rule 12b-1 fees received to the
Funds, see the discussion in the Prospectus entitled "Trust Management --
Execution of Portfolio Transactions."
THE TRANSFER AGENT
The Board of Trustees of the Trust has approved an Administration,
Accounting and Transfer Agency Agreement among the Trust, National
Shareholder Services, Inc. ("NSS" or the "Transfer Agent") and NFA.
Pursuant to such Agreement, NSS serves as the Trust's transfer and dividend
paying agent and performs shareholder service activities. NSS also calculates
daily net asset value per share for each Fund and maintains such books and
records as are necessary to enable it to perform its duties. The administrative
services necessary for the operation of the Trust and its Funds
B-5<PAGE>
provided by NSS include among other things (i) preparation of shareholder
reports and communications, (ii) regulatory compliance, such as reports and
filings with the Securities and Exchange Commission and state securities
commissions and (iii) general supervision of the operation of the Trust and
its Funds, including coordination of the services performed by NFA, the
custodian, independent accountants, legal counsel and others. NSS is
compensated by NFA for its services out of the investment management fee paid
to NFA by each Fund.
NSS is a wholly-owned subsidiary of The Group. The business address of
NSS is 715 Twining Road, Suite 202, Dresher, Pennsylvania 19025.
THE CUSTODIAN
Pursuant to a Custodian Agreement between the Trust, Firstrust Savings
Bank and NFA, Firstrust Savings Bank serves as the Trust's custodian. The
principal business address of Firstrust Savings Bank is 1931 Cottman Avenue,
Philadelphia, Pennsylvania 19111.
THE AUDITOR
Sanville & Company, independent certified public accountants located at
1514 Old York Road, Abington, Pennsylvania 19001, has been selected as the
auditors for the Trust. In such capacity, Sanville & Company periodically
reviews the accounting and financial records of the Trust and examines its
financial statements.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the Funds are made by the
Investment Manager subject to the overall supervision and review by the
Trust's Board of Trustees. Portfolio security transactions for the Funds are
effected by or under the supervision of the Investment Manager.
NFA Brokerage, the Distributor of the Fund shares, may assist in the
placement of Fund portfolio transactions. In such capacity, NFA Brokerage
may receive distribution or service payments from the underlying funds or
their underwriters or sponsors in accordance with the normal distribution
arrangements of those funds. See "The Distributor." In providing execution
assistance, NFA Brokerage may receive orders from the Investment Manager;
place them with the underlying fund's distributor, transfer agent or other
person, as appropriate; confirm the trade, price and number of shares
purchased or sold; and assure prompt and proper settlement of the order.
The Funds intend to arrange to be included within a class of investors
entitled not to pay sales charges by purchasing load fund shares under letters
of intent, rights of accumulation, cumulative purchase privileges and other
quantity discount programs.
CAPITAL STOCK AND OTHER SECURITIES
See "General Information" in the Prospectus.
PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
See "How to Purchase Shares" and "How to Redeem Shares" in the Prospectus.
B-6<PAGE>
DETERMINATION OF NET ASSET VALUE
See "How to Purchase Shares -- Price of Shares" in the Prospectus.
TAX STATUS
See "Dividends, Distributions and Taxes" in the Prospectus.
ADDITIONAL INFORMATION
The Prospectus and this Statement of Additional Information do not
contain all of the information included in the Trust's Registration Statement
filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, with respect to the securities offered hereby. Certain
portions of the Registration Statement have been omitted pursuant to the rules
and regulations of the Securities and Exchange Commission. The
Registration Statement, including the exhibits filed therewith, may be
examined at the offices of the Securities and Exchange Commission in
Washington, D.C.
Statements contained in the Prospectus and this Statement of
Additional Information as to the contents of any agreement or other
documents referred to are not necessarily complete, and, in each instance,
reference is made to the copy of such agreement or other documents filed as
an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference.
B-7<PAGE>
THE DRESHER FAMILY OF FUNDS
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements.
To be supplied by amendment.
(b) Exhibits.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
**(1) Trust Instrument of Registrant
**(2) Bylaws of Registrant
(3) Inapplicable
(4) Instrument of Designation of Series of Beneficial
Interest of Registrant
(5) Investment Advisory Agreement between Registrant
and National Financial Advisors, Inc. ("NFA")
(6)(a) Distribution Agreement between Registrant and NFA
Brokerage Services ("NFA Brokerage")
***(6)(b) Form of Dealer Agreement between NFA Brokerage and
Dealers.
(7) Inapplicable
(8) Custody Agreement among Registrant, NFA and
Firstrust Savings Bank
(9) Administration, Accounting and Transfer Agency
Agreement among Registrant, NFA and National
Shareholder Services, Inc.
(10) Opinion and Consent of Counsel
*(11) Consent of Independent Public Accountants
(12) Inapplicable
C-1<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
(13) Subscription Agreement between Registrant and
Initial Shareholders
(14) Inapplicable
(15)(a) Distribution Plan of Registrant
(15)(b) See Exhibit (6)
(16) Inapplicable
(17) Inapplicable
(18) Inapplicable
_______________________________
* To be supplied by amendment
** Incorporated herein by reference to the Registration Statement as
originally filed with the Securities and Exchange Commission on
April 14, 1997.
*** Incorporated herein by reference to Amendment No. 1 to the
Registration Statement filed with the Securities and Exchange
Commission on or about June 11, 1997.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Registrant is controlled by the Trustees. Registrant does not have any
subsidiaries.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of July 14, 1997, Jeffrey C. Brown and Larissa N. Patrylak each own 50%
of the outstanding shares of each of the Funds.
ITEM 27. INDEMNIFICATION
Article X, Section 10.2 of Registrant's Trust Instrument, incorporated by
reference as Exhibit (1) hereto, provides for the indemnification of
Registrant's past and present Trustees and officers. Indemnification of
Registrant's investment manager, principal underwriter and custodian is
provided for, respectively, in Section 8 of the Investment Advisory
Agreement filed herewith as Exhibit (5), in Section 9 of the Distribution
Agreement filed herewith as Exhibit (6), and in Article VII of the Custody
Agreement filed herewith as Exhibit (8). Registrant has obtained from a
major insurance carrier a Trustees' and officers' liability policy covering
certain types of errors and omissions. In no event will Registrant indemnify
any of its Trustees, officers, employees or agents against any liability to
which such person would otherwise be subject by reason of such person's willful
misfeasance, bad faith, gross negligence in the performance of such person's
duties, or by reason of such person's reckless disregard of the duties involved
in the conduct of such person's office or arising under such person's
agreement with Registrant. Registrant will comply with Rule 484 under
C-2<PAGE>
the Securities Act of 1933 and Release No. 11330 under the Investment Company
Act of 1940 in connection with any such indemnification.
ITEM 28. BUSINESS AND OTHER CONNECTION OF INVESTMENT ADVISER
NFA is a registered investment adviser providing investment advice to
individuals, employee benefit plans, trusts, and corporations.
The list required by this Item 28 of the officers and directors of NFA,
together with information as to any business, profession, vocation or
employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated herein by reference to Schedules A
and D of the Form ADV filed by NFA pursuant to the Investment Advisors Act of
1940 (SEC File No. 408-09).
ITEM 29. PRINCIPAL UNDERWRITERS
(a) None.
(b) For information as to the business, profession, vocation or
employment of a substantial nature of each of the principal
underwriter, its officers and directors, reference is made to
NFA Brokerage's Form BD (SEC File No. 8-47870).
(c) Inapplicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Registrant maintains the records required by Section 31(a) of the Investment
Company Act of 1940 and Rules 31a-1 to 31a-3 inclusive thereunder at its
office located at 715 Twining Road, Suite 202, Dresher, Pennsylvania 19025.
Certain records, including records relating to Registrant's shareholders and
the physical possession of its assets, may be maintained pursuant to Rule 31a-3
at the main offices of Registrant's transfer agent, dividend disbursing agent
and custodian located, as the custodian, at 1931 Cottman Avenue,
Philadelphia, Pennsylvania 19111, and, as to the transfer and dividend
disbursing agent functions, at 715 Twining Road, Suite 202, Dresher,
Pennsylvania 19025
ITEM 31. MANAGEMENT SERVICES
Inapplicable.
ITEM 32. UNDERTAKINGS
(a) Registrant hereby undertakes to file a post-effective
amendment with certified financial statements showing the
initial capital received by Registrant before accepting
subscriptions from any persons in excess of 25.
C-3<PAGE>
(b) Registrant hereby undertakes to file a post-effective
amendment, using financial statements which need not be
certified, within four to six months from the effective date of
Registrant's registration statement.
(c) Inapplicable.
C-4<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, Registrant,
has duly caused this Registration Statement to be signed on behalf by the
undersigned, thereunto duly authorized, in the City of Dresher and the
Commonwealth of Pennsylvania on this 17th day of July, 1997.
THE DRESHER FAMILY OF
FUNDS
By: /s/ Jeffrey C. Brown
Jeffrey C.Brown,
Trustee and President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Jeffrey C. Brown Trustee & President July 17, 1997
Jeffrey C. Brown
/s/ Stephen Patrylak Trustee & Treasurer July 17, 1997
Stephen Patrylak
/s/ Larissa N. Patrylak Trustee & Secretary July 17, 1997
Larissa N. Patrylak
/s/ Kathryn A. Brown Trustee July 17, 1997
Kathryn A. Brown
/s/ Alvin Brown Trustee July 17,1997
Alvin Brown
/s/ Howard S. Lubin Trustee July 17,1997
Howard S. Lubin
/s/ Leonid D. Rudnytzsky Trustee July 17,1997
Leonid D. Rudnytzsky
<PAGE>
EXHIBIT (4)
THE DRESHER FAMILY OF FUNDS
INSTRUMENT OF DESIGNATION OF
SERIES OF BENEFICIAL INTEREST
THIS INSTRUMENT OF DESIGNATION OF SERIES OF
BENEFICIAL INTEREST of The Dresher Family of Funds (the "Trust") is
being executed as of this 14th day of July, 1997 by the undersigned
individuals, being the Trustees of the Trust (the "Trustees").
WHEREAS, Section 2.1 of the Trust Instrument of the Trust dated
March 26, 1997 (the "Declaration") provides the Trustees with the authority
to establish and designate any new series of beneficial interests in the Trust.
WHEREAS, the Trustees approved the authorization and issuance of
two series of beneficial interest in the Trust and certain other matters with
respect to such series at a special meeting of the Board of Trustees held on
July 14, 1997.
Accordingly, the undersigned Trustees hereby establish and designate
two series of beneficial interests of the Trust consisting of Series A and
Series B (representing interests in The Dresher Classic Retirement Fund and
The Dresher Comprehensive Growth Fund, respectively) each having the
preferences, conversion and other rights, voting powers, restrictions,
limitations, qualifications and terms and conditions of redemption that are
set forth in the Declaration.
All signatures need not appear on the same copy of this Instrument:
/s/ Jeffrey C. Brown /s/ Stephen Patrylak
Jeffrey C. Brown Stephen Patrylak
/s/ Larissa N. Patrylak /s/ Katherine A.Brown
Larissa N. Patrylak Katherine A.Brown
/s/ Alvin Brown /s/ Howard S.Lubin
Alvin Brown Howard S. Lubin
/s/ Leonid D. Rudnytzky
Leonid D. Rudnytzky
<PAGE>
EXHIBIT (5)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT (this "Agreement") made as of July 14, 1997 between
the Dresher Family of Funds, a Delaware business trust (herein called the
"Trust"), and National Financial Advisors, Inc., a Pennsylvania corporation
and investment adviser registered under the Investment Advisers Act of 1940
(the "Investment Adviser").
WHEREAS, the Trust is registered as an open-end, management
investment company under the Investment Company Act of 1940, as amended
("1940 Act"); and
WHEREAS, the Trust desires to retain the Investment Adviser to
furnish investment advisory and administrative services to the series of the
Trust denominated as "Funds" and listed on Schedule A hereto, as such
schedule may be amended from time to time (each a "Fund" and collectively,
the "Funds"),
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Investment
Adviser to act as investment adviser and administrator to the Funds for the
period and on the terms set forth in this Agreement. The Investment Adviser
accepts such appointment and agrees to furnish the services herein set forth
for the compensation herein provided.
