UNITED STATES
Securities and Exchange Commission
Washington, DC. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. 1 X
and
THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 1 X
Bullfinch Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
2 Lantern Lane, Honeoye Falls, NY 14472
(Address of Principal Executive Offices)
716-624-1758
(Registrant's Telephone Number)
Christopher Carosa 2 Lantern Lane Honeoye Falls, NY 14472
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this registration.
Registrant hereby elects to register pursuant to rule 24f-2 under the Investment
Company Act of 1940 an indefinite number of shares.
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Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Cross Reference Sheet
INFORMATION REQUIRED CAPTIONS IN FILING
Part A: IN A PROSPECTUS
Item 1. Cover Page Cover Page
Item 2. Synopsis Unrestricted Series Expenses
Item 3. Condensed Financial Information Condensed Financial Information
Item 4. General Description of Registrant The Fund
Item 5. Management of the Fund Management of the Fund
Item 6. Capital Stock and other Securities Capitalization
Item 7. Purchase of Securities being Offered Purchase of Shares - Reinvestments
Item 8. Redemption or Repurchase Redemption of Shares
Item 9. Legal Proceedings Litigation
Part B: STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Fund
Item 13. Investment Objectives and Policies Objectives and Policies
Item 14. Management of the Registrant Officers & Directors of the Fund
Item 15. Control Persons & Principal Holders Not Applicable
of Securities
Item 16. Investment Management and Other Investment Adviser
Services
Item 17. Brokerage Allocation Brokerage
Item 18. Capital Stock & Other Securities Capitalization
Item 19. Purchase, Redemption & Pricing of Purchase of Shares
Securities Being Offered
Item 19. Purchase, Redemption & Pricing of Redemption of Shares
Securities Being Offered
Item 19. Purchase, Redemption & Pricing of Pricing of Shares
Securities Being Offered
Item 20. Tax Status Tax Status
Item 21. Underwriters Not Applicable
Item 22. Calculation of Performance Data
Item 23. Financial Statements Financial Statements
Part C: OTHER INFORMATION
Item 24. Financial Statements & Exhibits Financial Statements & Exhibits
Item 25. Persons Controlled by/or under Control Persons
Common Control
Item 26. Number of Holders of Securities Number of Shareholders
Item 27. Indemnifications Indemnification
Item 28. Business & Other Connections of Activities of Investment Adviser
Adviser
Item 29 Principal Underwriters Principal Underwriter
Item 30. Location of Accounts & Records Location of Accounts & Records
Item 31. Management Services Not Applicable
Item 32. Undertakings Not Applicable
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BULLFINCH FUND, INC.
HONOEYE FALLS, NY 14472
716-624-1758
PROSPECTUS XXXXXXXX XX, 1997
Unrestricted Series
Bullfinch Fund, Inc. (the "Fund") is an open-end non-diversified management in-
vestment company that offers separate series, each a separate investment
portfolio having its own investment objective and policies. This Prospectus
relates to the Unrestricted Series (the "Series"). The investment objective of
the Unrestricted Series is to seek wealth accumulation (i.e., conservative, long
term growth). Using conservative investment strategies, the Adviser seeks to
achieve this objective by using an asset mix consisting primarily of exchange
listed and over-the-counter common stocks as well as cash (including money
market funds) and short term notes. Criteria used by the Adviser will be based
on the Business Economics, Management Quality, Financial Condition and Stock
Price of each business. In using this conservative approach, current income
from these investments may be considered when selected investments.
Unrestricted Series Share Purchase
Capital shares of the Series may only be purchased directly from the Fund at
net asset value of the Series as next determined after receipt of order. The
Board of Directors has established $2,500 as the minimum initial purchase
($1,000 for IRAs) and $250 for subsequent purchases ($50 for IRAs).
Additional Information
This Prospectus, which should be held for future reference, is designed to set
forth concisely the information that you should know before you invest. A
"Statement of Additional Information" containing more information about the Fund
has been filed with the Securities and Exchange Commission. Such Statement is
dated XXXXX XX, 1997 and has been incorporated by reference into the Prospectus.
A copy of the Statement may be obtained without charge, by writing to the Fund
or by calling the telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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UNRESTRICTED SERIES EXPENSES
The following illustrates all expenses and fees that a shareholder of the
Unrestricted Series will incur. The expenses and fees set forth below are
anticipated for the 1997 fiscal year.
Shareholder Transaction Expenses:
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Redemption Fees None
Exchange Fees None
Annual Unrestricted Series Operating Expenses (as a percentage of net assets):
Management Fees 1.25%
12b-1 Fees None
Other Expenses 0.75%
Total Operating Expenses 2.00%
You would pay the following expenses on a $1,000 investment assuming
a) 5% annual rate of return and b) redemption at the end of each time period.
Example 1 Year 3 Years
$21 $66
The purpose of the table above is to assist the investor in understanding the
various costs and expenses associated with investing in the Unrestricted
Series. For a more complete description of the various costs and expenses
illustrated above, please refer to the Management section of this Prospectus.
THE EXAMPLE ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
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THE FUND
The Fund is an open-end management investment company incorporated under
the laws of the State of Maryland on January 29, 1997. The Fund offers
separate series of units of beneficial interest ("shares"). This Pros-
pectus relates to the Unrestricted Series. The Fund's business office
is in Honeoye Falls, NY: mail may be addressed to 2 Lantern Lane,
Honeoye Falls, NY 14472.
OBJECTIVES AND POLICES
Objective: The investment objective of the Unrestricted Series is to seek
wealth accumulation (i.e., conservative, long term growth). From time to time,
the Adviser will vary the proportions invested among common stocks in each
of its proprietary equity sectors (see Security Selection Criteria below) as
well as cash or cash equivalents (i.e., money market funds and short term gov-
ernment notes) depending on its view of their relative attractiveness in light
of market and economic conditions. Risks associated with the Series' perform-
ance will be those due to broad market declines and business risks from diffi-
culties which occur to particular companies while in the Series' portfolio.
Because the Series' investments fluctuate in value, the Series' shares will
fluctuate in value. The Adviser seeks to reduce the risk of negative returns
while seeking to obtain capital growth when it believes valuations and market
conditions are favorable. It must be realized, as is true of almost all secur-
ities, there can be no assurance that the Series will attain its objective.
The Series' investment objectives are not fundamental and may be changed by the
Board of Directors without shareholder approval; however, it is the Board of
Directors' policy to notify shareholders prior to any material change in the
Series' objective.
Security Selection Criteria: The Series invests primarily in exchange listed
and over-the-counter common stocks, money market funds and government obli-
gations maturing within five years. As such, the Series has no current intent-
ion to invest in illiquid securities. From time to time the Series may hold
warrants, preferred stock or convertible debt it may have received as a result
of a corporate action related to one of its then current holdings. To the ex-
tent feasible, the Adviser will endeavor to emphasize fundamental corporate
considerations related to the prospects of the issuer and its industry. The
Adviser classifies common stocks into three equity classes: growth, value and
income. Criteria used by the Adviser to classify equities includes balance
sheet and income statement data, historical pricing valuations and the stock's
current dividend yield.
Portfolio Turnover Policy: The Series does not purchase securities for short
term trading in the ordinary course of operations. Accordingly, it is expected
that the annual turnover rate will not exceed 50%, wherein turnover is com-
puted by dividing the lesser of the Series' total purchases or sales of securi-
ties within the period by the average monthly portfolio value of the Series'
during such period. There may be times when management deems it advisable to
substantially alter the composition of the portfolio, in which event, the port-
folio turnover rate might substantially exceed 50%; this would only result
from special circumstances and not from the Series' normal operations.
Non-diversification Policy: The Series is classified as being non-diversified
which means that it may invest a relatively high percentage of its assets in the
obligations of a limited number of issues. The Series, therefore, may be more
susceptible than a diversified fund to any single economic, political, or regul-
atory occurrence. The policy of the Series, in the hope of achieving its object-
ive as stated above, is, therefore, one of selective investments rather than di-
versification. The Series seeks only diversification to maintain its federal
non-taxable status under Sub-Chapter M of the Internal Revenue Code (see next
paragraph).
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TAX STATUS
Under provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as amend-
ed, the Series, by paying out substantially all of its investment income and
realized capital gains, and by satisfying certain other requirements has been
andintends to continue to be relieved of federal income tax on the amounts dis-
tributed to shareholders.
Distribution of any net long term capital gains realized by the Series in 1997
will be taxable to the shareholder as long term capital gains, regardless of the
length of time Series shares have been held by the investor. All income realized
by the Series, including short term capital gains, will be taxable to the share-
holder as ordinary income. Dividends from net income will be made annually or
more frequently at the discretion of the Fund's Board of Directors. Dividends
received shortly after purchase of shares by an investor will have the effect of
reducing the per share net asset value of his shares by the amount of such divi-
dends or distributions and, although in effect a return of capital, are subject
to federal income taxes.
The Series is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on a W-9 tax form supplied by
the Fund that your Social Security or Taxpayer Identification Number provided is
correct and that you are not currently subject to back-up withholding, or that
you are exempt from back-up withholding.
INVESTMENT RESTRICTIONS
By-laws of the Fund provide the following fundamental investment restrictions;
The Fund may not, except by the approval of a majority of the outstanding
shares; i.e. a) 67% or more of the voting securities present at a duly called
meeting, if the holders of more than 50% of the outstanding voting securities
are present or represented by proxy, or b) of more than 50% of the outstanding
voting securities, whichever is less:
(a) Act as underwriter for securities of other issuers except insofar as the
Fund may be deemed an underwriter in selling its own portfolio securities.
(b) Borrow money or purchase securities on margin, but may obtain such short
term credit as may be necessary for clearance of purchases and sales of se-
curities for temporary or emergency purposes in an amount not exceeding 5%
of the value of its total assets.
(c) Sell securities short.
(d) Invest in securities of other investment companies (other than money market
funds for temporary investment) except as part of a merger, consolidation,
or purchase of assets approved by the Fund's shareholders or by purchases
with no more than 10% of the Fund's assets in the open market involving
only customary brokers commissions.
(e) Invest 25% or more of its assets at the time of purchase in any one indus-
try (other than U.S. Government Securities or money market funds for temp-
orary investment).
(f) Make investments in commodities, commodity contracts or real estate although
the Fund may purchase and sell securities of companies which deal in real
estate or interests therein.
(g) Make loans. The purchase of a portion of a readily marketable issue of pub-
licly distributed bonds, debentures or other debt securities will not be
considered the making of a loan.
(h) Acquire more than 10% of the securities of any class of another issuer,
(other than obligations issued or guaranteed by the United States Govern-
ment, its agencies or its instrumentalities) treating all preferred secur-
ities of an issuer as a single class and all debt securities as a single
class, or acquire more than 10% of the voting securities of another issuer.
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(i) Invest in companies for the purpose of acquiring control.
(j) The Fund may not purchase or retain securities of any issuer if those offi-
cers and directors of the Fund or its Investment Adviser owning individual-
ly more than 1/2 of 1% of any class of security or collectively own more
than 5% of such class of securities of such issuer.
(k) Pledge, mortgage or hypothecate any of its assets.
(l) Invest in securities which may be subject to registration under the Securi-
ties Act of 1933 prior to sale to the public or which are not at the time of
purchase readily salable.
(m) Invest more than 5% of the total Fund assets, taken at market value at the
time of purchase, in securities of companies with less than three years'
continuous operation, including the operations of any predecessor.
