As filed with the Securities and Exchange Commission on ______________, 1997
Registration No. ___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ______
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:
(215) 881-7000
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.
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.
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
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 portfolios of mutual
funds that 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. The Funds are diversified investment
portfolios of The Dresher Family of Funds, an open-end management
investment company (the "Trust").
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 ___________________, 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 (215)
881-7000. 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
PROSPECTUS: June __, 1997
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
1. 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 net assets)
Comprehensive Classic
Growth Retirement
Fund Fund
Fund selection and management fees<F1> 0.95% 0.95%
12b-1 fees<F2> 0.25% 0.25%
Other expenses<F3> 0.00% 0.00%
Total Fund operating expenses 1.20% 1.20%
<F1> Based on average daily net assets. The Investment Manager
will voluntarily waive each Fund's fees and expenses to the
extent necessary to keep total Fund operating expenses no
greater than 0.95% (not including the 12b-1 fee expenses).
Unlike most other mutual funds, the management fees paid by
the Funds include transfer agency, pricing, custodial,
auditing, legal services, and general administrative and other
operating expenses. Management fees paid by the Funds do
not include brokerage commissions, transaction charges,
taxes, fees and expenses of non-interested Trustees or
extraordinary expenses.
<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.
In addition, the underlying funds in which the Funds invest
may impose 12b-1 or service fees. Such 12b-1 and/or service
fees will be paid by an underlying fund imposing such fees to
the Distributor. The Distributor will, in turn, after payment
of its expenses, reimburse a portion of any such 12b-1 or
service fees received from an underlying fund to the Fund
that invested in shares of such underlying fund. Such
payments will be made on the timetable and in accordance
with the discussion herein under the caption "Fund
Management -- Execution of Portfolio Transactions."
<F3> Does not include fees and expenses of the non-interested
Trustees, brokerage commissions, transaction charges, and
taxes, which are estimated to be less than .01% of net assets,
or extraordinary expenses.
EXAMPLE
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual return
and (2) redemption at the end of each 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 Funds are newly formed and
the amounts set forth above are based on estimated expenses and net
assets. 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
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, 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 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.
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 concentration of 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.)
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 continual
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. 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 in a money market deposit account
maintained by the Fund's Custodian (i) for temporary defensive
purposes (without monetary limitation) when and to the extent that,
in the judgment of the Investment Manager, other investments
involve unreasonable risk, or (ii) as may be considered necessary by
the Investment Manager to accumulate cash 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 assets in the securities of mutual
funds that concentrate themselves (i.e., invest 25% or more of their
assets) in any one industry, provided that the Fund (a) may indirectly
invest 25% or more of its assets in one industry if the underlying
funds invest their assets in the same industry and (b) will invest more
than 25% of its 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.
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 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 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
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. 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."
Each Fund may purchase shares of underlying funds which charge a
redemption fee. A redemption fee is a fee imposed by an underlying
fund upon shareholders (such as a Fund) redeeming shares of such
fund within a certain period of time (such as one year). The fee is
payable to the underlying fund. Accordingly, if a Fund were to invest
in an underlying fund and, as a result of redeeming shares in such
underlying fund, incur a redemption fee, the redeeming Fund would
bear such redemption fee. In addition, the underlying funds may
incur distribution 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 Rule 12b-1 or
service fees may be paid by such underlying funds to the Distributor.
The Distributor, in turn, will, after payment of its expenses,
reimburse to the Funds a portion of the excess Rule 12b-1 or service
fees received from the underlying funds. For a description of such
arrangements, please see the discussion under the caption "Trust
Management -- Execution of Portfolio Transactions." The Funds will
not, however, invest in shares of a mutual fund that is sold with a
contingent deferred sales load.
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.
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.
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.
The Investment Manager receives from each Fund as compensation
for its services an annual fee of 0.95% on each Fund's average daily
net assets. 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, 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 brokerage fees, commissions and transaction
costs, fees and expenses of non-interested Trustees, any taxes payable
by the Fund, extraordinary expenses, and costs pursuant to the
Distribution Plan described below.
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, payment for
distribution 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 and service organizations for services rendered by them to
their clients 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 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 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") of 0.25% of average net assets. The Distributor
determines the amount, if any, to be paid to service agents and the
basis on which such payments are made. The Distributor is not
required to bear any expenses in connection with the offering of Fund
shares. 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. In the event a Fund purchases
shares of such an underlying fund, such underlying fund will pay
such fees to the Distributor. Such underlying funds will sign dealer
agreements with the Distributor pursuant to which the Distributor
may provide certain services to such underlying funds. Such services
may include: sub-accounting, account status information, forwarding
of communications from such underlying funds to a Fund, and share
purchase processing, exchange, and redemption assistance. In the
absence of such a dealer agreement, an underlying fund would retain
the Rule 12b-1 or service fees.
After payment of the operating expenses of the Distributor through
the payment by underlying funds to the Distributor of any Rule 12b-1
or service fees, the Distributor will, out of any Rule 12b-1 or service
fees it receives from underlying funds imposing such fees, reimburse
the relevant Fund in accordance with the following schedule:
Gross Annual Percentage to
Rule 12b-1/Service Fee Distributor/Relevant Fund
Less than $150,000 90/10
$150,000 - $199,999 80/20
$200,000 - $249,999 70/30
$250,000 - $299,999 60/40
$300,000 - $349,999 50/50
$350,000 - $399,999 35/65
$400,000 - $449,999 30/70
Above $450,000 30/70
Reimbursement will be made by the Distributor to a Fund in
proportion to the Fund's share of Rule 12b-1 or service fee income
from an underlying fund. Within 90 days of the end of each calendar
year, any amounts to be reimbursed to a Fund will be reimbursed to
such Fund in accordance with the foregoing schedule.
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. 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
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.
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. 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 (215) 881-7000 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) by mail or by bank wire. 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 (215) 881-7000 for additional information about the
shareholder services described below.
Tax-Deferred Retirement Plans
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 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 (215) 881-7000.
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 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 (215) 881-7000. 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 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.
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.
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 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.
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,
holders of shares 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
___________________________________________________ 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 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 other electronic
media. A consent to receive such reports 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 Investment Manager. This Prospectus
does not constitute an offering in any state in which such offering
may not lawfully be made.
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
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.
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.
HIGH-YIELD SECURITIES
The Funds may, from time to time, invest in shares of
underlying funds which invest in lower-rated securities (rated BBB
or lower by Standard & Poor's Corporation Rating Service ("S&P"))
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.
In general, when interest rates decline, the value of fixed
income securities can be expected to rise. Conversely, when interest
rates rise, the value of fixed income securities can be expected to
decline. Prices of lower-rated securities (also sometimes referred to
as "high-yield" 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. In addition, periods of economic uncertainty and
change can be expected to result in increased volatility of market
prices of lower-rated securities.
The values of lower-rated securities tend to reflect individual
corporate developments to a greater extent than higher-rated
securities, which react primarily to fluctuations in the general level
of interest rates. Further, securities rated BB or lower by S&P are
below investment grade and are considered, on balance, to be
predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of the obligation and
will generally involve more credit risk than securities in the higher
rating categories. In some cases, such securities are subordinated to
the prior payment of senior indebtedness, thus potentially limiting the
underlying fund's ability to receive payments when senior securities
are in default or to recover full principal. Many issuers of lower-rated
corporate debt securities are substantially leveraged, which may
impair their ability to meet debt service obligations. Also, during an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which would
adversely affect their ability to service their principal and interest
payment obligations, to meet projected business goals, and to obtain
additional financing. Upon any default, the underlying fund may
incur additional expenses to the extent it is required to seek recovery
of the payment of principal or interest on the relevant portfolio
holding.
In addition, lower-rated 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.
The market for "high-yield" fixed-income securities has not
weathered a major economic recession and it is unknown what effect
such a recession might have on such securities. It is likely, however,
that any such recession would severely disrupt the market for such
securities and would have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn
would adversely affect the ability of the issuers of such securities to
repay principal and pay interest thereon.
S&P is a private service that provides ratings of the credit
quality of debt obligations. A description of ratings assigned to
commercial paper and corporate debt obligations by S&P can be
found in Appendix A to this Prospectus. These ratings represent
S&P's opinion as to the quality of the securities that they undertake
to rate. It should be emphasized, however, that ratings are general
and are not absolute standards of quality. Consequently, securities
with the same maturity, interest rate and rating may have different
market prices. 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.
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 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.
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 total 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 corporation, guarantee performance of the contracts.
Generally, if market interest rates increase, the value of
outstanding debt securities declines (and vice versa). Entering into
a futures contract for the sale of debt securities has an effect similar
to the actual sale of securities, although sale of the futures contract
might be accomplished more easily and quickly. For example, if an
underlying fund holds long-term U.S. government securities and it
anticipates a rise in long-term interest rates (and therefore a decline
in the value of those securities), it could, in lieu of disposing of those
securities, enter into futures contracts for the sale of similar long-term
securities. If rates thereafter increase and the value of the fund's
portfolio thus declines, the value of the fund's futures contracts would
increase, thereby protecting the fund by preventing the net asset value
from declining as much as it otherwise would have. Similarly,
entering into futures contracts for the purchase of debt securities has
an effect similar to the actual purchase of the underlying securities,
but permits the continued holding of securities other than the
underlying securities. For example, if an underlying fund expects
long-term interest rates to decline, it might enter into futures
contracts for the purchase of long-term securities so that it could gain
rapid market exposure that may offset anticipated increases in the
cost of securities it intends to purchase while continuing to hold
higher-yield short-term securities or waiting for the long-term market
to stabilize.
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.
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 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.
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 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 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 THROUGH BORROWING
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. 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.
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
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
STATEMENT OF ADDITIONAL INFORMATION
June ___, 1997
THE DRESHER FAMILY OF FUNDS
75 Twining Road, Suite 202
Dresher, Pennsylvania 19025
(215) 881-7000
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 (215) 881-7000. The date of the Prospectus to
which this Statement of Additional Information relates is
June __, 1997.
The date of this Statement of Additional Information is
June __, 1997.
TABLE OF CONTENTS
CAPTION PAGE LOCATION OF PROSPECTUS
General Information and History 1 General Information
Investment Objectives, Policies 1 Investment Objectives and Management
and Restrictions Techniques; Investment Policies and
Restrictions; Trust Management --
Portfolio Turnover
Management of the Trust 2 Trust Management
Principal Holders of Securities 4 Not Applicable
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 Securities 7 General Information
Purchases, Redemptions and Pricing 7 How to Purchase Shares; How to Redeem
of Securities Being Offered Shares
Determination of Net Asset Value 7 How to Purchase Shares -- Price of
Shares
Tax Status 7 Dividends, Distributions and Taxes
Additional Information 7 Not Applicable
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
a significant level of 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 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.
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.
Position Held Principal Occupation(s)
Name and Address with the Trust During Past 5 Years
Jeffrey C. Brown* Trustee, President of The National Advisory
715 Twining Road, President Group, National Financial Advisors,
Suite 202 Inc. (investment advisor), National
Dresher, PA 19025 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, Vice President, National Financial
715 Twining Road, Treasurer Advisors, Inc. and National
Suite 202 Shareholder Services, Inc.; Consultant
Dresher, PA 19025 to National Actuarial Consultants, Ltd.;
Vice President of NFA Brokerage
Services, Inc. Married to Larissa N.
Patrylak.
Larissa N. Patrylak* Trustee, Vice President of The National
715 Twining Road, Secretary Advisory Group ; Secretary/Treasurer
Suite 202 and Controller of National Financial
Dresher, PA 19025 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 Manager
715 Twining Road, of Ethyl Corporation. Father of Jeffrey
Suite 202 C. Brown.
Dresher, PA 19025
Kathryn A. Brown Trustee Founder of The Diet Center (weight
715 Twining Road, loss franchisor). Sister-in-law of
Suite 202 Jeffrey C. Brown.