2. Delivery of Documents. The Trust has furnished the
Investment Adviser with copies properly certified or authenticated of each of
the following:
(a) the Trust's Trust Instrument dated March 26, 1997
(such Trust Instrument, as presently in effect and as it shall from time
to time be amended or restated, is herein called the "Declaration of
Trust");
(b) the Trust's Bylaws;
(c) resolutions of the Trust's Board of Trustees authorizing
the appointment of the Investment Adviser and approving this
Agreement;
(d) the Trust's Notification of Registration on Form N-8A
under the 1940 Act, as filed with the Securities and Exchange
Commission ("SEC") on April 11, 1997;
(e) the Trust's Registration Statement on Form N-1A under
the Securities Act of 1933, as amended ("1933 Act"), (File No. 333-25073)
and under the 1940 Act (File No. 811-08177) as filed with the SEC and all
amendments thereto; and
<PAGE>
(f) the Trust's most recent prospectus and Statement of
Additional Information (such prospectus and Statement of Additional
Information, as presently in effect, and all amendments and
supplements thereto, are herein collectively called the "Prospectus").
The Trust will furnish the Investment Adviser from time to time with copies
of all amendments of or supplements to the foregoing.
3. Management.
(a) Subject to the succeeding provisions of this paragraph
and the Prospectus and subject to the direction and control of the
Board of Trustees of the Trust, the Investment Adviser shall (i) act as
investment adviser for and supervise and manage the investment and
reinvestment of the Funds' assets and, in connection therewith, have
complete discretion in purchasing and selling securities and other
assets for the Funds and in voting, exercising consents and exercising
all other rights appertaining to such securities and other assets on
behalf of the Funds; (ii) arrange for the purchase and sale of securities
and other assets held in the investment portfolios of the Funds and (iii)
oversee the administration of all aspects of the Funds' business and
affairs and provide, or arrange for others whom it believes to be
competent to provide, certain services as specified in subparagraph (b)
below. Nothing contained herein shall be construed to restrict the
Trust's right to hire its own employees or to contract for administrative
services to be performed by third parties.
(b) The specific services to be provided or arranged for by
the Investment Adviser for the Trust include, but are not limited to (i)
maintaining the Trust's books and records, such as journals, ledger
accounts and other records in accordance with applicable laws and
regulations to the extent not maintained by the Trust's custodian,
transfer agent and dividend disbursing agent; (ii) transmitting
purchase and redemption orders for each Fund's shares to the extent
not transmitted by the Trust's distributor or others who purchase and
redeem shares; (iii) initiating all money transfers to the Trust's
custodian and from the Trust's custodian for the payment of the Trust's
expenses, investments, dividends and share redemptions; (iv)
reconciling account information and balances among the Trust's
custodian, transfer agent, distributor, dividend disbursing agent and
the Investment Adviser; (iv) providing the Trust, upon request, with
such office space and facilities, utilities and office equipment as are
adequate for the Trust's needs; (vi) preparing all reports by the Trust,
on behalf of each Fund, to their respective shareholders and all reports
and filings required to maintain the registration and qualification of
the Funds' shares under federal and state law, including periodic
updating of the Trust's registration statement and Prospectus; (vii)
supervising the calculation of the net asset value of the Funds' shares;
(viii) preparing notices and agendas for meetings of the Funds'
shareholders and the Trust's Board of Trustees, as well as minutes of
such meetings in all matters required by applicable law to be acted
upon by the Board of Trustees; (ix) retaining, on behalf of the Trust,
a custodian, transfer agent, dividend disbursing agent, shareholder
services agent and such other agents as the Investment Adviser deems
necessary and appropriate for the conduct of the Trust's business and
affairs; and (x) preparing for execution by the Trust and filing all
federal and state
<PAGE 2>
returns and required tax filings other than those
required to be made by the Trust's custodian, transfer agent, dividend
disbursing agent or shareholder services agent.
(c) Subject to the provisions of this Agreement, the
Declaration of Trust and the 1940 Act, the Investment Adviser, at its
expense, may select and contract with investment advisers
(the "Sub-Advisers") for one or more of the Funds. So long as any
Sub-Adviser serves as Sub-Adviser to a Fund, it must be a party to a
sub-investment advisory agreement and will be obligated to: (i) furnish
continuously an investment program as to those assets of the Trust and
the Funds involved allocated by the Investment Adviser, (ii) in
connection therewith, adhere to such guidelines as may be established
by the Investment Adviser from time to time to insure compliance
with applicable investment objectives, policies and restrictions of the
Trust and the Funds, and (iii) place all orders for the purchase and sale
of investments. The Investment Adviser may also delegate or
subcontract some or all of the Investment Adviser's other duties
enumerated in this Agreement. The Investment Adviser will be
responsible for payment of all compensation to all Sub-Advisers and
other persons and entities to which Investment Adviser delegates any
duty hereunder.
(d) The Investment Adviser further agrees that it:
(1) will use the same skill and care in providing
such services as it uses in providing services to fiduciary
accounts if it has investment responsibilities for such
accounts;
(2) will conform with all applicable rules and
regulations and will conduct its activities under this
Agreement in accordance with any applicable regulations of
any governmental authority pertaining to the investment
advisory activities of the Investment Adviser;
(3) will not make loans to any person to purchase
or carry units of beneficial interest in the Trust or make loans
to the Trust; and
(4) will treat confidentially and as proprietary
information of the Trust all records and other information
relative to the Trust, and will not use such records and
information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Trust, which
approval shall not be unreasonably withheld and may not be
withheld where the Investment Adviser may be exposed to
civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly
constituted authorities, or when so requested by the Trust.
4. Services to Others. The Trust understands that the Investment
Adviser may in the future act as an investment adviser to fiduciary and other
managed accounts, and as investment adviser, sub-investment adviser, and/or
administrator to other investment companies. The Trust has no objection to
the Investment Adviser's acts in such capacities, provided that whenever one
of the
<PAGE 3>
Funds and one or more other investment companies advised by the
Investment Adviser have available funds for investment, investments suitable
and appropriate for each will be allocated in a fashion that is equitable to
each. The Trust recognizes that in some cases this procedure may adversely
affect the size of the position that a Fund may obtain in a particular
security. In addition, the Trust understands that the persons employed by the
Investment Adviser to assist in the Investment Adviser's duties under this
Agreement will not devote their full time to such service, and nothing
contained in this Agreement will be deemed to limit or restrict the right of
the Investment Adviser or any of its affiliates to engage in and devote time
and attention to other businesses or to render services of whatever kind or
nature.
5. Books and Records. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, the Investment Adviser hereby agrees that all
records it maintains for the Trust are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the Trust's
request and will require the same type of agreement from each Sub-Adviser.
The Investment Adviser further agrees to preserve, for the periods prescribed
by Rule 31a-2 under the 1940 Act, the records required to be maintained by
Rule 31a-1 under the 1940 Act.
6. Expenses. Except as provided herein, during the term of this
Agreement, the Investment Adviser will pay all expenses incurred by it in
providing general economic and financial analysis and advice to the Funds
and providing a continuous investment program for the Funds pursuant to
Section 3 above and in providing its activities under this Agreement,
including costs of performing the pricing of portfolio securities, transfer and
dividend disbursing agents' fees, certain insurance premiums, outside auditing
and legal expenses, costs of maintaining the Trust's existence as a Delaware
business trust, taxes, interest, redemption fees, fees of Trustees who are not
officers, directors, shareholders, or employees of the Investment Adviser or
any sub-adviser, SEC fees and state "blue sky" qualification fees, and costs
of shareholders' and Trustees' reports and meetings. The Investment Adviser
will also pay all compensation of any person employed by or associated with
the Investment Adviser to assist in the performance of the Investment
Adviser's obligations under this Agreement, whether or not such person is
also an officer or employee of the Trust, and the Investment Adviser will not
cause any obligation to be incurred on behalf of the Trust in respect of any
such compensation. Costs pursuant to the Trust's Distribution Plan and any
extraordinary expenses of the Trust will be borne by the Trust.
7. Compensation. For the services provided and the expenses
assumed pursuant to this Agreement, the Trust will pay the Investment
Adviser, and the Investment Adviser will accept as full compensation
therefor, an advisory fee, accrued daily and payable monthly in arrears, in
accordance with Schedule B hereto.
8. Limitation of Liability; Indemnification.
(a) The Investment Adviser will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Trust in
connection with the performance of this Agreement, except a loss resulting
from a breach of fiduciary duty with respect to the receipt of
<PAGE 4>
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Investment Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
(b) The Trust hereby agrees to indemnify the Investment
Adviser and each of the Investment Adviser's directors, officers, employees
and agents and controlling persons of each of them (each such person being
an "indemnitee") out of the relevant Fund's assets against any liabilities and
expenses, including amounts paid in satisfaction of judgments, in compromise
or as fines and penalties, and counsel fees reasonably incurred by such
indemnitee in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or investigative body in which such indemnitee may be or may
have been involved as a party or otherwise or with which such indemnitee
may be or may have been threatened, while acting in any capacity set forth
above in this subparagraph or thereafter by reason of such indemnitee's having
acted in any such capacity, except with respect to any matter as to which such
indemnitee shall have been adjudicated not to have acted in good faith in the
reasonable belief that such indemnitee's action was in the best interest of the
Trust and furthermore, in the case of any criminal proceeding, so long as such
indemnitee had no reasonable cause to believe that the conduct was unlawful,
provided, however, that (1) no indemnitee shall be indemnified hereunder
against any liability to the Trust or its shareholders or any expense of such
indemnitee arising by reason of (i) willful misfeasance, (ii) bad faith, (iii)
gross negligence (iv) reckless disregard of the duties involved in the conduct
of such indemnitee's position (the conduct referred to in such clauses (i)
through (v) being sometimes referred to herein as "disabling conduct"), (2)
as to any matter disposed of by settlement or a compromise payment by such
indemnitee, pursuant to a consent decree or otherwise, no indemnification
either for said payment or for any other expenses shall be provided unless
there has been a determination that such settlement or compromise is in the
best interests of the Trust and the relevant Fund and that such indemnitee
appears to have acted in good faith in the reasonable belief that such
indemnitee's action was in the best interest of the Trust and the relevant Fund
and did not involve disabling conduct by such indemnitee, and (3) with
respect to any action, suit or other proceeding voluntarily prosecuted by any
indemnitee as plaintiff, indemnification shall be mandatory only if the
prosecution of such action, suit or other proceeding by such indemnitee was
authorized by a majority of the full Board of Trustees of the Trust.
Notwithstanding the foregoing, the Trust shall not be obligated to provide any
such indemnification to the extent such provision would waive any right
which the Trust cannot lawfully waive. The Trust shall make advance
payments out of the assets of the relevant Fund in connection with the
expenses of defending any action with respect to which indemnification might
be sought hereunder if the Trust receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the Fund
unless it is subsequently determined that such indemnitee is entitled to such
indemnification and if the Board of Trustees of the Trust determines that the
facts then known to them would not preclude indemnification. In addition, at
least one of the following conditions must be met: (A) the indemnitee shall
provide a security for the indemnitee's undertaking, (B) the Fund shall be
insured against losses arising by reason of any lawful advances, or (C) a
majority of the Trustees of the Trust who are neither "interested persons" of
the Trust (as defined in the 1940 Act) nor parties to the proceeding
("Disinterested Non-Party Trustees") or an independent legal counsel in a
written
<PAGE 5>
opinion, shall determine, based on a review of readily available facts
(as opposed to a full trial-type inquiry), that there is reason to believe that
the indemnitee ultimately will be found entitled to indemnification. All
determinations with respect to indemnification hereunder shall be made (1)
by a final decision on the merits by a court or other body before whom the
proceeding was brought that such indemnitee is not liable by reason of
disabling conduct or, (2) in the absence of such decision, by (i) a majority
vote of the Disinterested Non-Party Trustees, or (ii) if a majority vote of the
Disinterested Non-Party Trustees so directs, independent legal counsel in a
written opinion. The rights accruing to any indemnitee under these provisions
shall not exclude any other right to which such indemnitee may be lawfully
entitled.
9. Brokerage Transactions. The Trust acknowledges that the
Investment Adviser is affiliated with NFA Brokerage Services, Inc., a
registered broker-dealer, and expressly authorizes the Investment Adviser to
execute transactions through NFA Brokerage Services, Inc., consistent with
the Investment Adviser's duty of best execution.
