AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
________________, 1997
1933 Act File No. _________
1940 Act File No. _________
Form N-1A
Securities and Exchange Commission
Washington, D.C. 20549
Form N-1A
Registration Statement Under the Securities Act of 1933 [x]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
and/or
Registration Statement Under the Investment Company Act of 1940 [x]
Amendment No. ___
(Check appropriate box or boxes.)
Empirical Investment Funds
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(Exact Name of Registrant as Specified in Charter)
Empirical Investment Funds
1521 Alton Road Suite 364
Miami Beach, FL 33139
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(305) 535-0023
- -------------------------------------------------------------------------------
(Registrant's Telephone Number, including Area Code)
Kaye Anderson-Kerr, President
Empirical Investment Funds
1521 Alton Road Suite 364
Miami Beach, FL 33139
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this
Registration Statement
It is proposed that this filing will become effective (check appropriate box)
[ ] Immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on September 11, 1997 pursuant to paragraph (a)(i) of rule 485
[X] 75 days after filing pursuant to paragraph (a)(ii) of Rule 485
[ ] on (date) pursuant to paragraph (a)(i) of Rule 485
An indefinite number of Registrant's securities is being registered pursuant to
Rule 24f-2 under the Investment Company Act of 1940.
The Registrant hereby amends this Registration Statement on such dates as may be
necessary to delay its effective date until the Registrant shall file a further
amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until this Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a) may determine.
<PAGE>
Cross Reference Sheet
INFORMATION REQUIRED CAPTIONS IN FILING
Part A: IN A PROSPECTUS
Item 1. Cover Page Cover Page
Item 2. Synopsis Fund Expenses
Item 3. Condensed Financial Information Not Applicable
Item 4. General Description of Registrant The Fund
Item 5. Management of the Fund Management of the Fund
Item 6. Capital Stock and other Securities Capital Stock
Item 7. Purchase of Securities being Offered Purchases and Redemptions
Item 8. Redemption or Repurchase Purchases and Redemptions
Item 9. Legal Proceedings Litigation
Part B: STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Fund
Item 13. Investment Objectives and Policies Objectives and Policies
Item 14. Management of the Registrant Officers & Trustees of the Fund
Item 15. Control Persons & Principal Officers & Trustees of the Fund
Holders of Securities
Item 16. Investment Advisory and Other Investment Adviser
Services
Item 17. Brokerage Allocation Brokerage
Item 18. Capital Stock & Other Securities Capital Stock
Item 19. Purchase, Redemption & Pricing of Purchases and Redemptions; Share
Securities Being Offered Valuation
Item 20. Tax Status Tax Status
Item 21. Underwriters Not Applicable
Item 22. Calculation of Yield Quotations of Not Applicable
Money Market Funds
Item 23. Financial Statements Financial Statements
Part C: OTHER INFORMATION
Item 24. Financial Statements & Exhibits Financial Statements & Exhibits
Item 25. Persons Controlled by/or under Control Persons
Common Control
Item 26. Number of Holders of Securities Number of Shareholders
Item 27. Indemnifications Indemnification
Item 28. Business & Other Connections of Activities of Investment Adviser
Adviser
Item 29 Principal Underwriters Principal Underwriter
Item 30. Location of Accounts & Records Location of Accounts & Records
Item 31. Management Services Not Applicable
Item 32. Undertakings Not Applicable
<PAGE>
THE FUND & INVESTMENT OBJECTIVE EMPIRICAL GROWTH FUND
The Empirical Growth Fund ("the Fund") is a diversified series of 1521 Alton
Rd., Suite 364 Empirical Investment Funds, ("the Trust") a no-load, open-end,
Miami Beach, FL 33139 management investment company. The Empirical Growth Fund's
investment (305) 535-1006 objective is to achieve superior risk-adjusted capital
appreciation on (800) 934-0566 long-term investment dollars; income is a
secondary consideration.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Investors are advised to read
and retain this prospectus for future reference.
A Statement of Additional Information provides a further discussion of certain
areas in this Prospectus and other matters which may be of interest to some
investors. A Statement of Additional Information, dated XXXXX XX, XXXX has been
filed with the Securities and Exchange Commission and is hereby incorporated by
reference into this Prospectus. A copy of the Statement may be obtained without
charge upon request to the Fund at the address Or telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS
DATED XXXXX XX, XXXX
TABLE OF CONTENTS
Fund Expenses...............................................................1
Fund Organization...........................................................2
Objective & Policies........................................................2
Management of the Fund
Board of Trustees........................................................5
Investment Adviser.......................................................5
Other Services...........................................................6
Purchase and Redemptions....................................................7
Brokerage...................................................................8
Share Valuation.............................................................8
Investment Performance......................................................8
Dividends, Distributions
and Tax Status...........................................................9
Reports to Shareholders....................................................10
General
Capital Stock...........................................................10
Voting Rights...........................................................10
FUND EXPENSES
The following tables are designed to assist investors in understanding.
Table 1: Shareholder Transaction Expenses:
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Redemption Fees None
Exchange Fees None
IRA Trustee Fees None
Table 2: Estimated Annual Fund Operating Expenses as a Percentage of Assets*:
Management Fees .75%
12b-1 Fees None
Other Expenses (after expense reimbursement)** .75%
-----
Total Operating Expenses 1.50%
*Figures shown are based on estimated expenses for the current fiscal year.
Actual expenses may be greater or less than such estimates.
**Other expenses does not include extraordinary expenses as determined by the
use of generally accepted accounting principles.
The following illustrates the expenses paid on a $1,000 investment over various
time periods assuming that all dividends are reinvested and further assumes (a)
5% annual rate of return and (b) redemption at the end of each time period. This
example should not be considered a representation of past or future expenses or
performance. Actual expenses may be greater or less than those shown.
1 Year 3 Years 5 Years 10 Years
1
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FUND ORGANIZATION
The Fund is a diversified series of Empirical Investment Funds (the "Trust") a
no-load, open-end, diversified, management investment company registered under
the Investment Company Act of 1940 (the "1940 Act") and organized under the
Delaware law as a business trust under a Declaration of Trust dated 9/29/97. The
Declaration of Trust permits the Trust to offer separate series ("Series") of
shares. All consideration received by the Company for shares of any Fund and all
assets of such Fund belong to that portfolio and would be subject to liabilities
related thereto. The Fund reserves the right to create and issue shares of
additional Funds.
OBJECTIVES AND POLICIES
Empirical Growth Fund seeks to achieve superior risk-adjusted capital
appreciation on long-term investment dollars; income is a secondary
consideration.
Under normal market conditions, the Fund expects to invest at least 75% in
equity securities including; common stocks, preferred stocks, and securities
that are convertible into common or preferred stocks, which are believed to
provide opportunities for capital gain. For liquidity, diversity, and
flexibility, the fund may invest the remaining 25% of its net assets in Real
Estate Investment Trusts, American Depository Receipts, short- to
intermediate-term corporate and U.S. Government debt securities, cash, and money
market instruments. In abnormal market conditions, it may invest more than 25%
in these securities as a defensive tactic. The Investment Objectives are
considered to be fundamental policy therefor requiring the approval of a
majority of the outstanding shares to be changed.
Investment Strategies and Policies: In pursuit of its objectives and policies,
the Fund may employ one or more of the following strategies in order to enhance
investment results:
Common stocks. Common stocks are ownership shares and represents a proportionate
interest in the issuing companies. They are sold initially by the corporation to
raise cash for business purposes and then traded among investors. Therefore, the
Fund participates in the success or failure of any company in which it holds
stock. (Please see Risk Factors on page 4.)
Convertible Securities. Convertibility refers to the ability of the holder of
the security to exchange it for another security, usually debt exchanged for
equity. The Fund may invest in convertible securities (bonds, notes, preferred
stock and other securities convertible into common stocks) which may offer
higher income than the common stocks into which they are convertible. The
convertible securities which the Fund may invest include bonds, preferred stock,
and warrants which may be converted or exchanged at a stated or determinable
exchange ratio into underlying shares of common stock. Prior to their
conversion, convertible securities may have characteristics similar to both
nonconvertible debt securities and equity securities. (Please see Risk Factors
on page 4.)
2
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Repurchase Agreements. As a means of earning income for periods as short as
overnight the Fund may enter into repurchase agreements with selected banks and
broker/dealers. Under a repurchase agreement, the Fund acquires securities,
subject the seller agreement, at the time of the sale, to repurchase them at a
mutually agreed upon time and price. (Please see Risk Factors on page 4.)
Real estate investment trusts (REITs) were created to give larger numbers of
Americans a means of investing in real estate projects that previously were
accessible to only the wealthy. REITs are designed to pass through all income of
the real estate properties and other assets managed by the REIT to investors.
(Please see Risk Factors on page 4.)
American Depositary Receipts. The fund may also purchase U.S. denominated
American Depositary Receipts ("ADRs") for foreign securities, which are traded
in the U.S. on national securities exchanges or over-the-counter and are issued
by domestic banks. (Please see Risk Factors on page 4.)
Risk Factors: Risks associated with the Fund's performance will be those due to
broad market declines as well as business risks from difficulties which may
occur to particular companies while in the Fund's portfolio. As is true of
almost all securities, it must be realized that there can be no assurance that
the Fund will obtain its ongoing objective of capital appreciation. The
following are descriptions of certain risks related to the investments and
techniques that the Fund may use from time to time.
Common Stocks. The market values of common stocks can fluctuate significantly,
reflecting the business performance of the issuing company, investor perception
and general economic or financial market movements. Despite the risk of price
volatility, however, common stocks have traditionally offered the greatest
potential for gain on investment, compared to other classes of financial assets
such as bonds or cash equivalents.
Convertible Securities. While convertible securities generally offer lower
yields than nonconvertible debt securities of similar quality, their prices may
reflect changes in the value of the underlying common stocks.
Convertible securities entail less credit risk than the issuer's common stock.
3
<PAGE>
Real estate investment trusts (REITs). Because the success of a REIT depends on
its management's ability to select potentially profitable assets and to manage
them well, the investment objective may or may not be reached. A risk associated
with certain mortgage-backed securities is the possibility that the underlying
borrowers will repay the mortgages faster than expected, thereby depriving
investors of the interest income they could have earned over a longer repayment
schedule.
American Depositary Receipts. While ADRs are not considered to be foreign
securities, they do not eliminate all the risk inherent in investing in the
securities of foreign issuers. However, by investing in ADRs the fund avoids
currency risks during the settlement period. Also, generally the information
available on ADRss is subject to the accounting, auditing and financial
reporting standards of the domestic market or exchange on which they are traded;
these standards are more uniform and more exacting than those to which many
foreign issuers may be subject.
Security Selection Criteria: The Adviser employs a bottom-up stock selection
process that is based on intensive fundamental and technical research. While the
Fund may invest in companies of any size, it will emphasize medium capitalized
companies. These companies may include those that can sustain above average and
consistent earnings growth as well as companies that the management believes
have new or innovative products, services, or processes, which can enhance
prospects for growth in future earnings. The Fund's strategy does not preclude
investment in large, seasoned companies which, in the judgment of management,
possess superior potential returns similar to companies with formative growth
profiles. Also, small-capitalized companies may be added to the portfolio if the
adviser feels that the opportunity to achieve returns outweigh the risks that
can be associated with companies of this size.
Portfolio Turnover Policy: The Fund does not propose to purchase securities for
short term trading in the ordinary course of operations. However, the Fund will
dispose of securities without regard to the time they have been held when such
action appears advisable to management either as a result of securities having
reached a price objective, or by reason of developments not foreseen at the time
of the investment decisions. Accordingly, the Fund's annual portfolio turnover
rate cannot be fully anticipated and may be relatively high (100% or more).
4
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MANAGEMENT OF THE FUND
The overall management and responsibility of the business and affairs of the
Fund is vested in the Trust's Board of Trustees. The Board of Trustees approves
all significant agreements between the Trust, on behalf of one or more of the
Fund's, and persons or companies furnishing services to the funds, including the
Investment Advisory Agreement. The Trust is not required to hold and has no
current intentions of holding annual shareholders meetings, although special
meetings may be called for purposes such as changing fundamental policies.
INVESTMENT ADVISER
Responsibility for overall management of the Fund rests with its Board of
Trustees in accordance with Delaware law. Professional investment supervision is
provided by the Investment Adviser, Worldwide Financial Management Associates,
Inc. in Miami Beach, FL. The Investment Adviser formulates guidelines and lists
of appropriate investments for each portfolio, will place all orders for the
purchase and sale of portfolio securities, and will maintain records relating to
such transactions.
On XXXXX XX, XXXX shareholders of the Fund approved an Investment Advisory
Agreement with Worldwide Financial Management Associates, Inc., which was
unanimously approved by the Board of Trustees XXXXX XX, XXXX. This Agreement
will continue on a year to year basis provided that approval is voted at least
annually by specific approval of the Board of Trustees of the Fund or by vote of
the holders of a majority of the outstanding voting securities of the Fund, but,
in either event, it must also be approved by a majority of the trustees of the
Fund who are neither parties to the agreement nor interested persons as defined
in the Investment Company Act of 1940 at a meeting called for the purpose of
voting on such approval.
Ms. Kaye Anderson-Kerr established the company in Oct. 1996 and is the sole
owner, director and officer of the Investment Adviser and president of the Fund.
Ms. Anderson-Kerr began her career as an account executive with R.J. Steichen &
Co. in Feb. 1994. In May of that year, Ms. Anderson-Kerr went to Tuschner &
Company where she became a Vice President. She has also served as a Financial
Adviser and Consultant to many established and ongoing business operations. In
addition, she passed the Series 7 - General Securities, Series 63 - Uniform Blue
Sky, Series 24 - General Principal, and the Series 65 - Registered Investment
Advisor NASD licensing exams. Ms. Anderson-Kerr is also a level I candidate for
the Chartered Financial Analyst (CFA) designation.
Under the Agreement, Worldwide Financial Management Associates, Inc. will
furnish investment advice to the Trustees of the Fund on the basis of a
continuous review of the portfolio and recommend to the Fund when and to what
extent securities should be purchased or disposed. The Agreement may be
terminated at any time, without the payment of any penalty, by the Board of
Trustees or by vote of a majority of the outstanding voting securities of the
Fund on not more than 60 days written notice to Worldwide Financial Management
Associates, Inc. In the event of its assignment, the Agreement will terminate
automatically. For these services the Fund has agreed to pay to Worldwide
Financial Management Associates, Inc. a fee of .75 of 1% per year on the net
assets of the Fund. All fees are computed on the average daily closing net asset
value of the Fund and are payable monthly.
5
<PAGE>
The Investment adviser has paid the initial organizational costs of the Fund and
will reimburse the Fund for any and all losses incurred because of purchase
reneges.
In order to increase the yield to investors, the Investment Manager and its
affiliates may voluntarily from time to time, waive or reduce its (or their)
fees on assets held by each of the Portfolios, which would have the effect of
lowering that Portfolio's overall expense ratio and increasing yield to
investors during the time such fees are waived or reduced. Fee waivers or
reductions, other than set forth in the Investment Advisory Agreement or
otherwise described in this Prospectus, may be rescinded at any time without
further notice to investors.
TRANSFER AGENT
Worldwide Investor Services, Inc. (a wholly owned subsidiary of the Investment
Adviser) will serve as the transfer agent and dividend disbursing agent pursuant
to the terms of the Transfer Agency and Dividend Disbursing Agency Agreement.
Services provided will include (but are not limited to) maintaining records of
shareholders, to cancel and issue certificates, to resolve problems arising from
lost, destroyed, or stolen certificates, providing confirmations of purchases
and sales, aggregating, processing and recording purchases and redemptions of
shares, processing dividend and distribution payments, and forwarding
shareholder communications such as proxies, shareholder reports, and dividend
notices.
As compensation for these services, the Fund will pay Worldwide Investor
Services, Inc. a fee of .20 of 1% of the Fund's average net assets which is
calculated daily and paid monthly.
ADMINISTRATION
The Trust and the Investment Adviser have entered into an Administration
Agreement pursuant to which the Investment Adviser, as Administrator, provides
administrative services to each of the Fund's portfolios. Administrative
services furnished by the Investment Adviser include, among others, maintaining
and preserving the records of the Fund, including financial and corporate
reports, computing NAV, dividends, performance data and financial information
regarding the Fund, preparing reports, overseeing the preparation and filing
with the SEC and state securities regulators of registration statements,
notices, reports and other material required to be filed under applicable laws,
developing and implementing procedures for monitoring compliance and regulatory
requirements, providing routine accounting services, providing office facilities
and clerical support as well as providing general oversight of other service
providers.