Dresher, PA 19025
Howard S. Lubin Trustee Physician.
715 Twining Road,
Suite 202
Dresher, PA 19025
Leonid D. Rudnytzsky Trustee Professor of Foreign Languages and
715 Twining Road, Literature at the University of
Suite 202 Pennsylvania and Lasalle University.
Dresher, PA 19025
No officer, director or employee of National Financial
Advisors, Inc., the Investment Manager of the Trust, or of any
affiliate thereof receives any compensation from the Trust for serving
as an officer or Trustee of the Trust. Currently, the Trust pays each
non-interested Trustee who is not an officer or employee of NFA or
its affiliates a fee of $100 per meeting attended and reimbursement
for travel and out-of-pocket expenses.
PRINCIPAL HOLDERS OF SECURITIES
[TO BE SUPPLIED BY AMENDMENT]
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.
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/deal 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. In addition
to those services, NFA may, from time to time, provide the Funds
with office space for managing their affairs, with the services of
required executive personnel, and with certain clerical services and
facilities. These services are provided without reimbursement by the
Funds for any costs incurred. 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.
NFA pays, out of the investment management fees it receives
from the Funds, all the expenses of the Funds except brokerage
commissions, transaction costs, taxes, fees and expenses of non-interested
Trustees of the Trust and 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. Such Rule 12b-1
or service fees will be paid to the Distributor by such underlying
funds or such fund's distributors. For a description of the
arrangements pursuant to which underlying funds imposing Rule
12b-1 or service fees pay such fees to the Distributor and the process
by which the Distributor will reimburse the Funds with a portion of
such fees, 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
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
_________________, independent certified public
accountants located at _____________________________________,
has been selected as the auditors for the Trust. In such capacity,
__________________ 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 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. NFA
Brokerage pays the per transaction charges and is reimbursed by the
relevant Fund.
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.
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.
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) Inapplicable
*(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) Custodian 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
*(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
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 the date hereof there are no record holders of the shares of
Registrant.
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
_____ of the Investment Advisory Agreement filed herewith as
Exhibit (5), in Section ____ of the Distribution Agreement filed
herewith as Exhibit (6), and in Section ___ of the Custodian
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 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) Inapplicable.
(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.
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 10th day
of April, 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 April 10, 1997
Jeffrey C. Brown
/s/ Stephen Patrylak Trustee & Treasurer April 10, 1997
Stephen Patrylak
/s/ Larissa N. Patrylak Trustee & Secretary April 10, 1997
Larissa N. Patrylak
/s/ Kathryn A. Brown Trustee April 10, 1997
Kathryn A. Brown
/s/ Alvin Brown Trustee April 10, 1997
Alvin Brown
/s/ Howard S. Lubin Trustee April 10, 1997
Howard S. Lubin
/s/ Leonid D. Rudnytzky Trustee April 10, 1997
Leonid D. Rudnytzky
Exhibit 1
THE DRESHER FAMILY OF FUNDS
TRUST INSTRUMENT
TABLE OF CONTENTS
Page
ARTICLE I -- NAME AND DEFINITIONS. . . . . .1
Section 1.1. Name . . . . . . . . . .1
Section 1.2. Definitions. . . . . . .1
ARTICLE II -- BENEFICIAL INTEREST. . . . . . . . . . . . . . . . . . 3
Section 2.1. Shares of Beneficial Interest. . . . . . . . . . 3
Section 2.2. Register of Shares and Share Certificates. . . . 4
Section 2.3. Transfer of Shares . . . . . . . . . . . . . . . 5
Section 2.4. Treasury of Shares.. . . . . . . . . . . . . . . 5
Section 2.5. Investment in the Trust . . . . . . . . . . . . 5
Section 2.6. Assets and Liabilities of Series . . . . . . . . 6
Section 2.7 Conversion Rights. . . . . . . . . . . . . . . . 8
Section 2.8. No Preemptive Rights. . . . . . . . . . . . . . 8
Section 2.9. Assent to Trust Instrument . . . . . . . . . . . 8
ARTICLE III -- THE TRUSTEES. . . . . . . . . . . . . . . . . . . . . 8
Section 3.1. Management of the Trust. . . . . . . . . . . . . 8
Section 3.2. Initial Trustees; Election of Trustees . . . . . 9
Section 3.3. Term of Office of Trustees . . . . . . . . . . . 10
Section 3.4. Vacancies and Appointment of Trustees. . . . . . 10
Section 3.5. Temporary Absence of Trustee . . . . . . . . . . 11
Section 3.6. Number of Trustees. . . . . . . . . . . . . . . 11
Section 3.7. Effect of Death, Resignation, Etc, of a
Trustee. . . . . . . . . . . . . . . . . . . . . 12
Section 3.8. Ownership of Assets of the Trust . . . . . . . . 12
ARTICLE IV -- POWERS OF THE TRUSTEES . . . . . . . . . . . . . . . . 12
Section 4.1. Powers . . . . . . . . 12
Section 4.2. Issuance and Repurchase of Shares. . . . . . . . 18
Section 4.3. Trustees and Officers as Shareholders. . . . . . 18
Section 4.4. Action by the Trustees . . . . . . . . . . . . . 19
Section 4.5. Chairman of the Trustees . . . . . . . . . . . . 20
Section 4.6. Principal Transactions . . . . . . . . . . . . . 20
ARTICLE V -- EXPENSES OF THE TRUST . . . . . . . . . . . . . . . . . 20
Section 5.1. Trustee Reimbursement. . . . . . . . . . . . . . 20
ARTICLE VI -- INVESTMENT ADVISER, PRINCIPAL
UNDERWRITER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
AND TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.1. Investment Adviser . . . . . . . . . . . . . . . 21
Section 6.2. Principal Underwriter. . . . . . . . . . . . . . 22
Section 6.3. Transfer Agent . . . . . . . . . . . . . . . . . 22
Section 6.4. Parties to Contract. . . . . . . . . . . . . . . 23
Section 6.5. Provisions and Amendments. . . . . . . . . . . . 23
ARTICLE VII -- SHAREHOLDERS' VOTING POWERSAND
MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VIII -- CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IX -- DISTRIBUTIONS AND REDEMPTIONS25
Section 9.1. Distributions. . . . . . . . . . . . . . . . . . 25
Section 9.2. Redemptions. . . . . . . . . . . . . . . . . . . 26
Section 9.3. Determination of Net Asset Value and
Valuation of Portfolio Assets. . . . . . . . . . 26
Section 9.4. Suspension of the Right of Redemption. . . . . . 28
Section 9.5. Redemption of Shares in Order to Qualify as
Regulated Investment Company . . . . . . . . . . 29
ARTICLE X -- LIMITATION OF LIABILITY AND
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 10.1. Limitation of Liability. . . . . . . . . . . . . 29
Section 10.2. Indemnification. . . . . . . . . . . . . . . . . 30
Section 10.3. Shareholders . . . . . . . . . . . . . . . . . . 32
ARTICLE XI -- MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . 33
Section 11.1. Trust Not a Partnership. . . . . . . . . . . . . 33
Section 11.2. Trustee's Good Faith Action, Expert Advice,
No Bond or Surety. . . . . . . . . . . . . . . . 33
Section 11.3. Termination of Trust . . . . . . . . . . . . . . 34
Section 11.4. Reorganization . . . . . . . . . . . . . . . . . 36
Section 11.5. Filing of Copies, References, Headings . . . . . 36
Section 11.6. Applicable Law . . . . . . . . . . . . . . . . . 37
Section 11.7. Amendments . . . . . . . . . . . . . . . . . . . 38
Section 11.8. Fiscal Year. . . . . . . . . . . . . . . . . . . 39
Section 11.9. Provisions in Conflict with Law . . . . . . . . 39
THE DRESHER FAMILY OF FUNDS
TRUST INSTRUMENT (this "Trust Instrument") made as
of March 26, 1997 by Jeffrey C. Brown, Stephen Patrylak, Larissa
N. Patrylak, Katherine A. Brown, Alvin Brown, Howard S. Lubin
and Leonid D. Rudnytzky (the "Trustees").
WHEREAS, the Trustees desire to establish a business trust
for the investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money
and property contributed to the trust hereunder shall be held and
managed in trust under this Trust Instrument as herein set forth
below.
ARTICLE I. -- NAME AND DEFINITIONS
Section 1.. Name. The name of the trust created hereby
is "The Dresher Family of Funds."
Section 2.. Definitions.
Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) "Bylaws" means the Bylaws referred to in
Article IV, Section 4.1(e) hereof, as from time to time amended;
(b) The term "Commission" has the meaning
given it in the 1940 Act (as hereinafter defined). The terms
"Affiliated Person", "Assignment," "Interested Person," "Person"
and "Principal Underwriter" shall have the meanings given them
in the 1940 Act, as modified by or interpreted by any applicable
order or orders of the Commission or any rules or regulations
adopted or interpretive releases of the Commission thereunder.
"Majority Shareholder Vote" shall have the same meaning as the
term "vote of a majority of the outstanding voting securities" is
given in the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Commission or any rules or
regulations adopted or interpretive releases of the Commission
thereunder.
(c) "Class" means any division of Shares within
a Series, which Class is or has been established in accordance with
the provisions of Article II, Section 2.1 hereof.
(d) The "Delaware Act" refers to Chapter 38 of
Title 12 of the Delaware Code entitled "Treatment of Delaware
Business Trusts," as it may be amended from time to time.
(e) "Net Asset Value" means the net asset value
of each Series of the Trust determined in the manner provided in
Article IX, Section 9.3 hereof;
(f) "Outstanding Shares" means those Shares
shown from time to time in the books of the Trust or its Transfer
Agent as then issued and outstanding, but shall not include Shares
which have been redeemed or repurchased by the Trust and which
are at the time held in the treasury of the Trust;
(g) "Prospectus" means the currently effective
prospectus of the Trust under the Securities Act of 1933, as
amended, and the 1940 Act.
(h) "Series" means a series of Shares of the Trust
established in accordance with the provisions of Article II, Section
2.1 hereof.
(i) "Shareholder" means a record owner of
Outstanding Shares of the Trust;
(j) "Statement of Additional Information"
means the currently effective statement of additional information of
the Trust under the Securities Act of 1933, as amended, and the
1940 Act.
(k) "Shares" means the equal proportionate
transferable units of beneficial interest into which the beneficial
interest of each Series of the Trust or Class thereof shall be divided
and may include fractions of Shares as well as whole Shares;
(l) The "Trust" refers to The Dresher Family of
Funds and reference to the Trust, when applicable to one or more
Series of the Trust, shall refer to any such Series;
(m) The "Trustees" means the person or persons
who has or have signed this Trust Instrument, so long as each of
them shall continue in office in accordance with the terms hereof,
and all other persons who may from time to time be duly qualified
and serving as Trustees in accordance with the provisions of Article
III hereof and reference herein to a Trustee or to the Trustees shall
refer to the individual Trustees in their capacity as Trustees
hereunder,
(n) "Trust Property" means any and all
property, real or personal, tangible or intangible, which is owned
or held by or for the account of one or more of the Trust or any
Series, or the Trustees on behalf of the Trust or any Series.
(o) The "1940 Act" refers to the Investment
Company Act of 1940, as amended from time to time.
ARTICLE II. -- BENEFICIAL INTEREST
Section 1.. Shares of Beneficial Interest. The Shares of
the Trust shall consist of one or more Series and Classes and
separate and distinct records shall be maintained by the Trust for
each Series and Class. The Trustees shall have full power and
authority, in their sole discretion, and without obtaining any prior
authorization or vote of the Shareholders of any Series or Class, to
establish and designate and to change in any manner any initial or
additional Series or Classes and to fix such preferences, voting
powers, rights and privileges of such Series or Classes as the
Trustees may from time to time determine, to divide or combine
the Shares or any Series or Classes into a greater or lesser number,
to classify or reclassify any issued Shares or any Series or Classes
into one or more Series or Classes of Shares, and to take such other
action with respect to the Shares as the Trustees may deem
desirable. Unless another time is specified by the Trustees, the
establishment and designation of any Series or Class shall be
effective upon the adoption of a resolution by the Trustees setting
forth such establishment and designation and the preferences,
powers, rights and privileges of the Shares of such Series or Class.
