File No. 333-27645
ICA No. 811-08221
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 3, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. 1
Post-Effective Amendment No.
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 1
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THE TRAUTMAN KRAMER TRUST
(Exact Name of Registrant as Specified in Charter)
500 Fifth Avenue
New York, New York 10110
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 575-5500
Robert Kramer
500 Fifth Avenue
New York, New York 10110
(Name and Address of Agent for Service)
Copies to:
Louis S. Citron, Esq.
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Approximate date of proposed public offering: As soon as practicable
after this registration statement becomes effective.
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The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
THE TRAUTMAN KRAMER TRUST
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Trautman Kramer Value Plus Fund
Form N-1A
Item Number
Part A Prospectus Caption
1. Cover Page
2. Highlights; Fee Table
3. *
4. Highlights;
Investment Objective, Policy and Risks; Additional
Investment Policies and Risk Considerations
5.(a)(b)(c) Investment Adviser and Investment Advisory Agreements
(d) Distribution Plans
(e) Custodian, Transfer Agent and Dividend Paying Agent
(f) Investment Adviser and Investment Advisory Agreements
(g) Brokerage Allocation
5A Performance Calculation
6.(a) Organization and Description of Shares of the Trust
(b) Investment Adviser and Investment Advisory Agreements
(c) Purchase of Shares
(d) Purchase of Shares; Redemption of Shares
(e) Cover Page
(f)(g) Dividends, Distribution and Tax Matters
7.(a)(b) Purchase of Shares
(c) Purchase of Shares
(d) Purchase of Shares
(e) *
(f) Distribution Plans
8. Redemption of Shares
9. *
- 2 -
<PAGE>
Part B Statement of Additional Information Caption
10. Cover Page
11. Table of Contents
12. *
13. Investment Policies and Risks; Investment
Restrictions
14. Management
15. Additional Information
16.(a)(b) Investment Adviser and Investment Advisory
Agreements
(c) *
(d) *
(e) *
(f) Distribution Plans
(g) *
(h) See Prospectus
(i) *
17.(a) Portfolio Transactions and Brokerage
(b) *
(c) Portfolio Transactions and Brokerage
(d) *
(e) *
18. Additional Information
19.(a) Purchase and Redemption of Shares
(b) Computation of Net Asset Value
(c) *
20. Tax Matters
21. Distribution Plans
22. Performance Calculation
23. Financial Statements
Part C Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
- --------------------------
* Not Applicable
- 3 -
<PAGE>
<PAGE>
THE TRAUTMAN KRAMER TRUST
TRAUTMAN KRAMER VALUE PLUS FUND
The Trautman Kramer Trust (the "Trust") is a Delaware business trust
currently consisting of one fund, Trautman Kramer Value Plus Fund, an open-end,
non-diversified management investment company (the "Fund"). The Fund's
investment objective is long-term capital appreciation. Capital appreciation
means an increase in the value of your shares. The Fund seeks to achieve its
objective primarily through investments in securities, generally common stock,
of United States issuers. The Fund also intends to invest up to 10% of its net
assets in securities that have not been registered under the Securities Act of
1933, as amended and therefore are subject to restrictions on resale, and may be
illiquid. There is minimal emphasis on current income (dividends).
Investors should read this Prospectus before investing in the Fund. It
contains important information about the Fund and should be kept for future
reference. A Statement of Additional Information, dated January o, 1998, which
contains additional information about the Fund has been filed with the
Securities and Exchange Commission. It is incorporated by reference into this
Prospectus. A copy of the Statement of Additional Information can be obtained
without charge by calling 1- 888-TKCOVAL (1-888-852-6825) or writing the Trust
at c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701.
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INVESTMENT IN THE FUND IS SUBJECT TO RISK -- INCLUDING POSSIBLE LOSS OF
PRINCIPAL -- AND WILL FLUCTUATE IN VALUE.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is January o, 1998.
TABLE OF CONTENTS
Page
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Highlights.............................................1
Fee Table..............................................2
Performance Calculation................................3
Investment Objective, Policies and Risks...............3
Additional Investment Policies and Risk
Considerations.......................................4
Investment Adviser and Investment
Advisory Agreements..................................5
Distribution Plans....................................6
Shareholder Servicing Plans...........................6
Administrative Services Agreement..................... 7
Brokerage Allocation.................................. 7
Purchase of Shares.................................... 7
Redemption of Shares................................. 11
Shareholder Privileges............................... 14
Dividends, Distributions and Tax Matters............. 15
Custodian, Transfer Agent and Dividend
Paying Agent....................................... 16
Counsel and Independent Auditors.....................17
Additional Information............................... 17
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<PAGE>
HIGHLIGHTS
WHAT IS THE TRAUTMAN KRAMER TRUST?
The Trautman Kramer Trust, a business trust formed under the laws of
the State of Delaware, is currently comprised of one series.
WHAT IS THE TRAUTMAN KRAMER VALUE PLUS FUND AND HOW IS ITS INVESTMENT OBJECTIVE
ACHIEVED?
The Trautman Kramer Value Plus Fund is an open-end, non-diversified
management investment company. The Fund seeks to achieve its objective primarily
through investments in securities , generally common stock, of United States
issuers. The Fund will invest in common stocks of companies that are considered
by its investment adviser or sub-adviser to be out of favor with investors and
which appear to be undervalued in relation to their potential growth or earning
power. The Fund also intends to invest up to 10% of its net assets in securities
that have not been registered under the Securities Act of 1933, as amended and
therefore are subject to restrictions on resale, and may be illiquid. Overall,
the Fund provides investors the opportunity to access a value style of
investment, emphasizing long-term capital appreciation, plus potential for
additional upside performance via non-registered "private" securities issues.
(See "Investment Objective, Policies and Risks.")
WHO MANAGES THE FUND?
Trautman Kramer Capital Management, Inc. (the "Adviser") serves as the
Fund's investment adviser. The Adviser supervises all aspects of the Fund's
operations and provides investment advisory services. As compensation, the
Adviser receives a fee based on the Fund's average daily net assets. To help in
providing these services, the Adviser has entered into a sub-advisory agreement
with Tocqueville Asset Management L.P. (the "Sub-Adviser"). (See "Investment
Adviser and Investment Advisory Contracts.")
BUYING AND SELLING SHARES
The Fund offers two classes of shares which may be purchased at a
price equal to the next determined net asset value per share plus a charge
which, at the election of the purchaser, may be imposed (i) at the time of
purchase (the "Class A shares"), or (ii) at the time of purchase and on a
deferred basis (the "Class B shares"). As an open-end investment company, the
Fund has an obligation to redeem its shares upon request. Class B shares may
only be purchased by certain investors. (See "Purchase of Shares - General
Information.")
DISTRIBUTION PLANS
The Fund has adopted a distribution plan for each class of shares,
pursuant to Rule 12b-1 of the Investment Company Act of 1940 (the "1940 Act"),
that allows the Fund to pay from the assets attributable to a particular class
for distribution activities related to the sale of such class of shares. Each
distribution plan provides that such expenses may total up to .50% per annum of
the average daily net assets of the class of shares. (See "Distribution Plans").
SPECIAL RISK CONSIDERATIONS
Investors should be aware that there are risks associated with certain
investment techniques and strategies employed by the Fund. The Fund's net asset
value per share can be expected to fluctuate. Investors should consider the Fund
a supplement to an overall investment program and should only invest if they are
willing to undertake the risks involved. (See "Investment Objective, Policies
and Risks" and "Additional Investment Policies and Risk Considerations.")
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FEE TABLE
The purpose of the fee table provided below is to assist investors in
understanding the various costs and expenses that they will bear directly or
indirectly. "Shareholder Transaction Expenses" are fees charged directly to an
individual account when shares are bought, sold or exchanged. The "Annual Fund
Operating Expenses" summary shows the advisory fee, Rule 12b-1 fee, and other
operating expenses incurred by the Fund. The Adviser may, from time to time,
voluntarily agree to defer or waive fees or absorb some or all of the expenses
of the Fund. To the extent that the Adviser should do so, it may seek repayment
of such deferred fees or absorbed expenses after this practice is discontinued.
However, no repayment will be made if the annual expense ratio of the applicable
class of shares of the Fund would exceed 1.98%. "Other Expenses" for the Class A
and Class B shares of the Fund are based on estimated amounts for the current
fiscal year. These expenses are deducted from the Fund's income before it is
paid to shareholders. The expenses shown in the table are estimates for the
current year.
<TABLE>
<CAPTION>
Class A Class B
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<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load on Purchases
(as a % of offering price).......................... 4.50% 1.00%
Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable......... None 1.00%*
Redemption Fee............................................... ** **
Exchange Fee................................................. *** ***
ANNUAL FUND OPERATING EXPENSES:
(as a % of average net assets)
Advisory Fee(3).......................................... 1.00% 1.00%
12b-1 Fee(1)............................................. .50% .50%
Other Expenses(2)(3)..................................... .48% .48%
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Total Operating Expenses(3).................................. 1.98% 1.98%
</TABLE>
(1) Under the Fund's Rule 12b-1 distribution plan, the Adviser is permitted to
carry forward expenses not reimbursed by the distribution fee to subsequent
fiscal years for submission to the Fund for payment, subject to the
continuation of the plan. Such amounts are not recognized in the Fund's
financial statements as expenses and liabilities, since the distribution
plan can be terminated on an annual basis without further liability to the
Fund. The Rule 12b-1 fee may represent the equivalent of an annual
asset-based sales charge to an investor. As a result of distribution fees, a
long-term shareholder in the Fund may pay more than the economic equivalent
of the maximum front-end sales charge permitted by the Rules of the National
Association of Securities Dealers, Inc.
(2) Includes Shareholder Servicing Fee of .25%.
(3) The Adviser has voluntarily undertaken to defer, waive and/or reimburse
expenses during the current fiscal year so that Total Fund Operating
Expenses, for each class, do not exceed 1.98%. Should the Adviser decide
during the current fiscal year that such deferral, waiver and/or
reimbursement cannot be maintained, shareholders will receive 30 days
notice of the change.
* The maximum 1% contingent deferred sales charge on Class B shares is applied
to redemptions during the 18 months after purchase; the charge declines to
zero after 18 months. The charge is 1% of the value of the shares sold or
the Net Asset Value at the time of purchase, whichever is less. Class B
shares will not be converted to Class A shares.
** The Transfer Agent charges a $12 service fee for each payment of redemption
proceeds made by wire.
*** The Transfer Agent charges a $5 fee for each telephone exchange.
2
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EXAMPLE: In the following hypothetical example, you would pay the following
expenses on a $1000 investment, assuming (1) 5% annual return and (2) redemption
at the end of each time period.
1 YEAR 3 YEARS
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Class A Class B Class A Class B
$64 $40 $104 $72
The "Example" set forth above assumes all dividends and other
distributions are reinvested and that the percentages under "Annual Fund
Operating Expenses" remain the same in the years shown. The Class A and Class B
shares examples include the initial sales charge, of 4.50% and 1.00%
respectively, and the Class B shares example, for year 1, also includes the
contingent deferred sales charge of 1.00% for the redemption within the first
eighteen months after purchase.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
PERFORMANCE CALCULATION
The Fund calculates performance on a total return basis for various
periods. The total return basis combines changes in principal and dividends and
distributions for the periods shown, as well as the deduction of all charges and
expenses. The total return basis for Class A shares reflects the deduction of
the maximum initial sales charge at the time of purchase, and the total return
basis for Class B shares reflects the deduction of the maximum initial sales
charge at the time of purchase and maximum contingent deferred sales charge upon
redemption of shares held for the period. Principal changes are based on the
difference between the beginning and closing net asset value for the period.
Calculations assume reinvestment of all dividends and distributions paid by the
Fund. Dividends and distributions are comprised of net investment income and net
realized capital gains, respectively. In addition, the Fund may calculate
performance on a total return basis at net asset value.
Performance will vary from time to time and past results are not
necessarily representative of future results. A shareholder should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Comparative performance information may be used from time to time in
the advertising or marketing of the Fund's Class A and Class B shares, including
data from Lipper Analytical Services, Inc. and Morningstar Mutual Funds. Such
comparative performance information will be stated in the same terms in which
the comparative data and indices are stated. All advertisements of the Fund will
disclose the maximum sales charge to which investments in shares of the Fund may
be subject.
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The Fund's investment objective is fundamental and may not be changed
without a vote of the holders of a majority of its outstanding voting securities
(as defined in the Statement of Additional Information). All investment policies
will be non-fundamental, unless otherwise noted as fundamental, and may be
changed without prior shareholder approval. The Fund will notify shareholders in
writing and revise the Prospectus accordingly should any such modifications in
investment strategies or techniques occur. There can be no assurance that the
Fund will achieve its investment objective.
The investment objective of the Trautman Kramer Value Plus Fund is
long-term capital appreciation. To achieve its objective the Fund invests in a
portfolio consisting of common stocks of United States companies that are
considered by the Adviser or Sub-Adviser to be out of favor with investors and
appear to be undervalued in relation to their potential growth or earning power.
Generally, the Adviser and the Sub-Adviser consider (a) stocks which have under
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<PAGE>
performed market indices such as Standard & Poor's Composite Index for at least
one year and (b) companies which have a historically low stock price in relation
to such factors as sales, potential earnings or underlying assets to be out of
favor with, and unattractive investments to, investors. The Adviser and
Sub-Adviser search for companies based on their judgment of relative value and
growth potential. One method of evaluating the potential growth and earning
power of a company is on the basis of past growth and profitability, as
reflected in its financial statements. Another method is the determination by
the Adviser or Sub-Adviser that the company has achieved better results than
similar companies in a depressed industry which the Adviser or Sub-Adviser
believes will improve within the next two years. There is no assurance that the
evaluation of the Adviser or Sub-Adviser will be accurate or that the Fund's
objective will be achieved. If the stocks in which the Fund invests never attain
their perceived potential or the valuation of such stocks in the marketplace
does not in fact reflect significant undervaluation, there may be little or no
appreciation or there may be a depreciation in the value of such stocks.
The Fund also intends to invest up to 10% of its net assets in
securities that have not been registered under the Securities Act of 1933, as
amended and therefore are subject to restrictions on resale, and may be
illiquid. These securities provide an opportunity for additional return
potential, but also present additional risks commensurate with this type of
investing. See "Additional Investment Policies and Risk Considerations -
Illiquid Securities"
The Fund may invest up to 25% of its total assets in common stock of
foreign companies which are traded in the United States or purchase American
Depository Receipts (ADRs). ADRs are certificates issued by U.S. banks which
represent the right to receive securities of a foreign issuer which have been
deposited with that bank or a correspondent bank.
In addition, the Fund may invest up to 5% of its net assets in
repurchase agreements which are fully collateralized by obligations of the U.S.
Government or U.S. Government agencies. Under the terms of a repurchase
agreement, the Fund acquires securities from financial institutions or
registered broker-dealers, subject to the seller's agreement to repurchase the
securities at a mutually agreed upon date and price.
The Fund may also invest up to 5% of its total assets in securities
convertible into common stocks, such as warrants and convertible bonds. The Fund
may, from time to time, borrow up to 10% of the value of its total assets from
banks at prevailing interest rates as a temporary measure for extraordinary or
emergency purposes. The Fund may not purchase securities while borrowings exceed
5% of the value of its total assets.
Finally, the Fund may invest in variable rate master demand notes.
Variable rate master demand notes are notes issued by corporations to finance
their current operations. Master demand notes are direct lending arrangements
between the Fund and the corporation. There is no secondary market for the
notes, but the Fund may demand payment of the principal of the instrument at any
time.
The Fund has only recently commenced operations and therefore has no
operating history.
ADDITIONAL INVESTMENT POLICIES AND RISK CONSIDERATIONS
ILLIQUID SECURITIES
The Fund may invest up to 10% of its net assets in illiquid securities.
Illiquid securities are those securities that are not readily marketable,
including restricted securities and repurchase agreements with maturities in
excess of seven days.
RESTRICTED SECURITIES
The Fund may invest in securities that are subject to restrictions on
resale because they have not been registered under the Securities Act of 1933
(the "1933 Act"). These securities are sometimes referred to as private
placements. Certain restricted securities that may be resold to institutional
investors pursuant to Rule 144A under the 1933 Act may be determined to be
liquid under guidelines adopted by the Board of Trustees. In determining whether
or not such Rule
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<PAGE>
144A securities are liquid, the Board of Trustees will take into account trading
activity, availability of reliable price, and other relevant information.
Investing in Rule 144A securities could have the effect of increasing the Fund's
level of illiquidity to the extent that qualified institutional buyers become,
for a time, uninterested in purchasing these securities.
OPTIONS
The Fund may write covered call options on optionable securities or stock
indices of the types in which it is permitted to invest from time to time as the
Adviser or Sub-Adviser determines is appropriate in seeking to attain its
objective. A call option written by the Fund gives the holder the right to buy
the underlying securities or index from the Fund at a stated exercise price.
Options on stock indices are settled in cash.
The Fund may purchase put options to protect its portfolio holdings in an
underlying stock index or security against a decline in market value. The Fund
may also purchase call options to hedge against an increase in prices of stock
indices or securities that it ultimately wants to buy. Such hedge protection is
provided during the life of the put (call) option since the Fund, as holder of
the put (call) option, is able to sell (buy) the underlying security or index at
the exercise price regardless of any increase in the underlying market price of
the security or index.
TEMPORARY INVESTMENTS
The Fund does not intend to engage in short-term trading on an ongoing
basis. Current income is not an objective of the Fund, and any current income
derived from the Fund's portfolio will be incidental. For temporary defensive
purposes, when deemed necessary by the Adviser or Sub-Adviser, the Fund may
invest up to 100% of its assets in U.S. Government obligations or high-quality
debt obligations of U.S. companies.
PORTFOLIO TURNOVER
The portfolio turnover rate is a measure of the Fund's buying and
selling activity. It is anticipated that the annual turnover rate for the Fund
should not exceed 150%. A high rate of portfolio turnover (100% or more) will
result in higher transaction costs, including brokerage commissions. Also, to
the extent that higher portfolio turnover results in a higher rate of net
realized capital gains to the Fund, the portion of the Fund's distributions
constituting taxable capital gains may increase.
SHORT SALES
The Fund may use a technique known as selling short "against the box."
This means that the Fund will not make short sales of securities or maintain a
short position unless, at all times when a short position is open, the Fund owns
an equal amount of such securities or securities convertible into or
exchangeable for, without payment of any further consideration, an equal amount
of the securities sold short.
YEAR 2000 PROBLEM
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the advisor/administrator and other service providers
so not providers do not properly process and calculate date-related information
and data from and after January 1, 2000. This is commonly known as the "Year
2000 Problem." The advisor/administrator is taking steps that it believes are
reasonably designed to address the Year 2000 Problem with respect to computer
systems that it uses and to obtain reasonable assurances that comparable steps
are being taken by each Fund's other major service providers. At this time,
however, there can be no assurance that these steps will be sufficient to avoid
any adverse impact to the funds."
INVESTMENT ADVISER AND INVESTMENT ADVISORY AGREEMENTS
Trautman Kramer Capital Management, Inc., 500 Fifth Avenue, New York,
New York 10110, acts as Adviser to the Fund under an investment advisory
agreement (the "Advisory Agreement") which provides that the Adviser identify
and analyze possible investments for the Fund, and determine the amount, timing,
and form of such investments. The Adviser has the responsibility of monitoring
and reviewing the Fund's portfolio on a regular basis and recommending the
ultimate disposition of such investments. It is the Adviser's responsibility to
cause the purchase and sale of securities in the Fund's portfolio, subject at
all times to the policies set forth by the Board of Trustees. The Adviser is a
new company and therefore does not have an operating history as an investment
manager of mutual funds, but its officers and employees are persons with
extensive experience in managing investment portfolios. The types of investments
the Adviser's officers and employees offer advice on include equity securities,
corporate debt securities, commercial paper, U.S. government securities, and
options.
5
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Under the terms of the Advisory Agreement, the Fund pays the cost of
all its expenses (other than those expenses specifically assumed by the Adviser
or the Fund's distributor), including the pro rata costs incurred in connection
with the Fund's maintenance of its registration under the 1933 Act and the 1940
Act, printing of prospectuses distributed to shareholders, taxes or governmental
fees, brokerage commissions, custodial, transfer and shareholder servicing agent
costs, expenses of outside counsel and independent auditors, preparation of
shareholder reports, trustees' fees and shareholder meetings. For its services
under the Advisory Agreement, the Adviser receives a fee at an annual rate of
1.00% of average daily net assets. The Adviser may from time to time and for
such periods as it deems appropriate voluntarily reduce its compensation (and/or
voluntarily assume expenses) for a class of shares of the Fund. The Adviser may
, at any later date, recoup such amounts after such time as the Adviser is no
longer reducing its compensation and/or assuming expenses for such class of the
Fund provided that the aggregate expenses in the year such amounts are recouped
do not exceed any limitation to which the Adviser has agreed. The Board of
Trustees has determined the advisory fee to be fair and reasonable in light of
the services provided to the Fund.
The Adviser has retained Tocqueville Asset Management L.P., 1675
Broadway, New York, New York 10019, to provide sub-advisory services to the Fund
pursuant to a sub-advisory agreement (the "Sub-Advisory Agreement"). The
Sub-Adviser acts as an adviser to mutual funds. Robert W. Kleinschmidt serves as
the portfolio manager of the Fund . Mr. Kleinschmidt is the President of
Tocqueville Asset Management Corporation, the general partner of the
sub-adviser. He previously held executive positions at the investment management
firm David J. Greene & Co. since 1978, resigning as a partner in 1991. The
Sub-Adviser will, subject at all times to the investment objective and policies
of the Fund and control of the Advisor and the Board of Trustees, supervise the
investment and reinvestment of the cash and securities of the Fund. For its
services under the Sub-Advisory Agreement, the Adviser pays the Sub-Adviser a
fee at an annual rate of .50% of average daily net assets.
DISTRIBUTION PLANS
The Fund has adopted a distribution plan (a "Plan") for each class of
shares, pursuant to the Investment Company Act of 1940, as amended, (the "1940
Act"), that allows the Fund to pay from the assets attributable to a particular
class for distribution activities related to the sale of such class of shares.
Each distribution plan provides that such expenses may total up to .50% per
annum of the average daily net assets of the class of shares.
Each Plan provides that the Fund may finance activities which are
primarily intended to result in the sale of its shares, including, but not
limited to, advertising, printing of prospectuses and reports for other than
existing shareholders, preparation and distribution of advertising material and
sales literature, and payments to dealers including Trautman Kramer & Company,
Inc. (the "Distributor"), who enter into agreements with the Fund or the
Distributor. The Plans will only make payments for expenses actually incurred on
a first-in, first-out basis. The Plan may carry forward for an unlimited number
of years any unreimbursed expenses. If a Plan is terminated in accordance with
its terms, the obligations of the Fund to make payments pursuant to the Plan
will cease and the Fund will not be required to make any payments past the date
the Plan terminates; however, the Distributor will be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day
subsequent to termination of the Class B Plan. (See the Statement of Additional
Information--"Distribution Plan" for further information about the Plan.)
SHAREHOLDER SERVICING PLANS
The Fund has adopted a Shareholder Servicing Plan for each class of
shares of the Fund. In accordance with the Shareholder Servicing Plan, the Fund
may enter into Shareholder Service Agreements under which it pays fees up to an
annual amount equal to .25% of the average daily net assets of the class of
shares for fees incurred in connection with the personal service and maintenance
of accounts holding such class of shares of the Fund. Such agreements are
entered into between the Trust and various shareholder servicing agents,
including the Distributor and its affiliates, and other financial institutions
and securities brokers (each, a "Shareholder Servicing Agent"). Among the
services provided by Shareholder Servicing Agents are: answering customer
inquiries regarding account matters; assisting shareholders in designating and
changing various account options; aggregating and processing purchase and
redemption orders and transmitting and receiving funds for shareholder orders;
transmitting, on behalf of the Trust, proxy statements,
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prospectuses and shareholder reports to shareholders and tabulating proxies;
processing dividend payments and providing subaccounting services for Fund
shares held beneficially; and providing such other services as the Trust or a
shareholder may request. Shareholder Servicing Agents may periodically waive all
or a portion of their respective shareholder servicing fees.
ADMINISTRATIVE SERVICES AGREEMENT
Under an Administrative Services Agreement, Firstar Trust Company (the
"Administrator") supervises the administration of all aspects of the Fund's
operations, including the Fund's receipt of services for which the Fund is
obligated to pay, provides the Fund with general office facilities and provides,
at the Fund's expense, the services of persons necessary to perform such
supervisory, administrative and clerical functions as are needed to effectively
operate the Fund. Those persons, as well as certain employees and Trustees of
the Trust, may be directors, officers or employees of (and persons providing
services to the Fund may include) the Administrator and its affiliates. For
these services and facilities, the Administrator receives a fee computed and
paid monthly, for each class of shares, at an annual rate of .05% on the first
$200 million of the Fund's average net assets, .04% on the next $500 million of
the Fund's average net assets and .03% on any remaining average net assets in
excess of $700 million, subject to an annual total minimum fee of $40,500 for
both classes.
BROKERAGE ALLOCATION
Subject to the supervision of the Board of Trustees, decisions to buy
and sell securities for the Fund are made by the Adviser or Sub-Adviser. The
Adviser or Sub-Adviser, subject to obtaining the best price and execution, may
allocate brokerage transactions in a manner that takes into account the sale of
shares of the Fund. Subject to the supervision of the Trustees, the Adviser and
Sub-Adviser are authorized to allocate brokerage to affiliated broker-dealers on
an agency basis to effect portfolio transactions. The Trustees have adopted
procedures incorporating the standards of Rule 17e-1 of the 1940 Act, which
require that the commission paid to affiliated broker-dealers must be reasonable
and fair compared to the commission, fee or other remuneration received, or to
be received, by other brokers in connection with comparable transactions
involving similar securities during a comparable period of time. It is expected
that brokerage will be allocated to Trautman Kramer & Company, Inc., an
affiliate of the Adviser and Tocqueville Securities L.P., an affiliate of the
Sub-Adviser. In addition, the Adviser would like to purchase securities that are
directly placed by the issuer where Trautman Kramer & Company, Inc. acts as the
placement agent, and has submitted a request to the Division of Investment
Management ("Division") of the Securities and Exchange Commission ("Commission")
seeking comfort that the Division will not recommend that the Commission take
any enforcement action under Section 10(f) or Section 17(e)(2) of the Investment
Company Act of 1940, as amended, or Section 206(3) of the Investment Advisers
Act of 1940, as amended. The Adviser will not purchase any securities that are
directly placed by the issuer where Trautman Kramer & Company, Inc. acts as the
placement agent unless such comfort is granted by the Division. For a complete
discussion of portfolio transactions and brokerage allocation, see "Portfolio
Transactions and Brokerage" in the Statement of Additional Information.
PURCHASE OF SHARES
GENERAL INFORMATION
Class A and Class B shares are sold to investors at the net asset value
next determined after a purchase order becomes effective (as described below)
plus a varying initial sales charge. Class B shares also are subject to a
contingent deferred sales charge payable upon certain redemptions. Class B
shares may be purchased by an investor only through an IRA, a 401(k) Plan, a
403(b) Plan or 457 (state deferred compensation) Plan or other retirement plan
as determined in the Adviser's sole discretion.
7
<PAGE>
The minimum initial investment in the Fund is $1,000 except for IRA
accounts where the minimum is $500. The minimum subsequent investment in the
Fund is $100. The Distributor may, in its discretion, waive the minimum
investment requirements for purchases, including those made via the Automatic
Investment Plan, which is discussed below.
Both Class A and Class B shares of the Fund may be purchased from the
following entities: (a) the Fund's Distributor, (b) authorized securities
dealers which have entered into sales agreements with the Distributor on a best
efforts basis and brokers who have entered into agreements with the Trust to
provide distribution and shareholder services (the "Selling Brokers"); and (c)
the Fund' transfer agent, Firstar Trust Company (the "Transfer Agent"). When
placing orders, investors shall specify whether the order is for Class A or
Class B shares. All share purchases that fail to specify a class will
automatically be invested in Class A shares. The Fund reserves the right to
cease offering shares for sale at any time or to reject any order for the
purchase of shares.
A purchase order becomes effective upon receipt of the order by the
Distributor, a Selling Broker or the Transfer Agent. Purchase orders received
prior to 4:00 p.m. New York time are priced according to the net asset value per
share next determined on that day. Purchase orders received after 4:00 p.m. New
York time are priced according to the net asset value per share next determined
on the following day.
The net asset value per share is determined by dividing the market
value of the Fund's investments as of the close of trading plus any cash or
other assets (including dividends receivable and accrued interest) less all
liabilities (including accrued expenses) by the number of Fund shares
outstanding. The Fund will determine the net asset value of its shares once
daily as of the close of trading on the New York Stock Exchange (the "Exchange")
on each "Fund business day" which is any day on which the Exchange is open for
business.
Investors who already have a brokerage account with the Distributor or
a Selling Broker may purchase the Fund's shares through such broker. Payment for
purchase orders through the Distributor or the Selling Broker must be made to
the Distributor or the Selling Broker within three business days of the purchase
order. All dealers are responsible for forwarding orders for the purchase of the
Fund's shares on a timely basis.
The Fund's shares normally will be maintained in book entry form and
share certificates will not be issued. The Distributor reserves the right to
refuse to sell shares of the Fund to any person.
INITIAL SALES CHARGES ON CLASS A AND CLASS B SHARES
The initial sales charge imposed upon a sale of Class A shares varies
according to the size of the purchase as shown in the table below. The initial
sales charge imposed upon a sale of Class B shares is 1.00% and, unlike Class A
shares, does not vary based on the size of the purchase.
<TABLE>
<CAPTION>
CONCESSION
INITIAL SALES CHARGE TO DEALERS
-------------------- ----------
% OF % OF NET % OF
OFFERING AMOUNT OFFERING
AMOUNT OF PURCHASE PRICE INVESTED PRICE
-------- -------- --------
<S> <C> <C> <C>
CLASS A SHARES:
Less than $100,000........................................... 4.50 4.67 4.00
$100,000 to $249,999......................................... 3.50 3.63 3.00
$250,000 to $499,999......................................... 2.50 2.56 2.00
$500,000 to $999,999........................................ 1.50 1.52 1.00
$1,000,000 and over.......................................... 1.00 1.01 0.50
CLASS B SHARES:
All amounts 1.00 1.01 1.00
</TABLE>
8
<PAGE>
The reduced initial sales charges apply to the aggregate of purchases
of Class A shares of the Fund made at one time by any "person", which includes
an individual, spouse and children under the age of 21, or a trustee or other
fiduciary of a trust, estate or fiduciary account.
Upon notice to Selling Brokers, the Distributor may reallow up to the
full applicable initial sales charge on Class A shares and such Selling Broker
may therefore be deemed an "underwriter" under the 1933 Act, as amended, during
such periods. The Distributor may, from time to time, provide promotional
incentives to certain Selling Brokers whose representatives have sold or are
expected to sell significant amounts of one or all of the funds of the Trust. At
various times the Distributor may implement programs under which a Selling
Broker's sales force may be eligible to win cash or material awards for certain
sales efforts. The Distributor may also implement programs under which it will
reallow an amount not exceeding the total applicable initial sales charges on
the sales of Class A shares or the maximum contingent deferred sales charge of
Class B shares generated by the Selling Broker during such programs to any
Selling Broker that sponsors sales contests or recognition programs conforming
to criteria established by the Distributor or participates in sales programs
sponsored by the Distributor. The Distributor may provide marketing services to
Selling Brokers, consisting of written informational material relating to sales
incentive campaigns conducted by such Selling Brokers for their representatives.
PURCHASES OF CLASS A SHARES AT NET ASSET VALUE
QUALIFIED PERSONS. There is no initial sales charge on Class A shares
for "Qualified Persons", which are the following (a) active or retired trustees,
directors, officers, partners or employees (their spouses and children under age
21) of (i) the Adviser, Sub-Adviser and Distributor or any affiliates or
subsidiaries thereof (the directors, officers or employees of which shall also
include their parents and siblings for all purchases of Fund shares), (ii)
Selling Brokers, (iii) trade organizations to which the Adviser belongs, or (iv)
organizations providing professional services to the Trust and (b) trustees or
custodians of any qualified retirement plan or IRA established for the benefit
of a person in (a) above.
REGISTERED INVESTMENT ADVISERS. There also is no initial sales charge
on Class A shares for a registered investment adviser who purchases the shares
for its own account, or an account for which the investment adviser has
discretion and is authorized to make investment decisions.
REDUCED INITIAL SALES CHARGES ON CLASS A SHARES
CUMULATIVE QUANTITY DISCOUNT. Class A shares of the Fund may be
purchased by any person at a reduced initial sales charge which is determined by
(a) aggregating the dollar amount of the new purchase and the greater of the
purchaser's total (i) net asset value or (ii) cost of all Class A shares of such
Fund , and (b) applying the initial sales charge applicable to such aggregate.
The privilege of the cumulative quantity discount is subject to modification or
discontinuance at any time with respect to all shares purchased thereafter.
GROUP PURCHASES. An individual who is a member of a qualified group (as
defined below) may also purchase Class A shares of the Fund at the reduced
initial sales charge applicable to the group taken as a whole. The reduced
initial sales charge is based upon the aggregate dollar value of Class A shares
previously purchased and still owned by the group plus the securities currently
being purchased and is determined as stated above under "Cumulative Quantity
Discount". For example, if members of the group had previously invested and
still held $90,000 of Class A shares and now were investing $15,000, the initial
sales charge would be 3.50%. In order to obtain such discount, the purchaser or
investment dealer must provide the Transfer Agent with sufficient information,
including the purchaser's total cost, at the time of purchase to permit
verification that the purchaser qualifies for a cumulative quantity discount,
and confirmation that the order is subject to such verification. Information
concerning the current initial sales charge applicable to a group may be
obtained by contacting the Transfer Agent.
A "qualified group" is one which: (a) has been in existence for more
than six months; (b) has a purpose other than acquiring Class A shares at a
discount; and (c) satisfies uniform criteria which enables the Distributor to
realize economies of scale in its costs of distributing Class A shares. A
qualified group must have more than 10 members, must be available to arrange for
group meetings between representatives of the Fund and the members, must agree
to include sales and other materials related to the Fund in its publications and
mailings to members at reduced or no cost to the Distributor, and must seek to
arrange for payroll deduction or other bulk transmission of investments in the
Fund. This privilege is subject to modification or discontinuance at any time
with respect to all Class A shares purchased thereafter.