For its services as administrator, the Investment Adviser receives from each
portfolio an annual fee, payable monthly, of .10 of 1% of average daily net
assets of such Portfolio. The fee is accrued daily as an expense of each
Portfolio.
CUSTODIAN To be supplied by amendment.
DISTRIBUTOR To be supplied by amendment.
6
<PAGE>
PURCHASES AND REDEMPTIONS
Shares may be purchased directly from the Fund by simply forwarding the
completed application and a check payable to "Empirical Investment Funds". Upon
receipt, your account will be credited with the full and fractional shares which
can be purchased at the net asset value next determined after receipt of the
purchase order by the Fund. Net asset value is computed in the manner described
under the caption "SHARE VALUATION" in this Prospectus. The Fund reserves the
right at its sole discretion to terminate the offering of its shares made by
this Prospectus at any time and to reject purchase applications when, in the
judgment of management, such termination or rejection is in the best interests
of the Fund.
Initial Investments: The minimum initial investment to establish an Empirical
Investment Funds account is $2,500. For the convenience of investors, a Share
Purchase Application form is provided with this Prospectus. The Fund will be
initially registered in Florida and therefore restricted to Florida residents
until which time registration under the Blue-Sky laws of other states becomes
effective and the state requirements have been met.
Subsequent Purchases: Subsequent purchases may be made for $500 or more.
The Trust reserves the right in its sole discretion to suspend the continued
offering of the Trust's shares and to reject purchase orders in whole or in part
when in the judgment of the Board such action is in the best interest of the
Trust.
Fractional Shares: Shares will be issued to three decimal places as purchased
from the fund. The fund will maintain an account for each shareholder of shares
for which no certificates have been issued.
Redemptions: Payments to shareholders for shares of the Trust redeemed directly
from the Trust will be made as promptly as possible but no later than seven days
after receipt by the Trust's transfer agent of the written request in proper
form, with the appropriate documentation as stated in the prospectus, except
that the Trust may suspend the right of redemption or postpone the date of
payment during any period when (a) trading on the New York Stock Exchange is
restricted as determined by the Securities and Exchange Commission or such
Exchange is closed for other than weekends and holidays; (b) an emergency exists
as determined by the Securities and Exchange Commission making disposal of
portfolio securities or valuation of net assets of the Trust not reasonably
practicable; or for such other period as the Securities and Exchange Commission
may permit for the protection of the Trust's shareholders.
The Fund reserves the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption or repurchase of the Trust's
shares by making payment in whole or in part in readily marketable securities
chosen by the Trust and valued in the same way as they would be valued for
purposes of computing each Fund's net asset value. If such payment were made, an
investor may incur brokerage costs in converting such securities to cash. The
value of shares on redemption or repurchase may be more or less than the
investor's cost, depending upon the market value of the Trust's portfolio
securities at the time of redemption or repurchase.
7
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BROKERAGE
Subject to the general supervision of the Board, the Adviser is responsible for
placing orders for securities transactions for the Fund. Purchases and sales of
equity securities will normally be conducted through brokerage firms entitled to
receive commissions for effecting such transactions. In placing orders, it is
the policy of the Trust to ensure that the most favorable execution for its
transactions is obtained. Where such execution may be obtained from more than
one broker or dealer, securities transactions may be directed to those who
provide research, statistical and other information to the Trust or the Adviser.
Purchases and sales of debt securities are expected to occur primarily with
issuers, underwriters or major dealers acting as principals. Such transactions
are normally effected on a net basis and do not involve payment of brokerage
commissions. The Trust has no obligation to enter into securities transactions
with any particular dealer, issuer, underwriter or other entity. In addition,
the Board may, to the extent consistent with the Investment Company Act and
other applicable law, authorize the Adviser to direct transactions to service
organizations retained by the Trust or their affiliates; under appropriate
circumstances, such transactions may be used for the purpose of offsetting fees
otherwise payable by the Trust for custody, transfer agency or other services.
SHARE VALUATION
The net asset value of the Fund's shares is determined as of the close of
business of the New York Stock Exchange on each business day of which that
Exchange is open (presently 4:00 p.m. EST) Monday through Friday exclusive of
Washington's Birthday, Good Friday, Memorial Day, July 4th, Labor Day,
Thanksgiving, Christmas & New Year's Day. The price is determined by dividing
the value of its securities, plus any cash and other assets less all
liabilities, excluding capital surplus, by the number of shares outstanding. The
market value of securities listed on a national exchange is determined to be the
closing sales price on such exchange on the day in which the valuation is made.
Listed securities that have not recently traded are valued at the last bid price
in such market.
Short term paper (debt obligations that mature in less than 60 days) are valued
at amortized cost which approximates market value. Other assets are valued at
fair market value as determined in good faith by the Board of Trustees.
INVESTMENT PERFORMANCE
From time to time the Fund may advertise performance data including monthly,
quarterly, yearly or cumulative total return and average annual total return
figures. All such figures are based on historical earnings and are not intended
to be indicative of future performance. The investment return on and principal
value of an investment in the Fund will fluctuate, so that an investor's shares,
when redeemed, may be more or less than their original cost.
Total return is the change in value of an investment in a Fund over a given
period, assuming reinvestment of any dividends from ordinary income or capital
gains. A cumulative total return reflects actual performance over a stated
period of time. An average total return is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. For more information on
performance, please refer to "Performance Measures" in the Statement of
Additional Information.
8
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DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
The policy of the Fund is to pay dividends from net investment income and
distributions of realized capital gains, if any, annually. However, provisions
in the Internal Revenue Code of 1986, as amended (the "Code"), may result in
additional net investment income and capital gains distributions by the Fund.
When you open your account, you should specify on your application how you want
to receive your distributions.
Under the provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as
amended, the Fund intends to pay out substantially all of its investment income
and realized capital gains, and intends to be relieved of federal income tax on
the amounts distributed to shareholders. In order to qualify as a "regulated
investment company" under Sub-Chapter M, at least 90% of the Fund's income must
be derived from dividends, interest, and gains from securities transactions, no
more than 30% of the Fund's profits may be derived from securities held less
than three months, and no more than 50% of the Fund assets may be held in
security holdings that exceed 5% of the total assets of the Fund at time of
purchase. Distribution of any net long-term capital gains realized by the Fund
in 1998 will be taxable to the shareholder as long-term capital gains,
regardless of the length of time Fund shares have been held by the investor. All
income realized by the Fund, including short-term capital gains, will be taxable
to the shareholder as ordinary income. Dividends from net income will be made
annually or more frequently at the discretion of the Fund's Board of Trustees.
Dividends received shortly after purchase of shares by an investor will have the
effect of reducing the per share net asset value of his shares by the amount of
such dividends or distributions and, although in effect a return of capital, are
subject to federal income taxes.
The Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on a W-9 tax form supplied by the
Fund that your Social Security or Taxpayer Identification Number provided is
correct and that you are not currently subject to back-up withholding, or that
you are exempt from back-up withholding.
LITIGATION
As of the date of this prospectus, there was no pending or threatened litigation
involving the Fund in any capacity whatsoever.
REPORTS TO SHAREHOLDERS
The Fund will send annual and semi-annual shareholder reports (based on a
calendar year) which will show all share transactions including dividends and
capital gains distributions for that year.
9
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CAPITAL STOCK
Empirical Investment Funds was organized as a Delaware business trust on 9/29/97
and has authorized capital of an indefinite number of shares of $.001 par value
common stock of all funds in the aggregate. The fund's shares are divided into
separate funds, and the shares of each fund have equal rights and privileges
with all other shares of the fund. The board of trustees is authorized to
classify un-issued shares of the funds by assigning them to a fund for issuance.
Additional funds may be offered in the future, but such additional offerings
would not affect the interests of current shareholders in the existing fund.
The assets received by each fund on the sale of shares of such fund and all
income, earnings, profits and proceeds thereof, subject only to the rights of
creditors, are allocated to such fund, and constitute assets of such fund. The
assets of each fund are required to be segregated on the fund's books of
account.
Each share of a fund represents an equal proportionate interest in that fund
with each other share and is entitled to its proportionate share of such
dividends and distributions out of the income or assets belonging to such fund
as are declared by the board of trustees. Upon liquidation of any fund, fund
shareholders are entitled to share pro rata in the net assets belonging to that
fund available for distribution.
Shares of the fund are fully paid, non-accessible, redeemable and fully
transferable. Shares do not have preemptive rights or subscription rights.
Voting Rights: Each shareholder has one vote for each share held. Voting rights
are non-cumulative, which means that holders of a majority of shares can elect
all trustees of the Fund if they so choose.
Major Shareholders: Kaye Anderson-Kerr, as of the date of this Prospectus, owns
all outstanding shares of the Fund.
DISCLAIMER
No person has been authorized to give any information or to make any
representation other than those contained in this Prospectus and in the Fund's
official sales literature in connection with the offer of the Fund's shares, and
if given or made, such other information or representation must not be relied
upon as having been authorized by the Fund. This Prospectus does not constitute
an offer in any state in which, or to any person to whom, such offering may not
lawfully be made.
10
<PAGE>
The Empirical Growth Fund
1521 Alton Rd., Suite 364
Miami Beach, FL 33139
800-934-0566
Part B
STATEMENT OF ADDITIONAL INFORMATION
This Statement is not a prospectus, but should be read in conjunction with the
Fund's current prospectus dated ______________. To obtain the Prospectus, please
write the Fund or call the telephone number that is shown above.
TABLE OF CONTENTS
Fund Organization.......................1
Objective & Policies....................1
Investment Restrictions.................2
Management of the Fund..................4
Investment Adviser...................4
Other Services.......................6
Officers & Trustees.....................7
Capital Stock...........................7
Portfolio Transactions..................8
Purchases and Redemptions...............9
Share Valuation........................10
Performance Measures...................10
Dividends, Distributions & Tax Status..11
Auditor's Report.......................12
<PAGE>
FUND ORGANIZATION
The Fund is a diversified series of Empirical Investment Funds (the "Trust") a
no-load, open-end, diversified, management investment company registered under
the Investment Company Act of 1940 (the "1940 Act") and organized under the
Delaware law as a business trust under a Declaration of Trust dated 9/29/97. The
Declaration of Trust permits the Trust to offer separate series ("Series") of
shares. All consideration received by the Company for shares of any Fund and all
assets of such Fund belong to that portfolio and would be subject to liabilities
related thereto. The Fund reserves the right to create and issue shares of
additional Funds.
OBJECTIVES AND POLICIES
Empirical Growth Fund seeks to achieve superior risk-adjusted capital
appreciation on long-term investment dollars; income is a secondary
consideration.
Under normal market conditions, the Fund expects to invest at least 75% in
equity securities including; common stocks, preferred stocks, and securities
that are convertible into common or preferred stocks, which are believed to
provide opportunities for capital gain. For liquidity, diversity, and
flexibility, the fund may invest the remaining 25% of its net assets in Real
Estate Investment Trusts, American Depository Receipts, short- to
intermediate-term corporate and U.S. Government debt securities, cash, and money
market instruments. In abnormal market conditions, it may invest more than 25%
in these securities as a defensive tactic.
Investment Strategies and Policies: In pursuit of its objectives and policies,
the Fund may employ one or more of the following strategies in order to enhance
investment results:
Common stocks. Common stocks are ownership shares and represents a proportionate
interest in the issuing companies. They are sold initially by the corporation to
raise cash for business purposes and then traded among investors. Therefore, the
Fund participates in the success or failure of any company in which it holds
stock. (Please see Risk Factors on page 4.)
Convertible Securities. Convertibility refers to the ability of the holder of
the security to exchange it for another security, usually debt exchanged for
equity. The Fund may invest in convertible securities (bonds, notes, preferred
stock and other securities convertible into common stocks) which may offer
higher income than the common stocks into which they are convertible. The
convertible securities which the Fund may invest include bonds, preferred stock,
and warrants which may be converted or exchanged at a stated or determinable
exchange ratio into underlying shares of common stock. Prior to their
conversion, convertible securities may have characteristics similar to both
nonconvertible debt securities and equity securities. (Please see Risk Factors
on page 4.)
1
<PAGE>
Repurchase Agreements. As a means of earning income for periods as short as
overnight the Fund may enter into repurchase agreements with selected banks and
broker/dealers. Under a repurchase agreement, the Fund acquires securities,
subject the seller agreement, at the time of the sale, to repurchase them at a
mutually agreed upon time and price. (Please see Risk Factors on page 4.)
Real estate investment trusts (REITs) were created to give larger numbers of
Americans a means of investing in real estate projects that previously were
accessible to only the wealthy. REITs are designed to pass through all income of
the real estate properties and other assets managed by the REIT to investors.
(Please see Risk Factors on page 4.)
American Depositary Receipts. The fund may also purchase U.S. denominated
American Depositary Receipts ("ADRs") for foreign securities, which are traded
in the U.S. on national securities exchanges or over-the-counter and are issued
by domestic banks. (Please see Risk Factors on page 4.)
Risk Factors: Risks associated with the Fund's performance will be those due to
broad market declines as well as business risks from difficulties which may
occur to particular companies while in the Fund's portfolio. As is true of
almost all securities, it must be realized that there can be no assurance that
the Fund will obtain its ongoing objective of capital appreciation. The
following are descriptions of certain risks related to the investments and
techniques that the Fund may use from time to time.
Common Stocks. The market values of common stocks can fluctuate significantly,
reflecting the business performance of the issuing company, investor perception
and general economic or financial market movements. Despite the risk of price
volatility, however, common stocks have traditionally offered the greatest
potential for gain on investment, compared to other classes of financial assets
such as bonds or cash equivalents.
Convertible Securities. While convertible securities generally offer lower
yields than nonconvertible debt securities of similar quality, their prices may
reflect changes in the value of the underlying common stocks. Convertible
securities entail less credit risk than the issuer's common stock.
INVESTMENT RESTRICTIONS
In addition to the investment objectives and policies described in the
prospectus, the Fund is subject to certain investment restrictions both in
accordance with various provisions of the Investment Company Act and guidelines
adopted by the Trust's Board. These investment restrictions are summarized
below.
The following investment restrictions are fundamental and cannot be changed
without the affirmative vote of a majority of the Fund's outstanding voting
securities as defined in the Investment Company Act.
The Fund may not:
1. Purchase the securities of any issuer, if as a result of such
purchase, more than 5% of the total assets of the Fund would be
invested in the securities of that issuer, or purchase any security
if, as a result of such purchase, the Fund would hold more than 10% of
the outstanding voting securities of an issuer, provided that up to
25% of the value of the Fund's assets may be invested without regard
to this limitation, and provided further that this restriction shall
not apply to investments in obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, repurchase
agreements secured by such obligations, or securities issued by other
investment companies.
2
<PAGE>
2. Borrow money, except that the Fund (i) may borrow amounts, taken in
the aggregate, equal to up to 5% of its total assets, from banks for
temporary purposes (but not for leveraging or investment) and (ii) may
engage in reverse repurchase agreements for any purpose, provided that
(i) and (ii) in combination do not exceed 33 1/3% of the value of the
Fund's total assets (including the amount borrowed) less liabilities
(other than borrowings).
3. Mortgage, pledge or hypothecate any of its assets except in connection
with any permitted borrowing, provided that this restriction does not
prohibit escrow, collateral or margin arrangements in connection with
a Fund's permitted use of options, futures contracts and similar
derivative financial instruments described in the Trust's prospectus.
4. Issue senior securities, as defined in the Investment Company Act,
provided that this restriction shall not be deemed to prohibit a Fund
from making any permitted borrowing, mortgage or pledge, and provided
further that the permitted use of options, futures contracts and
similar derivative financial instruments described in the Trust's
prospectus shall not constitute issuance of a senior security.
5. Underwrite securities issued by others, provided that this restriction
shall not be violated in the event that the Fund may be considered an
underwriter within the meaning of the Securities Act of 1933 in the
disposition of portfolio of securities.
6. Purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments, provided that this shall not
prevent a Fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business.
7. Purchase or sell commodities or commodity contracts, unless acquired
as a result of ownership of securities or other instruments, provided
that a Fund may purchase and sell futures contracts relating to
financial instruments and currencies and related options in the manner
described in the Trust's prospectus.