The Trust may issue any number of Shares of each Series or Class
and need not issue Shares.
Section 2.. Register of Shares and Share Certificates. A
register shall be kept at the principal office of the Trust or an office
of the Trust's transfer agent which shall contain the names and
addresses of the Shareholders of each Series, the number of Shares
of that Series (or any Class or Classes thereof) held by them
respectively and a record of all transfers thereof. As to Shares for
which no certificate has been issued, such register shall be
conclusive as to who are the holders of the Shares and who shall
be entitled to receive dividends or other distributions or otherwise
to exercise or enjoy the rights of Shareholders. No Shareholder
shall be entitled to receive payment of any dividend or other
distribution, nor to have notice given to such Shareholder as herein
or in the Bylaws provided, until such Shareholder has given such
Shareholder's address to the transfer agent or such other officer or
agent of the Trustees as shall keep the said register for entry
thereon. The Trustees, in their discretion, may authorize the
issuance of share certificates and promulgate appropriate rules and
regulations as to their use. Such certificates may be issuable for
any purpose limited in the Trustees' discretion. In the event that
one or more certificates are issued, whether in the name of a
Shareholder or a nominee, such certificate or certificates shall
constitute evidence of ownership of Shares for all purposes,
including transfer, assignment or sale of such Shares, subject to
such limitations as the Trustees may, in their discretion, prescribe.
Section 3.. Transfer of Shares. Except as otherwise
provided by the Trustees, Shares shall be transferable on the
records of the Trust only by the record holder thereof or by such
person's agent thereunto duly authorized in writing, upon delivery
to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate, if one is
outstanding, and such evidence of the genuineness of each such
execution and authorization and of such other matters as may be
required by the Trustees. Upon such delivery, the transfer shall be
recorded on the register of the Trust. Until such record is made,
the Shareholder of record shall be deemed to be the holder of such
Shares for all purposes hereunder and neither the Trustees nor the
Trust, nor any transfer agent or registrar nor any officer, employee
or agent of the Trust shall be affected by any notice of the
proposed transfer.
Section 4.. Treasury of Shares. Shares held in the
treasury shall, until reissued pursuant to Section 2.1 hereof, not
confer any voting rights on the Trustees, nor shall such Shares be
entitled to any dividends or other distributions declared with respect
to the Shares.
Section 5.. Investment in the Trust. The Trustees shall
accept investments in any Series of the Trust from such persons
and on such terms as they may from time to time authorize. At the
Trustees' discretion, such investments, subject to applicable law,
may be in the form of cash or securities in which the affected
Series is authorized to invest, valued as provided in Article IX,
Section 9.3 hereof. Investments in a Series shall be credited to
each Shareholder's account in the form of full Shares at the Net
Asset Value per Share next determined after the investment is
received; provided, however, that the Trustees may, in their sole
discretion, (a) fix the Net Asset Value per Share of the initial
capital contribution, (b) impose a sales charge upon investments in
the Trust in such manner and at such time determined by the
Trustees or (c) issue fractional Shares.
Section 6.. Assets and Liabilities of Series. All
consideration received by the Trust for the issue or sale of Shares
of a particular Series, together with assets in which such
consideration is invested or reinvested, all income, earnings, profits,
and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form
the same may be, shall be held and accounted for separately from
the other assets of the Trust and of every other Series and may be
referred to herein as "assets belonging to" that Series. The assets
belonging to a particular Series shall belong to that Series for all
purposes, and to no other Series, subject only to the rights of
creditors of that Series. In addition, any assets, income, earnings,
profits or funds, or payments and proceeds with respect thereto,
which are not readily identifiable as belonging to any particular
Series shall be allocated by the Trustees between and among one
or more of the Series in such manner as the Trustees, in their sole
discretion, deem fair and equitable. Each such allocation shall be
conclusive and binding upon the Shareholders of all Series for all
purposes, and such assets, income, earnings, profits or funds, or
payments and proceeds with respect thereto shall be assets
belonging to that Series. The assets belonging to a particular Series
shall be so recorded upon the books of the Trust, and shall be held
by the Trustees in trust for the benefit of the holders of Shares of
that Series. The assets belonging to each particular Series shall be
charged with the liabilities of that Series and all expenses, costs,
charges and reserves attributable to that Series. Any general
liabilities, expenses, costs, charges or reserves of the Trust which
are not readily identifiable as belonging to any particular Series
shall be allocated and charged by the Trustees between or among
any one or more of the Series in such manner as the Trustees in
their sole discretion deem fair and equitable. Each such allocation
shall be conclusive and binding upon the Shareholders of all Series
for all purposes. The liabilities, expenses, costs, charges and
reserves allocated and so charged to a Series are herein referred to
as "liabilities belonging to" that Series. Except as provided in the
next sentence or otherwise required or permitted by applicable law
or any rule or order of the Commission, each Class of a Series
shall bear a pro rata portion of the "liabilities belonging to" such
Series. To the extent permitted by rule or order of the
Commission, the Trustees may allocate all or a portion of any
liabilities, expenses, costs, charges and reserves belonging to a
Series to a particular Class or Classes as the Trustee may from time
to time determine is appropriate. Without limitation of the
foregoing provisions of this Section 2.6, but subject to the right of
the Trustees in their discretion to allocate general liabilities,
expenses, costs, charges or reserves as herein provided, the debts,
liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular Series shall be
enforceable against the assets of such Series only, and not against
the assets of the Trust generally. Notice of this contractual
limitation on inter-Series liabilities may, in the Trustees' sole
discretion, be set forth in the certificate of trust of the Trust
(whether originally or by amendment) as filed or to be filed in the
Office of the Secretary of State of the State of Delaware pursuant
to the Delaware Act, and upon the giving of such notice in the
certificate of trust, the statutory provisions of Section 3804 of the
Delaware Act relating to limitations on inter-Series liabilities (and
the statutory effect under Section 3804 of setting forth such notice
in the certificate of trust) shall become applicable to the Trust and
each Series. Any person extending credit to, contracting with or
having any claim against any Series may look only to the assets of
that Series to satisfy or enforce any debt, liability, obligation or
expense incurred, contracted for or otherwise existing with respect
to that Series. No Shareholder or former Shareholder of any Series
shall have a claim on or any right to any assets allocated or
belonging to any other Series.
Section 7. Conversion Rights. The Trustees shall have
the authority to provide from time to time that the holders of
Shares of any Series or Class shall have the right to convert or
exchange said Shares for or into Shares of one or more other Series
or Classes in accordance with such requirements and procedures as
may be established from time to time by the Trustees.
Section 8.. No Preemptive Rights. Shareholders shall
have no preemptive or other right to subscribe to any additional
Shares or other securities issued by the Trust or the Trustees,
whether of the same or other Series.
Section 9.. Assent to Trust Instrument. Every
Shareholder, by virtue of having purchased a Share, shall become
a Shareholder and shall be held to have expressly assented and
agreed to be bound by the terms hereof.
ARTICLE III. -- THE TRUSTEES
Section 1.. Management of the Trust. Trustees shall
have exclusive and absolute control over the Trust Property and
over the business of the Trust to the same extent as if the Trustees
were the sole owners of the Trust Property and business in their
own right, but with such powers of delegation as may be permitted
by this Trust Instrument and the 1940 Act. The Trustees shall have
power to conduct the business of the Trust and carry on its
operations in any and all of its branches and maintain offices both
within and without the State of Delaware, in any and all states of
the United States of America, in the District of Columbia, in any
and all commonwealths, territories, dependencies, colonies, or
possessions of the United States of America, and in any foreign
jurisdiction and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to
promote the interests of the Trust although such things are not
herein specifically mentioned. Any determination as to what is in
the interests of the Trust made by the Trustees in good faith shall
be conclusive. In construing the provisions of this Trust
Instrument, the presumption shall be in favor of a grant of power
to the Trustees.
The enumeration of any specific power in this Trust
Instrument shall not be construed as limiting the aforesaid power.
The powers of the Trustees may be exercised without order of or
resort to any court.
Section 2.. Initial Trustees; Election of Trustees. The
initial Trustees shall be the persons named herein. Except for the
Trustees named herein or appointed to fill vacancies pursuant to
Section 3.4 of this Article III, the Trustees shall be elected by the
Shareholders owning of record a plurality of the Shares voting at
a meeting of Shareholders. To the extent required by the 1940 Act,
the selection and nomination of those Trustees who are not
Interested Persons of the Trust shall be committed to the discretion
of those Trustees who are not Interested Persons of the Trust. Such
a meeting shall be held on a date fixed by the Trustees. In the
event that less than a majority of the Trustees holding office have
been elected by Shareholders, the Trustees then in office will call
a Shareholders meeting for the election of Trustees in accordance
with the 1940 Act.
Section 3.. Term of Office of Trustees. The Trustees
shall hold office during the lifetime of this Trust, and until its
termination as herein provided; except (a) that any Trustee may
resign such Trustee's trust by written instrument signed by such
Trustee and delivered to the other Trustees, which shall take effect
upon such delivery or upon such later date as is specified therein;
(b) that any Trustee may be removed at any time by written
instrument, signed by at least two-thirds of the number of Trustees
prior to such removal, specifying the date when such removal shall
become effective; and (c) that any Trustee who requests in writing
to be retired or who has died, become physically or mentally
incapacitated by reason of disease or otherwise, or is otherwise
unable to serve, may be retired by written instrument signed by a
majority of the other Trustees, specifying the date of such Trustee's
retirement.
Section 4.. Vacancies and Appointment of Trustees. In
case of the declination to serve, death, resignation, retirement,
removal, physical or mental incapacity by reason of disease or
otherwise, or a Trustee is otherwise unable to serve, or an increase
in the number of Trustees, a vacancy shall occur. Whenever a
vacancy in the Board of Trustees shall occur, until such vacancy is
filled, the other Trustees shall have all the powers hereunder and
the certificate of the other Trustees of such vacancy shall be
conclusive. In the case of an existing vacancy, the remaining
Trustees shall fill such vacancy by appointing such other person as
they in their discretion shall see fit consistent with the limitations
under the 1940 Act, unless the Trustees determine, in accordance
with Section 3.6, to decrease the size of the Board to the number
of remaining Trustees. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office or
by resolution of the Trustees, duty adopted, which shall be recorded
in the minutes of a meeting of the Trustees, whereupon the
appointment shall take effect; provided, however, that, to the extent
required by the 1940 Act, the selection and nomination of those
Trustees who are not Interested Persons of the Trust shall be
committed to the sole discretion of those Trustees who are not
Interested Persons of the Trust. An appointment of a Trustee may
be made by the Trustees then in office in anticipation of a vacancy
to occur by reason of retirement, resignation or increase in number
of Trustees effective at a later date, provided that said appointment
shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon
as any Trustee appointed pursuant to this Section 3.4 shall have
accepted this trust, or at such date as may be specified in the
acceptance whenever made, the trust estate shall vest in the new
Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and such person shall be deemed a
Trustee hereunder. The power to appoint a Trustee pursuant to this
Section 3.4 is subject to the provisions of Section 16(a) of the 1940
Act.
Section 5.. Temporary Absence of Trustee. Any Trustee
may, by power of attorney, delegate such Trustee's power for a
period not exceeding six months at any one time to any other
Trustee or Trustees, provided that in no case shall less than two
Trustees personally exercise the other powers hereunder except as
herein otherwise expressly provided.
Section 6.. Number of Trustees. The number of
Trustees shall be at least seven, and thereafter shall be such number
as shall be fixed from time to time by a majority of the Trustees.