(n) Issue senior securities
INVESTMENT ADVISER
Carosa & Stanton Asset Management, LLC is a New York Limited Liability Company
that acts as an Investment Adviser to the Fund. Carosa & Stanton Asset Manage-
ment, LLC began accepting private portfolio management clients in February of
1997 and currently manages five portfolios and has nearly one million dollars
under management as of May 1997. Christopher Carosa and Gordon R. Stanton est-
ablished Carosa & Stanton Asset Management, LLC in late 1996 as the principal
members & officers and are, respectively, are the president and vice-president
of the Fund. Mr. Carosa has direct responsibility for day to day management of
the Series' portfolio. He has a B.S. (Intensive) in Physics and Astronomy from
Yale University and an MBA in Finance and Marketing from the University of
Rochester's William E. Simon Graduate School of Business. He began his career
in 1982 with Manning & Napier Advisors, Inc. When he left Manning & Napier in
the summer of 1996 to begin writing finance books, he was a Managing Director
and member of the Funds Group as well as Executive Vice President and Senior
Trust Officer for Exeter Trust Company, an affiliate of Manning & Napier. At
the time of his departure, Mr. Carosa was responsible for custody and trust
operations for more than 700 accounts with assets approaching $1 billion and he
was a member of the Trust and Investment Committee. Mr. Stanton has a B.A. in
Architecture from Yale University and an MBA in Finance, Economics and Manage-
ment for the Stern School of Business. While his most recent experience has been
as owner of a company which produced laser light shows, Mr. Stanton has extens-
ive experience working for non-profit organizations. Mr. Carosa & Mr. Stanton
have been the members of the management committee of a private investment part-
nership formed in July of 1987. In order to permit other investors to particip-
ate in the investment objective of this partnership, in early 1997 the partners
voted to convert that partnership into a public no-load mutual fund and formal-
ize Mr. Carosa's and Mr. Stanton's duties by selecting their firm to be invest-
ment adviser. The board of directors include former partners of the private in-
vestment partnership. Shareholders should recognize that, even though Series has
been operated as a partnership since 1987 and will continue to be operated in a
substantially similar fashion, and even though Mr. Carosa has extensive exper-
ience with investment company and collective fund operations, the Fund itself is
a new entity and has no operating history. On February 1, 1997 shareholders of
the Series reviewed an Investment Management Agreement with Carosa & Stanton
Asset Management, LLC, which was unanimously approved by the Board of Directors
February 1, 1997. This Agreement will continue on a year to year basis provided
that approval is voted at least annually by specific approval of the Board of
Directors of the Fund or by vote of the holders of a majority of the outstanding
voting securities of the Series, but, in either event, it must also be approved
by a majority of the directors of the Fund who are neither parties to the agree-
ment nor interested persons as defined in the Investment Company Act of 1940 at
a meeting called for the purpose of voting on such approval. Under the Agree-
ment, Carosa & Stanton Asset Management, LLC will furnish investment advice to
the Directors on the basis of a continuous review of the portfolio and recommend
when and to what extent securities should be purchased or disposed. The Agree-
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ment may be terminated at any time, without the payment of any penalty, by the
Board of Directors or by vote of a majority of the outstanding voting securities
of the Series on not more than 60 days' written notice to Carosa & Stanton Asset
Management, LLC. In the event of its assignment, the Agreement will terminate
automatically. Ultimate decisions as to the investment policy and as to individ-
ual purchases and sales of securities are made by the Fund's officers and dir-
ectors. For these services the Fund has agreed to pay to Carosa & Stanton Asset
Management, LLC a fee of 1.25% per year on the first million dollars of net
assets of the Series and 1.0% per year on the remaining portion of net assets of
the Series. All fees are computed on the average daily closing net asset value
of the Series and are payable monthly in arrears. Notwithstanding, the Invest-
ment Adviser will forgo sufficient fees to hold the total expenses of the Series
to less than 2.0% of the first $10 million in assets and 1.5% of the next $20
million. These ratios were selected by the Board of Directors because they are
believed to meet the most restrictive state requirements.
Pursuant to its contract with the Fund, the Investment Adviser is required to
render research, statistical, and Advisory services to the series; to make spe-
cific recommendations based on the Series' investment requirements; and to pay
the salaries of those of the Series' employees who may be officers or directors
or employees of the Investment Adviser. The Fund is responsible for the operat-
ing expenses of the Series, including: (i) interest and taxes; (ii) brokerage
commissions; (iii) insurance premiums; (iv) compensation and expenses of its
Directors other than those affiliated with the Adviser; (v)legal and audit ex-
penses; (vi) fees and expenses of the Series' Custodian, and Accounting Servic-
es Agent, if obtained for the Series from an entity other than the Adviser;
(vii) expenses incidental to the issuance of its shares, including iss-
uance on the payment of, or reinvestment of, dividends and capital gain distrib-
utions; (viii) fees and expenses incidental to the registration under federal
or state securities laws of the Series or its shares;(ix) expenses of preparing,
printing and mailing reports and notices and proxy material to shareholders
of the Series; (x) all other expenses incidental to holding meetings of the
Series' shareholders; (xi) dues or assessments of or contributions to the In-
vestment Company Institute or any successor; and (xii) such non-recurring ex-
penses as may arise, including litigation affecting the Series and the legal
obligations with respect to which the Series may have to indemnify its Officers
and Directors.
The Adviser may use its own resources to engage in activities that promote
the sale of the Series, including payments to third-parties who provide share-
holder support servicing and distribution assistance. Investors may be charged
a fee if they effect transactions through a broker or agent.
CAPITALIZATION
Description of Common Stock: The authorized capitalization of the Fund consists
of 10,000,000 shares of common stock of $0.01 par value per share. Each share
has equal dividend, distribution and liquidation rights. There are no conver-
sion or pre-emptive rights applicable to any shares of the Fund. All shares
issued are fully paid and non-accessible.
Voting Rights: Each holder of common stock has one vote for each share held
and fractional shares will have an equivalent fractional vote. Voting rights
are non-cumulative.
PURCHASE OF SHARES -REINVESTMENTS
The offering price of the shares offered by the Series is at the net asset value
per share next determined after receipt of the purchase order by the Series and
is computed in the manner described under the caption "PRICING OF SHARES" in
this Prospectus. The Series reserves the right at its sole discretion to termin-
ate the offering of its shares made by this Prospectus at any time and to reject
purchase applications when, in the judgment of management such termination or
rejection is in the best interests of the Series.
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Payment may be made by check or readily available funds. A purchase
order will be effective as of the day the check is received by the Series
if the Series receives the check before the close of regular trading on
the New York Stock Exchange, normally 4:00 p.m., Eastern time. If payment is
received by wire, the purchase order will be effective the day payment is
received by the Series' custodian. The purchase price of shares of the
Series is the net asset value determined on the day the purchase order
is effective.
The shares of the Series may be purchased in exchange for securities to
be included in the Series, subject to the Adviser's determination that these
securities are acceptable. Securities accepted in an exchange will be valued
using the same valuation method the Series uses to value portfolio securities.
All accrued interest and purchase or other rights which are reflected in the
market price of accepted securities at the time of valuation become the prop-
erty of the Series and must be delivered by the shareholder to the Series upon
receipt from the issuer. Shares issued in exchanged for securities will be
priced at the net asset value calculated on the day of exchange.
The Adviser will not accept securities in exchange for shares of the Series
unless (1) such securities would normally qualify for purchase by the Series
at the time of the exchange; (2) the shareholder represents and agrees that
all securities offered to the Series are not subject to any restrictions upon
their sale by the Series under the Securities Act of 1933, or otherwise; and
(3) prices are available consistent with the valuation method the Series uses
to value portfolio securities.
Initial Investments: Initial purchase of shares of the Series may be made on-
ly by application submitted to the Fund. For the convenience of investors, a
Share Purchase Application form is provided with this Prospectus. The minimum
initial purchase of shares is $2,500 ($1,000 for IRAs). Less may be accepted
under special circumstances.
Subsequent Purchases: Subsequent purchases may be made by check or readily
available funds and may be made in writing (including an electronic trans-
mission) or by telephone. Shareholders wishing to make subsequent purchases
by telephone must first elect the privilege by writing to the Fund. The
minimum subsequent purchase is $250 ($50 for IRAs), but less may be accepted
under special circumstances.
Re-Investments: The Fund will automatically retain and reinvest dividends
and capital gains distributions in fractional shares and use same for the pur-
chase of additional shares for the shareholder at net asset value as of the
close of business on the distribution date. A shareholder may at any time by
letter or forms supplied by the Fund direct the Fund to pay dividend and/
or capital gains distributions, if any, to such shareholder in cash.
Fractional Shares: Fractional shares may be purchased. The Fund will
maintain an account for each shareholder of shares for which no certificates
have been issued.
RETIREMENT PLANS
Individual Retirement Account: Persons who earn compensation and are not active
participants (and who do not have a spouse who is an active participant) in an
employee maintained retirement plan may establish Individual Retirement Accounts
(IRA) using Fund shares. Annual contributions, limited to the lesser of $2,000
or 100% of compensation, are tax deductible from gross income. This IRA deduc-
tion is also retained for individual taxpayers and married couples with adjusted
gross ncomes within certain specified limits. All individuals may make nonde-
ductible IRA contributions to separate accounts to the extent that they are not
eligible for a deductible contribution.
Earnings under the IRA are reinvested and are tax-deferred until withdrawals be-
gin. The maximum annual contribution may be increased to $2,250 if you have a
spouse who earns no compensation during the taxable year. A separate and inde-
pendent Spousal IRA must be maintained.
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You may begin to make non-penalty withdrawals as early as age 59 1/2 or as late
as age 70 1/2. In the event of death or disability, withdrawals may be made be-
fore age 59 1/2 without penalty.
A Disclosure Statement is required by U.S. Treasury Regulations. This Statement
describes the general provisions of the IRA and is forwarded to all prospective
IRA accounts. There is no charge to open and maintain a Bullfinch Fund IRA.
This policy may be changed by the Board of Directors if they deem it to be
in the best interests of all shareholders. All IRA's may be revoked within 7
days of their establishment with no penalty.
PRICING OF SHARES
The net asset value of the Series' shares is determined as of the close of busi-
ness of the New York Stock Exchange (the "Exchange") on each business day of
which that Exchange is open. The Exchange annually announces the days on which
it will not be open for trading; the most recent announcement indicates that
it will not be open on: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The price
is determined by dividing the value of its securities, plus any cash and other
assets less all liabilities, excluding capital surplus, by the number of shares
outstanding. The market value of securities listed on a national exchange is
determined to be the last recent sales price on such exchange. Listed securities
that have not recently traded and over-the-counter securities are valued at the
last bid price in such market.
Short term paper (debt obligations that mature in less than 60 days) is valued
at amortized cost which approximates market value. Other assets are valued at
fair value as determined in good faith by the Board of Directors.
REDEMPTION OF SHARES
The Series will redeem all or any part of the shares of any shareholder who
sends a letter requesting redemption to the Fund at its address as it
appears on this Prospectus (if certificates have not been issued) or certifi-
cates with respect to shares for which certificates have been issued. In either
case, proper endorsements guaranteed either by a national bank or a member firm
of the New York Stock Exchange will be required. The Fund will waive the sig-
nature guarantee requirement should the shareholder personally deliver the
letter requesting redemption to the Fund at its address as it appears on this
Prospectus and provides two valid forms of identification including a valid
drivers license and a major credit card. The redemption price is the net asset
value per share next determined after notice is received by the Series for
redemption of shares. The proceeds received by the shareholder may be more or
less than his cost of such shares, depending upon the net asset value per
share at the time of redemption and the difference should be treated by the
shareholder as a capital gain or loss for federal income tax purposes.
Payment by the Series will ordinarily be made within three business days after
tender. The Series may suspend the right of redemption or postpone the date of
payment if: The New York Stock Exchange is closed for other than customary week-
end or holiday closings, or when trading on the New York Stock Exchange is re-
stricted as determined by the Securities and Exchange Commission or when the
Securities and Exchange Commission has determined that an emergency exists, mak-
ing disposal of fund securities or valuation of net assets not reasonably prac-
ticable. The Series intends to make payments in cash, however, the Series
reserves the right to make payments in kind.
BROKERAGE
The Investment Management Agreement states that in connection with its duties to
arrange for the purchase and the sale of securities held in the portfolio of
the Series by placing purchase and sale orders for the Series, the Adviser shall
select such broker-dealers ("brokers") as shall, in the Adviser's judgment,
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implement the policy of the Series to achieve "best execution", i.e., prompt
and efficient execution at the most favorable securities price. In making such
selection, the Adviser is authorized in the Agreement to consider the
reliability, integrity and financial condition of the broker, the size and
difficulty in executing the order and the value of the expected contribution of
the broker to the investment performance of the Series on a continuing basis.
The Adviser is also authorized to consider whether a broker provides brokerage
and/or research services to the Series and/or other accounts of the Adviser.
Information or services may include economic studies, industry studies, stat-
istical analyses, corporate reports, or other forms of assistance to the Series
or its Adviser. No effort will be made to determine the value of these
services or the amount they may reduce expenses of the Adviser or the Series.
The Board of Directors will evaluate and review the reasonableness of
brokerage commissions paid on a monthly basis initially and after the first
year of operation at least semiannually.
MANAGEMENT OF THE FUND
The Fund does not expect to hold annual meetings of shareholders but special
meetings of shareholders may be held under certain circumstances. Shareholders
of the Fund retain the right, under certain circumstances, to request that a
meeting of shareholders be held for the purpose of considering the removal of a
Director from office, and if such a request is made, the Fund will assist with
shareholder communications in connection with the meeting. The overall business
and affairs of the Fund is managed by the Fund's Board of Directors. The Board
approves all significant agreements between the Fund and persons or companies
furnishing services to the Fund, including the Fund's agreements with its
Investment Adviser and Custodian. The day-to-day operations of the Fund are
delegated to the Fund's officers and to Carosa & Stanton Asset Management, LLC
(the "Adviser"), 2 Lantern Lane, Honeoye Falls, NY 14472. Christopher Carosa,
President of the Fund and President of the Series' Investment Adviser, will be
primarily responsible for the day-to-day management of the Series' portfolio.