10. Duration and Termination. This Agreement shall become
effective upon the date hereof and shall continue in effect for a period of two
years and thereafter from year to year, but only so long as such continuation
is specifically approved at least annually in accordance with the requirements
of the 1940 Act. Notwithstanding the foregoing, this Agreement may be
terminated as to a Fund at any time, without the payment of any penalty, on
60 days' written notice by the Trust (by vote of the Trust's Board of Trustees
or by vote of a majority of the outstanding voting securities of such Fund or
by a majority of the Trustees who are not "interested persons" (as defined by
the 1940 Act) of the Trust) or by the Investment Adviser. This Agreement
will immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities" and
"assignment" shall have the same meanings of such terms under the 1940
Act.)
11. Amendment of this Agreement. 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.
12. Miscellaneous. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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 and shall be
governed by the laws of the Commonwealth of Pennsylvania.
The names "The Dresher Family of Funds" and "Trustees of The
Dresher Family of Funds" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under the Declaration of Trust, to which reference is hereby made and
a copy of which is on file at the office of the Trust and elsewhere as required
by law, and to any and all amendments thereto. The obligations of the "The
Dresher Family of Funds" entered into in the name or on behalf thereof by any
of the Trustees, representatives or agents are made not
<PAGE 6>
individually, but in such capacities, and are not binding upon any of the
Trustees, interest holders or representatives of the Trust personally, but
bind only the assets of the Trust, and all persons dealing with any series
of units of interest of the Trust must look solely to the assets of the
Trust belonging to such series for the enforcement of any claims against
the Trust.
13. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the Commonwealth of
Pennsylvania without regard to the principles of conflicts of laws.
<PAGE 7>
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
THE DRESHER FAMILY OF FUNDS
By: /s/ Jeffrey C. Brown
Name: Jeffrey C. Brown
Title: President
NATIONAL FINANCIAL ADVISORS, INC.
By: /s/ Jeffrey C. Brown
Name: Jeffrey C. Brown
Title: President
<PAGE 8>
SCHEDULE A
The Dresher Comprehensive Growth Fund
The Dresher Classic Retirement Fund
Dated: July 14, 1997
<PAGE 9>
SCHEDULE B
ADVISORY FEE SCHEDULE
Fund Fee
The Dresher Comprehensive Growth 1.20% of the Fund's average
daily net assets.*
The Dresher Classic Retirement Fund 1.20% of the Fund's average
daily net assets.*
* Until December 31, 1998, the Investment Adviser agrees to reduce its
advisory fees to keep total annual Fund operating expenses no greater
than .95% (not including 12b-1 and service fee expenses and
extraordinary expenses).
Dated: July 14, 1997
<PAGE 10>
EXHIBIT (6)(a)
DISTRIBUTION AGREEMENT
This Distribution Agreement (this "Distribution Agreement") is
made as of this 14th day of July, 1997, by and between THE DRESHER
FAMILY OF FUNDS, a Delaware business trust, (the "Trust") and NFA
Brokerage Services, Inc. (the "Distributor").
WHEREAS, the Trust is an investment company registered under the
Investment Company Act of 1940, as amended (the "Investment Company
Act");
WHEREAS, the Distributor is as broker dealer registered with the
Securities and Exchange Commission (the "Commission") and a member of
the National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust desires that the Distributor perform certain
services in connection with the distribution of the shares (the "Shares") of
each of the series of the Trust denominated as "Funds" as listed on Schedule
A hereto (and any other series which may be issued by the Trust (each a
"Fund" and collectively, the "Funds")) and the Distributor agrees to perform
such services in accordance with the provisions set forth herein.
NOW, THEREFORE, in consideration of the premises and agreements
of the parties herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Appointment of the Distributor. Subject to the provisions of
Section 4 hereof, the Trust appoints the Distributor as the exclusive agent for
the distribution of the Shares and the Distributor accepts such appointment
under the terms and conditions of this Distribution Agreement.
2. Distribution Fee. As consideration for the Distributor's
services hereunder, each Fund will pay an individual distribution fee (the
"Distribution Fee") to the Distributor. The Distribution Fee will be an
amount equal to .25% per annum of the average daily net asset value (the
"Net Asset Value") of such Fund. Such payments shall be accrued daily and
paid monthly in arrears.
3. Sales and Repurchase of Shares; Purchases by a Fund.
3.1 The Distributor, as agent for the Trust, shall have the
right to sell Shares to the public, against orders therefor, at a purchase
price (the "Purchase Price") equal to the Net Asset Value.
3.2 The Distributor, as agent for the Trust, shall have the
right to take all actions which, in the Distributor's sole judgment, are
necessary or appropriate to effect the distribution of the Shares.
<PAGE>
3.3 For all purposes hereunder, the Net Asset Value of the
Shares shall be determined in a manner set forth registration statement on
Form N-1A, registration number 333-25073, as filed by the Trust with the
Commission (and as amended, the "Registration Statement"). The
Distributor shall have no obligation to inquire into, or liability for, the
accuracy of the Net Asset Value as so determined.
3.4 With respect to each sale of Shares, the Trust shall
receive the Purchase Price (without any deductions or set-off) as soon as
practicable, but in no event later than the tenth business day following the
date on which the Distributor shall have received an order for the purchase of
the Shares.
3.5 The Distributor, as agent of and for the account of the
Trust, may repurchase the Shares at such prices and upon such terms and
conditions as are set forth in the Registration Statement.
3.6 The Distributor, as agent for the Trust, shall have the
right to enter into dealer agreements ("Dealer Agreements") with underlying
funds that sell shares to the Funds and to collect fees pursuant to the
distribution plans with respect to such underlying funds and service fees (the
"Service Fees"). In no event shall the Service Fees exceed the fair market
value of the services provided by the Distributor to the underlying funds. The
Distributor shall be entitled to retain the Service Fees. The Distributor
shall reimburse to the relevant Fund any fees received from underlying funds
for effecting purchases of such funds' shares. Such amounts shall be
reimbursed by the Distributor as soon as administratively possible.
3.7 Upon receipt of purchase instructions, the Distributor
shall forward such instructions to the Trust (or its transfer agent) for
registration of the account applications and payments to the Trust (or its
transfer agent) for further processing.
4. Sale of Shares by the Trust. During the term of this
Distribution Agreement, the Trust agrees that it will not sell any Shares
except as set forth in the Registration Statement. Without limiting the
foregoing, the Trust reserves the right to issue Shares (i) at any time
directly to holders of Shares (the "Shareholders"), to sell shares to the
Shareholders (or to such other person which may be approved in writing by the
Distributor), for a purchase price not less than the Net Asset Value and (ii)
in exchange for all or substantially all of the assets of any corporation or
trust or in exchange for the shares of any corporation or trust.
5. Best Efforts Basis. The Distributor, as agent for the Trust,
undertakes to sell the Shares on a best efforts basis only, against orders
therefor, and shall not be required to sell any specific number of Shares.
6. Compliance with NASD and Securities Laws.
<PAGE 2>
6.1 The Distributor represents and warrants that it is a
member of NASD and shall conform to the Rules of Fair Practice of the
NASD and the securities laws of any jurisdiction in which it sell any Shares.
6.2 The Distributor, at its own expense, shall qualify as a
dealer or broker, or otherwise, under all applicable state or federal laws
required in order that Shares may be sold in those states which are mutually
agreed upon by the parties.
6.3 In connection with any sale of Shares, the Distributor
shall not make, or permit any representative to make, any representations
concerning the Shares except those contained in the then current prospectus
and statement of additional information covering the Shares and in printed
information approved by the Trust as information supplemental to such
prospectus and statement of additional information.
7. Expenses Payable by the Distributor. The Distributor shall be
solely responsible for all expenses and other fees ("Expenses") incurred by
the Distributor in connection with the distribution of such Fund's Shares, and
the provision of its services under the Distribution Agreement, including the
expenses and other fees for any activity which is primarily intended to result
in the sale of Shares. Such Expenses may include, without limitation, (a)
compensation to securities brokers and dealers for selling Shares; (b)
compensation to securities brokers and dealers, accountants, attorneys,
investment advisors, pension actuaries, non-profit entities not advised by the
Trust's Investment Manager and service organizations for services rendered
by them to their clients in reviewing, explaining or interpreting the Trusts's
prospectus and other selling materials; (c) advertising costs; (d) costs of
telephone, mail, or other direct solicitation of prospective investors and of
responding to inquiries, as well as the compensation of persons who do the
soliciting or respond to inquiries; (e) preparing and printing prospectuses
and other selling materials and the cost of distributing them (including
postage); (f) reimbursement of travel, entertainment and like expenditures made
by the Board of Trustees of the Trust (the "Trustees") in promoting the Funds
and their investment objective and policies; (g) fees of public relations
consultants and (h) awards. So long as this Distribution Agreement is in
effect, the Distributor shall provide a written report to the Trustees, at
least quarterly, of (a) the amounts expended by the Distributor pursuant to
this paragraph and (b) the purpose of each such expenditure.
8 Indemnification of the Trust. The Distributor agrees to
indemnify, defend and hold harmless the Trust, and each person who has
been, is, or may hereafter be a Trustee, officer, employee, shareholder or
control person of the Trust, against any loss, damage or expense (including
the costs of investigation) reasonably incurred by any of them in connection
with any claim or in connection with any action, suit or proceeding to which
any of them may be a party, which arises out of or is alleged to arise out of
or is based upon any untrue statement or alleged untrue statement of a material
fact, or the omission or alleged omission to state a material fact necessary to
make the statements not misleading, on the part of the Distributor or any agent
or employee of the Distributor or any other person for whose acts the
Distributor is responsible, unless such statement or omission was made in
reliance upon written information furnished by the Trust.
<PAGE 3>
9. Indemnification of the Distributor. The Distributor, its
directors, officers, employees, shareholders and control persons shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust in connection with the matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith, or gross
negligence on the part of any such persons in the performance of the
Distributor's duties or from the reckless disregard by any of such persons of
the Distributor's obligations and duties under this Distribution Agreement.
The Trust will advance attorney's fees and other expenses incurred by any such
person, upon (a) a determination of the Trustees who are not "interested
persons" (as defined in the Investment Company Act) of the Trust (the
"Disinterested Trustees") that the facts then known to them would not preclude
indemnification and (b) the undertaking by or on behalf of such person to
repay the advance if it is ultimately determined that such person is not
entitled to indemnification.
10 Termination and Amendment of this Distribution Agreement.
10.1 This Distribution Agreement is terminable with respect
to any Fund, without penalty, at any time by the Trust (which termination may
be by a vote of a majority of the Disinterested Trustees or by vote of the
holders of a majority of the outstanding Shares of such Fund) or by the
Distributor upon notice to the other party hereto. This Distribution
Agreement will also terminate automatically in the event of its assignment (as
defined in the Investment Company Act) or in the event the Distributor is
expelled from the NASD.
10.2 This Distribution Agreement may be amended only if
such amendment is approved (i) by action of the Board of Trustees of the
Trust or by the affirmative vote of a majority of the outstanding shares and
(ii) by a majority of the Disinterested Trustees, by vote cast in person at a
meeting called for the purpose of voting on such approval. Notwithstanding
anything contained herein, the Trust may terminate, suspend or withdraw the
offering of Shares at any time, in its sole discretion, it deems such action
to be desirable or appropriate.
11 Effective Period of the Distribution Agreement. With respect
to each Fund, this Distribution Agreement shall be effective upon execution
and shall remain in full force and effect for a period of one year (unless
terminated earlier as set forth in Section 10), and from year to year
thereafter, subject to annual approval (i) by the Distributor, (ii) by action
of the Trustees or by the affirmative vote of the holders of a majority of the
outstanding Shares of such Fund, and (iii) by a majority of the Disinterested
Trustees, by vote cast in person at a meeting called for the purpose of voting
on such approval.
12. Limitation on Liability. The term Trustees means and refers
to the Trustees from time to time serving under the Trust's Trust Instrument
(the "Declaration of Trust") as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the obligations of
the Trust hereunder shall not be binding upon any of the Trustees, Shareholders,
nominees, officers agents or employees of the Trust, personally, but bind only
the trust property of the Trust, as provided in the Declaration of Trust. The
execution and delivery of this Distribution Agreement has been authorized by the
Trustees and signed by the officers of the Trust, acting as such, and neither
such authorization by such Trustees nor such execution and delivery by such
<PAGE 4>
officers shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the trust
property of the Trust as provided in its Declaration of Trust.