9
<PAGE>
LETTER OF INTENT. Investors in Class A shares may also qualify for
reduced initial sales charges by signing a Letter of Intent (the "LOI"). This
enables the investor to aggregate purchases of Class A shares of the Fund during
a 13-month period. The initial sales charge is based on the total amount
invested in Class A shares during the 13-month period. All Class A shares of the
Fund currently owned by the investor will be credited as purchases (at their
current offering prices on the date the LOI is signed) toward completion of the
LOI. A 90-day back-dating period can be used to include earlier purchases at the
investor's cost. The 13-month period would then begin on the date of the first
purchase during the 90-day period. No retroactive adjustment will be made if
purchases exceed the amount indicated in the LOI. A shareholder must notify the
Transfer Agent or Distributor whenever a purchase is being made pursuant to a
LOI.
The LOI is not a binding obligation on the investor to purchase, or on
the Fund to sell, the full amount indicated; however, on the initial purchase
(or subsequent purchases if necessary), 5% of the dollar amount specified in the
LOI will be held in escrow by the Transfer Agent in Class A shares registered in
the shareholder's name in order to assure payment of the proper initial sales
charge. If total purchases pursuant to the LOI (less any dispositions and
exclusive of any distributions on such shares automatically reinvested) are less
than the amount specified, the investor will be requested to remit to the
Transfer Agent an amount equal to the difference between the initial sales
charge paid and the initial sales charge applicable to the aggregate purchases
actually made. If not remitted within 20 days after written request, an
appropriate number of escrowed shares will be redeemed in order to realize the
difference. This privilege is subject to modification or discontinuance at any
time with respect to all shares purchased thereunder. Shareholders will be paid
distributions, either in additional shares or cash, upon such escrowed shares.
PURCHASES OF CLASS A AND CLASS B SHARES AT NET ASSET VALUE
RECENTLY REDEEMED SHARES. Class A shares of the Fund may be purchased
at net asset value by persons who have, within the previous 30 days, redeemed
their Class A shares of the Fund. The amount which may be purchased at net asset
value is limited to an amount up to, but not exceeding, the net amount of
redemption proceeds. Such purchases may also be handled by a securities dealer,
who may charge the shareholder a fee for this service. In addition, Class B
shareholders who have redeemed Class B shares may purchase Class B shares with
no initial sales charge (in an amount not exceeding redemption proceeds) if the
purchase occurs within 30 days of redemption of the Class B shares. This
privilege is subject to modification or discontinuance at any time.
METHODS OF PAYMENT
BY CHECK. Investors who wish to purchase Class A or Class B shares
directly from the Transfer Agent may do so by sending a completed purchase
application (included with this Prospectus or obtainable from the Trust) to The
Trautman Kramer Trust, c/o Firstar Trust Company, P.O. Box 701, Milwaukee, WI
53201-0701, accompanied by a check payable to the Trautman Kramer Value Plus
Fund. Purchase applications sent to the Fund will be forwarded to the Transfer
Agent, and will not be effective until received by the Transfer Agent. The price
per share is the next determined per share net asset value (plus a varying
initial sales charge with respect to Class A and Class B shares) after receipt
of an application by Firstar Trust Company. The U.S. Postal Service and other
independent delivery services are not agents of the Trust. Therefore, deposit of
purchase applications in the mail or with such services does not constitute
receipt by Firstar Trust Company or the Trust. To purchase Class A or Class B
shares by overnight or express mail, please use the following street address:
The Trautman Kramer Trust - Trautman Kramer Value Plus Fund, c/o Firstar Trust
Company, Mutual Fund Services, Third Floor, 615 East Michigan Street, Milwaukee,
Wisconsin 53202. Payment should be made in the form of a check drawn on a U.S.
bank . Neither cash nor third party checks will be accepted. Firstar Trust
Company will charge a $20 fee against a shareholder's account for any payment
check returned to the custodian. The shareholder will also be responsible for
any losses suffered by the Fund as a result.
BY WIRE. Investors who purchase Class A or Class B shares directly from
the Transfer Agent may also purchase shares by wire. Funds should be wired to:
10
<PAGE>
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ABA # 075000022
Credit: Firstar Trust Company
Account # 112952137
Further credit: The Trautman Kramer Trust
Name of shareholder and account number (if known)
(Wired funds must be received prior to 4:00 p.m.Eastern time to be
eligible for same day pricing.)
The establishment of a new account or any additional purchases for an
existing account by wire transfer should be preceded by a phone call to Firstar
Trust Company, 1-888-852-6825, to provide information for the account. The Fund
is not responsible for the consequences of delays resulting from the banking or
Federal Reserve wiring system. A properly signed share purchase application
marked "Follow Up" must be sent for all new accounts opened by wire transfer.
Applications are subject to acceptance by the Fund, and are not binding until so
accepted.
BY TELEPHONE. The telephone purchase option allows investors to make
subsequent investments directly from a bank checking or savings account. To
establish the telephone purchase option on your account, complete the
appropriate section on the Account Application Form. Only bank accounts held at
domestic financial institutions that are Automated Clearing House (ACH) members
may be used for telephone transactions. The option will become effective
approximately 15 business days after the application form is received.
Subsequent investments may be made by calling 1-888-852-6825. Your shares will
be purchased at the net asset value determined as of the close of regular
trading on the date that the Transfer Agent receives payment for shares
purchased by electronic funds transfer through the ACH system, plus any initial
sales charge. Purchases must be in amounts of $100 or more and may not be used
for initial purchases of the Fund's shares. Most transfers are completed within
three business days after your call to place the order. The Fund reserves the
right to modify or remove the ability to purchase shares by telephone at any
time.
BY AUTOMATIC INVESTMENT PLAN. The Fund has an Automatic Investment Plan
which permits an existing shareholder to purchase additional Class A or Class B
shares of the Fund (minimum $100 per transaction) at regular intervals. Under
the Automatic Investment Plan, shares are purchased by transferring funds from a
shareholder's checking, bank money market, NOW account, or savings account in an
amount of $100 or more designated by the shareholder. At the shareholder's
option, the account designated will be debited and shares will be purchased on
the date selected by the shareholder. There must be a minimum of seven days
between automatic purchases. If the date selected by the shareholder is not a
business day, funds will be transferred the next business day thereafter. Only
an account maintained at a domestic financial institution which is an Automated
Clearing House member may be so designated. To establish an Automatic Investment
Account, complete and sign the applicable section of the Purchase Application
and send it to the Transfer Agent. Shareholders may cancel this privilege or
change the amount of purchase at any time by calling 1-888-852-6825 or by
mailing written notification to: The Trautman Kramer Trust, c/o Firstar Trust
Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. The change will be
effective five business days following receipt of notification by the Transfer
Agent. The Fund may modify or terminate this privilege at any time or charge a
service fee, although no such fee currently is contemplated. However, a $20 fee
will be imposed by Firstar Trust Company if sufficient funds are not available
in the shareholder's account at the time of the automatic transaction.
While investors may use this option to purchase shares in their IRA or
other retirement plan accounts, neither the Distributor nor the Transfer Agent
will monitor the amount of contributions to ensure that they do not exceed the
amount allowable for Federal tax purposes.
REDEMPTION OF SHARES
GENERAL INFORMATION
A shareholder may redeem Class A shares in the Fund at any time without
charge. Class B shares may be subject to the contingent deferred sales charge
upon redemption.
11
<PAGE>
In order to redeem Class A or Class B shares purchased through the
Distributor or a Selling Broker, the broker must be notified by telephone or
mail to execute a redemption. A properly completed order to redeem shares
received by the broker's office will be executed at the net asset value next
determined after receipt by the broker of the order. Redemption proceeds, minus
any applicable contingent deferred sales charge, will be held in a shareholder's
account with the Distributor unless the broker is instructed to remit all
proceeds directly to the shareholder.
Class A and Class B shares purchased through the Transfer Agent may be
redeemed by the Transfer Agent at the next determined net asset value upon
receipt of a request in good order. Payment will be made, minus any applicable
contingent deferred sales charge, for redeemed shares as soon as practicable,
but in no event later than the seventh day after receipt of a redemption
notification in good order. If the shares being redeemed were purchased directly
from the Transfer Agent by check, payment may be delayed for the minimum time
needed to verify that the purchase check has been honored. This is not normally
more than 15 days from the time of receipt of the check by the Transfer Agent.
"Good order" means that the request complies with the following: (a) where the
shareholder has not elected to permit telephone redemptions, the request must be
in writing, signed by all owners of the account exactly as the shares are
registered and specifying the number of shares or dollar amount to be redeemed
and sent to the Transfer Agent, Attn. The Trautman Kramer Trust c/o Firstar
Trust Company at P.O. Box 701, Milwaukee, Wisconsin 53201-0701. The U.S. Postal
Service and other independent delivery services are not agents of the Trust.
Therefore, deposit of redemption requests in the mail or with such services does
not constitute receipt by Firstar Trust Company or the Trust. Redemption
requests sent by overnight or express mail should be directed to: The Trautman
Kramer Trust c/o Firstar Trust Company, Mutual Fund Services, Third Floor, 615
East Michigan Street, Milwaukee, Wisconsin 53202. Requests for redemption by
telegram and requests which are subject to any special conditions or which
specify an effective date other than as provided herein cannot be honored; (b)
where written requests are received within 15 days after a change of an
investor's address or redemption proceeds are to be sent to an address or payee
other than as the shares are registered, signatures on the redemption request
must be guaranteed by a commercial bank which is a member of the Federal Deposit
Insurance Corporation, a trust company or a member firm (broker-dealer) of a
national securities exchange (a notary public or a savings and loan association
is not an acceptable guarantor); (c) the request must include any additional
legal documents concerning authority and related matters in the case of estates,
trusts, guardianships, custodianships, partnerships and corporations. Any
written requests sent to the Fund will be forwarded to the Transfer Agent and
the effective date of a redemption request will be when the request is received
by the Transfer Agent. Shareholders who purchased shares through the Transfer
Agent may arrange for the proceeds of redemption requests to be sent by Federal
Fund wire to a designated bank account by sending wiring instructions to Firstar
Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. The Transfer Agent
charges a $12 service fee for each payment of redemption proceeds made by
Federal Fund wire. Additional information regarding redemptions may be obtained
by calling 1- 888-852-6825.
Shareholders who have an Individual Retirement Account ("IRA") or other
retirement plan must indicate on their redemption request whether or not to
withhold federal income tax. Redemption requests failing to indicate an election
will be subject to 10% withholding.
Redemption of the Fund's Class A and Class B shares or payments
therefore may be suspended at such times (a) when the Exchange is closed, (b)
when trading on the Exchange is restricted, (c) when an emergency exists which
makes it impractical for the Fund to either dispose of securities or make a fair
determination of net asset value, or (d) for such other period as the Securities
and Exchange Commission may permit for the protection of the Fund's
shareholders. There is no assurance that the net asset value received upon
redemption will be greater than that paid by a shareholder upon purchase.
The Fund reserves the right to close an account that has dropped below
$500 in value for a period of three months or longer other than as a result of a
decline in the net asset value per share. Shareholders are notified at least 60
days prior to any proposed redemption and are invited to add to their account if
they wish to continue as shareholders of the Fund.
12
<PAGE>
CONTINGENT DEFERRED SALES CHARGES ON CLASS B SHARES
A contingent deferred sales charge is imposed upon certain redemptions
of Class B shares, according to the applicable percentage, shown in the table
below.
CONTINGENT DEFERRED SALES
CHARGE AS A PERCENTAGE OF NET
REDEMPTION DURING ASSET VALUE AT REDEMPTION
----------------- -----------------------------
18 Months Since Purchase..................... 1%
After 18 Months Since Purchase............... None
In determining the applicability and rate of any contingent deferred
sales charge, Class B shares are redeemed on a first-in/first-out basis. The
amount of the charge is determined as a percentage of the lesser of the current
market value or the cost of the shares being redeemed. Accordingly, redemption
of Class B shares are not subject to a contingent deferred sales charge to the
extent that the value of such shares represents capital appreciation of Fund
assets.
If a redeeming shareholder owns shares of both Class A and Class B,
unless the shareholder specifically requests otherwise, the Class A shares will
be redeemed before any Class B shares. The amount of any contingent deferred
sales charge imposed will reduce the gain or increase the loss on the amount
realized on redemption for purposes of federal income taxes.
WAIVER OF THE CONTINGENT DEFERRED SALES CHARGE. The contingent deferred
sales charge for Class B shares will be waived, subject to confirmation of a
shareholder's status, for: (i) a total or partial redemption made within one
year of the death of the shareholder; (ii) a redemption in connection with a
minimum required distribution from an IRA, Keogh or custodial account under
section 403(b) of the Internal Revenue Code; (iii) distributions from a
qualified plan upon retirement; and (iv) a redemption resulting from an
over-contribution to an IRA.
TELEPHONE REDEMPTION
Shareholders of the Fund will also be permitted to redeem Class A and
Class B shares by telephone. To redeem shares by telephone, call 1- 888-852-6825
with your account name, account number and amount of redemption. Redemption
proceeds will only be sent to a shareholder's address or a pre-authorized bank
account of a commercial bank located within the United States as shown on the
Transfer Agent's records. (Available only if established on the account
application and if there has been no change of address by telephone within the
preceding 15 days.) Once a telephone redemption request has been placed, it
cannot be canceled or modified.
To arrange for telephone redemptions after an account has been opened
or to change the bank account or designated payee, a written request must be
sent to the Transfer Agent. The request must be signed by all owners of the
account with their signatures guaranteed. (See "Redemption of Shares - General
Information").
The Fund reserves the right to refuse a telephone redemption if it
believes it is advisable to do so. Procedures for redeeming shares by telephone
may be modified or terminated by the Fund at any time upon 60 days' notice to
shareholders. During periods of substantial economic or market change, telephone
redemptions may be difficult to implement. If a shareholder is unable to contact
the Transfer Agent by telephone, shares may also be redeemed by delivering the
redemption request to the Transfer Agent.
In an effort to prevent unauthorized or fraudulent redemption requests
by telephone, the Fund and the Transfer Agent employ reasonable procedures to
confirm that such instructions are genuine. Among the procedures used to
determine authenticity, investors electing to redeem or exchange by telephone
will be required to provide their account number. All such telephone
transactions will be tape recorded. The Fund may implement other procedures from
time to time. If reasonable procedures are not implemented, the Fund and/or the
Transfer Agent may be liable for any loss due
13
<PAGE>
to unauthorized or fraudulent transactions. In all other cases, the shareholder
is liable for any loss for unauthorized transactions.
REDEMPTION IN-KIND
The Fund reserves the right, if conditions exist which make cash
payments undesirable, to honor any request for redemption of Class A or Class B
shares by making payment in whole or in part in securities chosen by the Fund
and valued in the same way as they would be valued for purposes of computing its
net asset value. If payment is made in securities, a shareholder may incur
transaction costs in converting these securities into cash after they have
redeemed their shares.
SHAREHOLDER PRIVILEGES
SYSTEMATIC WITHDRAWAL PLAN. The Fund offers a Systematic Withdrawal
Plan for shareholders who own Class A or Class B shares worth at least $10,000
at current net asset value of the Fund. Under the Systematic Withdrawal Plan, a
fixed sum (minimum $500) will be distributed at regular intervals (on any day,
either monthly, quarterly or annually). In electing to participate in the
Systematic Withdrawal Plan, investors should realize that within any given
period the appreciation of their investment in the Fund may not be as great as
the amount withdrawn. A shareholder may vary the amount of frequency of
withdrawal payments or temporarily discontinue them by notifying Firstar Trust
Company at 1- 888-852-6825. The Systematic Withdrawal Plan does not apply to
shares held in Individual Retirement Accounts or defined contribution retirement
plans. For additional information or to request an application please call
Firstar Trust Company at 1- 888-852-6825.
EXCHANGE PRIVILEGE. Shareholders may exchange Class A and/or Class B
shares of any or all of an investment in the Fund for shares of the Firstar
Money Market Fund (the "Money Market Fund"). This Exchange Privilege is a
convenient way for shareholders to buy shares in a money market fund in order to
respond to changes in their goals or market conditions. Before exchanging into
the Money Market Fund, shareholders must read the Firstar Money Market Fund's
Prospectus. To obtain the Money Market Fund's Prospectus and the necessary
exchange authorization forms, call the Transfer Agent at 1- 888-852-6825. The
Transfer Agent charges a $5 fee for each telephone exchange which will be
deducted from the investor's account from which the funds are being withdrawn
prior to effecting the exchange. There is no charge for exchange transactions
that are requested by mail. Use of the Exchange Privilege is subject to the
minimum purchase and redemption amounts set forth in the Prospectus for the
Money Market Fund. All accounts opened in the Money Market Fund as a result of
using the Exchange Privilege must be registered in the identical name and
taxpayer identification number as a shareholder's existing account with the
Fund.
For purposes of the Exchange Privilege, exchanges into and out of the
Money Market Fund will be treated as shares owned in the Fund. For example, if
an investor who owned shares in the Fund moved an investment from the Fund to
the Money Market Fund and then decided at a later date to move the investment
back to the Fund, he or she would be deemed to have continuously owned shares in
the Fund and would not be imposed the contingent deferred sales charge or the
initial sales charge, as applicable, so long as the investment has been
continuously invested in shares of the Money Market Fund during the period
between withdrawal and reinvestment and the investor repurchased the same class
of shares that such investor originally owned.
Exchanges may be authorized by telephone. In order to protect itself
and shareholders from liability for unauthorized or fraudulent telephone
transactions, the Fund will use reasonable procedures in an attempt to verify
the identity of a person making a telephone exchange request. The Fund reserves
the right to refuse a telephone exchange request if it believes that the person
making the request is not the record owner of the shares being exchanged, or is
not authorized by the shareholder to request the exchange. Shareholders will be
promptly notified of any refused request for a telephone exchange. As long as
these normal identification procedures are followed, neither the Fund nor its
agents will be liable for loss, liability or cost which results from acting upon
instructions of a person believed to be a shareholder with respect to the
telephone exchange privilege. You will not automatically be assigned this
privilege unless you check the box on the Purchase Application which indicates
that you wish to have the privilege. The exchange privilege may be modified or
discontinued at any time.
14
<PAGE>
Remember that each exchange represents the sale of shares of one fund
and the purchase of shares of another for tax purposes. Therefore, shareholders
may realize a taxable gain or loss on the transaction. Before making an exchange
request, an investor should consult a tax or other financial adviser to
determine the tax consequences of a particular exchange. The Distributor is
entitled to receive a fee from the Money Market Fund for certain support
services at the annual rate of .20 of 1% of the average daily net asset value of
the shares for which it is the holder or dealer of record. Because excessive
trading can hurt the Fund's performance and shareholders, the Fund reserve the
right to temporarily or permanently limit the number of exchanges or to
otherwise prohibit or restrict shareholders from using the Exchange Privilege at
any time, without notice to shareholders. In particular, a pattern of exchanges
with a "market timing" strategy may be disruptive to the Fund and may thus be
restricted or refused. Excessive use of the Exchange Privilege is defined as
more than five exchanges per calendar year. The restriction or termination of
the Exchange Privilege does not affect the rights of shareholders to redeem
shares, as discussed in the Prospectus.
The Money Market Fund is managed by Firstar Investment Research and
Management Company, an affiliate of Firstar Trust Company. The Money Market Fund
is unrelated to The Trautman Kramer Trust.
DIVIDENDS, DISTRIBUTIONS, AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS. The Fund pays dividends at least annually.
The Fund also distributes net capital gains (if any) at least annually.
Dividends and distributions of shares may be reinvested at net asset value
without an initial sales charge. Shareholders should indicate on the purchase
application whether they wish to receive dividends and distributions in cash.
Otherwise, all income dividends and capital gains distributions of Class A and
Class B shares are automatically reinvested in the Fund at the next determined
net asset value without an initial sales charge unless the Transfer Agent
receives written notice from an individual shareholder prior to the record date,
requesting that the distributions and dividends be distributed to the investor
in cash. A shareholder may change an election by telephone, subject to certain
limitations, by calling the Transfer Agent at 1-888-852-6825.
Shareholders requesting to have dividends and/or capital gains paid in
cash may choose to have such amounts mailed or sent via electronic funds
transfer ("EFT"). Transfers via EFT generally take up to three business days to
reach the shareholder's bank account.
If a shareholder elects to receive distributions and dividends by check
and the post office cannot deliver such check, or if such check remains uncashed
for six months, the Fund reserves the right to reinvest the distribution check
in the shareholder's account at the Fund's then current net asset value per
share (NAV) and to reinvest all subsequent distributions in shares of the Fund.
TAX MATTERS. The Fund intends to qualify as a regulated investment
company for federal income tax purposes by satisfying the requirements under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
including the requirements with respect to diversification of assets,
distribution of income and sources of income. It is the Fund's policy to
distribute to shareholders all of its investment income (net of expenses) and
any capital gains (net of capital losses) in accordance with the timing
requirements imposed by the Code, so that the Fund will satisfy the distribution
requirement of Subchapter M and not be subject to Federal income taxes or the 4%
excise tax .
If the Fund fails to satisfy any of the Code requirements for
qualification as a regulated investment company, it will be taxed at regular
corporate tax rates on all its taxable income (including capital gains) without
any deduction for distributions to shareholders, and distributions to
shareholders will be taxable as ordinary dividends (even if derived from the
Fund's net long-term capital gains) to the extent of the Fund's current and
accumulated earnings and profits.
Distributions by the Fund of its net investment income (including
foreign currency gains and losses) and the excess, if any, of its net short-term
capital gain over its net long-term capital loss are taxable to shareholders as
ordinary income.
15
<PAGE>
Distributions by the Fund of the excess, if any, of its net long-term
capital gain over its net short-term capital loss are designated as capital gain
dividends and are taxable to shareholders as long-term capital gains, regardless
of the length of time shareholders have held their shares.
Distributions by the Fund which are taxable to shareholders as ordinary
income are treated as dividends for Federal income tax purposes, but in any year
only a portion thereof (which cannot exceed the aggregate amount of qualifying
dividends from domestic corporations received by the Fund during the year) may
qualify for the 70% dividends-received deduction for corporate shareholders.
Distributions to shareholders will be treated in the same manner for
Federal income tax purposes whether shareholders elect to receive them in cash
or reinvest them in additional shares of the Fund . In general, shareholders
take distributions into account in the year in which they are made. However,
shareholders are required to treat certain distributions made during January as
having been paid by the Fund and received by shareholders on December 31 of the
preceding year . A statement setting forth the Federal income tax status of all
distributions made (or deemed made) during the year will be sent to shareholders
promptly after the end of each year.
Investors should carefully consider the tax implications of purchasing
shares just prior to the record date of any ordinary income dividend or capital
gain dividend. Those investors purchasing shares just prior to an ordinary
income or capital gain dividend will be taxed on the entire amount of the
dividend received, even though the net asset value per share on the date of such
purchase reflected the amount of such dividend and such dividend economically
constitutes a return of capital to such investors.
A shareholder will recognize gain or loss upon the sale or redemption
of shares of the Fund in an amount equal to the difference between the proceeds
of the sale or redemption and the shareholder's adjusted tax basis in the
shares. Any loss realized upon a taxable disposition of shares within six months
from the date of their purchase will be treated as a long-term capital loss to
the extent of any capital gain dividends received on such shares. All or a
portion of any loss realized upon a taxable disposition of shares of the Fund
may be disallowed if other shares of the Fund are purchased within 30 days
before or after such disposition.
If a shareholder is a non-resident alien or foreign entity shareholder,
ordinary income dividends paid to such shareholder generally will be subject to
United States withholding tax at a rate of 30% (or lower rate under an
applicable treaty). We urge non-United States shareholders to consult their own
tax adviser concerning the applicability of the United States withholding tax.
Under the backup withholding rules of the Code, shareholders may be
subject to 31% withholding of federal income tax on ordinary income dividends,
capital gain dividends and redemption payments made by the Fund. In order to
avoid backup withholding, shareholders must provide the Fund with a correct
taxpayer identification number (which for an individual is usually his Social
Security number) or certify that the shareholder is a corporation or otherwise
exempt from or not subject to backup withholding.
The foregoing discussion of federal income tax consequences is based on
tax laws and regulations in effect on the date of this Prospectus, and is
subject to change by legislative or administrative action. As the foregoing
discussion is for general information only, shareholders should also review the
more detailed discussion of federal income tax considerations relevant to the
Fund that is contained in the Statement of Additional Information. In addition ,
shareholders should consult with their own tax adviser as to the tax
consequences of investments in the Fund, including the application of state and
local taxes which may differ from the federal income tax consequences described
above.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND PAYING AGENT
Firstar Trust Company serves as custodian for the Fund's portfolio
securities and cash, and as transfer and dividend paying agent, and in those
capacities maintains certain financial and accounting books and records pursuant
to agreements with the Trust. Its mailing address is 615 East Michigan Street,
Third Floor, Milwaukee, WI 53202.
16
<PAGE>
The Transfer Agent charges the following fees to shareholders
requesting specialized services: a $12 service fee for each payment of
redemption proceeds made by wire; a $5 fee for each telephone exchange; a $20
fee for any stop payment order of a liquidation or distribution check; and, a $5
fee for each research item related to events which occurred in or previous to
the second calendar year previous to the date of the request.
COUNSEL AND INDEPENDENT AUDITORS
Kramer, Levin, Naftalis & Frankel, 919 Third Avenue, New York, N.Y.
10022, is counsel for the Trust. Ernst & Young LLP, has been appointed
independent auditors for the Trust.
ADDITIONAL INFORMATION
The Trust may issue an unlimited number of shares and classes of the
Fund. Shares of each class of the Fund participate equally in dividends and
distributions and have equal voting, liquidation and other rights. When issued
and paid for, shares will be fully paid and nonassessable by the Trust and will
have no preference, conversion, exchange or preemptive rights. Shareholders are
entitled to one vote for each full share owned and fractional votes for
fractional shares owned. For those investors with qualified trust accounts, the
trustee will vote the shares at meetings of the Fund's shareholders in
accordance with the shareholder's instructions or will vote in the same
percentage as shares that are not so held in trust. The trustee will forward to
these shareholders all communications received by the trustee, including proxy
statements and financial reports. The Trust and the Fund are not required to
hold annual meetings of shareholders and in ordinary circumstances do not intend
to hold such meetings. The Trustees may call special meetings of shareholders
for action by shareholder vote as may be required by the 1940 Act or the Trust
Instrument. Under certain circumstances, the Trustees may be removed by action
of the Trustees or by the shareholders. Shareholders holding 10% or more of the
Trust's outstanding shares may call a special meeting of shareholders for the
purpose of voting upon the question of removal of Trustees.
The Trust's Board of Trustees may authorize the Trust to offer other
funds which may differ in the types of securities in which their assets may be
invested.
The Code of Ethics of the Adviser, the Sub-Adviser and the Fund
prohibit all affiliated personnel from engaging in personal investment
activities which compete with or attempt to take advantage of the Fund's planned
portfolio transactions. Each entity maintains careful monitoring of compliance
with the Codes of Ethics.
DELAWARE LAW.
The Delaware Business Trust Act provides that a shareholder of a
Delaware business trust shall be entitled to the same limitation of personal
liability extended to stockholders of Delaware corporations and the Trust
Instrument provides that shareholders will not be personally liable for
liabilities of the Trust. In light of Delaware law, the nature of the Trust's
business, and the nature of its assets, management of the Trust believes that
the risk of personal liability to the Fund shareholder would be extremely
remote.
In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust will be required to use its property to protect
or compensate the shareholder. On request, the Trust will defend any claim made
and pay any judgment against a shareholder for any act or obligation of the
Trust. Therefore, financial loss resulting from liability as a shareholder will
occur only if the Trust itself cannot meet its obligations to indemnify
shareholders and pay judgments against them.
Delaware law authorizes electronic or telephone communications between
shareholders and the Trust. Under Delaware law, the Trust will have the
flexibility to respond to future business contingencies. For example, the
Trustees will have the power to incorporate the Trust, to merge or consolidate
it with another entity, to cause each fund to become a separate trust, and to
change the Trust's domicile without a shareholder vote. This flexibility could
help reduce the expense and frequency of future shareholder meetings for
non-investment related issues.
17
<PAGE>
MISCELLANEOUS.
As of the date of this Prospectus, the Fund offers only the two classes
of shares, Class A and Class B, that are offered by this Prospectus. Subsequent
to the date of this Prospectus, the Fund may offer additional classes of shares
through a separate prospectus. Any such additional classes may have different
sales charges and other expenses, which would affect investment performance.
Further information may be obtained by calling 1- 888-852-6825.
Shareholders will receive Semi-Annual Reports, which are unaudited, and
Annual Reports, which are audited by independent public auditors ("Reports"),
describing the investment operations of the Fund. Each of these Reports, when
available for a particular fiscal year end or the end of a semi-annual period,
is incorporated herein by reference. The Trust may include information in its
Reports to shareholders that (a) describes general economic trends, (b)
describes general trends within the financial services industry or the mutual
fund industry, (c) describes past or anticipated portfolio holdings for the Fund
or (d) describes investment management strategies for the Trust. Such
information is provided to inform shareholders of the activities of the Trust
for the most recent fiscal year or semi-annual period and to provide the views
of the Adviser, Sub-Adviser and/or the Trust's officers regarding expected
trends and strategies.
The Trust intends to eliminate duplicate mailings of Reports to an
address at which more than one shareholder of record with the same last name has
indicated that mail is to be delivered. Shareholders may receive additional
copies of any Report at no cost by writing to the Fund at the address listed on
the cover page of this Prospectus or by calling 1-888-852-6825.
Inquiries regarding the Trust or the Fund may be directed in writing to
the Trautman Kramer Trust c/o Firstar Trust Company, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701, or by telephone, toll-free, at 1- 888-852-6825.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND THE STATEMENT
OF ADDITIONAL INFORMATION, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST
OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE TRUST
OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
18
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION - January o, 1998
THE TRAUTMAN KRAMER TRUST
TRAUTMAN KRAMER VALUE PLUS FUND
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information is incorporated by reference in its entirety
into the Prospectus and should be read in conjunction with the Trust's current
Prospectus, copies of which may be obtained by writing The Trautman Kramer
Trust, c/o Firstar Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin
53202 or calling 1-888-TKCOVAL (1-888-852- 6825).
This Statement of Additional Information relates to the Trust's
Prospectus which is dated January o, 1998.
TABLE OF CONTENTS
Page
----
Investment Policies and Risks........................................ 2
Investment Restrictions.............................................. 3
Management........................................................... 5
Investment Adviser and Investment Advisory Agreements................ 7
Distribution Plans................................................... 7
Administrative Services Agreement.................................... 8
Portfolio Transactions and Brokerage................................. 8
Allocation of Investments............................................ 9
Computation of Net Asset Value....................................... 9
Purchase and Redemption of Shares.................................... 10
Tax Matters.......................................................... 10
Performance Calculation.............................................. 15
Additional Information............................................... 16
Reports ............................................................ 17
Financial Statements................................................. 17
<PAGE>
The Trautman Kramer Trust (the "Trust") is a Delaware business trust
currently consisting of one fund, the Trautman Kramer Value Plus Fund (the
"Fund"). The Fund is an open-end, non-diversified management investment company.
The Fund's investment objective is long-term capital appreciation. There is
minimal emphasis on current income. Much of the information contained in this
Statement of Additional Information expands on subjects discussed in the
Prospectus. Capitalized terms not defined herein are used as defined in the
Prospectus. No investment in shares of the Fund should be made without first
reading the Fund's Prospectus.
INVESTMENT POLICIES AND RISKS
The following descriptions supplement the investment policies of the Fund
set forth in the Prospectus. The Fund's investments in the following securities
and other financial instruments are subject to the investment policies and
limitations described in the Prospectus and this Statement of Additional
Information.
1. WRITING COVERED CALL OPTIONS ON SECURITIES AND STOCK INDICES
The Fund may write covered call options on optionable securities or
stock indices of the types in which it is permitted to invest from time to time
as the Adviser or Sub-Adviser determines is appropriate in seeking to attain its
objective. A call option written by the Fund gives the holder the right to buy
the underlying securities or index from the Fund at a stated exercise price.
Options on stock indices are settled in cash.
The Fund may write only covered call options, which means that, so long
as the Fund is obligated as the writer of a call option, it will own the
underlying securities subject to the option (or comparable securities or cash
satisfying the cover requirements of securities exchanges).
The Fund will receive a premium for writing a covered call option,
which increases the return of the Fund in the event the option expires
unexercised or is closed out at a profit. The amount of the premium will
reflect, among other things, the relationship of the market price of the
underlying security or index to the exercise price of the option, the term of
the option and the volatility of the market price of the underlying security or
index. By writing a covered call option, the Fund limits its opportunity to
profit from any increase in the market value of the underlying security or index
above the exercise price of the option.
The Fund may terminate an option that it has written prior to the
option's expiration by entering into a closing purchase transaction in which an
option is purchased having the same terms as the option written. The Fund will
realize a profit or loss from such transaction if the cost of such transaction
is less or more than the premium received from the writing of the option.
Because increases in the market price of a call option will generally reflect
increases in the market price of the underlying security or index, any loss
resulting from the repurchase of a call option is likely to be offset in whole
or in part by unrealized appreciation of the underlying security (or securities)
owned by the Fund.
2. PURCHASING PUT AND CALL OPTIONS ON SECURITIES AND STOCK INDICES
The Fund may purchase put options to protect its portfolio holdings in
an underlying stock index or security against a decline in market value. Such
hedge protection is provided during the life of the put option since the Fund,
as holder of the put option, is able to sell the underlying security or index at
the put exercise price regardless of any decline in the underlying market price
of the security or index. In order for a put option to be profitable, the market
price of the underlying security or index must decline sufficiently below the
exercise price to cover the premium and transaction costs. By using put options
in this manner, the Fund will reduce any profit it might otherwise have realized
in its underlying security or index by the premium paid for the put option and
by transaction costs, but it will retain the ability to benefit from future
increases in market value.
<PAGE>
The Fund may also purchase call options to hedge against an increase in
prices of stock indices or securities that it ultimately wants to buy. Such
hedge protection is provided during the life of the call option since the Fund,
as holder of the call option, is able to buy the underlying security or index at
the exercise price regardless of any increase in the underlying market price of
the security or index. In order for a call option to be profitable, the market
price of the underlying security or index must rise sufficiently above the
exercise price to cover the "out of the money" premium and transaction costs. By
using call options in this manner, the Fund will reduce any profit it might have
realized had it bought the underlying security or index at the time it purchased
the call option by the premium paid for the call option and by transaction
costs, but it limits the loss it will suffer if the security or index declines
in value to such premium and transaction costs.
3. BORROWING
The Fund may, from time to time, borrow up to 10% of the value of its
total assets from banks at prevailing interest rates as a temporary measure for
extraordinary or emergency purposes. The Fund may not purchase securities while
borrowings exceed 5% of the value of its total assets.
4. REPURCHASE AGREEMENTS
The Fund may invest up to 5% of its net assets in repurchase agreements
subject to resale to a bank or dealer at an agreed upon price which reflects a
net interest gain for the Fund. The Fund will receive interest from the
institution until the time when the repurchase is to occur.