The Board meets regularly four times a year to review Fund progress and status.
The Board may convene a special meeting under certain circumstances. In addi-
tion, the Board may ask a non-interested Director to perform an independent
audit as requested by the Board.
CUSTODIAN & TRANSFER AGENT
The Fund acts as its own transfer agent. Pursuant to an agreement unanimously
approved by the Board of Directors on February 1, 1997, the custodian for the
Unrestricted Series is Charles Schwab & Co., Inc., The Schwab Building, 101
Montgomery Building, San Francisco, CA 94104. Charles Schwab & Co., Inc. may,
at its own expense, employ a sub-custodian, provided that Charles Schwab & Co.,
Inc. shall remain liable for all its duties as custodian.
REPORTS TO SHAREHOLDERS
The Fund sends all shareholders annual reports containing audited financial
statements and other periodic reports, at least semiannually, containing unau-
dited financial statements.
AUDITORS
Bonadio & Co., LLP, Certified Public Accountants, Rochester, NY have been
selected as the independent auditor of the Series. Bonadio & Co., LLP has no
direct or indirect financial interest in the Fund or the Adviser.
ADDITIONAL INFORMATION
This Prospectus omits certain information contained in the registration state-
ment on file with the Securities & Exchange Commission. The registration state-
ment may be inspected without charge at the principal office of the Commission
in Washington, D.C. and copies of all or part thereof may be obtained upon pay-
ment of the fee prescribed by the Commission. Shareholders may also direct in-
quiries to the Fund by phone or at the address given on pg 1 of this Prospectus.
-11-
<PAGE>
SHARE PURCHASE APPLICATION
A) Please fill out one of the following four types of accounts:
1) Individual Accounts ****
______________________ __ ____________________ ______________________
First Name MI Last Name Social Security Number
2) Joint Accounts ****
______________________ __ ____________________ ______________________
First Name MI Last Name Social Security Number
______________________ __ _____________________ _______________________
First Name MI Last Name Social Security Number
3) Custodial Accounts ****
______________________ __ ____________________
Custodian's First Name MI Custodian's Last Name
______________________ __ ____________________ ______________________
Minor's First Name MI Minor's Last Name Minor's
Social Security Number
4) All Other Accounts ****
___________________________________________ __________________________
Name of account. Tax Identification Number
___________________________________________
(Use this second line if you need it)
B) Biographical and other information about the new account:
Full Address:
Number & Street ___________________________________________________
City__________________________ St____ Zip________________________
Citizen of____________________ Home Phone_____________ Bus Phone______________
Dividend Direction: Reinvest all distributions_________ Pay in Cash__________
Signature of Owner, Trustee or Custodian: ___________________________________
Signature of Joint Owner (if joint account): ___________________________________
Please make check payable to: BULLFINCH FUND, INC.
Amount of Investment Attached $______________ (Minimum initial purchase $2,500)
All applications are accepted in New York and under New York laws.
-13-
<PAGE>
FORM W-9
(March 1994)
Department of Treasury
Internal Revenue Service
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER
Name as shown on account (if joint account, give name corresponding to TIN)
_________________________________________________
Street Address
_________________________________________________
City, State & Zip Code
_________________________________________________
Part 1.- Taxpayer Identification Number Part 2. - Backup Withholding
Social Security Number ______________________ Check if you are NOT subject
to backup withholding under
or the provisions of section
3406(a) (1) (C) of the In-
Employer ID Number ______________________ ternal Revenue Code ________
Certification - Under the penalty of perjury, I certify that the information
provided on this form is true, correct and complete.
Signature ___________________________________ Date _______________________
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<PAGE>
INVESTMENT ADVISER PROSPECTUS
CAROSA & STANTON ASSET MANAGEMENT, LLC BULLFINCH FUND, INC.
UNRESTRICTED SERIES
8 East Street, Suite 200 2 Lantern Lane
Honeoye Falls, NY 14472 Honeoye Falls, NY 14472
716-234-2080 716-624-1758
XXXXX XX, 1997
TABLE OF CONTENTS
Unrestricted Series Expenses ..... 2 The Series seeks wealth accumulation
Condensed Financial Information .. 2 (i.e., conservative long term growth)
The Fund ......................... 3 Using conservative investment strat-
Objective & Policies egies, the Adviser seeks to achieve
Objective ...................... 3 this objective by using an asset mix
Investment Policies ............ 3 consisting primarily of exchange
Portfolio Turnover Policy ...... 3 listed and over-the-counter common
Nondiversification Policy ...... 3 stocks (that the Adviser categorizes
Tax Status ....................... 3 into three proprietary equity sect-
Investment Restrictions .......... 4 ors: growth, value and income) as
Investment Adviser ............... 5 well as cash (including money market
Capitalization funds) and short term notes. The Adv-
Description of Common Stock .... 6 iser seeks to reduce the risk of neg-
Voting Rights .................. 6 ative returns while seeking to obtain
Purchase of Shares - Reinvestment. 6 capital growth when it believes valu-
Initial Investments ............ 7 ations and market conditions are fav-
Subsequent Purchases ........... 7 orable. In using this conservative
Reinvestments .................. 7 approach, current income from these
Whole Shares ................... 7 investments may be considered when
Retirement Plans selecting investments.
IRA ............................ 7
Pricing of Shares ................ 8
Redemption of Shares ............. 8
Brokerage ........................ 8
Management of the Fund ........... 9
Custodian & Transfer Agent ....... 9
Reports to Shareholders .......... 9
Auditors ......................... 9
Additional Information ........... 9
Share Purchase Application ...... 10
-15-
<PAGE>
BULLFINCH FUND, INC.
UNRESTRICTED SERIES
2 Lantern Lane
Honeoye Falls, NY 14472
716-624-1758
Part B
STATEMENT OF ADDITIONAL INFORMATION
XXXXX XX, 1997
This Statement is not a prospectus, but should be read in conjunction with the
Serie's current prospectus dated XXXXX XX, 1996. To obtain the Prospectus,
please write the Fund or call the either of the telephone number that are shown
above and on the prior page.
TABLE OF CONTENTS
Tax Status ............................2
Officers and Directors of the Fund ....4
Calculation of Performance Data .......5
Auditor's Report ......................6
Statement of Assets and Liabilities ...7
Notes to Financial Statement ..........9
-1-
<PAGE>
TAX STATUS
Under provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as amend-
ed, the Series, by paying out substantially all of its investment income and
realized capital gains, and by satisfying certain other requirements has been
andintends to continue to be relieved of federal income tax on the amounts dis-
tributed to shareholders.
Distribution of any net long term capital gains realized by the Series in 1997
will be taxable to the shareholder as long term capital gains, regardless of the
length of time Series shares have been held by the investor. All income realized
by the Series, including short term capital gains, will be taxable to the share-
holder as ordinary income. Dividends from net income will be made annually or
more frequently at the discretion of the Fund's Board of Directors. Dividends
received shortly after purchase of shares by an investor will have the effect of
reducing the per share net asset value of his shares by the amount of such divi-
dends or distributions and, although in effect a return of capital, are subject
to federal income taxes.
The Series is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on a W-9 tax form supplied by
the Fund that your Social Security or Taxpayer Identification Number provided is
correct and that you are not currently subject to back-up withholding, or that
you are exempt from back-up withholding.
FEDERAL TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS
The following is only a summary of certain additional tax considerations
generally affecting the Series and its shareholders that are not described in
the Series' Prospectus. No attempt is made to present a detailed explanation
of the tax treatment of the Series or its shareholders, and the discussion here
and in the Series' Prospectus is not intended as a substitute for careful tax
planning.
The following discussion of federal income tax consequences is based on
the Internal Revenue Code of 1986, as amended (the "Code") and the regulations
issued thereunder as in effect on the date of this Statement of Additional
Information. New legislation, as well as administrative changes or court
decisions, may significantly change the conclusions expressed herein, and may
have a retroactive effect with respect to the transactions contemplated
herein.
Qualification as Regulated Investment Company
As a regulated investment company ("RIC") under Subchapter M of the Code,
the Series is exempt from federal income tax on its net investment income and
capital gains which it distributes to shareholders, provided that it
distributes at least 90% of its investment company taxable income (generally,
net investment income and the excess of net short-term capital gain over net
long-term capital loss) for the year (the "Distribution Requirement") and
satisfies certain other requirements of the Code that are described below.
Distributions of investment company taxable income made during the taxable
year will satisfy the Distribution Requirement.
- 2 -
<PAGE>
In addition to satisfaction of the Distribution Requirement each Series
must derive at least 90% of its gross income from dividends, interest, certain
payments with respect to securities loans and gains from the sale or other
disposition of stocks, securities or foreign currencies, or from other income
(including but not limited to gains from options, futures or forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies ("Qualifying Income") and derive less than 30% of its
gross income from the sale or other disposition of stocks, securities and
certain other investments held for less than three months including foreign
currencies (or options, futures or forward contracts on foreign currencies)
but only if such currencies (or options, futures or forward contracts) are not
directly related to the Series' principal business of investing in stock or
securities or options and futures with respect to stocks or securities (the
so-called "Short-Short Gain Rule"). Moreover, at the close of each quarter
of its taxable year, at least 50% of the value of the Series' assets must
consist of cash and cash items, Government securities, securities of other
RICs, and securities of other issuers (as to which the Series has not
invested more than 5% of the value of its total assets in any one issuer and
as to which the Series does not hold more than 10% of the outstanding voting
securities of any one issuer), and no more than 25% of the value of its total
assets may be invested in the securities of any one issuer (other than
Government securities and securities of other RICs), or in two or more issuers
which the Series controls and which are engaged in the same, similar or related
trades or businesses (the "Asset Diversification Test").
- 3 -
<PAGE>
OFFICERS AND DIRECTORS OF THE FUND
Officers and Directors of the Fund, together with their addresses, principal
occupations during the past five years are:
Name and Address Age Position Principal Occupation Past Five Years
Christopher Carosa* 36 President, President
2 Lantern Lane Treasurer, Carosa & Stanton Asset Management, LLC
Honeoye Falls, Chairman of the NY Honeoye Falls, NY
the Board/
Director Managing Director
Manning & Napier Advisers, Inc.
Executive VP & Senior Trust Officer
Exeter Trust Company
Rochester NY
Gordon R. Stanton* 38 Vice-President, Vice-President
230 E. 73rd St. #4C Director Carosa & Stanton Asset Management, LLC
New York, NY Honeoye Falls, NY
President
Laser Reflections, Inc.
(Producer of Laser Light Shows)
New York, NY
William E.J. Martin 37 Director Construction Project Manager/Estimator
4410 Woodlawn Ave N ECI General Contractors, Inc.
Seattle, WA Seattle, WA
Thomas Midney 36 Director Director of Production Planning
13 Burr Road The Goss & DeLeeuw Machine Company
Bloomfield, CT Kensington, CT
Michael J. Morris 36 Director Director of Pricing
334 Robbins Ave United HealthCare
Newington, CT Hartford, CT
Betsy K. Carosa 36 Secretary Secretary
2 Lantern Lane (Wife of the Bullfinch Fund, Inc.
Honeoye Falls, NY President) Honeoye Falls, NY
COMPENSATION TABLE
Aggregate Pension or Estimated Total
Name, Position Compens Retirement Annual Compensation
ation From Benefits Benefits Upon From Registrant
Registrant Accrued As Retirement And Fund Complex
Part of Fund Paid to
Expenses Directors
Christopher $ 0 N/A N/A $ 0
Carosa*, Director
Gordon R. $ 0 N/A N/A $ 0
Stanton*, Director
William E.J. $ 0 N/A N/A $ 0
Martin, Director
Thomas $ 0 N/A N/A $ 0
Midney, Director
Michael J. $ 0 N/A N/A $ 0
Morris, Director
* Director of the Fund who would be considered "interested persons" as defined
by the Investment Company Act of 1940.
A total of $0 has been paid in 1997 to officers and directors of the Fund to
compensate for travel expenses associated with their Fund duties. The Fund does
not compensate its officers and directors that are affiliated with the Invest-
ment Adviser except as they may benefit through payment of the Advisory fee (see
pg. 5 of the Prospectus).
- 4 -
<PAGE>
CALCULATION OF PERFORMANCE DATA
YIELD AND TOTAL RETURN
From time-to-time the Series may advertise its total return. Both
yield and total return figures are based on historical earnings and are not
intended to indicate future performance. The "total return" of a Series
refers to the average annual compounded rates of return over one-, five-, and
ten-year periods or for the life of the Series (as stated in the
advertisement) that would equate an initial amount invested at the beginning
of a stated period to the ending redeemable value of the investment, assuming
the reinvestment of all dividend and capital gains distributions.