8. Make loans to others, provided that this restriction shall not be
construed to limit (a) purchases of debt securities or repurchase
agreements in accordance with a Fund's investment objectives and
policies; and (b) loans of portfolio securities in the manner
described in the Trust's prospectus.
9. Invest more than 25% of the market value of its assets in the
securities of companies engaged in any one industry provided that this
restriction does not apply to obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, repurchase
agreements secured by such obligations or securities issued by other
investment companies.
10. Invest in securities of other investment companies except as permitted
under the Investment Company Act or by order of the Securities and
Exchange Commission issued pursuant to that Act.
An investment restriction applicable to a particular Fund shall not be deemed
violated as a result of a change in the market value of an investment, the net
or total assets of that Fund, or any other later change provided that the
restriction was satisfied at the time the relevant action was taken. In order to
permit the sale of its shares in certain states, the Trust may make commitments
more restrictive than those described above. Should the Trust determine that any
such commitment may no longer be appropriate, the Board will consider whether to
revoke the commitment and terminate sales of its shares in the state involved.
3
<PAGE>
MANAGEMENT OF THE FUND
The overall management and responsibility of the business and affairs of the
Fund is vested in the Trust's Board of Trustees. The Board of Trustees approves
all significant agreements between the Trust, on behalf of one or more of the
Fund's, and persons or companies furnishing services to the funds, including the
Investment Advisory Agreement. The Trust is not required to hold and has no
current intentions of holding annual shareholders meetings, although special
meetings may be called for purposes such as changing fundamental policies.
INVESTMENT ADVISER
Responsibility for overall management of the Fund rests with its Board of
Trustees in accordance with Delaware law. Professional investment supervision is
provided by the Investment Adviser, Worldwide Financial Management Associates,
Inc. 1521 Alton Rd., Suite. 364, Miami Beach, FL 33139. The Investment Adviser
formulates guidelines and lists of appropriate investments for each portfolio
and once approved by the president will place all orders for the purchase and
sale of portfolio securities and maintains records relating to such
transactions.
On XXXXX XX, XXXX shareholders of the Fund approved an Investment Advisory
Agreement with Worldwide Financial Management Associates, Inc., which was
unanimously approved by the Board of Trustees XXXXX XX, XXXX. This Agreement
will continue on a year to year basis provided that approval is voted at least
annually by specific approval of the Board of Trustees of the Fund or by vote of
the holders of a majority of the outstanding voting securities of the Fund, but,
in either event, it must also be approved by a majority of the trustees of the
Fund who are neither parties to the agreement nor interested persons as defined
in the Investment Company Act of 1940 at a meeting called for the purpose of
voting on such approval.
4
<PAGE>
Ms. Kaye Anderson-Kerr established the company in Oct. 1996 and is the sole
owner, director and officer of the Investment Adviser and president of the Fund.
Ms. Anderson-Kerr began her career as an account executive with R.J. Steichen &
Co. in Feb. 1994. In May of that year, Ms. Anderson-Kerr went to Tuschner &
Company where she progressed to be a Vice President. She has also served as a
Financial Adviser and Consultant to many established and ongoing business
operations. In addition, she passed the Series 7 - General Securities, Series 63
- - Uniform Blue Sky, Series 24 - General Principal, and the Series 65 -
Registered Investment Advisor NASD licensing exams. Ms. Anderson-Kerr is also a
level I candidate for the Chartered Financial Analyst (CFA) designation.
Under the Agreement, Worldwide Financial Management Associates, Inc. will
furnish investment advice to the Trustees of the Fund on the basis of a
continuous review of the portfolio and recommend to the Fund when and to what
extent securities should be purchased or disposed. The Agreement may be
terminated at any time, without the payment of any penalty, by the Board of
Trustees or by vote of a majority of the outstanding voting securities of the
Fund on not more than 60 days written notice to Worldwide Financial Management
Associates, Inc. In the event of its assignment, the Agreement will terminate
automatically. Ultimate decisions as to the investment policy and as to
individual purchases and sales of securities are made by the Fund's officers and
trustees. For these services the Fund has agreed to pay to Worldwide Financial
Management Associates, Inc. a fee of .75 of 1% per year on the net assets of the
Fund. All fees are computed on the average daily closing net asset value of the
Fund and are payable monthly.
The Investment adviser has paid the initial organizational costs of the Fund and
will reimburse the Fund for any and all losses incurred because of purchase
reneges.
In order to increase the yield to investors, the Investment Manager and its
affiliates may voluntarily from time to time, waive or reduce its (or their)
fees on assets held by each of the Portfolios, which would have the effect of
lowering that Portfolio's overall expense ratio and increasing yield to
investors during the time such fees are waived or reduced. Fee waivers or
reductions, other than set forth in the Investment Advisory Agreement or
otherwise described in this Prospectus, may be rescinded at any time without
further notice to investors.
5
<PAGE>
TRANSFER AGENT
Worldwide Investor Services, Inc. (a wholly owned subsidiary of the Investment
Adviser) will serve as the transfer agent and dividend disbursing agent pursuant
to the terms of the Transfer Agency and Dividend Disbursing Agency Agreement.
Services provided will include (but are not limited to) maintaining records of
shareholders, to cancel and issue certificates, to resolve problems arising from
lost, destroyed, or stolen certificates, providing confirmations of purchases
and sales, aggregating, processing and recording purchases and redemptions of
shares, processing dividend and distribution payments, and forwarding
shareholder communications such as proxies, shareholder reports, and dividend
notices.
As compensation for these services, the Fund will pay Worldwide Investor
Services, Inc. a fee of .20 of 1% of the Fund's average net assets which is
calculated daily and paid monthly.
ADMINISTRATION
The Trust and the Investment Adviser have entered into an Accounting Services
Agreement pursuant to which the Investment Adviser, as Administrator, provides
administrative services to each of the Fund's portfolios. Administrative
services furnished by the Investment Adviser include, among others, maintaining
and preserving the records of the Fund, including financial and corporate
reports, computing NAV, dividends, performance data and financial information
regarding the Fund, preparing reports, overseeing the preparation and filing
with the SEC and state securities regulators of registration statements,
notices, reports and other material required to be filed under applicable laws,
developing and implementing procedures for monitoring compliance and regulatory
requirements, providing routine accounting services, providing office facilities
and clerical support as well as providing general oversight of other service
providers.
For its services as administrator, the Investment Adviser receives from each
portfolio an annual fee, payable monthly, of .10 of 1% of average daily net
assets of such Portfolio. The fee is accrued daily as an expense of each
Portfolio.
CUSTODIAN To be supplied by amendment.
DISTRIBUTOR To be supplied by amendment.
AUDITORS To be supplied by amendment.
6
<PAGE>
OFFICERS AND TRUSTEES OF THE FUND
Officers and Trustees of the Fund together with their principal occupations for
the past five years are:
Principle Occupation
Name Position Past 5 Years
Kaye Anderson-Kerr* President/TrusteeInvestment Executive/Investment Adviser
ADDITIONAL TRUSTEES WILL BE SUPPLIED BY AMENDMENT.
* Trustees of the Fund who are considered "Interested" as defined by the
Investment Company act of 1940. Ms. Anderson-Kerr is president, director and
owner of the Fund's Investment Adviser.
The Fund does not compensate its officers and trustees affiliated with the
Investment Adviser except as they may benefit through payment of the Advisory
fee. The Fund does not intend to compensate its officers and trustees until
assets exceed $2,500,000 although they will be reimbursed for their expenses.
CAPITAL STOCK
Empirical Investment Funds was organized as a Delaware business trust on 9/29/97
and has authorized capital of an indefinite number of shares of $.001 par value
common stock of all funds in the aggregate. The fund's shares are divided into
separate funds, and the shares of each fund have equal rights and privileges
with all other shares of the fund. The board of trustees is authorized to
classify un-issued shares of the funds by assigning them to a fund for issuance.
Additional funds may be offered in the future, but such additional offerings
would not affect the interests of current shareholders in the existing fund.
The assets received by each fund on the sale of shares of such fund and all
income, earnings, profits and proceeds thereof, subject only to the rights of
creditors, are allocated to such fund, and constitute assets of such fund. The
assets of each fund are required to be segregated on the fund's books of
account.
Each share of a fund represents an equal proportionate interest in that fund
with each other share and is entitled to its proportionate share of such
dividends and distributions out of the income or assets belonging to such fund
as are declared by the board of trustees. Upon liquidation of any fund, fund
shareholders are entitled to share pro rata in the net assets belonging to that
fund available for distribution.
Shares of the fund are fully paid, non-accessible, redeemable and fully
transferable. Shares do not have preemptive rights or subscription rights.
Voting Rights: Each shareholder has one vote for each share held. Voting rights
are non-cumulative, which means that holders of a majority of shares can elect
all trustees of the Fund if they so choose.
Major Shareholders: Kaye Anderson-Kerr, as of the date of this Prospectus, owns
all outstanding shares of the Fund.
7
<PAGE>
PORTFOLIO TRANSACTIONS
Subject to the general supervision of the Board, the Adviser of the Fund are
responsible for placing orders for securities transactions for the Fund.
Securities transactions involving stocks will normally be conducted through
brokerage firms entitled to receive commissions for effecting such transactions.
In placing portfolio transactions, the Adviser will use its best efforts to
choose a broker or dealer capable of providing the services necessary to obtain
the most favorable price and execution available. The full range and quality of
services available will be considered in making these determinations, such as
the size of the order, the difficulty of execution, the operational facilities
of the firm involved, the firm's risk in positioning a block of securities, and
other factors. In placing brokerage transactions, the Adviser may, however,
consistent with the interests of the Fund, select brokerage firms on the basis
of the research, statistical and pricing services they provide to the Adviser.
In such cases, the Fund may pay a commission that is higher than the commission
that another qualified broker might have charged for the same transaction,
providing the Investment Manager involved determines in good faith that such
commission is reasonable in terms either of that transaction or the overall
responsibility of the Adviser and the Adviser's other investment advisory
clients.
Transactions involving debt securities and similar instruments are expected to
occur primarily with issuers, underwriters or major dealers acting as
principals. Such transactions are normally effected on a net basis and do not
involve payment of brokerage commissions. The price of the security, however,
usually includes a profit to the dealer. Securities purchased in underwritten
offerings include a fixed amount of compensation to the underwriter, generally
referred to as the underwriter's concession or discount. When securities are
purchased directly from or sold directly to an issuer, no commissions or
discounts are paid.
In no instance will portfolio securities be purchased from or sold to the
Adviser or any affiliated person of the Adviser except to the extent permitted
by applicable law or an order of the Securities and Exchange Commission.
Investment decisions for the Fund are made independently from those of any other
client accounts (which may include mutual funds) managed or advised by the Fund.
Nevertheless, it is possible that at times identical securities will be
acceptable for both the Fund and one or more of such client accounts. In such
cases, simultaneous transactions are inevitable. Purchases and sales are then
averaged as to price and allocated as to amount according to a formula deemed
equitable to each such account. While in some cases this practice could have a
detrimental effect upon the price or value of the security as far as the Fund is
concerned, in other cases it is believed that the ability of the Fund to
participate in volume transactions may produce better executions for the Fund.
8
<PAGE>
PURCHASES AND REDEMPTIONS
Shares may be purchased directly from the Fund by simply forwarding the
completed application and a check payable to "Empirical Investment Funds". Upon
receipt, your account will be credited with the full and fractional shares which
can be purchased at the net asset value next determined after receipt of the
purchase order by the Fund. Net asset value is computed in the manner described
under the caption "SHARE VALUATION" in this Prospectus. The Fund reserves the
right at its sole discretion to terminate the offering of its shares made by
this Prospectus at any time and to reject purchase applications when, in the
judgment of management, such termination or rejection is in the best interests
of the Fund.
Initial Investments: The minimum initial investment to establish an Empirical
Investment Funds account is $2,500. For the convenience of investors, a Share
Purchase Application form is provided with this Prospectus. The Fund will be
initially registered in Florida and therefore restricted to Florida residents
until which time registration under the Blue-Sky laws of other states becomes
effective and the state requirements have been met.
Subsequent Purchases: Subsequent purchases may be made for $500 or more.
The Trust reserves the right in its sole discretion to suspend the continued
offering of the Trust's shares and to reject purchase orders in whole or in part
when in the judgment of the Board such action is in the best interest of the
Trust.
Fractional Shares: Shares will be issued to three decimal places as purchased
from the fund. The fund will maintain an account for each shareholder of shares
for which no certificates have been issued.
Redemptions
Payments to shareholders for shares of the Trust redeemed directly from the
Trust will be made as promptly as possible but no later than seven days after
receipt by the Trust's transfer agent of the written request in proper form,
with the appropriate documentation as stated in the prospectus, except that the
Trust may suspend the right of redemption or postpone the date of payment during
any period when (a) trading on the New York Stock Exchange is restricted as
determined by the Securities and Exchange Commission or such Exchange is closed
for other than weekends and holidays; (b) an emergency exists as determined by
the Securities and Exchange Commission making disposal of portfolio securities
or valuation of net assets of the Trust not reasonably practicable; or for such
other period as the Securities and Exchange Commission may permit for the
protection of the Trust's shareholders.
The Fund reserves the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption or repurchase of the Trust's
shares by making payment in whole or in part in readily marketable securities
chosen by the Trust and valued in the same way as they would be valued for
purposes of computing each Fund's net asset value. If such payment were made, an
investor may incur brokerage costs in converting such securities to cash. The
value of shares on redemption or repurchase may be more or less than the
investor's cost, depending upon the market value of the Trust's portfolio
securities at the time of redemption or repurchase.
9
<PAGE>
SHARE VALUATION
The net asset value of the Fund's shares is determined as of the close of
business of the New York Stock Exchange on each business day of which that
Exchange is open (presently 4:00 p.m. EST) Monday through Friday exclusive of
Washington's Birthday, Good Friday, Memorial Day, July 4th, Labor Day,
Thanksgiving, Christmas & New Year's Day. The price is determined by dividing
the value of its securities, plus any cash and other assets less all
liabilities, excluding capital surplus, by the number of shares outstanding. The
market value of securities listed on a national exchange is determined to be the
closing sales price on such exchange on the day in which the valuation is made.
Listed securities that have not recently traded are valued at the last bid price
in such market.
Short term paper (debt obligations that mature in less than 60 days) are valued
at amortized cost which approximates market value. Other assets are valued at
fair market value as determined in good faith by the Board of Trustees.
PERFORMANCE MEASURES
Performance quotations are subject to SEC rules. These rules require the use of
standardized performance quotations or, alternatively, that every
non-standardized performance quotations furnished by the Fund be accompanied by
certain standardized performance information computed as required by the SEC.
Average annual total return quotations used by the Fund are based on
standardized methods of computing performance mandated by the SEC.
Average Annual Total Return: Average annual total return is determined by
finding the average annual rates of return over one-, five- and ten-year
periods, or fractional portions thereof, that would equate an initial
hypothetical $1,000 investment to its ending redeemable value. The calculation
assumes that income dividends and capital gains distributions are reinvested at
Net Asset Value. The quotation assumes that the account was completely redeemed
at the end of each one-, five- and ten-year period and that the deductions of
all applicable charges and fees.
Cumulative Total Return: Like average annual return, cumulative total return
assumes that income dividends and capital gains distributions are reinvested at
Net Asset Value. Cumulative total return, however, will be based on the actual
return for a specified period rather than on the average return over one-, five-
and ten-year periods, or fractional portions thereof.
10
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
The policy of the Fund is to pay dividends from net investment income and
distributions of realized capital gains, if any, annually. However, provisions
in the Internal Revenue Code of 1986, as amended (the "Code"), may result in
additional net investment income and capital gains distributions by the Fund.
When you open your account, you should specify on your application how you want
to receive your distributions.
Under the provisions of Sub-Chapter M of the Internal Revenue Code of 1986 as
amended, the Fund intends to pay out substantially all of its investment income
and realized capital gains, and intends to be relieved of federal income tax on
the amounts distributed to shareholders. In order to qualify as a "regulated
investment company" under Sub-Chapter M, at least 90% of the Fund's income must
be derived from dividends, interest, and gains from securities transactions, no
more than 30% of the Fund's profits may be derived from securities held less
than three months, and no more than 50% of the Fund assets may be held in
security holdings that exceed 5% of the total assets of the Fund at time of
purchase. Distribution of any net long-term capital gains realized by the Fund
in 1998 will be taxable to the shareholder as long-term capital gains,
regardless of the length of time Fund shares have been held by the investor. All
income realized by the Fund, including short-term capital gains, will be taxable
to the shareholder as ordinary income. Dividends from net income will be made
annually or more frequently at the discretion of the Fund's Board of Trustees.