The Fund will always receive as collateral U.S. Government or
short-term money market securities whose market value is equal to at least 100%
of the amount invested by the Fund, and the Fund will make payment for such
securities only upon the physical delivery or evidence by book entry transfer to
the account of its custodian. If the seller institution defaults, the Fund might
incur a loss or delay in the realization of proceeds if the value of the
collateral securing the repurchase agreement declines and it might incur
disposition costs in liquidating the collateral. The Fund attempts to minimize
such risks by entering into such transactions only with well-capitalized
financial institutions and specifying the required value of the underlying
collateral.
CONCLUSION
Unlike the fundamental investment objective of the Fund set forth above
and the investment restrictions set forth below which may not be changed without
shareholder approval, the Fund has the right to modify the investment policies
described above without shareholder approval.
INVESTMENT RESTRICTIONS
The following fundamental policies and investment restrictions have
been adopted by the Fund and except as noted, such policies and restrictions
cannot be changed without approval by the vote of a majority of the outstanding
voting shares of the Fund which, as defined by the Investment Company Act of
1940, as amended (the "1940 Act"), means the affirmative vote of the lesser of
(a) 67% or more of the shares of the Fund present at a meeting at which the
holders of more than 50% of the outstanding shares of the Fund are represented
in person or by proxy, or (b) more than 50% of the outstanding shares of the
Fund.
-3-
<PAGE>
The Fund may not:
1. Purchase or sell physical commodities unless acquired as a
result of ownership of securities or other instruments (but this shall
not prevent the Fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities).
2. Purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the Fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business). Investments by the Fund in securities backed by
mortgages on real estate or in marketable securities of companies
engaged in such activities are not hereby precluded.
3. Issue any senior security (as defined in the Investment
Company Act of 1940, as amended (the "1940 Act")), except that (a) the
Fund may engage in transactions that may result in the issuance of
senior securities to the extent permitted under applicable regulations
and interpretations of the 1940 Act or an exemptive order; (b) the
Fund may acquire other securities, the acquisition of which may result
in the issuance of a senior security, to the extent permitted under
applicable regulations or interpretations of the 1940 Act; (c) subject
to the restrictions set forth below, the Fund may borrow money as
authorized by the 1940 Act.
4. Borrow money, except that the Fund may borrow money for
temporary or emergency purposes in an amount not exceeding 10% of the
value of its total assets at the time when the loan is made. Any
borrowing representing more than 5% of the Fund's total assets must be
repaid before the Fund may make additional investments.
5. Lend any security or make any other loan but this limitation
does not apply to purchases of publicly issued debt securities or to
repurchase agreements.
6. Underwrite securities issued by others, except to the extent
that the Fund may be considered an underwriter within the meaning of
the Securities Act of 1933, as amended (the "1933 Act") in the
disposition of restricted securities.
7. With respect to 50% of its total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, (a) more than 5% of the Fund's total assets would be
invested in the securities of that issuer, or (b) the Fund would hold
more than 10% of the outstanding voting securities of that issuer.
8. Purchase the securities of an issuer if, as a result, 25% or
more of its total assets would be invested in the securities of
companies whose principal business activities are in the same
industry. These limitations do not apply to securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities.
The following restrictions are non-fundamental and may be changed by
the Fund's Board of Trustees. Pursuant to such restrictions, the Fund will not:
(1) make short sales of securities, other than short sales
"against the box," or purchase securities on margin except for
short-term credits necessary for clearance of portfolio transactions,
provided that this restriction will not be applied to limit the use of
options, futures contracts and related options, in the manner
otherwise permitted by the investment restrictions, policies and
investment program of the Fund;
(2) purchase the securities of any other investment company, if
the Fund, immediately after such purchase or acquisition, owns in the
aggregate, (i) more than 3% of the total outstanding voting
-4-
<PAGE>
stock of such investment company, (ii) securities issued by such
investment company having an aggregate value in excess of 5% of the
value of the total assets of the Fund, or (iii) securities issued by
such investment company and all other investment companies having an
aggregate value in excess of 10% of the value of the total assets of
the Fund; and
(3) invest more than 10% of its total net assets in illiquid
securities. Illiquid securities are securities that are not readily
marketable or cannot be disposed of promptly within seven days and in
the usual course of business without taking a materially reduced
price. Such securities include, but are not limited to, time deposits
and repurchase agreements with maturities longer than seven days.
Securities that may be resold under Rule 144A or securities offered
pursuant to Section 4(2) of the Securities Act of 1933, as amended,
shall not be deemed illiquid solely by reason of being unregistered.
The Investment Adviser shall determine whether a particular security
is deemed to be liquid based on the trading markets for the specific
security and other factors.
GENERAL. The policies and limitations listed above supplement those set
forth in the Prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of the Fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be determined
immediately after and as a result of the Fund's acquisition of such security or
other asset except in the case of borrowing (or other activities that may be
deemed to result in the issuance of a "senior security" under the 1940 Act).
Accordingly, any subsequent change in values, net assets, or other circumstances
will not be considered when determining whether the investment complies with the
Fund's investment policies and limitations. If the value of the Fund's holdings
of illiquid securities at any time exceeds the percentage limitation applicable
at the time of acquisition due to subsequent fluctuations in value or other
reasons, the Trustees will consider what actions, if any, are appropriate to
maintain adequate liquidity.
MANAGEMENT
The overall management of the business and affairs of the Fund is
vested with the Board of Trustees. The Board of Trustees approves all
significant agreements between the Trust or the Fund and persons or companies
furnishing services to the Fund, including the Fund's agreement with an
investment advisor, custodian and transfer agent. The day-to-day operations of
the Fund are delegated to the Fund's officers subject always to the investment
objectives and policies of the Fund and to general supervision by the Trust's
Board of Trustees.
The Trustees and officers and their principal occupations are noted
below. Unless otherwise indicated the address of each Trustee and executive
officer is 500 Fifth Avenue, New York, New York 10110.
*Robert J. Kramer (51) -- Chairman of the Board and Trustee. Mr. Kramer is
Chairman of Trautman Kramer & Company, Inc., a
broker dealer, since May 1993, and Trautman Kramer
Capital Management, Inc., since July 1997. From
March 1993 to May 1993, Mr. Kramer was a Vice
President of Investors Associates, Inc., a broker
dealer. From March 1991 to February 1993, Mr.
Kramer was self employed as a consultant.
*Mark Barbera (40) -- Chief Financial Officer, Treasurer and Secretary.
Mr. Barbera is Chief Financial Officer of Trautman
Kramer & Company, Inc., a broker dealer, since
July 1993, and Trautman Kramer Capital Management,
Inc., since July 1997. From May 1989 to August
1996, was also the proprietor of Barbera &
Associates, a consulting firm.
-5-
<PAGE>
James A. Arcara (63)-- Trustee. 898 Park Avenue, New York, New York
10021. Presently Mr. Arcara is Chairman of Radio
Enterprises Inc., a radio broadcasting company.
From 1990 to 1995, Mr. Arcara was the President of
ABC Cap Cities Radio, a media company. Mr. Arcara
is also a Director of Metro Traffic Inc.
Michael Asch (31) -- Trustee. Mr. Asch is President and Principal of
Anniston Capital, Inc., a merchant bank, since
1992. Since 1993, Mr. Asch has been employed by
Oak Hill Sportswear Corporation in various
capacities, most recently in the capacity as
President, Treasurer and Chief Operation Officer,
since January 1997.
Robert A. DeFruscio (42) -- Trustee. Mr. DeFruscio is the managing partner of
the firm R.A. DeFruscio & Co., a multi-state CPA
and financial consulting firm, since 1983. In
addition, Mr. DeFruscio sits on the Board of The
Cure for Lymphoma Foundation, a cancer research
foundation. Mr. DeFruscio is also the Treasurer of
John S. Nussbaum, Candidate for Lt. Governor of
Connecticut in 1998.
John W. Wilson, III (55) -- Trustee. 619 W. Texas, Suite 400, Midland Texas
79701. Mr. Wilson is the President/Executive
Officer of several closely held (family) Texas
corporations involved in various aspects of the
oil and gas industry. Mr. Wilson has been employed
by the "Wilson Companies" which are comprised of
the above referenced Texas corporations for a
period on excess of 20 years.
*Gregory O. Trautman (30) -- President/Trustee. Mr. Trautman is President of
Trautman Kramer & Company, Inc., a broker dealer,
since May 1993. Prior to May 1993, Mr. Trautman
held the position as a stock broker with various
broker dealer firm in New York.
Joseph Neuberger (35) -- Assistant Secretary. 615 E. Michigan Street,
Milwaukee, WI 53202. Since 1994, Mr. Neuberger has
been employed by Firstar Trust Company, currently
in the position of Vice President. Prior to 1994,
Mr. Neuberger was a Manager with Arthur Andersen
LLP.
Dana L Armour (29) -- Assistant Secretary. 615 E. Michigan Street,
Milwuakee, WI 53202. Since 1992, Ms. Armour has
been employed by Firstar Trust Company, currently
in the position of Trust Officer.
- ---------------
* Interested person of the Fund as defined in the 1940 Act.
The Fund does not pay direct remuneration to any officer of the Fund.
For the upcoming fiscal year, 1998, each disinterested Trustee will receive $250
per board meeting attended. For the upcoming fiscal year, the Trustees have
agreed to waive their fees. "Interested" Trustees do not receive Trustees' fees.
The Trust will not reimburse Trustee expenses.
-6-
<PAGE>
The table below illustrates the proposed compensation to paid to each
Trustee for the Trust's upcoming fiscal year:
<TABLE>
<CAPTION>
Pension or Total
Retirement Compensation
Aggregate Benefits Accrued Estimated Annual from Fund and
Name of Person, Compensation as Part of Fund Benefits Upon Fund Complex
Position from Fund Expenses Retirement Paid to Trustees
- -------- --------- -------- ---------- ----------------
<S> <C> <C> <C> <C>
James A. Arcara $0 $0 $0 $0
Michael Asch $0 $0 $0 $0
Robert A. DeFruscio $0 $0 $0 $0
John W. Wilson $0 $0 $0 $0
</TABLE>
INVESTMENT ADVISER AND INVESTMENT ADVISORY AGREEMENT
Trautman Kramer Capital Management, Inc. (the "Adviser"), 500 Fifth
Avenue, New York, New York 10110, acts as the Adviser to the Fund under an
investment advisory agreement (the "Agreement""). The Agreement provides that
the Adviser identify and analyze possible investments for the Fund, determine
the amount and timing of such investments, and the form of investment. The
Adviser has the responsibility of monitoring and reviewing the Fund's portfolio,
and, on a regular basis, to recommend the ultimate disposition of such
investments. It is the Adviser's responsibility to cause the purchase and sale
of securities in the Fund's portfolio, subject at all times to the policies set
forth by the Trust's Board of Trustees. In addition, the Adviser also provides
certain administrative and managerial services to the Fund.
The Adviser receives a fee from the Fund, calculated daily and payable
monthly, for the performance of its services at an annual rate of 1.00% of
average daily net assets. The advisory fees are higher than that paid by most
investment companies but the Board of Trustees believes them to be reasonable in
light of the services the Fund receives thereunder. The Adviser may from time to
time and for such periods as it deems appropriate voluntarily reduce its
compensation hereunder (and/or voluntarily assume expenses) for the Fund. The
Adviser may, at any later date, recoup such amounts after such time as the
Adviser is no longer reducing its compensation and/or assuming expenses for the
Fund provided that the aggregate expenses in the year such amounts are recouped
do not exceed any limtitation to which the Adviser has agreed.
Under the terms of the Agreement, the Fund pays all of its expenses
(other than those expenses specifically assumed by the Adviser and the Fund's
distributor) including the costs incurred in connection with the maintenance of
its registration under the Securities Act of 1933, as amended, and the 1940 Act,
printing of prospectuses distributed to shareholders, taxes or governmental
fees, brokerage commissions, custodial, transfer and shareholder servicing
agents, expenses of outside counsel and independent auditors, preparation of
shareholder reports, and expenses of Trustee and shareholder meetings.
The Agreement terminates upon assignment (as defined in the 1940 Act)
and may be terminated without penalty on 60 days' written notice by a vote of
the majority of the Trust's Board of Trustees or by the Adviser, or by holders
of a majority of the Fund's outstanding shares. The Fund's Agreement will
continue for two years from its effective date and from year-to-year thereafter
provided it is approved, at least annually, in the manner stipulated in the 1940
Act. This requires that the Agreement and any renewal thereof be approved
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by a vote of the majority of the Fund's Trustees who are not parties thereto or
interested persons of any such party, cast in person at a meeting specifically
called for the purpose of voting on such approval.
The Adviser has retained Tocqueville Asset Management L.P., 1675
Broadway, New York, New York 10019, to provide sub-advisory services to the Fund
pursuant to a sub-advisory agreement (the "Sub-Advisory Agreement"). The
Sub-Adviser acts as an adviser to mutual funds. Robert W. Kleinschmidt serves as
the portfolio manager of the Fund. Mr. Kleinschmidt is the President of
Tocqueville Asset Management Corporation, the general partner of the
sub-adviser. He previously held executive positions at the investment management
firm David J. Greene & Co. since 1978, resigning as a partner in 1991. The
Sub-Adviser will, subject at all times to the investment objective and policies
of the Fund and control of the Advisor and the Board of Trustees, supervise the
investment and reinvestment of the cash and securities of the Fund. For its
services under the Sub-Advisory Agreement, the Adviser pays the Sub-Adviser a
fee at an annual rate of .50% of average daily net assets.
DISTRIBUTION PLANS
The Fund has adopted a distribution plan pursuant to Rule 12b-1 of the
1940 Act for the Class A shares and a plan for the Class B shares that allows
the Fund to pay from the assets attributable to a particular class for
distribution activities related to the sale of such class of shares. Each
distribution plan provides that such expenses may total up to .50% per annum of
the average daily net assets of the class of shares. With respect to Class B
shares, because of the .50% annual limitation on the compensation paid during a
fiscal year, compensation relating to a large portion of the commissions
attributable to sales of Class B shares in any one year will be paid by a Fund
to the distributor in fiscal years subsequent thereto. In determining whether to
purchase Class B shares, investors should consider that daily compensation
payments could continue until the Distributor has been reimbursed for the
commissions paid on the sales of Class B shares.
Each plan provides that the Fund may finance activities which are
primarily intended to result in the sale of the Fund's shares, including, but
not limited to, advertising, printing of prospectuses and reports for other than
existing shareholders, preparation and distribution of advertising material and
sales literature and payments to dealers and shareholder servicing agents
including Trautman Kramer & Company who enter into agreements with the Fund or
its distributor. The Class B Plan also provides that the Fund may finance any
other expenses primarily intended to result in the sale of the Fund's Class B
shares, including, without limitation, payments to brokers at the time of the
sale of Class B shares, if applicable, continuing fees to each such broker,
which fee shall begin to accrue immediately after the sale of such shares, and
accruals for interest.
In approving a Plan in accordance with the requirements of Rule 12b-1
under the 1940 Act, the Trustees (including the "disinterested" Trustees, as
defined in the 1940 Act) considered various factors and determined that there is
a reasonable likelihood that the Plan will benefit the Fund and its
shareholders. Each Plan will continue in effect from year to year if approved
annually (a) by the majority of the Fund's outstanding voting shares or by the
Board of Trustees and (b) by the vote of a majority of the disinterested
Trustees. While the Plans remain in effect, the Fund's Principal Financial
Officer shall prepare and furnish to the Board of Trustees a written report
setting forth the amounts spent by the Fund under the Plan and the purposes for
which such expenditures were made. The Plans may not be amended to increase
materially the amount to be spent for distribution without shareholder approval
and all material amendments to each of the Plans must be approved by the Board
of Trustees and by the disinterested Trustees cast in person at a meeting called
specifically for that purpose. While the Plans are in effect, the selection and
nomination of the disinterested Trustees shall be made by those disinterested
Trustees then in office.
ADMINISTRATIVE SERVICES AGREEMENT
Firstar Trust Company ("Firstar") provides administrative services to
the Fund pursuant to an Administrative Services Agreement with the Fund. Under
the Administrative Services Agreement, Firstar
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provides administrative services to all aspects of the Fund's operations,
including the Fund's receipt of services for which the Fund is obligated to pay,
provides the Fund with general office facilities and provides, at the Fund's
expense, the services of persons necessary to perform such supervisory,
administrative and clerical functions as are needed to effectively operate the
Fund. Those persons, as well as certain employees and Trustees of the Trust, may
be directors, officers or employees of (and persons providing services to the
Fund may include) the Administrator and its affiliates. For these services and
facilities, the Administrator receives a fee computed and paid monthly, for each
class of shares, at an annual rate of .05% on the first $200 million of the
Fund's average net assets, .04% on the next $500 million of the Fund's average
net assets and .03% on any remaining average net assets in excess of $700
million, subject to an annual total minimum fee of $40,500 for both shares.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to the supervision of the Board of Trustees, decisions to buy
and sell securities for the Fund are made by the Adviser or the Sub-Adviser. The
Adviser and the Sub-Adviser are each authorized to allocate the orders placed by
them on behalf of the Fund to such unaffiliated brokers who also provide
research or statistical material, or other services to the Fund or the Adviser
or the Sub-Adviser for the Fund's use. Such allocation shall be in such amounts
and proportions as the Adviser and the Sub-Adviser shall determine and the
Adviser and Sub-Adviser will report on said allocations regularly to the Board
of Trustees indicating the unaffiliated brokers to whom such allocations have
been made and the basis therefor. In addition, the Adviser and the Sub-Adviser
may consider sales of shares of the Fund and of any other funds advised or
managed by the Adviser and the Sub-Adviser as a factor in the selection of
unaffiliated brokers to execute portfolio transactions for the Fund, subject to
the requirements of best execution. The Trustees have authorized the allocation
of brokerage to affiliated broker-dealers on an agency basis to effect portfolio
transactions. The Trustees have adopted procedures incorporating the standards
of Rule 17e-1 of the 1940 Act, which require that the commission paid to
affiliated broker-dealers must be "reasonable and fair compared to the
commission, fee or other remuneration received, or to be received, by other
brokers in connection with comparable transactions involving similar securities
during a comparable period of time." At times, the Fund may also purchase
portfolio securities directly from dealers acting as principals, underwriters or
market makers. As these transactions are usually conducted on a net basis, no
brokerage commissions are paid by the Fund.
In selecting a broker to execute each particular transaction, the
Adviser and the Sub-Adviser will take the following into consideration: the best
net price available; 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 Fund on
a continuing basis. Accordingly, the cost of the brokerage commissions to the
Fund in any transaction may be greater than that available from other brokers if
the difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies and procedures as the Board
of Trustees may determine, neither the Adviser nor the Sub-Adviser shall be
deemed to have acted unlawfully or to have breached any duty solely by reason of
its having caused the Fund to pay an unaffiliated broker that provides research
services to the Adviser or the Sub-Adviser for the Fund's use an amount of
commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker would have charged for effecting the
transaction, if the Adviser or the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the value of the
research service provided by such broker viewed in terms of either that
particular transaction of the ongoing responsibilities of the Adviser and the
Sub-Adviser with respect to the Fund.
ALLOCATION OF INVESTMENTS
The Adviser and the Sub-Adviser have other advisory clients which
include individuals, trusts, pension and profit sharing funds, some of which
have similar investment objectives to the Fund. As such, there will be times
when the Adviser or the Sub-Adviser may recommend purchases and/or sales of the
same portfolio
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securities for the Fund and its other clients. In such circumstances, it will be
the policy of the Adviser and the Sub-Adviser to allocate purchases and sales
among the Fund and its other clients in a manner which the Investment Adviser or
the Sub-Adviser deems equitable, taking into consideration such factors as size
of account, concentration of holdings, investment objectives, tax status, cash
availability, purchase cost, holding period and other pertinent factors relative
to each account. Simultaneous transactions may have an adverse effect upon the
price or volume of a security purchased by the Fund.
COMPUTATION OF NET ASSET VALUE
The Fund will determine the net asset value of its shares once daily as
of the close of trading on the New York Stock Exchange (the "Exchange") on each
day that the Exchange is open for business. It is expected that the Exchange
will be closed on Saturdays and Sundays and on New Year's Day, Reverend Martin
Luther King Day, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. The Fund may make or cause to be
made a more frequent determination of the net asset value and offering price,
which determination shall reasonably reflect any material changes in the value
of securities and other assets held by the Fund from the immediately preceding
determination of net asset value. The net asset value of each class is
determined by dividing the market value of the Fund's investments as of the
close of trading plus any cash or other assets (including dividends receivable
and accrued interest) less all liabilities (including accrued expenses)
attributable to that class by the number of the Fund's shares of that class
outstanding. Securities traded on the New York Stock Exchange or the American
Stock Exchange will be valued at the last sale price, or if no sale, at the mean
between the latest bid and asked price. Securities traded in any other U.S. or
foreign market shall be valued in a manner as similar as possible to the above,
or if not so traded, on the basis of the latest available price. Securities sold
short "against the box" will be valued at market as determined above; however,
in instances where the Fund has sold securities short against a long position in
the issuer's convertible securities, for the purpose of valuation, the
securities in the short position will be valued at the "asked" price rather than
the mean of the last "bid" and "asked" prices. Where there are no readily
available quotations for securities they will be valued at a fair value as
determined by the Board of Trustees acting in good faith.
PURCHASE AND REDEMPTION OF SHARES
A complete description of the manner by a which the Fund's shares may
be purchased and redeemed, including discussions concerning the front-end sales
load on Class A and Class B shares and contingent deferred sales charge on Class
B shares, appears in the Prospectus under the headings "Purchase of Shares" and
"Redemption of Shares" respectively.
TAX MATTERS
The following is only a summary of certain additional tax
considerations generally affecting the Fund and its shareholders that are not
described in the Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Fund or its shareholders, and the
discussions here and in the Prospectus are not intended as substitutes for
careful tax planning.
Qualification as a Regulated Investment Company
The Fund has elected to be taxed as a regulated investment company for
federal income tax purposes under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). As a regulated investment company, the Fund is
not subject to federal income tax on the portion of its net investment income
(i.e., taxable interest, dividends and other taxable ordinary income, net of
expenses) and capital gain net income (i.e., the excess of capital gains over
capital losses) that it distributes to shareholders, provided that it
distributes
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at least 90% of its investment company taxable income (i.e., net investment
income and the excess of net short-term capital gain over net long-term capital
loss) for the taxable year (the "Distribution Requirement"), and satisfies
certain other requirements of the Code that are described below. Distributions
by the Fund made during the taxable year or, under specified circumstances,
within twelve months after the close of the taxable year, will be considered
distributions of income and gains of the taxable year and will therefore satisfy
the Distribution Requirement.
In addition to satisfying the Distribution Requirement, a regulated
investment company must derive at least 90% of its gross income from dividends,
interest, certain payments with respect to securities loans, gains from the sale
or other disposition of stock or securities or foreign currencies (to the extent
such currency gains are directly related to the regulated investment company's
principal business of investing in stock or securities) and 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 (the "Income Requirement").
In general, gain or loss recognized by the Fund on the disposition of
an asset will be a capital gain or loss. In addition, gain will be recognized as
a result of certain constructive sales, including short sales "against the box."
However, gain recognized on the disposition of a debt obligation purchased by
the Fund at a market discount (generally, at a price less than its principal
amount) will be treated as ordinary income to the extent of the portion of the
market discount which accrued during the period of time the Fund held the debt
obligation. In addition, under the rules of Code Section 988, gain or loss
recognized on the disposition of a debt obligation denominated in a foreign
currency or an option with respect thereto (but only to the extent attributable
to changes in foreign currency exchange rates), and gain or loss recognized on
the disposition of a foreign currency forward contract, futures contract, option
or similar financial instrument, or of foreign currency itself, except for
regulated futures contracts or non-equity options subject to Code section 1256
(unless the Fund elects otherwise), will generally be treated as ordinary income
or loss.
In general, for purposes of determining whether capital gain or loss
recognized by the Fund on the disposition of an asset is long-term or
short-term, the holding period of the asset may be affected if (as applicable,
depending on the type of the Fund) (1) the asset is used to close a "short sale"
(which includes for certain purposes the acquisition of a put option) or is
substantially identical to another asset so used, or (2) the asset is otherwise
held by the Fund as part of a "straddle" (which term generally excludes a
situation where the asset is stock and the Fund grants a qualified covered call
option (which, among other things, must not be deep-in-the-money) with respect
thereto), or (3) the asset is stock and the Fund grants an in-the-money
qualified covered call option with respect thereto. In addition, the Fund may be
required to defer the recognition of a loss on the disposition of an asset held
as part of a straddle to the extent of any unrecognized gain on the offsetting
position.
Any gain recognized by the Fund on the lapse of, or any gain or loss
recognized by the Fund from a closing transaction with respect to, an option
written by the Fund will be treated as a short-term capital gain or loss.
Certain transactions that may be engaged in by the Fund (such as
regulated futures contracts, certain foreign currency contracts, and options on
stock indexes and futures contracts) will be subject to special tax treatment as
"Section 1256 contracts." Section 1256 contracts are treated as if they are sold
for their fair market value on the last business day of the taxable year, even
though a taxpayer's obligations (or rights) under such contracts have not
terminated (by delivery, exercise, entering into a closing transaction or
otherwise) as of such date. Any gain or loss recognized as a consequence of the
year-end deemed disposition of Section 1256 contracts is taken into account for
the taxable year together with any other gain or loss that was previously
recognized upon the termination of Section 1256 contracts during that taxable
year. Any capital gain or loss for the taxable year with respect to Section 1256
contracts (including any capital gain or loss arising as a consequence of the
year-end deemed sale of such contracts) is generally treated as 60% long-term
capital gain or loss and 40% short-term capital gain or loss. The Fund, however,
may elect not to have this special tax
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treatment apply to Section 1256 contracts that are part of a "mixed straddle"
with other investments of the Fund that are not Section 1256 contracts.
Treasury Regulations permit a regulated investment company, in
determining its investment company taxable income and net capital gain (i.e.,
the excess of net long-term capital gain over net short-term capital loss) for
any taxable year, to elect (unless it has made a taxable year election for
excise tax purposes as discussed below) to treat all or any part of any net
capital loss, any net long-term capital loss or any net foreign currency loss
(including, to the extent provided in Treasury Regulations, losses recognized
pursuant to the PFIC mark-to-market election) incurred after October 31 as if it
had been incurred in the succeeding year.
In addition to satisfying the requirements described above, the Fund
must satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of the Fund's
taxable year, at least 50% of the value of the Fund's assets must consist of
cash and cash items, U.S. Government securities, securities of other regulated
investment companies, and securities of other issuers (as to each of which the
Fund has not invested more than 5% of the value of the Fund's total assets in
securities of such issuer and does not hold more than 10% of the outstanding
voting securities of such 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
U.S. Government securities and securities of other regulated investment
companies), or in two or more issuers which the Fund controls and which are
engaged in the same or similar trades or businesses. Generally, an option (call
or put) with respect to a security is treated as issued by the issuer of the
security not the issuer of the option.
If for any taxable year the Fund does not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
will be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable to the
shareholders as ordinary dividends to the extent of the Fund's current and
accumulated earnings and profits. Such distributions generally will be eligible
for the dividends-received deduction in the case of corporate shareholders.
Excise Tax on Regulated Investment Companies
A 4% non-deductible excise tax is imposed on a regulated investment
company that fails to distribute in each calendar year an amount equal to 98% of
its ordinary income for such calendar year and 98% of net capital gain for the
one-year period ended on October 31 of such calendar year (or, at the election
of a regulated investment company having a taxable year ending November 30 or
December 31, for its taxable year (a "taxable year election")). The balance of
such income must be distributed during the next calendar year. For the foregoing
purposes, a regulated investment company is treated as having distributed any
amount on which it is subject to income tax for any taxable year ending in such
calendar year.
For purposes of the excise tax, a regulated investment company shall:
(1) reduce its capital gain net income (but not below its net capital gain) by
the amount of any net ordinary loss for the calendar year; and (2) exclude
foreign currency gains and losses and ordinary gains or losses arising as a
result of a PFIC mark-to-market election (or upon an actual disposition of the
PFIC stock subject to such election) incurred after October 31 of any year (or
after the end of its taxable year if it has made a taxable year election) in
determining the amount of ordinary taxable income for the current calendar year
(and, instead, include such gains and losses in determining ordinary taxable
income for the succeeding calendar year).
The Fund intends to make sufficient distributions or deemed
distributions of its ordinary taxable income and capital gain net income prior
to the end of each calendar year to avoid liability for the excise tax. However,
investors should note that the Fund may in certain circumstances be required to
liquidate portfolio investments to make sufficient distributions to avoid excise
tax liability.
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Fund Distributions
The Fund anticipates distributing substantially all of its investment
company taxable income for each taxable year. Such distributions will be taxable
to shareholders as ordinary income and treated as dividends for federal income
tax purposes, but they generally should not qualify for the 70%
dividends-received deduction for corporate shareholders.
The Fund may either retain or distribute to shareholders its net
capital gain for each taxable year. The Fund currently intends to distribute any
such amounts. Net capital gain that is distributed and designated as a capital
gain dividend will be taxable to shareholders as long-term capital gain,
regardless of the length of time the shareholder has held his shares or whether
such gain was recognized by the Fund prior to the date on which the shareholder
acquired his shares.
Conversely, if the Fund elects to retain its net capital gain, the Fund
will be taxed thereon (except to the extent of any available capital loss
carryovers) at the 35% corporate tax rate. If the Fund elects to retain its net
capital gain, it is expected that the Fund also will elect to have shareholders
of record on the last day of its taxable year treated as if each received a
distribution of his pro rata share of such gain, with the result that each
shareholder will be required to report his pro rata share of such gain on his
tax return as long-term capital gain, will receive a refundable tax credit for
his pro rata share of tax paid by the Fund on the gain, and will increase the
tax basis for his shares by an amount equal to the deemed distribution less the
tax credit.
Investment income that may be received by the Fund from sources within
foreign countries may be subject to foreign taxes withheld at the source. The
United States has entered into tax treaties with many foreign countries which
may entitle the Fund to a reduced rate of, or exemption from, taxes on such
income. It is impossible to determine the effective rate of foreign tax in
advance since the amount of the Fund's assets to be invested in various
countries is not known. If more than 50% of the value of the Fund's total assets
at the close of its taxable year consist of the stock or securities of foreign
corporations, the Fund may elect to "pass through" to the Fund's shareholders
the amount of foreign taxes paid by the Fund. If the Fund so elects, each
shareholder would be required to include in gross income, even though not
actually received, his pro rata share of the foreign taxes paid by the Fund, but
would be treated as having paid his pro rata share of such foreign taxes and
would therefore be allowed to either deduct such amount in computing taxable
income or use such amount (subject to various Code limitations) as a foreign tax
credit against federal income tax (but not both). For purposes of the foreign
tax credit limitation rules of the Code, each shareholder would treat as foreign
source income his pro rata share of such foreign taxes plus the portion of
dividends received from the Fund representing income derived from foreign
sources. No deduction for foreign taxes could be claimed by an individual
shareholder who does not itemize deductions. Each shareholder should consult his
own tax adviser regarding the potential application of foreign tax credits.
Distributions by the Fund that do not constitute ordinary income
dividends or capital gain dividends will be treated as a return of capital to
the extent of (and in reduction of) the shareholder's tax basis in his shares;
any excess will be treated as gain from the sale of his shares, as discussed
below.
Distributions by the Fund will be treated in the manner described above
regardless of whether they are paid in cash or reinvested in additional shares
of the Fund (or of another fund). Shareholders receiving a distribution in the
form of additional shares will be treated as receiving a distribution in an
amount equal to the fair market value of the shares received, determined as of
the reinvestment date. In addition, if the net asset value at the time a
shareholder purchases shares of the Fund reflects undistributed net investment
income or recognized capital gain net income, or unrealized appreciation in the
value of the assets of the Fund, distributions of such amounts will be taxable
to the shareholder in the manner described above, although such distributions
economically constitute a return of capital to the shareholder.
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Ordinarily, shareholders are required to take distributions by the Fund
into account in the year in which the distributions are made. However, dividends
declared in October, November or December of any year and payable to
shareholders of record on a specified date in such a month will be deemed to
have been received by the shareholders (and made by the Fund) on December 31 of
such calendar year if such dividends are actually paid in January of the
following year. Shareholders will be advised annually as to the U.S. federal
income tax consequences of distributions made (or deemed made) during the year.
The Fund will be required in certain cases to withhold and remit to the
U.S. Treasury 31% of ordinary income dividends and capital gain dividends, and
the proceeds of redemption of shares, paid to any shareholder (1) who has
provided either an incorrect tax identification number or no number at all, (2)
who is subject to backup withholding for failure to report the receipt of
interest or dividend income properly, or (3) who has failed to certify to the
Fund that it is not subject to backup withholding or that it is an "exempt
recipient" (such as a corporation).
Sale or Redemption of Shares
A shareholder will recognize gain or loss on the sale or redemption of
shares of the Fund in an amount equal to the difference between the proceeds of
the sale or redemption and the shareholder's adjusted tax basis in the shares.
All or a portion of any loss so recognized may be disallowed if the shareholder
purchases other shares of the Fund within 30 days before or after the sale or
redemption. In general, any gain or loss arising from (or treated as arising
from) the sale or redemption of shares of the Fund will be considered capital
gain or loss and will be long-term capital gain or loss if the shares were held
for longer than one year. Long-term capital gain recognized by an individual
shareholder will be taxed at the lowest rates applicable to capital gains if the
holder has held such shares for more than 18 months at the time of the sale.
However, any capital loss arising from the sale or redemption of shares held for
six months or less will be treated as a long-term capital loss to the extent of
the amount of capital gain dividends received on such shares. For this purpose,
the special holding period rules of Code Section 246(c)(3) and (4) generally
will apply in determining the holding period of shares. Long-term capital gains
of noncorporate taxpayers are currently taxed at a maximum rate at least 11.6%
lower than the maximum rate applicable to ordinary income. Capital losses in any
year are deductible only to the extent of capital gains plus, in the case of a
noncorporate taxpayer, $3,000 of ordinary income.
Foreign Shareholders
Taxation of a shareholder who, as to the United States, is a
nonresident alien individual, foreign trust or estate, foreign corporation, or
foreign partnership ("foreign shareholder"), depends on whether the income from
the Fund is "effectively connected" with a U.S. trade or business carried on by
such shareholder.
If the income from the Fund is not effectively connected with a U.S.
trade or business carried on by a foreign shareholder, ordinary income dividends
paid to a foreign shareholder will be subject to U.S. withholding tax at the
rate of 30% (or lower treaty rate) upon the gross amount of the dividend.