13. New Series. The terms and provisions of this Distribution
Agreement shall become automatically applicable to any additional series of
the Trust established during the initial or any renewal term of this
Distribution Agreement.
14 Successor Investment Company. Unless this Distribution
Agreement has been terminated in accordance with Paragraph 10, the terms
and provisions of this Agreement shall become automatically applicable to
any investment company which is a successor to the Trust as a result of a
reorganization, recapitalization or change of domicile.
15. Severability. In the event any provision of this Distribution
Agreement is determined to be void or unenforceable, such determination
shall not affect the remainder of this Distribution Agreement, which shall
continue to be in force.
16. Interpretation.
16.1 This Distribution Agreement shall be governed by the
laws of the Commonwealth of Pennsylvania.
16.2 Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term
or provision of the Investment Company Act shall be resolved by reference
to such term or provision of the Investment Company Act and to interpretation
thereof, if any, by the United States courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of
the Commission issued pursuant to the Investment Company Act. In addition,
where the effect of a requirement of the Investment Company Act, reflected
in any provision of this Distribution Agreement is revised by rule, regulation
or order of the Commission, such provision shall be deemed to incorporate the
effect of such rule, regulation or order.
17. Notices. Any notices under this Distribution Agreement shall
be in writing, addressed and delivered or mailed postage paid to the other
party at such address as such other party may designate for the receipt of such
notice. Until further notice to the other party, it is agreed that the address
of the Trust and of the Distributor for this purpose shall be 715 Twining Road,
Suite 202, Dresher, Pa. 19025.
<PAGE 5>
IN WITNESS WHEREOF, the Trust and the Distributor have each
caused this Distribution Agreement to be signed in duplicate on its behalf, all
as of the day and year first above written.
THE DRESHER FAMILY OF FUNDS
By: /s/ Jeffrey C. Brown
Name: Jeffrey C. Brown
Its: President
NFA BROKERAGE SERVICES, INC.
By: /s/ Jeffrey C. Brown
Name: Jeffrey C. Brown
Its: President
<PAGE 6>
SCHEDULE A
The Dresher Comprehensive Growth Fund
The Dresher Classic Retirement Fund
Dated: July 14, 1997
<PAGE 7>
EXHIBIT (8)
CUSTODY AGREEMENT
This agreement ("Agreement") is entered into as of the 14th day of
July, 1997, by and among The Dresher Family of Funds (the "Trust"), a
business trust organized under the laws of Delaware and having its office at
715 Twining Road, Suite 202, Dresher, Pennsylvania 19025, on behalf of the
series of shares of the Trust denominated as "Funds" and listed in Schedule
A hereto, and any other series which may become subject to this Agreement
pursuant to Article IX hereof, (each, a "Fund," and collectively, the "Funds")
National Financial Advisors, Inc. ("NFA"), a Pennsylvania corporation
having its office at the same address as the Trust, and Firstrust Savings Bank
(the "Custodian"), a savings bank organized under the laws of the
Pennsylvania and having its principal office at 1931 Cottman Avenue,
Philadelphia, Pennsylvania 19111.
WHEREAS, the Trust and the Custodian desire to enter into this
Agreement to provide for the custody and safekeeping of the assets of the
Trust as required by the Investment Company Act of 1940, as amended (the
"Act").
WHEREAS, NFA is registered as an investment adviser under the Act
and provides advisory services to the Trust pursuant to an Investment
Advisory Agreement.
WHEREAS, under the Investment Advisory Agreement, NFA is
responsible for retaining and compensating agents to provide non-advisory
services to the Trust.
WHEREAS, NFA hereby appoints the Custodian as custodian of all
the Fund's Securities and moneys at any time owned by any of the Funds
during the term of this Agreement (the "Fund Assets").
WHEREAS, the Custodian hereby accepts such appointment as
Custodian and agrees to perform the duties as hereinafter set forth.
THEREFORE, in consideration of the mutual promises hereinafter set
forth, the parties agree as follows:
ARTICLE I.
DEFINITIONS
The following words and phrases, when used in this Agreement,
unless the context otherwise requires, shall have the following meanings:
"Authorized Person" - the President, Secretary or Treasurer of the
Trust, or any other person, whether or not any such person is an officer of
employee of the Trust, duly authorized by the Board of Trustees of the Trust
to give Oral Instructions and Written Instructions on behalf of the Trust, and
listed in the certificate annexed hereby as Schedule B, or such other
certificate as may be received by the Custodian from time to time.
1<PAGE>
"Book-Entry System" - The Federal Reserve Bank book-entry system
for United States Treasury securities and federal agency securities.
"Dividend and Transfer Agent" - the dividend and transfer agent
appointed from time to time pursuant to a written agreement between the
dividend and transfer agent and the Trust, initially being National Shareholder
Services, Inc., a Pennsylvania corporation with an address at 715 Twining
Road, Suite 202, Dresher, Pennsylvania 19025.
"Fund Agent" - the transfer agent for a mutual fund whose shares are
purchased by any of the Funds.
"Money Market Security" - debt obligations issued or guaranteed as
to principal and/or interest by the government of the United States or agencies
or instrumentalities thereof, commercial paper, obligations (including
certificates of deposit, bankers' acceptances, repurchase agreements and
reverse repurchase agreements with respect to the same), and time deposits
of deposit banks and thrift institutions whose deposits are insured by the
Federal Deposit Insurance Corporation, and other short-term obligations
where the purchase and sale of such securities normally require settlement in
federal funds or their equivalent on the same day as such purchase and sale,
all of which mature in not more than 13 months.
"Mutual Fund Shares" - shares of a mutual fund owned by any of the
Funds.
"Officers" - the President, Secretary and Treasurer of the Trust listed
in the certificate annexed hereto as Schedule B, or such other certificate as
may be received by the Custodian from time to time.
"Oral Instructions" - verbal instructions received by the Custodian
from an Authorized Person (or from a person that the Custodian reasonably
believes in good faith to be an Authorized Person) and confirmed by Written
Instructions in such manner that such Written Instructions are received by the
Custodian on the same business day on which Oral Instructions were given.
"Prospectus" - the Trust's then currently effective prospectus and
Statement of Additional Information, as filed with and declared effective from
time to time by the Securities and Exchange Commission.
"Security or Securities" - Money Market Securities or Mutual Fund
Shares.
"Written Instructions" - communication received in writing by the
Custodian from an Authorized Person.
2<PAGE>
ARTICLE II.
DOCUMENTS AND NOTICES TO BE FURNISHED BY THE TRUST
The following documents, including any amendments thereto, will be
provided contemporaneously with the execution of the Agreement, to the
Custodian by the Trust:
1. A copy of the Trust Instrument of the Trust certified by the
Secretary.
2. A copy of the Bylaws of the Trust certified by the Secretary.
3. A copy of the resolutions of the Board of Trustees of
the Trust appointing the Custodian, certified by the
Secretary.
4. A copy of the then current Prospectus.
5. A Certificate of the President and Secretary of the
Trust setting forth the names and signatures of the
officers of the Trust.
ARTICLE III.
RECEIPT OF FUND ASSETS
A. During the term of this Agreement, the Trust will deliver or
cause to be delivered to the Custodian all moneys constituting Fund Assets.
The Custodian shall be entitled to reverse any deposits made on the Trust's
behalf where such deposits have been entered and moneys are not finally
collected within 30 days of the making of such entry.
B. During the term of this Agreement, the Trust will deliver or
cause to be delivered to the Custodian all Securities constituting Fund Assets,
except Securities which are maintained pursuant to Section F of Article V in
an account with a Fund Agent. The Custodian will not have any duties or
responsibilities with respect to such Securities until actually received by the
Custodian.
C. As and when received, the Custodian shall deposit to the
account(s) of the relevant Fund any and all payments for shares of such Fund
issued or sold from time to time as they are received from the Trust's
distributor or Dividend and Transfer Agent or from the Trust itself.
ARTICLE IV.
DISBURSEMENT OF FUND ASSETS
A. The Trust shall furnish to the Custodian a copy of the
resolutions of the Board of Trustees of the Trust, certified by the Trust's
Secretary, either (i) setting forth the date of the declaration of any dividend
or distribution in respect of shares of the Funds, the date of payment thereof,
the record date as of which the relevant Fund's shareholders entitled to
payment shall be determined, the amount payable per share to the relevant
Fund's shareholders of record as that date, and the total amount to be paid by
the Dividend and Transfer Agent on the payment date, OR (ii)
3<PAGE>
authorizing the declaration of dividends and distributions in respect of shares
of the Funds on a daily basis and authorizing the Custodian to rely on a
certificate setting forth the date of the declaration of any such dividend or
distribution, the date of payment thereof, the record date as of which the
relevant Fund's shareholders entitled to payment shall be determined, the
amount payable per share to the relevant Fund's shareholders of record as of
that date, and the total amount to be paid by the Dividend and Transfer Agent
on the payment date. On the payment date specified in such resolutions or
certificate described above, the Custodian shall disburse such amounts..
B. Upon receipt of Written Instructions so directing it, the
Custodian shall disburse amounts necessary for the payment of redemption
proceeds to be made by the Dividend and Transfer Agent.
C. Upon receipt of a certificate directing payment and setting
forth the name and address of the person to whom such payment is to be
made, the amount of such payment, and the purpose for which payment is to
be made, the Custodian shall disburse amounts as and when directed from the
Fund Assets. So long as and to the extent it exercises reasonable care, the
Custodian is authorized to rely on such directions reasonably believed by it
to be genuine and signed by the proper party and shall be under no obligation
to inquire as to the propriety of such directions.
ARTICLE V.
CUSTODY OF FUND ASSETS
A. The Custodian shall open and maintain a separate bank account
or accounts in the United States in the name of each of the Funds, subject only
to draft or order by the Custodian acting pursuant to the terms of this
Agreement, and shall hold all cash received by it from or for the account of
each of the Funds, other than cash maintained by the Trust or the Funds in a
bank account established and used by the Trust or the Funds in accordance
with Rule 17f-3 under the Act. Such moneys shall be deposited by the
Custodian in its capacity as such, and shall be withdrawable by the Custodian
only in such capacity.
B. The Custodian shall hold all Securities delivered to it in
safekeeping in a separate account or accounts maintained for the benefit of
each of the Funds.
C. All Securities held which are issued or issuable only in bearer
form shall be held by the Custodian in that form; all other Securities held for
any of the Funds shall be registered in the name of the appropriate Fund or its
nominee or the Custodian as the custodian of such Fund. The Trust agrees to
furnish to the Custodian appropriate instruments to enable the Custodian to
hold, or deliver in proper form for transfer, any Securities that it may hold
for the account of any of the Funds and which may, from time to time, be
registered in the name of the Trust.
D. With respect to all Securities held for the Funds, the Custodian
shall on a timely basis:
4<PAGE>
1. Collect all income due and payable with respect to
such Securities; and
2. Execute, as agent, any necessary declarations or
certificates of ownership under the federal income tax
laws or the laws of regulations of any other taxing
authority now or hereafter in effect.
E. The Custodian shall promptly deliver to the Trust all written
information received by the Custodian from issuers of the Securities held by
the Funds.
F. Mutual Fund Shares shall be deposited and/or maintained with
a Fund Agent acting as transfer agent for such fund. Each such Fund Agent
shall be deemed to be a "depository" for purposes of Rule 17f-4 of the Act.
The Custodian shall deposit and/or maintain such Securities with a Fund
Agent, subject to the following provisions:
1. The Custodian may keep Mutual Fund Shares with a
Fund Agent, provided that such Securities are
represented in an account with the Fund Agent, in the
name of the appropriate Fund or its nominee or the
Custodian as custodian of such Fund, in which the
Custodian shall not deposit any assets of the Custodian
other than assets held on behalf of such Fund;
2. The records of the Custodian with respect to Mutual
Fund Shares which are maintained with a Fund Agent
shall identify by book-entry those Securities which the
Trust or NFA identifies to the Custodian as belonging
to the Funds;
3. Copies of all advices from a Fund Agent of transfers of
Mutual Fund Shares for the account of the any of the
Funds shall identify the appropriate Fund, be
maintained for such Fund by the Custodian and be
provided to the Trust at its request. Upon request, the
Custodian shall furnish the Trust confirmation of each
transfer to or from the account of any of the Funds in
the form of a written advice or notice and shall furnish
to the Trust copies of daily transaction sheets
reflecting each day's transactions with each Fund
Agent for the account of any of the Funds; and
4. The Custodian shall not be liable to the Trust for any
loss or damage to the Trust resulting from the
maintenance of Mutual Fund Shares with a Fund
Agent except for losses resulting directly from the
negligence, misfeasance or misconduct of the
Custodian or any of its agents or of any of its or their
employees.