The "30-day yield" of a Series is calculated by dividing the net investment
income per share earned during a 30-day period by the net asset value per
share on the last day of the period. Net investment income includes interest
and all recurring and nonrecurring charges that have been applied to all
shareholder accounts. The yield calculation assumes that net investment
income earned over 30 days is compounded monthly for six months and then
annualized. Methods used to calculate advertised yields are standardized for
all stock and bond mutual funds. However, these methods differ from the
accounting methods used by a Series to maintain its books and records, and so
the advertised 30-day yield may not fully reflect the income paid to your own
account or the yield reported in a Series' reports to shareholders.
-5-
<PAGE>
BONADIO & CO, LLP
Certified Public Accountants
1850 South Winton Road
Rochester, NY 14628
716-244-2000
Fax 716-244-5611
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of Bullfinch Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of Bull-
finch Fund, Inc., including the schedule of investments in securities, as of
March 31, 1997. This financial statement is the responsibility of the Fund's
management. Our responsibility is to express an opinion on this statement based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material misstate-
ment. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by man-
agement, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above pre-
sents fairly, in all material respects, the financial position of Bullfinch
Fund, Inc. as of March 31, 1997 in conformity with generally accepted accounting
principles.
BONADIO & CO., LLP
Rochester, New York
April 7, 1997
-6-
<PAGE>
BULLFINCH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997
ASSETS
Investments in securities, at value, identified cost $51,433 $ 50,413
Cash 56,382
Receivable from initial sale of common stock 5,150
Other 288
Organization expenses, net of accumulated amortization of $217 6,283
--------------
Total assets 118,516
--------------
LIABILITIES
Accrued organization costs 6,500
--------------
NET ASSETS
Net assets (equivalent to $9.96 per share based on
shares of common stock outstanding) $ 112,016
==============
The accompanying notes are an integral part of these statements.
-7-
<PAGE>
BULLFINCH FUND, INC.
INVESTMENTS IN SECURITIES
MARCH 31, 1997
Shares Value
Common Stock -
Oracle Corporation 450 $ 17,353
Pepsico Incorporated 200 6,475
Dollar General Corporation 156 4,875
Texas Utilities Company 110 3,768
Toys R Us Inc. Holding Company 100 2,800
Standard Motor Products, Inc. 200 2,625
Vital Signs, Inc. 100 2,250
Skyline Corporation 100 2,187
Vertex Communications Corp. 100 2,125
Pier One Imports, Inc. 110 1,939
Nevada Power Company 110 1,590
Jackpot Enterprises, Inc. 126 1,260
Walt Disney Holding Co. 16 1,166
------------
$ 50,413
==============
The accompanying notes are an integral part of these statements.
-8-
<PAGE>
BULLFINCH FUND, INC.
NOTES TO FINANCIAL STATEMENT
MARCH 31, 1997
(1) The Organization
Bullfinch Fund, Inc. (the "Fund") was organized as a corporation in Mary-
land on January 29, 1997. The Fund had no operations since that date oth-
er than matters relating to its organization and registration as an open-
end, nondiversified management investment company under the Investment
Company Act of 1940, its registration of securities under the Securities
Act of 1933 and the sale and issuance of 11,247.184 shares of common stock
("initial shares") to its initial, joint tenant investors on February 1,
1997.
A majority of the Fund's owners are also the sole members of Carosa &
Stanton Asset Management, LLC, (Carosa & Stanton) the Fund's investment
advisor.
(2) Significant Accounting Policies
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those est-
imates.
The following is a summary of significant accounting policies of the
Fund, which are in accordance with generally accepted accounting princ-
iples in the investment company industry:
Cash -
Cash consists of amounts deposited in money market accounts and is not
federally insured. The Fund has not experienced any losses on such
amounts and believes it is not exposed to any significant credit risk on
cash.
Security Valuation -
Securities traded on national securities exchanges are valued daily at
the closing prices of the securities on these exchanges, and securities
traded on over-the-counter markets are valued daily at the closing price.
Short-term and money market securities are valued at amortized cost which
approximates market value.
Federal Income Taxes -
For federal income tax purposes, the Fund is expected to qualify as a
regulated investment company under the provisions of the Internal Revenue
Code by distributing substantially all of its taxable net income (both
ordinary and capital gain) to its shareholders and complying with other
requirements for regulated investment companies. Therefore, no provision
for income taxes is required.
-9-
<PAGE>
Organization Expenses -
The Fund expects to incur approximately $6,500 in organization costs.
These costs are being amortized over a 60 month period beginning with the
commencement of Fund operations.
The Fund's initial shareholders have agreed that if any of the initial
shares are redeemed during the first 60 months of the Fund's operations
by any holder thereof, the proceeds of the redemption will be reduced by
the pro rata share of the unamortized organization expenses as of the date
of the redemption. The pro rata share by which the redemption proceeds
shall be reduced shall be derived by dividing the number of original
shares redeemed by the total number of original shares outstanding at the
time of the redemption.
(3) Investment Advisory Agreement
Carosa & Stanton serves as investment advisor to the Fund pursuant to an
investment advisory agreement which was approved by the Fund's board of
directors. Carosa & Stanton is a registered investment adviser under the
Investment Advisers Act of 1940. The investment advisory agreement prov-
ides that Carosa & Stanton, subject to the supervision and approval of
the Fund's board of directors, is responsible for the day-to-day manage-
ment of the Fund's portfolio which include selecting the investments and
handling its business affairs.
As compensation for its services to the Fund, the investment advisor re-
ceives monthly compensation at an annual rate of 1.25% on the first $1
million of daily average net assets and 1% on that portion of the daily
average net assets in excess of $1 million. These fees will be reduced
by any sub-transfer agent fees incurred by the Fund.
Carosa & Stanton have agreed to forego sufficient investment advisory fees
to limit total expenses of the Fund to 2% of the first $10 million in av-
erage assets and 1.5% of the next $20 million in average assets.
(4) Capital Stock
The Fund has authorized 10,000,000 shares of common stock at $0.01 par
value per share. Each share has equal dividend, distribution and liquid-
ation rights. At March 31, 1997, 11,274.184 shares of common stock were
outstanding.
At March 31, 1997, $5,150 was receivable from the initial sale of common
stock. Subsequent to March 31, 1997, the Fund received equity securities
in payment of this amount.
-10-
<PAGE>
FORM N-1A
PART C - OTHER INFORMATION
Contents Page #
Item 24. Financial Statements & Exhibits 1
Item 25. Persons Controlled by or Under Common Control 1
Item 26. Number of Holders of Securities 1
Item 27. Indemnification 1
Item 28. Business and Other Connections of Investment Adviser 1
Item 29. Principal Underwriters 1
Item 30. Location of Accounts & Records 1
Item 31. Management Services 2
Item 32. Undertakings 2
Signatures 3
Exhibits 4
-i-
<PAGE>
Item 24. a. Financial Statements - All other financial statements are
presented in Part B. These include:
Statement of Assets and Liabilities March 31, 1997
Schedule of Investments in Securities March 31, 1997
Notes to Financial Statement March 31, 1997
b. Exhibits
(3.i) Articles of Incorporation
(3.ii) By-Laws
(10.1) Investment Management Agreement
(10.2) Custodian Agreement
(10.3) Reimbursement Agreements with Officers and/or Directors
(99.1) Opinion of Counsel Concerning Fund Securities
(99.2) Auditor's Consent
All exhibits believed to be applicable to the Fund have been
included.
Item 25. Persons Controlled by or Under Common Control - not applicable
Item 26. Number of Holders of Securities - There are three (3) shareholders of
the BULLFINCH FUND, Inc. as of filing.
Item 27. Indemnification - Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant, the registrant
has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being regist-
ered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be gov-
erned by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser - the activity
of Carosa & Stanton Asset Management, LLC at the present time is
performance under the terms of the Investment Management Agreement
currently effective between Carosa & Stanton Asset Management, LLC
and the BULLFINCH FUND, Inc. Mr. Christopher Carosa and Mr. Gordon R.
Stanton are the sole members of the Investment Adviser. Mr. Carosa
is also Executive Director of CTO Research Associate, a research
and consulting firm, and within the past two years has been employed
as a Managing Director by Manning & Napier Advisors, Inc. and as
Executive Vice President and Senior Trust Officer of its affiliate,
Exeter Trust Company. Mr. Stanton, within the past two years, has
been President of Laser Reflections, Inc., a producer of laser light
shows. Both Mr. Carosa and Mr. Stanton are partners of and are sole
members of the CTO Fund, a private investment partnership.
Item 29. Principal Underwriters - the Fund acts as its own underwriter.
Item 30. Location of Accounts & Records - all Fund records, including all
accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules promulgated thereunder,
are held in corporate headquarters - 2 Lantern Lane, Honeoye Falls,
New York 14472. All assets and securities of the Series are in
account at Charles Schwab & Co. Inc, The Schwab Building, 101
Montgomery Building, San Francisco, CA 94104.
- 1 -
<PAGE>
Item 31. Management Services - Not applicable
Item 32. Undertakings - The Series undertakes to file a post-effective
amendment using financial statements which need not be certified
within four to six months after the effective date of the Series'
1933 Act Registration Statement.
- 2 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Invest-
ment Company Act of 1940, the BULLFINCH FUND, Inc. has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of Mendon and State of New York,
on the 30th day of May 1997.
BULLFINCH FUND, INC.
Christopher Carosa,
President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following person in the capacities and
on the date indicated.
Christopher Carosa President, Treasurer and Director 5-30-97
Gordon R. Stanton Vice President and Director 5-30-97
William E. J. Martin Director 5-30-97
Thomas Midney Director 5-30-97
Michael J. Morris Director 5-30-97
Betsy K. Carosa Secretary 5-30-97
-3-
<PAGE>
EXHIBIT - 3 i
Filed with the Maryland State Department of Assessments and
Taxation on January 29, 1997
Joseph V. Stewart
____________________________
Charter Specialist
ARTICLES OF INCORPORATION
OF
BULLFINCH FUND, INC.
FIRST: The undersigned, Evelyn Wright, whose post office address is
1013 Centre Road, Wilmington DE 19805, being at least eighteen years of age,
does hereby form a corporation under the General Laws of Maryland.
SECOND: The name of the corporation (which is hereinafter called the
Corporation) is: BULLFINCH FUND, INC.
THIRD: The purpose or purposes of the Corporation shall be to engage
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Maryland.
FOURTH: The post office address of the principal office of the
Corporation in Maryland is, 11 East Chase Street, Baltimore, MD 21202. The name
of the resident agent is CSC-Lawyers Incorporating Service Company at the same
address. Said resident agent is a citizen of Maryland and actually resides
therein.
FIFTH: The total number of shares of stock which the Corporation has
authority to issue is:
Ten million shares of Common Stock with a par value or one cent.
- 1 -
<PAGE>
SIXTH: The number of directors of the Corporation shall be Five which
number may be increased or decreased pursuant to the by-laws of the Corporation,
and so long as there are less than three (3) stockholders, the number of
directors may be less than three (3) but not less than the number of
stockholders, and the name(s) of the directors who shall act until there
successors are duly chosen and qualified are:
Christopher Carosa
Gordon R. Stanton
Michael J. Morris
Thomas Midney
William E. J. Martin
SEVENTH: The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, I have signed these Articles of Incorporation on
January 28, 1997, and severally acknowledged the same to be my act.
/s/ Evelyn Wright
- 2 -
EXHIBIT 3 ii
BULLFINCH FUND, INC.
BY-LAWS
ARTICLE I
STOCKHOLDERS
Section 1. Place of Meeting. All meetings of the stockholders shall be
held at the principal office of the Corporation or at such other place within
or without the State of Maryland as may from time to time be designated by the
Board of Directors and stated in the notice of meeting.
Section 2. Annual Meeting. An annual meeting of the stockholders of the
Corporation shall not be required to be held in any year in which the Investment
Company Act of 1940, as amended (the "1940 Act"), does not require that the
corporation obtain shareholder approval (i) for the election of director(s),
(ii) of any contract with an investment advisor or principal underwriter, as
those terms are defined in the 1940 Act, that the Corporation enters into, or
renewal or amendment thereof, or (iii) for the selection of the Corporation's
independent public accountants. In any year which an annual meeting of stock-
holders is not required to be held, the Board of Directors may, but shall not be
required to, determine to hold a meeting of the stockholders of the Corporation.
The meeting, if any, of the stockholders of the Corporation shall be held on the
date established by the Board of Directors during the fourth month following the
close of the Corporation's fiscal year, or on such other date as the Board of
Directors may from time to time determine, for the purpose of transacting any
business as may properly be brought before the meeting.