Furthermore, such a foreign shareholder may be subject to U.S. withholding tax
at the rate of 30% (or lower treaty rate) on the gross income resulting from the
Fund's election to treat any foreign taxes paid by it as paid by its
shareholders, but may not be allowed a deduction against this gross income or a
credit against this U.S. withholding tax for the foreign shareholder's pro rata
share of such foreign taxes which it is treated as having paid. Such a foreign
shareholder generally would be exempt from U.S. federal income tax on gains
realized on the sale of shares of the Fund, capital gain dividends and amounts
retained by the Fund that are designated as undistributed capital gains.
If the income from the Fund is effectively connected with a U.S. trade
or business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends, and any gains realized upon the
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sale of shares of the Fund will be subject to U.S. federal income tax at the
rates applicable to U.S. citizens or domestic corporations.
In the case of foreign noncorporate shareholders, the Fund may be
required to withhold U.S. federal income tax at a rate of 31% on distributions
that are otherwise exempt from withholding tax (or taxable at a reduced treaty
rate) unless such shareholders furnish the Fund with proper notification of
their foreign status.
The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the Fund,
including the applicability of foreign taxes.
Effect of Future Legislation; Local Tax Considerations
The foregoing general discussion of U.S. federal income tax
consequences is based on the Code and the Treasury Regulations issued thereunder
as in effect on the date of this Statement of Additional Information. Future
legislative or administrative changes or court decisions may significantly
change the conclusions expressed herein, and any such changes or decisions may
have a retroactive effect with respect to the transactions contemplated herein.
Rules of state and local taxation of ordinary income dividends and
capital gain dividends from regulated investment companies often differ from the
rules for U.S. federal income taxation described above. Shareholders are urged
to consult their tax advisers as to the consequences of these and other state
and local tax rules affecting investment in the Fund.
PERFORMANCE CALCULATION
For purposes of quoting and comparing the performance of the Fund to
that of other mutual funds and to other relevant market indices in
advertisements or in reports to shareholders, performance may be stated in terms
of total return. Under rules promulgated by the Securities and Exchange
Commission ("SEC"), a fund's advertising performance must include total return
quotations calculated according to the following formula:
P(1 + T)^n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years (1, 5 or 10)
ERV = ending redeemable value of a hypothetical $1,000
payment, made at the beginning of the 1, 5 or 10 year
period, at the end of such period (or fractional
portion thereof.)
Under the foregoing formula, the time periods used in advertising will
be based on rolling calendar quarters, updated to the last day of the most
recent quarter prior to submission of the advertising for publication, and will
cover 1, 5 and 10 year periods of the Fund's existence or such shorter period
dating from the effectiveness of the Fund's Registration Statement. In
calculating the ending redeemable value, all dividends and distributions by the
Fund are assumed to have been reinvested at net asset value as described in the
Prospectus on the reinvestment dates during the period. Total return, or "T" in
the formula above, is computed by finding the average annual compounded rates of
return over the 1, 5 and 10 year periods (or fractional portion thereof) that
would equate the initial amount invested to the ending redeemable value. Any
recurring account charges that might in the future be imposed by the Fund would
be included at that time.
Any quotation of performance stated in terms of yield will be given no
greater prominence than the information prescribed under the SEC's rules. In
addition, all advertisements containing performance data of any kind will
include a legend disclosing that such performance data represents past
performance and that the
-15-
<PAGE>
investment return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
INDEPENDENT AUDITORS
Ernst & Young LLP serves as independent auditors to the Trust.
LEGAL COUNSEL.
Kramer, Levin, Naftalis & Frankel, 919 Third Avenue, New York, New York 10022 is
counsel to the Trust.
EXPENSES.
The Fund bears certain expenses relating to its operations; such expenses
include, but are not limited to, the following: taxes, interest, brokerage fees
and commissions, fees of the Trustees, Securities and Exchange Commission fees,
state securities qualification fees, costs of preparing and printing
prospectuses for regulatory purposes and for distribution to current
shareholders, outside auditing and legal expenses, advisory fees, fees and
out-of-pocket expenses of the custodian, administrators and transfer agent,
certain insurance premiums, costs of maintenance of the Fund's existence, costs
of shareholders' reports and meetings, and any extraordinary expenses incurred
in the Fund's operation.
ADDITIONAL INFORMATION
DESCRIPTION OF SHARES.
The Trust is a Delaware business trust. The Delaware Trust Instrument
authorizes the Trustees to issue an unlimited number of shares, which are units
of beneficial interest, with $.001 par value. The Trust presently has one series
of shares, which represents interests in the Trautman Kramer Value Plus Fund.
The Trust's Trust Instrument authorizes the Trustees to divide or redivide any
unissued shares of the Trust into one or more additional series by setting or
changing in any one or more aspects their respective preferences, conversion or
other rights, voting power, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption.
Shares have no subscription or preemptive rights and only such
conversion or exchange rights as the Trustees may grant in their discretion.
When issued for payment as described in the Prospectus and this Statement of
Additional Information, the Trust's shares will be fully paid and
non-assessable. In the event of a liquidation or dissolution of the Trust,
shares of the Fund are entitled to receive the assets available for distribution
belonging to the Fund, and a proportionate distribution, based upon the relative
asset values of the respective funds of the Trust, of any general assets not
belonging to any particular fund which are available for distribution.
Shares of the Trust are entitled to one vote per share (with
proportional voting for fractional shares) on such matters as shareholders are
entitled to vote. On any matter submitted to a vote of the shareholders, all
shares are voted separately by individual series (funds), and whenever the
Trustees determine that the matter affects only certain series, may be submitted
for a vote by only such series, except (1) when required by the 1940 Act, shares
are voted in the aggregate and not by individual series; and (2) when the
Trustees have determined that the matter affects the interests of more than one
series and that voting by shareholders of all series would be consistent with
the 1940 Act, then the shareholders of all such series shall be entitled to vote
thereon (either by individual series or by shares voted in the aggregate, as the
Trustees in their discretion may determine). The Trustees may also determine
that a matter affects only the interests of one or more classes of a series, in
which case (or if required under the 1940 Act) such matter shall be voted on by
such class or classes. There will normally be no meetings of shareholders for
the purpose of electing Trustees unless and until such
-16-
<PAGE>
time as less than a majority of the Trustees have been elected by the
shareholders, at which time the Trustees then in office will call a
shareholders' meeting for the election of Trustees. In addition, Trustees may be
removed from office by a vote of the holders of at least two-thirds of the
outstanding shares of the Trust. A meeting shall be held for such purpose upon
the written request of the holders of not less than 10% of the outstanding
shares. Upon written request by ten or more shareholders meeting the
qualifications of Section 16(c) of the 1940 Act, (i.e., persons who have been
shareholders for at least six months, and who hold shares having a net asset
value of at least $25,000 or constituting 1% of the outstanding shares) stating
that such shareholders wish to communicate with the other shareholders for the
purpose of obtaining the signatures necessary to demand a meeting to consider
removal of a Trustee, the Trust will provide a list of shareholders or
disseminate appropriate materials (at the expense of the requesting
shareholders). Except as set forth above, the Trustees shall continue to hold
office and may appoint their successors.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as the Trust shall not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each fund of the Trust affected by the matter. For purposes of determining
whether the approval of a majority of the outstanding shares of a fund will be
required in connection with a matter, a fund will not be deemed to be affected
by a matter unless it is clear that the interests of each fund in the matter are
identical, or that the matter does not affect any interest of the fund. Under
Rule 18f-2, the approval of an investment advisory agreement or any change in
investment policy would be effectively acted upon with respect to a fund only if
approved by a majority of the outstanding shares of such fund. However, Rule
18f-2 also provides that the ratification of independent public accountants, the
approval of principal underwriting contracts, and the election of Trustees may
be effectively acted upon by shareholders of the Trust voting without regard to
series.
SHAREHOLDER AND TRUSTEE LIABILITY.
The Delaware Business Trust Act provides that a shareholder of a
Delaware business trust shall be entitled to the same limitation of personal
liability extended to shareholders of Delaware corporations, and the Delaware
Trust Instrument provides that shareholders of the Trust shall not be liable for
the obligations of the Trust. The Delaware Trust Instrument also provides for
indemnification out of the trust property of any shareholder held personally
liable solely by reason of his or her being or having been a shareholder. The
Delaware Trust Instrument also provides that the Trust shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the Trust, and shall satisfy any judgment thereon. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability is
considered to be extremely remote.
The Delaware Trust Instrument states further that no Trustee, officer,
or agent of the Trust shall be personally liable in connection with the
administration or preservation of the assets of a Fund or the conduct of the
Trust's business; nor shall any Trustee, officer, or agent be personally liable
to any person for any action or failure to act except for his own bad faith,
willful misfeasance, gross negligence, or reckless disregard of his duties. The
Declaration of Trust also provides that all persons having any claim against the
Trustees or the Trust shall look solely to the assets of the Trust for payment.
REPORTS
Shareholders receive reports at least semi-annually showing the Fund's
holdings and other information. In addition, shareholders receive annual
financial statements examined by the Trust's independent auditors.
-17-
<PAGE>
FINANCIAL STATEMENTS
TRAUTMAN KRAMER VALUE PLUS FUND
Statement of Assets and Liabilities
January 28, 1998
Report of Independent Auditors
To the Shareholder and
Board of Trustees of
The Trautman Kramer Trust -
Trautman Kramer Value Plus Fund
We have audited the accompanying statement of assets and liabilities of the
Trautman Kramer Value Plus Fund, (the "Fund"), as of January 28, 1998. This
statement of assets and liabilities is the responsibility of the Fund's
management. Our responsibility is to express an opinion on this statement of
assets and liabilities based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards required that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statement of assets and liabilities presentation. We believe that our audit of
the statement of assets and liabilities provides a reasonable basis for our
opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of the
Trautman Kramer Value Plus Fund at January 28, 1998, in conformity with
generally accepted account principles.
/s/ ERNST & YOUNG LLP
Milwaukee, Wisconsin
January 28, 1998
<PAGE>
TRAUTMAN KRAMER TRUST
Trautman Kramer Value Plus Fund
Statement of Assets and Liabilities
January 28, 1998
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Cash $101,284
Unamortized organizational costs $ 41,900
Prepaid expenses $ 14,407
--------
Total Assets $157,591
--------
LIABILITIES
Payable to Investment Adviser $ 56,307
--------
Total Liabilities $ 56,307
--------
NET ASSETS $101,284
========
Capital Stock, No par value; Unlimited number of Class A shares of beneficial
interest authorized; 10,128.400 Class A shares of beneficial interest
outstanding. $101,284
========
Net asset value, and redemption price per share $10.00
======
Maximum Offering Price (4.5% of offering price or $10.47
4.7% of net asset value) ======
</TABLE>
The accompanying notes to the statement of assets and liabilities
are an integral part of this statement.
<PAGE>
TRAUTMAN KRAMER TRUST
TRAUTMAN KRAMER VALUE PLUS FUND
NOTES TO THE STATEMENT OF ASSETS AND LIABILITIES
JANUARY 28, 1998
1. ORGANIZATION
Trautman Kramer Trust (the "Trust") was organized as a Delaware business
trust on May 1, 1997, and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, non-diversified
management investment company. Trautman Kramer Value Plus Fund ("the Fund")
is currently the only series of the Trust. The Fund currently offers two
classes of shares, Class A and Class B. The investment objective of the
fund is long-term capital appreciation. The Trust has had no operations
other than those relating to organizational matters and the sale of
10,128.400 Class A shares of its common stock to its original shareholder,
Robert J. Kramer, Trustee, Trautman Kramer 401K Plan, for cash in the
amount of $101,284.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Organization costs
Costs incurred by the Fund in connection with the organization,
registration and the initial public offering of shares, are being deferred
and amortized over the period of benefit, but not to exceed sixty months
from the Fund's commencement of operations. These costs were advanced by
the Investment Adviser and will be reimbursed by the Fund. The proceeds of
any redemption of the initial shares by the original shareholder will be
reduced by a pro-rata portion of any then unamortized organizational costs
in the same proportion as the number of initial shares being redeemed bears
to the number of initial shares outstanding at the time of such redemption.
(b) Federal Income Taxes
The Fund intends to comply with the requirements necessary to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended, and to make the requisite distributions of income
and capital gains to its shareholders sufficient to relieve it from all or
substantially all Federal income taxes.
<PAGE>
(c) Use of Estimates
The preparation of the statement of assets and liabilities in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities. Actual amounts could differ from those estimates.
3. INVESTMENT ADVISER
The Trust, has an agreement with the Investment Adviser, (the "Advisory
Agreement"), with whom certain officers and Trustees of the Trust are
affiliated, to furnish investment advisory services to the Fund. For its
services under the Advisory Agreement, the Adviser receives a fee, accrued
daily and payable monthly at the annual rate of 1.00% of the Fund's average
daily net assets.
The Adviser has retained Tocqueville Asset Management LP. (the
"Sub-Adviser") to provide sub-advisory services to the Fund pursuant to a
sub-advisory agreement (the "Sub-Advisory Agreement). The Sub-Adviser will,
subject at all times to the investment objective and policies of the Fund
and control of the Advisor and the Board of Trustees, supervise the
investment and reinvestment of the cash and securities of the Fund. For its
services under the Sub-Advisory agreement, the Adviser pays the Sub-Adviser
a fee at an annual rate of .50% of the Fund's average daily net assets.
4. DISTRIBUTION PLAN
The Fund has adopted a distribution plan (the "Plan"), for each class of
shares, pursuant to Rule 12b-1 of the 1940 Act. Pursuant to the Plan, the
Fund may pay for distribution activities related to the sale of its shares
up to an annual amount equal to .50% of the Fund's average daily net
assets.
The Plan provides that the Fund may finance activities which are primarily
intended to result in the sale of its shares, including, but not limited
to, advertising, printing of prospectuses and reports for other than
existing shareholders, preparation and distribution of advertising material
and sales literature, and payments to dealers, including Trautman Kramer &
Company, Inc. (the "Distributor"), who enter into agreements with the Fund
or the Distributor.
5. SHAREHOLDER SERVICING PLAN
The Trust has adopted a Shareholder Servicing Plan for each class of shares
for the Fund. In accordance with the Shareholder Servicing Plan, the Fund
may enter into Shareholder Service Agreements under which it pays fees up
to an annual amount equal to .25% of the average daily net
<PAGE>
assets for fees incurred in connection with the personal service and
maintenance of accounts holding the shares of the Fund.
6. ADMINISTRATIVE SERVICES AGREEMENT Under an Administrative Services Agreement,
Firstar Trust Company (the "Administrator")supervises the administration of all
aspects of the Fund's operations. For these services, the Administrator receives
a fee computed and paid monthly, for each class of shares, at an annual rate of
.05% on the first $200 million of the Fund's average net assets, .04% on the
next $500 million of the Fund's average net assets and .03% on any remaining
average net assets in excess of $700 million, subject to an annual minimum fee,
of $40,500 for both classes.
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
List all financial statements and exhibits filed as part of the
Registration Statement.
(a) Financial statements:
In Part A: None.
In Part B: Statement of Assets and Liabilities as of January 28, 1998.
In Part C: None.
(b) Exhibits
EX- 99.B1. (a) Certificate of Trust. (1)
(b) Trust Instrument.(1)
EX- 99.B2. By-laws(1)
EX- 99.B3. None.
EX- 99.B4. None
EX- 99.B5. (a) Investment Advisory Agreement between Registrant
on behalf of the Trautman Kramer Value Plus Fund
and Trautman Kramer Capital Management, Inc.(2)
(b) SubAdvisory Agreement by and between Trautman
Kramer Capital Management, Inc. and Tocqueville
Capital Management, L.P.(2)
EX-99.B6. Distribution Agreement between the Registrant on
behalf of the Trautman Kramer Value Plus Fund and
Trautman Kramer & Company, Inc.(2)
EX-99.B7. None.
EX-99.B8. Custodian Agreement between Registrant on behalf
of Trautman Kramer Value Plus Fund and Firstar
Trust Company.(2)
- --------------------
(1) Filed as an Exhibit to Registrant's Registration Statement on Form N-1A
filed electronically on May 22, 1997, accession number
0000922423-97-000450 and incorporated by reference.
(2) Filed herewith.
(3) To be filed by amendment.
<PAGE>
EX- 99.B9. (a) Fund Administration Servicing Agreement by and
between Registrant and Firstar Trust Company.(2)
(b) NSCC Fund/Serv Networking Servicing Agreement
between Firstar Trust Company and the
Registrant.(2)
(c) Fund Accounting Servicing Agreement between the
Registrant on behalf of Trautman Kramer Value Plus
Fund and Firstar Trust Company .(2)
(d) Transfer Agency Agreement between the Registrant
on behalf of Trautman Kramer Value Plus Fund and
Firstar Trust Company .(2)
(e) Fulfillment Servicing Agreement between Firstar
Trust Company and the Registrant on behalf of
Trautman Kramer Value Plus Fund.(2)
(f) Shareholder Servicing Plan, with Form of
Shareholder Servicing Agreement, with respect to
Class A Shares.(2)
(g) Shareholder Servicing Plan, with Form of
Shareholder Servicing Agreement, with respect to
Class B Shares.(2)
EX-99.B10. Opinion of Kramer, Levin, Naftalis & Frankel.(3)
EX-99.B11(a) Consent of Kramer, Levin, Naftalis & Frankel, Counsel for
the Registrant.(2)
EX-99.B11(b) Consent of Ernst & Young LLP, independent auditors
for the Registrant.(2)
EX- 99.B12. None.
EX- 99.B13. Investment letter re: initial $100,000 capital.(2)
EX- 99.B14. None.
- -------------------
(1) Filed as an Exhibit to Registrant's Registration Statement on Form N-1A
filed electronically on May 22, 1997, accession number
0000922423-97-000450 and incorporated by reference.
(2) Filed herewith.
(3) To be filed by amendment.
- 5 -
<PAGE>
EX-99.B15.(a) Plan pursuant to Rule 12b-1, with Form of Selected
Dealer Agreement, with respect to Class A Shares
of the Trautman Kramer Value Plus Fund.
(b) Distribution Plan pursuant to Rule 12b-1, with
Form of Selected Dealer Agreement, with respect to
Class B shares of the Trautman Kramer Value Plus
Fund.(2)
EX-99.B16. Schedule for computation of performance quotation.(3)
EX-99.B17. None
EX-99.B18. None.
- -------------------
(1) Filed as an Exhibit to Registrant's Registration Statement on Form N-1A
filed electronically on May 22, 1997, accession number
0000922423-97-000450 and incorporated by reference.
(2) Filed herewith.
(3) To be filed by amendment.
ITEM 25. Persons Controlled By or Under Common Control with Registrant
None.
ITEM 26. Number of Holders of Securities
Number of Record Holders
Title of Class as of January 28, 1998
- -------------- -----------------------
Shares of beneficial interest
Trautman Kramer Value Fund 1
($.001 par value)
ITEM 27. Indemnification
Section 10.02 of the Registrant's Trust Instrument provides as follows:
(a) Subject to the exceptions and limitations contained in Subsection 10.02(b):
(i) every person who is, or has been, a Trustee or officer of
the Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him
in connection with any claim, action, suit or proceeding in
- 6 -
<PAGE>
which he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts paid or
incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body
before which the proceeding was brought (A) to be liable to the Trust
or its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office or (B) not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, (A) by the court or
other body approving the settlement; (B) by at least a majority of
those Trustees who are neither Interested Persons of the Trust nor are
parties to the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); or (C) by written opinion
of independent legal counsel based upon a review of readily available
facts (as opposed to a full trial-type inquiry).
(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person
may now or hereafter be entitled, shall continue as to a person who
has ceased to be a Covered Person and shall inure to the benefit of
the heirs, executors and administrators of such a person. Nothing
contained herein shall affect any rights to indemnification to which
Trust personnel, other than Covered Persons, and other persons may be
entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character
described in Subsection (a) of this Section 10.02 may be paid by the
Trust or Series from time to time prior to final disposition thereof
upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the Trust or Series if it
is ultimately determined that he is not entitled to indemnification
under this Section 10.02; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such
undertaking, (ii) the Trust is insured against losses arising out of
any such advance payments or (iii) either a majority of the Trustees
who are neither Interested Persons of the Trust nor parties to the
matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed
to a trial-type inquiry or full
- 7 -
<PAGE>
investigation), that there is reason to believe that such Covered
Person will be found entitled to indemnification under this Section
10.02
ITEM 28 (a). Business and Other Connections of Investment Adviser
Registrant is fulfilling the requirement of this Item 28(a) to provide
a list of the officers and directors of Trautman Kramer Capital Management, Inc.
("TKCM"), the investment adviser of the Registrant, together with information as
to any other business, profession, vocation or employment of a substantial
nature engaged in by TKCM or those of its officers and directors during the past
two years, by incorporating by reference the information contained in the Form
ADV filed with the SEC pursuant to the Investment Advisers Act of 1940 by BSFM
(SEC File No. 801-45926).
ITEM 28(b). Business and Other Connections of Sub-Investment Adviser
Registrant is fulfilling the requirement of this Item 28(b) to provide
a list of the officers and directors of Tocqueville Capital Management, L.P.
("Tocqueville"), the sub-investment adviser of the Registrant's Trautman Kramer
Value Fund, together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by Tocqueville or
those of its officers and directors during the past two years, by incorporating
by reference the information contained in the Form ADV filed with the SEC
pursuant to the Investment Advisers Act of 1940 by Tocqueville (SEC File No.
801- 36209).
ITEM 29. Principal Underwriters
(a) None.
(b) The following information is furnished with respect to the officers
and partners of Trautman Kramer & Company, the Registrant's principal
underwriter. The business address for all persons listed below is 500 Fifth
Avenue, New York, NY 10110.
Positions and
Name and Principal Positions and Offices with Offices
Business Address Principal Underwriter with Registrant
- ---------------- --------------------- ---------------
Robert Kramer Chairman Chairman
Mark Barbera CFO CFO
Gregory Trautman President President
(c) Not Applicable. The Registrant's principal underwriter is an
affiliated person of the Registrant.
- 8 -
<PAGE>
ITEM 30. Location of Accounts and Records
As required by Section 31(a) of the Investment Company Act of 1940, the
accounts, books or other documents relating to the Trautman Kramer Value Plus
Fund's budget and accruals will be kept by Firstar Trust Company, 615 East
Michigan Street, Milwaukee, Wisconsin 53202. The accounts, books or other
documents of the Fund relating to shareholder accounts and records and dividend
disbursements will also be kept by Firstar Trust Company at the above address.
ITEM 31. Management Services
There are no management-related service contracts not discussed in
Parts A and B.
ITEM 32. Undertakings
(1) Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a director or directors if
requested to do so by the holders of at least 10% of the Registrant's
outstanding voting securities, and to assist in communications with other
shareholders as required by Section 16(c) of the 1940 Act.
(2) Registrant undertakes to file a post-effective amendment, using
financial statements which need not be certified within four to six months from
the effective date of registrant's 1933 Act registration statement.
- 9 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Pre-Effective Amendment to the Registration Statement on Form N-1A to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City New
York, and the State of New York on this 3rd day of February, 1998.
THE TRAUTMAN KRAMER TRUST
By:/s/ Gregory O. Trautman
------------------------------
Gregory O. Trautman, President
================================================================================
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment to the Registration Statement has been signed by the
following persons in the capacities indicated on the 3rd day of February, 1998.
SIGNATURE TITLE
/s/ Robert Kramer Chairman of the Board and Trustee
- -----------------------
Robert Kramer
/s/ Mark Barbera Chief Financial Officer
- -----------------------
Mark Barbera
/s/ James Arcara Trustee
- -----------------------
James Arcara
/s/ Michael Asch Trustee
- -----------------------
Michael Asch
/s/ Robert A. DeFruscio Trustee
- -----------------------
Robert A. DeFruscio
/s/ Gregory O. Trautman Trustee
- -----------------------
Gregory O. Trautman
/s/ William Wilson Trustee
- ------------------------
William Wilson
<PAGE>
INDEX TO EXHIBITS
Exhibit Caption
EX-99.B5(a) Investment Advisory Agreement between Registrant on behalf of the
Trautman Kramer Capital Value Fund and Trautman Kramer & Capital
Management, Inc.
EX-99.B5(b) SubAdvisory Agreement by and between Trautman Kramer Capital
Management, Inc. and Tocqueville Asset Management, L.P.
EX-99.B6 Distribution Agreement between the Registrant on behalf of the
Trautman Kramer Value Plus Fund and Trautman Kramer &
Company, Inc.
EX-99.B8 Custodian Agreement between Registrant on behalf of Trautman
Kramer Value Plus Fund and Firstar Trust Company
EX-99.B9(a) Fund Administration Servicing Agreement by and between Registrant
on behalf of Trautman Kramer Value Plus Fund and Firstar Trust
Company
EX-99.B9(b) NSCC Fund/Serv Networking Servicing Agreement between Firstar
Trust Company and the Registrant on behalf of Trautman Kramer
Value Plus Fund
EX-99.B9(c) Fund Accounting Servicing Agreement between the Registrant on
behalf of Trautman Kramer Value Plus Fund and Firstar Trust
Company
EX-99.B9(d) Transfer Agency Agreement between the Registrant on behalf of
Trautman Kramer Value Plus Fund and Firstar Trust Company
EX-99.B9(e) Fulfillment Servicing Agreement between Firstar Trust Company and
the Registrant on behalf of Trautman Kramer Value Plus Fund
EX-99.B9(f) Shareholder Servicing Plan, with Form of Shareholder
Servicing Agreement, with respect to Class A Shares.
EX-99.B9(g) Shareholder Servicing Plan, with Form of Shareholder Servicing
Agreement, with respect to Class B Shares.
EX-99.B10 Opinion of Kramer, Levin, Naftalis & Frankel
EX-99.B11(a) Consent of Kramer, Levin, Naftalis & Frankel, Counsel for the
Registrant
EX-99.B11(b) Consent of Ernst & Young LLP, independent accountants for the
Registrant
EX-99.B13 Investment letter re: initial $100,000 capital
EX-99.B15(a) Plan pursuant to Rule 12b-1, with Form of Selected Dealer
Agreement, with respect to Class A Shares of the Trautman
Kramer Value Plus Fund.
EX-99.B15(b) Distribution Plan pursuant to Rule 12b-1, with Form of
Selected Dealer Agreement, with respect to Class B shares of the
Trautman Kramer Value Plus Fund.
EX-99.B18 Rule 18f-3 Multiple Class Plan
INVESTMENT ADVISORY AGREEMENT
<PAGE>
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 20th day of November, 1997 by and between
THE TRAUTMAN KRAMER TRUST, a Delaware business trust (the "Trust"), on behalf of
its series THE TRAUTMAN KRAMER VALUE PLUS FUND (the "Fund") and TRAUTMAN KRAMER
CAPITAL MANAGEMENT, INC., a Delaware corporation (the "Investment Adviser");
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations promulgated thereunder;
and
WHEREAS, the Investment Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Investment Advisers
Act"), and engages in the business of acting as an investment adviser; and
WHEREAS, the Trust and the Investment Adviser desire to enter into an
agreement to provide for the management of the assets of the Fund on the terms
and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
<PAGE>
1. Management. The Investment Adviser shall act as investment adviser
for the Trust and shall, in such capacity, supervise the investment and
reinvestment of the cash, securities or other properties comprising the Trust's
assets, subject at all times to the policies and control of the Trust's Board of
Trustees. The Investment Adviser shall give the Trust the benefit of its best
judgment, efforts and facilities in rendering its services as investment
adviser. The Investment Adviser shall, for all purposes herein, be deemed an
independent contractor and shall have, unless otherwise expressly provided or
authorized, no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
2. Duties of Investment Advisor. In carrying out its obligation under
paragraph 1 hereof, the Investment Adviser shall:
(a) supervise and manage all aspects of the Fund's operations;
(b) provide the Fund or obtain for it, and thereafter supervise,
such executive, administrative, clerical and shareholder servicing services as
are deemed advisable by the Trust's Board of Trustees;
(c) arrange, but not pay for, the periodic updating of
prospectuses and supplements thereto, proxy material, tax returns, reports to
the Fund's shareholders and reports to and filings with the Securities and
Exchange Commission, state Blue Sky authorities;
(d) provide the Fund with, or obtain for it, adequate office
space and all necessary office equipment and services, including telephone
service, heat, utilities, stationery supplies and similar items for the Fund's
principal office;
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<PAGE>
(e) provide the Board of Trustees of the Trust on a regular basis
with financial reports and analyses on the Fund's operations and the operations
of comparable investment companies;
(f) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic, foreign or
otherwise, whether affecting the economy generally or the Fund, and whether
concerning the individual issuers whose securities are included in the Fund or
the activities in which they engage, or with respect to securities which the
Investment Adviser considers desirable for inclusion in the Fund;
(g) determine what issuers and securities shall be represented in
the Fund's portfolio and regularly report them to the Board of Trustees of the
Trust;
(h) formulate and implement continuing programs for the purchases
and sales of the securities of such issuers and regularly report thereon to the
Board of Trustees of the Trust; and
(i) take, on behalf of the Fund, all actions which appear to the
Fund necessary to carry into effect such purchase and sale programs and
supervisory functions as aforesaid, including the placing of orders for the
purchase and sale of portfolio securities.
3. Broker-Dealer Relationships. The Investment Adviser is responsible
for decisions to buy and sell securities for the Fund, broker-dealer selection,
and negotiation of brokerage commission rates. The Investment Adviser may select
Trautman Kramer & Company, Inc. or any other affiliated person of the Trust or
the Investment Adviser to the extent permitted pursuant to the Trust's
procedures for securities transactions with affiliated
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<PAGE>
brokers pursuant to Section 17(e)(2) and Rule 17e-1 under the Investment Company
Act. Adviser's primary consideration in effecting a security transaction will be
execution at a price that is reasonable and fair compared to the commission, fee
or other remuneration received or to be received by other brokers in connection
with comparable transactions, including similar securities being purchased or
sold on a securities exchange during a comparable period of time.
In selecting a broker-dealer to execute each particular transaction,
the Investment Adviser will take the following into consideration: the best net
price available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-dealer to the investment performance
of the Fund on a continuing basis. Accordingly, the price to the Fund in any
transaction may be less favorable than that available from another broker-dealer
if the difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies and procedures as the Board
of Trustees may determine, the Investment Adviser shall not be deemed to have
acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Fund to pay a broker or
dealer that provides brokerage and research services to the Investment Adviser
for the Fund's use an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Investment Adviser
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
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<PAGE>
transaction or the Investment Adviser's overall responsibilities with respect to
the Fund. The Investment Adviser is further authorized to allocate the orders
placed by it on behalf of the Fund to such brokers and dealers who also provide
research or statistical material, or other services to the Fund or the
Investment Adviser for the Fund's use. Such allocation shall be in such amounts
and proportions as the Investment Adviser shall determine and the Investment
Adviser will report on said allocations regularly to the Board of Trustees of
the Trust indicating the brokers to whom such allocations have been made and the
basis therefor.
4. Control by Board of Trustees. Any investment program undertaken by
the Investment Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Investment Adviser on behalf of the Fund pursuant
thereto, shall at all times be subject to any directives of the Board of
Trustees of the Trust.
5. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Investment Adviser shall at all times
conform to:
(a) all applicable provisions of the Investment Company Act and
the Investment Advisers Act and any rules and regulations adopted thereunder as
amended; and
(b) the provisions of the Registration Statements of the Fund
under the Securities Act of 1933, as amended, and the Investment Company Act;
and
(c) the provisions of the Trust Instrument of the Trust, as
amended; and
(d) the provisions of the By-laws of the Trust, as amended; and
(e) any other applicable provisions of state and federal law.
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<PAGE>
6. Expenses. The expenses connected with the Fund shall be allocable
between the Fund and the Investment Adviser as follows:
(a) The Investment Adviser shall furnish, at its expense and
without cost to the Trust, the services of a President, Secretary and one or
more Vice Presidents of the Fund, to the extent that such additional officers
may be required by the Fund for the proper conduct of its affairs.
(b) The Investment Adviser shall further maintain, at its expense
and without cost to the Fund, a trading function in order to carry out its
obligations under subparagraph (i) of paragraph 2 hereof to place orders for the
purchase and sale of portfolio securities for the Fund.
(c) Nothing in subparagraph (a) hereof shall be construed to
require the Investment Adviser to bear:
(i) any of the costs (including applicable office
space, facilities and equipment) of the services of a
principal financial officer of the Fund whose normal duties
consist of maintaining the financial accounts and books and
records of the Fund; including the reviewing of calculations
of net asset value and preparing tax returns; or
(ii) any of the costs (including applicable office
space, facilities and equipment) of the services of any of
the personnel operating under the direction of such
principal financial officer. Notwithstanding the obligation
of the Fund to bear the expense of the functions referred to
in clauses (i) and (ii) of this subparagraph (c), the
Investment Adviser may pay the salaries,
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<PAGE>
including any applicable employment or payroll taxes and
other salary costs, of the principal financial officer and
other personnel carrying out such functions and the Fund
shall reimburse the Investment Adviser therefor upon proper
accounting.
(d) All of the ordinary business expenses incurred in the
operations of the Fund and the offering of its shares shall be borne by the Fund
unless specifically provided otherwise in this paragraph 6. These expenses
include but are not limited to brokerage commissions, legal, auditing, taxes or
governmental fees, networking servicing costs, fund accounting servicing costs,
administrative servicing costs, fulfillment servicing costs, the cost of
preparing share certificates, custodian, depository, transfer and shareholder
service agent costs, expenses of issue, sale, redemption and repurchase of
shares, expenses of registering and qualifying shares for sale, insurance
premiums on property or personnel (including officers and trustees if available)
of the Fund which inure to its benefit, expenses relating to trustee and
shareholder meetings, the cost of preparing and distributing reports and notices
to shareholders, the fees and other expenses incurred by the Fund in connection
with membership in investment company organizations and the cost of printing
copies of prospectuses and statements of additional information distributed to
shareholders.
7. Delegation of Responsibilities. The Investment Adviser may delegate
the performance of certain investment advisory services to a subadvisor.
8. Compensation. The Fund shall pay the Investment Adviser in full
compensation for services rendered hereunder an annual investment advisory fee,
payable
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<PAGE>
monthly, of 1.00% of the Fund's average daily net assets. The average daily net
asset value of the Fund shall be determined in the manner set forth in the
Registration Statement of the Fund.
The Investment Adviser may from time to time and for such periods as it
deems appropriate voluntarily reduce its compensation hereunder (and/or
voluntarily assume expenses) for the Fund. The Investment Adviser may, at any
later date, recoup such amounts after such time as the Investment Adviser is no
longer reducing its compensation and/or assuming expenses for the Fund provided
that the aggregate expenses in the year such amounts are recouped do not exceed
any limitation to which the Investment Adviser has agreed.