5<PAGE>
ARTICLE VI.
PURCHASE AND SALE OF SECURITIES
A. Promptly after each purchase of Securities by a Fund, the Trust
shall deliver to the Custodian (i) with respect to each purchase of Securities
which are not Money Market Securities, Written Instructions, and (ii) with
respect to each purchase of Money Market Securities, Written Instructions or
Oral Instructions, specifying with respect to each such purchase the:
1. Name of the issuer and the title of the Securities;
2. Principal amount purchased and accrued interest, if any;
3. Date of purchase and settlement;
4. Purchase price per unit;
5. Total amount payable; and
6. Name of the person from whom, or the broker through
which, the purchase was made.
The Custodian shall, against receipt of Securities purchased by or for a Fund,
pay out of the appropriate Fund Assets the total amount payable to the person
from whom or the broker through which the purchase was made, provided that
the same conforms to the total amount payable as set forth in such Written
Instructions or Oral Instructions, as the case may be.
B. Promptly after each sale of Securities by any of the Funds, the
Trust shall deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, Written Instructions, and
(ii) with respect to each sale of Money Market Securities, Written Instructions
or Oral Instructions, specifying with respect to each such sale the:
1. Name of the issuer and the title of the Securities;
2. Principal amount sold and accrued interest, if any;
3. Date of sale and settlement;
4. Sale price per unit;
5. Total amount receivable; and
6. Name of the person whom, or the broker through
which, the sale was made.
6<PAGE>
The Custodian shall deliver the Securities against receipt of the total amount
receivable, provided that the same conforms to the total amount receivable as
set forth in such Written Instructions or Oral Instructions, as the case may be.
C. On contractual settlement date, the account of the appropriate
Fund will be charged for all purchased Securities settling on that day,
regardless of whether or not delivery is made. Likewise, on contractual
settlement date, proceeds from the sale of Securities settling that day will be
credited to the account of the appropriate Fund, irrespective of delivery.
D. Purchases and sales of Securities effected by the Custodian
will be made on a delivery versus payment basis. The Custodian may, in its
sole discretion, upon receipt of a certificate, elect to settle a purchase or
sale transaction in some other manner, but only upon receipt of acceptable
indemnification from the Trust.
E. Except as otherwise may be agreed upon by the parties hereto,
the Custodian shall not be required to comply with any Written Instructions
to settle the purchase of any Securities on behalf of any of the Funds unless
there is sufficient cash in such Fund's account(s) at the time or to settle the
sale of any Securities from an account(s) unless such Securities are in
deliverable form.
ARTICLE VII.
CONCERNING THE CUSTODIAN
A. Except as otherwise provided herein, the Custodian shall not
be liable for any loss or damage resulting from its action or omission to act
or otherwise, except for any such loss or damage arising out of its own
negligence, willful misfeasance or bad faith. The Trust shall defend,
indemnify and hold harmless the Custodian, its directors, officers, employees
and agents, with respect to any loss, claim, liability or cost (including
reasonable attorneys' fees) arising, or alleged to arise from or relating to
the Trust's duties hereunder or any other action or inaction of the Trust or
its Trustees, officers, employees or agents, except such as may arise from the
negligent action, omission, willful misfeasance, bad faith or breach of this
Agreement by the Custodian. The Custodian may, with respect to questions
of law, apply for and obtain the advice and opinion of counsel, and shall be
fully protected with respect to anything done or omitted by it in good faith in
conformity with the advice or opinion of counsel. The provisions under this
paragraph shall survive the termination of this Agreement.
B. Without limiting the generality of the foregoing, the Custodian,
acting in the capacity of Custodian hereunder, shall be under no obligation to
inquire into, and shall not be liable for:
1. The validity of the issue of any Securities purchased
by or for the account of any of the Funds, the legality
of the purchase thereof, or the proprietary of the
amount paid therefor;
7<PAGE>
2. The legality of the sale of any Securities by or for the
account of any of the Funds, or the proprietary of the
amount for which the same are sold;
3. The legality of the issue or sale of any shares of the Trust,
or the sufficiency of the amount to be received therefor;
4. The legality of the redemption of any shares of the Trust,
or the proprietary of the amount to be paid therefor; or
5. The legality of the declaration or payment of any
dividend by the Trust in respect of shares of the Trust.
C. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Trust from any Dividend
and Transfer Agent nor to take any action to effect payment or distribution by
any Dividend and Transfer Agent of any amount paid by the Custodian to any
Dividend and Transfer Agent in accordance with this Agreement.
D. The Custodian shall not be under any duty or obligation to
ascertain whether any Securities at any time delivered to or held by it for the
account of any of the Funds are such as properly may be held by the Trust
under the provisions of the Trust's Trust Instrument and Bylaws.
E. The Custodian shall treat all records and other information
relating to the Trust and the Fund Assets as confidential and shall not disclose
any such records or information to any other person unless (i) the Trust shall
have consented thereto in writing or (ii) such disclosure is required by law.
F. The Custodian shall be entitled to rely upon any Oral
Instructions and any Written Instructions. The Trust agrees to forward to the
Custodian Written Instructions confirming Oral Instructions in such a manner
so that such Written Instructions are received by the Custodian, whether by
hand delivery, facsimile or otherwise, on the same business day on which
such Oral Instructions were given. The Trust agrees that the failure of the
Custodian to receive such confirming instructions shall in no way affect the
validity of the transactions or enforceability of the transactions hereby
authorized by the Trust. So long as and to the extent the Custodian exercises
reasonable care, the Trust agrees that the Custodian shall incur no liability to
the Trust for acting upon Oral Instructions given to the Custodian hereunder
concerning such transactions.
G. The Custodian will (i) set up and maintain proper books of account
and complete records of all transactions in the accounts maintained by the
Custodian hereunder in such manner as will meet the obligations of the Trust
under the Act, with particular attention to Section 31 thereof and Rules 31a-1
and 31a-2 thereunder, and (ii) preserve for the periods prescribed by
applicable federal statute or regulation all records required to be so
preserved. All such books and records shall be the property of the Trust, and
shall be open to inspection and audit at reasonable times and with prior notice
by Officers and auditors employed by the Trust.
8<PAGE>
H. The Custodian shall provide to the Trust, at such times as the
Trust may reasonably require, with reports by independent public accountants
on the accounting system, internal accounting control and procedures for
safeguarding securities relating to the services provided by the Custodian
under this Agreement. Such reports shall be of sufficient scope and in
sufficient detail as may be required by the Trust to provide reasonable
assurance that any material inadequacies would be disclosed by such
examination and, if there are no such inadequacies, the reports shall so state.
I. The Custodian performs only the services of a custodian and
shall have no responsibility for the management, investment or reinvestment
of the Securities from time to time owned by the Trust. The Custodian is not
a selling agent for shares of the Trust and performance of its duties as
custodian shall not be deemed to be a recommendation to the Trust's
depositors or others of shares of the Trust as an investment.
J. The Custodian shall take all reasonable action that the Trust
may from time to time request to assist the Trust in obtaining favorable
opinions from the Trust's independent accountants, with respect to the
Custodian's activities hereunder, in connection with the preparation of the
Trust's Form N-1A, Form N-SAR, or other reports to and filings with the
Securities and Exchange Commission.
ARTICLE VIII.
TERMINATION
A. The Trust, NFA or the Custodian may terminate this Agreement for any
reason by giving to the other parties a notice in writing specifying the date
of such Termination, which shall be not less than 120 days after the date of
giving of such notice. If such notice is given by the Trust or NFA, it shall
be accompanied by a copy of a resolution of the Board of Trustees of the Trust,
certified by the Secretary of the Trust, electing to terminate this Agreement
and designating a successor custodian or custodians. If such notice is given
by the Custodian, the Trust shall, on or before the termination date, deliver
to the Custodian a copy of a resolution of the Board of Trustees of the Trust,
certified by the Secretary, designating a successor custodian or custodians to
act on behalf of the Trust. In the absence of such designation by the Trust,
the Custodian may designate a successor custodian which shall be a bank or
trust company meeting the requirements of applicable law relating to custodians
of investment companies registered under the Act. Upon the date set forth in
such notice, this Agreement shall terminate and the Custodian, provided that
it has received a notice of acceptance by the successor custodian, shall
deliver on that date, directly to the successor custodian, all Securities and
moneys then owned by the Trust and held by it as Custodian.
B. If a successor custodian is not designated by the Trust, or by
the Custodian in accordance with the preceding paragraph, or the designated
successor cannot or will not serve, the Trust shall, upon the delivery by the
Custodian to the Trust of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Trust) and moneys then
owned by the Trust, be deemed to be the custodian for the Trust, and the
Custodian shall thereby be relieved of all duties and responsibilities pursuant
to this Agreement, other than the duty with respect to
9<PAGE>
Securities held in the Book-Entry System, which cannot be delivered to the
Trust, which shall be held by the Custodian in accordance with this Agreement.
ARTICLE IX.
ADDITIONAL FUNDS
In the event that the Trust establishes one or more series of shares in
addition to the Funds listed on Schedule A hereto with respect to which it
desires to have the Custodian render services as custodian under the terms
hereof, it shall so notify the Custodian in writing, and if the Custodian
agrees in writing to provide such services, such Fund(s) shall become a part
of the Trust hereunder.
ARTICLE X.
MISCELLANEOUS
A. Schedule B sets forth the names and the signatures of all
Authorized Persons, as certified by the Secretary of the Trust. The Trust
agrees to furnish to the Custodian a new Schedule B, in form similar to the
attached Schedule B, if any present Authorized Person ceases to be an
Authorized Person or if any other or additional Authorized Persons are elected
or appointed. Until such new Schedule B shall be received, the Custodian
shall be fully protected in acting under the provisions of this Agreement upon
Oral Instructions or signatures of the then current Authorized Persons as set
forth in the last delivered Schedule B.
B. No recourse under any obligation of this Agreement or for any
claim based thereon shall be had against any organizer, shareholder, Officer,
Trustee, past, present or future as such, of the Trust or of any predecessor or
successor, either directly or through the Trust or any such predecessor or
successor, whether by virtue of any constitution, statute or rule of law or
equity, or by the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that this Agreement and the obligations
thereunder are enforceable solely against the Trust, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
organizers, shareholders, Officers, Trustees of the Trust or of any predecessor
or successor, or any of them as such. To the extent that any such liability
exists, it is hereby expressly waived and released by the Custodian as a
condition of, and as a consideration for, the execution of this Agreement.
C. The obligations set forth in this Agreement as having been made by
the Trust have been made by the Board of Trustees, acting as such Trustees for
and on behalf of the Trust, pursuant to the authority vested in them under the
laws of the State of Delaware, the Trust Instrument and the Bylaws of the
Trust. This Agreement has been executed by Officers of the Trust as officers,
and not individually, and the obligations contained herein are not binding upon
any of the Trustees, Officers, agents or holders of shares, personally, but
bind only the Trust.
D. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian, shall be sufficiently
given when delivered to the Custodian in hand or by confirmed telecopy or
on the second business day following the time such notice is deposited in the
U.S. Mail, postage prepaid, and addressed to the Custodian at the address set
forth in the preamble hereto, or at such other place as the Custodian may from
time to time designate in writing.
10<PAGE>
E. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Trust or NFA, shall be
sufficiently given when delivered in hand or confirmed telecopy to the Trust
or on the second business day following the time such notice is deposited in
the U.S. mail, postage prepaid, and addressed to the Trust or NFA, as
appropriate, at the address set forth in the preamble hereto or at such other
place as the Trust or NFA, as appropriate, may from time to time designate in
writing.
F. This Agreement, with the exception of the Schedules, may not
be amended or modified in any manner except by a written agreement
executed by both parties with the same formality as this Agreement, and
authorized and approved by a resolution of the Board of Trustees of the Trust.
G. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Trust or by the Custodian,
and no attempted assignment by the Trust or the Custodian shall be effective
without the written consent of the other party hereto.
H. This Agreement shall be construed in accordance with the laws
of the Commonwealth of Pennsylvania.
I. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
11<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Custodian
Agreement to be executed by their respective officers, thereunto duly
authorized as of the date and year first above written.