Dividends received shortly after purchase of shares by an investor will have the
effect of reducing the per share net asset value of his shares by the amount of
such dividends or distributions and, although in effect a return of capital, are
subject to federal income taxes.
The Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains, distributions and redemptions) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on a W-9 tax form supplied by the
Fund that your Social Security or Taxpayer Identification Number provided is
correct and that you are not currently subject to back-up withholding, or that
you are exempt from back-up withholding.
11
<PAGE>
INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS.
___________, serves as the Trust's independent accountants.
The Trust's statement of assets and liabilities as of _______, have been audited
by _____________________, whose address is ______________. Such statement and
accompanying are set forth below.
[AUDITED BALANCE TO BE SUPPLIED BY AMENDMENT]
12
<PAGE>
Part C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Included in Part A of the Registration Statement:
Expense Information
(b) Included in Part B of the Registration Statement:
Audited Balance Sheet
Auditors' Report and Consent
TO BE FILED BY AMENDMENT
(b) Exhibits:
(1)(a)Certificate of Trust filed on September 29, 1997 with the
Secretary of State of Delaware
FILED HEREWITH
(1)(b)Declaration and Agreement of Trust
FILED HEREWITH
(2) Bylaws of the Trust
FILED HEREWITH
(3) [voting trust agreement] Not Applicable.
(4) [instruments defining right of security holders] Not Applicable.
(5) Investment Advisory Agreement
TO BE FILED BY AMENDMENT
(6) Distribution Agreement
TO BE FILED BY AMENDMENT
(7) [bonus, pension and profit-sharing plans] Not Applicable.
(8) Custodian Agreement
TO BE FILED BY AMENDMENT
(9)(a) Administration Agreement
TO BE FILED BY AMENDMENT
(b) Transfer Agency Agreement and Accounting Services Agreement TO
BE FILED BY AMENDMENT
(10) Opinion of Counsel.
TO BE FILED BY AMENDMENT
(11) Consent of Accountants.
TO BE FILED BY AMENDMENT
(12) [other financial statements] Not Applicable.
(13) [agreements regarding initial capital] TO BE FILED BY AMENDMENT
<PAGE>
(14) [model retirement plans]
TO BE FILED BY AMENDMENT
(15) [Rule 12b-1 plan] Not Applicable.
(16) [computation for Item 22 performance] TO BE FILED BY AMENDMENT
(17) Financial Data Schedule
TO BE FILED BY AMENDMENT
(18) [plan pursuant to rule 18f-3] Not Applicable.
Item 25. Persons Controlled by or Under Common Control with Registrant.
None.
Item 26. Number of Holders of Securities.
One (1)
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
as of ____________, 1997
-------------- --------------------------
<S> <C>
Units of beneficial
interest, par value $.001 TO BE FILED BY AMENDMENT
</TABLE>
Item 27. Indemnification.
Reference is made to Article VI of Registrant's Agreement and Declaration of
Trust which is incorporated herein by reference. Pursuant to Rule 484 under the
Securities Act of 1933(the "Act"), as amended, the Trust furnishes the following
undertaking:
"Insofar as indemnification for liabilities arising under the Act may be
permitted to trustees, officers and controlling persons of the Trust pursuant to
the foregoing provisions, or otherwise, the Trust has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Trust of expenses incurred or paid by a trustee, officer
or controlling person of the Trust in the successful defense of any action, suit
or proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Trust will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue."
Item 28. Business and Other Connections of Investment Adviser.
TO BE SUPPLIED BY AMENDMENT
<PAGE>
Item 29. Principal Underwriters.
TO BE SUPPLIED BY AMENDMENT
Item 30. Location of Accounts and Records.
300 South Pointe Dr., Suite 4306, Miami Beach, FL 33139
Item 31. Management Services.
Not Applicable
Item 32. Undertakings.
-------------
(a) Registrant hereby undertakes to file an amendment to this
Registrations Statement containing certified financial statements showing the
initial capital received before accepting subscriptions from any persons in
excess of 25 if said Registrant proposed to raise its initial capital pursuant
to Section 14(a)(3) of the Investment Company Act of 1940.
(b) Registrant hereby undertakes to file a post-effective amendment
containing financial statements within four to six months from the effective
date of this Registration Statement filed under the Securities Act of 1933.
<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 Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized in the
City of Miami Beach, and the State of Florida on ____________, 1997.
Empirical Investment Funds
BY:
---------------------------
Kaye Anderson-Kerr
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
/s/
------------------------- (Principal Financial Officer)_____________, 1997
Kaye Anderson-Kerr
/s/ (Sole Trustee) _____________, 1997
-------------------------
Kaye Anderson-Kerr
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EXHIBIT INDEX
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EXHIBIT NUMBER DESCRIPTION
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1(a) Certificate of Trust
1(b) Declaration of Trust
2 By-Laws
[Stamp from the State of Delaware Secretary of State]
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 09/29/1997
971327045 - 2802065
STATE of DELAWARE
CERTIFICATE of TRUST
of
EMPIRICAL INVESTMENT FUNDS
This Certificate of Trust is filed in accordance with the provisions of the
Delaware Business Trust Act (12 Del. C. Section 3801 et seq.) and sets forth the
following:
FIRST: This trust shall be known as Empirical Investment Funds. The trustees
shall conduct the business of the trust under that name.
SECOND: The address of the Registered Agent of the trust is: The Company
Corporation, 1313 N. Market Street, Wilmington, DE 19801-1511, County of New
Castle.
THIRD: The Purpose for which this trust is organized shall be to conduct,
operate and carry on the business of a management investment company registered
under the 1940 Act through one or more Series investing primarily in securities.
NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust be filed
with Office of the Secretary of State of the State of Delaware and do hereby
declare that the Trustees will hold IN TRUST all cash, securities and other
assets which the Trust now possesses or may hereafter acquire from time to time
in any manner and manage and dispose of the same upon the following terms and
conditions for the pro rata benefit of the holders of Shares in this Trust.
-----------------------
Kaye Anderson-Kerr
-----------------------
Date
TABLE OF CONTENTS
ARTICLE I Name and Definitions.............................................1
Section 1. Name.......................................................1
Section 2. Definitions................................................1
ARTICLE II Purpose of Trust................................................2
ARTICLE III Shares.........................................................2
Section 1. Division of Beneficial Interest............................2
Section 2. Ownership of Shares........................................3
Section 3. Investments in the Trust...................................3
Section 4. Status of Shares and Limitations of Personal Liability.....3
Section 5. Power of Board of Trustees to Change Provisions - Shares...4
Section 6. Establishment and Designation of Shares....................4
ARTICLE IV The Board of Trustees...........................................7
Section 1. Number, Election and Tenure................................7
Section 2. Effect of Death, Resignation, etc. of a Trustee............7
Section 3. Powers.....................................................8
Section 4. Payment of Expenses by the Trust..........................11
Section 5. Payment of Expense by Shareholders........................11
Section 6. Ownership of Assets of the Trust..........................11
Section 7. Service Contracts.........................................11
ARTICLE V Shareholders' Voting Powers and Meetings........................13
Section 1. Voting Powers.............................................13
Section 2. Voting Power and Meetings.................................13
Section 3. Quorum and Required Vote..................................13
Section 4. Action by Written Consent.................................14
Section 5. Record Dates..............................................14
Section 6. Additional Provisions.....................................14
ARTICLE VI Net Asset Value, Distributions, and Redemptions................15
Section 1. Determination of Net Asset Value, Net Income, and
Distributions.............................................15
Section 2. Redemptions and Repurchases...............................15
Section 3. Redemptions at the Option of the Trust....................15
ARTICLE VII Compensation and Limitation of Liability of Trustees..........16
Section 1. Compensation..............................................16
Section 2. Indemnification and Limitation of Liability...............16
Section 3. Trustee's Good Faith Action, Expert Advice, No Bond or
Surety....................................................16
Section 4. Insurance.................................................17
ARTICLE VIII Miscellaneous................................................17
Section 1. Liability of Third Persons Dealing with Trustees..........17
Section 2. Termination of Trust or Series............................17
Section 3. Merger and Consolidation..................................17
Section 4. Amendments................................................18
Section 5. Filing of Copies, References, Headings....................18
Section 6. Applicable Law............................................18
Section 7. Provisions in Conflict with Law or Regulations............19
Section 8. Business Trust Only.......................................19
<PAGE>
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
Empirical Investment Funds
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered
into as of the date set forth below by the Trustees named hereunder for
the purpose of forming a Delaware business trust in accordance with the
provisions hereinafter set forth,
NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust
be filed with Office of the Secretary of State of the State of Delaware
and do hereby declare that the Trustees will hold IN TRUST all cash,
securities and other assets which the Trust now possesses or may
hereafter acquire from time to time in any manner and manage and dispose
of the same upon the following terms and conditions for the pro rata
benefit of the holders of Shares in this Trust.
ARTICLE I
Name and Definitions
Section 1. Name. This trust shall be known as Empirical Investment Funds
and the Trustees shall conduct the business of the Trust under that name
or any other name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "Trust" refers to the Delaware business trust established by
this Declaration of Trust, as amended from time to time;
(b) The "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of
the Trust, including without limitation the rights referenced in Article
VIII, Section 9 hereof;
(c) "Trustee" refers to each person who has signed this Agreement and
Declaration of Trust, so long a each such person continues in office in
accordance with the terms hereof, and any other person who may from time
to time be duly elected or appointed to serve on the Board of Trustees
in accordance with the provisions hereof, and reference herein to a
Trustee or the Trustees shall refer to such person or persons in their
capacity as trustees hereunder;
(d) "Shares" means the shares of beneficial interest into which the
beneficial interest in the Trust shall be divided from time to time and
includes fractions of Shares as well as whole Shares;
(e) "Shareholder" means a record owner of outstanding Shares;
(f) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures, estates and other entities,
whether or not legal entities, and governments and agencies and
political subdivisions thereof, whether domestic or foreign;
(g) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time;
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(h) The terms "Commission" and "Principal Underwriter" shall have the
meanings given them in the 1940 Act;
(i) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time;
(j) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time and incorporated herein by reference;
(k) The term "Interested Person" has the meaning given it in Section
2(a)(19) of the 1940 Act;
(l) "Investment Manager" or "Manager" means a party furnishing services
to the Trust pursuant to any contract described in Article IV, Section
7(a) hereof;
(m) "Series" refers to each Series of Shares established and designated
under or in accordance with the provisions of Article III.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the
business of a management investment company registered under the 1940
Act through one or more Series investing primarily in securities.
ARTICLE III
Shares
Section 1. Division of Beneficial Interest. The beneficial interests in
the Trust shall at all times be divided into an unlimited number of
Shares, with a par value of $ .001 per Share and Shares shall have the
rights and preferences provided for herein. The Trustees may authorize
the division of Shares into separate Series. The different Series shall
be established and designated, and the variations in the relative rights
and preferences as between the different Series shall be fixed and
determined, by the Trustees. If the context so requires, all references
to Series shall be construed to refer to the Trust.
Subject to the provisions of Section 6 of this Article III, each Share
shall have voting rights as provided in Article V hereof, and holders of
the Shares of any Series shall be entitled to receive dividends, when,
if and as declared with respect thereto in the manner provided in
Article VI, Section 1 hereof. No Shares shall have any priority or
preference over any other Share of the same Series with respect to
dividends or distributions upon termination of the Trust or of such
Series made pursuant to Article VIII, Section 4 hereof. All dividends
and distributions shall be made ratably among all Shareholders of a
particular Series from the assets held with respect to such Series
according to the number of Shares of such Series held of record by such
Shareholder on the record date for any dividend or distribution or on
the date of termination, as the case may be. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares or other
securities issued by the Trust or any Series. The Trustees may from time
to time divide or combine the Shares of any particular Series into a
greater or lesser number of Shares of that Series without thereby
materially changing the proportionate beneficial interest of the Shares
of that Series in the assets held with respect to that Series or
materially affecting the rights of Shares of any other Series.
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Section 2. Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or a transfer or similar agent for
the Trust, which books shall be maintained separately for the Shares of
each Series. No certificates certifying the ownership of Shares shall be
issued except as the Board of Trustees may otherwise determine from time
to time. The Trustees may make such rules as they consider appropriate
for the transfer of Shares of each Series and similar matters. The
record books of the Trust as kept by the Trust or any transfer or
similar agent, as the case may be, shall be conclusive as to who are the
Shareholders of each Series and as to the number of Shares of each
Series held from time to time by each.
Section 3. Investments in the Trust. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such
considerations as the Trustees from time to time may authorize. The
Board of Trustees has the right to suspend sales of Shares of any series
or to decline to sell Shares to any investor, in its sole discretion.
Section 4. Status of Shares and Limitations of Personal Liability.
Shares shall be deemed to be personal property giving only the rights
provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed
to the terms hereof and to have become a party hereto. The death of a
Shareholder during the existence of the Trust shall not operate to
terminate the Trust, nor entitle the representative of any deceased
Shareholder to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but entitles such representative only
to the rights of said deceased Shareholder under this Trust. Ownership
of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust Property or right to call for a partition
or division of the same or for an accounting, nor shall the ownership of
Shares constitute the Shareholders as partners. Neither the Trust nor
the Trustees, nor any officer, employee or agent of the Trust shall have
any power to bind personally any Shareholders nor, except as
specifically provided herein, to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as
the Shareholder may at any time personally agree to pay.
Section 5. Power of Board of Trustees to Change Provisions Relating to
Shares. Notwithstanding any other provisions of this Declaration of
Trust and without limiting the power of the Board of Trustees to amend
the Declaration of Trust as provided elsewhere herein, the Board of
Trustees shall have the power to amend this Declaration of Trust, at any
time and from time to time, in such manner as the Board of Trustees may
determine in their sole discretion, without the need for Shareholder
action, so as to add to, delete, replace or otherwise modify any
provisions relating to the Shares contained in this Declaration of Trust
including, without limitation, the power to establish separate classes
of shares within any Series and determine the relative rights and
preferences of any such class, provided that the creation of separate
classes within any Series comports with applicable requirements of the
1940 Act and other applicable law. If Shares have been issued,
Shareholder approval shall be required to adopt any amendments to this
Declaration of Trust which would adversely affect to a material degree
the rights and preferences of the Shares of any Series or to increase or
decrease the par value of the Shares of any Series. Subject to the
foregoing Paragraph, the Board of Trustees may amend the Declaration of
Trust to amend any of the provisions set forth in paragraphs (a) through
(i) of Section 6 of this Article III.
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Section 6. Establishment and Designation of Shares. The establishment
and designation of any Series of Shares shall be effective upon the
resolution by a majority of the then Trustees, adopting a resolution
which sets forth such establishment and designation and the relative
rights and preferences of such Series. Each such resolution shall be
incorporated herein by reference upon adoption.
Shares of each Series established pursuant to this Section 6, unless
otherwise provided in the resolution establishing such Series, shall
have the following relative rights and preferences:
(a) Assets Held with Respect to a Particular Series. All consideration
received by the Trust for the issue or sale of Shares of a particular
Series, together with all assets in which such consideration is invested
or reinvested, all income, earnings, profits, and proceeds thereof from
whatever source derived, including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably be held with respect to
that Series for all purposes, subject only to the rights of creditors,
and shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits and proceeds thereof,
from whatever source derived, including, without limitation, any
proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as
"assets held with respect to" that Series. In the event that there are
any assets, income, earnings, profits and proceeds thereof, funds or
payments which are not readily identifiable as assets held with respect
to any particular Series (collectively "General Assets"), the Trustees
shall allocate such General Assets to, between or among any one or more
of the Series in such manner and on such basis as the Trustees, in their
sole discretion, deem fair and equitable, and any General Asset so
allocated to a particular Series shall be held with respect to that
Series. Each such allocation by the Trustees shall be conclusive and
binding upon the Shareholders of all Series for all purposes.