Section 3. Special or Extraordinary Meetings. Special or extraordinary
meetings of the stockholders for any purpose or purposes may be called by the
President or Chairman of the Board of Directors, if any, or by the Board of
Directors, and shall be called by the Secretary upon receipt of the request in
writing signed by stockholders holding not less than one quarter in amount of
the entire capital stock issued and outstanding and entitled to vote thereat.
Such request shall state the purpose or purposes of the proposed meeting.
Section 4. Notice of Meetings of Stockholders. Written or printed notice
of every meeting of stockholders, stating the time and place thereof (and gener-
al nature of the business proposed to be transacted at any special or extraord-
inary meeting), shall be given to each stockholder entitled to vote thereat not
less than the minimum nor more than the maximum number of days permitted under
the laws of Maryland, by leaving the same with him or at his residence or usual
place of business or by mailing it, postage prepaid, and addressed to him at his
address as it appears upon the books of the Corporation.
No notice of the time, place or purpose of any meeting of
stockholders need be given to any stockholder who attends in person or by proxy
or to any stockholder who, in writing executed and filed with the records of the
meeting, either before or after the holding thereof, waives such notice.
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<PAGE>
Section 5. Record Date. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, to exercise any rights in respect of
any stock or for the purpose of any other lawful action, the Board of Directors
may fix in advance a record date which shall not be less than the minimum nor
more than the maximum number of days prior to the scheduled date of such meeting
or prior to such action, as the case may be, permitted by the laws of Maryland.
A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting, unless
the Board of Directors fixes a new record date for the adjourned meeting.
Section 6. Quorum, Adjournment of Meetings. The presence in person or by
proxy of the holders of record of one-third the shares of stock of the
Corporation issued and outstanding and entitled to vote thereat, shall constit-
ute a quorum at all meetings of stockholders. If at any meeting of the stock-
holders there shall be less than a quorum present, the stockholders present at
such meeting may, without further notice, adjourn the same from time to time
until a quorum shall attend, but no business shall be transacted at any such ad-
journed meeting except such as might have been lawfully transacted had the meet-
ing not been adjourned.
Section 7. Voting and Inspectors. At all meetings, of stockholders, every
stockholder of record entitled to vote thereat shall be entitled to vote at such
meeting either in person or by proxy appointed by instrument in writing
subscribed by sich shareholder or his duly authorized attorney. No proxy which
is dated more than eleven months before the meeting at which it is offered shall
be accepted, unless such proxy shall, on its face, name a longer period for
which it is to remain in force.
All elections shall be had and all questions decided by a
majority of the votes cast at a duly constituted meeting, except as otherwise
provided in the Articles of Incorporation or in these By-Laws or by specific
statutory provision superceding the restrictions and limitations contained in
the Articles of Incorporation or in these By-Laws.
At any election of Directors, the Board of Directors prior
thereto may, or, if they have not so acted, the chairman of the meeting may, and
upon the receipt of the holders of ten percent of the stock entitled to vote at
such election shall, appoint two inspectors of elections who shall first
subscribe an oath or affirmation to execute faithfully the duties or inspectors
at such election with strict impartiality and according to the best of their
ability, and shall after the election make a certificate of the result of the
vote taken. No candidate for the office of Director shall be appointed such
Inspector.
The chairman of the meeting may cause a vote by ballot to be
taken upon any election or matter, and such vote shall be taken upon the request
of the holders of ten percent of the stock entitled to vote on such election or
matter.
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Section 8. Conduct of Shareholders' Meetings. The meetings of the
stockholders shall be presided over by the Chairman of the Board of Directors,
or if the Chairman shall not have been elected or present, by the President, or
if he shall no be present, by a Vice-President, or if none of them is present,
by a chairman to be elected at the meeting. The Secretary of the Corporation, if
present, shall act as secretary of such meetings, or if he is not present, an
Assistant Secretary shall so act; if neither the Secretary not an Assistant Sec-
retary is present, then the chairman of the meeting shall appoint a secretary.
Section 9. Concerning Validity of Proxies, Ballots, Etc. At every meeting
of stockholders, all proxies shall be received and taken in charge of, and all
ballots shall be received and canvassed by, the secretary of the meeting, who
shall decide all questions touching the qualification of voters, of votes, un-
less inspectors of election shall decide all such questions.
ARTICLE II
BOARD OF DIRECTORS
Section 1. Number and Tenure of Office. The business and affairs of the
Corporation shall be conducted and managed by a Board of Directors consisting of
that number of Directors specified by the Articles of Incorporation as original-
ly filed, which number may be increased or decreased as provided in Section 3 of
this Article. Each Director shall hold office until the annual meeting of
stockholders of the Corporation next succeeding his election or until a
successor is duly elected and qualifies. Directors need not be shareholders.
Section 2. Vacancies. Subject to the provisions of the Investment Company
Act of 1940 or any rule, regulation or order thereunder, (collectively referred
to herein as the "1940 Act"), any vacancy in the Board of Directors occurring
otherwise than by reason of any increase in the number of Directors authorized
for the Corporation shall be filled in accordance with the applicable laws of
Maryland.
Section 3. Increase or Decrease in Number of Directors. By the vote of a
majority of the entire Board, the Board of Directors may increase the number of
Directors to a number not exceeding fifteen, and may elect Directors to fill the
vacancies created by any such increase in the number of Directors, to hold
office until the next annual meeting of the stockholders or until their success-
ors are duly elected and qualify. By the vote of a majority of the entire Board,
the Board of Directors likewise may decrease the number of Directors to a number
not less than three, but the tenure of the office of any Director shall not be
affected by any such decrease made by the Board. In the event that after proxy
material has been printed or otherwise reproduced for a meeting of stockholders
at which Directors are to be elected, any one or more nominees for Director
nominated by management of the Corporation dies or becomes incapacitated and
thereby unable to serve in such office, the authorized number of Directors shall
be reduced automatically by the number of such deceased or incapacitated
nominees, and such deceased or incapacitated nominee's name shall be stricken
automatically from the name of those nominated, unless the Board of Directors
prior to the meeting shall determine otherwise.
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<PAGE>
Section 4. Place of Meeting. The Directors may hold their meetings, have
one or more offices, and keep the books of the Corporation outside the State of
Maryland, at any office or offices of the Corporation or at any other place as
they may from time to time by resolution determine, or, in the case of meetings,
as they may from time to time by resolution determine or as shall be specified
or fixed in the respective notices or waivers of notice thereof.
Section 5. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such time and on such notice, if any, as the Directors may from
time to time determine.
Section 6. Special Meetings. Special meetings of the Board of Directors
may be held from time to time upon call of the President or the Chairman of the
Board of Directors, if any, or of a majority of the Directors, by oral,
telegraphic or written notice duly served on, sent or mailed to each Director
not less than one day before each such meeting. No notice need be given to any
Director who attends in person or to any Director who, in writing executed and
filed with the records of the meeting wither before or after the holding there-
of, waives such notice. Such notice or waiver of notice need not state the pur-
pose or purposes of such meeting.
Section 7. Quorum. One-third of the Directors then in office shall constitute a
quorum for the transaction of business, provided that a quorum shall in no case
be less than two Directors. If at any meeting of the Board there shall be less
than a quorum present (in person or by open telephone line, to the extent perm-
itted by the 1940 Act), a majority of those present may adjourn the meeting from
time to time until a quorum shall have been obtained. The act of the majority of
the Directors present at any meeting at which there is a quorum shall be the act
of the Board of Directors, except as may be otherwise specifically provided by
statute, by the Articles of Incorporation or by these By-Laws.
Section 8. Executive Committee. By the affirmative vote of a majority of
the entire Board, the Board of Directors may elect from the Directors an
Executive Committee to consist of such number of Directors as the Board may from
time to time determine. The Board of Directors by such affirmative vote shall
have power at any time to change the members of such Committee and may fill
vacancies in the Committee by electing from the Directors. When the Board of
Directors is not in session, the Executive Committee shall have and may exercise
any or all of the powers of the Board of Directors in the management of the
business and affairs of the Corporation (including the power to authorize the
seal of the Corporation to be affixed to all papers which may require it) except
as provided by law. The Executive Committee may fix its own rules of procedure
and may meet, when and as provided by such rules or by resolution of the Board
of Directors, but in every case the presence of a majority shall be necessary to
constitute a quorum. In the absence of any member of the Executive Committee the
members thereof present at any meeting, whether or not they constitute a quorum,
may appoint a member of the Board of Directors to act in the place of such
absent member.
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Section 9. Other Committees. By the affirmative vote of a majority of the
entire Board, the Board of Directors may appoint other committees which shall in
each case consist of such number of members (not less than two) and shall have
and may exercise such powers as the Board may determine in the resolution
appointing them. A majority of all members of any committee may determine its
actions and fix the time and place of its meetings, unless the Board of Direct-
ors shall otherwise provide. The Board of Directors shall have power at any time
to change the members and powers of such committee, to fill vacancies, and to
discharge any such committee.
Section 10. Informal Action by and Telephone Meetings of Directors and
Committees. Any action required or permitted to be taken at any meeting of the
Board of Directors or any Committee thereof may be taken, except as otherwise
required by the 1940 Act, if a written consent to such action is signed by all
members of the Board, or of such Committee, as the case may be, and filed with
the minutes of the proceedings of the Board or Committee. Subject to the 1940
Act, members of the Board of Directors or a Committee thereof may participate in
a meeting by means of a conference telephone or similar communications equip-
ment; such participation shall, except as otherwise required by the 1940 Act,
have the same effect as presence in person.
Section 11. Compensation of Directors. Directors shall be entitled to
receive such compensation from the Corporation for their services as may from
time to time be voted by the Board of Directors.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The executive officers of the Corporation
shall be chosen by the Board of Directors. These may include a Chairman of the
Board of Directors, who shall be a Director, and shall include a President, one
or more Vice-Presidents (the number thereof to be determined by the Board of
Directors), a Secretary and a Treasurer. The Board of Directors or the Executive
Committee may also in their discretion appoint Assistant Secretaries, Assistant
Treasurers and other officers, agent and employees, each of whom shall hold
office at the pleasure of the Board or Executive Committee, or until his earlier
resignation, removal or other termination of employment and shall have such
authority and perform such duties as the Board or the Executive Committee may
determine. The Board of Directors may fill any vacancy which may occur in any
office. Any two officers, except those of President and Vice-President, may be
held by the same person, but no officer shall execute, acknowledge or verify any
instrument in more than one capacity, if such instrument is required by law or
these By-Laws to be executed, acknowledged or verified by two or more officers.
Section 2. Term of Office. The term of office or all officers shall be one
year and until their respective successors are chosen and qualified; however,
any officer may be removed from office at any time with or without cause by the
vote of the majority of the entire Board of Directors.
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<PAGE>
Section 3. Powers and Duties. The officers of the Corporation shall have
such powers and duties as generally pertain to their respective offices, as well
as such powers and duties as may from time to time be conferred by the Board of
Directors or the Executive Committee.
ARTICLE IV
CAPITAL STOCK
Section 1. Certificate of Shares. Each stockholder of the Corporation upon
request shall be entitled to a certificate or certificates evidencing his
interest in the Corporation, in such form as the Board of Directors may from
time to time prescribe.
Section 2. Transfer of Shares. Shares of the Corporation shall be
transferable on the books of the Corporation by the holder thereof in person or
by his duly authorized attorney or legal representative, upon surrender and
cancellation of certificates, if any, for the same number of shares of the same
class, duly endorsed or accompanied by proper instruments of assignment and
transfer, with such proof of the authenticity of the signature as the Corpora-
tion or its agents may reasonably require; in the case of share not represented
by certificates, the same or similar requirements may be imposed by the Board of
Directors.
Section 3. Stock Ledgers. The stock ledgers of the Corporation, containing
the name and address of the stockholders and the number of shares held by them
respectively, shall be kept at the principal offices of the Corporation or, if
the Corporation employs a transfer agent, at the offices of the transfer agent
of the Corporation.
Section 4. Lost, Stolen or Destroyed Certificates. The Board of Directors
may determine the conditions upon which a new certificate of stock of the
Corporation of any class may be issued in place of a certificate which is al-
leged to have been lost, stolen or destroyed; and may, in their discretion, re-
quire the owner of such certificates or his legal representatives to give bond,
with sufficient surety to the Corporation and the transfer agent, if any, to in-
demnify it and such transfer agent against any and all loss or claims which may
arise by reason of the issue of a new certificate in the place of the one so
lost, stolen or destroyed.
ARTICLE V
CORPORATE SEAL
The Board of Directors shall provide a suitable corporate seal, in such
form and bearing such inscriptions as it may determine.
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ARTICLE VI
FISCAL YEAR
The fiscal year of the Corporation shall be fixed from time to time by the
Board of Directors.