9. Non-Exclusivity. The services of the Investment Adviser to the Fund
are not to be deemed to be exclusive, and the Investment Adviser shall be free
to render investment advisory and corporate administrative or other services to
others (including other investment companies) and to engage in other activities.
It is understood and agreed that officers or Partners of the Investment Adviser
may serve as officers or trustees of the Trust, and that officers or trustees of
the Trust may serve as officers or partners of the Investment Adviser to the
extent permitted by law; and that the officers and partners of the Investment
Adviser are not prohibited from engaging in any other business activity or from
rendering services to any other person, or from serving as partners, officers or
partners of any other firm or corporation, including other investment companies.
-8-
<PAGE>
10. Term and Approval. This Agreement shall become effective at the
close of business on the date hereof and shall remain in force and effect for
two years and thereafter from year to year, provided that such continuance is
specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the vote of a
majority of the Fund's outstanding voting securities (as defined in Section
2(a)(42) of the Investment Company Act); and
(b) by the affirmative vote of a majority of the Trustees who are
not parties to this Agreement or interested persons of a party to this Agreement
(other than as Trust trustees), by votes cast in person at a meeting
specifically called for such purpose.
11. Termination. This Agreement may be terminated at any time, without
the payment of any penalty, by vote of the Trust's Board of Trustees or by vote
of a majority of the Fund's outstanding voting securities, or by the Investment
Adviser, on sixty (60) days' written notice to the other party. The notice
provided for herein may be waived by either party. This Agreement shall
automatically terminate in the event of its assignment, the term "assignment"
for the purpose having the meaning defined in Section 2(a)(4) of the Investment
Company Act.
12. Liability of Investment Adviser and Indemnification. In the absence
of willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Investment Adviser or any of
its officers, trustees or employees, it shall not be subject to liability to the
Trust or to any shareholder of the Trust for any
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<PAGE>
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security.
13. Liability of Trustees and Shareholders. A copy of the Certificate
of Trust of the Trust is on file with the Secretary of State of Delaware, and
notice is hereby given that this instrument is executed on behalf of the
trustees of the Trust as trustees and not individually and that the obligations
of this instrument are not binding upon any of the trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
14. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust
and that of the Investment Adviser shall be 500 Fifth Avenue, New York, New York
10110.
15. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the Investment Company Act shall be resolved by
reference to such term or provision of the Act and to interpretations thereof,
if any, by the United States Courts or in the absence of any controlling
decision of any such court, by rules, regulations or orders of the Securities
and Exchange
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<PAGE>
Commission issued pursuant to said Act. In addition, where the effect of a
requirement of the Investment Company Act reflected in any provision of this
Agreement is released by rules, regulation or order of the Securities and
Exchange Commission, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
THE TRAUTMAN KRAMER TRUST, on
behalf of the Trautman Kramer Value
Fund
Attest: By:/s/Robert Kramer
--------------------------------
/s/Mark Barbera Chairman
- --------------------
TRAUTMAN KRAMER CAPITAL
MANAGEMENT, INC.
Attest:
By:/s/Robert Kramer
/s/Mark Barbera --------------------------------
- -------------------- Chairman
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SUBADVISORY AGREEMENT
AGREEMENT executed as of November 20, 1997 by and between
TRAUTMAN KRAMER CAPITAL MANAGEMENT, INC. ("Trautman Kramer") and TOCQUEVILLE
ASSET MANAGEMENT, L.P. ("Sub-Adviser").
WHEREAS, Trautman Kramer desires to retain the Sub-Adviser to
furnish investment advisory services to Trautman Kramer in connection with the
underlying investment funds specified on Schedule A hereto (collectively, the
"Funds," and each, a "Fund"), each of which is an investment portfolio of The
Trautman Kramer Trust (the "Trust"); and
WHEREAS, Sub-Adviser is willing to make available to Trautman
Kramer and to the Funds certain sub-investment advisory services;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
1. Appointment. Trautman Kramer hereby appoints the
Sub-Adviser to provide certain sub-investment advisory services for the period
and on the terms set forth in this Agreement. The Sub-Adviser accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
2. Management. Subject always to the supervision of Trautman
Kramer and the Trust's Board of Trustees, the Sub-Adviser will furnish an
investment program in respect of, and make investment decisions for, the
portions of the portfolios of the Funds allocated to it by Trautman Kramer, and
place all orders for the purchase and sale of securities for such portions of
the portfolios of the Funds. In the performance of its duties, the Sub-Adviser
will comply with the provisions of the Trust's organizational documentation, and
the stated investment objective, policies and restrictions of the Funds, as
amended, will use its best efforts to safeguard and promote the welfare of the
Funds, and will comply with other policies which the Trust's Board of Trustees
or Trautman Kramer, as the case may be, may from time to time determine and
communicate to the Sub-Adviser. The Sub-Adviser and Trautman Kramer shall each
make its officers and employees available to the other from time to time to
review investment policies for the Funds and to consult with each other
regarding the investment affairs of the Funds. The Sub-Adviser shall report to
the Trust's Board of Trustees and to Trautman Kramer with respect to the
implementation of such program.
The Sub-Adviser further agrees that it:
<PAGE>
(a) will use the same skill and care in providing such
services as it uses in providing services to other accounts
for which it has investment management responsibilities;
(b) will conform with all applicable rules and regulations
of the SEC and in addition will conduct its activities under
this Agreement in accordance with any applicable regulations
of any other governmental authority pertaining to the
investment advisory activities of the Sub- Adviser;
(c) will not make loans to any person to purchase or carry
units of beneficial interest in the Trust or make loans to
the Trust;
(d) will place orders pursuant to its investment
determinations for the Funds either directly with the issuer
or with any broker or dealer. The Sub-Adviser may select
affiliated persons of the Trust or the Sub-Adviser to the
extent permitted pursuant to the Trust's procedures for
securities transactions with affiliated brokers pursuant to
Section 17(e)(2) and Rule 17e-1 under the Investment Company
Act. In placing orders with brokers and dealers, the
Sub-Adviser will attempt to obtain best execution of orders,
which shall mean quality execution at favorable securities
prices. Consistent with this obligation, when the execution
and price offered by two or more brokers or dealers are
comparable, the Sub-Adviser may, in its discretion, purchase
and sell portfolio securities to and from brokers and
dealers who provide the Sub-Adviser with research, advice
and other services;
(e) will report regularly to the Trust and to Trautman
Kramer and will make appropriate persons available for the
purpose of reviewing with representatives of Trautman Kramer
on a regular basis the management of the Funds, including,
without limitation, review of the general investment
strategy of the Fund, interest rate considerations and
general conditions affecting the marketplace;
(f) will maintain books and records with respect to the
Funds' securities transactions as are required by applicable
laws and regulations to be maintained and will furnish the
Trust's Board of Trustees such periodic and special reports
as are required by applicable laws and regulations to be
furnished or as the Board may reasonably request;
(g) will treat confidentially and as proprietary information
of the Trust all records and other information relative to
the Trust, and will not use records and information for any
purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and
approval in writing by the Trust, which approval shall not
be unreasonably withheld and may not be withheld where the
Sub-Adviser may be exposed to civil or criminal contempt
proceedings for failure to comply, when
<PAGE>
requested to divulge such information by duly constituted
authorities, or when so requested by the Trust;
(h) will receive the recommendations as to guidelines and
benchmarks of Trautman Kramer with respect to the investment
and reinvestment of the assets of the Funds and perform its
duties hereunder in accordance therewith;
(i) in making investment recommendations for the Funds, the
Sub- Adviser's personnel will not inquire as to or take into
consideration whether the issuers of securities proposed for
purchase or sale for the Fund's accounts are clients of the
Sub-Adviser or of its affiliates. In dealing with such
clients, the Sub-Adviser and its affiliates will not inquire
as to or take into consideration whether securities of those
customers are held by the Trust; and
(j) will provide advice and recommendations with respect to
other aspects of the business and affairs of the Funds and
perform such other functions related to the provision of
investment management services as Trautman Kramer may
reasonably request.
3. Books and Records. In compliance with Rule 3la-3 under the
1940 Act, the Sub-Adviser hereby agrees that all records which it maintains for
the Trust on behalf of Trautman Kramer are the property of the Trust and further
agrees to surrender promptly to the Trust or to Trautman Kramer any of such
records upon request. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 3la-2 adopted under the 1940 Act all records required to be
maintained by Sub-Adviser on behalf of Trautman Kramer under Rule 3la-1 under
the 1940 Act.
4. Expenses. During the term of this Agreement, the
Sub-Adviser will pay all expenses incurred by it in connection with its
activities under this Agreement other than the cost of securities (including
brokerage commissions, if any) purchased for the Funds.
5. Compensation. For the services provided and the expenses
assumed pursuant to this Agreement, Trautman Kramer will pay the Sub-Adviser and
the Sub-Adviser will accept as full compensation therefor a fee computed daily
and paid monthly in arrears at the annual rate set forth on Schedule A, based on
each Fund's average daily net assets.
<PAGE>
In the event that investment advisory fees charged to a Fund by
Trautman Kramer are waived, deferred or reduced, then sub-advisory fees payable
in accordance with this Paragraph 5 shall be proportionally waived, deferred or
reduced. Such fee reduction, if applicable, shall be applied on a monthly basis
at the time each payment of sub-advisory fees is due hereunder. If investment
advisory fees are deferred by Trautman Kramer and recovered from the Fund at a
later date, then the sub-advisory fees deferred in conjunction with the deferral
of the investment advisory fees shall be proportionally recouped from Trautman
Kramer by the Sub-Adviser at such later date.
6. Services Not Exclusive. The investment management services
furnished by the Sub-Adviser hereunder are not to be deemed exclusive, and the
Sub-Adviser shall be free to furnish similar services to others so long as its
services under this Agreement are not impaired thereby.
7. Limitation of Liability. The Sub-Adviser and its officers,
directors and employees shall not be liable for any error of judgment or mistake
of law or for any loss suffered by Trautman Kramer or by the Funds in connection
with the performance of this Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services, or a
loss from willful misfeasance, bad faith or gross negligence on the part of the
Sub-Adviser in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement.
8. Duration and Termination. This Agreement will become
effective as of the date first written above in accordance with the requirements
under the 1940 Act, and, unless sooner terminated as provided herein, shall
continue in effect for a one-year term.
Thereafter, if not terminated, this Agreement shall continue
in effect as to each Fund for successive one-year periods, provided that such
continuance is specifically approved at least annually (a) by the vote of a
majority of those members of the Trust's Board of Trustees who are not
interested persons of the Trust, the Sub-Adviser, or Trautman Kramer, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trust's Board of Trustees or by the vote of a majority of the outstanding
voting securities of that Fund. Notwithstanding the foregoing, this Agreement
may be terminated as to any Fund at any time
<PAGE>
on sixty days' written notice, without the payment of any penalty, by the Trust
(by vote of the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of the relevant Fund), by Trautman Kramer, or by
the Sub-Adviser. This Agreement will immediately terminate in the event of its
assignment, or in the event of the termination of Trautman Kramer's investment
advisory agreement with the Funds. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested persons" and
"assignment" shall have the meaning ascribed to such terms in the 1940 Act.)
9. Amendment of this Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
10. Miscellaneous. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the laws of the State of New York.
11. Limit of Liability. The terms "The Trautman Kramer Trust"
and "Trustees" (of the Trust) refer, respectively to the trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under the Trust's organizational documentation, to which reference is
hereby made. The obligations of "The Trautman Kramer Trust" entered into in the
name or on behalf thereof by any of the Trustees, representatives or agents are
made not individually, but in such capacities and are not binding upon any of
the Trustees, shareholders or representatives of the Trust personally, but bind
only the assets of the Funds, and all persons dealing with the Funds or other
series of the Trust must look solely to the assets of the Funds for the
enforcement of any claims against the Trust.
12. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original and both of which,
collectively, shall constitute one agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
TRAUTMAN KRAMER CAPITAL MANAGEMENT, INC.
By: /s/Robert Kramer
-------------------------------------
Title: Chairman
-----------------------------------
TOCQUEVILLE ASSET MANAGEMENT, L.P.
By: /s/Robert Kleinschmidt
-------------------------------------
Title: President of the General Partner
-----------------------------------
<PAGE>
SCHEDULE A
Name of Series Annual Rate
- -------------- -----------
Trautman Kramer Value Plus Fund .50% of average daily net assets
DISTRIBUTION AGREEMENT
BETWEEN
THE TRAUTMAN KRAMER TRUST
AND
TRAUTMAN KRAMER & COMPANY, INC.
THIS AGREEMENT made this 20th day of November, 1997, by and between THE
TRAUTMAN KRAMER TRUST, a Delaware business trust (hereinafter referred to as the
"Trust"), on behalf of each of its series and classes listed on Schedule A, and
TRAUTMAN KRAMER & COMPANY, INC. (hereinafter referred to as the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
FIRST: The Trust hereby appoints the Distributor as its underwriter to
promote the sale and to arrange for the sale of shares of beneficial interest of
the Trust to the public through its sales representatives and to investment
dealers. In addition, the Distributor may receive payment for certain
distribution expenses pursuant to any Rule 12b-1 distribution plan adopted by
the Trust.
The Trust agrees to sell and deliver its shares, upon the terms
hereinafter set forth, as long as it has unissued and/or treasury shares
available for sale.
<PAGE>
SECOND: The Trust hereby authorizes the Distributor, subject to law and
the organizational documentation of the Trust, to accept, for the account of the
Trust, orders for the purchase of its shares, satisfactory to the Distributor,
as of the time of receipt of such orders by the dealer or as otherwise described
in the then current Prospectus of the Trust.
THIRD: The Trust will determine the net asset value of its shares of
each series once daily as of the close of trading on The New York Stock Exchange
on each day that the Exchange is open for business. It is expected that the
Exchange will be closed on Saturdays and Sundays and on New Year's Day, Reverend
Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset
value of a series is determined by dividing the market value of such series as
of the close of trading plus any cash or other assets (including dividends
receivable and accrued interest) less all liabilities (including accrued
expenses) by the number of shares of the series outstanding. Securities will be
valued according the Securities Valuation Procedures of the Trust.
FOURTH: The Distributor agrees to devote reasonable time and effort to
enlist investment dealers and otherwise promote the sale and distribution and
act as Distributor for the sale and distribution of the shares of the Trust as
such arrangements may profitably be made; but so long as it does so, nothing
herein contained shall prevent the Distributor from entering into similar
arrangements with other funds and to engage in other activities. The Trust
reserves the right to issue shares in connection with any merger or
consolidation of the Trust with any other investment company or any personal
holding company or in connection with offers of exchange exempted from Section
22(a) of the Investment Company Act of 1940.
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<PAGE>
FIFTH: Upon receipt by the Trust at its principal place of business of
a written order from the Distributor, together with delivery instructions, the
Trust shall, as promptly as practicable, cause certificates for the shares
called for in such order to be delivered or credited in such amounts and in such
names as shall be specified by the Distributor, against payment therefor in such
manner as may be acceptable to the Trust.
SIXTH: All sales literature and advertisements used by the Distributor
in connection with sales of the shares of the Trust shall be subject to the
approval of the Trust. The Trust authorizes the Distributor in connection with
the sale or arranging for the sale of its shares to give only such information
and to make only such statement or representations as are contained in the
current Prospectus and Statement of Additional Information or in sales
literature or advertisements approved by the Trust or in such financial
statements and reports as are furnished to the Distributor pursuant to this
Agreement. The Trust shall not be responsible in any way for any information,
statements or representations given or made by the Distributor or its
representatives or agents other than such information, statements and
representations contained in the then current Prospectus and Statement of
Additional Information.
SEVENTH: The Distributor as agent of the Trust is authorized, subject
to the direction of the Trust, to accept shares for redemption at their net
asset value, determined as prescribed in the then current prospectus of the
Trust.
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<PAGE>
EIGHTH: The Trust shall bear:
(A) the expenses related to the sales of the shares in connection with
such public offerings in such states as shall be selected by the Distributor and
of continuing the qualification therein until the Distributor notifies the Trust
that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
NINTH: The Distributor shall bear:
(A) the expenses of printing and distributing prospectuses and
statements of additional information (other than those prospectuses and
statements of additional information required by applicable laws and regulations
to be distributed to the shareholders by the Trust and pursuant to any Rule
12b-1 distribution plan), and any other promotional or sales literature which
are used by the Distributor or furnished by the Distributor to purchasers or
dealers in connection with the Distributor's activities pursuant to this
Agreement;
(B) expenses of any advertising used by the Distributor in connection
with such public offering; and
TENTH: The Distributor will accept orders for shares of the Trust only
to the extent of purchase orders actually received and not in excess of such
orders, and it will not avail itself of any opportunity of making a profit by
expediting or withholding orders.
ELEVENTH: The Trust shall keep the Distributor fully informed with
regard to its affairs, shall furnish the Distributor with a certified copy of
all financial statements, and a signed copy of each report, prepared by
independent public accountants, and with such reasonable number of printed
copies of each quarterly, semi-annual and annual report of the
-4-
<PAGE>
Trust as the Distributor may request, and shall cooperate fully in the efforts
of the Distributor to sell and arrange for the sale of its shares and in the
performance by the Distributor of all its duties under this Agreement.
TWELFTH: The Trust agrees to register, from time to time as necessary,
additional shares with the Securities and Exchange Commission, state and other
regulatory bodies and to pay the related filing fees therefor and to file such
amendments, reports and other documents as may be necessary in order that there
may be no untrue statement of a material fact in the Registration Statement,
Prospectus or necessary in order that there may be no omission to state a
material fact therein necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. As used
in this Agreement, the term "Registration Statement" shall mean from time to
time the Registration Statement most recently filed by the Trust with the
Securities and Exchange Commission and effective under the Securities Act of
1933, as amended, as such Registration Statement is amended at such time, and
the term "Prospectus" shall mean for the purposes of this Agreement from time to
time the form of prospectus and statement of additional information authorized
by the Trust for use by the Underwriter and by dealers.
THIRTEENTH:
(A) The Trust and the Distributor shall each comply with all applicable
provisions of the Investment Company Act of 1940, the Securities Act of 1933,
and of all other Federal and state laws, rules and regulations governing the
issuance and sale of shares of the Trust.
(B) In absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Trust
-5-
<PAGE>
agrees to indemnify the Distributor against any and all claims, demands,
liabilities and expenses which the Distributor may incur under the Securities
Act of 1933, or common law or otherwise, arising out of or based upon any
alleged untrue statement of a material fact contained in any registration
statement, statement of additional information or prospectus of the Trust, or
any omission to state a material fact therein, the omission of which makes any
statement contained therein misleading, unless such statement or omission was
made in reliance upon, and in conformity with information furnished to the Trust
in connection therewith by or on behalf of the Distributor. The Distributor
agrees to indemnify the Trust against any and all claims, demands, liabilities
and expenses which the Trust may incur arising out of or based upon any act or
deed of sales representatives of the Distributor which is outside the scope of
their authority.
(C) The Distributor agrees to indemnify the Trust against any and all
claims, demands, liabilities and expenses which the Trust may incur under the
Securities Act of 1933, or common law or otherwise, arising out of or based upon
any alleged untrue statement of a material fact contained in any registration
statement, or Prospectus of the Trust, or any omission to state a material fact
therein if such statement or omission was made in reliance upon, and in
conformity with, information furnished to the Trust in connection therewith by
or on behalf of the Distributor.
FOURTEENTH: Nothing herein contained shall require the Trust to take
any action contrary to any provision of its trust agreement or to any applicable
statute or regulation.
FIFTEENTH: This Agreement has been approved by the Trustees of the
Trust and shall become effective at the close of business on the date hereof,
and shall remain
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<PAGE>
in effect for two years from the date hereof and shall continue in force and
effect for successive annual periods thereafter, provided that such continuance
is specifically approved at least annually (a)(i) by the Board of Trustees of
the Trust, or (ii) by vote of a majority of the Trust's outstanding voting
securities (as defined in Section 2(a)(42) of the Investment Company Act), and
(b) by vote of a majority of the Trust's Trustees who are not interested persons
(as defined in Section 2(a)(19) of the Investment Company Act) of the
Distributor by votes cast in person at a meeting called for such purpose.
SIXTEENTH: A copy of the Certificate of Formation of the Trust is on
file with the Secretary of the State of Delaware, and notice is hereby given
that this instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Trust.
SEVENTEENTH:
(A) This Agreement may be terminated at any time, without the payment
of any penalty, by vote of the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Trust, or by the
Distributor, on sixty (60) days written notice to the other party. (B) This
Agreement shall automatically terminate in the event of its assignment, the term
"assignment" for this purpose having the meaning defined in Section 2(a)(4) of
the Investment Company Act.
EIGHTEENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed, postage paid, to the other party at such
address as such
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<PAGE>
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the address of the Trust shall be 615 East
Michigan Street, Milwaukee, Wisconsin 53202 and the address of the Distributor
shall be 500 Fifth Avenue, New York, New York 10110.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
ATTEST: THE TRAUTMAN KRAMER TRUST,
on behalf of each of its series listed on
Schedule A
/s/Mark Barbera By: /s/Robert Kramer
- ----------------------- -----------------------
Chief Financial Officer Chairman
ATTEST: TRAUTMAN KRAMER & COMPANY,
INC.
/s/Mark Barbera By: /s/Robert Kramer
- ----------------------- ------------------------
Chief Financial Officer Chairman
-8-
<PAGE>
SCHEDULE A
Trautman Kramer Value Plus Fund -- Class A and Class B
-9-
CUSTODIAN AGREEMENT
THIS AGREEMENT made on this SIXTEENTH day of January, 1998, between The
TRAUTMAN KRAMER TRUST, a Delaware business trust consisting of one fund: The
Trautman Kramer Value Plus Fund, (hereinafter called the ("Fund"), and FIRSTAR
TRUST COMPANY, a corporation organized under the laws of the State of Wisconsin
(hereinafter called "Custodian"),
WHEREAS, the Fund desires that its securities and cash shall be
hereafter held and administered by Custodian pursuant to the terms of this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Fund and Custodian agree as follows:
1. DEFINITIONS
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Fund by any two of the
President, a Vice President, the Secretary and the Treasurer of the Fund, or any
other persons duly authorized to sign by the Board of Trustees.
The word "Board" shall mean Board of Trustees of The TRAUTMAN KRAMER
TRUST.
2. NAMES, TITLES, AND SIGNATURES OF THE FUNDS' OFFICERS
An officer of the Fund will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board of
Trustees, together with any changes which may occur from time to time.
ADDITIONAL SERIES. THE TRAUTMAN KRAMER TRUST is authorized to issue
separate Series of shares of beneficial interest representing interests in
separate investment portfolios. The parties intend that each portfolio
established by the Trust, now or in the future, be covered by the terms and
conditions of this agreement.
<PAGE>
3. RECEIPT AND DISBURSEMENT OF MONEY
A. Custodian shall open and maintain a separate account or accounts in
the name of the Fund, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement. Custodian shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
the account of the Fund. Custodian shall make payments of cash to, or for the
account of, the Fund from such cash only:
(a) for the purchase of securities for the portfolio of the Fund upon
the delivery of such securities to Custodian, registered in the
name of the Fund or of the nominee of Custodian referred to in
Section 7 or in proper form for transfer;
(b) for the purchase or redemption of shares of beneficial interest
of the Fund upon delivery thereof to Custodian, or upon proper
instructions from The Trautman Kramer Trust;
(c) for the payment of interest, dividends, taxes, investment
adviser's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing and
custodian services and expenses for printing and postage);
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Fund held
by or to be delivered to Custodian; or
(e) for other proper corporate purposes certified by resolution of
the Board of Trustees of the Fund.
Before making any such payment, Custodian shall receive (and may rely
upon) an officers' certificate requesting such payment and stating that it is
for a purpose permitted under the terms of items (a), (b), (c), or (d) of this
Subsection A, and also, in respect of item_(e), upon receipt of an officers'
certificate specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made, provided, however, that an officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a money market instrument, or
any other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Fund issues appropriate oral or
facsimile instructions to Custodian and an appropriate officers' certificate is
received by Custodian within two business days thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for the
account of the Fund.
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<PAGE>
C. Custodian shall, upon receipt of proper instructions, make federal
fund available to the Fund as of specified times agreed upon from time to time
by the Fund and the custodian in the amount of checks received in payment for
shares of the Fund which are deposited into the Fund's account.
4. SEGREGATED ACCOUNTS
Upon receipt of proper instructions, the Custodian shall establish and
maintain a segregated account(s) for and on behalf of the portfolio, into which
account(s) may be transferred cash and/or securities.
5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
Custodian shall have sole power to release or deliver any securities of
the Fund held by it pursuant to this Agreement. Custodian agrees to transfer,
exchange or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of the Fund upon
receipt by Custodian of payment therefore;
(b) when such securities are called, redeemed or retired or otherwise
become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities alone
or other securities and cash whether pursuant to any plan of
merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise;
(e) upon conversion of such securities pursuant to their terms into
other securities;
(f) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
(h) for the purpose of redeeming in kind shares of common stock of
the Fund upon delivery thereof to Custodian; or
(i) for other proper corporate purposes.
3
<PAGE>
As to any deliveries made by Custodian pursuant to items (a), (b), (d),
(e), (f), and (g), securities or cash receivable in exchange therefore shall be
deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian shall
receive (and may rely upon) an officers' certificate requesting such transfer,
exchange or delivery, and stating that it is for a purpose permitted under the
terms of items (a), (b), (c), (d), (e), (f), (g), or (h) of this Section 5 and
also, in respect of item (i), upon receipt of an officers' certificate
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made, provided, however, that an officers' certificate need not precede
any such transfer, exchange or delivery of a money market instrument, or any
other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Fund issues appropriate oral or
facsimile instructions to Custodian and an appropriate officers' certificate is
received by Custodian within two business days thereafter.
6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall: (a) present for payment all coupons and other income
items held by it for the account of the Fund, which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of the Fund; (b) collect interest and cash dividends received, with notice to
the Fund, for the account of the Fund; (c) hold for the account of the Fund
hereunder all stock dividends, rights and similar securities issued with respect
to any securities held by it hereunder; and (d) execute, as agent on behalf of
the Fund, all necessary ownership certificates required by the Internal Revenue
Code or the Income Tax Regulations of the United States Treasury Department or
under the laws of any state now or hereafter in effect, inserting the Fund's
name on such certificates as the owner of the securities covered thereby, to the
extent it may lawfully do so.
7. REGISTRATION OF SECURITIES
Except as otherwise directed by an officers' certificate, Custodian
shall register all securities, except such as are in bearer form, in the name of
a registered nominee of Custodian as defined in the Internal Revenue Code and
any Regulations of the Treasury Department issued hereunder or in any provision
of any subsequent federal tax law exempting such transaction from liability for
stock transfer taxes, and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state. Custodian shall use its best efforts to the end that the
specific securities held by it hereunder shall be at all times identifiable in
its records.
The Fund shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities which it
may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund.
4
<PAGE>
8. VOTING AND OTHER ACTION
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall deliver, or cause to be executed and delivered, to the
Corporation all notices, proxies and proxy soliciting materials with relation to
such securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
9. TRANSFER TAX AND OTHER DISBURSEMENTS
The Fund shall pay or reimburse Custodian from time to time for any
transfer taxes payable upon transfers of securities made hereunder, and for all
other necessary and proper disbursements and expenses made or incurred by
Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any state, to exempt
from taxation any exemptable transfers and/or deliveries of any such securities.
10. CONCERNING CUSTODIAN
Custodian shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in writing, such compensation
shall be as set forth in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith upon
any certificate herein described or certified copy of any resolution of the
Board, and may rely on the genuineness of any such document which it may in good
faith believe to have been validly executed.
The Fund agrees to indemnify and hold harmless Custodian and its
nominee from all taxes, charges, expenses, assessments, claims and liabilities
(including counsel fees) incurred or assessed against it or by its nominee in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct. Custodian is authorized to charge any account of the Fund for such
items.
In the event of any advance of cash for any purpose made by Custodian resulting
from orders or instructions of the Fund, or in the event that Custodian or its
nominee shall incur or be
5
<PAGE>
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund shall be
security therefore.
Custodian agrees to indemnify and hold harmless the Fund from all charges,
expenses, assessments, and claims/liabilities (including counsel fees) incurred
or assessed against it in connection with the performance of this agreement,
except such as may arise from the Fund's own negligent action, negligent failure
to act, or willful misconduct.
11. SUBCUSTODIANS
Custodian is hereby authorized to engage another bank or trust company
as a Subcustodian for all or any part of the Fund's assets, so long as any such
bank or trust company is a bank or trust company organized under the laws of any
state of the United States, having an aggregate capital, surplus and undivided
profit, as shown by its last published report, of not less than Two Million
Dollars ($2,000,000) and provided further that, if the Custodian utilizes the
services of a Subcustodian, the Custodian shall remain fully liable and
responsible for any losses caused to the Fund by the Subcustodian as fully as if
the Custodian was directly responsible for any such losses under the terms of
the Custodian Agreement.
Notwithstanding anything contained herein, if the Fund require the
Custodian to engage specific Subcustodians for the safekeeping and/or clearing
of assets, the Fund agree to indemnify and hold harmless Custodian from all
claims, expenses and liabilities incurred or assessed against it in connection
with the use of such Subcustodian in regard to the Fund assets, except as may
arise from their own negligent action, negligent failure to act or willful
misconduct.
12. REPORTS BY CUSTODIAN
Custodian shall furnish the Fund periodically as agreed upon with a
statement summarizing all transactions and entries for the account of Fund.
Custodian shall furnish to the Fund, at the end of every month, a list of the
portfolio securities showing the aggregate cost of each issue. The books and
records of Custodian pertaining to its actions under this Agreement shall be
open to inspection and audit at reasonable times by officers of, and of auditors
employed by, the Fund.
13. TERMINATION OR ASSIGNMENT
This Agreement may be terminated by the Fund, or by Custodian, on
ninety (90) days notice, given in writing and sent by registered mail to
Custodian at P.O. Box 2054, Milwaukee, Wisconsin 53201, or to the Fund at The
TRAUTMAN KRAMER TRUST located at 500 Fifth Avenue, New York, N.Y. 10110 as the
case may be. Upon any termination of this Agreement, pending appointment of a
successor to Custodian or a vote of the shareholders of the Fund to dissolve or
to function without a custodian of its cash, securities and other property,
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<PAGE>
Custodian shall not deliver cash, securities or other property of the Fund to
the Fund, but may deliver them to a bank or trust company of its own selection,
having an aggregate capital, surplus and undivided profits, as shown by its last
published report of not less than Two Million Dollars ($2,000,000) as a
Custodian for the Fund to be held under terms similar to those of this
Agreement, provided, however, that Custodian shall not be required to make any
such delivery or payment until full payment shall have been made by the Fund of
all liabilities constituting a charge on or against the properties then held by
Custodian or on or against Custodian, and until full payment shall have been
made to Custodian of all its fees, compensation, costs and expenses, subject to
the provisions of Section 10 of this Agreement.
This Agreement may not be assigned by Custodian without the consent of
the Fund, authorized or approved by a resolution of its Board of Trustees.
14. DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
No provision of this Agreement shall be deemed to prevent the use by
Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and
regulations, and the Board of Trustees of the Fund approves by resolution the
use of such central securities clearing agency or securities depository.
15. RECORDS
To the extent that Custodian in any capacity prepares or maintains any
records required to be maintained and preserved by the Fund pursuant to the
provisions of the Investment Company Act of 1940, as amended, or the rules and
regulations promulgated thereunder, Custodian agrees to make any such records
available to the Fund upon request and to preserve such records for the periods
prescribed in Rule 31a-2 under the Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and their respective corporate seals to be affixed hereto as of the
date first above-written by their respective officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
THE TRAUTMAN KRAMER TRUST FIRSTAR TRUST COMPANY
By /s/Robert J. Kramer By /s/ Joe D. Redwine
-------------------------- -----------------------------
Print: Robert J. Kramer Print: Joe D. Redwine
-------------------------- -----------------------------
Title: Chairman Title: Senior Vice President
-------------------------- -----------------------------
Date: 1-16-98 Date: 1/22/98
-------------------------- -----------------------------
Attest: /s/Gillian Trautman Attest: /s/Gail M. Zess
-------------------------- -----------------------------
7
FUND ADMINISTRATION SERVICING AGREEMENT
This Agreement is made and entered into on this sixteenth day of January, 1998,
by and between THE TRAUTMAN KRAMER TRUST (hereinafter referred to as the "Fund")
and Firstar Trust Company, a corporation organized under the laws of the State
of Wisconsin (hereinafter referred to as "FTC").
WHEREAS, The Fund are an open-ended management investment companies which are
registered under the Investment Company Act of 1940;
WHEREAS, FTC is a trust company and, among other things, is in the business of
providing fund administration services for the benefit of its customers;
NOW, THEREFORE, the Fund and FTC do mutually promise and agree as follows:
I. Appointment of Administrator
The Fund hereby appoints FTC as Administrator of the Fund on the terms
and conditions set forth in this Agreement, and FTC hereby accepts such
appointment and agrees to perform the services and duties set forth in
this Agreement in consideration of the compensation provided for
herein.
II. Duties and Responsibilities of FTC
A. General Fund Management
1. Act as liaison among all fund service providers
2. Coordinate board communication by:
a. Assisting fund counsel in establishing meeting agendas
b. Preparing board reports based on financial and
administrative data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director and
officers liability coverage, and making the necessary
SEC filings relating thereto
3. Audits
a. Prepare appropriate schedules and assist independent
auditors
b. Provide information to SEC and facilitate audit process
c. Provide office facilities
4. Assist in overall operations of the Fund
<PAGE>
B. Compliance
1. Regulatory Compliance
a. Periodically monitor compliance with Investment Company
Act of 1940 requirements
1) Asset diversification tests
2) Total return and SEC yield calculations
3) Maintenance of books and records under Rule 31a-3
4) Code of ethics
b. Periodically monitor Fund's compliance with the
policies and investment limitations of the Fund as set
forth in its prospectus and statement of additional
information
2. Blue Sky Compliance
a. Prepare and file with the appropriate state securities
authorities any and all required compliance filings
relating to the registration of the securities of the
Fund so as to enable the Fund to make a continuous
offering of its shares
b. Monitor status and maintain registrations in each state
3. SEC Registration and Reporting
a. Assisting the Fund's counsel in updating prospectus
and statement of additional information; and in
preparing proxy statements, and Rule 24f-2 notice,
b. Annual and semiannual reports
4. IRS Compliance
a. Periodically monitor the Fund's status as a regulated
investment company under Subchapter M through review of
the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Monitor short short testing
c. Calculate required distributions (including excise tax
distributions)
2
<PAGE>
C. Financial Reporting
1. Provide financial data required by the fund's prospectus and
statement of additional information
2. Prepare financial reports for shareholders, the board, the
SEC, and independent auditors
3. Supervise the Fund's Custodian and Fund Accountants in the
maintenance of the Fund's general ledger and in the
preparation of the Fund's financial statements including
oversight of expense accruals and payments, of the
determination of net asset value of the Fund's net assets
and of the Fund's shares, and of the declaration and payment
of dividends and other distributions to shareholders
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and
state tax returns including forms 1120/8610 with any
necessary schedules
2. Prepare state income breakdowns where relevant
3. File 1099 Miscellaneous for payments to directors and other
service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate
shareholders
III. Compensation
The Fund agree to pay FTC for performance of the duties listed in this
Agreement and the fees and out-of-pocket expenses as set forth in the
attached Schedule A.