ATTEST: THE DRESHER FAMILY OF FUNDS
__________________________ By: /s/ Jeffrey C. Brown
Name: Jeffrey C. Brown
Title: President
ATTEST: NATIONAL FINANCIAL ADVISORS, INC.
__________________________ By: /s/ Jeffrey C. Brown
Name: Jeffrey C. Brown
Title: President
ATTEST: FIRSTRUST SAVINGS BANK
__________________________ By: /s/ Jim DiDio
Name: Jim DiDio
Title: Vice-President
12<PAGE>
SCHEDULE A
The Dresher Comprehensive Growth Fund
The Dresher Classic Retirement Fund
13<PAGE>
SCHEDULE B
Trust: Authorized Persons Specimen Signatures
President Jeffrey C. Brown
Vice President Daniel Nyschit
Secretary Larissa N. Patrylak
Treasurer Stephen Patrylak
Investment Manager:
President Jeffrey C. Brown
Vice President Stephen Patrylak
Daniel Nyschit
Secretary/Treasurer Larissa N. Patrylak
Transfer Agent:
President Jeffrey C. Brown
Vice President Stephen Patrylak
Daniel Nyschit
Secretary/Treasurer Larissa N. Patrylak
14<PAGE>
EXHIBIT (9)
ADMINISTRATION, ACCOUNTING AND TRANSFER AGENCY AGREEMENT
AGREEMENT (this "Agreement") dated as of July 14, 1997 by and
between The Dresher Family of Funds (the "Trust"), a Delaware business
trust, on behalf of the series of shares of the Trust denominated as "Funds"
and listed on Schedule A hereto (and any other series which may be issued by
the Trust (each, a "Fund," and collectively, the "Funds")), National Financial
Advisors, Inc. ("NFA"), a Pennsylvania corporation, and National
Shareholder Services, Inc. ("NSS"), an Pennsylvania corporation.
WHEREAS, the Trust has been organized to operate as an open-end
investment company registered under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, NFA is registered as an investment adviser under the
Investment Advisers Act of 1940 and provides advisory services to the Trust
pursuant to an Investment Advisory Agreement;
WHEREAS, under the Investment Advisory Agreement NFA is
responsible for retaining and compensating agents to provide non-advisory
services to the Trust; and
WHEREAS, NFA desires to appoint NSS to serve as the Trust's
administrative agent, accounting and pricing agent and transfer agent,
dividend disbursing agent, shareholder service agent, plan agent and
shareholder purchase and redemption agent, and NSS is willing to act in such
capacities upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Appointment
NSS is hereby appointed to provide the Trust with those
services described in this Agreement, and NSS accepts such appointment and
agrees to provide such services under the terms and conditions set forth
herein.
2. Documentation
The Trust will furnish from time to time the following
documents:
(a) Each resolution of the Board of Trustees of the Trust
authorizing the original issue of its shares;
(b) Each Registration Statement filed with the Securities
and Exchange Commission (the "SEC") and amendments thereof;
<PAGE>
(c) A certified copy of each amendment to the Trust
Instrument and the Bylaws of the Trust;
(d) Certified copies of each resolution of the Board of
Trustees authorizing officers to give instructions to NSS;
(e) Such other certificates, documents or opinions which
NSS may, in its discretion, deem necessary or appropriate in the proper
performance of its duties;
(f) Copies of all distribution and dealer agreements in
effect;
(g) Copies of all advisory agreements in effect; and
(h) Copies of all documents relating to special investment
of withdrawal plans which are offered or may be offered in the future by the
Trust and for which NSS is to act as plan agent.
3. Trust Administration
Subject to the direction and control of NFS and the Trust, NSS
shall supervise the Trust's business affairs not otherwise supervised by other
agents of the Trust. To the extent not otherwise the primary responsibility
of, or provided by, other agents of NFA or the Trust, NSS shall supply (i)
non-investment related statistical and research data, (ii) internal regulatory
compliance services, and (iii) executive and administrative services. NSS
shall coordinate the preparation of (i) tax returns, (ii) reports to
shareholders of the Funds, (iii) reports to and filings with the SEC and state
securities authorities including preliminary and definitive proxy materials and
post-effective amendments to the Trust's Registration Statement, and (iv)
necessary materials for meetings of the Trust's Board of Trustees.
4. Calculation of Net Asset Value
NSS will maintain and keep current the general ledger for each
Fund, recording all income and expenses, capital share activity and security
transactions of each Fund. NSS will calculate the net asset value of each
Fund and the per share net asset value of each Fund, in accordance with the
Trust's then current prospectus and statement of additional information (the
"Prospectus"). NSS will prepare and maintain a daily valuation of all
securities and other assets of the Trust in accordance with instructions from
a designated officer of the Trust or NFA and in the manner set forth in the
Prospectus. In valuing securities of the Trust, NSS may contract with, and
rely upon market quotations provided by, outside services or the underlying
funds in which the Funds invest.
<PAGE 2>
5. Payment of Trust Expenses
NSS shall process each request received from the Trust or its
authorized agents for payment of the Trust's expenses. Upon receipt of
written instructions signed by an officer or other authorized agent of the
Trust, NSS shall prepare checks in the appropriate amounts which shall be
signed by an authorized officer of NSS and mailed to the appropriate party.
6. NSS to Record Shares
NSS shall record the issuance of shares of the Trust and
maintain, pursuant to applicable rules of the SEC, a record of the total number
of shares of the Trust which are authorized, issued and outstanding, based
upon data provided to it by the Trust. NSS shall also provide the Trust, on a
regular basis or upon reasonable request, the total number of shares which are
authorized, issued and outstanding, but shall have no obligation when
recording the issuance of the Trust's shares, except as otherwise set forth
herein, to monitor the issuance of such shares or to take cognizance of any
laws relating to the issue or sale of such shares, which functions shall be the
sole responsibility of the Trust.
7. NSS to Validate Transfers
Upon receipt of a proper request for transfer and upon
surrender to NSS of certificates, if any, in proper form for transfer, NSS
shall approve such transfer and shall take all necessary steps to effectuate
the transfer as indicated in the transfer request. Upon approval of the
transfer, NSS shall notify the Trust in writing of each such transaction and
shall make appropriate entries on the shareholder records maintained by NSS.
8. Receipt of Funds
Upon receipt of any check or other instrument drawn or
endorsed to it as agent for, or identified as being for the account of, the
Trust, NSS shall stamp the check or instrument with the date of receipt and
shall forthwith process the same for collection. Upon receipt of notification
of receipt of funds eligible for share purchases in accordance with the
Prospectus, NSS shall notify the Trust, at the close of each business day, in
writing of the amount of said funds credited to the Trust and deposited in its
account with its custodian (the "Custodian").
9. Purchase Orders
Upon receipt of a check or other order for the purchase of
shares of the Trust, accompanied by sufficient information to enable NSS to
establish a shareholder account, NSS shall, as of the next determination of net
asset value after receipt of such order in accordance with the Prospectus,
compute the number of shares due to the shareholder, credit the share account
of the shareholder, subject to collection of the funds, with the number of
shares so purchased, shall notify the Trust in writing or by computer report at
the close of each business day of such transactions and
<PAGE 3>
shall mail to the shareholder and/or dealer of record a notice of such credit
when requested to do so by the Trust.
10. Returned Checks
In the event that NSS is notified by the Custodian that any
check or other order for the payment of money is returned unpaid for any
reason, NSS will:
(a) Give prompt notification to the Trust of the non-payment of said
check;
(b) In the absence of other instructions from the Trust, take
such steps as may be necessary to redeem any shares purchased on the basis
of such returned check and cause the proceeds of such redemption plus any
dividends declared with respect to such shares to be credited to the account
of the Trust and to request the Custodian to forward such returned check to
the person who originally submitted the check; and
(c) Notify the Trust of such actions and correct the Trust's
records maintained by NSS pursuant to this Agreement.
11. Dividends and Distributions
The Trust shall furnish NSS with appropriate evidence of
Trustee action authorizing the declaration of dividends and other
distributions. NSS shall establish procedures in accordance with the
Prospectus and with other authorized actions of the Trust's Board of Trustees
under which it will have available from the Custodian or the Trust any required
information for each dividend and other distribution. After deducting any
amount required to be withheld by any applicable laws, NSS shall, as agent for
each shareholder who so requests, invest the dividends and other distributions
in full and fractional shares in accordance with the Prospectus. If a
shareholder of record has elected to receive dividends or other distributions
in cash, then NSS shall disburse dividends to such shareholder in accordance
with the Prospectus. NSS shall, on or before the mailing date of such checks,
notify the Trust and the Custodian of the estimated amount of cash required to
pay such dividend or distribution, and the Trust shall instruct the Custodian
to make available sufficient funds therefor in the appropriate account of the
Trust. NSS shall mail to the shareholders periodic statements, as requested
by the Trust, showing the number of full and fractional shares and the net
asset value per share of shares so credited. When requested by the Trust, NSS
shall prepare and file with the Internal Revenue Service, and when required,
shall address and mail to shareholders, such returns and information relating
to dividends and distributions paid by the Trust as are required to be so
prepared, filed and mailed by applicable laws, rules and regulations.
12. Unclaimed Dividends and Unclaimed Redemption Proceeds
NSS shall, at least annually, furnish in writing to the Trust the
names and addresses, as shown in the shareholder accounts maintained by
NSS, of all shareholders for which there are,
<PAGE 4>
as of the end of the calendar year, dividends, distributions or redemption
proceeds for which checks or share certificates mailed in payment of
distributions have been returned. NSS shall use its best efforts to contact
the shareholders affected and to follow any other written instructions received
from the Trust concerning the disposition of any such unclaimed dividends,
distributions or redemption proceeds.
13. Redemptions and Exchanges
(a) NSS shall process, in accordance with the Prospectus,
each order for redemption of shares received by NSS and in proper form.
Upon its approval of such redemption transactions, NSS, if requested by the
Trust, shall mail to the shareholder and/or dealer of record a confirmation
showing trade date, number of full and fractional shares redeemed, the price
per share and the total redemption proceeds. For each such redemption, NSS
shall either: (i) prepare checks in the appropriate amounts for approval and
verification by the Trust and signature by an authorized officer of NSS and
mail the checks to the appropriate person, or (ii) in the event redemption
proceeds are to be wired through the Federal Reserve Wire System or by bank
wire, cause such proceeds to be wired in federal funds to the bank account
designated by the shareholder, or (iii) effectuate such other redemption
procedures which are authorized by the Trust's Board of Trustees or the
Prospectus. The requirements as to instruments of transfer and other
documentation, the applicable redemption price and the time of payment shall
be as provided in the Prospectus, subject to such supplemental instructions as
may be furnished by the Trust. If NSS or the Trust determines that a request
for redemption does not comply with the requirements for redemptions, NSS
shall promptly notify the shareholder, indicating the reason therefor.
(b) If shares of the Trust are eligible for exchange with
shares of any other Fund or investment company, NSS, in accordance with the
Prospectus and exchange rules of the Trust and such other investment
company (or such other investment company's transfer agent), shall review all
exchange requests to ensure they are in proper form and shall, on behalf of the
Trust's shareholders, process such exchange requests that are in proper form.
(c) NSS shall notify the Trust and the Custodian on each
business day of the amount of cash required to meet payments made pursuant
to the provisions of this Paragraph 13, and, on the basis of such notice, the
Trust shall instruct the Custodian to make available from time to time
sufficient funds therefor in the appropriate account of the Trust. Procedures
for effecting redemption orders accepted from shareholders or dealers of
record by telephone or other methods shall be established by mutual
agreement between NSS and the Trust consistent with the Prospectus.
(d) The authority of NSS to perform its responsibilities
under Paragraph 9, Paragraph 11, and this Paragraph 13 shall be suspended
with respect to any Fund upon receipt of notification by it of the suspension
of the determination of such Fund's net asset value.
(e) NSS shall notify the Trust and the shareholder in
writing in the event any shareholder's account drops below the applicable
Fund's minimum balance requirement as set forth in the Prospectus. The
shareholder notice shall state that the shareholder shall have the number of
<PAGE 5>
days specified in the Prospectus from the date of such notice to increase such
shareholder's account balance before the Fund redeems such shareholder's
shares. In the event such shareholder does not timely increase its account
balance and upon authorization by the Trust's Board of Trustees, NSS shall
process the redemption in accordance with this Paragraph 13 and the
Prospectus.