(b) Liabilities Held with Respect to a Particular Series. The assets of
the Trust held with respect to each particular Series shall be charged
against the liabilities of the Trust held with respect to that Series
and all expenses, costs, charges and reserves attributable to that
Series, and any general liabilities of the Trust which are not readily
identifiable as being held with respect to any particular Series shall
be allocated and charged by the Trustees to and among any one or more of
the Series in such manner and on such basis as the Trustees in their
sole discretion deem fair and equitable. The liabilities, expenses,
costs, charges, and reserves so charged to a Series are herein referred
to as "liabilities held with respect to" that Series. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall
be conclusive and binding upon the holders of all Series for all
purposes. All Persons who have extended credit which has been allocated
to a particular Series, or who have a claim or contract which has been
allocated to any particular Series, shall look, and shall be required by
contract to look exclusively, to the assets of that particular Series
for payment of such credit, claim, or contract. In the absence of an
express contractual agreement so limiting the claims of such creditors,
claimants and contract providers, each creditor, claimant and contract
provider will be deemed nevertheless to have agreed to such limitation
unless an express provision to the contrary has been incorporated in the
written contract or other document establishing the claimant
relationship.
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(c) Dividends, Distributions, Redemptions, and Repurchases.
Notwithstanding any other provisions of this Declaration of Trust,
including, without limitation, Article VI, no dividend or distribution
including, without limitation, any distribution paid upon termination of
the Trust or of any Series with respect to, nor any redemption or
repurchase of, the Shares of any Series shall be effected by the Trust
other than from the assets held with respect to such Series, nor, except
as specifically provided in Section 7 of this Article III, shall any
Shareholder of any particular Series otherwise have any right or claim
against the assets held with respect to any other Series except to the
extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series. The Trustees shall have full
discretion, to the extent not inconsistent with the 1940 Act, to
determine which items shall be treated as income and which items as
capital; and each such determination and allocation shall be conclusive
and binding upon the Shareholders.
(d) Voting. All Shares of the Trust entitled to vote on a matter shall
vote separately by Series, that is, the Shareholders of each Series
shall have the right to approve or disapprove matters affecting the
Trust and each respective Series as if the Series were separate
companies. There are, however, two exceptions to voting by separate
Series. First, if the 1940 Act requires all Shares of the Trust to be
voted in the aggregate without differentiation between the separate
Series, then all the Trust's Shares shall be entitled to vote on a
one-vote-per-Share basis. Second, if any matter affects only the
interests of some but not all Series then only the Shareholders of such
affected Series shall be entitled to vote on the matter.
(e) Equality. All the Shares of each particular Series shall represent
an equal proportionate interest in the assets held with respect to that
Series, and each Share of any particular Series shall be equal to each
other Share of that Series.
(f) Fractions. Any fractional Share of a Series shall carry
proportionately all the rights and obligations of a whole share of that
Series, including rights with respect to voting, receipt of dividends
and distributions, redemption of Shares and termination of the Trust.
(g) Exchange Privilege. The Trustees shall have the authority to provide
that the holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series of Shares in
accordance with such requirements and procedures as may be established
by the Trustees.
(h) Combination of Series. The Trustees shall have the authority,
without the approval of the Shareholders of any Series unless otherwise
required by applicable law, to combine the assets and liabilities held
with respect to any two or more Series into assets and liabilities held
with respect to a single Series.
(i) Elimination of Series. At any time that there are no Shares
outstanding of any particular Series previously established and
designated, the Trustees may by resolution abolish that Series and
rescind the establishment and designation thereof.
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Section 7. Indemnification of Shareholders. If any Shareholder or former
Shareholder shall be exposed to liability by reason of a claim or demand
relating to his or her being or having been a Shareholder, and not
because of his or her acts or omissions, the Shareholder or former
Shareholder (or his or her heirs, executors, administrators, or other
legal representatives or in the case of a corporation or other entity,
its corporate or other general successor) shall be entitled to be held
harmless from and indemnified out of the assets of the Trust against all
loss and expense arising from such claim or demand.
ARTICLE IV
The Board of Trustees
Section 1. Number, Election and Tenure. The number of Trustees
constituting the Board of Trustees shall be fixed from time to time by a
written instrument signed, or by resolution approved at a duly
constituted meeting, by a majority of the Board of Trustees, provided,
however, that the number of Trustees shall in no event be less than one
(1) nor more than fifteen (15). The Board of Trustees, by action of a
majority of the then Trustees at a duly constituted meeting, may fill
vacancies in the Board of Trustees or remove Trustees with or without
cause. Each Trustee shall serve until the next meeting of Shareholders
called for the purpose of electing Trustees and until the election and
qualification of his or her successor, unless he or she sooner resigns,
is declared bankrupt or incompetent by a court of appropriate
jurisdiction, is removed or dies. Any Trustee may resign at any time by
written instrument signed by him and delivered to any officer of the
Trust or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other
time. Except to the extent expressly provided in a written agreement
with the Trust, no Trustee resigning and no Trustee removed shall have
any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such
removal. The Shareholders may elect Trustees at any meeting of
Shareholders called by the Trustees for that purpose. Any Trustee may be
removed at any meeting of Shareholders by a vote of two-thirds of the
outstanding Shares of the Trust. A meeting of Shareholders for the
purpose of electing or removing one or more Trustees may be called (i)
by the Trustees upon their own vote, or (ii) upon the demand of
Shareholders owning 10% or more of the Shares of the Trust in the
aggregate.
Section 2. Effect of Death, Resignation, etc. of a Trustee. The death,
declination, resignation, retirement, removal, or incapacity of one or
more Trustees, or all of them, shall not operate to annul the Trust or
to revoke any existing agency created pursuant to the terms of this
Declaration of Trust. Whenever a vacancy in the Board of Trustees shall
occur, until such vacancy is filled as provided in Article IV, Section
1, the Trustees in office, regardless of their number, shall have all
the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Declaration of Trust. As conclusive
evidence of such vacancy, a written instrument certifying the existence
of such vacancy may be executed by an officer of the Trust or by a
majority of the Board of Trustees. In the event of the death,
declination, resignation, retirement, removal, or incapacity of all the
then Trustees within a short period of time and without the opportunity
for at least one Trustee being able to appoint additional Trustees to
fill vacancies, the Trust's Investment Manager(s) are empowered to
appoint new Trustees subject to the provisions of Section 16(a) of the
1940 Act.
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Section 3. Powers. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the Board of
Trustees, and such Board shall have all powers necessary or convenient
to carry out that responsibility including the power to engage in
securities transactions of all kinds on behalf of the Trust. Without
limiting the foregoing, the Trustees may: adopt By-Laws not inconsistent
with this Declaration of Trust providing for the regulation and
management of the affairs of the Trust and may amend and repeal them to
the extent that such By-Laws do not reserve that right to the
Shareholders; fill vacancies in or remove from their number, and may
elect and remove such officers and appoint and terminate such agents as
they consider appropriate; to contract for management, administrative,
advisory, and other services for the Trust or for any Series, in
accordance with Section 7 of the Article IV; establish, from time to
time, an executive committee and/or such other committee or committees
of the Board of Trustees consisting of two or more Trustees (unless
otherwise expressly provided by the By-Laws), which committee may
exercise such powers and authority as may be provided in the By-Laws or
as otherwise determined by the Board of Trustees; employ one or more
custodians of the assets of the Trust and authorize such custodians to
employ subcustodians and to deposit all or any part of such assets in a
system or systems for the central handling of securities or with a
Federal Reserve Bank, retain a transfer agent or a shareholder servicing
agent, or both; provide for the issuance and distribution of Shares by
the Trust directly or through one or more Principal Underwriters or
otherwise; redeem, repurchase and transfer Shares pursuant to applicable
law; set record dates for the determination of Shareholders with respect
to various matters; declare and pay dividends and distributions to
Shareholders of each Series from the assets of such Series; and in
general delegate such authority as they consider desirable to any
officer of the Trust, to any committee of the Trustees and to any agent
or employee of the Trust or to any such custodian, transfer or
shareholder servicing agent, or Principal Underwriter. Any determination
as to what is in the interests of the Trust made by the Trustees in good
faith shall be conclusive. In construing the provisions of this
Declaration of Trust, the presumption shall be in favor of a grant of
power to the Trustees. Any action by the Board of Trustees shall be
deemed effective if approved or taken by a majority of the Trustees then
in office unless this Declaration of Trust, the By-Laws, the 1940 Act or
other applicable law expressly provides otherwise, and provided that any
such action may be taken by any committee of the Board of Trustees duly
constituted under this Declaration of Trust and under the By-Laws and
acting in accordance with such By-Laws, and notwithstanding that such
committee may consist of fewer than a majority of the Trustees then in
office. Without limiting the foregoing, the Trust shall have power and
authority:
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(a) To invest and reinvest cash, to hold cash uninvested, and to
subscribe for, invest in, reinvest in, purchase or otherwise acquire,
own, hold, pledge, sell, assign, transfer, exchange, distribute, write
options on, lend or otherwise deal in securities and contracts for the
future acquisition or delivery of fixed income securities or other
instruments (including, for this purpose, contracts relating to
currencies in which securities that the Trust may invest in are
denominated) of every nature and kind, including, without limitation,
all types of bonds, debentures, stocks, negotiable or non-negotiable
instruments, obligations, evidences of indebtedness, certificates of
deposit or indebtedness, commercial paper, repurchase agreements,
bankers' acceptances, and other securities of any kind, issued, created,
guaranteed, or sponsored by any and all Persons, including, without
limitation, states, territories, and possessions of the United States
and the District of Columbia and any political subdivision, agency, or
instrumentality thereof, any foreign government or any political
subdivision of the U.S. Government or any foreign government, or any
international instrumentality, or by any bank or savings institution, or
by any corporation or organization organized under the laws of the
United States or of any state, territory, or possession thereof, or by
any corporation or organization organized under any foreign law, or in
"when issued" contracts for any such securities, to change the
investments of the assets of the Trust; and to exercise any and all
rights, powers, and privileges of ownership or interest in respect of
any and all such investments of every kind and description, including,
without limitation, the right to consent and otherwise act with respect
thereto, with power to designate one or more Persons, to exercise any of
said rights, powers, and privileges in respect of any of said
instruments;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or
write options with respect to or otherwise deal in any property rights
relating to any or all of the assets of the Trust or any Series;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper;
(d) To exercise powers and right of subscription or otherwise which in
any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in its own
name or in the name of a custodian or subcustodian or a nominee or
nominees or otherwise;
(f) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security
which is held in the Trust; to consent to any contract, lease, mortgage,
purchase or sale of property by such corporation or issuer; and to pay
calls or subscriptions with respect to any security held in the Trust;
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(g) To join with other security holders in acting through a committee,
depository, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depository or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and
to pay, such portion of the expenses and compensation of such committee,
depository or trustee as the Trustees shall deem proper;
(h) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not
limited to claims for taxes;
(i) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(j) To borrow funds or other property in the name of the Trust
exclusively for Trust purposes;
(k) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship,
or otherwise assume liability for payment thereof;
(l) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the
conduct of the business, including, without limitation, insurance
policies insuring the assets of the Trust or payment of distributions
and principal on its portfolio investments, and insurance policies
insuring the Shareholders, Trustees, officers, employees, agents,
investment advisers, Managers, principal underwriters, or independent
contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding Shares,
holding, being or having held any such office or position, or by reason
of any action alleged to have been taken or omitted by any such Person
as Trustee, officer, employee, agent, investment adviser, Manager,
principal underwriter, or independent contractor, including any action
taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person
against liability; and
(m) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive
and benefit plans, trusts and provisions, including the purchasing of
life insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust.
The Trust shall not be limited to investing in obligations maturing
before the possible termination of the Trust or one or more of its
Series. The Trust shall not in any way be bound or limited by any
present or future law or custom in regard to investment by fiduciaries.
The Trust shall not be required to obtain any court order to deal with
any assets of the Trust or take any other action hereunder.
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Section 4. Payment of Expenses by the Trust. The Trustees are authorized
to pay or cause to be paid out of the principal or income of the Trust,
or partly out of the principal and partly out of income, as they deem
fair, all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with the Trust, or in connection with the
management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the
Trust's officers, employees, investment adviser or Manager, principal
underwriter, auditors, counsel, custodian, transfer agent, Shareholder
servicing agent, and such other agents, consultants, or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur.
Section 5. Payment of Expense by Shareholders. The Trustees shall have
the power, as frequently as they may determine, to cause each
Shareholder, or each Shareholder of any particular Series, to pay
directly, in advance or arrears, for charges of the Trust's custodian or
transfer agent, Shareholder servicing or similar agent, an amount fixed
from time to time by the Trustees, by setting off such charges due from
such Shareholder from declared but unpaid dividends owed such
Shareholder and/or by reducing the number of shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such
Shareholder.
Section 6. Ownership of Assets of the Trust. Title to all of the assets
of the Trust shall at all times be considered as vested in the Trust,
except that the Trustees shall have power to cause legal title to any
Trust Property to be held by or in the name of one or more of the
Trustees, or in the name of the Trust, or in the name of any other
Person as nominee, on such terms as the Trustees may determine. The
right, title and interest of the Trustees in the Trust Property shall
vest automatically in each Person who may hereafter become a Trustee.
Upon the resignation, removal or death of a Trustee he or she shall
automatically cease to have any right, title or interest in any of the
Trust Property, and the right, title and interest of such Trustee in the
Trust Property shall vest automatically in the remaining Trustees. Such
vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.
(a) The Trustees may, at any time and from time to time, contract for
exclusive or nonexclusive advisory, management, consulting and/or
administrative services for the Trust or for any Series with any
corporation, trust, association or other organization; and any such
contract may contain such other terms as the Trustees may determine,
including without limitation, authority for the Investment Manager(s) or
administrator to determine from time to time without prior consultation
with the Trustees what investments shall be purchased, held, sold or
exchanged and what portion, if any, of the assets of the Trust shall be
held uninvested and to make changes in the Trust's investments, or such
other activities as may specifically be delegated to such party.
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(b) The Trustees may also, at any time and from time to time, contract
with any corporation, trust, association or other organization,
appointing it exclusive or nonexclusive distributor or Principal
Underwriter for the Shares of one or more of the Series or other
securities to be issued by the Trust.
(c) The Trustees are also empowered, at any time and from time to time,
to contract with any corporations, trusts, associations or other
organizations, appointing it or them the custodian, transfer agent
and/or shareholder servicing agent for the Trust or one or more of its
Series.
(d) The Trustees are further empowered, at any time and from time to
time, to contract with any entity to provide such other services to the
Trust or one or more of the Series, as the Trustees determine to be in
the best interests of the Trust and the applicable Series.
(e) In the event that
(i) any Shareholder, Trustee, or officer of the Trust is a
shareholder, director, officer, partner, trustee, employee,
affiliate or agent of any Person (or of any affiliate or parent of
such Person) with which a service contract of any kind may have been
or may hereafter be made, or has any other interest in any Service
Provider (or in any affiliate or agent of such Service Provider);
(ii) any Service Provider (or any affiliate or agent of any Service
Provider) is a Shareholder of or has any other interest in the
Trust; or (iii) any Service Provider (or any affiliate or agent of
any Service Provider) has entered into, or may at any time enter
into a service contract with Persons other that the Trust;
such fact shall not affect the validity of any contract between a
Service Provider and the Trust, or disqualify any Shareholder, Trustee
or officer of the Trust from voting upon or executing any such contract,
nor shall any liability or accountability to the Trust or its
Shareholders arise solely as a result of any interest identified in (i),
(ii) or (iii) above on the part of any such Shareholder, Trustee or
officer to the Trust, provided that all applicable requirements of the
1940 are satisfied.
ARTICLE V
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers. Subject to the provisions of Article III,
Section 6(d), the Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1,
and (ii) with respect to such additional matters relating to the Trust
as may be required by this Declaration of Trust, the By-Laws or any
registration of the Trust with the Commission (or any successor agency)
or any state, or as the Trustees may consider necessary or desirable.
Each whole Share shall be entitled to one vote as to any matter on which
it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in
the election of Trustees. Shares may be voted in person or by proxy. A
proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to
exercise of the proxy the Trust receives a specific written notice to
the contrary from any one of them. A proxy purporting to be executed by
or on behalf of a Shareholder shall be deemed valid unless challenged at
or prior to its exercise and the burden of proving invalidity shall rest
on the challenger.
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Section 2. Voting Power and Meetings. Meetings of the Shareholders may
be called by the Trustees for the purpose of electing Trustees as
provided in Article IV, Section 1 and for such other purposes as may be
prescribed by law, by this Declaration of Trust or by the By-Laws.