Section 7.. Effect of Death, Resignation, Etc, of a
Trustee. The declination to serve, death, resignation, retirement,
removal, incapacity, or inability of the Trustees, or any one of
them, shall not operate to terminate the Trust or to revoke any
existing agency created pursuant to the terms of this Trust
Instrument.
Section 8.. Ownership of Assets of the Trust. The assets
of the Trust and of each Series shall be held separate and apart
from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustees. Legal
title in all of the assets of the Trust and the right to conduct any
business shall at all times be considered as vested in the Trustees
on behalf of the Trust, except that the Trustees may cause legal
title to any Trust Property to be held by, or in the name of, the
Trust or in the name of any person as nominee. No Shareholder
shall be deemed to have a severable ownership in any individual
asset of the Trust or of any Series or any right of partition or
possession thereof, but each Shareholder shall have, except as
otherwise provided for herein, a proportionate undivided beneficial
interest in the Trust or Series. The Shares shall be personal
property giving only the rights specifically set forth in this Trust
Instrument.
ARTICLE IV. -- POWERS OF THE TRUSTEES
Section 1.. Powers. The Trustees in all instances shall act
as principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to
do any and all acts and to make and execute any and all contracts
and instruments that they may consider necessary or appropriate in
connection with the management of the Trust. The Trustees shall
not in any way be bound or limited by present or future laws or
customs in regard to trust investments, but shall have full authority
and power to make any and all investments which they, in their
sole discretion, shall deem proper to accomplish the purpose of this
Trust without recourse to any court or other authority. Subject to
any applicable limitation in this Trust Instrument or the Bylaws of
the Trust, the Trustees shall have power and authority:
(a) To invest and reinvest cash and other
property, and to hold cash or other property uninvested, without in
any event being bound or limited by any present or future law or
custom in regard to investments by trustees, and to sell, exchange,
lend, pledge, mortgage, hypothecate, write options on and lease any
or all of the assets of the Trust;
(b) To operate as and carry on the business of an
investment company, and exercise all the powers necessary and
appropriate to the conduct of such operations, including the power
to invest all or any part of its assets in the securities of other
investment companies;
(c) Subject to the restrictions and policies set
forth in the Prospectus and Statement of Additional Information
and designated as those which may not be changed without a
Majority Shareholder Vote, borrow money and in this connection
issue notes or other evidence of indebtedness; to secure borrowings
by mortgaging, pledging or otherwise subjecting as security the
Trust Property; to endorse, guarantee, or undertake the performance
of an obligation or engagement of any other Person and to lend
Trust Property;
(d) To provide for the distribution of interests of
the Trust either through a principal underwriter in the manner
hereinafter provided for or by the Trust itself, or both, or otherwise
pursuant to a plan of distribution of any kind;
(e) To adopt Bylaws not inconsistent with this
Trust Instrument providing for the conduct of the business of the
Trust and to amend and repeal them to the extent that they do not
reserve that right to the Shareholders; such Bylaws shall be deemed
incorporated and included in this Trust Instrument;
(f) To elect and remove such officers and
appoint and terminate such agents and contractors as they consider
appropriate, any of whom may be a Trustee, and may provide for
the compensation of all of the foregoing;
(g) To employ one or more banks, trust
companies or companies that are members of a national securities
exchange or such other entities as the Commission may permit as
custodians of any assets of the Trust subject to any conditions set
forth in this Trust Instrument or in the Bylaws;
(h) To retain one or more transfer agents and
shareholder servicing agents, or both;
(i) To set record dates in the manner provided
herein or in the Bylaws;
(j) To delegate such authority as they consider
desirable to any officers of the Trust and to any investment adviser,
manager, custodian, underwriter or other agent or independent
contractor;
(k) To sell, exchange, lend, pledge, mortgage,
hypothecate, write options on or lease any or all of the assets of the
Trust, subject to the provisions of Article XI, Section 11.3(b)
hereof;
(l) To vote or give assent, or exercise any rights
of ownership, with respect to stock or other securities or property;
and to execute and deliver powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such person
or persons such power and discretion with relation to securities or
property as the Trustees shall deem proper;
(m) To exercise powers and rights of subscription
or otherwise which in any manner arise out of ownership of
securities;
(n) To hold any security or property in a form
not indicating any trust, whether in bearer, book entry, unregistered
or other negotiable form; or either in the name of the Trust or in
the name of a custodian or a nominee or nominees, subject in either
case to proper safeguards according to the usual practice of
Delaware business trusts or investment companies;
(o) To establish separate and distinct Series with
separately defined investment objectives and policies and distinct
investment purposes in accordance with the provisions of Article II
hereof and to establish Classes of such Series having relative rights,
powers and duties as they may provide consistent with applicable
law;
(p) Subject to the provisions of Section 3804 of
the Delaware Act and the 1940 Act, to allocate assets, liabilities
and expenses of the Trust to a particular Series or to apportion the
same between or among two or more Series, provided that any
liabilities or expenses incurred by a particular Series shall be
payable solely out of the assets belonging to that Series as provided
for in Article II hereof,
(q) To consent to or participate in any plan for
the reorganization, consolidation or merger of any corporation or
concern, any security of which is held in the Trust; to consent to
any contract, lease, mortgage, purchase, or sale of property by such
corporation or concern, and to pay calls or subscriptions with
respect to any security held in the Trust;
(r) To make distributions of income and of
capital gains to Shareholders in the manner hereinafter provided;
(s) To establish, from time to time, a minimum
investment for Shareholders in the Trust or in one or more Series
or Class, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon
giving notice to such Shareholder;
(t) To establish one or more committees, to
delegate any of the powers of the Trustees to said committees and
to adopt a committee charter providing for such responsibilities,
membership (including Trustees, officers or other agents of the
Trust therein) and any other characteristics of said committees as
the Trustees may deem proper. Notwithstanding the provisions of
this Article IV, and in addition to such provisions or any other
provision of this Trust Instrument or of the Bylaws, the Trustees
may by resolution appoint a committee consisting of less than the
whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if the
acts of such committee were the acts of all the Trustees then in
office, with respect to the institution, prosecution, dismissal,
settlement, review or investigation of any action, suit or proceeding
which shall be pending or threatened to be brought before any
court, administrative agency or other adjudicatory body;
(u) To interpret the investment policies, practices
or limitations of any Series;
(v) Notwithstanding any other provision hereof,
to invest all of the assets of any Series in a single open-end
investment Company, including investment by means of a transfer
of such assets in an exchange for an interest or interests in such
investment company;
(w) To pay pensions for faithful service, as
deemed appropriate by the Trustees, and to adopt, establish and
carry out pension, profit-sharing, share bonus, share purchase,
savings, thrift and other retirement, incentive and benefit plans,
trusts and provisions, including the purchasing of life insurance and
annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and
agents of the Trust;
(x) To the extent permitted by law, indemnify
any person with whom the Trust or any Series or Class has
dealings;
(y) To engage in and to prosecute, defend,
compromise, abandon, or adjust by arbitration, or otherwise, any
actions, suits, proceedings, disputes, claims and demands relating
to the Trust, and out of the assets of the Trust or any Series or
Class thereof to pay or to satisfy any debts, claims or expenses
incurred in connection therewith, including those of litigation, and
such power shall include without limitation the power of the
Trustees or any appropriate committee thereof, in the exercise of
their or its good faith business judgment, to dismiss any action,
suit, proceeding, dispute, claim or demand, derivative or otherwise,
brought by any person, including a Shareholder in its own name or
the name of the Trust, whether or not the Trust or any of the
Trustees may be named individually therein or the subject matter
arises by reason of business for or on behalf of the Trust.
(z) To establish a registered office and have a
registered agent in the state of Delaware; and
(aa) In general to carry on any other business in
connection with or incidental to any of the foregoing powers, to do
everything necessary, suitable or proper for the accomplishment of
any purpose or the attainment of any object or the furtherance of
any power hereinbefore set forth, either alone or in association with
others, and to do every other act or thing incidental or appurtenant
to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and
powers, and the foregoing enumeration of specific powers shall not
be held to limit or restrict in any manner the general powers of the
Trustees. Any action by one or more of the Trustees in their
capacity as such hereunder shall be deemed an action on behalf of
the Trust or the applicable Series, and not an action in an
individual capacity.
No one dealing with the Trustees shall be under any
obligation to make any inquiry concerning the authority of the
Trustees, or to see to the application of any payments made or
property transferred to the Trustees or upon their order.
Section 2.. Issuance and Repurchase of Shares. The
Trustees shall have the power to issue, sell, repurchase, redeem,
retire, cancel, acquire, hold, resell, reissue, dispose of, and
otherwise deal in Shares and, subject to the provisions set forth in
Article II and Article IX, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any
funds or property of the Trust, or the particular Series of the Trust,
with respect to which such Shares are issued.
Section 3.. Trustees and Officers as Shareholders. Any
Trustee, officer or other agent of the Trust may acquire, own and
dispose of Shares to the same extent as if such person were not a
Trustee, officer or agent; and any Trustee may issue and sell or
cause to be issued and sold Shares to and buy such Shares from
any such person or any firm or company in which such Trustee is
interested, subject only to the general limitations herein contained
as to the sale and purchase of such Shares; and all subject to any
restrictions which may be contained in the Bylaws.
Section 4.. Action by the Trustees. The Trustees shall
act by majority vote at a meeting duly called or by unanimous
written consent without a meeting or by telephone meeting,
provided a quorum of Trustees participate in any such telephone
meeting, unless the 1940 Act requires that a particular action be
taken only at a meeting at which the Trustees are present in person.
At any meeting of the Trustees, a majority of the Trustees shall
constitute a quorum. Meetings of the Trustees may be called orally
or in writing by the Chairman of the Board of Trustees or by any
two other Trustees. Notice of the time, date and place of all
meetings of the Trustees shall be given by the party calling the
meeting to each Trustee by telephone, telefax, or telegram sent to
each Trustee's home or business address at least 24 hours in
advance of the meeting or by written notice mailed to each
Trustee's home or business address at least 72 hours in advance of
the meeting. Notice need not be given to any Trustee who attends
the meeting without objecting to the lack of notice or who executes
a written waiver of notice with respect to the meeting. Any
meeting conducted by telephone shall be deemed to take place at
the principal office of the Trust, as determined by the Bylaws or by
the Trustees. Subject to the requirements of the 1940 Act, the
Trustees by majority vote may delegate to any one or more of their
number their authority to approve particular matters or take
particular actions on behalf of the Trust. Written consents or
waivers of the Trustees may be executed in one or more
counterparts. Execution of a written consent or waiver and delivery
thereof to the Trust may be accomplished by telefax.
Section 5.. Chairman of the Trustees. The Trustees shall
appoint one of their number to be Chairman of the Board of
Trustees. The Chairman shall preside at all meetings of the
Trustees, shall be responsible for the execution of policies
established by the Trustees and the administration of the Trust, and
may be (but is not required to be) the chief executive, financial
and/or accounting officer of the Trust.
Section 6.. Principal Transactions. Except to the extent
prohibited by applicable law, the Trustees may, on behalf of the
Trust, buy any securities from or sell any securities to, or lend any
assets of the Trust to, any Trustee or officer of the Trust or any
firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser,
distributor or transfer agent for the Trust or with any Interested
Person of such person; and the Trust may employ any such person,
or firm or company in which such person is an Interested Person
as broker, legal counsel, registrar, investment adviser, distributor,
transfer agent, dividend disbursing agent, custodian or in any other
capacity upon customary terms.