These fees may be changed from time to time, subject to mutual written
Agreement between the Fund and FTC.
The Fund agree to pay all fees and reimbursable expenses within ten
(10) business days following the mailing of the billing notice.
IV. Additional Series
In the event that The Trautman Kramer Trust a Delaware business
trust which is organized as a series fund currently offering one fund:
The Trautman Kramer Value Plus Fund, establishes one or more series of
shares with respect to which it desires to have FTC render fund
administration services, under the terms hereof, it shall so notify
FTC in writing, and if FTC agrees in writing to provide such services,
such series will be subject
3
<PAGE>
to the terms and conditions of this Agreement, and shall be maintained
and accounted for by FTC on a discrete basis. The fund currently
covered by this Agreement is: The Trautman Kramer Value Plus
Fund.
V. Performance of Service; Limitation of Liability
A. FTC shall exercise reasonable care in the performance of its
duties under this Agreement. FTC shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond FTC's control, except a loss
resulting from FTC's refusal or failure to comply with the terms of
this Agreement or from bad faith, negligence, or willful misconduct on
its part in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, the Fund shall
indemnify and hold harmless FTC from and against any and all claims,
demands, losses, expenses, and liabilities (whether with or without
basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which FTC may sustain or incur or which may be
asserted against FTC by any person arising out of any action taken or
omitted to be taken by it in performing the services hereunder (i) in
accordance with the foregoing standards, or (ii) in reliance upon any
written or oral instruction provided to FTC by any duly authorized
officer of the Fund, such duly authorized officer to be included in a
list of authorized officers furnished to FTC and as amended from time
to time in writing by resolution of the Board of Trustees of the Fund.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FTC shall take all
reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FTC's control. FTC will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of FTC. FTC
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency use
of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Fund shall be entitled
to inspect FTC's premises and operating capabilities at any time during
regular business hours of FTC, upon reasonable notice to FTC.
Regardless of the above, FTC reserves the right to
reprocess and correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the Fund may
be asked to indemnify or hold FTC harmless, the Fund shall be fully
and promptly advised of all pertinent facts concerning the situation
in question, and it is further understood that FTC will use all
reasonable care to notify the Fund promptly concerning any situation
which presents or appears likely to present the probability of such a
claim for indemnification against the Fund. The Fund shall have the
option to defend FTC against any claim which may be the subject of
this
4
<PAGE>
indemnification. In the event that the Fund so elects, it will so
notify FTC and thereupon the Fund shall take over complete defense of
the claim, and FTC shall in such situation initiate no further legal
or other expenses for which it shall seek indemnification under this
section. FTC shall in no case confess any claim or make any compromise
in any case in which the Fund will be asked to indemnify FTC except
with the Fund's prior written consent.
C. FTC shall indemnify and hold the Fund harmless from and
against any and all claims, demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which may be asserted against
the Fund by any person arising out of any action taken or omitted to
be taken by FTC as a result of FTC's refusal or failure to comply with
the terms of this Agreement, its bad faith, negligence, or willful
misconduct.
VI. Confidentiality
FTC shall handle, in confidence, all information relating to the Fund's
business which is received by FTC during the course of rendering any
service hereunder.
VII. Data Necessary to Perform Service
The Fund's or its agent, which may be FTC, shall furnish to FTC the
data necessary to perform the services described herein at times and in
such form as mutually agreed upon.
VIII. Terms of Agreement
This Agreement shall become effective as of the date hereof and,
unless sooner terminated as provided herein, shall continue
automatically in effect for successive annual periods. The Agreement
may be terminated by either party upon giving ninety (90) days prior
written notice to the other party or such shorter period as is mutually
agreed upon by the parties.
IX. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any
of FTC's duties or responsibilities hereunder is designated by the
Fund by written notice to FTC, FTC will promptly, upon such
termination and at the expense of the Fund, transfer to such successor
all relevant books, records, correspondence, and other data
established or maintained by FTC under this Agreement in a form
reasonably acceptable to the Fund (if such form differs from the form
in which FTC has maintained, the Fund shall pay any expenses
associated with transferring the data to such form), and will
cooperate in the transfer of such duties and responsibilities,
including provision for assistance from FTC's personnel in the
establishment of books, records, and other data by such successor.
5
<PAGE>
X. Choice of Law
This Agreement shall be construed in accordance with the laws of the
State of Wisconsin.
XI. Notices
Notices of any kind to be given by either party to the other party
shall be in writing and shall be duly given if mailed or delivered as
follows: Notice to FTC shall be sent to Mutual Fund Services located at
615 East Michigan Street, Milwaukee, Wisconsin 53202 and notice to the
Fund shall be sent to The Trautman Kramer Trust located at 500 Fifth
Avenue, New York, N.Y. 10110.
XII. Records
FTC shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Fund but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the Investment Company Act of 1940 as amended
(the "Investment Company Act"), and the rules thereunder. FTC agrees
that all such records prepared or maintained by FTC relating to the
services to be performed by FTC hereunder are the property of the Fund
and will be preserved, maintained, and made available with such section
and rules of the Investment Company Act and will be promptly
surrendered to the Fund on and in accordance with its request.
THE TRAUTMAN KRAMER TRUST FIRSTAR TRUST COMPANY
By: /s/ Robert J. Kramer By: /s/ Joe D. Redwine
-------------------- ----------------------
Print: Robert J. Kramer Print: Joe D. Redwine
-------------------- ----------------------
Title: Chairman Title: Senior Vice President
-------------------- ----------------------
Date: 1-16-98 Date: 1/22/98
-------------------- ----------------------
Attest:/s/ Gillian Trautman Attest: /s/ Gail M. Zess
-------------------- ----------------------
6
NSCC FUND/SERV NETWORKING SERVICE AGREEMENT
This Agreement between Firstar Trust Company (FTC) and The Trautman Kramer
Trust a Delaware business trust, (hereinafter called the "Fund") is entered
into on this sixteenth day of January, 1998.
WHEREAS, the Fund provides investment opportunities to prospective shareholders
through a family of open end mutual funds; and
WHEREAS, FTC provides transfer agency services to mutual funds;
NOW, THEREFORE, the parties agree as follows:
DUTIES AND RESPONSIBILITIES OF FTC
1. Implement all necessary programming with FTC's transfer agency
system and NSCC's (National Securities Clearing Corporation) interface that
serves as clearinghouse for mutual fund trades. Typically, programming time
ranges six to eight weeks. See funds listed in the attached Schedule A which may
be modified from time to time.
2. Support all four levels of NSCC Fund/Serv networking functionality
in order to receive and transmit transaction information to the appropriate
third party.
DUTIES AND RESPONSIBILITIES OF THE FUND
1. Supply FTC with MRO and Alpha code information which is required to
establish a system connection with NSCC.
COMPENSATION
The Fund agrees to compensate FTC for the services performed under this
agreement in accordance with the attached Schedule B; the Fund agrees to pay all
invoices within ten days of receipt.
<PAGE>
PROPRIETARY AND CONFIDENTIAL INFORMATION
FTC agrees on behalf of itself and its directions, officers, and employees to
treat confidentiality and as proprietary information of the Fund all records and
other information relative to the Fund and prior, present, or potential
shareholders of the Fund (and clients of said shareholders), and not to use such
records and information for any purpose other than performance of its
responsibilities and duties thereunder, except after prior notification to and
approval in writing by the Fund, which approval shall not be unreasonably
withheld and may not be withheld where FTC may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Fund.
THE TRAUTMAN KRAMER TRUST FIRSTAR TRUST COMPANY
By: /s/ Robert J. Kramer By: /s/ Joe D. Redwine
-------------------- ------------------
Print: Robert J. Kramer Print: Joe D. Redwine
-------------------- ------------------
Title: Chairman Title: Senior Vice President
-------------------- ------------------
Date: 1-16-98 Date: 1/22/98
-------------------- ------------------
Attest:/s/ Gillian Trautman Attest: /s/ Gail M. Zess
-------------------- ------------------
<PAGE>
SCHEDULE A
Trautman Kramer Value Plus Fund
<PAGE>
SCHEDULE B MUTUAL FUND SERVICES
- --------------------------------------------------------------------------------
NSCC CHARGES
FUND/SERV NETWORKING FEES
THE TRAUTMAN KRAMER TRUST
Firstar Setup Charges (pass through costs):
o Setup Fee (included in Transfer Agency Minimum) o Fund/SERV &
Networking (included in Transfer Agency) Minimum
o ACATS $0
o Exchanges $0
o Commissions $5,000 (optional)
Monthly Billing Charges NSCC-NY (pass through costs):
o Fund/SERV base fee (per month) $ 50.00
o Networking base fee (per month) $250.00
o CPU Access Fee (per month) $ 40.00
-------
MINIMUM MONTHLY FEE (W/O TRANSACTIONS) $340.00
Fund/SERV Transaction Charges (pass through costs):
o Per Transaction Charge for same day trades $0.15
o Per Transaction Charge for next day trades $0.10
o Fund/SERV Transaction Charge (per item) $0.35
o Networking Transaction Charge (per item) $0.025 for monthly dividend
funds
o $0.015 for other dividend funds
- --------------------------------------------------------------------------------
FIRSTAR
-------
FUND ACCOUNTING SERVICING AGREEMENT
This contract between THE TRAUTMAN KRAMER TRUST, a Delaware Business Trust
consisting of one fund, The Trautman Kramer Value Plus Fund hereinafter called
the "Fund," and Firstar Trust Company, a Wisconsin corporation, hereinafter
called "FTC," is entered into on this sixteenth day of January, 1998.
WHEREAS, The Trautman Kramer Trust, is an open-ended management
investment company registered under the Investment Company Act of 1940; and
WHEREAS, Firstar Trust Company ("FTC") is in the business of providing,
among other things, mutual fund accounting services to investment companies;
NOW, THEREFORE, the parties do mutually promise and agree as follows:
1. SERVICES. FTC agrees to provide the following mutual fund
accounting services to the Fund:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date +1 basis
using security trade information communicated from the investment
manager on a timely basis.
(2) For each valuation date, obtain prices from a pricing
source approved by the Board of Trustees and apply those prices
to the portfolio positions. For those securities where market
quotations are not readily available, the Board of Trustees shall
approve, in good faith, the method for determining the fair value
for such securities.
(3) Identify interest and dividend accrual balances as of
each valuation date and calculate gross earnings on investments
for the accounting period.
(4) Determine gain/loss on security sales and identify
them as to short-short, short- or long-term status; account for
periodic distributions of gains or losses to shareholders and
maintain undistributed gain or loss balances as of each valuation
date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Fund as to methodology, rate or dollar
amount.
(2) Record payments for Fund expenses upon receipt of
written authorization from the Fund.
<PAGE>
(3) Account for fund expenditures and maintain expense
accrual balances at the level of accounting detail, as agreed
upon by FTC and the Fund.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other Fund share activity
as reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the Fund.
(3) Determine net investment income (earnings) for the
Fund as of each valuation date. Account for periodic
distributions of earnings to shareholders and maintain
undistributed net investment income balances as of each valuation
date.
(4) Maintain a general ledger for the Fund in the form as
agreed upon.
(5) For each day the Fund is open as defined in the
prospectus, determine the net asset value according to the
accounting policies and procedures set forth in the prospectus.
(6) Calculate per share net asset value, per share net
earnings, and other per share amounts reflective of fund
operation at such time as required by the nature and
characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share
price for each valuation date to parties as agreed upon from time
to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment
portfolio of the Fund to support the tax reporting required for
IRS-defined regulated investment companies.
(2) Maintain tax lot detail for the investment portfolios.
(3) Calculate taxable gain/loss on security sales using
the tax lot relief method designated by the Fund.
2
<PAGE>
(4) Provide the necessary financial information to support
the taxable components of income and capital gains distributions
to the transfer agent to support tax reporting to the
shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support
financial statement preparation by making the fund accounting
records available to The Trautman Kramer Trust, the Securities
and Exchange Commission, and the outside auditors.
(2) Maintain accounting records according to the
Investment Company Act of 1940 and regulations provided
thereunder.
2. PRICING OF SECURITIES. For each valuation date, obtain prices from a
pricing source selected by FTC but approved by the Fund's Board and apply those
prices to the portfolios positions. For those securities where market quotations
are not readily available, the Fund's Board shall approve, in good faith, the
method for determining the fair value for such securities.
If the Fund desires to provide a price which varies from the
pricing source, the Fund shall promptly notify and supply FTC with the valuation
of any such security on each valuation date. All pricing changes made by the
Fund will be in writing and must specifically identify the securities to be
changed by CUSIP, name of security, new price or rate to be applied, and, if
applicable, the time period for which the new prices are effective.
3. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by the Board
of Trustees that affects accounting practices and procedures under this
agreement shall be effective upon written receipt and acceptance by the FTC.
4. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC. FTC reserves the right
to make changes from time to time, as it deems advisable, relating to its
services, systems, programs, rules, operating schedules and equipment, so long
as such changes do not adversely affect the service provided to the Fund under
this Agreement.
5. COMPENSATION. FTC shall be compensated for providing the services set
forth in this Agreement in accordance with the Fee Schedule attached hereto as
Exhibit A and as mutually agreed upon and amended from time to time.
6. PERFORMANCE OF SERVICE.
A. FTC shall exercise reasonable care in the performance of
its duties under this Agreement. FTC shall not be liable for any
error of judgment or mistake of law or for any loss suffered by
the Fund in connection with matters to which this Agreement
relates, including losses resulting from mechanical breakdowns or
the failure of communication or power supplies beyond FTC's
control, except a loss resulting from FTC's refusal or failure to
comply with the terms of this Agreement
3
<PAGE>
or from bad faith, negligence, or willful misconduct on its part
in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, the Fund
shall indemnify and hold harmless FTC from and against any and
all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which FTC may sustain or
incur or which may be asserted against FTC by any person arising
out of any action taken or omitted to be taken by it in
performing the services hereunder (i) in accordance with the
foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to FTC by any duly authorized officer of the
Fund, such duly authorized officer to be included in a list of
authorized officers furnished to FTC and as amended from time to
time in writing by resolution of the Board of Trustees of the
Fund.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FTC shall
take all reasonable steps to minimize service interruptions for
any period that such interruption continues beyond FTC's control.
FTC will make every reasonable effort to restore any lost or
damaged data and correct any errors resulting from such a
breakdown at the expense of FTC. FTC agrees that it shall, at all
times, have reasonable contingency plans with appropriate
parties, making reasonable provision for emergency use of
electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Fund shall be
entitled to inspect FTC's premises and operating capabilities at
any time during regular business hours of FTC, upon reasonable
notice to FTC.
Regardless of the above, FTC reserves the right to
reprocess and correct administrative errors at its own expense.
B. In order that the indemnification provisions contained
in this section shall apply, it is understood that if in any case
the Fund may be asked to indemnify or hold FTC harmless, the Fund
shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further
understood that FTC will use all reasonable care to notify the
Fund promptly concerning any situation which presents or appears
likely to present the probability of such a claim for
indemnification against the Fund. The Fund shall have the option
to defend FTC against any claim which may be the subject of this
indemnification. In the event that the Fund so elects, it will so
notify FTC and thereupon the Fund shall take over complete
defense of the claim, and FTC shall in such situation initiate no
further legal or other expenses for which it shall seek
indemnification under this section. FTC shall in no case confess
any claim or make any compromise in any case in which the Fund
will be asked to indemnify FTC except with the Fund's prior
written consent.
C. FTC shall indemnify and hold the Fund harmless from and
against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any
and every nature (including reasonable attorneys' fees)
4
<PAGE>
which may be asserted against the Fund by any person arising out
of any action taken or omitted to be taken by FTC as a result of
FTC's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
7. RECORDS. FTC shall keep records relating to the services to be
performed hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Fund but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
The Investment Company Act of 1940 as amended (the "Investment Company Act"),
and the rules thereunder. FTC agrees that all such records prepared or
maintained by FTC relating to the services to be performed by FTC hereunder are
the property of the Fund and will be preserved, maintained, and made available
with such section and rules of the Investment Company Act and will be promptly
surrendered to the Fund on and in accordance with its request.
8. CONFIDENTIALITY. FTC shall handle in confidence all information
relating to the Fund's business, which is received by FTC during the course of
rendering any service hereunder.
9. DATA NECESSARY TO PERFORM SERVICES. The Fund or its agent, which may
be FTC, shall furnish to FTC the data necessary to perform the services
described herein at times and in such form as mutually agreed upon.
10. NOTIFICATION OF ERROR. The Fund will notify FTC of any balancing or
control error caused by FTC within three (3) business days after receipt of any
reports rendered by FTC to the Fund, or within three (3) business days after
discovery of any error or omission not covered in the balancing or control
procedure, or within three (3) business days of receiving notice from any
shareholder.
11. ADDITIONAL SERIES. In the event that The Trautman Kramer Trust
establishes one or more series of shares with respect to which it desires to
have FTC render accounting services, under the terms hereof, it shall so notify
FTC in writing, and if FTC agrees in writing to provide such services, such
series will be subject to the terms and conditions of this Agreement, and shall
be maintained and accounted for by FTC on a discrete basis. The portfolio
currently covered by this Agreement is: The Trautman Kramer Value Plus Fund.
12. TERM OF AGREEMENT. This Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties. However, this
Agreement may be replaced or modified by a subsequent agreement between the
parties.
13. DUTIES IN THE EVENT OF TERMINATION. In the event that in connection
with termination a Successor to any of FTC's duties or responsibilities
hereunder is designated by The Trautman Kramer Trust by written notice to FTC,
FTC will promptly, upon such termination and at the expense of The Trautman
Kramer Trust, transfer to such Successor all relevant books, records,
correspondence and other data established or maintained by FTC under this
Agreement in a form reasonably acceptable to The Trautman Kramer Trust (if such
form differs from the
5
<PAGE>
form in which FTC has maintained the same, The Trautman Kramer Trust shall pay
any expenses associated with transferring the same to such form), and will
cooperate in the transfer of such duties and responsibilities, including
provision for assistance from FTC's personnel in the establishment of books,
records and other data by such successor.
14. NOTICES. Notices of any kind to be given by either party to the
other party shall be in writing and shall be duly given if mailed or delivered
as follows: Notice to FTC shall be sent to Mutual Fund Services located at 615
East Michigan Street, Milwaukee, Wisconsin 53202 and notice to the Fund shall be
sent to The Trautman Kramer Trust located at 500 Fifth Avenue, New York, N.Y.
10110.
15. CHOICE OF LAW. This Agreement shall be construed in accordance with
the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
THE TRAUTMAN KRAMER TRUST FIRSTAR TRUST COMPANY
By /s/Robert J. Kramer By /s/ Joe D. Redwine
-------------------------- -----------------------------
Print: Robert J. Kramer Print: Joe D. Redwine
-------------------------- -----------------------------
Title: Chairman Title: Senior Vice President
-------------------------- -----------------------------
Date: 1-16-98 Date: 1/22/98
-------------------------- -----------------------------
Attest: /s/Gillian Trautman Attest: /s/Gail M. Zess
-------------------------- -----------------------------
6
TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into on this sixteenthth day of
January, 1996, by and between THE TRAUTMAN KRAMER TRUST a Delaware business
trust consisting of one fund: The Trautman Kramer Value Plus Fund (hereinafter
referred to as the "Fund") and Firstar Trust Company, a corporation organized
under the laws of the State of Wisconsin (hereinafter referred to as the
"Agent").
WHEREAS, the Fund are open-ended management investment companies which
are registered under the Investment Company Act of 1940; and
WHEREAS, the Agent is a trust company and, among other things, is in the
business of administering transfer and dividend disbursing agent functions for
the benefit of its customers;
NOW, THEREFORE, the Fund and the Agent do mutually promise and agree as
follows:
1. TERMS OF APPOINTMENT; DUTIES OF THE AGENT
Subject to the terms and conditions set forth in this Agreement, the Fund
hereby employ and appoint the Agent to act as transfer agent and dividend
disbursing agent.
The Agent shall perform all of the customary services of a transfer agent
and dividend disbursing agent, and as relevant, agent in connection with
accumulation, open account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), including but not
limited to:
A. Receive orders for the purchase of shares;
B. Process purchase orders and issue the appropriate number of
certificated or uncertificated shares with such uncertificated shares
being held in the appropriate shareholder account;
C. Process redemption requests received in good order;
D. Pay monies;
E. Process transfers of shares in accordance with the shareowner's
instructions;
F. Process exchanges between funds within the same family of fund;
G. Issue and/or cancel certificates as instructed; replace lost, stolen
or destroyed certificates upon receipt of satisfactory indemnification
or surety bond;
H. Prepare and transmit payments for dividends and distributions declared
by the Fund;
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (i.e., systematic withdrawal, automatic
investment, dividend reinvestment, etc.);
1
<PAGE>
J. Record the issuance of shares of the Fund and maintain, pursuant to
Securities Exchange Act of 1934 Rule 17ad-10(e), a record of the total
number of shares of the Fund which are authorized, issued and
outstanding;
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies;
L. Mail shareholder reports and prospectuses to current shareholders;
M. Prepare and file U.S. Treasury Department forms 1099 and other
appropriate information returns required with respect to dividends and
distributions for all shareholders;
N. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all
purchases, redemptions and other confirmable transactions as agreed
upon with the Fund; and
O. Provide a Blue Sky System which will enable the Fund to monitor the
total number of shares sold in each state. In addition, the Fund shall
identify to the Agent in writing those transactions and assets to be
treated as exempt from the Blue Sky reporting to the Fund for each
state. The responsibility of the Agent for the Fund's Blue Sky state
registration status is solely limited to the initial compliance by the
Fund and the reporting of such transactions to the Fund.
2. COMPENSATION
The Fund agree to pay the Agent for performance of the duties listed in
this Agreement; the fees and out-of-pocket expenses include, but are not limited
to the following: printing, postage, forms, stationery, record retention,
mailing, insertion, programming, labels, shareholder lists and proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Fund and the Agent.
The Fund agree to pay all fees and reimbursable expenses within ten (10)
business days following the mailing of the billing notice.
3. REPRESENTATIONS OF AGENT
The Agent represents and warrants to the Fund that:
A. It is a trust company duly organized, existing and in good standing
under the laws of Wisconsin;
B. It is a registered transfer agent under the Securities Exchange Act of
1934 as amended.
C. It is duly qualified to carry on its business in the state of
Wisconsin;
D. It is empowered under applicable laws and by its charter and bylaws to
enter into and perform this Agreement;
2
<PAGE>
E. All requisite corporate proceedings have been taken to authorize it to
enter and perform this Agreement;
F. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement; and
G. It will comply with all applicable requirements of the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended,
the Investment Company Act of 1940, as amended, and any laws, rules,
and regulations of governmental authorities having jurisdiction.
4. REPRESENTATIONS OF THE FUND
The Fund represent and warrant to the Agent that:
A. The Fund are open-ended diversified investment companies under the
Investment Company Act of 1940;
B. The Fund are a Delaware business trust organized, existing, and in
good standing under the laws of Delaware;
C. The Fund are empowered under applicable laws and by their Declaration
of Trust and bylaws to enter into and perform this Agreement;
D. All necessary proceedings required by the Declaration of Trust have
been taken to authorize them to enter into and perform this Agreement;
E. The Fund will comply with all applicable requirements of the
Securities Act of 1933, as amended, Securities Exchange Act of 1934,
as amended, the Investment Company Act of 1940, as amended, and any
laws, rules and regulations of governmental authorities having
jurisdiction; and
F. A registration statement under the Securities Act of 1933 is currently
effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect
to all shares of the Fund being offered for sale.
5. COVENANTS OF THE FUND AND AGENT
The Fund shall furnish the Agent a certified copy of the resolution of the
Board of Trustees of the Fund authorizing the appointment of the Agent and the
execution of this Agreement. The Fund shall provide to the Agent a copy of the
Declaration of Trust, bylaws of the Fund, and all amendments.
3
<PAGE>
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the rules thereunder, the Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such section and rules and will be surrendered
to the Fund on and in accordance with their request.
6. INDEMNIFICATION; REMEDIES UPON BREACH
The Agent shall exercise reasonable care in the performance of its duties
under this Agreement. The Agent shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with matters
to which this Agreement relates, including losses resulting from mechanical
breakdowns or the failure of communication or power supplies beyond the Agent's
control, except a loss resulting from the Agent's refusal or failure to comply
with the terms of this Agreement or from bad faith, negligence, or willful
misconduct on its part in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, the Fund shall indemnify
and hold harmless the Agent from and against any and all claims, demands,
losses, expenses, and liabilities (whether with or without basis in fact or law)
of any and every nature (including reasonable attorneys' fees) which the Agent
may sustain or incur or which may be asserted against the Agent by any person
arising out of any action taken or omitted to be taken by it in performing the
services hereunder (i) in accordance with the foregoing standards, or (ii) in
reliance upon any written or oral instruction provided to the Agent by any duly
authorized officer of the Fund, such duly authorized officer to be included in a
list of authorized officers furnished to the Agent and as amended from time to
time in writing by resolution of the Board of Trustees of the Fund.
Further, the Fund will indemnify and hold the Agent harmless against any
and all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action, or suit as
a result of the negligence of the Fund or the principal underwriter (unless
contributed to by the Agent's breach of this Agreement or other Agreements
between the Fund and the Agent, or the Agent's own negligence or bad faith); or
as a result of the Agent acting upon telephone instructions relating to the
exchange or redemption of shares received by the Agent and reasonably believed
by the Agent under a standard of care customarily used in the industry to have
originated from the record owner of the subject shares; or as a result of acting
in reliance upon any genuine instrument or stock certificate signed,
countersigned, or executed by any person or persons authorized to sign,
countersign, or execute the same.
In the event of a mechanical breakdown or failure of communication or power
supplies beyond its control, the Agent shall take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond the Agent's control. The Agent will make every reasonable effort to
restore any lost or damaged data and correct any errors resulting from such a
breakdown at the expense of the Agent. The Agent agrees that it shall, at all
times, have reasonable contingency plans with appropriate parties, making
reasonable provision for emergency use of electrical data processing equipment
to the extent appropriate equipment is available. Representatives of the Fund
shall be entitled to inspect the Agent's premises and operating capabilities at
any time during regular business hours of the Agent, upon reasonable notice to
the Agent.
Regardless of the above, the Agent reserves the right to reprocess and
correct administrative errors at its own expense.
4
<PAGE>
In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the Fund may be asked to
indemnify or hold the Agent harmless, the Fund shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that the Agent will use all reasonable care to notify the
Fund promptly concerning any situation which presents or appears likely to
present the probability of such a claim for indemnification against the Fund.
The Fund shall have the option to defend the Agent against any claim which may
be the subject of this indemnification. In the event that the Fund so elect, the
Fund will so notify the Agent and thereupon the Fund shall take over complete
defense of the claim, and the Agent shall in such situation initiate no further
legal or other expenses for which it shall seek indemnification under this
section. The Agent shall in no case confess any claim or make any compromise in
any case in which the Fund will be asked to indemnify the Agent except with the
Fund' prior written consent.
The Agent shall indemnify and hold the Fund harmless from and against any
and all claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which may be asserted against the Fund by any person arising
out of any action taken or omitted to be taken by the Agent as a result of the
Agent's refusal or failure to comply with the terms of this Agreement, its bad
faith, negligence, or willful misconduct.
7. CONFIDENTIALITY
The Agent agrees on behalf of itself and its employees to treat
confidentially all records and other information relative to the Fund and their
shareholders and shall not disclose to any other party, except after prior
notification to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld where the Agent may be exposed to
civil or criminal contempt proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities.
Additional Series. The Trautman Kramer Trust is authorized to issue
separate Series of shares of beneficial interest representing interests in
separate investment portfolios. The parties intend that each portfolio
established by the Trust, now or in the future, be covered by the terms and
conditions of this agreement.
8. RECORDS
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Fund but not inconsistent with the rules and regulations
of appropriate government authorities, in particular, Section 31 of The
Investment Company Act of 1940 as amended (the "Investment Company Act"), and
the rules thereunder. The Agent agrees that all such records prepared or
maintained by The Agent relating to the services to be performed by The Agent
hereunder are the property of the Fund and will be preserved, maintained, and
made available with such section and rules of the Investment Company Act and
will be promptly surrendered to the Fund on and in accordance with its request.
9. WISCONSIN LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the state of Wisconsin.
5
<PAGE>
10. AMENDMENT, ASSIGNMENT, TERMINATION AND NOTICE
A. This Agreement may be amended by the mutual written consent of the
parties.
B. This Agreement may be terminated upon ninety (90) day's written notice
given by one party to the other.
C. This Agreement and any right or obligation hereunder may not be
assigned by either party without the signed, written consent of the
other party.
D. Any notice required to be given by the parties to each other under the
terms of this Agreement shall be in writing, addressed and delivered,
or mailed to the principal place of business of the other party. If to
the agent, such notice should be sent to Firstar Trust Company/Mutual
Fund Services located at 615 East Michigan Street, Milwaukee,
Wisconsin 53202. If to the Fund, such notice should be sent to: The
Trautman Kramer Trust located at 500 Fifth Avenue, New York, N.Y.
10110.
E. In the event that the Fund give to the Agent their written intention
to terminate and appoint a successor transfer agent, the Agent agrees
to cooperate in the transfer of its duties and responsibilities to the
successor, including any and all relevant books, records and other
data established or maintained by the Agent under this Agreement.
F. Should the Fund exercise their right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
paid by the Fund.
THE TRAUTMAN KRAMER TRUST FIRSTAR TRUST COMPANY
By: /s/Robert J. Kramer By: /s/Joe D. Redwine
----------------------------- -----------------------------
Print: Rorbert J. Kramer Print: Joe D. Redwine
----------------------------- -----------------------------
Title: Chairman Title: Senior Vice President
----------------------------- -----------------------------
Date: 1-16-98 Date: 1/22/98
----------------------------- -----------------------------
Attest: /s/Gillian Trautman Attest: /s/Gail M. Zess
----------------------------- -----------------------------
Assistant Secretary
6
FULFILLMENT SERVICING AGREEMENT
This Agreement between Firstar Trust Company (FTC) and The TRAUTMAN KRAMER
TRUST, a Delaware business trust consisting of one fund: The Trautman Kramer
Value Plus Fund, (hereinafter called the "Fund") is entered into on this
sixteenth day of January, 1998.
WHEREAS, the Fund provides investment opportunities to prospective shareholders
through a open end mutual fund; and
WHEREAS, FTC provides fulfillment services to mutual funds;
NOW THEREFORE, the parties agree as follows:
DUTIES AND RESPONSIBILITIES OF FTC
1. Answer all prospective shareholder calls concerning any of The
Trautman Kramer Value Plus Fund listed in the attached Schedule A
which may be modified from time to time.
2. Send all available fund(s) materials requested by the prospect which
may include but not limited to, prospectus, financial statements, new
account forms, fact sheets, and sales literature or other materials at
the direction of the Fund within 24 hours from time of call.
3. Receive and update all fund fulfillment literature so that most
current information is sent and quoted.
4. Provide 24 hour answering service to record prospect calls made after
hours (8 p.m. to 9 a.m. NYT).
5. Maintain and store fund fulfillment inventory.
6. Send periodic fulfillment reports to the fund as agreed upon between
the parties.
DUTIES AND RESPONSIBILITIES OF THE FUND
1. Provide fund fulfillment literature updates to FTC as necessary.
2. Supply FTC with sufficient inventory of fulfillment materials as
requested from time to time by FTC
3. Provide FTC with any sundry information about the Fund in order to
answer prospect questions.
<PAGE>
COMPENSATION
Fund agrees to compensate FTC for the services performed under this agreement in
accordance with the attached Schedule B; the Fund agrees to pay all invoices
within ten days of receipt.
PROPRIETARY AND CONFIDENTIAL INFORMATION
FTC agrees on behalf of itself and its directors, officers, and employees to
treat confidentiality and as proprietary information of the Fund all records and
other information relative to the Fund and prior, present, or potential
shareholders of the Fund (and clients of said shareholders), and not to use such
records and information for any purpose other than performance of its
responsibilities and duties thereunder, except after prior notification to and
approval in writing by the Fund, which approval shall not be unreasonably
withheld and may not be withheld where FTC may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Fund.
TERMINATION
This agreement may be terminated by either party upon 30 days written notice.
Dated this sixteenth day of January, 1998.
THE TRAUTMAN KRAMER TRUST FIRSTAR TRUST COMPANY
By: /s/ Robert J. Kramer By: /s/ Joe D. Redwine
-------------------- -----------------------
Print: Robert J. Kramer Print: Joe D. Redwine
-------------------- -----------------------
Title: Chairman Title: Senior Vice President
-------------------- -----------------------
Date: 1-16-98 Date: 1/22/98
-------------------- -----------------------
Attest: /s/ Gillian Trautman Attest: /s/ Gail M. Zess
-------------------- -----------------------
THE TRAUTMAN KRAMER TRUST
SHAREHOLDER SERVICING PLAN - CLASS A
This Shareholder Servicing Plan (the "Plan") is adopted by The Trautman
Kramer Trust, a business trust organized under the laws of Delaware (the
"Company"), on behalf of the Class A shares of each of its Funds (individually,
a "Fund," and collectively, the "Funds") as set forth in Schedule I, as amended
from time to time, subject to the following terms and conditions:
SECTION 1. ANNUAL FEES.
Shareholder Services Fee. The Class A shares of a Fund may pay to the
distributor of its shares (the "Distributor") or financial institutions that
provide certain services to the Class A shares of the Fund, a shareholder
services fee under the Plan at the annual rate of 0.25% of the average daily net
assets of such Class A shares of the Fund (the "Services Fee").
Adjustment to Fees. Any Fund may pay a Services Fee to the Distributor
or financial institution at a lesser rate than the fees specified in Section 1
hereof as agreed upon by the Board of Trustees and each Distributor or financial
institution and approved in the manner specified in Section 3 of this Plan.
Payment of Fees. The Services Fees will be calculated daily and paid
monthly by the Class A shares of the Fund at the annual rates indicated above.
SECTION 2. EXPENSES COVERED BY THE PLAN.