Meetings of the Shareholders may also be called by the Trustees from
time to time for the purpose of taking action upon any other matter
deemed by the Trustees to be necessary or desirable. A meeting of
Shareholders may be held at any place designated by the Trustees.
Written notice of any meeting of Shareholders shall be given or caused
to be given by the Trustees by mailing such notice at least seven (7)
days before such meeting, postage prepaid, stating the time and place of
the meeting, to each Shareholder at the Shareholder's address as it
appears on the records of the Trust. Whenever notice of a meeting is
required to be given to a Shareholder under this Declaration of Trust or
the By-Laws, a written waiver thereof, executed before or after the
meeting by such Shareholder or his or her attorney thereunto authorized
and filed with the records of the meeting, shall be deemed equivalent to
such notice.
Section 3. Quorum and Required Vote. Except when a larger quorum is
required by applicable law, by the By-Laws or by this Declaration of
Trust, forty percent (40%) of the Shares "entitled to vote" (as that
term is defined in the By-Laws) shall constitute a quorum at a
Shareholders' meeting. When one or more Series is to vote on a
particular matter as a single Series separate from Shares of any other
Series, forty percent (40%) of the Shares of each such Series entitled
to vote shall constitute a quorum of the holders of such Series. Any
meeting of Shareholders may be adjourned from time to time by a majority
of the "votes properly cast" (as that term is defined in the By-Laws)
upon the question of adjourning a meeting to another date and time,
whether or not a quorum is present, and the meeting may be held as
adjourned within a reasonable time after the date set for the original
meeting without further notice. Subject to the provisions of Article
III, Section 6(d), when a quorum is present at any meeting, a majority
of the Shares "voted" (as that term is defined in the By-Laws) shall
decide any questions properly before the meeting and a plurality shall
elect a Trustee, except when a larger vote is required by any provision
of this Declaration of Trust, the By-Laws, the 1940 Act or other
applicable law.
Section 4. Action by Written Consent. Any action taken by Shareholders
may be taken without a meeting if Shareholders holding a majority of the
Shares entitled to vote on the matter (or such larger proportion thereof
as shall be required by any express provision of this Declaration of
Trust or by the By-Laws) and holding a majority (or such larger
proportion as aforesaid) of the Shares of any Series entitled to vote
separately on the matter consent to the action in writing and such
written consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as a vote
taken at a meeting of Shareholders.
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Section 5. Record Dates. For the purpose of determining the Shareholders
of any Series who are entitled to vote or act at any meeting or any
adjournment thereof, the Trustees may from time to time fix a time,
which shall be not more than ninety (90) days before the date of any
meeting of Shareholders, as the record date for determining the
Shareholders of such Series having the right to notice of and to vote at
such meeting and any adjournment thereof, and in such case only
Shareholders of record on such record date shall have such right,
notwithstanding any transfer of shares on the books of the Trust after
the record date. For the purpose of determining the Shareholders of any
Series who are entitled to receive payment of any dividend or of any
other distribution, the Trustees may from time to time fix a date, which
shall be before the date for the payment of such dividend or such other
payment, as the record date for determining the Shareholders of such
Series having the right to receive such dividend or distribution.
Without fixing a record date the Trustees may for voting and/or
distribution purposes close the register or transfer books for one or
more Series for all or any part of the period between a record date and
a meeting of Shareholders or the payment of a distribution. Nothing in
this Section shall be construed as precluding the Trustees from setting
different record dates for different Series.
Section 6. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI
Net Asset Value, Distributions, and Redemptions
Section 1. Determination of Net Asset Value, Net Income, and
Distributions. Subject to Article III, Section 6 hereof, the Trustees,
in their absolute discretion, may prescribe and shall set forth in the
By-laws or in a duly adopted vote of the Trustees such bases and time
for determining the net asset value of the Shares of any Series or net
income attributable to the Shares of any Series , or the declaration and
payment of dividends and distributions on the Shares of any Series, as
they may deem necessary or desirable.
Section 2. Redemptions and Repurchases. The Trust shall honor requests
for redemption, upon the presentation of a proper instrument of transfer
together with a request directed to the Trust or a Person designated by
the Trust that the Trust purchase such Shares or in accordance with such
other procedures for redemption as the Trustees may from time to time
authorize; and the Trust will pay therefor the net asset value thereof,
in accordance with the By-Laws and applicable law. Payment for said
Shares shall be made by the Trust to the Shareholder within seven days
after the date on which the request is made in proper form. The
obligation set forth in this Section 2 is subject to the provision that
in the event that at any time the New York Stock Exchange (the
"Exchange") is closed for other than weekends or holidays, or if
permitted by the Rules of the Commission during periods when trading on
the Exchange is restricted or during any emergency which makes it
impracticable for the Trust to dispose of the investments of the
applicable Series or to determine fairly the value of the net assets
held with respect to such Series or during any other period permitted by
order of the Commission for the protection of investors, such
obligations may be suspended or postponed by the Trustees.
The redemption price may in any case or cases be paid wholly or partly
in kind if the Trustees determine that such payment is advisable in the
interest of the remaining Shareholders of the Series for which the
shares are being redeemed. Subject to the foregoing, the fair value,
selection and quantity of securities or other property so paid or
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delivered as all or part of the redemption price may be determined by or
under authority of the Trustees. In no case shall the Trust be liable
for any delay on the part of any corporation or other Person in
transferring securities selected for delivery as all or part of any
payment in kind.
Section 3. Redemptions at the Option of the Trust. The Trust shall have
the right at its option and at any time to redeem Shares of any
Shareholder at the net asset value thereof as described in Section 1 of
this Article VI: (i) if at such time such Shareholder owns Shares of any
Series having an aggregate net asset value of less than an amount
determined from time to time by the Trustees prior to the acquisition of
said Shares; or (ii) to the extent that such Shareholder owns Shares of
a particular Series equal to or in excess of a percentage of the
outstanding Shares of that Series determined from time to time by the
Trustees; (iii) to the extent that such Shareholder owns Shares equal to
or in excess of a percentage, determined from time to time by the
Trustees, of the outstanding Shares of the Trust or of any Series; or,
(iv) in accordance with any agreement by and among all Shareholders of
record of the Trust, provided such agreement is consistent with the 1940
Act and other applicable law.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of
such compensation. Nothing herein shall in any way prevent the
employment of any Trustee for advisory, management, legal, accounting,
investment banking or other services and payment for the same by the
Trust.
Section 2. Indemnification and Limitation of Liability. The Trustees
shall not be responsible or liable in any event for any neglect or
wrong-doing of any officer, agent, employee, Manager or Principal
Underwriter of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee, and the Trust out of its assets
shall indemnify and hold harmless each and every Trustee from and
against any and all claims and demands whatsoever arising out of or
related to each Trustee's performance of his or her duties as a Trustee
of the Trust; provided that nothing herein contained shall indemnify,
hold harmless or protect any Trustee from or against any liability to
the Trust or any Shareholder to which he or she would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her
office.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever issued, executed or done by or on
behalf of the Trust or the Trustees or any of them in connection with
the Trust shall be conclusively deemed to have been issued, executed or
done only in or with respect to their or his or her capacity as Trustees
or Trustee, and such Trustees or Trustee shall not be personally liable
thereon.
Section 3. Trustee's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretion
hereunder shall be binding upon everyone interested. A Trustee shall be
liable to the Trust and to any Shareholder solely for his or her own
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee, and
shall not be liable for errors of judgment or mistakes of fact or law.
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The Trustees may take advice of counsel or other experts with respect to
the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such
advice nor for failing to follow such advice. The Trustees shall not be
required to give any bond as such, nor any surety if a bond is required.
Section 4. Insurance. The Trustees shall be entitled and empowered to
the fullest extent permitted by law to purchase with Trust assets
insurance for liability and for all expenses reasonably incurred or paid
or expected to be paid by a Trustee or officer in connection with any
claim, action, suit or proceeding in which he or she becomes involved by
virtue of his or her capacity or former capacity with the Trust.
ARTICLE VIII
Miscellaneous
Section 1. Liability of Third Persons Dealing with Trustees. No Person
dealing with the Trustees shall be bound to make any inquiry concerning
the validity of any transaction made or to be made by the Trustees or to
see to the application of any payments made or property transferred to
the Trust or upon its order.
Section 2. Termination of Trust or Series. Unless terminated as provided
herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by vote of a majority of the Shares of
each Series entitled to vote, voting separately by Series, or by the
Trustees by written notice to the Shareholders. Any Series may be
terminated at any time by vote of a majority of the Shares of that
Series or by the Trustees by written notice to the Shareholders of that
Series.
Upon termination of the Trust (or any Series, as the case may be), after
paying or otherwise providing for all charges, taxes, expenses and
liabilities held, severally, with respect to each Series (or the
applicable Series, as the case may be), whether due or accrued or
anticipated as may be determined by the Trustees, the Trust shall, in
accordance with such procedures as the Trustees consider appropriate,
reduce the remaining assets held, severally, with respect to each Series
(or the applicable Series, as the case may be), to distributable form in
cash or shares or other securities, or any combination thereof, and
distribute the proceeds held with respect to each Series (or the
applicable Series, as the case may be), to the Shareholders of that
Series, as a Series, ratably according to the number of Shares of that
Series held by the several Shareholders on the date of termination.
Section 3. Merger and Consolidation. The Trustees may cause (i) the
Trust or one or more of its Series to the extent consistent with
applicable law to be merged into or consolidated with another Trust or
company, (ii) the Shares of the Trust or any Series to be converted into
beneficial interests in another business trust (or series thereof)
created pursuant to this Section 3 of Article VIII, or (iii) the Shares
to be exchanged under or pursuant to any state or federal statute to the
extent permitted by law. Such merger or consolidation, Share conversion
or Share exchange must be authorized by vote of a majority of the
outstanding Shares of the Trust, as a whole, or any affected Series, as
may be applicable; provided that in all respects not governed by statute
or applicable law, the Trustees shall have power to
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prescribe the procedure necessary or appropriate to accomplish a sale of
assets, merger or consolidation including the power to create one or
more separate business trusts to which all or any part of the assets,
liabilities, profits or losses of the Trust may be transferred and to
provide for the conversion of Shares of the Trust or any Series into
beneficial interests in such separate business trust or trusts (or
series thereof).
Section 4. Amendments. This Declaration of Trust may be restated and/or
amended at any time by an instrument in writing signed by a majority of
the then Trustees or by a majority of the then Trustees, by resolution
approved at a meeting of the Trust's Board of Trustees. The approval of
the Trust's Shareholders will not be required with respect to any such
restatement or amendment unless (i) such approval is mandated by
applicable state law or the 1940 Act; or (ii) such approval is found by
a majority of the Trustees, in their sole discretion and by resolution,
to be appropriate or desirable. Any such restatement and/or amendment
hereto shall be effective immediately upon execution and approval. The
Certificate of Trust of the Trust may be restated and/or amended by a
similar procedure, and any such restatement and/or amendment shall be
effective immediately upon filing with the Office of the Secretary of
State of the State of Delaware or upon such future date as may be stated
therein.
Section 5. Filing of Copies, References, Headings. The original or a
copy of this instrument and of each restatement and/or amendment hereto
shall be kept at the office of the Trust where it may be inspected by
any Shareholder. Anyone dealing with the Trust may rely on a certificate
by an officer of the Trust as to whether or not any such restatements
and/or amendments have been made and as to any matters in connection
with the Trust hereunder; and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be
a copy of this instrument or of any such restatements and/or amendments.
In this instrument and in any such restatements and/or amendment,
references to this instrument, and all expressions like "herein",
"hereof" and "hereunder", shall be deemed to refer to this instrument as
amended or affected by any such restatements and/or amendments. Headings
are placed herein for convenience of reference only and shall not be
taken as a part hereof or control or affect the meaning, construction or
effect of this instrument. Whenever the singular number is used herein,
the same shall include the plural; and the neuter, masculine and
feminine genders shall include each other, as applicable. This
instrument may be executed in any number of counterparts each of which
shall be deemed an original.
Section 6. Applicable Law. This Agreement and Declaration of Trust is
created under and is to be governed by construed and administered
according to the laws of the State of Delaware and the Delaware Business
Trust Act, as amended from time to time (the "Act"). The Trust shall be
a Delaware business trust pursuant to such Act, and without limiting the
provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a business trust.
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Section 7. Provisions in Conflict with Law or Regulations.
(a) The provisions of the Declaration of Trust are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the regulated investment
company provisions of the Internal Revenue Code or with other applicable
laws and regulations, the conflicting provision shall be deemed never to
have constituted a part of the Declaration of Trust; provided, however,
that such determination shall not affect any of the remaining provisions
of the Declaration of Trust or render invalid or improper any action
taken or omitted prior to such determination.
(b) If any provision of the Declaration of Trust shall be held invalid
or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provision in any
other jurisdiction or any other provision of the Declaration of Trust in
any jurisdiction.
Section 8. Business Trust Only. It is the intention of the Trustees to
create a business trust pursuant to the Delaware Business Trust Act, as
amended from time to time (the "Act"), and thereby to create only the
relationship of trustee and beneficial owners within the meaning of such
Act between the Trustees and each Shareholder. It is not the intention
of the Trustees to create a general partnership, limited partnership,
joint stock association, corporation, bailment, or any form of legal
relationship other than a business trust pursuant to such Act. Nothing
in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or
members of a joint stock association.
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TABLE OF CONTENTS
BY-LAWS
Empirical Investment Funds
ARTICLE I OFFICES.........................................................1
1. PRINCIPAL OFFICE...................................................1
2. DELAWARE OFFICE....................................................1
3. OTHER OFFICES......................................................1
ARTICLE II MEETINGS OF SHAREHOLDERS.......................................1
1. PLACE OF MEETINGS..................................................1
2. CALL OF MEETING....................................................1
3. NOTICE OF SHAREHOLDERS' MEETING....................................1
4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.......................1
5. ADJOURNED MEETING; NOTICE..........................................2
6. VOTING.............................................................2
7. WAIVER OF NOTICE BY CONSENT OF ABSENT SHAREHOLDERS.................2
8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING............2
9. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING CONSENTS.....3
10. PROXIES............................................................3
11. INSPECTORS OF ELECTION.............................................3
ARTICLE III TRUSTEES......................................................4
1. POWERS.............................................................4
2. NUMBER OF TRUSTEES.................................................4
3. VACANCIES..........................................................4
4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE........................4
5. REGULAR AND SPECIAL MEETINGS.......................................4
6. NOTICE OF MEETINGS.................................................4
7. QUORUM.............................................................5
8. WAIVER OF NOTICE...................................................5
9. ADJOURNMENT........................................................5
10. NOTICE OF ADJOURNMENT..............................................5
11. ACTION WITHOUT A MEETING...........................................5
12. FEES AND COMPENSATION OF TRUSTEES..................................5
13. DELEGATION OF POWER TO OTHER TRUSTEES..............................5
ARTICLE IV COMMITTEES.....................................................6
1. COMMITTEES OF TRUSTEES.............................................6
2. MEETINGS AND ACTION OF COMMITTEES..................................6
ARTICLE V OFFICERS........................................................6
1. OFFICERS...........................................................6
2. ELECTION OF OFFICERS...............................................7
3. SUBORDINATE OFFICERS...............................................7
4. REMOVAL AND RESIGNATION OF OFFICERS................................7
5. VACANCIES IN OFFICES...............................................7
6. CHAIRMAN OF THE BOARD..............................................7
7. PRESIDENT..........................................................7
8. VICE PRESIDENTS....................................................7
9. SECRETARY..........................................................7
10. TREASURER..........................................................8
<PAGE>
ARTICLE VI INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND
OTHER AGENTS...............................................................8
1. AGENTS, PROCEEDINGS AND EXPENSES...................................8
2. ACTIONS OTHER THAN BY TRUST........................................8
3. ACTIONS BY THE TRUST...............................................8
4. EXCLUSION OF INDEMNIFICATION.......................................9
5. SUCCESSFUL DEFENSE BY AGENT........................................9
6. REQUIRED APPROVAL..................................................9
7. ADVANCE OF EXPENSES................................................9
8. OTHER CONTRACTUAL RIGHTS..........................................10
9. LIMITATIONS.......................................................10
10. INSURANCE.........................................................10
11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN..............................10
ARTICLE VII RECORDS AND REPORTS..........................................10
1. MAINTENANCE AND INSPECTION OF SHARE REGISTER......................10
2. MAINTENANCE AND INSPECTION OF BY-LAWS.............................10
3. MAINTENANCE AND INSPECTION OF OTHER RECORDS.......................10
4. INSPECTION BY TRUSTEES............................................11
ARTICLE VIII GENERAL MATTERS.............................................11
1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS..........................11
2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED...........................11
3. CERTIFICATES FOR SHARES...........................................11
4. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD BY TRUST..........11
5. FISCAL YEAR.......................................................11
ARTICLE IX AMENDMENTS....................................................11
1. AMENDMENT BY TRUSTEES.............................................11
<PAGE>
BY-LAWS
OF
Empirical Investment Funds
A Delaware Business Trust
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal executive office of
Empirical Investment Funds(the "Trust") shall be 300 South Pointe Dr.,
Suite 4306, Miami Beach, Florida 33139. The Board of Trustees may,
from time to time, fix the location of the principal executive office
of the Trust, by resolution, to any place within or outside the State
of Delaware.