ARTICLE V. -- EXPENSES OF THE TRUST
Section 1.. Trustee Reimbursement. Subject to the
provisions of Article II, Section 2.6 hereof and of the Prospectus
and the Statement of Additional Information, the Trustees shall be
reimbursed from the Trust estate or the assets belonging to the
appropriate Series for their expenses and disbursements, including,
without limitation, fees and expenses of Trustees who are not
Interested Persons of the Trust, interest expense, taxes, fees and
commissions of every kind, expenses of pricing Trust portfolio
securities, expenses of issue, repurchase and redemption of Shares,
including expenses attributable to a program of periodic repurchases
or redemptions, expenses of registering and qualifying the Trust
and its Shares under Federal and State laws and regulations or
under the laws of any foreign jurisdiction, charges of third parties,
including investment advisers, managers, custodians, transfer
agents, portfolio accounting and/or pricing agents, and registrars,
expenses of preparing and setting up in type prospectuses and
statements of additional information and other related Trust
documents, expenses of printing and distributing prospectuses sent
to existing Shareholders, auditing and legal expenses, reports to
Shareholders, expenses of meetings of Shareholders and proxy
solicitations therefor, insurance expenses, association membership
dues and for such non-recurring items as may arise, including
litigation to which the Trust (or a Trustee acting as such) is a party,
and for all losses and liabilities by them incurred in administering
the Trust, and for the payment of such expenses, disbursements,
losses and liabilities the Trustees shall have a lien on the assets
belonging to the appropriate Series, or in the case of an expense
allocable to more than one Series, on the assets of each such Series,
prior to any rights or interests of the Shareholders thereto. This
Section shall not preclude the Trust from directly paying any of the
aforementioned fees and expenses.
ARTICLE VI. -- INVESTMENT ADVISER, PRINCIPAL
UNDERWRITER
AND TRANSFER AGENT
Section 1.. Investment Adviser. The Trustees may in
their discretion, from time to time, enter into (or renew) an
investment advisory or management contract or contracts with
respect to the Trust or any Series whereby the other party or parties
to such contract or contracts shall undertake to furnish the Trustees
with such management, investment advisory, statistical and research
facilities and services and such other facilities and services, if any,
and all upon such terms and conditions, as the Trustees may in
their discretion determine. Notwithstanding any other provision of
this Trust Instrument, the Trustees may authorize any investment
adviser (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales or
exchanges of portfolio securities, other investment instruments of
the Trust, or other Trust Property on behalf of the Trustees, or may
authorize any officer, agent, or Trustee to effect such purchases,
sales or exchanges pursuant to recommendations of the investment
adviser (and all without further action by the Trustees). Any such
purchases, sales and exchanges shall be deemed to have been
authorized by all of the Trustees.
The Trustees may authorize, subject to applicable
requirements of the 1940 Act, including those relating to
Shareholder approval, the investment adviser to employ, from time
to time, one or more sub-advisers to perform such of the acts and
services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser
and sub-adviser. Any reference in this Trust Instrument to the
investment adviser shall be deemed to include such sub-advisers,
unless the context otherwise requires.
Section 2.. Principal Underwriter. The Trustees may in
their discretion from time to time enter into an exclusive or non-exclusive
underwriting contract or contracts providing for the sale
of Shares, whereby the Trust may either agree to sell Shares to the
other party to the contract or appoint such other party its sales
agent for such Shares. In either case, the contract shall be on such
terms and conditions, if any, as may be prescribed in the Bylaws,
and such further terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this
Article VI, or of the Bylaws; and such contract may also provide
for the repurchase or sale of Shares by such other party as principal
or as agent of the Trust.
Section 3.. Transfer Agent. The Trustees may in their
discretion from time to time enter into one or more transfer agency
and Shareholder service contracts whereby the other party or parties
shall undertake to furnish the Trustees with transfer agency and
Shareholder services. The contract or contracts shall be on such
terms and conditions as the Trustees may in their discretion
determine not inconsistent with the provisions of this Trust
Instrument or of the Bylaws.
Section 4.. Parties to Contract. Any contract of the
character described in Section 4.1(f) of Article IV, this Article VI,
or Article VIII may be entered into with any corporation, firm,
partnership, trust or association, although one or more of the
Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract, and no
such contract shall be invalidated or rendered void or voidable by
reason of the existence of any relationship, nor shall any person
holding such relationship be disqualified from voting on or
executing the same in such person's capacity as Shareholder and/or
Trustee, nor shall any person holding such relationship be liable
merely by reason of such relationship for any loss or expense to the
Trust under or by reason of said contract or accountable for any
profit realized directly or indirectly therefrom, provided that the
contract when entered into was not inconsistent with the provisions
of this Article VI or Article VIII hereof or of the Bylaws. The
same person (including a firm, corporation, partnership, trust, or
association) may be the other party to contracts entered into
pursuant to this Article VI or Article VIII, and any individual may
be financially interested or otherwise affiliated with persons who
are parties to any or all of the contracts mentioned in this Section
6.4.
Section 5.. Provisions and Amendments. Any contract
entered into pursuant to Sections 6.1 or 6.2 of this Article VI shall
be consistent with and subject to the requirements of Section 15 of
the 1940 Act or other applicable Act of Congress hereafter enacted
with respect to its continuance in effect, its termination, and the
method of authorization and approval of such contract or renewal
thereof, and no amendment to any contract entered into pursuant to
Section 6.1 of this Article VI shall be effective unless assented to
in a manner consistent with the requirements of said Section 15, as
modified by any applicable rule, regulation or order of the
Commission.
ARTICLE VII. -- SHAREHOLDERS' VOTING POWERSAND
MEETINGS
Shareholders shall have such power to vote as is provided
for in the Bylaws. Special meetings of the Shareholders shall be
called as is provided in the Bylaws.
ARTICLE VIII. -- CUSTODIAN
The Trustees shall at all times employ a bank, a company
that is a member of a national securities exchange, the Trust, or
such other person as may be permitted by the Commission as
custodian with authority as its agent, but subject to such
restrictions, limitations and other requirements, if any, as may be
contained in the 1940 Act or the Bylaws:
(1) to receive and receipt for any monies due to
the Trust and deposit the same in its own banking department or
elsewhere as the Trustees may direct; and
(2) to disburse such funds upon orders or
vouchers;
and the Trust may also employ such custodian as its agent:
(3) to keep the books and accounts of the Trust
or of any Series or Class and furnish clerical and accounting
services; and
(4) to compute, if authorized to do so by the
Trustees, the Net Asset Value of any Series, or Class thereof, in
accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon
between the Trustees and the custodian.
The Trustees may also authorize the custodian to employ
one or more sub-custodians from time to time to perform such of
the acts and services of the custodian, and upon such terms and
conditions, as may be agreed upon between the custodian and such
sub-custodian and approved by the Trustees, provided that in every
case such sub-custodian shall be a eligible to act as a custodian in
accordance with the 1940 Act.
ARTICLE IX. -- DISTRIBUTIONS AND REDEMPTIONS
Section 1.. Distributions.
(a) The Trustees may from time to time declare
and pay dividends or other distributions with respect to any Series
or Class. The amount of such dividends or distributions and the
payment of them and whether they are in cash or any other Trust
Property shall be wholly in the discretion of the Trustees.
(b) Dividends and other distributions may be paid
or made to the Shareholders of record at the time of declaring a
dividend or other distribution or among the Shareholders of record
at such other date or time or dates or times as the Trustees shall
determine, which dividends or distributions, at the election of the
Trustees, may be paid pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the
Trustees may determine. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend
payout plans or related plans as the Trustees shall deem
appropriate.
(c) Anything in this Trust Instrument to the
contrary notwithstanding, the Trustees may at any time declare and
distribute a stock dividend pro rata among the Shareholders of a
particular Series, or Class thereof, as of the record date of that
Series or Class fixed as provided in Section (b) hereof. The
Trustees shall have full discretion, to the extent not inconsistent
with the 1940 Act, to determine which items shall be treated as
income and which items as capital; and each such determination
and allocation shall be conclusive and binding upon the
Shareholders.
Section 2.. Redemptions. In case any Shareholder of
Shares of a particular Series desires to dispose of such
Shareholder's Shares or any portion thereof, such Shareholder may
deposit at the office of the transfer agent or other authorized agent
of that Series a written request or such other form of request as the
Trustees may from time to time authorize, requesting that the Series
purchase the Shares in accordance with this Section 9.2; and the
Shareholder so requesting shall be entitled to require the Series to
purchase, and the Series or the principal underwriter of the Series
shall purchase, such Shareholder's said Shares, but only at the Net
Asset Value thereof (as described in Section 9.3 of this Article IX).
The Series shall make payment for any such Shares to be
redeemed, as aforesaid, in cash or property from the assets of that
Series and payment for such Shares shall be made by the Series or
the principal underwriter of the Series to the Shareholder of record
within seven (7) days after the date upon which the request is
effective or as otherwise set forth in the Prospectus and the
Statement of Additional Information. Upon redemption, Shares
shall become treasury Shares and may be re-issued from time to
time.
Section 3.. Determination of Net Asset Value and
Valuation of Portfolio Assets. The term "Net Asset Value" of any
Series shall mean that amount by which the assets of that Series
exceed its liabilities, all as determined in accordance with the
methods and procedures, including without limitation those with
respect to rounding, established by the Trustees from time to time.
Such value shall be determined separately for each Series and shall
be determined on such days and at such times as the Trustees may
determine. Such determination shall be made with respect to
securities for which market quotations are readily available, at the
market value of such securities; and with respect to other securities
and assets, at the fair value as determined in good faith by the
Trustees; provided, however, that the Trustees, without Shareholder
approval, may alter the method of valuing portfolio securities
insofar as permitted under the 1940 Act and the rules, regulations
and interpretations thereof promulgated or issued by the
Commission or insofar as permitted by any Order of the
Commission applicable to the Series. The Trustees may delegate
any of their powers and duties under this Section 9.3 with respect
to valuation of assets and liabilities. The resulting amount, which
shall represent the total Net Asset Value of the particular Series,
shall be divided by the total number of Shares of that Series
outstanding at the time and the quotient so obtained shall be the
Net Asset Value per Share of that Series. At any time the Trustees
may cause the Net Asset Value per Share last determined to be
determined again in similar manner and may fix the time when
such redetermined value shall become effective. If, for any reason,
the net income of any Series, determined at any time, is a negative
amount the Trustees shall have the power with respect to that
Series (i) to offset each Shareholder's pro rata share of such
negative amount from the accrued dividend account of such
Shareholder, or (ii) to reduce the number of Outstanding Shares of
such Series by reducing the number of Shares in the account of
each Shareholder by a pro rata portion of that number of full and
fractional Shares which represents the amount of such excess
negative net income, or (iii) to cause to be recorded on the books
of such Series an asset account in the amount of such negative net
income (provided that the same shall thereupon become the
property of such Series with respect to such Series and shall not be
paid to any Shareholder), which account may be reduced by the
amount of dividends declared thereafter upon the Outstanding
Shares of such Series on the day such negative net income is
experienced, until such asset account is reduced to zero; (iv) to
combine the methods described in clauses (i), (ii) and (iii) of this
sentence; or (v) to take any other action they deem appropriate in
order to cause (or in order to assist in causing) the Net Asset Value
per Share of such Series to remain at a constant amount per
Outstanding Share immediately after each such determination and
declaration. The Trustees shall also have the power not to declare
a dividend out of net income for the purpose of causing the Net
Asset Value per Share to be increased. The Trustees shall not be
required to adopt, but may at any time adopt, discontinue or
amend, the practice of maintaining the Net Asset Value per Share
of the Series at a constant amount.
Section 4.. Suspension of the Right of Redemption. The
Trustees may declare a suspension of the right of redemption or
postpone the date of payment as permitted under the 1940 Act.
Such suspension shall take effect at such time as the Trustees shall
specify but not later than the close of business on the business day
next following the declaration of suspension, and thereafter there
shall be no right of redemption or payment until the Trustees shall
declare the suspension at an end. In the case of a suspension of the
right of redemption, a Shareholder may either withdraw 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. In the event that any Series is divided into
Classes, the provisions of this Section 9.4, to the extent applicable
as determined in the discretion of the Trustees and consistent with
applicable law, may be equally applied to each such Class.