ARTICLE VII
INVESTMENT RESTRICTIONS
The Fund may not, except by the approval of a majority of the outstanding
shares; i.e. a) 67% or more of the voting securities present at a duly called
meeting, if the holders of more than 50% of the outstanding voting securities
are present or represented by proxy, or b) of more than 50% of the outstanding
voting securities, whichever is less:
(a) Act as underwriter for securities of other issuers except insofar as
the Fund may be deemed an underwriter in selling its own portfolio
securities.
(b) Borrow money or purchase securities on margin, but may obtain such
short term credit as may be necessary for clearance of purchases and
sales of securities for temporary or emergency purposes in an amount
not exceeding 5% of the value of its total assets.
(c) Sell securities short.
(d) Invest in securities of other investment companies (other than money
market funds for temporary investment) except as part of a merger,
consolidation, or purchase of assets approved by the Fund's
shareholders or by purchases with no more than 10% of the Fund's
assets in the open market involving only customary brokers commissions.
(e) Invest 25% or more of its assets at the time of purchase in any one
industry (other than U.S. Government Securities).
(f) Make investments in commodities, commodity contracts or real estate
although the Fund may purchase and sell securities of companies which
deal in real estate or interests therein.
(g) Make loans. The purchase of a portion of a readily marketable issue of
publicly distributed bonds, debentures or other debt securities will
not be considered the making of a loan.
(h) Acquire more than 10% of the securities of any class of another
issuer, (other than obligations issued or guaranteed by the United
States Government, its agencies or its instrumentalities) treating all
preferred securities of an issuer as a single class and all debt
securities as a single class, or acquire more than 10% of the voting
securities of another issuer.
(i) Invest in companies for the purpose of acquiring control.
(j) The Fund may not purchase or retain securities of any issuer if those
officers and directors of the Fund or its Investment Advisor owning
individually more than 1/2 of 1% of any class of security or
collectively own more than 5% of such class of securities of such
issuer.
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<PAGE>
(k) Pledge, mortgage or hypothecate any of its assets.
(l) Invest in securities which may be subject to registration under the
Securities Act of 1933 prior to sale to the public or which are not at
the time of purchase readily salable.
(m) Invest more than 5% of the total Fund assets, taken at market value at
the time of purchase, in securities of companies with less than
three years' continuous operation, including the operations of any
predecessor.
(n) Issue senior securities.
ARTICLE VIII
AMENDMENT OF BY-LAWS
The By-Laws of the Corporation may be altered, amended, added to or
repealed by the stockholders or by majority vote of the entire Board of
Directors, but any such alteration, amendment, addition or repeal of the By-Laws
by action of the Board of Directors may be altered or repealed by the
stockholders.
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Exhibit - 10 i
INVESTMENT MANAGEMENT AGREEMENT
This Investment Management Agreement (the "Agreement") is made by and between
the Bullfinch Fund, Inc. (the "Fund") and Carosa & Stanton Asset Management, LLC
(the "Investment Manager").
Whereas the Investment Manager is a registered investment adviser as required by
State and Federal law; and,
Whereas the Fund wishes to engage the services of the Investment Manager as
provided in the Agreement below;
Now, Therefore, the parties intend that the following Agreement govern the
relationship between them:
1. Appointment of Investment Manager. The Fund appoints the Investment Manager
as Fund's agent and attorney-in-fact, subject to the supervision and direction
of the Board of Directors of the Fund, to manage assets of the Fund which will
be delivered to the Custodian for that purpose, together with the proceeds of
investment and reinvestment, (hereinafter referred to as the "Account"), with
full authority to invest and reinvest all assets of the Account in securities or
funds on behalf of the Fund. In general, the role of the investment manager
includes, but is not limited to, the following: working with the Fund to
establish appropriate investment objectives for the portfolio of the Account;
making asset allocation decisions within the portfolio in accordance with set
objectives; making the day-to-day investment decisions for the portfolio; and,
providing materials necessary for monitoring results in an accurate and relevant
manner. Should the Fund itself, or through a third party service provider, wish
to perform services similar to, or impacting on, the Investment Manager's above
listed responsibilities, the interests of the Account will be served by the Fund
notifying the Investment Manager in advance, to ensure consistency in the
measurement and performance of the investment management process.
2. Discretionary Authority. The Fund acknowledges and understands that: (a)
The Investment Manager is given a Limited Power of Attorney giving full and
exclusive discretionary authority to invest and reinvest the assets in the
Account, and, in that connection, to make determinations as to which securities
are to be bought or sold, where the securities are to be bought or sold, and the
total amount of securities to be bought or sold for the Account, without
obtaining the consent of or consulting with the Fund, but consistent with the
Investment Objectives or Special Instructions of the Fund with respect to the
Account. The term "securities" as used in this Agreement shall include (but not
by way of limitation) mutual funds. It is understood that all or a portion of
the Account may be held in cash or cash equivalents. (b) The Investment Manager
may select brokers or dealers to execute orders for the purchase or sale of
securities so long as the Investment Manager has acted prudently. If the Fund
wishes to designate that brokerage transactions be directed to a specific brok-
er, he must do so in writing in the format provided by the Investment Manager.
This written direction and any future changes to them must be in writing which
upon receipt, shall be attached to, and become part of, this Agreement. (c) Un-
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<PAGE>
less the Fund elects to retain voting powers for the securities held in the
Account (to so elect, the Fund should notify the Investment Manager in writing),
the Investment Manager shall have the power and authority to vote according to
its sole discretion the proxies for all securities held in the Account including
the right to revoke proxies given by the Fund prior to the effective date of
this Agreement. The Investment Manager is hereby authorized to consent to, or
request any action on the part of such corporation whose securities are held in
the Account, and to participate in reorganizations, recapitalizations consolid-
ations, mergers and similar transactions with respect to such securities. The
Investment Manager shall not be liable for any actions taken pursuant to the
voting power and authority granted hereunder. (d) The Investment Manager shall
not have the right to transfer out of or deposit into the Account funds or sec-
urities unless such transaction is part of a purchase or sale of securities on
the Fund's behalf, involves a clearly documented error, or involves an amount or
adjustment determined by the Investment Manager to be payable from the Account
pursuant to the terms of this Agreement. The Investment Manager shall not be
liable for Fund initiated transactions which are outside the authority granted
by this Limited Power of Attorney. (e) The Custodian for the Account is hereby
authorized and empowered to follow the Investment Manager's instructions in ev-
ery respect with regard to any such trades, purchases, or sales for the Account.
It is further understood that the Custodian will not be liable for the actions
or instructions from the Investment Manager. (f) Any uninvested cash will be
swept into a money market fund offered by the Account's Custodian, which fund
has associated with it certain advisory fees and other costs.
3. Commencement of Services. The Investment Manager will assume none of its
management responsibilities under this Agreement, and no fees shall be due, un-
til the "Commencement Date" has been reached. The Commencement Date is deemed to
be reached when the asset comprising the Account (or a substantial enough por-
tion of the assets comprising the Account as determined at the discretion of the
Investment Manager) are ready to trade in the sole discretion of the Investment
Manager. The Commencement Date shall not be deemed to have been triggered if the
Custodian sweeps cash from the Account in order to generate interest for the
Account, or if the Investment Manager liquidates securities transferred into the
Account by the Fund, or if the Investment Manager issues instructions for
isolated trades due to circumstances unrelated to or which precede its general
discretionary management of the Account or result from the specific direction of
the Fund. Securities transferred into the Account may, in the sole discretion of
the Investment Manager, be liquidated prior to the Commencement Date. The
Investment Manager shall not, under any circumstances, be liable for any loss
which results from a reduction in the value of the assets in the Account prior
to the Commencement Date.
4. Fees. The Fund will pay management fees to the Investment Manager as
outlined in this Section 4. As a compensation for the services to be rendered to
the Fund by the Investment Manager under the provisions of this Agreement, the
Fund shall pay to the Investment Adviser monthly a fee equal to one-twelfth of
one and a quarter (1.25) percent per month, (the equivalent of 1.25% per annum)
on the first $1,000,000 of the daily average net assets of the Fund during the
month and one (1.00) percent per month, (the equivalent of 1.00% per annum) on
that portion of the daily average net assets of the Fund during the month in
excess of $1,000,000. The first payment of fee hereunder shall be prorated
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<PAGE>
on a daily basis from the date this Agreement takes effect. By executing this
Agreement, the Fund hereby authorizes the Custodian to deduct the management
fees from the Account and pay the Investment Manager upon proper instructions
received from the Investment Manager. The Investment Adviser agrees to forgo
sufficient fees to hold the total expenses of the Fund to less than 2.0% of
the first $10 million in average assets and 1.5% of the next $20 million.
5. Termination. This Agreement shall remain in full force and effect until
terminated by either of the parties hereto, only so long as such continuance is
approved at least annually by votes of the Fund's Board of Directors, cast at
a meeting called for the purpose of voting on such approval, including the
votes of a majority of the Directors who are not parties to such agreement or
interested persons of any such party. Either party may terminate the Agreement
with or without cause. Termination shall occur upon at least sixty (60) days
written notice; and in such event, the Investment Manager shall be paid through
the date of termination. Upon receipt of such notice of termination, the
Investment Manager shall, to the extent practicable, liquidate all securities in
the Account in a timely manner by reducing the Fund's holdings to cash or cash
equivalents unless the Fund specifically instructs the Investment Manager to do
otherwise in the notice of termination. The Fund has a right to terminate this
Agreement without penalty within 5 business days after the date of execution of
this Agreement; provided, however, that any investment action taken by the
Investment Manager with respect to the Account prior to the effective date of
such termination shall be at the Fund's risk.
6. Representations of the Fund. The Fund represents and warrants that in
entering into this Agreement, the Fund has relied only upon representations and
data which have been provided in written materials of the Investment Manager.
7. Account Investment Objectives. The Investment Manager will manage the
Account according to its understanding of the Fund's Registration Statement. The
Fund will communicate any change in investment objectives to the Investment
Manager in writing. The Investment Manager will be allowed a reasonable time
period to come into compliance with changes in investment objectives so that the
prevailing market conditions can be considered.
8. Disclaimers. The Investment Manager will not be responsible for and is
hereby released from any loss or damage in any form resulting directly or
indirectly from the failure of the Fund to fulfill any of the Fund's
responsibilities under this Agreement or to provide the Investment Manager with
complete, accurate, and truthful data as required in this Agreement or as
otherwise requested by the Investment Manager. The disclaimers and limitations
of liability of the Investment Manager in this Section 8 and elsewhere in this
Agreement (including the last sentences of Section 2 (c) and Section 3) do not
constitute a waiver of any right of the Fund provided by the Advisers Act, any
other federal and state securities laws or ERISA, and the Fund retains all such
rights.
9. Arbitration. All disputes between the Investment Manager and the Fund,
except for those involving alleged theft or misappropriation, shall be submitted
to arbitration with the American Arbitration Association; and the results of
such shall be binding upon the parties and enforceable in a court of law. Any
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<PAGE>
such arbitration shall be arbitrated by one person who shall be a businessman
not active in the investment advisory business. This Section 9 does not const-
itute a waiver by the Fund of any right provided by the Advisers Act, or other
federal and state securities laws or ERISA, including any right to choose the
forum, whether arbitration or litigation in court, in which to seek resolution
of disputes.
10. Miscellaneous. (a) No assignment of this Agreement shall be made without
the written consent of both parties. (b) Any notice of service of process to be
given hereunder shall be sufficient if in writing and addressed to the parties
at their last known address or place of business. (c) This Agreement shall be
governed by the laws of the State of New York (without regard to any principles
or conflicts of laws) and applicable federal laws and regulations; and is bind-
ing upon the parties hereto and their respective executors, administrators,
heirs and successors in interest. (d) The site of jurisdiction and venue for any
arbitration or court proceeding will be Monroe County, New York. Neither party
shall, except as required by law, governmental order, or in the preparation for,
or in the conduct of, litigation or arbitration, disclose to any third party the
fact of litigation or arbitration, or any of the allegations of the parties
relating thereto. (e) This Agreement may not be amended or modified in any way
except by a subsequent written agreement executed by the parties. (f) In the
case of a joint Account, each owner must subscribe to this Agreement. The In-
vestment Manager is expressly authorized, in its sole discretion, to rely and to
act upon the instructions of a single joint owner, unless and until written in-
structions to the contrary, signed by each such joint owner, are received by the
Investment Manager. (g) If any term, covenant, condition or provision of this
Agreement shall be construed to be illegal, invalid or unenforceable, the re-
mainder of the Agreement shall be unaffected and shall remain in full force and
effect.
11. Acknowledgement. The Fund hereby acknowledges receipt of forms as required
by Federal or State law (e.g., Form ADV Part II or its equivalent) provided by
the Investment Manager.