Section 2. DELAWARE OFFICE. The Board of Trustees shall establish a
registered office in the State of Delaware and shall appoint as the
Trust's registered agent for service of process in the State of
Delaware an individual resident of the State of Delaware or a Delaware
corporation or a foreign corporation authorized to transact business
in the State of Delaware; in each case the business office of such
registered agent for service of process shall be identical with the
registered Delaware office of the Trust.
Section 3. OTHER OFFICES. The Board of Trustees may at any time
establish branch or subordinate offices at any place or places where
the Trust intends to do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held
at any place designated by the Board of Trustees. In the absence of
any such designation, shareholders' meetings shall be held at the
principal executive office of the Trust.
Section 2. CALL OF MEETING. A meeting of the shareholders may be
called at any time by the Board of Trustees or by the Chairman of the
Board or by the President.
Section 3. NOTICE OF SHAREHOLDERS' MEETING. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with
Section 4 of this Article II not less than seven (7) nor more than
seventy-five (75) days before the date of the meeting. The notice
shall specify (i) the place, date and hour of the meeting, and (ii)
the general nature of the business to be transacted. The notice of any
meeting at which Trustees are to be elected also shall include the
name of any nominee or nominees whom at the time of the notice are
intended to be presented for election. If action is proposed to be
taken at any meeting for approval of (i) a contract or transaction in
which a Trustee has a direct or indirect financial interest, (ii) an
amendment of the Agreement and Declaration of Trust of the Trust,
(iii) a reorganization of the Trust, or (iv) a voluntary dissolution
of the Trust, the notice shall also state the general nature of that
proposal.
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Section 4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any
meeting of shareholders shall be given either personally or by
first-class mail or telegraphic or other written communication,
charges prepaid, addressed to the shareholder at the address of that
shareholder appearing on the books of the Trust or its transfer agent
or given by the shareholder to the Trust for the purpose of notice. If
no such address appears on the Trust's books or is given, notice shall
be deemed to have been given if sent to that shareholder by
first-class mail or telegraphic or other written communication to the
Trust's principal executive office, or if published at least once in a
newspaper of general circulation in the county where that office is
located. Notice shall be deemed to have been given at the time when
delivered personally or deposited in the mail or sent by telegram or
other means of written communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the Trust is returned to the
Trust by the United States Postal Service marked to indicate that the
Postal Service is unable to deliver the notice to the shareholder at
that address, all future notices or reports shall be deemed to have
been duly given without further mailing if these shall be available to
the shareholder on written demand of the shareholder at the principal
executive office of the Trust for a period of one year from the date
of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
shareholder's meeting shall be executed by the Secretary, Assistant
Secretary or any transfer agent of the Trust giving the notice and
shall be filed and maintained in the minute book of the Trust.
Section 5. ADJOURNED MEETING; NOTICE. Any shareholder's meeting,
whether or not a quorum is present, may be adjourned from time to time
by the vote of the majority of the shares represented at that meeting,
either in person or by proxy. When any meeting of the shareholders is
adjourned to another time or place, notice need not be given of the
adjourned meeting at which the adjournment is taken, unless a new
record date of the adjourned meeting is fixed or unless the
adjournment is for more than sixty (60) days from the date set for the
original meeting, in which case the Board of Trustees shall set a new
record date. Notice of any such adjourned meeting shall be given to
each shareholder of record entitled to vote at the adjourned meeting
in accordance with the provisions of Sections 3 and 4 of this Article
II. At any adjourned meeting, the Trust may transact any business
which might have been transacted at the original meeting.
Section 6. VOTING. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of
the Agreement and Declaration of Trust of the Trust, as in effect at
such time. The shareholders' vote may be by voice vote or by ballot,
provided, however, that any election for Trustees must be by ballot if
demanded by any shareholder before the voting has begun. On any matter
other than elections of Trustees, any shareholder may vote part of the
shares in favor of the proposal and refrain from voting the remaining
shares or vote them against the proposal, but if the shareholder fails
to specify the number of shares which the shareholder is voting
affirmatively, it will be conclusively presumed that the shareholder's
approving vote is with respect to the total shares that the
shareholder is entitled to vote on such proposal.
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Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT SHAREHOLDERS. The
transactions of the meeting of shareholders, however called and
noticed and wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice if a quorum be present
either in person or by proxy and if either before or after the
meeting, each person entitled to vote who was not present in person or
by proxy signs a written waiver of notice or a consent to a holding of
the meeting or an approval of the minutes. The waiver of notice or
consent need not specify either the business to be transacted or the
purpose of any meeting of shareholders.
Attendance by a person at a meeting shall also constitute a waiver of
notice of that meeting, except when the person objects at the
beginning of the meeting to the transaction of any business because
the meeting is not lawfully called or convened and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters not included in the notice of the meeting if
that objection is expressly made at the beginning of the meeting.
Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.
Any action which may be taken at any meeting of shareholders may be
taken without a meeting and without prior notice if a consent in
writing setting forth the action so taken is signed by the holders of
outstanding shares having not less than the minimum number of votes
that would be necessary to authorize or take that action at a meeting
at which all shares entitled to vote on that action were present and
voted. All such consents shall be filed with the Secretary of the
Trust and shall be maintained in the Trust's records. Any shareholder
giving a written consent or the shareholder's proxy holders or a
transferee of the shares or a personal representative of the
shareholder or their respective proxy holders may revoke the consent
by a writing received by the Secretary of the Trust before written
consents of the number of shares required to authorize the proposed
action have been filed with the Secretary.
If the consents of all shareholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
shareholders shall not have been received, the Secretary shall give
prompt notice of the action approved by the shareholders without a
meeting. This notice shall be given in the manner specified in Section
4 of this Article II. In the case of approval of (i) contracts or
transactions in which a Trustee has a direct or indirect financial
interest, (ii) indemnification of agents of the Trust, and (iii) a
reorganization of the Trust, the notice shall be given at least ten
(10) days before the consummation of any action authorized by that
approval.
Section 9. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING
CONSENTS. For purposes of determining the shareholders entitled to
notice of any meeting or to vote or entitled to give consent to action
without a meeting, the Board of Trustees may fix in advance a record
date which shall not be more than ninety (90) days nor less than seven
(7) days before the date of any such meeting as provided in the
Agreement and Declaration of Trust of the Trust. If the Board of
Trustees does not so fix a record date:
(a) The record date for determining shareholders entitled to notice of
or to vote at a meeting of shareholders shall be at the close of
business on the business day next preceding the day on which notice is
given or if notice is waived, at the close of business on the business
day next preceding the day on which the meeting is held.
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(b) The record date for determining shareholders entitled to give
consent to action in writing without a meeting, (i) when no prior
action by the Board of Trustees has been taken, shall be the day on
which the first written consent is given, or (ii) when prior action of
the Board of Trustees has been taken, shall be at the close of
business on the day on which the Board of Trustees adopt the
resolution relating to that action or the seventy-fifth day before the
date of such other action, whichever is later.
Section 10. PROXIES. Every person entitled to vote for Trustees or on
any other matter shall have the right to do so either in person or by
one or more agents authorized by a written proxy signed by the person
and filed with the Secretary of the Trust. A proxy shall be deemed
signed if the shareholder's name is placed on the proxy (whether by
manual signature, typewriting, telegraphic transmission or otherwise)
by the shareholder or the shareholder's attorney-in-fact. A validly
executed proxy which does not state that it is irrevocable shall
continue in full force and effect unless (i) revoked by the person
executing it before the vote pursuant to that proxy by a writing
delivered to the Trust stating that the proxy is revoked or by a
subsequent proxy executed by or attendance at the meeting and voting
in person by the person executing that proxy; or (ii) written notice
of the death or incapacity of the maker of that proxy is received by
the Trust before the vote pursuant to that proxy is counted; provided
however, that no proxy shall be valid after the expiration of eleven
(11) months from the date of the proxy unless otherwise provided in
the proxy.
Section 11. INSPECTORS OF ELECTION. Before any meeting of
shareholders, the Board of Trustees may appoint any persons other than
nominees for office to act as inspectors of election at the meeting or
its adjournment. If no inspectors of election are so appointed, the
chairman of the meeting may and on the request of any shareholder or a
shareholder's proxy shall, appoint inspectors of election at the
meeting. The number of inspectors shall be either one (1) or three
(3). If inspectors are appointed at a meeting on the request of one or
more shareholders or proxies, the holders of a majority of shares or
their proxies present at the meeting shall determine whether one (1)
or three (3) inspectors are to be appointed. If any person appointed
as inspector fails to appear or fails or refuses to act, the chairman
of the meeting may and on the request of any shareholder or a
shareholder's proxy, shall appoint a person to fill the vacancy. In
the event that inspectors of election are appointed, such inspectors
shall: (a) Determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the existence of
a quorum and the authenticity, validity and effect of proxies; (b)
Receive votes, ballots or consents; (c) Hear and determine all
challenges and questions in any way arising in connection with the
right to vote; (d) Count and tabulate all votes or consents;
(e)Determine when the polls shall close; (f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or
vote with fairness to all shareholders.
ARTICLE III
TRUSTEES
Section 1. POWERS. Subject to the applicable provisions of the
Agreement and Declaration of Trust of the Trust and these By-Laws
relating to action required to be approved by the shareholders or by
the outstanding shares, the business and affairs of the Trust shall be
managed and all powers shall be exercised by or under the direction of
the Board of Trustees.
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Section 2. NUMBER OF TRUSTEES. The number of Trustees of the Trust
shall be three, provided, however, that the Board of Trustees may,
within the limits specified in the Agreement and Declaration of Trust
of the Trust and by a written instrument signed, or a resolution
approved at a duly constituted meeting, by a majority of the Board of
Trustees, fix a greater or lesser number of Trustees.
Section 3. VACANCIES. Vacancies on the Board of Trustees may be filled
by a majority of the remaining Trustees, though less than a quorum, or
by a sole remaining Trustee, unless the Board of Trustees calls a
meeting of shareholders for the purposes of electing Trustees. In the
event that at any time less than a majority of the Trustees holding
office at that time were so elected by the holders of the outstanding
voting securities of the Trust, the Board of Trustees shall forthwith
cause to be held as promptly as possible, and in any event within a
time period that will satisfy applicable requirements of the
Investment Company Act of 1940 ("1940 Act"), a meeting of such holders
for the purpose of electing Trustees to fill any existing vacancies on
the Board of Trustees.
Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. All meetings
of the Board of Trustees may be held at any place that has been
designated from time to time by resolution of the Board. In the
absence of such a designation, regular meetings shall be held at the
principal executive office of the Trust. Any meeting, regular or
special, may be held by conference telephone or similar communication
equipment, so long as all Trustees participating in the meeting can
hear one another and all such Trustees shall be deemed to be present
in person at the meeting.
Section 5. REGULAR AND SPECIAL MEETINGS. Regular meetings of the Board
of Trustees shall be held without call at least four times during each
fiscal year, at such times as shall from time to time be fixed by the
Board of Trustees. Such regular meetings may be held without notice,
except that a notice of meeting shall be delivered in accordance with
these By-laws with respect to any regular meeting at which a matter
that may be acted upon by the Board of Trustees under the 1940 Act
only at meeting called for the purposed of acting upon such matter.
Upon notice to each of the Trustee, special meetings of the Board of
Trustees for any purpose or purposes may be called at any time by the
Chairman of the Board or the President or any Vice President or the
Secretary or any two (2) Trustees.
Section 6. NOTICE OF MEETINGS. Notices of special meetings or regular
meetings (if such notice is required) shall be in writing and shall
include the date and time of the meeting, as well as a description of
the matters expected to be considered at any such meeting. The notice
need not specify the place that the meeting is to be held if the
meeting will take place at the principal executive office of the
Trust. Notwithstanding the foregoing, if a matter not indicated on the
notice of any such meeting properly comes before any such meeting, the
Board may take action on such matter provided that it is not a matter
which, under the 1940 Act, may be acted upon only at a meeting called
for the purpose of acting on such matter. Notices may be delivered to
each Trustee in person, by facsimile or other electronic means, by
first-class mail, telegram or other recognized delivery service
addressed to each Trustee at that Trustee's business address or
residence as it is shown on the records of the Trust or such other
address
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designated by the Trustee for such delivery, provided that, where
written notice of a meeting is required under these By-laws, such
notice is delivered by means reasonably likely to be received by each
Trustees at least 48 hours prior to the date of the meeting to which
such notice relates is to be held.
Section 7. QUORUM. A majority of the total number of Trustees
specified in Section 2 of this Article III shall constitute a quorum
for the transaction of business, except to adjourn as provided in
Section 10 of this Article III. Every act or decision done or made by
a majority of the Trustees present at a meeting duly held at which a
quorum is present shall be regarded as the act of the Board of
Trustees, unless the Agreement and Declaration of Trust of the Trust
expressly provides otherwise with respect to any matter. A meeting at
which a quorum is initially present may continue to transact business
notwithstanding the withdrawal of Trustees if any action taken is
approved by at least a majority of the required quorum for that
meeting.
Section 8. WAIVER OF NOTICE. Notice of any meeting need not be given
to any Trustee who either before or after the meeting signs a written
waiver of notice, a consent to holding the meeting, or an approval of
the minutes. The waiver of notice or consent must specify the purpose
of the meeting only if a matter that may be acted upon by the Board of
Trustees under the 1940 Act only at meeting called for the purposed of
acting upon such matter is to be considered at the meeting to which
the waiver relates. All such waivers, consents, and approvals shall be
filed with the records of the Trust or made a part of the minutes of
the meeting. Notice of a meeting shall also be deemed given to any
Trustee who attends the meeting without protesting before or at its
commencement the lack of notice to that Trustee.
Section 9. ADJOURNMENT. A majority of the Trustees present, whether or
not constituting a quorum, may adjourn any meeting to another time and
place.
Section 10. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given unless the meeting is
adjourned for more than forty-eight (48) hours, in which case notice
of the time and place shall be given before the time of the adjourned
meeting in the manner specified in Section 6 of this Article III, both
to the Trustees who were present at the time of the adjournment and
all other Trustees.
Section 11. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken by the Board of Trustees may be taken without a meeting if
a majority of the members of the Board of Trustees shall individually
or collectively consent in writing to that action, unless the matter
to be acted upon may be acted upon requires, under the 1940 Act, the
vote, cast in person, of a majority of those Trustees who are not
"interested persons" of the Trust as that term is defined by the 1940
Act. Action by written consent shall have the same force and effect as
a majority vote of the Board of Trustees. Such written consent or
consents shall be filed with the minutes of the proceedings of the
Board of Trustees.
Section 12. FEES AND COMPENSATION OF TRUSTEES. Trustees and members of
committees may receive such compensation, if any, for their services
and such reimbursement of expenses as may be fixed or determined by
resolution of the Board of Trustees. This Section 12 shall not be
construed to preclude any Trustee from serving the Trust in any other
capacity as an officer, agent, employee, or otherwise and receiving
compensation for those services.
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Section 13. DELEGATION OF POWER TO OTHER TRUSTEES. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six
(6) months at any one time to any other Trustee or Trustees; provided
that in no case shall fewer than two (2) Trustees personally exercise
the powers granted to the Trustees under the Agreement and Declaration
of Trust of the Trust except as otherwise expressly provided herein or
by resolution of the Board of Trustees. Except where applicable law
may require a Trustee to be present in person, a Trustee represented
by another Trustee pursuant to such power of attorney shall be deemed
to be present for purposes of establishing a quorum and satisfying the
required majority vote.