Section 5.. Redemption of Shares in Order to Qualify as
Regulated Investment Company. If the Trustees shall, at any time
and in good faith, be of the opinion that direct or indirect
ownership of Shares of any Series has or may become concentrated
in any Person to an extent which would disqualify any Series as a
regulated investment company under the Internal Revenue Code,
then the Trustees shall have the power (but not the obligation) by
lot or other means deemed equitable by them (i) to call for
redemption by any such Person of a number, or principal amount,
of Shares sufficient to maintain or bring the direct or indirect
ownership of Shares into conformity with the requirements for such
qualification and (ii) to refuse to transfer or issue Shares to any
Person whose acquisition of the Shares in question would result in
such disqualification. The redemption shall be effected at the
redemption price and in the manner provided in this Article IX.
The Shareholders shall upon demand disclose to the
Trustees in writing such information with respect to direct and
indirect ownership of Shares as the Trustees deem necessary to
comply with the provisions of the Internal Revenue Code, or to
comply with the requirements of any other taxing authority.
ARTICLE X. -- LIMITATION OF LIABILITY AND
INDEMNIFICATION
Section 1.. Limitation of Liability. No Trustee or
officer shall be liable for any act or omission or any conduct
whatsoever in such Trustee's or officer's capacity as Trustee or
officer, provided that nothing contained herein or in the Delaware
Act shall protect any Trustee or officer against any liability to the
Trust or to Shareholders to which such Trustee or officer would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee or officer hereunder.
Section 2.. Indemnification.
(a) Subject to the exceptions and limitations
contained in Section (b) below:
(i) every Person who is, or has been, a
Trustee or officer of the Trust (hereinafter referred to as a
"Covered Person") shall be indemnified by the Trust to the fullest
extent permitted by law against liability and against all expenses
reasonably incurred or paid by such Covered Person in connection
with any claim, action, suit or proceeding in which such Covered
Person becomes involved as a party or otherwise by virtue of such
Covered Person being or having been a Trustee or officer and
against amounts paid or incurred by such Covered Person in the
settlement thereof;
(ii) the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or proceedings
(civil, criminal or other, including appeals), actual or threatened
while in office or thereafter, and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and other
liabilities.
(b) No indemnification shall be provided
hereunder to a Covered Person:
(i) who shall have been adjudicated by a
court or body before which the proceeding was brought (A) to be
liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such person's office or (B) not to
have acted in good faith in the reasonable belief that such Person's
action was in the best interest of the Trust; or
(ii) in the event of a settlement unless
there has been a determination that such Trustee or officer did not
engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such
person's office,
(A) by the court or other body
approving the settlement;
(B) by at least a majority of those
Trustees who are neither Interested Persons of the Trust nor are
parties to the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); or
(C) by written opinion of
independent legal counsel based upon a review of readily available
facts (as opposed to a full trial-type inquiry);
provided, however, that any Shareholder may, by
appropriate legal proceedings, challenge any such determination by
the Trustees or by independent counsel.
(c) The rights of indemnification herein provided
may be insured against by policies maintained by the Trust, shall
be severable, shall not be exclusive of or affect any other rights to
which any Covered Person may now or hereafter be entitled, shall
continue as to a person who has ceased to be a Covered Person and
shall inure to the benefit of the heirs, executors and administrators
of such a person. Nothing contained herein shall affect any rights
to indemnification to which Trust personnel, other than Covered
Persons, and other persons may be entitled by contract or otherwise
under law.
(d) Expenses in connection with the preparation
and presentation of a defense to any claim, action, suit or
proceeding of the character described in paragraph (a) of this
Section 10.2 may be paid by the Trust or Series from time to time
prior to final disposition thereof upon receipt of an undertaking by
or on behalf of such Covered Person that such amount will be paid
over by such Covered Person to the Trust or Series if it is
ultimately determined that such Covered Person is not entitled to
indemnification under this Section 10.2; provided, however, that (a)
such Covered Person shall have provided appropriate security for
such undertaking, (b) the Trust is insured against losses arising out
of any such advance payments or (c) either a majority of the
Trustees who are neither Interested Persons of the Trust nor parties
to the matter, or independent legal counsel in a written opinion,
shall have determined, based upon a review of readily available
facts (as opposed to a trial-type inquiry or full investigation), that
there is reason to believe that such Covered Person will be found
entitled to indemnification under this Section 10.2.
Section 3.. Shareholders. In case any Shareholder or
former Shareholder of any Series shall be held to be personally
liable solely by reason of such person's being or having been a
Shareholder of such Series and not because of such person's acts
or omissions or for some other reason, the Shareholder or former
Shareholder (or such person's heirs, executors, administrators or
other legal representatives, or, in the case of a corporation or other
entity, its corporate or other general successor) shall be entitled out
of the assets belonging to the applicable Series to be held harmless
from and indemnified against all loss and expense arising from
such liability. The Trust, on behalf of the affected Series, shall,
upon request by the Shareholder, assume the defense of any claim
made against the Shareholder for any act or obligation of the Series
and satisfy any judgment thereon from the assets of the Series.
The indemnification and reimbursement required by the preceding
sentence shall be made only out of assets of the one or more Series
whose Shares were held by said Shareholder at the time the act or
event occurred which gave rise to the claim against or liability of
said Shareholder. The rights accruing to a Shareholder under this
Section shall not impair any other right to which such Shareholder
may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust or any Series thereof to indemnify or
reimburse a Shareholder in any appropriate situation even though
not specifically provided herein.
ARTICLE XI. -- MISCELLANEOUS
Section 1.. Trust Not a Partnership. It is hereby expressly
declared that a trust and not a partnership is created hereby. No
Trustee hereunder shall have any power to bind personally either
the Trust's officers or any Shareholder. All persons extending
credit to, contracting with or having any claim against the Trust or
the Trustees shall look only to the assets of the appropriate Series
or (if the Trustees shall have yet to have established Series) of the
Trust for payment under such credit, contract or claim; and neither
the Shareholders nor the Trustees, nor any of their agents, whether
past, present or future, shall be personally liable therefor. Nothing
in this Trust Instrument shall protect a Trustee against any liability
to which the Trustee would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of
Trustee hereunder. Every note, bond, contract or other undertaking
issued by or on behalf of the Trust or the Trustees relating to the
Trust or to a Series shall include a recitation limiting the
obligations represented thereby to the Trust or to one or more
Series and its or their assets (but the omission of such recitation
shall not operate to bind any Shareholder, Trustee, officer,
employee or agent of the Trust).
Section 2.. Trustee's Good Faith Action, Expert Advice,
No Bond or Surety. The exercise by the Trustees of their powers
and discretions hereunder in good faith and with reasonable care
under the circumstances then prevailing shall be binding upon
everyone interested. The Trustees shall not be responsible or liable
in any event for any neglect or wrongdoing of any officer, agent,
employee, consultant, adviser, administrator, distributor or principal
underwriter, custodian or transfer, dividend disbursing, Shareholder
servicing or accounting agent of the Trust, nor shall any Trustee be
responsible for the act or omission of any other Trustee. Subject
to the provisions of Article X hereof and to Section 11.1 of this
Article XI, the Trustees shall not be liable for errors of judgment
or mistakes of fact or law. In discharging their duties, the
Trustees, when acting in good faith, shall be entitled to rely upon
the books of account of the Trust and upon written reports made to
the Trustees by an officer appointed by them, any independent
public accountant, and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee of
a contracting party appointed by the Trustees. The Trustees may
take advice of counsel or other experts with respect to the meaning
and operation of this Trust Instrument, and subject to the provisions
of Article X hereof and Section 11.1 of this Article XI, shall be
under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. The Trustees shall not
be required to give any bond as such, nor any surety if a bond is
obtained.
Section 3.. Termination of Trust.
(a) This Trust shall continue without limitation
of time but subject to the provisions of subsection (b) of this
Section 11.3.
(b) The Trustees may, subject to a Majority
Shareholder Vote of each Series affected by the matter or, if
applicable, to a Majority Shareholder Vote of the Trust, and subject
to a vote of a majority of the Trustees,
(i) sell and convey all or substantially all
of the assets of the Trust or any affected Series to another trust,
partnership, association or corporation, or to a separate series of
shares thereof, organized under the laws of any state which trust,
partnership, association or corporation is an open-end management
investment company as defined in the 1940 Act, or is a series
thereof, for adequate consideration which may include the
assumption of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust or any affected Series, and
which may include shares of beneficial interest, stock or other
ownership interests of such trust, partnership, association or
corporation or of a series thereof; or
(ii) at any time sell and convert into
money all of the assets of the Trust or any affected Series.
Upon making reasonable provision, in the determination of
the Trustees, for the payment of all such liabilities in either (i) or
(ii), by such assumption or otherwise, the Trustees shall distribute
the remaining proceeds or assets (as the case may be) of each
Series (or Class) ratably among the holders of Shares of that Series
then outstanding.
(c) Upon completion of the distribution of the
remaining proceeds or the remaining assets as provided in
paragraph (b), the Trust or any affected Series shall terminate and
the Trustees and the Trust shall be discharged of any and all further
liabilities and duties hereunder and the right, title and interest of all
parties with respect to the Trust or Series shall be canceled and
discharged.
Upon termination of the Trust, following completion of
winding up of its business, the Trustees shall cause a certificate of
cancellation of the Trust's certificate of trust to be filed in
accordance with the Delaware Act, which certificate of cancellation
may be signed by any one Trustee.
Section 4.. Reorganization. Notwithstanding anything
else herein, the Trustees, in order to change the form of
organization of the Trust, may, without prior Shareholder approval,
(i) cause the Trust to merge or consolidate with or into one or more
trusts, partnerships, associations or corporations so long as the
surviving or resulting entity is an open-end management investment
company under the 1940 Act, or is a series thereof, that will
succeed to or assume the Trust's registration under that Act and
which is formed, organized or existing under the laws of a state,
commonwealth possession or colony of the United States or (ii)
cause the Trust to incorporate under the laws of Delaware. Any
agreement of merger or consolidation or certificate of merger may
be signed by a majority of Trustees and facsimile signatures
conveyed by electronic or telecommunication means shall be valid.
Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, and notwithstanding anything to the
contrary contained in this Trust Instrument, an agreement of merger
or consolidation approved by the Trustees in accordance with this
Section 11.4 may effect any amendment to the Trust Instrument or
effect the adoption of a new trust instrument of the Trust if it is the
surviving or resulting trust in the merger or consolidation.
Section 5.. Filing of Copies, References, Headings. The
original of a copy of this Trust Instrument and of each amendment
hereof or Trust Instrument supplemental hereto shall be kept at the
office of the Trust where it may be inspected by any Shareholder.
Anyone dealing with the Trust may rely on a certificate by an
officer or Trustee of the Trust as to whether or not any such
amendments or supplements have been made and as to any matters
in connection with the Trust hereunder, and, with the same effect
as if it were the original, may rely on a copy certified by an officer
or Trustee of the Trust to be a copy of this Trust Instrument or of
any such amendment or supplemental Trust Instrument. In this
Trust Instrument or in any such amendment or supplemental Trust
Instrument, references to this Trust Instrument, and all expressions
like "herein," "hereof" and "hereunder," shall be deemed to refer to
this Trust Instrument as amended or affected by any such
supplemental Trust Instrument. Headings are placed herein for
convenience of reference only and in case of any conflict, the text
of this Trust Instrument, rather than the headings, shall control.
This Trust Instrument may be executed in any number of
counterparts each of which shall be deemed an original.