Services Fees may be used by the Distributor or financial institution
for payments to financial institutions and persons who provide administrative
and support services to their customers who may from time to time beneficially
own Class A shares, which may include: (i) establishing and maintaining accounts
and records relating to shareholders; (ii) processing dividend and distribution
payments from the Fund on behalf of shareholders; (iii) providing information
periodically to shareholders showing their positions in shares and integrating
such statements with those of other transactions and balances in shareholders'
other accounts serviced by such financial institution; (iv) arranging for bank
wires; (v) responding to shareholder inquiries relating to the services
performed; (vi) responding to routine inquiries from shareholders concerning
their investments; (vii) providing subaccounting with respect to shares
beneficially owned by shareholders, or the information to the Fund necessary for
subaccounting; (viii) if required by law, forwarding shareholder communications
from the Fund (such as proxies, shareholder reports, annual and semi-annual
financial statements and dividend, distribution and tax notices) to
shareholders; (ix) assisting in processing purchase, exchange and redemption
requests from shareholders and in placing such orders with service contractors;
(x) assisting shareholders in changing dividend options, account designations
and addresses; (xi) providing shareholders with a service that invests the
assets of their accounts in shares pursuant to specific or pre-authorized
instructions; and (xii) providing such other similar services as the Fund may
reasonably request to the extent the Distributor or financial institution is
permitted to do so under applicable statutes, rules and regulations.
<PAGE>
SECTION 3. APPROVAL OF TRUSTEES.
Neither the Plan nor any related agreements will take effect until
approved by a majority of both (a) the full Board of Trustees of the Company and
(b) those Trustees who are not interested persons of the Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related to it (the "Qualified Trustees"), cast in person at a meeting
called for the purpose of voting on the Plan and the related agreements.
SECTION 4. CONTINUANCE OF THE PLAN.
The Plan will continue in effect until two years from the date of
effectiveness as it pertains to the Class A shares of a Fund, and thereafter for
successive twelve-month periods; provided, however, that such continuance is
specifically approved at least annually by the Trustees of the Fund and by a
majority of the Qualified Trustees.
SECTION 5. TERMINATION.
The Plan may be terminated at any time with respect to the Class A
shares of a Fund (i) by the Fund without the payment of any penalty, by the vote
of a majority of the outstanding voting securities of the Class A shares of the
Fund or (ii) by a vote of the Qualified Trustees. The Plan may remain in effect
with respect to the Class A shares of the Fund even if the Plan has been
terminated in accordance with this Section 5 with respect to any other Fund.
SECTION 6. AMENDMENTS.
No material amendment to the Plan may be made unless approved by the
Company's Board of Trustees in the manner described in Section 3 above.
SECTION 7. LIMIT OF LIABILITY.
The obligations of the Funds under this Plan, if any, shall not be
binding upon the Trustees individually or upon holders of shares of the Funds
individually but shall be binding only upon the assets and property of the
Funds.
SECTION 8. MEANINGS OF CERTAIN TERMS.
As used in the Plan, the terms "interested person" and "majority of the
outstanding voting securities" will be deemed to have the same meaning that
those terms have under the Investment Company Act of 1940, as amended, by the
Securities and Exchange Commission.
Approved: November 20, 1997
2
<PAGE>
SCHEDULE I
This Shareholder Servicing Plan shall be adopted with respect to the
Class A shares of the following Funds of The Trautman Kramer Trust:
Fund
- ----
Trautman Kramer Value Plus Fund
<PAGE>
SHAREHOLDER SERVICING AGREEMENT - CLASS A
THE TRAUTMAN KRAMER TRUST
C/O FIRSTAR TRUST COMPANY
615 EAST MICHIGAN STREET
MILWAUKEE, WISCONSIN 53202
To: _______________
We (the "Trust") wish to enter into this Servicing Agreement with you
concerning the provision of support services to your client ("Clients") who may
from time to time beneficially own Class A shares ("Shares") of the Funds (the
"Funds") offered by us.
The terms and conditions of this Servicing Agreement are as follows:
SECTION 1. You agree to provide the following support services to
Clients who may from time to time beneficially own Shares:1 (i) establishing and
maintaining accounts and records relating to Clients that invest in Shares; (ii)
processing dividend and distribution payments from us on behalf of Clients;
(iii) providing information periodically to Clients showing their positions in
Shares and integrating such statements with those of other transactions and
balances in Clients' other accounts serviced by you; (iv) arranging for bank
wires; (v) responding to Client inquiries relating to the services performed by
you; (vi) responding to routine inquiries from Clients concerning their
investments in Shares; (vii) providing subaccounting with respect to Shares
beneficially owned by Clients, or the information to us necessary for
subaccounting; (viii) if required by law, forwarding shareholder communications
from us (such as proxies, shareholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices) to Clients; (ix)
assisting in processing purchase, exchange and redemption requests from Clients
and in placing such orders with our service contractors; (x) assisting Clients
in changing dividend options, account designations and addresses; (xi) providing
Clients with a service that invests the assets of their accounts in Shares
pursuant to specific or pre-authorized instructions; and (xii) providing such
other similar services as we may reasonably request to the extent you are
permitted to do so under applicable statutes, rules and regulations.
SECTION 2. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by you) as
may be reasonably necessary or beneficial in order to provide the aforementioned
services and assistance to Clients.
SECTION 3. Neither you nor any of your officers, employees or agents
are authorized to make any representations concerning us or the Shares except
those contained in our then current prospectuses and statement of additional
information, copies of which will be
- --------
1 Series may be modified or omitted in the particular case and items renumbered.
<PAGE>
supplied by us to you, or in such supplemental literature or advertising as may
be authorized by us in writing.
SECTION 4. For all purposes of this Agreement you will be deemed to be
an independent contractor, and will have no authority to act as agent for us in
any matter or in any respect. By your written acceptance of this Agreement, you
agree to and do release, indemnify and hold us harmless from and against any and
all direct or indirect liabilities or losses resulting from requests,
directions, actions, or inactions of or by you or your officers, employees or
agents regarding your responsibilities hereunder or the purchase, redemption,
transfer or registration of Shares (or orders relating to the same) by or on
behalf of Clients. You and your employees will, upon request, be available
during normal business hours to consult with us or our designees concerning the
performance of your responsibilities under this Agreement.
SECTION 5. In consideration of the services and facilities provided by
you hereunder, we will pay to you, and you will accept as full payment therefor,
a fee at the annual rate of __ one-hundredths of one percent (.__%) of the
average daily net asset value of the Shares beneficially owned by your Clients
for whom you are the dealer of record or holder of record or with whom you have
a servicing relationship (the "Clients' Shares"), which fee will be computed
daily (on the basis of 360-day year) and payable monthly. For purposes of
determining the fees payable under this Section 5, the average daily net asset
value of the Clients' Shares will be computed in the manner specified in our
Registration Statement (as the same is in effect from time to time) in
connection with the computation of the net asset value of Shares for purposes of
purchases and redemptions. By your written acceptance of this Agreement, you
agree to and do waive such portion of any fee payable to you hereunder to the
extent necessary to assure that such fee and other expenses required to be
accrued by us on any day with respect to the Clients' Shares in any Fund that
declares its net investment income as a dividend to shareholders on a daily
basis does not exceed the income to be accrued by us to such Shares on that day.
The fee rate stated above may be prospectively increased or decreased by us, in
our sole discretion, at any time upon notice to you. Further, we may, in our
discretion and without notice, suspend or withdraw the sale of Shares, including
the sale of Shares to you for the account of any Client or Clients.
SECTION 6. Any person authorized to direct the disposition of monies
paid or payable by us pursuant to this Agreement will provide to our Board of
Trustees, and our trustees will review, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
In addition, you will furnish us or our designees with such information as we or
they may reasonably request (including, without limitation, periodic
certifications confirming the provision to Clients of the services described
herein), and will otherwise cooperate with us and our designees (including,
without limitation, any auditors designated by us), in connection with the
preparation of reports to our Board of Trustees concerning this Agreement and
the monies paid or payable by us pursuant hereto, as well as any other reports
or filings that may be required by law.
SECTION 7. We may enter into other similar Servicing Agreements with
any other person or persons without your consent.
2
<PAGE>
SECTION 8. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) the compensation payable to you in connection with
the investment of your Clients' assets in Shares will be disclosed by you to
your Clients, will be authorized by your Clients and will not be excessive; and
(ii) the services provided by you under this Agreement will in no event be
primarily intended to result in the sale of Shares.
SECTION 9. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by us or our designee. This
Agreement is terminable without penalty at any time by us (which termination may
be by a vote of a majority of the Disinterested Trustees as defined in Section
12) or by you upon written notice to the other party hereto.
SECTION 10. All notices and other communications to either you or us
will be duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunication device to the appropriate address stated herein, or to such
other address as either party shall so provide the other.
SECTION 11. This Agreement will be construed in accordance with the
laws of the State of New York and is non-assignable by the parties hereto.
SECTION 12. This Agreement has been approved by vote of a majority of
(i) our Board of Trustees and (ii) those Trustees who are not "interested
persons" (as defined in the Investment Company Act of 1940) of us and have no
direct or indirect financial interest in this Agreement ("Disinterested
Trustees"), cast in person at a meeting called for the purpose of voting on such
approval.
SECTION 13. The names "The Trautman Kramer Trust" and the "Board of
Trustees" refer respectively to the Trust created and the Trustees, as trustees
but not individually or personally, acting from time to time under a Certificate
of Trust filed at the office of the State Secretary of Delaware on May 1, 1997.
The obligations of "The Trautman Kramer Trust" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually but in such capacities, and are not binding upon any of the
Trustees, Shareholders or representatives of the Trust personally, but bind only
the Trust Property (as defined in the Declaration of Trust), and all persons
dealing with any class of Shares of our must look solely to the Trust Property
belonging to such class for the enforcement of any claims against us.
3
<PAGE>
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us, c/o Firstar Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin
53201.
Very truly yours,
THE TRAUTMAN KRAMER TRUST
Date: ________________________ By: ________________________
(Authorized Officer)
Title:
Accepted and Agreed to:
Date: ________________________ By: ________________________
(Authorized Officer)
Title:
4
THE TRAUTMAN KRAMER TRUST
SHAREHOLDER SERVICING PLAN - CLASS B
This Shareholder Servicing Plan (the "Plan") is adopted by The Trautman
Kramer Trust, a business trust organized under the laws of Delaware (the
"Company"), on behalf of the Class B shares of each of its Funds (individually,
a "Fund," and collectively, the "Funds") as set forth in Schedule I, as amended
from time to time, subject to the following terms and conditions:
SECTION 1. ANNUAL FEES.
Shareholder Services Fee. The Class B shares of a Fund may pay to the
distributor of its shares (the "Distributor") or financial institutions that
provide certain services to the Class B shares of the Fund, a shareholder
services fee under the Plan at the annual rate of 0.25% of the average daily net
assets of such Class B shares of the Fund (the "Services Fee").
Adjustment to Fees. Any Fund may pay a Services Fee to the Distributor
or financial institution at a lesser rate than the fees specified in Section 1
hereof as agreed upon by the Board of Trustees and the Distributor or financial
institution and approved in the manner specified in Section 3 of this Plan.
Payment of Fees. The Services Fees will be calculated daily and paid
monthly by the Class B shares of each Fund at the annual rates indicated above.
SECTION 2. EXPENSES COVERED BY THE PLAN.
Services Fees may be used by the Distributor or financial institution
for payments to financial institutions and persons who provide administrative
and support services to their customers who may from time to time beneficially
own Class B shares, which may include: (i) establishing and maintaining accounts
and records relating to shareholders; (ii) processing dividend and distribution
payments from the Fund on behalf of shareholders; (iii) providing information
periodically to shareholders showing their positions in shares and integrating
such statements with those of other transactions and balances in shareholders'
other accounts serviced by such financial institution; (iv) arranging for bank
wires; (v) responding to shareholder inquiries relating to the services
performed; (vi) responding to routine inquiries from shareholders concerning
their investments; (vii) providing subaccounting with respect to shares
beneficially owned by shareholders, or the information to the Fund necessary for
subaccounting; (viii) if required by law, forwarding shareholder communications
from the Fund (such as proxies, shareholder reports, annual and semi-annual
financial statements and dividend, distribution and tax notices) to
shareholders; (ix) assisting in processing purchase, exchange and redemption
requests from shareholders and in placing such orders with service contractors;
(x) assisting shareholders in changing dividend options, account designations
and addresses; (xi) providing shareholders with a service that invests the
assets of their accounts in shares pursuant to specific or pre-authorized
instructions; and (xii) providing such other similar services as the Fund may
reasonably request to the extent the Distributor or financial institution is
permitted to do so under applicable statutes, rules and regulations.
<PAGE>
SECTION 3. APPROVAL OF TRUSTEES.
Neither the Plan nor any related agreements will take effect until
approved by a majority of both (a) the full Board of Trustees of the Company and
(b) those Trustees who are not interested persons of the Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related to it (the "Qualified Trustees"), cast in person at a meeting
called for the purpose of voting on the Plan and the related agreements.
SECTION 4. CONTINUANCE OF THE PLAN.
The Plan will continue in effect until two years from the date of
effectiveness as it pertains to the Class B shares of a Fund, and thereafter for
successive twelve-month periods; provided, however, that such continuance is
specifically approved at least annually by the Trustees of the Fund and by a
majority of the Qualified Trustees.
SECTION 5. TERMINATION.
The Plan may be terminated at any time with respect to the Class B
shares of a Fund (i) by the Fund without the payment of any penalty, by the vote
of a majority of the outstanding voting securities of the Class B shares of the
Fund or (ii) by a vote of the Qualified Trustees. The Plan may remain in effect
with respect to the Class B shares of the Fund even if the Plan has been
terminated in accordance with this Section 5 with respect to any other Fund.
SECTION 6. AMENDMENTS.
No material amendment to the Plan may be made unless approved by the
Company's Board of Trustees in the manner described in Section 3 above.
SECTION 7. LIMIT OF LIABILITY.
The obligations of the Funds under this Plan, if any, shall not be
binding upon the Trustees individually or upon holders of shares of the Funds
individually but shall be binding only upon the assets and property of the
Funds.
SECTION 8. MEANINGS OF CERTAIN TERMS.
As used in the Plan, the terms "interested person" and "majority of the
outstanding voting securities" will be deemed to have the same meaning that
those terms have under the Investment Company Act of 1940, as amended, by the
Securities and Exchange Commission.
Approved: November 20, 1997
2
<PAGE>
SCHEDULE I
This Shareholder Servicing Plan shall be adopted with respect to the
Class B shares of the following Funds of The Trautman Kramer Trust:
Fund
- ----
Trautman Kramer Value Plus Fund
<PAGE>
SHAREHOLDER SERVICING AGREEMENT - CLASS B
THE TRAUTMAN KRAMER TRUST
C/O FIRSTAR TRUST COMPANY
615 EAST MICHIGAN STREET
MILWAUKEE, WISCONSIN 53202
To: _______________
We (the "Trust") wish to enter into this Servicing Agreement with you
concerning the provision of support services to your client ("Clients") who may
from time to time beneficially own Class B shares ("Shares") of the Funds (the
"Funds") offered by us.
The terms and conditions of this Servicing Agreement are as follows:
SECTION 1. You agree to provide the following support services to
Clients who may from time to time beneficially own Shares:1 (i) establishing and
maintaining accounts and records relating to Clients that invest in Shares; (ii)
processing dividend and distribution payments from us on behalf of Clients;
(iii) providing information periodically to Clients showing their positions in
Shares and integrating such statements with those of other transactions and
balances in Clients' other accounts serviced by you; (iv) arranging for bank
wires; (v) responding to Client inquiries relating to the services performed by
you; (vi) responding to routine inquiries from Clients concerning their
investments in Shares; (vii) providing subaccounting with respect to Shares
beneficially owned by Clients, or the information to us necessary for
subaccounting; (viii) if required by law, forwarding shareholder communications
from us (such as proxies, shareholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices) to Clients; (ix)
assisting in processing purchase, exchange and redemption requests from Clients
and in placing such orders with our service contractors; (x) assisting Clients
in changing dividend options, account designations and addresses; (xi) providing
Clients with a service that invests the assets of their accounts in Shares
pursuant to specific or pre-authorized instructions; and (xii) providing such
other similar services as we may reasonably request to the extent you are
permitted to do so under applicable statutes, rules and regulations.
SECTION 2. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by you) as
may be reasonably necessary or beneficial in order to provide the aforementioned
services and assistance to Clients.
SECTION 3. Neither you nor any of your officers, employees or agents
are authorized to make any representations concerning us or the Shares except
those contained in our then current prospectuses and statement of additional
information, copies of which will be
- --------
1 Series may be modified or omitted in the particular case and items renumbered.
<PAGE>
supplied by us to you, or in such supplemental literature or advertising as may
be authorized by us in writing.
SECTION 4. For all purposes of this Agreement you will be deemed to be
an independent contractor, and will have no authority to act as agent for us in
any matter or in any respect. By your written acceptance of this Agreement, you
agree to and do release, indemnify and hold us harmless from and against any and
all direct or indirect liabilities or losses resulting from requests,
directions, actions, or inactions of or by you or your officers, employees or
agents regarding your responsibilities hereunder or the purchase, redemption,
transfer or registration of Shares (or orders relating to the same) by or on
behalf of Clients. You and your employees will, upon request, be available
during normal business hours to consult with us or our designees concerning the
performance of your responsibilities under this Agreement.
SECTION 5. In consideration of the services and facilities provided by
you hereunder, we will pay to you, and you will accept as full payment therefor,
a fee at the annual rate of __ one-hundredths of one percent (.__%) of the
average daily net asset value of the Shares beneficially owned by your Clients
for whom you are the dealer of record or holder of record or with whom you have
a servicing relationship (the "Clients' Shares"), which fee will be computed
daily (on the basis of 360-day year) and payable monthly. For purposes of
determining the fees payable under this Section 5, the average daily net asset
value of the Clients' Shares will be computed in the manner specified in our
Registration Statement (as the same is in effect from time to time) in
connection with the computation of the net asset value of Shares for purposes of
purchases and redemptions. By your written acceptance of this Agreement, you
agree to and do waive such portion of any fee payable to you hereunder to the
extent necessary to assure that such fee and other expenses required to be
accrued by us on any day with respect to the Clients' Shares in any Fund that
declares its net investment income as a dividend to shareholders on a daily
basis does not exceed the income to be accrued by us to such Shares on that day.
The fee rate stated above may be prospectively increased or decreased by us, in
our sole discretion, at any time upon notice to you. Further, we may, in our
discretion and without notice, suspend or withdraw the sale of Shares, including
the sale of Shares to you for the account of any Client or Clients.
SECTION 6. Any person authorized to direct the disposition of monies
paid or payable by us pursuant to this Agreement will provide to our Board of
Trustees, and our trustees will review, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
In addition, you will furnish us or our designees with such information as we or
they may reasonably request (including, without limitation, periodic
certifications confirming the provision to Clients of the services described
herein), and will otherwise cooperate with us and our designees (including,
without limitation, any auditors designated by us), in connection with the
preparation of reports to our Board of Trustees concerning this Agreement and
the monies paid or payable by us pursuant hereto, as well as any other reports
or filings that may be required by law.
SECTION 7. We may enter into other similar Servicing Agreements with
any other person or persons without your consent.
2
<PAGE>
SECTION 8. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) the compensation payable to you in connection with
the investment of your Clients' assets in Shares will be disclosed by you to
your Clients, will be authorized by your Clients and will not be excessive; and
(ii) the services provided by you under this Agreement will in no event be
primarily intended to result in the sale of Shares.
SECTION 9. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by us or our designee. This
Agreement is terminable without penalty at any time by us (which termination may
be by a vote of a majority of the Disinterested Trustees as defined in Section
12) or by you upon written notice to the other party hereto.
SECTION 10. All notices and other communications to either you or us
will be duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunication device to the appropriate address stated herein, or to such
other address as either party shall so provide the other.
SECTION 11. This Agreement will be construed in accordance with the
laws of the State of New York and is non-assignable by the parties hereto.
SECTION 12. This Agreement has been approved by vote of a majority of
(i) our Board of Trustees and (ii) those Trustees who are not "interested
persons" (as defined in the Investment Company Act of 1940) of us and have no
direct or indirect financial interest in this Agreement ("Disinterested
Trustees"), cast in person at a meeting called for the purpose of voting on such
approval.
SECTION 13. The names "The Trautman Kramer Trust" and the "Board of
Trustees" refer respectively to the Trust created and the Trustees, as trustees
but not individually or personally, acting from time to time under a Certificate
of Trust filed at the office of the State Secretary of Delaware on May 1, 1997.
The obligations of "The Trautman Kramer Trust" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually but in such capacities, and are not binding upon any of the
Trustees, Shareholders or representatives of the Trust personally, but bind only
the Trust Property (as defined in the Declaration of Trust), and all persons
dealing with any class of Shares of our must look solely to the Trust Property
belonging to such class for the enforcement of any claims against us.
3
<PAGE>
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us, c/o Firstar Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin
53201.
Very truly yours,
THE TRAUTMAN KRAMER TRUST
Date: ________________________ By: ________________________
(Authorized Officer)
Title:
Accepted and Agreed to:
Date: ________________________ By: ________________________
(Authorized Officer)
Title:
4
Kramer, Levin, Naftalis & Frankel
919 THIRD AVENUE
NEW YORK, N.Y. 10022 - 3852
(212) 715 - 9100
Arthur H. Aufses III Monica C. Lord Sherwin Kamin
Thomas D. Balliett Richard Marlin Arthur B. Kramer
Jay G. Baris Thomas E. Molner Maurice N. Nessen
Philip Bentley Thomas H. Moreland Founding Partners
Saul E. Burian Ellen R. Nadler Counsel
Barry Michael Cass Gary P. Naftalis _____
Thomas E. Constance Michael J. Nassau
Michael J. Dell Michael S. Nelson Martin Balsam
Kenneth H. Eckstein Jay A. Neveloff Joshua M. Berman
Charlotte M. Fischman Michael S. Oberman Jules Buchwald
David S. Frankel Paul S. Pearlman Rudolph de Winter
Marvin E. Frankel Susan J. Penry-Williams Meyer Eisenberg
Alan R. Friedman Bruce Rabb Arthur D. Emil
Carl Frischling Allan E. Reznick Maria T. Jones
Mark J. Headley Scott S. Rosenblum Maxwell M. Rabb
Robert M. Heller Michele D. Ross James Schreiber
Philip S. Kaufman Howard J. Rothman Counsel
Peter S. Kolevzon Max J. Schwartz _____
Kenneth P. Kopelman Mark B. Segall
Michael Paul Korotkin Judith Singer M. Frances Buchinsky
Shari K. Krouner Howard A. Sobel Abbe L. Dienstag
Kevin B. Leblang Jeffrey S. Trachtman Ronald S. Greenberg
David P. Levin Jonathan M. Wagner Debora K. Grobman
Ezra G. Levin Harold P. Weinberger Christian S. Herzeca
Larry M. Loeb E. Lisk Wyckoff, Jr. Jane Lee
Pinchas Mendelson
Lynn R. Saidenberg
Special Counsel
-----
FAX
(212) 715-8000
---
WRITER'S DIRECT NUMBER
(212)715-9100
-------------
January 30, 1998
The Trautman Kramer Trust
500 Fifth Avenue
New York, New York 10110
Re: The Trautman Kramer Trust
-------------------------
Ladies/Gentlemen:
We have acted as counsel for The Trautman Kramer Trust, a Delaware
business trust (the "Trust"), in connection with the proposed public offering of
shares of beneficial interest, having a par value of $.001 (the "Shares") of The
Trautman Kramer Value Plus Fund, a series of the Trust, pursuant to a
registration statement on Form N-1A (File No. 333-27645) (the "Registration
Statement"), filed with the Securities and Exchange Commission under the
Securities Act of 1933, and the Investment Company Act of 1940, as amended.
We have reviewed the Trust's Certificate of Trust, its Delaware Trust
Instrument and its By-Laws, resolutions of the Board of Trustees of the Trust,
and the Registration Statement (including all Pre-Effective Amendments and
exhibits thereto). We have also made such inquiries and have examined originals,
certified copies or copies otherwise identified to our satisfaction of such
documents, records and other instruments as we have deemed necessary or
appropriate for the purposes of this opinion. For purposes of such examination,
we have assumed the genuineness of all signatures on original documents and the
conformity to the original documents of all copies submitted.
<PAGE>
We are members of the Bar of the State of New York and do not hold
ourselves out as experts as to the law of any other state or jurisdiction. We
have received and relied upon an opinion from Morris, Nichols, Arsht & Tunnell,
special Delaware counsel, a copy of which is attached herewith, concerning the
organization of the Trust and the authorization and issuance of the Shares.
Based upon and subject to the foregoing, we are of the opinion, and so
advise you as follows:
i. The Trust is duly organized and validly existing as a business
trust in good standing under the laws of the State of Delaware.
ii. The shares of The Trautman Krmaer Value Plus Fund to be offered
for sale pursuant to the Prospectus are duly authorized and, when
sold, issued and paid for as contemplated by the Prospectus, will
have been validly and legally issued and will be fully paid and
nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/Kramer, Levin, Naftalis & Frankel
------------------------------------
<PAGE>
[LETTERHEAD OF MORRIS, NICHOLS, ARSHT & TUNNELL]
December 11, 1997
The Trautman Kramer Trust
500 Fifth Avenue
New York, New York 10110
Re: The Trautman Kramer Trust
-------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to The Trautman Kramer Trust,
a Delaware business trust (the "Trust"), in connection with certain matters
relating to the organization of the Trust and the issuance of Shares of
beneficial interest in the Trust. Capitalized terms used herein and not
otherwise herein defined are used as defined in the Trust Instrument of the
Trust dated May 1, 1997, as amended May 21, 1997 (as so amended, the "Governing
Instrument").
In rendering this opinion, we have examined copies of the following
documents, each in the form provided to us: the Certificate of Trust of the
Trust as filed in the Office of the Secretary of State of the State of Delaware
(the "Recording Office") on May 1, 1997 (the "Certificate"); the Governing
Instrument; the Bylaws of the Trust; certain resolutions of the Trustees of the
Trust; the Trust's Notification Of Registration Filed Pursuant to Section 8(a)
of the Investment Company Act of 1940 on Form N-8A as filed with the Securities
and Exchange Commission on May 22, 1997; the Trust's Registration Statement on
Form N-1A as filed with the Securities and Exchange Commission on May 22, 1997
(the "Registration Statement"); and a certification of good standing of the
Trust obtained as of a recent date from the Recording Office. In such
examinations, we have assumed the genuineness of all signatures, the conformity
to original documents of all documents submitted to us as copies or drafts of
documents to be executed, and the legal capacity of natural persons to complete
the execution of documents. We have further assumed for the purpose of this
opinion: (i) the due authorization, execution and delivery by, or on behalf of,
each of the parties thereto of the above-referenced instruments, certificates
and other documents, and of all documents contemplated by the Governing
Instrument and applicable resolutions of the Trustees, to be executed by
investors
<PAGE>
The Trautman Kramer Trust
December 11, 1997
Page 2
desiring to become Shareholders; (ii) the payment of consideration for Shares,
and the application of such consideration, as provided in the Governing
Instrument, and compliance with the other terms, conditions and restrictions set
forth in the Governing Instrument and all applicable resolutions of the Trustees
in connection with the issuance of Shares (including, without limitation, the
taking of all appropriate action by the Trustees to designate Series of Shares
and the rights and preferences attributable thereto as contemplated by the
Governing Instrument); (iii) that appropriate notation of the names and
addresses of, the number of Shares held by, and the consideration paid by,
Shareholders will be maintained in the appropriate registers and other books and
records of the Trust in connection with the issuance or transfer of Shares; (iv)
that no event has occurred subsequent to the filing of the Certificate that
would cause a termination or dissolution of the Trust under Sections 11.04 or
11.05 of the Governing Instrument; (v) that the activities of the Trust have
been and will be conducted in accordance with the terms of the Governing
Instrument and the Delaware Act; and (vi) that each of the documents examined by
us is in full force and effect and has not been modified, supplemented or
otherwise amended except as herein referenced. No opinion is expressed herein
with respect to the requirements of, or compliance with, federal or state
securities or blue sky laws. Further, we express no opinion on the sufficiency
or accuracy of the Registration Statement or any other registration or offering
material relating to the Trust or the Shares. As to any facts material to our
opinion, other than those assumed, we have relied without independent
investigation on the above-referenced documents and on the accuracy, as of the
date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. The Trust is a duly organized and validly existing business trust in
good standing under the laws of the State of Delaware.
2. The Shares, when issued to Shareholders in accordance with the
terms, conditions, requirements and procedures set forth in the Governing
Instrument, will constitute legally issued, fully paid and non-assessable Shares
of beneficial interest in the Trust.
3. Under the Delaware Act and the terms of the Governing Instrument,
each Shareholder of the Trust, in such capacity, will be entitled to the same
limitation of personal liability as that extended to stockholders of private
corporations for profit organized under the general corporation law of the State
of Delaware; provided, however, that we express no opinion with
<PAGE>
The Trautman Kramer Trust
December 11, 1997
Page 3
respect to the liability of any Shareholder who is, was or may
become a named Trustee of the Trust.
We hereby consent to the filing of a copy of this opinion with the
Securities and Exchange Commission as an exhibit to a pre-effective amendment to
the Registration Statement. In giving this consent, we do not thereby admit that
we come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as provided in this
paragraph, the opinion set forth above is expressed solely for the benefit of
the addressee hereof in connection with the matters contemplated hereby and may
not be relied upon by, or filed with, any other person or entity or for any
other purpose without our prior written consent.
Sincerely,
/s/MORRIS, NICHOLS, ARSHT & TUNNELL
-----------------------------------
Kramer, Levin, Naftalis & Frankel
919 THIRD AVENUE
NEW YORK, N.Y. 10022 - 3852
(212) 715 - 9100
Arthur H. Aufses III Monica C. Lord Sherwin Kamin
Thomas D. Balliett Richard Marlin Arthur B. Kramer
Jay G. Baris Thomas E. Molner Maurice N. Nessen
Philip Bentley Thomas H. Moreland Founding Partners
Saul E. Burian Ellen R. Nadler Counsel
Barry Michael Cass Gary P. Naftalis _____
Thomas E. Constance Michael J. Nassau
Michael J. Dell Michael S. Nelson Martin Balsam
Kenneth H. Eckstein Jay A. Neveloff Joshua M. Berman
Charlotte M. Fischman Michael S. Oberman Jules Buchwald
David S. Frankel Paul S. Pearlman Rudolph de Winter
Marvin E. Frankel Susan J. Penry-Williams Meyer Eisenberg
Alan R. Friedman Bruce Rabb Arthur D. Emil
Carl Frischling Allan E. Reznick Maria T. Jones
Mark J. Headley Scott S. Rosenblum Maxwell M. Rabb
Robert M. Heller Michele D. Ross James Schreiber
Philip S. Kaufman Howard J. Rothman Counsel
Peter S. Kolevzon Max J. Schwartz _____
Kenneth P. Kopelman Mark B. Segall
Michael Paul Korotkin Judith Singer M. Frances Buchinsky
Shari K. Krouner Howard A. Sobel Abbe L. Dienstag
Kevin B. Leblang Jeffrey S. Trachtman Ronald S. Greenberg
David P. Levin Jonathan M. Wagner Debora K. Grobman
Ezra G. Levin Harold P. Weinberger Christian S. Herzeca
Larry M. Loeb E. Lisk Wyckoff, Jr. Jane Lee
Pinchas Mendelson
Lynn R. Saidenberg
Special Counsel
-----
FAX
(212) 715-8000
---
WRITER'S DIRECT NUMBER
(212)715-9100
-------------
January 30, 1998
The Trautman Kramer Trust
500 Fifth Avenue
New York, New York 10110
Re: The Trautman Kramer Trust
Registration No. 333-27645
--------------------------
Gentlemen:
We hereby consent to the reference to our firm as Counsel in this
Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1A.
Very truly yours,
/s/Kramer, Levin, Naftalis & Frankel
------------------------------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Counsel and
Independent Auditors" and to the use of our report dated January 28, 1998 for
the Trautman Kramer Value Plus Fund in the Registration Statement (Form N-1A)
and related Prospectus of The Trautman Kramer Trust filed with the Securities
and Exchange Commission in this Pre-Effective Amendment No. 1 to the
Registration Statement under the Securities Act of 1933 (Registration No.
333-27645) and in this Amendment No. 1 to the Registration Statement under the
Investment Company Act of 1940 (Registration No. 811-08221).
/s/ ERNST & YOUNG LLP
Milwaukee, Wisconsin
January 28, 1998
ROBERT J. KRAMER
500 FIFTH AVENUE
NEW YORK, NEW YORK 10110
December 30, 1997
The Trautman Kramer Trust
615 East Michigan Street
Milwaukee, Wisconsin 53202
Ladies/Gentlemen:
Robert J. Kramer, as Trustee of The Trautman Kramer 401K Plan (the
"Trustees") hereby offers to purchase 10,128.400 Class A shares (the "Seed
Capital Shares") of the Trautman Kramer Value Plus Fund (the "Fund"), a series
of The Trautman Kramer Trust. This letter will confirm that the Trustee is
purchasing the Seed Capital Shares for its own account for investment purposes
only and not with a view to reselling or otherwise distributing such shares.
The Trustee agrees and hereby undertakes that, in the event any of the
Seed Capital Shares are redeemed during the period of amortization of the Fund's
organizational expenses, the redemption proceeds will be reduced by any
unamortized organizational expenses in the same proportion as the number of Seed
Capital Shares being redeemed bears to the number of Seed Capital Shares
outstanding at the time of redemption.
Sincerely,
Robert J. Kramer, as Trustee of
The Trautman Kramer 401K Plan
By: /s/ Robert J. Kramer
--------------------
Name: Robert J. Kramer
Title: Chairman
RULE 12B-1 DISTRIBUTION PLAN
<PAGE>
PLAN FOR PAYMENT OF CERTAIN EXPENSES
FOR DISTRIBUTION OF SHARES - CLASS A SHARES
A Plan (the "Plan") pertaining to the Class A shares of each
series as listed in Schedule I (individually, a "Fund," and collectively, the
"Funds"), of The Trautman Kramer Trust, a Delaware business trust (the "Trust")
and an open-end, diversified management investment company registered under the
Investment Company Act of 1940, as amended (the "Act"), adopted pursuant to
Section 12(b) of the Act and Rule 12b-1 promulgated thereunder ("Rule 12b-1").
1. Principal Underwriter. Trautman Kramer & Company, Inc.
("the Distributor"), acts as the principal underwriter of the Funds' Class A
shares pursuant to a Distribution Agreement with the Trust. Trautman Kramer
Capital Management, Inc. (the "Investment Advisor"), acts as the Funds'
investment adviser pursuant to an Investment Advisory Agreement with the Trust.