14. Wire-Order Purchases
NSS will send written confirmations to the dealers of record
containing all details of the wire-order purchases placed by each such dealer
by the close of business on the business day following receipt of such orders
by NSS. Upon receipt of any check drawn or endorsed to the Trust (or NSS,
as agent) or otherwise identified as being payment of an outstanding
wire-order, NSS will stamp said check with the date of its receipt and deposit
the amount represented by such check to NSS's deposit accounts maintained with
the Custodian. NSS will cause the Custodian to transfer federal funds in an
amount equal to the net asset value of the shares so purchased to the Trust's
account with the Custodian, and will notify the Trust before noon of each
business day of the total amount deposited in the Trust's deposit accounts, and
in the event that payment for a purchase order is not received by NSS or the
Custodian on the tenth business day following receipt of the order, prepare an
NASD "notice of failure of dealer to make payment."
15. Other Plans
NSS will process such group programs and other plans or
programs for investing in shares of the Trust as are provided for in the
Prospectus and will act as plan agent for shareholders pursuant to the terms
of such plans and programs duly executed by such shareholders.
16. Recordkeeping and Other Information
NSS shall create and maintain all records required by
applicable rules, rules and regulations, including but not limited to records
required by Section 31(a) of the 1940 Act and the rules thereunder, as the
same may be amended from time to time, pertaining to the various functions
performed by it and not otherwise created and maintained by another party
pursuant to contract with NFA or the Trust. All such records shall be the
property of the Trust at all times and shall be available for inspection and
use by the Trust. Where applicable, such records shall be maintained by NSS
for the periods and in the places required by Rule 31a-2 under the 1940 Act.
NSS shall make available during regular business hours all records and other
data created and maintained pursuant to this Agreement for reasonable audit and
inspection by the Trust, NFA, or any regulatory agency having authority over
the Trust.
17. Shareholder Records
In addition to the requirements of Paragraph 17, NSS shall
maintain records for each shareholder account showing the following:
(a) Name, address and tax identifying number;
<PAGE 6>
(b) Name of the dealer of record, if any;
(c) Number of shares held of each Fund;
(d) Historical information regarding the account, including
dividends and distributions in cash or invested in shares;
(e) Information with respect to the source of all dividends
and distributions allocated among income, realized short-term gains and
realized long-term gains;
(f) Any instructions from a shareholder, including all
forms furnished by the Trust and executed by a shareholder with respect to (i)
dividend or distribution elections and (ii) elections with respect to payment
options in connection with the redemption of shares;
(g) Any correspondence relating to the current maintenance
of such shareholder's account;
(h) Any stop or restraining order placed against such
shareholder's account;
(i) Information with respect to withholding in the case of
a foreign account or any other account for which withholding is required by
the Internal Revenue Code of 1986, as amended; and
(j) Any information required in order for NSS to perform
the calculations contemplated under this Agreement.
18. Tax Returns and Reports
NSS will prepare in the appropriate form, file with the Internal
Revenue Service and appropriate state agencies and, if required, mail to
shareholders of the Trust such returns for reporting dividends and
distributions paid by the Trust as are required to be so prepared, filed and
mailed and shall withhold such sums as are required to be withheld under
applicable federal and state income tax laws, rules and regulations.
19. Form N-SAR
NSS shall maintain such records within its control and shall be
requested by the Trust to assist the Trust in fulfilling the requirements of
Form N-SAR.
20. Other Information to the Trust
Subject to such instruments, verifications and approval of the
Custodian and the Trust as shall be required by any agreement or applicable
law, NSS will also maintain such records as shall be necessary to furnish to
the Trust the following: annual shareholder meeting lists, proxy lists
<PAGE 7>
and mailing materials, shareholder reports and confirmations and checks for
disbursing redemption proceeds, dividends and other distributions for expense
disbursements.
21. Access to Shareholder Information
NSS shall arrange for NFA to have direct access to shareholder
information contained in NSS's computer system, including account balances,
performance information and such other information which is available to
NSS with respect to shareholder accounts.
22. Cooperation with Accountants
NSS shall cooperate with the Trust's independent public
accountants and shall take all reasonable action in the performance of its
obligations under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their unqualified
opinion where required for any document for the Trust.
23. Shareholder Service and Correspondence
NSS will provide and maintain adequate personnel, records
and equipment to receive and answer all shareholder and dealer inquiries
relating to account status, share purchases, redemptions and exchanges and
other investment plans available to Trust shareholders. NSS will answer
written correspondence from shareholders relating to their share accounts and
such other written or oral inquiries as may from time to time be mutually
agreed upon, and NSS will notify the Trust of any correspondence or inquiries
which may require an answer from the Trust.
24. Proxies
NSS shall assist the Trust in the mailing of proxy cards and
other materials in connection with shareholder meetings of the Trust, shall
receive, examine and tabulate returned proxies and shall, if requested by the
Trust, provide at least one inspector of election to attend and participate as
required by law in shareholder meetings of the Trust.
25. Further Actions
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
26. Compensation
For the performance of NSS's obligations under this
Agreement, NFA shall pay NSS, on the first business day following the end
of each month, a monthly fee in accordance with the schedule attached hereto
as Schedule B.
27. Expenses
<PAGE 8>
NSS shall furnish, at its expense and without cost to the Trust:
(i) the services of its personnel to the extent that such services are required
to carry out its obligations under this Agreement and (ii) use of data
processing equipment. All costs and expenses not expressly assumed by NSS
under this Paragraph 27 shall be paid by NFA, including, but not limited to,
costs and expenses for postage, envelopes, checks, drafts, continuous forms,
reports, communications, statements and other materials, telephone, telegraph
and remote transmission lines, use of outside pricing services, use of outside
mailing firms, necessary outside record storage, media for storage of records
(e.g., microfilm, microfiche, computer tapes), printing, confirmations and any
other shareholder correspondence and any and all assessments, taxes or levies
assessed on NSS for services provided under this Agreement.
28. Equipment Failures
In the event of equipment failures beyond NSS's control, NSS
shall take all steps necessary to minimize service interruptions but shall have
no liability with respect thereto so long as and to the extent it exercises
reasonable care. NSS shall endeavor to enter into one or more agreements
making provision for emergency use of electronic data processing equipment
to the extent appropriate equipment is available.
29. Indemnification of NSS
(a) NSS may rely on information reasonably believed by
it to be accurate and reliable. Except as may otherwise be required by the
1940 Act and the rules thereunder, neither NSS nor its shareholders, officers,
directors, employees, agents, control persons or affiliates of any thereof
shall be subject to any liability for, or any damages, expenses or losses
incurred by the Trust or NFA in connection with, any error of judgment,
mistake of law, any act or omission connected with or arising out of any
services rendered under or payments made pursuant to this Agreement or any
other matter to which this Agreement relates, except by reason of willful
misfeasance, bad faith or gross negligence on the part of any such persons in
the performance of the duties of NSS under this Agreement or by reason of
reckless disregard by any of such persons of the obligations and duties of NSS
under this Agreement.
(b) Notwithstanding any other provision of this Agreement,
the Trust and NFA shall each indemnify, defend and hold harmless NSS, its
directors, officers, employees, shareholders, agents, control persons and
affiliates from and against any and all claims, demands, expenses and
liabilities (whether with or without basis in fact or law) of any and every
nature which NSS may sustain or incur or which may be asserted against NSS
by any person by reason of, or as a result of: (i) any action taken or omitted
to be taken by NSS in good faith in reliance upon any certificate, instrument,
order or share certificate believed by it to be genuine and to be signed,
countersigned or executed by and duly authorized person of the Trust, upon
the oral instructions or written instructions of an authorized person of the
Trust or upon the opinion of legal counsel for the Trust or its own counsel; or
(ii) any action taken or omitted to be taken by NSS in connection with its
appointment in good faith in reliance upon any law, act, regulation or
interpretation of the same even though the same may thereafter have been
altered, changed, amended or repealed. However,
<PAGE 9>
indemnification under this subparagraph shall not apply to actions or omissions
of NSS or its directors, officers, employees, shareholders or agents in cases
of its or their own negligence, willful misconduct, bad faith, or reckless
disregard of its or their own duties hereunder.
30. Termination
(a) The provisions of this Agreement shall be effective on
the date first above written, shall continue in effect for two years from that
date and shall continue in force from year to year thereafter, but only so long
as such continuance is approved (i) by vote, cast in person at a meeting called
for the purpose, of a majority of the Trust's trustees who are not parties to
this Agreement or interested persons (as defined in the 1940 Act) of any such
party, and (ii) by vote of a majority of the Trust's Board of Trustees or a
majority of the Trust's outstanding voting securities.
(b) Any party may terminate this Agreement on any date
by giving the other parties at least 60 days' prior written notice of such
termination specifying the date fixed therefor. Upon termination of this
Agreement, NFA shall pay to NSS such compensation as may be due as of the
date of such termination, and shall likewise reimburse NSS for any
out-of-pocket expenses and disbursements reasonably incurred by NFA to such
date.
(c) In the event that in connection with the termination of
this Agreement a successor to any of NSS's duties or responsibilities under
this Agreement is designated by the Trust or by NFA by written notice to
NSS, NSS shall, promptly upon such termination, transfer all records
maintained by NSS under this Agreement and shall cooperate in the transfer
of such duties and responsibilities, including provision for assistance from
NSS's cognizant personnel in the establishment of books, records and other
data by such successor.
31. Services for Others
Nothing in this Agreement shall prevent NSS or any affiliated
person (as defined in the 1940 Act) of NSS from providing services for any
other person, firm or corporation (including other investment companies);
provided, however, that NSS expressly represents that it will undertake no
activities which, in its judgment, will adversely affect the performance of its
obligations to the Trust under this Agreement.
32. Compliance with Governmental Rules and Regulations
(a) The parties hereto acknowledge and agree that nothing
contained herein shall be construed to require NSS to perform any services for
the Trust or NFA which could cause NSS to be deemed an "investment
adviser" of the Trust within the meaning of Section 2(a)(20) of the 1940 Act.
(b) NSS represents and warrants to the Trust that it is
registered with the SEC as a transfer agent.
<PAGE 10>
33. Limitation of Liability
It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally, but bind
only the trust property of the Trust. The execution and delivery of this
Agreement have been authorized by the Trustees of the Trust and signed by
an officer of the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any
of them personally, but shall bind only the trust property of the Trust.
34. Severability
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder
of this Agreement, which shall continue to be in force.
35. Questions of Interpretation
This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania. Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act shall be resolved by reference to
such term or provision of the 1940 Act and to interpretations thereof, if any,
by the United States courts or, in the absence of any controlling decision of
any such court, by rules, regulations or orders of the SEC issued pursuant to
the 1940 Act. In addition, where the effect of a requirement of the 1940 Act,
reflected in any provision of this Agreement, is revised by rule, regulation or
order of the SEC, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
36. Notices
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice.
Until further notice, it is agreed that the address of the Trust, NFA and NSS
for this purpose shall be 715 Twining Road, Suite 202, Dresher, Pennsylvania
19025.
37. Counterparts
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
38. Force Majeure
If NSS shall be delayed in its performance of services or
prevented entirely or in part from performing services due to causes or events
beyond its control, including and without
<PAGE 11>
limitation, acts of God, interruption of power or other utility, transportation
or communication services, acts of civil or military authority, sabotages,
national emergencies, explosion, flood, accident, earthquake or other
catastrophe, fire, strike or other labor problems, legal action, present or
future law, governmental order, rule or regulation, or shortages of suitable
parts, materials, labor or transportation, such delay or non-performance shall
be excused and a reasonable time for performance in connection with this
Agreement shall be extended to include the period of such delay or
non-performance.
39. Miscellaneous
The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof
or otherwise affect their construction or effect.
<PAGE 12>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
THE DRESHER FAMILY OR FUNDS
By: /s/ Jeffrey C. Brown
Name: Jeffrey C. Brown
Its: President
NATIONAL FINANCIAL ADVISORS, INC.
By: /s/ Jeffrey C. Brown
Name: Jeffrey C. Brown
Its: President
NATIONAL SHAREHOLDER SERVICES, INC.
By: /s/ Jeffrey C. Brown
Name: Jeffrey C. Brown
Its: President
<PAGE 13>
SCHEDULE A
The Dresher Comprehensive Growth Fund
The Dresher Classic Retirement Fund
Dated: July 14, 1997
<PAGE 14>
SCHEDULE B
The Dresher Comprehensive Growth Fund: $1,000 per month.