Section 6.. Applicable Law. The trust set forth in this
instrument is made in the State of Delaware, and the Trust and this
Trust Instrument, and the rights and obligations of the Trustees and
Shareholders hereunder, are to be governed by and construed and
administered according to the Delaware Act and the laws of said
State; provided, however, that there shall not be applicable to the
Trust, the Trustees or this Trust Instrument (a) the provisions of
Section 3540 of Title 12 of the Delaware Code or (b) any
provisions of the laws (statutory or common) of the State of
Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and
charges, (ii) affirmative requirements to post bonds for trustees,
officers, agents or employees of a trust, (iii) the necessity for
obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv)
fees or other sums payable to trustees, officers, agents or employees
of a trust (v) the allocation of receipts and expenditures to income
or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or
requirements relating to the titling, storage or other manner of
holding of trust assets, or (vii) the establishment of fiduciary or
other standards or responsibilities or limitations on the acts or
powers of trustees, which are inconsistent with the limitations or
liabilities or authorities and powers of the Trustees set forth or
referenced in this Trust Instrument. The Trust shall be of the type
commonly called a "business trust", and without limiting the
provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust under Delaware law. The Trust
specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific
reference herein to any such power, privilege or action shall not
imply that the Trust may not exercise such power or privilege or
take such actions.
Section 7.. Amendments. Except as specifically provided
herein, the Trustees may, without Shareholder vote, amend or
otherwise supplement this Trust Instrument by making an
amendment, a Trust Instrument supplemental hereto or an amended
and restated Trust Instrument. Shareholders shall have the right to
vote (i) on any amendment which would affect their right to vote,
(ii) on any amendment to this Section 11.7, (iii) on any amendment
as may be required by law or by the Trust's registration statement
filed with the Commission and (iv) on any amendment submitted
to them by the Trustees. Any amendment required or permitted to
be submitted to Shareholders which, as the Trustees determine,
shall affect the Shareholders of one or more Series shall be
authorized by vote of the Shareholders of each Series affected and
no vote of Shareholders of a Series not affected shall be required.
Notwithstanding anything else herein, any amendment to Article 10
hereof shall not limit the rights to indemnification or insurance
provided therein with respect to action or omission of Covered
Persons prior to such amendment.
Section 8.. Fiscal Year. The fiscal year of the Trust
shall end on a specified date as set forth in the Bylaws, provided,
however, that the Trustees may, without Shareholder approval,
change the fiscal year of the Trust.
Section 9.. Provisions in Conflict with Law. The
provisions of this Trust Instrument are severable, and if the
Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the 1940 Act, the regulated
investment company provisions of the Internal Revenue Code or
with other applicable laws and regulations, the conflicting provision
shall be deemed never to have constituted a part of this Trust
Instrument; provided, however, that such determination shall not
affect any of the remaining provisions of this Trust Instrument or
render invalid or improper any action taken or omitted prior to such
determination. If any provision of this Trust Instrument shall be
held invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in
any other jurisdiction or any other provision of this Trust
Instrument in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being all of the
initial Trustees of the Trust, have executed this instrument as of
March 26, 1997.
/s/ Jeffrey C. Brown
Jeffrey C. Brown, as Trustee
and not individually.
/s/Stephen Patrylak
Stephen Patrylak, as Trustee
and not individually.
/s/Larissa N. Patrylak
Larissa N. Patrylak, as Trustee
and not individually.
/s/Kathryn A. Brown
Katheryn A. Brown, as Trustee
and not individually.
/s/Alvin Brown
Alvin Brown, as Trustee
and not individually.
/s/Howard S. Lubin
Howard S. Lubin, as Trustee
and not individually.
/s/Leonid D. Rudnytzky
Leonid D. Rudnytzky, as Trustee
and not individually.
Exhibit 2
BYLAWS
of
THE DRESHER FAMILY OF FUNDS
These Bylaws of The Dresher Family of Funds (the "Trust"),
a Delaware business trust, are subject to the Trust Instrument of the
Trust dated March 26, 1997, as from time to time amended,
supplemented or restated (the "Trust Instrument"). Capitalized
terms used herein which are defined in the Trust Instrument are used
as therein defined.
ARTICLE I.
PRINCIPAL OFFICE
The principal office of the Trust shall be located in Dresher,
Pennsylvania, or such other location as the Trustees may, from time
to time, determine. The Trust may establish and maintain such other
offices and places of business as the Trustees may, from time to time,
determine.
ARTICLE II.
OFFICERS AND THEIR ELECTION
Officers
Section 1. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers as the Trustees may
from time to time elect. The Trustees may delegate to any officer or
committee the power to appoint any subordinate officers or agents.
It shall not be necessary for any Trustee or other officer to be a
Shareholder in the Trust.
Election of Officers
Section 2. The Treasurer and Secretary shall be chosen by the
Trustees. The President shall be chosen by and from the Trustees.
Two or more offices may be held by a single person except the
offices of President and Secretary. Subject to the provisions of
Section 12 hereof, the President, the Treasurer and the Secretary shall
each hold office until their successors are chosen and qualified and
all other officers shall hold office at the pleasure of the Trustees.
Resignations
Section 3. Any officer of the Trust may resign,
notwithstanding Section 2 hereof, by filing a written resignation with
the President, the Trustees or the Secretary, which resignation shall
take effect on being so filed or at such time as may be therein
specified.
ARTICLE III.
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
Management Of The Trustee-General
Section 1. The business and affairs of the Trust shall be
managed by, or under the direction of, the Trustees, and they shall
have all powers necessary and desirable to carry out their
responsibilities, so far as such powers are not inconsistent with the
laws of the State of Delaware, the Trust Instrument or with these
Bylaws.
Executive And Other Committees
Section 2. The Trustees may elect from their own number an
executive committee, which shall have any or all the powers of the
Trustees while the Trustees are not in session. The Trustees may also
elect from their own number other committees from time to time.
The number composing such committees and the powers conferred
upon the same are to be determined by vote of a majority of the
Trustees. All members of such committees shall hold such offices at
the pleasure of the Trustees. The Trustees may abolish any such
committee at any time. Any committee to which the Trustees
delegate any of their powers or duties shall keep records of its
meetings and shall report its actions to the Trustees. The Trustees
shall have power to rescind any action of any committee, but no such
rescission shall have retroactive effect.
Compensation
Section 3. Each Trustee and each committee member may
receive such compensation for such person's services and
reimbursement for such person's expenses as may be fixed from time
to time by resolution of the Trustees.
Chairman Of The Trustees
Section 4. The Trustees shall appoint from among their
number a Chairman who shall serve as such at the pleasure of the
Trustees. When present, the Chairman shall preside at all meetings
of the Shareholders and the Trustees, and may, subject to the
approval of the Trustees, appoint a Trustee to preside at such
meetings in the Chairman's absence. The Chairman shall perform
such other duties as the Trustees may from time to time designate.
President
Section 5. The President shall be the chief executive officer
of the Trust and, subject to the direction of the Trustees, shall have
general administration of the business and policies of the Trust.
Except as the Trustees may otherwise order, the President shall have
the power to grant, issue, execute or sign such powers of attorney,
proxies, agreements or other documents as may be deemed advisable
or necessary in the furtherance of the interests of the Trust or any
Series thereof. The President shall also have the power to employ
attorneys, accountants and other advisers and agents and counsel for
the Trust. The President shall perform such duties additional to all
of the foregoing as the Trustees may from time to time designate.
Treasurer
Section 6. The Treasurer shall be the principal financial and
accounting officer of the Trust. The Treasurer shall deliver all funds
and securities of the Trust which may come into the Treasurer's hands
to such company as the Trustees shall employ as custodian in
accordance with the Trust Instrument and applicable provisions of
law. The Treasurer shall make annual reports regarding the business
and condition of the Trust, which reports shall be preserved in Trust
records, and shall furnish such other reports regarding the business
and condition of the Trust as the Trustees may from time to time
require. The Treasurer shall perform such additional duties as the
Trustees may from time to time designate.
Secretary
Section 7. The Secretary shall record in books kept for the
purpose all votes and proceedings of the Trustees and the
Shareholders at their respective meetings. The Secretary shall have
the custody of the seal of the Trust. The Secretary shall perform such
additional duties as the Trustees may from time to time designate.
Vice President
Section 8. Any Vice President of the Trust shall perform such
duties as the Trustees or the President may from time to time
designate. At the request or in the absence or disability of the
President, the Vice President (or, if there are two or more Vice
Presidents, then the senior of the Vice Presidents present and able to
act) may perform all the duties of the President and, when so acting,
shall have all the powers of and be subject to all the restrictions upon
the President.
Assistant Treasurer
Section 9. Any Assistant Treasurer of the Trust shall perform
such duties as the Trustees or the Treasurer may from time to time
designate, and, in the absence of the Treasurer, the senior Assistant
Treasurer, present and able to act, may perform all the duties of the
Treasurer.
Assistant Secretary
Section 10. Any Assistant Secretary of the Trust shall
perform such duties as the Trustees or the Secretary may from time
to time designate, and, in the absence of the Secretary, the senior
Assistant Secretary, present and able to act, may perform all the
duties of the Secretary.
Subordinate Officers
Section 11. The Trustees from time to time may appoint such
other officers or agents as they may deem advisable, each of whom
shall have such title, hold office for such period, have such authority
and perform such duties as the Trustees may determine. The Trustees
from time to time may delegate to one or more officers or committees
of Trustees the power to appoint any such subordinate officers or
agents and to prescribe their respective terms of office, authorities
and duties.
Surety Bonds
Section 12. The Trustees may require any officer or agent of
the Trust to execute a bond (including, without limitation, any bond
required by the 1940 Act and the rules and regulations of the
Commission) to the Trust in such sum and with such surety or
sureties as the Trustees may determine, conditioned upon the faithful
performance of such person's duties to the Trust including
responsibility for negligence and for the accounting of any of the
Trust's property, funds or securities that may come into such person's
hands.
Removal
Section 13. Any officer may be removed from office
whenever in the judgment of the Trustees the best interests of the
Trust will be served thereby, by the vote of a majority of the Trustees
given at any regular meeting or any special meeting of the Trustees.
In addition, any officer or agent appointed in accordance with the
provisions of Section 10 hereof may be removed, either with or
without cause, by any officer upon whom such power of removal
shall have been conferred by the Trustees.
Remuneration
Section 14. The salaries or other compensation, if any, of the
officers of the Trust shall be fixed from time to time by resolution of
the Trustees.
ARTICLE IV.
SHAREHOLDERS' MEETINGS
Special Meetings
Section 1. Meetings of the Shareholders may be called by
the Trustees for the purpose of electing Trustees as provided in the
Trust Instrument and for such other purposes as may be prescribed by
law, by the Trust Instrument or by these Bylaws. Meetings of the
Shareholders may also be called by the Trustees from time to time for
the purpose of taking action upon any other matter deemed by the
Trustees to be necessary or desirable. If the meeting is a meeting of
the Shareholders of one or more Series or classes of Shares, but not
a meeting of all Shareholders of the Trust, then only special meetings
of the Shareholders of such one or more Series or classes shall be
called and only the shareholders of such one or more Series or classes
shall be entitled to notice of and to vote at such meeting.
Notices
Section 2. Except as above provided, notices of any meeting
of the Shareholders shall be given by the Secretary by delivering or
mailing, postage prepaid, to each Shareholder entitled to vote at said
meeting, written or printed notification of such meeting at least 7
calendar days before the meeting, to such address as may be
registered with the Trust by the Shareholder. Notice of any
Shareholder meeting need not be given to any Shareholder if a
written waiver of notice, executed before or after such meeting, is
filed with the record of such meeting, or to any Shareholder who shall
attend such meeting in person or by proxy. Notice of adjournment of
a Shareholders' meeting to another time or place need not be given,
if such time and place are announced at the meeting or reasonable
notice is given to persons present at the meeting and the adjourned
meeting is held within a reasonable time after the date set for the
original meeting.