2. Distribution Payments. (a) The Class A shares of each Fund
either directly or through the Investment Advisor, may make payments
periodically (i) to the Distributor or to any broker-dealer (a "Broker") who is
registered under the Securities Exchange Act of 1934 and a member in good
standing of the National Association of Securities Dealers, Inc. and who has
entered into a selected dealer agreement with the Distributor, (ii) to other
persons or organizations ("Distribution Agents") who have entered into
agreements with the Trust on behalf of a Fund for the distribution of the Fund's
Class A shares, or (iii) to the Distributor, a Broker, the Investment Advisor, a
Distribution Agent, or
<PAGE>
any other person for expenses associated with distribution of the Fund's Class A
shares, including the compensation of the sales personnel of the Distributor.
(b) The schedule of such fees and the basis upon which such
fees will be paid shall be determined from time to time by the Distributor and
the Investment Advisor, subject to approval by the Board of Trustees of the
Trust.
(c) Payments may also be made for any advertising and
promotional expenses relating to selling efforts, including but not limited to
the incremental costs of printing prospectuses, statements of additional
information, annual reports and other periodic reports for distribution to
persons who are not Class A shareholders of a Fund; costs of preparing and
distributing any other supplemental sales literature; costs of radio,
television, newspaper and other advertising; telecommunications expenses,
including the cost of telephones, telephone lines and other communications
equipment, incurred by or for the Distributor in carrying out its obligations
under the Distribution Agreement.
(d) The aggregate amount of all payments by the Class A shares
of a Fund in any fiscal year, to the Distributor, Brokers, the Investment
Advisor, Distribution Agents and for advertising and promotional expenses
pursuant to paragraphs (a), (b), (c) of this Section 2 shall not exceed 0.50% of
the average daily net asset value attributable to the Class A shares of the Fund
on an annual basis for such fiscal year, or such lesser amounts as determined
appropriate. The Plan will only make payments for expenses actually incurred on
a first-in, first-out basis. The amount of expenses incurred in any year may not
exceed the rate of reimbursement set forth in the Plan. The unreimbursed amounts
may be recovered through future payments under the Plan. Carry-over amounts are
not limited in the number
-2-
<PAGE>
of years they may be carried forward. If the Plan is terminated in accordance
with its terms with respect to the Class A shares of a Fund, the obligations of
the Fund to make payments pursuant to the Plan will cease and the Class A shares
of the Fund will not be required to make any payments past the date the Plan
terminates.
3. Reports. Quarterly, in each year that this Plan remains in
effect, the Trust's Principal Financial Officer shall prepare and furnish to the
Board of Trustees of the Trust a written report, complying with the requirements
of Rule 12b-l, setting forth the amounts expended by the Class A shares of each
Fund under the Plan and purposes for which such expenditures were made.
4. Approval of Plan. This Plan shall become effective upon
approval of the Plan as it pertains to the Class A shares of a Fund and the form
of Selected Dealer Agreement, by the majority votes of the Board of Trustees and
the Qualified Trustees (as defined in Section 6), cast in person at a meeting
called for the purpose of voting on the Plan.
5. Term. This Plan as it pertains to the Class A shares of a
Fund shall remain in effect for one year from its adoption date and may be
continued thereafter if this Plan and all related agreements are approved at
least annually by a majority vote of the Trustees, including a majority of the
Qualified Trustees, cast in person at a meeting called for the purpose of voting
on such Plan and agreements. This Plan may not be amended as it pertains to the
Class A shares of a Fund in order to increase materially the amount to be spent
for distribution assistance without Class A shareholder approval of such Fund.
All material amendments to this Plan must be approved by a vote of the Board of
Trustees, and
-3-
<PAGE>
of the Qualified Trustees (as hereinafter defined), cast in person at a meeting
called for the purpose of voting thereon.
6. Termination. This Plan may be terminated as it pertains the
Class A shares of a Fund at any time by a majority vote of the Trustees who are
not interested persons (as defined in section 2(a)(19) of the Act) of the Fund
and have no direct or indirect financial interest in the operation of the Plan
or in any agreements related to the Plan (the "Qualified Trustees") or by vote
of a majority of the outstanding voting securities of the Class A shares of the
Fund, as defined in section 2(a)(42) of the Act. The Plan may remain in effect
with respect to the Class A shares of a Fund even if the Plan has been
terminated in accordance with this Section 6 with respect to the Class A shares
of any other Fund.
7. Nomination of "Disinterested" Trustees. While this Plan
shall be in effect, the selection and nomination of the "disinterested" Trustees
of the Trust shall be committed to the discretion of the Qualified Trustees then
in office.
8. Miscellaneous. (a) Any termination or noncontinuance of (i)
a Selected Dealer Agreement between the Distributor and a particular Broker, or
(ii) any other Agreement between the Investment Advisor or the Trust on behalf
of the Class A shares of a Fund and a particular person or organization, shall
have no effect on any similar agreements between Brokers or other persons and
the Fund and its Class A shares, the Investment Advisor or the Distributor
pursuant to this Plan.
(b) Neither the Distributor, the Investment Advisor nor the
Class A shares of a Fund shall be under any obligation because of this Plan to
execute any Selected Dealer Agreement with any Broker or any other Agreement
with any person or organization.
-4-
<PAGE>
(c) All agreements with any person or organization relating to
the implementation of this Plan shall be in writing and any agreement related to
this Plan shall be subject to termination, without penalty, pursuant to the
provisions of Section 6 hereof.
(d) This Plan shall not be construed to contain any of the
terms and provisions of The Trautman Kramer Trust Shareholder Servicing Plan
(the "Servicing Plan") and all payments under this Plan for distribution
services shall be separate and in addition to payments for shareholder servicing
services provided under the Servicing Plan.
Approved: November 20, 1997
-5-
<PAGE>
SCHEDULE I
This Shareholder Servicing Plan shall be adopted with respect to the
Class A shares of the following Funds of The Trautman Kramer Trust:
Fund
- ----
Trautman Kramer Value Plus Fund
-6-
<PAGE>
Trautman Kramer & Company, Inc.
500 Fifth Avenue
New York, New York 10110
Re: Form of Selected Dealer Agreement for Class A Shares of
The Trautman Kramer Value Plus Fund
Gentlemen:
We understand that the Trautman Kramer Value Plus Fund (the
"Fund"), a series of The Trautman Kramer Trust (the "Trust"), has adopted a plan
(the "Plan") pertaining to its Class A shares pursuant to Rule 12b-l of the
Investment Company Act of 1940, as amended (the "Act"), for making payments to
selected brokers for distribution assistance of the Fund's Class A shares.
We desire to enter into an Agreement with you for the sale and
distribution of the Class A shares of the Fund for which you are Distributor and
whose Class A shares are offered to the public at net asset value plus any
initial sales charge as set forth in the current prospectus. Upon acceptance of
this Agreement by you, we understand that we may offer and sell Class A shares
of the Fund, subject, however, to all of the terms and conditions hereof and to
your right to suspend or terminate the sale of such securities.
1. We understand that the Class A shares of the Fund covered
by this agreement will be offered and sold at the public offering price. The
public offering price is the net asset value described in the Fund's current
Prospectus in effect at the time the order for such shares is confirmed and
accepted on your behalf by the Fund plus any initial sales charge. We further
understand that all purchase requests and applications submitted by us are
subject to acceptance or rejection in the Fund's or your sole discretion.
2. We certify that we are members of the National Association
of Securities Dealers, Inc. ("NASD") and agree to maintain Membership in said
Association, or in the alternative, that we are foreign brokers not eligible for
membership in said Association. In either case, we agree to abide by all the
rules and regulations of the NASD which are binding upon underwriters and
brokers in the distribution of the shares of open-end investment companies,
including without limitation, Section 26 of Article III of the Rules of Fair
Practice, all of which are incorporated herein as if set forth in full. We
further agree to comply with all applicable state and Federal laws and the rules
and regulations of authorized regulatory agencies. We agree that we will not
sell or offer for sale, Class A shares of the Fund in any state or jurisdiction
where they are not exempt from registration or have not been qualified for sale.
<PAGE>
3. We will offer and sell the Class A shares of the Fund
covered by this Agreement only in accordance with the terms and conditions of
its then current Prospectus, and we will make no representations not included in
said Prospectus or in any authorized supplemental material supplied by you. We
will use our best efforts in the development and promotion of sales of the Class
A shares covered by this Agreement and agree to be responsible for the proper
instruction and training of all sales personnel employed by us, in order that
the Class A shares will be offered in accordance with the terms and conditions
of this Agreement and all applicable laws, rules and regulations. We agree to
hold you harmless and indemnify you in the event that we, or any of our sales
representatives, should violate any law, rule or regulation, or any provisions
of this Agreement, which may result in liability to you; and in the event you
determine to refund any amount paid by any investor by reason of any such
violation on our part, we shall return to you any distribution assistance
payments previously paid or allowed by you to us with respect to the transaction
for which the refund is made. All expenses which we incur in connection with our
activities under this Agreement shall be borne by us.
4. For purposes of this Agreement "Qualified Accounts" shall
mean: accounts of customers of ours who have purchased Class A shares of the
Fund and who use our facilities to communicate with the Fund or to effect
redemptions or additional purchases of Class A shares of the Fund.
5. In consideration of the distribution services and
facilities described herein, we shall be entitled to receive from you such fees
as are set forth in the Plan for Payment of Certain Expenses for Distribution
Shares - Class A shares (the "Plan"). We understand that the payment of such
fees has been authorized pursuant to a Plan approved by the Board of Trustees
and shall be paid only so long as this Agreement is in effect.
6. The frequency of payment, the terms of any right to sell in
a territory, and any other supplemental terms, conditions or qualifications for
us to receive such payments are subject to change by you from time to time, upon
30 days' written notice. Any orders placed after the effective date of such
change shall be subject to the fee rates in effect at the time of receipt of the
payment by the Fund or you. Such 30-day period may be waived at your sole option
in the event such change increases the distribution assistance payments due us.
7. Payment for Class A shares shall be made to the Fund and
shall be received by the Fund promptly after the acceptance of our order. If
such payment is not received by the Fund, we understand that the Fund reserves
the right without notice, forthwith to cancel the sale, or, at the Fund's
option, to sell the Class A shares ordered by us back to the Fund in which
latter case we may be held responsible for any loss, including loss of profit,
suffered by the Fund resulting from our failure to make payments aforesaid.
8. Your obligations to us under this Agreement are subject to
all the provisions of any underwriting agreements you have or may enter into
with the Fund. We
-2-
<PAGE>
understand and agree that in performing our services covered by this Agreement
we are acting as principal, and you are in no way responsible for the manner of
our performance or for any of our acts or omissions in connection therewith.
Nothing in this Agreement or in the Plan shall be construed to constitute us or
any of our agents, employees or representatives as your agent, partner or
employee, or the agent, partner or employee of the Fund.
9. This Agreement shall terminate automatically (i) in the
event of its assignment, the term "assignment" for this purpose having the
meaning defined in Section 2(a)(4) of the Act or (ii) in the event the Plan is
terminated.
10. This Agreement may be terminated at any time (without
payment of any penalty) by a majority of the "Qualified Trustees" as defined in
the Plan or by a vote of a majority of the outstanding voting Class A securities
of the Fund as defined in the Plan (on not more than 60 days' written notice to
us at our principal place of business). We, on 60 days' written notice addressed
to you at your principal place of business, may terminate this Agreement. You
may also terminate this Agreement for cause on violation by us of any of the
provisions of this Agreement, said termination to become effective on the date
of mailing notice to us of such termination. Without limiting the generality of
the foregoing and any provision hereof to the contrary notwithstanding, our
expulsion from the NASD will automatically terminate this Agreement without
notice; our suspension from the NASD or violation of applicable state or Federal
laws or rules and regulations of authorized regulatory agencies will terminate
this Agreement effective upon date of mailing notice to us of such termination.
Your failure to terminate for any cause shall not constitute a waiver of your
right to terminate at a later date for any such cause.
11. A copy of the Certificate of Trust is on file with the
Secretary of State of Delaware, and notice is hereby given that this instrument
is executed on behalf of the Trustees as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees or
shareholders individually but are binding only upon the assets and property of
the Fund.
12. All communications to you shall be sent to you at your
offices at 500 Fifth Avenue, New York, N.Y. 10110. Any notice to us shall be
duly given if mailed or telegraphed to us at the address shown on this
Agreement.
13. This Agreement shall become effective as of the date when
it is executed and dated by you below. This Agreement and all the rights and
obligations of the parties hereunder shall be governed by and construed under
the laws of the State of New York.
---------------------------------
(Broker/Dealer)
-3-
<PAGE>
By:______________________________
Name:
Title:
---------------------------------
(Address)
---------------------------------
(City) (State) (Zip Code)
ACCEPTED:
TRAUTMAN KRAMER & COMPANY, INC.
By:___________________________
Name:
Title:
Dated:
-4-
RULE 12B-1 DISTRIBUTION PLAN
<PAGE>
PLAN FOR PAYMENT OF CERTAIN EXPENSES
FOR DISTRIBUTION OF SHARES - CLASS B SHARES
A Plan (the "Plan") pertaining to the Class B shares of each
series as listed in Schedule I (individually, a "Fund," and collectively, the
"Funds"), of The Trautman Kramer Trust, a Delaware business trust (the "Trust")
and an open-end, diversified management investment company registered under the
Investment Company Act of 1940, as amended (the "Act"), adopted pursuant to
Section 12(b) of the Act and Rule 12b-1 promulgated thereunder ("Rule 12b-1").
1. Principal Underwriter. Trautman Kramer & Company, Inc.
("the Distributor"), acts as the principal underwriter of the Funds' Class B
shares pursuant to a Distribution Agreement with the Trust. Trautman Kramer
Capital Management, Inc. (the "Investment Advisor"), acts as the Funds'
investment adviser pursuant to an Investment Advisory Agreement with the Trust.
2. Distribution Payments. (a) The Class B shares of each Fund
either directly or through the Investment Advisor, may make payments
periodically (i) to the Distributor or to any broker-dealer (a "Broker") who is
registered under the Securities Exchange Act of 1934 and a member in good
standing of the National Association of Securities Dealers, Inc. and who has
entered into a selected dealer agreement with the Distributor, (ii) to other
persons or organizations ("Distribution Agents") who have entered into
agreements with the Trust on behalf of a Fund for the distribution of the Fund's
Class B shares, or (iii) to the Distributor, a Broker, the Investment Advisor, a
Distribution Agent, or
<PAGE>
any other person for expenses associated with distribution of the Fund's Class B
shares, including the compensation of the sales personnel of the Distributor.
(b) The schedule of such fees and the basis upon which such
fees will be paid shall be determined from time to time by the Distributor and
the Investment Advisor, subject to approval by the Board of Trustees of the
Trust.
(c) Payments may also be made for any advertising and
promotional expenses relating to selling efforts, including but not limited to
the incremental costs of printing prospectuses, statements of additional
information, annual reports and other periodic reports for distribution to
persons who are not Class B shareholders of a Fund; costs of preparing and
distributing any other supplemental sales literature; costs of radio,
television, newspaper and other advertising; telecommunications expenses,
including the cost of telephones, telephone lines and other communications
equipment, incurred by or for the Distributor in carrying out its obligations
under the Distribution Agreement.
(d) The aggregate amount of all payments by the Class B shares
of a Fund in any fiscal year, to the Distributor, Brokers, the Investment
Advisor, Distribution Agents and for advertising and promotional expenses
pursuant to paragraphs (a), (b), (c) of this Section 2 shall not exceed 0.50% of
the average daily net asset value attributable to the Class B shares of the Fund
on an annual basis for such fiscal year, or such lesser amounts as determined
appropriate. The Plan will only make payments for expenses actually incurred on
a first-in, first-out basis. The amount of expenses incurred in any year may not
exceed the rate of reimbursement set forth in the Plan. The unreimbursed amounts
may be recovered through future payments under the Plan. Carry-over amounts are
not limited in the number
-2-
<PAGE>
of years they may be carried forward. If the Plan is terminated in accordance
with its terms with respect to the Class B shares of a Fund, the obligations of
the Fund to make payments pursuant to the Plan will cease and the Class B shares
of the Fund will not be required to make any payments past the date the Plan
terminates; however, the Distributor shall be entitled to receive all contingent
deferred sales charges paid or payable with respect to any day subsequent to the
termination of this Plan.
3. Reports. Quarterly, in each year that this Plan remains in
effect, the Trust's Principal Financial Officer shall prepare and furnish to the
Board of Trustees of the Trust a written report, complying with the requirements
of Rule 12b-l, setting forth the amounts expended by the Class B shares of each
Fund under the Plan and purposes for which such expenditures were made.
4. Approval of Plan. This Plan shall become effective upon
approval of the Plan as it pertains to the Class B shares of a Fund and the form
of Selected Dealer Agreement, by the majority votes of the Board of Trustees and
the Qualified Trustees (as defined in Section 6), cast in person at a meeting
called for the purpose of voting on the Plan.
5. Term. This Plan as it pertains to the Class B shares of a
Fund shall remain in effect for one year from its adoption date and may be
continued thereafter if this Plan and all related agreements are approved at
least annually by a majority vote of the Trustees, including a majority of the
Qualified Trustees, cast in person at a meeting called for the purpose of voting
on such Plan and agreements. This Plan may not be amended as it pertains to the
Class B shares of a Fund in order to increase materially the amount to be
-3-
<PAGE>
spent for distribution assistance without Class B shareholder approval of such
Fund. All material amendments to this Plan must be approved by a vote of the
Board of Trustees, and of the Qualified Trustees (as hereinafter defined), cast
in person at a meeting called for the purpose of voting thereon.
6. Termination. This Plan may be terminated as it pertains the
Class B shares of a Fund at any time by a majority vote of the Trustees who are
not interested persons (as defined in section 2(a)(19) of the Act) of the Fund
and have no direct or indirect financial interest in the operation of the Plan
or in any agreements related to the Plan (the "Qualified Trustees") or by vote
of a majority of the outstanding voting securities of the Class B shares of the
Fund, as defined in section 2(a)(42) of the Act. The Plan may remain in effect
with respect to the Class B shares of a Fund even if the Plan has been
terminated in accordance with this Section 6 with respect to the Class B shares
of any other Fund.
7. Nomination of "Disinterested" Trustees. While this Plan
shall be in effect, the selection and nomination of the "disinterested" Trustees
of the Trust shall be committed to the discretion of the Qualified Trustees then
in office.
8. Miscellaneous. (a) Any termination or noncontinuance of (i)
a Selected Dealer Agreement between the Distributor and a particular Broker, or
(ii) any other Agreement between the Investment Advisor or the Trust on behalf
of the Class B shares of a Fund and a particular person or organization, shall
have no effect on any similar agreements between Brokers or other persons and
the Fund and its Class B shares, the Investment Advisor or the Distributor
pursuant to this Plan.
-4-
<PAGE>
(b) Neither the Distributor, the Investment Advisor nor the
Class B shares of a Fund shall be under any obligation because of this Plan to
execute any Selected Dealer Agreement with any Broker or any other Agreement
with any person or organization.
(c) All agreements with any person or organization relating to
the implementation of this Plan shall be in writing and any agreement related to
this Plan shall be subject to termination, without penalty, pursuant to the
provisions of Section 6 hereof.
(d) This Plan shall not be construed to contain any of the
terms and provisions of The Trautman Kramer Trust Shareholder Servicing Plan
(the "Servicing Plan") and all payments under this Plan for distribution
services shall be separate and in addition to payments for shareholder servicing
services provided under the Servicing Plan.
Approved: November 20, 1997
-5-
<PAGE>
SCHEDULE I
This Shareholder Servicing Plan shall be adopted with respect to the
Class B shares of the following Funds of The Trautman Kramer Trust:
Fund
- ----
Trautman Kramer Value Plus Fund
-6-
<PAGE>
Trautman Kramer & Company, Inc.
500 Fifth Avenue
New York, New York 10110
Re: Form of Selected Dealer Agreement for Class B Shares of
The Trautman Kramer Value Plus Fund
Gentlemen:
We understand that the Trautman Kramer Value Plus Fund (the
"Fund"), a series of The Trautman Kramer Trust (the "Trust"), has adopted a plan
(the "Plan") pertaining to its Class B shares pursuant to Rule 12b-l of the
Investment Company Act of 1940, as amended (the "Act"), for making payments to
selected brokers for distribution assistance of the Fund's Class B shares.
We desire to enter into an Agreement with you for the sale and
distribution of the Class B shares of the Fund for which you are Distributor and
whose Class B shares are offered to the public at net asset value plus any
initial sales charge as set forth in the current prospectus. Upon acceptance of
this Agreement by you, we understand that we may offer and sell Class B shares
of the Fund, subject, however, to all of the terms and conditions hereof and to
your right to suspend or terminate the sale of such securities.
1. We understand that the Class B shares of the Fund covered
by this agreement will be offered and sold at the public offering price. The
public offering price is the net asset value described in the Fund's current
Prospectus in effect at the time the order for such shares is confirmed and
accepted on your behalf by the Fund plus any initial sales charge. We further
understand that all purchase requests and applications submitted by us are
subject to acceptance or rejection in the Fund's or your sole discretion.
2. We certify that we are members of the National Association
of Securities Dealers, Inc. ("NASD") and agree to maintain Membership in said
Association, or in the alternative, that we are foreign brokers not eligible for
membership in said Association. In either case, we agree to abide by all the
rules and regulations of the NASD which are binding upon underwriters and
brokers in the distribution of the shares of open-end investment companies,
including without limitation, Section 26 of Article III of the Rules of Fair
Practice, all of which are incorporated herein as if set forth in full. We
further agree to comply with all applicable state and Federal laws and the rules
and regulations of authorized regulatory agencies. We agree that we will not
sell or offer for sale, Class B shares of the Fund in any state or jurisdiction
where they are not exempt from registration or have not been qualified for sale.
<PAGE>
3. We will offer and sell the Class B shares of the Fund
covered by this Agreement only in accordance with the terms and conditions of
its then current Prospectus, and we will make no representations not included in
said Prospectus or in any authorized supplemental material supplied by you. We
will use our best efforts in the development and promotion of sales of the Class
B shares covered by this Agreement and agree to be responsible for the proper
instruction and training of all sales personnel employed by us, in order that
the Class B shares will be offered in accordance with the terms and conditions
of this Agreement and all applicable laws, rules and regulations. We agree to
hold you harmless and indemnify you in the event that we, or any of our sales
representatives, should violate any law, rule or regulation, or any provisions
of this Agreement, which may result in liability to you; and in the event you
determine to refund any amount paid by any investor by reason of any such
violation on our part, we shall return to you any distribution assistance
payments previously paid or allowed by you to us with respect to the transaction
for which the refund is made. All expenses which we incur in connection with our
activities under this Agreement shall be borne by us.
4. For purposes of this Agreement "Qualified Accounts" shall
mean: accounts of customers of ours who have purchased Class B shares of the
Fund and who use our facilities to communicate with the Fund or to effect
redemptions or additional purchases of Class B shares of the Fund.
5. In consideration of the distribution services and
facilities described herein, we shall be entitled to receive from you such fees
as are set forth in the Plan for Payment of Certain Expenses for Distribution
Shares - Class B shares (the "Plan"). We understand that the payment of such
fees has been authorized pursuant to a Plan approved by the Board of Trustees
and shall be paid only so long as this Agreement is in effect.
6. The frequency of payment, the terms of any right to sell in
a territory, and any other supplemental terms, conditions or qualifications for
us to receive such payments are subject to change by you from time to time, upon
30 days' written notice. Any orders placed after the effective date of such
change shall be subject to the fee rates in effect at the time of receipt of the
payment by the Fund or you. Such 30-day period may be waived at your sole option
in the event such change increases the distribution assistance payments due us.
7. Payment for Class B shares shall be made to the Fund and
shall be received by the Fund promptly after the acceptance of our order. If
such payment is not received by the Fund, we understand that the Fund reserves
the right without notice, forthwith to cancel the sale, or, at the Fund's
option, to sell the Class B shares ordered by us back to the Fund in which
latter case we may be held responsible for any loss, including loss of profit,
suffered by the Fund resulting from our failure to make payments aforesaid.
8. Your obligations to us under this Agreement are subject to
all the provisions of any underwriting agreements you have or may enter into
with the Fund. We
-2-
<PAGE>
understand and agree that in performing our services covered by this Agreement
we are acting as principal, and you are in no way responsible for the manner of
our performance or for any of our acts or omissions in connection therewith.
Nothing in this Agreement or in the Plan shall be construed to constitute us or
any of our agents, employees or representatives as your agent, partner or
employee, or the agent, partner or employee of the Fund.
9. This Agreement shall terminate automatically (i) in the
event of its assignment, the term "assignment" for this purpose having the
meaning defined in Section 2(a)(4) of the Act or (ii) in the event the Plan is
terminated.
10. This Agreement may be terminated at any time (without
payment of any penalty) by a majority of the "Qualified Trustees" as defined in
the Plan or by a vote of a majority of the outstanding voting Class B securities
of the Fund as defined in the Plan (on not more than 60 days' written notice to
us at our principal place of business). We, on 60 days' written notice addressed
to you at your principal place of business, may terminate this Agreement. You
may also terminate this Agreement for cause on violation by us of any of the
provisions of this Agreement, said termination to become effective on the date
of mailing notice to us of such termination. Without limiting the generality of
the foregoing and any provision hereof to the contrary notwithstanding, our
expulsion from the NASD will automatically terminate this Agreement without
notice; our suspension from the NASD or violation of applicable state or Federal
laws or rules and regulations of authorized regulatory agencies will terminate
this Agreement effective upon date of mailing notice to us of such termination.
Your failure to terminate for any cause shall not constitute a waiver of your
right to terminate at a later date for any such cause.
11. A copy of the Certificate of Trust is on file with the
Secretary of State of Delaware, and notice is hereby given that this instrument
is executed on behalf of the Trustees as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees or
shareholders individually but are binding only upon the assets and property of
the Fund.
12. All communications to you shall be sent to you at your
offices at 500 Fifth Avenue, New York, N.Y. 10110. Any notice to us shall be
duly given if mailed or telegraphed to us at the address shown on this
Agreement.
13. This Agreement shall become effective as of the date when
it is executed and dated by you below. This Agreement and all the rights and
obligations of the parties hereunder shall be governed by and construed under
the laws of the State of New York.
-----------------------------------
(Broker/Dealer)
-3-
<PAGE>
By:________________________________
Name:
Title:
-----------------------------------
(Address)
-----------------------------------
(City) (State) (Zip Code)
ACCEPTED:
TRAUTMAN KRAMER & COMPANY, INC.
By:_________________________
Name:
Title:
-4-
MULTIPLE CLASS PLAN
OF
THE TRAUTMAN KRAMER TRUST
SECTION 1. This Multiple Class Plan (the "Plan") adopted in accordance
with Rule 18f-3 promulgated under the Investment Company Act of 1940, as amended
(the "1940 Act"), shall govern the terms and conditions under which The Trautman
Kramer Trust (the "Trust") may issue separate classes of shares representing
interests in the Trust's series of funds (the "Funds") listed on Appendix A. To
the extent that a subject matter herein is covered by the Trust's Certificate of
Trust, Trust Instrument or Bylaws, the Certificate of Trust, Trust Instrument
and/or Bylaws will control in the event of any inconsistencies with the
descriptions herein.
SECTION 2. Rights and Obligations. Except as set forth herein, all
classes of shares issued in respect of a Fund have identical voting, dividend,
liquidation and other rights, preferences, powers, restrictions, limitations,
qualifications, designations, and terms and conditions. The only difference
among the various classes of shares relate solely to the following factors: (a)
each class may be subject to different class expenses as discussed under Section
4 of this Plan; (b) each class may bear different identifying designations; (c)
each class will have exclusive voting rights with respect to any such class; (d)
each class may have different exchange privileges; and (e) certain classes may
provide for the conversion of such class into another class.
SECTION 3. Classes of Shares and Designation Thereof. Each Fund may
offer any or all of the following classes of shares:
(a) Class A Shares. "Class A" Shares of a Fund will be sold at
net asset value plus a front-end sales load of 4.50% of the offering
price. The sales load will be subject to reductions for larger
purchases under a combined purchase privilege, a right of accumulation,
or a letter of intent. The front-end sales load will be subject to
certain other reductions permitted by Section 22(d) of the 1940 Act. No
sales load will be imposed upon purchases: (1) by certain "qualified
persons," which are (a) active or retired Trustees, Directors,
officers, partners or employees (their spouses and children under age
21) of (i) Trautman Kramer Capital Management, Inc. (the "Adviser"),
Tocqueville Asset Management, L.P. (the "Subadviser"), and Trautman
Kramer & Company, Inc. (the "Distributor") or any affiliates or
subsidiaries thereof (the directors, officers or employees of which
shall also include their parents and siblings for all purchasers of
Fund shares), (ii) dealers having a selected dealer agreement with the
Distributor, (iii) trade organizations to which the Adviser belongs, or
(iv) organizations providing professional services to the Trust and (b)
trustees or custodians of any qualified retirement plan or IRA
established for the benefit of a person in (a) above; and (2) by
persons who have, within the previous 30 days, redeemed their shares of
such Fund. The amount which may be purchased at net asset value is
limited to an amount up to, but not exceeding, the net amount of
redemption proceeds.
<PAGE>
Class A Shares of a Fund will be subject to a Rule 12b-1
distribution fee and a Shareholder Servicing fee, as provided under
separate plans, at an annual rate of up to .50% and .25%, respectively,
of the average daily net assets attributable to the Class A Shares of
the Fund. The Rule 12b-1 distribution fee is payable to the
Distributor, and/or certain financial intermediaries having agreements
with the Distributor for the distribution of Class A shares of the
Fund, and the Shareholder Servicing fee is payable to the Distributor
and/or certain financial intermediaries that provide certain
shareholder services to the Class A shares of the Fund.
(b) Class B Shares. "Class B" Shares of a Fund will be sold to
investors at net asset value plus a front-end sales load of 1.00% of
the offering price and a contingent deferred sales charge ("CDSC"). An
investor's proceeds from a redemption of Class B Shares of a Fund made
within eighteen (18) months after their purchase (the "CDSC Period")
generally will be subject to a maximum 1% CDSC payable to the
Distributor. No CDSC will be imposed on amounts representing an
increase in the value of the shareholder's account resulting from
capital appreciation above the amount paid for shares purchased during
the CDSC Period. In determining whether a CDSC is applicable, it will
be assumed that a redemption is made, first, of any shares in the
shareholder's Fund account that are not subject to a CDSC; second, of
shares derived from reinvestment of dividends and distributions; third,
of shares purchased and held on a first-in/first-out basis. The CDSC
will be assessed on an amount equal to the lesser of the then current
market value or the original cost of the shares being redeemed. The
provisions of the CDSC Period may not be changed without the consent of
the Distributor and the Trust's Board of Trustees, including a majority
of trustees who are not interested persons of the Trust, with respect
to Class B Shareholders.
Class B Shares of a Fund will be subject to a Rule 12b-1
distribution fee and a Shareholder Servicing fee, as provided under
separate plans, at an annual rate of up to .50% and .25%, respectively,
of the average dialy net assets attributable to the Class B Shares of
the Fund. The Rule 12b-1 distribution fee is payable to the
Distributor, and/or certain financial intermediaries having agreements
with the Distributor for the distribution of Class B shares of the
Fund, and the Shareholder Servicing fee is payable to the Distributor
and/or certain financial intermediaries that provide certain
shareholder services to the Class B shares of the Fund.
No sales load will be imposed upon purchases by persons who
have, within the previous 30 days, redeemed their Class B shares of
such Fund.
The CDSC applicable to Class B shares may be waived, subject
to confirmation of a shareholder's status, for: (1) a total or partial
redemption made within one year of the death of the shareholder; (2) a
redemption in connection with a minimum required distribution from an
IRA, Keogh or custodial account under section 403(b) of the Internal
Revenue Code; (3) distributions from a qualified plan upon retirement;
and (4) a redemption resulting from an over-contribution to an IRA.
- 2 -
<PAGE>
SECTION 4. Allocation of Expenses.
(a) Class Expenses. Each class of shares of a Fund shall be
subject to different class expenses consisting of (1) Rule 12b-1 plan
distribution fees and shareholder service plan fees, if applicable to a
particular class, (2) transfer agency and other recordkeeping costs to
the extent allocated to a particular class, (3) SEC and blue sky
registration fees incurred separately by a particular class, (4)
litigation or other legal expenses relating solely to a particular
class, (5) printing and postage expenses related to the preparation and
distribution of class specific materials such as shareholder reports,
prospectuses and proxies to shareholders of a particular class, (6)
expenses of administrative personnel and services as required to
support the shareholders of a particular class, (7) audit or accounting
fees or expenses relating solely to a particular class, (8) director
fees and expenses incurred as a result of issues relating solely to a
particular class, and (9) any other expenses subsequently identified
that should be properly allocated to a particular class, which shall be
approved by the Board of Trustees (collectively, "Class Expenses").
(b) Other Expenses. Except for the Class Expenses discussed
above (which will be allocated to the appropriate class), all expenses
incurred by a Fund will be allocated to each class of shares of the
Fund on the basis of the net asset value of each class to the net asset
value of the Trust or the Fund, as the case may be.
(c) Waivers and Reimbursements of Expenses. The Distributor,
the Adviser, and any provider of services to the Funds may defer, waive
or reimburse the expenses of a particular class or classes, provided,
however, that such waiver shall not result in cross-subsidization
between classes. The Distributor, the Adviser, and any provider of
services may seek repayment of such deferred or absorbed expenses after
the practice is discontinued, provided that the aggregate expenses in
the year such amounts are recouped do not exceed any expense
limitations of the class of shares of the Fund.
SECTION 5. Allocation of Income. Each Fund will allocate income and
realized and unrealized capital gains and losses based on the relative net
assets of each class of its shares.
SECTION 6. Exchange Privileges. Shareholders may exchange Class A
and/or Class B shares of any or all of an investment in a Fund for shares of the
Firstar Money Market Fund. For purposes of the exchange privilege, exchanges
into and out of the Firstar Money Market Fund will be treated as shares owned in
the Fund.
SECTION 7. Conversions. Class A shares may not be converted into Class
B shares, and Class B shares may not be converted into Class A Shares.
SECTION 8. This Plan shall not take effect until a majority of the
trustees of the Trust, including a majority of the directors who are not
interested persons of the Trust, shall
- 3 -
<PAGE>
find that the Plan, as proposed and including the expense allocations, is in the
best interests of each class individually and the Trust as a whole.
SECTION 9. This Plan may not be amended to materially change the
provisions of this Plan unless such amendment is approved in the manner
specified in Section 8 above.
Approved: November 20, 1997
- 4 -
<PAGE>
APPENDIX A TO
MULTIPLE CLASS PLAN
OF
THE TRAUTMAN KRAMER TRUST
The Trautman Kramer Value Plus Fund
- 5 -