IN WITNESS WHEREOF, the parties hereto have caused their signatures to be affix-
ed and duly attested and their presence to be signed by their duly authorized
officers this 1st day of February, 1997.
BULLFINCH FUND, INC. By ___________________________
Christopher Carosa, President
Attest: ________________
Betsy K. Carosa
CAROSA & STANTON ASSET MANAGEMENT, LLC By _____________________________
Christopher Carosa, President
Attest: ________________
Betsy K. Carosa
- 4 -
Exhibit - 10 ii
Custodian Agreement
between BULLFINCH FUND, INC. and Charles Schwab & Co. Inc.
SCHWAB INSTITUTIONAL SCHWAB BROKERAGE ACCOUNT APPLICATION
Investment Manager ("IM") Firm Name: Carosa & Stanton Asset Management, LLC
1. TYPE OF ACCOUNT (Check one)
X Brokerage Account Only
Brokerage Account With Margin and Short Account Feature
2. ACCOUNT REGISTRATION (Check only one.)
Individual Tenants in Common
Joint Tenants with Rights to Survivorship Community Property
X Corporate/Business Investment Club
Pension Trust Other
3. ACCOUNT HOLDER INFORMATION
Account Holder Name: BULLFINCH FUND, INC.
Social Security/Tax I.D. Number: 16-1516377 Birth (Inception) Date: 2/1/97
Country of Citizenship: USA Country of Legal Residence: USA
Home Street Address: 2 Lantern Lane
City/State/Zip: Honeoye Falls, NY 14472 Home Phone: (716) 624-1758
Occupation: n/a
Employer's Name: n/a
Employer's Street Address: n/a
City/State/Zip: n/a Employer's Phone: n/a
Bank Reference: n/a
4. JOINT ACCOUNT HOLDER INFORMATION - n/a
5. CHOOSE A SCHWAB MONEY FUND TO EARN DAILY INCOME ON YOUR CASH BALANCE
You may have the cash balance in your Schwab Account sept daily into a Schwab
Money Fund and earn daily income. There is a $1,000 minimum opening investment
for a Schwab Money Fund. To obtain a prospectus and Money Fund Agreement, please
check one of the Boxes below. This is an indication of interest only. You are
not obligated to buy shares of any Schwab Money Fund. Please read the prospectus
carefully for any Schwab Money Fund in which you are interested before you in-
vest. Select one of the boxes below.
X Schwab Money Market Fund
Schwab Municipal Money Fund-Sweep Shares
Schwab U.S. Treasury Fund
Florida Municipal Cash Trust
(for FL taxpayers only)(Not a Schwab Money Fund)
Schwab Government Securities Money Fund
Schwab California Municipal Money Fund-Sweep Shares
(for CA taxpayers only)
Schwab New York Municipal Money Fund-Sweep Shares
(for NY taxpayers only)
I do not wish to open a Schwab Money Fund.
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<PAGE>
If you wish to fund your account at this time, please enclose a check for your
initial deposit. Minimum to activate the account is $1,000. Please make check
payable to Charles Schwab & Co. Inc.
Amount of your initial deposit: $20,000
6. ACCOUNT HANDLING INSTRUCTIONS
For your convenience, Schwab will automatically hold all your securities purch-
ased, sales proceeds, dividends and interest. If you do not want your account
handled in this manner, we will follow your special handling instructions indic-
ated below. (Please check the appropriate line, if any)
Mail certificates to me (a small handling fee applies).
Mail proceeds to me on settlement date (not available if you select a
money market fund).
Mail all dividends to me at the end of the month.
Mail all dividends/interest to me as they are paid.
7. REORGANIZATION LETTER AND MATERIALS MAILING PREFERENCES (Check one)
Note: Materials are any documents the Issuer wishes to include in the mailing.
Investment Manager receives an information-only letter and the materials.
Account Holder performs the action, receives the Response Coupon
and the materials.
Investment Manager performs the action, receives the Response Coupon and
the materials. Account Holder receives an information-only letter
and the materials.
X Investment Manager performs the action, receives the Response Coupon and
the materials. Account Holder does not receive anything related to
the Reorganization.
Investment Manager does not receive anything related to the Reorganization.
Account Holder performs the action, receives the Response Coupon
and the materials.
8. INTERIM MAILING PREFERENCES (Check one)
Note: Interim mailings include annual reports, semi-annual reports, quarterly
reports, and prospectuses that are subsequent to the initial purchase making.
X Investment Manager receives the Interim mailings; Account Holder receives
the Interim Mailings.
Investment Manager receives the Interim mailings; Account Holder does not
receive the Interim mailings.
Investment Manager does not receive the Interim mailings; Account Holder
receives the Interim mailings.
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<PAGE>
9. INITIAL ANY OF THE FOLLOWING STATEMENTS WHICH APPLY
Note: Any of these authorizations may be revoked by providing written notice to
Schwab. Please Note: If more than one person is listed on the account, each
Account Holder must initial the information below.
CC GRS TRADING AUTHORIZATION. I Authorize IM to direct Schwab to execute
trades in my account provided under the Trading Authorization
heading below.
CC GRS DISBURSEMENT AUTHORIZATION. I Authorize IM to direct disbursal of
funds for investment purposes or to me personally. I authorize
Schwab to remit checks, wire funds, and otherwise to make dis-
bursements of funds held in the account, 1) to banks, broker-
dealers, investment companies or other financial institutions to
an account of identical registration, or 2) to me at my address
of record. (NOTE: This option is only effective if IM is author-
ized to direct Schwab to execute trades.)
CC GRS FEE PAYMENT AUTHORIZATION. I authorize Schwab to pay management
fees to IM from my account in the amount of IM's invoice. I have
authorized IM in writing to receive fee payments directly from
my account. Schwab may redeem money market fund shares in my
account to the extent necessary to pay such fees. Schwab may re-
ly on the invoices submitted by IM, and will have no responsib-
ility to verify fees so invoiced.
ASSET-BASED PRICING AUTHORIZATION. If Schwab fees will be asset-
based, I have received, read, and agreed to the terms indicated
in the Asset-Based Pricing Agreement.
CC GRS RELEASE OF INFORMATION AUTHORIZATION. I authorize Schwab to send
duplicate copies of my trade confirmations and account state-
ments to IM via mail and/or via Schwablink(TM).
CC GRS RELEASE OF NAME AUTHORIZATION. I authorize Schwab to disclose my
name upon request to companies whose securities are held in my
account.
10. PLEASE READ AND SIGN THIS BROKERAGE ACCOUNT AGREEMENT
This agreement is only effective upon Schwab's acceptance and approval of this
application.
I authorize Charles Schwab & Co., Inc. ("Schwab") to open a Brokerage Account
(the "Account") in the names listed on this Brokerage Account Application
("BAA"). I am of legal age. I agree to read and be bound by the terms of this
BAA and the Schwab Brokerage Account Agreement Booklet ("Account Agreement"),
all as currently in effect and as periodically amended. I will notify Schwab if
I do not receive the Account Agreement.
TRADING AUTHORIZATION. If I have indicated on this BAA that Investment Manager
("IM") will have the authority to direct Schwab to execute trades in my account,
I authorize IM to be my agent and attorney-in-fact, and as such to give instr-
uctions to Schwab regarding my account, and to take all actions necessary or in-
cidental to the execution of such instructions. If my account has a margin fea-
ture, IM is authorized to direct Schwab to trade on margin, to sell short, to
borrow securities, to otherwise cause credit to be extended through the Account,
and to secure the performance of obligations in the Account with any assets held
in the Account (the "Account Assets"). If my account is authorized for option
trading, IM is authorized to direct Schwab to purchase and sell (write) index
participation contracts and covered and uncovered option contracts on securities
and securities-related indexes. Schwab, and other people Schwab has given
instructions to in order to implement the IM's instructions, may rely on IM's
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<PAGE>
instructions without obtaining my approval, counter-signature or co-signature.
IM's authority will include, without limitation: the authority to give instruc-
tions for transactions in securities and financial instruments, including the
buying and selling of stocks, bonds, debentures, notes, subscription warrants,
stock purchase warrants, covered options (if I have authorized trading covered
options), mutual fund shares, evidences of indebtedness and any other securit-
ies, instruments or contracts relating to securities.
I authorize Schwab to take such actions as Schwab deems reasonably necessary to
carry out instructions Schwab receives from me and/or IM. I further authorize
Schwab, acting upon IM's instructions, to aggregate transaction orders for my
account with orders for one or more other accounts over which IM has investment
discretion or to accept or deliver assets in transactions executed by other
broker-dealers where IM has so aggregated orders. I agree that if any such ag-
gregated order is executed in more than one transaction, my portion of such or-
der may be deemed to have been executed at the weighted average of the prices at
which all of such transactions were executed.
ROLE OF CHARLES SCHWAB & CO., INC. I acknowledge and agree that: Schwab will
merely carry out transactions as directed by me and/or IM as the case may be;
Schwab will not give investment advice to me or to IM; I (and not Schwab) am
responsible for investigating and selecting IM; IM is not affiliated with or
controlled or employed by Schwab; Schwab has no duty to supervise or monitor
trading by me or by IM in my account. Schwab will send me written confirmations
of my trades executed through Schwab and monthly statements of all activity in
my account. I authorize Schwab to obtain from IM, and IM to provide to Schwab,
information regarding my account as Schwab may reasonably request. If any of
IM's employees is associated with a member of NASD, NYSE or affiliate, Schwab is
authorized to deliver information concerning my account to such member upon
request.
TERMINATION OF AUTHORIZATIONS. The authorizations I have granted in this BAA
will remain effective until I have revoked any of them by giving written notice
to Schwab. Such revocation will not affect my obligation resulting from trans-
actions prior to Schwab's receipt of such written notice. I understand that if
Schwab terminates its Investment Management Service Agreement with IM, Schwab
will not be obligated to honor the authorizations I have granted to IM in this
BAA; I will have exclusive control over, and responsibility for, my account; and
unless Schwab notifies me otherwise, my account will become a Schwab retail
brokerage account. Schwab will notify me as soon as reasonably possible after
any such termination.
INDEMNIFICATION. I agree to indemnify and hold harmless Schwab, its affiliates,
and their directors, officers, employees, and agents from and against all
claims, actions, costs, and liabilities, including attorney's fees arising out
of or relating to: (1) their reliance on this BAA, and (2) Schwab's execution of
IM's instructions.
TRANSFER AGENT. I agree that any transfer agent or third party receiving a copy
of this BAA may act according to its terms and agree to indemnify and hold harm-
less any such transfer agent or third party from all claims arising from such
reliance. Any transfer agent or third party's right to act hereunder shall re-
main in effect until such transfer agent or third party is informed of its re-
vocation or termination.
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<PAGE>
TELEPHONE MONITORING. I understand that Charles Schwab & Co., Inc. may tape-
record my telephone conversations in order to verify data regarding my transac-
tions.
SUCCESSORS AND HEIRS. This Agreement supplements and in no way limits or re-
stricts rights which Schwab may have under any other agreement with me. This
Agreement will bind my heirs, executors, administrators, successors, and
assigns, and will benefit Schwab's successors and assigns.
ARBITRATION AGREEMENT AND DISCLOSURE. Regulatory authorities require that any
brokerage agreement containing a pre-dispute arbitration agreement must disclose
the following:
- - Arbitration is final and binding on the parties.
- - The parties are waiving their right to seek remedies in court, including the
right to jury trial.
- - Pre-arbitration discovery is generally more limited than and different from
court proceedings.
- - The arbitrator's award is not required to include factual findings or legal
reasoning and any party's right to appeal or to seek modification of rulings
by the arbitrators is strictly limited.
- - The panel of arbitrators will typically include a minority of arbitrators who
were or are affiliated with the securities industry.
I agree to settle by arbitration any controversy between itself and Schwab or
any of Schwab's officers, directors, employees, or agents relating to the
Account Agreement,and Account transaction, or in any way arising out of my re-
lationship to Schwab or IM. Such arbitration will be conducted according to the
securities arbitration rules then in effect of the American Arbitration Associa-
tion (applying its securities arbitration rules), the National Association of
Securities Dealers, Inc., or any registered national securities exchange. Arbi-
tration may be initiated by serving or mailing a written notice. The notice must
specify which forum will hear the arbitration. This specification will be bind-
ing on all parties. Any award the arbitrator makes will be final, and judgement
on it may be entered in any court having jurisdiction. This arbitration
agreement shall be enforced and interpreted exclusively in accordance with
applicable federal law, including the Federal Arbitration Act.
No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against any person who has
initiated in court a putative class action; or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until: (I) The class certification is denied; or
(II) The class is decertified; or (III) The customer is excluded from the class
by the court. Such forbearance to enforce an agreement to arbitrate shall not
constitute a waiver of any rights under this Agreement except to the extent
stated herein.