Voting Rights
Section 3. On any matter submitted to a vote of the
Shareholders, all Shares shall be voted separately by individual
Series, except (i) when required by the 1940 Act, Shares shall be
voted in the aggregate and not by individual Series; and (ii) when
the Trustees have determined that the matter affects the interests of
more than one Series, then the Shareholders of all such Series shall
be entitled to vote thereon. The Trustees may also determine that
a matter affects only the interests of one or more classes of a
Series, in which case any such matter shall be voted on by such
class or classes. A Shareholder of each Series shall be entitled to
one vote for each dollar of Net Asset Value (number of Shares
owned times Net Asset Value per Share) of such Series on any
matter on which such Shareholder is entitled to vote and each
fractional dollar amount shall be entitled to a proportionate
fractional vote. There shall be no cumulative voting in the election
of Trustees. Until Shares are issued, the Trustees may exercise all
rights of Shareholders and may take any action required or
permitted by law, the Trust Instrument or any of these Bylaws to
be taken by Shareholders.
Quorum and Required Vote.
Section 4. A majority of Shares entitled to vote in
person or by proxy shall be a quorum for the transaction of
business at a Shareholders meeting, except that where any provision
of law or of these Bylaws permits or requires that holders of any
Series shall vote as a Series (or that holders of a class shall vote as
a class), then a majority of the aggregate number of Shares of that
Series (or that class) entitled to vote shall be necessary to constitute
a quorum for the transaction of business by that Series (or that
class). Except when a larger vote is required by law or these
Bylaws, a majority of the Shares voted in person or by proxy shall
decide any questions and a plurality shall elect a Trustee, provided
that where any provision of law permits or requires that the holders
of any Series shall vote as a Series (or that the holders of any class
shall vote as a class), then a majority of the Shares present in
person or by proxy of that Series or, if required by law, a Majority
Shareholder Vote of that Series (or class), voted on the matter in
person or by proxy shall decide that matter insofar as that Series
(or class) is concerned. "Majority Shareholder Vote" shall have
the same meaning as the term "vote of a majority of the
outstanding voting securities" is given in the Investment Company
Act of 1940, as modified by or interpreted by any applicable order
or orders of the Securities and Exchange Commission or any rules
or regulations adopted or interpretive releases of the Securities and
Exchange Commission thereunder.
Voting-Proxies
Section 5. Shareholders entitled to vote may vote either in
person or by proxy, provided that either (i) an instrument authorizing
such proxy to act is executed by the Shareholder in writing and dated
not more than 11 months before the meeting, unless the instrument
specifically provides for a longer period or (ii) the Trustees adopt by
resolution an electronic, telephonic, computerized or other alternative
to execution of a written instrument authorizing the proxy to act
which authorization is received not more than 11 months before the
meeting. Proxies shall be delivered to the Secretary or other person
responsible for recording the proceedings before being voted. A
proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by one of them unless at or prior to exercise
of such proxy the Trust receives a specific written notice to the
contrary from any one of them. Unless otherwise specifically limited
by their terms, proxies shall entitle the holder thereof to vote at any
adjournment of a meeting. A proxy purporting to be exercised by or
on behalf of a Shareholder shall be deemed valid unless challenged
at or prior to its exercise and the burden or proving invalidity shall
rest on the challenger. At all meetings of the Shareholders, unless the
voting is conducted by inspectors, all questions relating to the
qualifications of voters, the validity of proxies, and the acceptance or
rejection of votes shall be decided by the Chairman of the meeting.
Except as otherwise provided herein or in the Trust Instrument, or as
these Bylaws or such Trust Instrument may be amended or
supplemented from time to time, all matters relating to the giving,
voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Shareholders were shareholders of a Delaware
corporation.
Place Of Meeting
Section 6. All special meetings of the Shareholders shall be
held at the principal place of business of the Trust or at such other
place in the United States of America as the Trustees may designate.
Action Without a Meeting
Section 7. Any action to be taken by Shareholders may be
taken without a meeting if all Shareholders entitled to vote on the
matter consent to the action in writing and the written consents are
filed with the records of meetings of Shareholders of the Trust. Such
consent shall be treated for all purposes as a vote at a meeting of the
Shareholders held at the principal place of business of the Trust.
Record Dates
Section 8. For purposes of determining the Shareholders
who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to receive payment of any dividend or of
any other distribution, the Trustees may fix a date from time to time,
which shall not be more than 90 days before the date of any meeting
of Shareholders or the date for the payment of any dividend or other
distribution, as the record date for determining the Shareholders
having the right to notice of and to vote at such meeting and any
adjournment thereof or the right to receive such dividend or
distribution, and in such case only Shareholders of record on such
date shall have such right notwithstanding any transfer of Shares on
the books of the Trust after the record date; or without fixing such
record date the Trustees may for any of such purposes close the
register or transfer books for all or any part of such period.
ARTICLE V.
TRUSTEES' MEETINGS
Special Meetings
Section 1. Special meetings of the Trustees may be called
orally or in writing by the Chairman of the Board of Trustees or any
two other Trustees.
Regular Meetings
Section 2. Regular meetings of the Trustees may be held at
such places and at such times as the Trustees may from time to time
determine; each Trustee present at such determination shall be
deemed a party calling the meeting and no call or notice will be
required to such Trustee provided that any Trustee who is absent
when such determination is made shall be given notice of the
determination by the Chairman or any two other Trustees, as
provided for in Section 4.4 of the Trust Instrument.
Quorum
Section 3. A majority of the Trustees shall constitute a
quorum for the transaction of business and an action of a majority of
the quorum shall constitute action of the Trustees.
Notice
Section 4. Except as otherwise provided, notice of any
special meeting of the Trustees shall be given by the party calling the
meeting to each Trustee, as provided for in Section 4.4 of the Trust
Instrument. A written notice may be mailed, postage prepaid,
addressed to each Trustee at each Trustee's address as registered on
the books of the Trust or, if not so registered, at such Trustee's last
known address.
Place Of Meeting
Section 5. All special meetings of the Trustees shall be held
at the principal place of business of the Trust or such other place as
the Trustees may designate. Any meeting may adjourn to any place.
Special Action
Section 6. When all the Trustees shall be present at any
meeting, however called or wherever held, or shall assent to the
holding of the meeting without notice, or shall sign a written assent
thereto filed with the record of such meeting, the acts of such meeting
shall be valid as if such meeting had been regularly held.
Action By Consent
Section 7. Any action by the Trustees may be taken without
a meeting if a written consent thereto is signed by a the Trustees and
filed with the records of the Trustees' meetings. Such consent shall
be treated, for all purposes, as a vote at a meeting of the Trustees held
at the principal place of business of the Trust.
Participation in Meetings By Conference Telephone
Section 8. Trustees may participate in a meeting of Trustees
by conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each
other, and such participation shall constitute presence in person at
such meeting. Any meeting conducted by telephone shall be deemed
to take place at and from the principal office of the Trust.
ARTICLE VI.
SHARES OF BENEFICIAL INTEREST
Section 1. The beneficial interest in the Trust shall at all
times be divided into such transferable Shares of one or more
separate and distinct Series, or classes thereof, as the Trustees shall
from time to time create and establish. The number of Shares is
unlimited, and each Share of each Series or class thereof shall be
without par value and shall represent an equal proportionate interest
with each other Share in the Series, none having priority or
preference over another, except to the extent that such priorities or
preferences are established with respect to one or more classes of
shares consistent with applicable law and any rule or order of the
Commission.
Transfer of Shares
Section 2. The Shares of the Trust shall be transferable, so as
to affect the rights of the Trust, only by transfer recorded on the
books of the Trust, in person or by attorney.
Equitable Interest Not Recognized
Section 3. The Trust shall be entitled to treat the holder of
record of any Share or Shares of beneficial interest as the holder in
fact thereof, and shall not be bound to recognize any equitable or
other claim or interest in such Share or Shares on the part of any
other person except as may be otherwise expressly provided by law.
Share Certificate
Section 4. No certificates certifying the ownership of Shares
shall be issued except as the Trustees may otherwise authorize. The
Trustees may issue certificates to a Shareholder of any Series or class
thereof for any purpose and the issuance of a certificate to one or
more Shareholders shall not require the issuance of certificates
generally. In the event that the Trustees authorize the issuance of
Share certificates, such certificate shall be in the form proscribed
from time to time by the Trustees and shall be signed by the President
or a Vice President and by the Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary. Such signatures may be facsimiles
if the certificate is signed by a transfer or shareholder services agent
or by a registrar other than a Trustee, officer or employee of the
Trust. In case any officer who has signed or whose facsimile
signature has been placed on such certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the
Trust with the same effect as if he or she were such officer at the time
of its issue.
In lieu of issuing certificates for Shares, the Trustees or the
transfer or shareholder services agent may either issue receipts
therefor or may keep accounts upon the books of the Trust for the
record holders of such Shares, who shall in either case be deemed, for
all purposes hereunder, to be the holders of certificates for such
Shares as if they had accepted such certificates and shall be held to
have expressly assented and agreed to the terms hereof.
Loss of Certificate
Section 5. In the case of the alleged loss or destruction or the
mutilation of a Share certificate, a duplicate certificate may be issued
in place thereof, upon such terms as the Trustees may prescribe.
Discontinuance of Issuance Of Certificates
Section 6. The Trustees may at any time discontinue the
issuance of Share certificates and may, by written notice to each
Shareholder, require the surrender of Share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the
ownership of Shares in the Trust.
ARTICLE VII.
OWNERSHIP OF ASSETS OF THE TRUST
The Trustees, acting for and on behalf of the Trust, shall be
deemed to hold legal and beneficial ownership of any income earned
on securities held by the Trust issued by any business entity formed,
organized or existing under the laws of any jurisdiction other than a
state, commonwealth, possession or colony of the United States or
the laws of the United States.
ARTICLE VIII.
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and
to what extent, and at what times and places, and under what
conditions and regulations the accounts and books of the Trust or any
of them shall be open to the inspection of the Shareholders; and no
Shareholder shall have any right to inspect any account or book or
document of the Trust except as conferred by law or otherwise by the
Trustees or by resolution of the Shareholders.
ARTICLE IX.
INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYERS
The Trust may purchase and maintain insurance on behalf of
any Covered Person or employee of the Trust, including any Covered
Person or employee of the Trust who is or was serving at the request
of the Trust as a Trustee, officer or employee of a corporation,
partnership, joint venture, trust or other enterprise against any
liability asserted against such person and incurred by such person in
any such capacity or arising out of such person's status as such,
whether or not the Trustees would have the power to indemnify such
person against such liability.
The Trust may not acquire or obtain a contract for insurance
that protects or purports to protect any Trustee or officer of the Trust
against any liability to the Trust or its Shareholders to which such
person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such person's office.
ARTICLE X.
SEAL
The seal of the Trust shall be circular in form bearing the
inscription:
"THE DRESHER FAMILY OF FUNDS -- 1997
THE STATE OF DELAWARE"
The form of the seal shall be subject to alteration by the
Trustees and the seal may be used by causing it or a facsimile to be
impressed or affixed or Printed or otherwise reproduced.
Any officer or Trustee of the Trust shall have authority to
affix the seal of the Trust to any document, instrument or other paper
executed and delivered by or on behalf of the Trust; however, unless
otherwise required by the Trustees, the seal shall not be necessary to
be placed on and its absence shall not impair the validity of any
document, instrument, or other paper executed by or on behalf of the
Trust.
ARTICLE XI.
FISCAL YEAR
The fiscal year of the Trust shall end on such date as the
Trustees shall from time to time determine.
ARTICLE XII.
AMENDMENTS
These Bylaws may be amended at any meeting of the Trustees
by a majority vote.
ARTICLE XIII.
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the
Shareholders a written financial report of the Trust including
financial statements which shall be certified at least annually by
independent public accountants.
ARTICLE XIV.
HEADINGS
Headings are placed in these Bylaws for convenience of
reference only and in case of any conflict, the text of these Bylaws
rather than the headings shall control.