ARTICLE IV
COMMITTEES
Section 1. COMMITTEES OF TRUSTEES.
(a) The Board of Trustees may by resolution adopted by a majority of
the authorized number of Trustees designate one or more committees,
each consisting of two (2) or more Trustees, to serve at the pleasure
of the Board. The Board may designate one or more Trustees as
alternate members of any committee who may replace any absent member
at any meeting of the committee. Any committee to the extent provided
in the resolution of the Board, shall have the authority of the Board,
except with respect to: (i) the approval of any action which the 1940
Act or other applicable law requires be approved by a majority of
those Trustees who are not "interested persons" of the Trust as that
term is defined by the 1940 Act and/or the approval of a majority of
the Board of Trustees; (ii) the filling of vacancies on the Board of
Trustees, the appointment of members of any committee or the
establishment of any new committee; (iii) the fixing of compensation
of the Trustees for serving on the Board of Trustees or on any
committee; or (iv) any proposal that would amend Agreement and
Declaration of Trust or the By-laws. Notwithstanding the foregoing,
the Board of Trustees may establish a Pricing committee consisting of
one or more Trustees and shall include, as ex-officio members, the
Trust's Vice President or any assistant vice president and Treasurer
or any Assistant Treasurer. The Pricing Committee shall be authorized
to act on behalf of the Board of Trustees in connection with issues
arising between regular meetings of the Board of Trustees relating to
the pricing of the Trust's shares, provided that any action taken by
the Pricing Committee is reported to the full Board, and ratified by a
majority of the Board of Trustees not later than at the next regularly
scheduled meeting of the Board of Trustees.
(b) The Board of Trustees shall establish an Executive Committee,
consisting of three Trustees, all of whom may be persons who are
"interested persons" of the Trust, as that term is defined by the 1940
Act. The Executive Committee shall have the authority to act with
respect to any matter in the stead of the full Board of Trustees,
except as expressly limited by the preceding paragraph. The Executive
Committee is further authorized to consider any matter with respect to
which action by the full Board of Trustees is necessary or
appropriate, and to make recommendations, either in written or oral
form, with respect to any such matter to the full Board of Trustees.
The Executive Committee shall maintain written records of its meetings
and shall report, either in writing or orally, to the full Board of
Trustees at each regular meeting of the Board, on any meeting and any
action taken at any meeting of the Executive Committee, since the
prior regular meeting of the full Board.
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Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
committees shall be governed by and held and taken in accordance with
the provisions of Article III of these By-Laws, with such changes in
the context thereof as are necessary to substitute the committee and
its members for the Board of Trustees and its members, except that the
time of regular meetings of committees may be determined either by
resolution of the Board of Trustees or by resolution of the committee.
Special meetings of committees may also be called by resolution of the
Board of Trustees. Alternate members shall be given notice of meetings
of committees and shall have the right to attend all meetings of
committees. The Board of Trustees may adopt rules for the governance
of any committee not inconsistent with the provisions of these
By-Laws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the Trust shall be a Chairman, a
President, a Secretary, and a Treasurer. The Trust may also have, at
the discretion of the Board of Trustees, a Chairman of the Board, one
or more Vice Presidents, one or more Assistant Secretaries, one or
more Assistant Treasurers, and such other officers as may be appointed
in accordance with the provisions of Section 3 of this Article V. Any
number of offices may be held by the same person.
Section 2. ELECTION OF OFFICERS. The officers of the Trust, except
such officers as may be appointed in accordance with the provisions of
Section 3 or Section 5 of this Article V, shall be chosen by the Board
of Trustees, and each shall serve at the pleasure of the Board of
Trustees, subject to the rights, if any, of an officer under any
contract of employment.
Section 3. SUBORDINATE OFFICERS. The Board of Trustees may appoint and
may empower the President to appoint such other officers as the
business of the Trust may require, each of whom shall hold office for
such period, have such authority and perform such duties as are
provided in these By-Laws or as the Board of Trustees may from time to
time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights,
if any, of an officer under any contract of employment, any officer
may be removed, either with or without cause, by the Board of Trustees
at any regular or special meeting of the Board of Trustees or by the
principal executive officer or by such other officer upon whom such
power of removal may be conferred by the Board of Trustees.
Any officer may resign at any time by giving written notice to the
Trust. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and unless
otherwise specified in that notice, the acceptance of the resignation
shall not be necessary to make it effective. Any resignation is
without prejudice to the rights, if any, of the Trust under any
contract to which the officer is a party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office because of
death, resignation, removal, disqualification or other cause shall be
filled in the manner prescribed in these By-Laws for regular
appointment to that office. The President may make temporary
appointments to a vacant office pending action by the Board of
Trustees.
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Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board shall if
present preside at meetings of the Board of Trustees and perform such
other powers and duties as may be from time to time assigned to him by
the Board of Trustees or prescribed by the By-Laws.
Section 7. PRESIDENT. The President shall be the chief executive
officer of the Trust and shall, subject to the control of the Board of
Trustees, have general supervision, direction and control of the
business and the officers of the Trust. He shall preside at all
meetings of the shareholders and in the absence of the Chairman of the
Board or if there be none, at all meetings of the Board of Trustees.
He shall have the general powers and duties of management usually
vested in the office of President of a corporation and shall have such
other powers and duties as may be prescribed by the Board of Trustees
or these By-Laws.
Section 8. VICE PRESIDENTS. In the absence or disability of the
President, the Vice Presidents, if any, shall perform all the duties
of the President and when so acting shall have all powers of and be
subject to all the restrictions upon the President. The Vice
Presidents shall have such other powers and perform such other duties
as from time to time may be prescribed for them respectively by the
Board of Trustees or the President or the Chairman of the Board or by
these By-Laws.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept at
the principal executive office of the Trust or such other place as the
Board of Trustees may direct a book of minutes of all meetings and
actions of Trustees, committees of Trustees and shareholders with the
time and place of holding, whether regular or special, and if special,
how authorized, the notice given, the names of those present at
Trustees' meetings or committee meetings, the number of shares present
or represented at shareholders' meetings, and the proceedings. The
Secretary shall give or cause to be given notice of all meetings of
the shareholders and of the Board of Trustees required to be given by
these By-Laws or by applicable law and shall have such other powers
and perform such other duties as may be prescribed by the Board of
Trustees or by these By-Laws.
Section 10. TREASURER. The Treasurer shall be the chief financial
officer and chief accounting officer of the Trust and shall keep and
maintain or cause to be kept and maintained adequate and correct books
and records of accounts of the properties and business transactions of
the Trust, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, retained earnings and shares.
The books of account shall at all reasonable times be open to
inspection by any Trustee.
The Treasurer shall deposit all monies and other valuables in the name
and to the credit of the Trust with such depositories as may be
designated by the Board of Trustees. He shall disburse the funds of
the Trust as may be ordered by the Board of Trustees, shall render to
the President and Trustees, whenever they request it, an account of
all of his transactions as chief financial officer and of the
financial condition of the Trust and shall have other powers and
perform such other duties as may be prescribed by the Board of
Trustees or these By-Laws.
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ARTICLE VI
INDEMNIFICATION OF TRUSTEES, OFFICERS,
EMPLOYEES AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a Trustee, officer,
employee or other agent of this Trust or is or was serving at the
request of this Trust as a Trustee, director, officer, employee or
agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise or was a Trustee, director,
officer, employee or agent of a foreign or domestic corporation which
was a predecessor of another enterprise at the request of such
predecessor entity; "proceeding" means any threatened, pending or
completed action or proceeding, whether civil, criminal,
administrative or investigative; and "expenses" includes without
limitation attorney's fees and any expenses of establishing a right to
indemnification under this Article.
Section 2. ACTIONS OTHER THAN BY TRUST. This Trust shall indemnify any
person who was or is a party or is threatened to be made a party to
any proceeding (other than an action by or in the right of this Trust)
by reason of the fact that such person is or was an agent of this
Trust, against expenses, judgments, fines, settlements and other
amounts actually and reasonably incurred in connection with such
proceeding, if it is determined that person acted in good faith and
reasonably believed: (a) in the case of conduct in his official
capacity as a Trustee of the Trust, that his conduct was in the
Trust's best interests and (b) in all other cases, that his conduct
was at least not opposed to the Trust's best interests and (c) in the
case of a criminal proceeding, that he had no reasonable cause to
believe the conduct of that person was unlawful. The termination of
any proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent shall not of itself create a
presumption that the person did not act in good faith and in a manner
which the person reasonably believed to be in the best interests of
this Trust or that the person had reasonable cause to believe that the
person's conduct was unlawful.
Section 3. ACTIONS BY THE TRUST. This Trust shall indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action by or in the right of this
Trust to procure a judgment in its favor by reason of the fact that
the person is or was an agent of this Trust, against expenses actually
and reasonably incurred by that person in connection with the defense
or settlement of that action if that person acted in good faith, in a
manner that person believed to be in the best interests of this Trust
and with such care, including reasonable inquiry, as an ordinarily
prudent person in a like position would use under similar
circumstances.
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision
to the contrary contained herein, there shall be no right to
indemnification for any liability arising by reason of willful
misfeasance, bad faith, gross negligence, or the reckless disregard of
the duties involved in the conduct of the agent's office with this
Trust.
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No indemnification shall be made under Sections 2 or 3 of this
Article:
(a) In respect of any claim, issue, or matter as to which that person
shall have been adjudged to be liable on the basis that personal
benefit was improperly received by him, whether or not the benefit
resulted from an action taken in the person's official capacity; or
(b) In respect of any claim, issue or matter as to which that person
shall have been adjudged to be liable in the performance of that
person's duty to this Trust, unless and only to the extent that the
court in which that action was brought shall determine upon
application that in view of all the circumstances of the case, that
person was not liable by reason of the disabling conduct set forth in
the preceding paragraph and is fairly and reasonably entitled to
indemnity for the expenses which the court shall determine; or
(c) Of amounts paid in settling or otherwise disposing of a threatened
or pending action, with or without court approval, or of expenses
incurred in defending a threatened or pending action which is settled
or otherwise disposed of without court approval, unless the required
approval set forth in Section 6 of this Article is obtained.
Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of
this Trust has been successful on the merits in defense of any
proceeding referred to in Sections 2 or 3 of this Article or in
defense of any claim, issue or matter therein, before the court or
other body before whom the proceeding was brought, the agent shall be
indemnified against expenses actually and reasonably incurred by the
agent in connection therewith, provided that the Board of Trustees,
including a majority who are disinterested, non-party Trustees, also
determines that based upon a review of the facts, the agent was not
liable by reason of the disabling conduct referred to in Section 4 of
this Article.
Section 6. REQUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by this
Trust only if authorized in the specific case on a determination that
indemnification of the agent is proper in the circumstances because
the agent has met the applicable standard of conduct set forth in
Sections 2 or 3 of this Article and is not prohibited from
indemnification because of the disabling conduct setforth in Section 4
of this Article, by:
(a) A majority vote of a quorum consisting of Trustees who are not
parties to the proceeding and are not interested persons of the Trust
(as defined in the Investment Company Act of 1940); or
(b) A written opinion by an independent legal counsel.
Section 7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this Trust before the final disposition
of the proceeding provided (a) receipt of a written affirmation by the
Trustee of his good faith belief that he has met the standard of
conduct necessary for indemnification under this Article and a written
undertaking by or on behalf of the agent, such undertaking being an
unlimited general obligation to repay the amount of the advance if it
is ultimately determined that he has not met those requirements, and
(b) a determination that the facts then known to those making the
determination would not preclude indemnification under this Article.
Determinations and authorizations of payments under this Section must
be made in the manner specified in Section 6 of this Article for
determining that the indemnification is permissible.
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Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than
Trustees and officers of this Trust or any subsidiary hereof may be
entitled by contract or otherwise.
Section 9. LIMITATIONS. No indemnification or advance shall be made
under this Article, except as provided in Sections 5 or 6 in any
circumstances where it appears:
(a) That it would be inconsistent with a provision of the Agreement
and Declaration of Trust of the Trust, a resolution of the
shareholders, or an agreement in effect at the time of accrual of the
alleged cause of action asserted in the proceeding in which the
expenses were incurred or other amounts were paid which prohibits or
otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly imposed
by a court in approving a settlement.
Section 10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees of this Trust to purchase such insurance, this Trust
shall purchase and maintain insurance on behalf of any agent of this
Trust against any liability asserted against or incurred by the agent
in such capacity or arising out of the agent's status as such, but
only to the extent that this Trust would have the power to indemnify
the agent against that liability under the provisions of this Article
and the Agreement and Declaration of Trust of the Trust.
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does
not apply to any proceeding against any Trustee, investment manager or
other fiduciary of an employee benefit plan in that person's capacity
as such, even though that person may also be an agent of this Trust as
defined in Section 1 of this Article. Nothing contained in this
article shall limit any right to indemnification to which such a
Trustee, investment manager, or other fiduciary may be entitled by
contract or otherwise which shall be enforceable to the extent
permitted by applicable law other than this Article.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. This Trust
shall keep at its principal executive office or at the office of its
transfer agent or registrar, if either be appointed and as determined
by resolution of the Board of Trustees, a record of its shareholders,
giving the names and addresses of all shareholders and the number and
series of shares held by each shareholder.
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS. The Trust shall keep
at its principal executive office the original or a copy of these
By-Laws as amended to date, which shall be open to inspection by the
shareholders at all reasonable times during office hours.
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Section 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS. The accounting
books and records of the Trust shall be kept by, and at the officers
of the Trust's administrator and accounting services agent. Minutes of
proceedings of the shareholders and the Board of Trustees and any
committee or committees of the Board of Trustees shall be kept such
place or places designated by the Board of Trustees or in the absence
of such designation, at the principal executive office of the Trust.
The minutes shall be kept in written form and the accounting books and
records shall be kept either in written form or in any other form
capable of being converted into written form. The minutes and
accounting books and records shall be open to inspection upon the
written demand of any shareholder or holder of a voting trust
certificate at any reasonable time during usual business hours for a
purpose reasonably related to the holder's interests as a shareholder
or as the holder of a voting trust certificate. The inspection may be
made in person or by an agent or attorney and shall include the right
to copy and make extracts.
Section 4. INSPECTION BY TRUSTEES. Every Trustee shall have the
absolute right at any reasonable time to inspect all books, records,
and documents of every kind and the physical properties of the Trust.
This inspection by a Trustee may be made in person or by an agent or
attorney and the right of inspection includes the right to copy and
make extracts of documents.
ARTICLE VIII
GENERAL MATTERS
Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All checks,
drafts, or other orders for payment of money, notes or other evidences
of indebtedness issued in the name of or payable to the Trust shall be
signed or endorsed in such manner and by such person or persons as
shall be designated from time to time in accordance with the
resolution of the Board of Trustees.
Section 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of
Trustees, except as otherwise provided in these By-Laws, may authorize
any officer or officers, agent or agents, to enter into any contract
or execute any instrument in the name of and on behalf of the Trust
and this authority may be general or confined to specific instances;
and unless so authorized or ratified by the Board of Trustees or
within the agency power of an officer, no officer, agent, or employee
shall have any power or authority to bind the Trust by any contract or
engagement or to pledge its credit or to render it liable for any
purpose or for any amount.
Section 3. CERTIFICATES FOR SHARES. All shares of the Trust shall be
uncertificated and shall be issued in accordance with such system of
issuance, recordation and transfer of its shares by electronic or
other means as may be from time to time used by its transfer agent or
registrar.
Section 4. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD BY TRUST.
The Chairman of the Board, the President or any Vice President or any
other person authorized by resolution of the Board of Trustees or by
any of the foregoing designated officers, is authorized to vote or
represent on behalf of the Trust any and all shares of any
corporation, partnership, trusts, or other entities,
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foreign or domestic, standing in the name of the Trust. The authority
granted may be exercised in person or by a proxy duly executed by such
designated person.
Section 5. FISCAL YEAR. The fiscal year of the Trust and each Series
of the Trust shall be fixed as December 31 of each year, provided
however, that the fiscal year may be changed from time to time by
resolution of the Trustees.
ARTICLE IX
AMENDMENTS
Section 1. AMENDMENT BY TRUSTEES. Subject to the right of shareholders
as provided in Section 1 of this Article to adopt, amend or repeal
ByLaws, and except as otherwise provided by applicable law or by the
Agreement and Declaration of Trust of the Trust, these By-Laws may be
adopted, amended, or repealed by the Board of Trustees.