Please note that the Account Agreement contains a pre-dispute arbitration
agreement on Page 8, Section 16.
If this Account has a margin feature, I acknowledge that, for short sale pur-
poses, certain of its securities may be lent to Schwab as principal or lent to
other.
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<PAGE>
I certify under penalty of perjury that, (1) the number shown on this BAA is my
correct taxpayer number, and (2) I am not subject to back-up withholding wither
because I have not been notified that I am subject to back-up withholding as a
result of failure to report all interest and dividends, or the Internal Revenue
Service ("IRS") has notified me that I am no longer subject to back-up withhold-
ing. (I understand that if the IRS has notified me that I am subject to back-up
withholding as a result of dividend or interest underreporting, and I have not
received a notice from the IRS advising me that back-up withholding is terminat-
ed, I must cross out the incorrect information contained above.) The Internal
Revenue Service does not require your consent to any provision of this document
other than the certifications required to avoid back-up withholding.
Account Holder's Signature: Christopher Carosa Date: February 4, 1997
Account Holder's Signature: Gordon R. Stanton Date: February 4, 1997
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<PAGE>
CORPORATION ACCOUNT
(Authorizing Trading in securities and commodities and permitting margin trans-
actions and short sales. Also authorizing trading in puts, calls and combin-
ations.)
To Whom it May Concern:
The Bullfinch Fund, Inc. ("Corporation"), by Christopher Carosa its President,
pursuant to the resolutions, a copy of which, certified by the Secretary, is
annexed hereto, hereby authorizes you to open an account in the name of said
Corporation; and the undersigned also encloses herewith your Account Application
duly executed on behalf of the Corporation. This authorization shall continue in
force until revoked by the Corporation by the written notice, addressed to you
and delivered at your office at Charles Schwab.
Dated February 2, 1997
(City) Honeoye Falls (State) New York
Very Truly Yours,
Bullfinch Fund, Inc.
By Christopher Carosa
President
I, Betsy K. Carosa, being the Secretary of Bullfinch Fund, Inc. hereby certify
that the annexed resolutions were duly adopted at a meeting of the Board of
Directors of the Corporation, and that no action has been taken to rescind or
amend said resolutions and that the same are now in full force and effect.
I further certify that each of the following has been duly elected and is now
legally holding the office set opposite his/her name.
Christopher Carosa, President
Gordon R. Stanton, Vice President
Christopher Carosa, Treasurer
Betsy K. Carosa, Secretary
I further certify that the said Corporation is duly organized and existing and
has power to take action called for by the resolutions annexed.
IN WITNESS WHEREOF, I have hereunto affixed my hand this 4th day of February
1997.
By Betsy K. Carosa, Secretary
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<PAGE>
CERTIFIED COPY OF CERTAIN RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS
WHEREBY THE ESTABLISHMENT AND MAINTENANCE OF TRADING ACCOUNTS HAVE
BEEN AUTHORIZED
RESOLVED-
FIRST: That the President or any Vice President of this Corporation be and they
hereby are, and each of them hereby is, authorized and empowered for and on be-
half of its Corporation (the "Corporation"), to establish and maintain one or
more accounts, which may be margin accounts, with Charles Schwab & Co., Inc.
(the "Brokers") for the purpose of purchasing, investing in, or otherwise ac-
quiring, selling (including short-sales), possessing, transferring, exchanging,
endorsing, assigning, pledging, or otherwise deposing of, or turning to account
of, or realizing upon, and generally dealing in and with (a) any and all forms
of securities including, but not by way of limitation, shares, stocks, bonds,
debentures, notes, scrip, participation certificates, rights to subscribe, op-
tion warrants, stock purchase warrants, certificates of deposits, mortgages,
choses in action, evidences of indebtedness, commercial paper, certificates of
indebtedness and certificates of interest of any and every kind and nature what-
soever, secured or unsecured, whether represented by trust, participating and/or
other certificates or otherwise; and (b) any and all commodities and/or con-
tracts for the future delivery thereof, whether represented by trust, partic-
ipating and/or other certificates or otherwise.
The fullest authority at all times with respect to any such commitment or with
respect to any transaction deemed by any of the said officers and/or agents to
be proper in connection therewith is hereby confirmed, including authority
(without limiting the generality of the foregoing) to give written or oral in-
structions to the Brokers with respect to said transactions; to borrow money and
securities and if transactions in commodities are authorized hereby to borrow
such money, securities, commodities and/or future contracts in commodities from
or through the Brokers, and to secure repayment thereof with the property of the
Corporation; to bind and obligate the Corporation to and for the carrying out of
any contract arrangement, or transact on, which shall be entered into by any
such officer and/or agent for or on behalf of the Corporation with or through
the Brokers; to pay in cash or by checks and/or drafts drawn upon the funds of
the Corporation such sums as may be necessary in connection with any of the said
accounts; to deliver securities, contracts and/or commodity futures to the Bro-
kers; to order the transfer or delivery thereof to any other person whatsoever
and/or to order the transfer of record of securities, or contracts, or titles,
to any name selected by any of the said officers or agents; to affix the Corpor-
ate seal to any documents or agreements, or otherwise; to endorse any securities
and/or contracts in order to pass title thereto; to direct the sale or exercise
of any rights with respect to any securities; to sign for the Corporation all
releases, powers of attorney and/or other documents in connections with any such
account, and to agree to any terms or conditions to control any such account; to
direct the Brokers to surrender any securities to the proper agent or party for
the purpose of effecting any exchange or conversion, or for the purpose of de-
posit with any protective or similar committee, or otherwise to accept delivery
of any securities, contracts and/or commodity futures; to appoint any other per-
son or persons to do any and all things which any of the said officers and/or
agents is hereby empowered to do and generally to do and take all action necess-
ary in connection with the account, or considered desirable by such officer and/
or agent with respect thereto.
SECOND: That the Brokers may deal with any and all of the persons directly or
indirectly by the foregoing resolution empowered as thought they are dealing
with the Corporation directly.
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<PAGE>
THIRD: That the Secretary of the Corporation be and he/she hereby is authorized,
empowered and directed to certify, under the seal of the Corporation, or other-
wise to the Brokers:
(a) a true copy of these resolutions
(b) specimen signatures of each and every person by these resolutions empowered;
(c) a certificate (which, if required by the Brokers, shall be supported by an
opinion of general counsel of the Corporation, or other counsel satisfactory to
the Brokers) that the Corporation is duly organized and existing, that its char-
ter empowers it to transact the business by these resolutions defined, and that
no limitation has been imposed upon such powers by the By-laws or otherwise.
FOURTH: That the Brokers may rely upon any certification given in accordance
with these resolutions, as continuing fully effective unless and until the Bro-
kers shall receive due written notice of a change in or the rescission of the
authority so evidenced and the dispatch or receipt of any other form of notice
shall not constitute a waiver of this provision, nor shall the fact that any
person hereby empowered ceases to be an officer of the Corporation or becomes an
officer under some other title in any way affect the powers hereby conferred.
The failure to supply any specimen signature shall not invalidate any trans-
action if the transaction is in accordance with authority actually granted.
FIFTH: That in the event of any change in the office or powers or persons hereby
empowered, the Secretary shall certify such changes to the Brokers in writing in
the manner hereinabove provided, which notification, when received, shall be
adequate both to terminate the powers of the persons theretofore authorized, and
to empower the persons thereby substituted.
SIXTH: That the foregoing resolutions and the certificates actually furnished to
the Brokers by the Secretary of the Corporation pursuant thereto, be and they
hereby are made irrevocable until written notice of the revocation thereof shall
have been received by the Brokers.
SEVENTH: That the Corporation authorizes its agents to trade in the following
types of Options: covered puts and calls and uncovered puts and calls, subject
to approval by Charles Schwab & Co., Inc. of each agent of the Corporate
Account.
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<PAGE>
CERTIFICATE OF CORPORATE AUTHORIZATION TO TRANSFER (GENERAL)
I, Betsy K. Carosa, being duly constituted Secretary of Bullfinch Fund, Inc., a
corporation organized and existing under and by virtue of the Laws of the State
of Maryland (hereinafter called this Corporation) do hereby certify that the
following is a true and complete copy of resolutions duly adopted at a meeting
of the Board of Directors of this Corporation, duly called and held on February
1, 1997, at which a quorum was present and voting; that said resolutions are
still in full force and effect and have not been rescinded; and that said re-
solutions are not in conflict with the Charter or By-Laws of the Corporation.
RESOLVED: That any of the following officers, to wit: Christopher Carosa, Pres-
ident and Gordon R. Stanton, Vice President, of this Corporation be, and they
hereby are, fully authorized and empowered to transfer, convert, endorse, sell,
assign, set over and deliver any and all shares of stock, bonds, debentures,
notes, subscription warrants, stock purchase warrants, evidences of indebtedness
or other securities now or hereafter standing in the name of or owned by this
Corporation and to make, execute and deliver, under the corporate seal of this
Corporation, any and all written instruments of assignment and transfer necess-
ary or proper to effectuate the authority hereby conferred.
FURTHER RESOLVED: That whenever there shall be annexed to any instrument of
assignment and transfer, executed pursuant to and in accordance with the forego-
ing resolution, a certificate of the Secretary or an Assistant Secretary of this
Corporation in office at the date of such certificate, and such certificate
shall set forth these resolutions and shall state that these resolutions are in
full force and effect and shall also set forth the names of the persons who are
then officers of this Corporation, than all persons to whom such instrument with
the annexed certificate shall thereafter come, shall be entitled, without fur-
ther inquiry or investigation and regardless of the date of such certificate, to
assume and to act in reliance upon the assumption that the shares of stock or
other securities named in such instrument were theretofore duly and properly
transferred, endorsed, sold, assigned, set over and delivered by this Corpora-
tion, and that whith respect to such securities the authority of these resolu-
tions and of such officers is still in full force and effect.
I hereby certify that the following is a true and correct list of present
officers of this Corporation:
President: Christopher Carosa
Vice-President: Gordon R. Stanton
Secretary: Betsy K. Carosa
Treasurer: Christopher Carosa
(CORPORATE SEAL) Secretary (signed) Betsy K. Carosa
- 10 -
Exhibit - 10 iii
Reimbursement Agreements
The Fund will reimburse officers and directors not affiliated with the Invest-
ment Adviser to compensate for travel expenses associated with performance of
their duties.
The Fund has no plans to, compensate officers and directors who are affiliated
with the Investment Adviser except indirectly through payment of the management
fee.
Exhibit - 99.1
Saperston & Day, P.C.
Attorneys at Law
800 First Federal Plaza
Rochester, NY 14614-1999
Re: Bulldog Fund, Inc. - Registration of Common Capital Stock
Our File RC07132
Dear Mr. Carosa:
We have been asked to provide our opinion relating to the
registration under the Securities Act of 1933 (the "Securities Act") of an
indefinite number of shares of the Common Capital Stock (par value $0.01
per share) of Bulldog Fund, Inc. ("Fund"), a Maryland corporation organized
on January 29, 1997.
We have examined the Articles of Incorporation of the Fund; the By-
Laws of the Fund; various pertinent corporate proceedings; and such other
items considered to be material to determine the legality of the authorized
but unissued shares of the Fund's Common Stock.
Based upon the foregoing, it is our opinion that upon effectiveness
of the Registration Statement of the Fund filed under the Securities Act
pursuant to Regulation Section 270.24f-2 (Rule 24f-2) of the Investment
Company Act of 1940, to register an indefinite number of shares of the
Fund's Common Stock, and during such time as such Registration Statement
continues to be in effect, the Fund will be authorized to solicit, and
cause to be solicited, share purchase orders and to issue its shares for
cash consideration, as described in the Fund's proposed Prospectus and
Statement of Additional Information, which shares so issued will be validly
issued, fully paid and non-assessable.
We offer no opinion with respect to the offer and sales of the
Fund's securities under the security laws of the several states, the
District of Columbia, any territory of the United States or any foreign
country.
We consent to the inclusion of this opinion as an exhibit to the
Securities Act Registration Statement of the Fund and to the reference in
the Fund's Prospectus and/or Statement of Additional Information to the
fact that this opinion concerning the legality of the issue on behalf of
the Fund, as issuer, has been rendered by us.
Sincerely,
SAPERSTON & DAY, P.C.
William R. Nojay
Exhibit - 99.2
BONADIO & CO, LLP
Certified Public Accountants
1850 South Winton Road
Rochester, NY 14628
716-244-2000
Fax 716-244-5611
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to use in this Registration
Statement of Bullfinch Fund, Inc. of our report dated April 7, 1997, appearing
in the Statement of Additional Information, which is a part of such Registration
Statement, and to all references to our Firm included in this Registration
Statement.
BONADIO & CO., LLP
Rochester, New York
April 7, 1997