The Dresher Classic Retirement Fund: $1,000 per month.
Dated: July 14, 1997
<PAGE 15>
EXHIBIT (10)
Direct Dial: (215) 568-6060
July 16, 1997
The Dresher Family of Funds
715 Twining Road, Suite 202
Dresher, Pennsylvania 19025
Dear Ladies and Gentlemen:
As counsel to The Dresher Family of Funds, a Delaware business trust
(the "Trust"), in connection with the registration under the Securities Act of
1933, as amended, of an indefinite number of shares of The Dresher Classic
Retirement Fund and The Dresher Comprehensive Growth Fund (the
"Shares"), we have examined the Certificate of Trust of the Trust certified by
the Office of the Secretary of State of the State of Delaware (the "Secretary
of State") as having been filed with the Secretary of State on March 26, 1997.
We have additionally examined the Certificate of the Secretary of the Trust
dated July 16, 1997, including the exhibits attached thereto (the
"Certificate"). In rendering our opinion, we are relying on the Certificate and
have made no independent investigations or inquiries as to the matters set forth
therein.
Based on our examination and subject to the assumptions set forth
herein, we advise you that in our opinion the Shares to be issued by the Trust
have been duly and validly authorized and, when issued upon the terms set
forth in the Registration Statement on Form N-1A of the Trust (the
"Registration Statement") filed with the Securities and Exchange Commission
(the "Commission"), will be legally issued, fully paid and non-assessable.
This opinion is limited to the General Corporation Law of the State of
Delaware and Title 12, Chapter 38 of the Delaware Code. This opinion is as
of the date hereof and we do not express any opinion as to the effect of any
matter that may occur subsequent to the date hereof.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving our consent, we do not thereby admit that
we are in the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Commission thereunder.
Very truly yours,
/s/ Klehr, Harrison, Harvey, Branzburg & Ellers
KLEHR, HARRISON, HARVEY,
BRANZBURG & ELLERS
<PAGE>
EXHIBIT (13)
SUBSCRIPTION AGREEMENT
THE DRESHER FAMILY OF FUNDS
1. SUBSCRIPTION. The undersigned investor (the "Subscriber")
hereby subscribes for and agrees to purchase $1.00 of stock of each of The
Dresher Classic Retirement Fund and The Dresher Comprehensive Growth
Fund (the "Shares"), each a portfolio of The Dresher Family of Funds (the
"Trust").
2. REPRESENTATIONS AND WARRANTIES OF THE
SUBSCRIBER. By executing this Subscription Agreement, the Subscriber
represents, acknowledges, warrants and agrees that:
2.1 The Subscriber is acquiring the Shares for investment purposes
only, for such Subscriber's own account and with such Subscriber's own
funds and not for the account or with the funds of any other person and not
with a view to resale, assignment, fractionalization, distribution or
redemption thereof, either in whole or in part.
2.2 The Subscriber has been advised that the Shares have not been
registered under the Securities Act, or registered or qualified under any state
securities law, on the basis, among others, that no distribution or public
offering of the Shares is to be effected and the Shares will be issued by the
Trust in connection with a transaction that is exempt from registration under
Rule 506 under the Securities Act of 1933, as amended (the "Securities Act")
and does not involve any public offering within the meaning of any state
securities law. The Subscriber understands that the Trust is relying in part
on the truth and accuracy of the Subscriber's representations, acknowledgments,
warranties and agreements as set forth herein for purposes of determining the
applicability of such exemptions and the suitability of the Subscriber to
acquire the Shares.
2.3 The Subscriber has such knowledge and experience in financial
and business matters that the Subscriber is capable of evaluating the merits
and risks of an investment in the Shares and has the capacity to protect the
Subscriber's own interests in connection with the Subscriber's proposed
investment in the Shares. The Subscriber is able to bear the economic risk of
an investment in the Shares.
2.4 This Subscription Agreement constitutes a legal, valid and
binding agreement of the Subscriber enforceable against the Subscriber in
accordance with its terms.
<PAGE>
3. MISCELLANEOUS PROVISIONS.
3.1 This Agreement and the representations, acknowledgments,
warranties and agreements set forth herein shall be binding upon and shall
inure to the benefit of the Subscriber, successors, assigns, heirs and legal
representatives. This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns.
3.2 This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of laws.
3.3 This Agreement may be executed in counterparts, each of
which shall be constitute an original and which together shall constitute a
single agreement.
3.4 If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
<PAGE 2>
SIGNATURE PAGE: INDIVIDUAL SUBSCRIBER
July 14, 1997 Jeffrey C. Brown
Date of Signature Print or Type Name of
Subscriber
Dresher, Pennsylvania /s/ Jeffrey C. Brown
Place of Signature Signature of Subscriber
<PAGE 3>
SUBSCRIPTION AGREEMENT
THE DRESHER FAMILY OF FUNDS
1. SUBSCRIPTION. The undersigned investor (the "Subscriber")
hereby subscribes for and agrees to purchase $1.00 of stock of each of The
Dresher Classic Retirement Fund and The Dresher Comprehensive Growth
Fund (the "Shares"), each a portfolio of The Dresher Family of Funds (the
"Trust").
2. REPRESENTATIONS AND WARRANTIES OF THE
SUBSCRIBER. By executing this Subscription Agreement, the Subscriber
represents, acknowledges, warrants and agrees that:
2.1 The Subscriber is acquiring the Shares for investment purposes
only, for such Subscriber's own account and with such Subscriber's own
funds and not for the account or with the funds of any other person and not
with a view to resale, assignment, fractionalization, distribution or
redemption thereof, either in whole or in part.
2.2 The Subscriber has been advised that the Shares have not been
registered under the Securities Act, or registered or qualified under any state
securities law, on the basis, among others, that no distribution or public
offering of the Shares is to be effected and the Shares will be issued by the
Trust in connection with a transaction that is exempt from registration under
Rule 506 under the Securities Act of 1933, as amended (the "Securities Act")
and does not involve any public offering within the meaning of any state
securities law. The Subscriber understands that the Trust is relying in part
on the truth and accuracy of the Subscriber's representations, acknowledgments,
warranties and agreements as set forth herein for purposes of determining the
applicability of such exemptions and the suitability of the Subscriber to
acquire the Shares.
2.3 The Subscriber has such knowledge and experience in financial
and business matters that the Subscriber is capable of evaluating the merits
and risks of an investment in the Shares and has the capacity to protect the
Subscriber's own interests in connection with the Subscriber's proposed
investment in the Shares. The Subscriber is able to bear the economic risk of
an investment in the Shares.
2.4 This Subscription Agreement constitutes a legal, valid and
binding agreement of the Subscriber enforceable against the Subscriber in
accordance with its terms.
<PAGE>
3. MISCELLANEOUS PROVISIONS.
3.1 This Agreement and the representations, acknowledgments,
warranties and agreements set forth herein shall be binding upon and shall
inure to the benefit of the Subscriber, successors, assigns, heirs and legal
representatives. This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns.
3.2 This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of laws.
3.3 This Agreement may be executed in counterparts, each of
which shall be constitute an original and which together shall constitute a
single agreement.
3.4 If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement
or the validity or enforceability of this Agreement in any other jurisdiction.
<PAGE 2>
SIGNATURE PAGE: INDIVIDUAL SUBSCRIBER
July 14, 1997 Larissa N. Patrylak
Date of Signature Print or Type Name of Subscriber
Dresher, Pennsylvania /s/ Larissa N. Patrylak
Place of Signature Signature of Subscriber
<PAGE 3>
EXHIBIT (15)(a)
DISTRIBUTION PLAN
July 14, 1997
This Distribution Plan (the "Plan") has been adopted by the Board of
Trustees (the "Trustees") of THE DRESHER FAMILY OF FUNDS (the
"Trust") in conformance with Rule 12b-1 under the Investment Company Act
of 1940, as amended (the "Investment Company Act"), with respect to those
series of the Trust denominated as "Funds" (each a "Fund" and collectively,
the "Funds") and listed on Schedule A hereto (and any other series which
may be issued by the Trust).
1. Distribution Agreement and Distribution Fee. The Trust on
behalf of the Funds will enter into a Distribution Agreement (the
"Distribution Agreement") with NFA Brokerage Services, Inc. (the
"Distributor"). Each Fund will pay an individual distribution fee (the
"Distribution Fee") to the Distributor as consideration for certain services in
connection with the distribution of such Fund's shares (the "Shares"). The
Distribution Fee will be an amount equal to .25% per annum of the average
daily net asset value (the "Net Asset Value") of the Fund. Such payments
shall be accrued daily and paid monthly in arrears or shall be accrued and paid
at such other intervals as the Trustees shall determine. For purposes of
determining the Distribution Fee, the Net Asset Value shall be determined as
set forth in the Trust's prospectus.
2. Expenses and Other Fees. The Distributor shall be solely
responsible for, and shall pay from each Fund's respective Distribution Fee,
all expenses and other fees ("Expenses") incurred by the Distributor in
connection with the distribution of such Fund's Shares, and the provision of
its services under the Distribution Agreement. Such Expenses may include,
without limitation, (a) compensation to securities brokers and dealers for
selling Shares; (b) compensation to securities brokers and dealers,
accountants, attorneys, investment advisors, pension actuaries, non-profit
entities not advised by the Trust's Investment Manager or its affiliates and
service organizations for services rendered by them to their clients in
reviewing, explaining or interpreting the Trusts's prospectus and other selling
materials; (c) advertising costs; (d) costs of telephone, mail, or other direct
solicitation of prospective investors and of responding to inquiries, as well
as the compensation of persons who do the soliciting or respond to inquiries;
(e) preparing and printing prospectuses and other selling materials and the
cost of distributing them (including postage); (f) reimbursement of travel,
entertainment and like expenditures made by the Trustees in promoting the
Funds and their investment objective and policies; (g) fees of public relations
consultants and (h) awards.
Payments made from each respective Distribution Fee must be
for services rendered for or on behalf of, or Expenses related to, such Fund;
provided, that, joint distribution financing shall be permitted in accordance
with the applicable regulations of the Securities and Exchange Commission
as in effect from time to time.
3. Reports of Distributor. So long as the Plan remains in effect,
at least quarterly, the Distributor shall provide a written report to the
Trustees of (a) the amounts expended by each Fund pursuant to Paragraph 2 above
and (b) the purpose of each such expenditure. Such report shall be reviewed
by the Board of Trustees.
<PAGE>
4. Approval of the Plan. The Plan will be effective, with respect
to the Shares of any Fund, upon its approval by (a) the holders of a majority
of the outstanding Shares of such Fund, and (b) a majority of the Trustees and
a majority of the Disinterested Trustees (as hereinafter defined).
5. Term of the Plan. With respect to each Fund, the Plan shall be
in effect for a period of one (1) year from the date of adoption by the
Trustees and shall continue from year to year thereafter subject to annual
approval by the Trustees in the manner set forth in Paragraph 6 hereto.
6. Amendments. The Plan may be amended at any time by the
Trustees; provided, that (a) any amendment to increase materially the costs
which each Fund may bear for distribution pursuant to the Plan shall be
effective only upon approval by a vote of the holders of a majority of the
outstanding Shares of such Fund, and (b) any material amendments of the
terms of the Plan shall become effective only upon approval of a majority of
the Trustees and a majority of the Trustees who are not "interested persons"
(as such term is defined in the Investment Company Act) of the Trust and who
have no direct or indirect financial interest in the operation of the Plan or
in any agreements entered into in connection with the Plan (the "Disinterested
Trustees"), pursuant to a vote cast in person at a meeting called for that
purpose.
7. Termination. With respect to each Fund, the Plan may be
terminated, without penalty, at any time by a vote of a majority of the
Disinterested Trustees or by a vote of the holders of a majority of the
outstanding Shares of such Fund.
8. Selection/Nomination of Disinterested Trustees. The selection
and nomination of Disinterested Trustees shall be committed to the discretion
of the then current Disinterested Trustees.
9. Miscellaneous. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the Trust has executed the Plan as of July
14, 1997 on behalf of each of the Funds.
THE DRESHER FAMILY OF FUNDS
By: /s/ Jeffrey C. Brown
Jeffrey C. Brown
President
<PAGE 2>
SCHEDULE A
The Dresher Comprehensive Growth Fund
The Dresher Classic Retirement Fund
Dated: July 14, 1997
<PAGE 3>
