Form N-1A
Securities and Exchange Commission
Washington, D.C. 20549
Registration Statement Under the Securities Act of 1933 [ ]
Pre-Effective Amendment [ ]
Post-Effective Amendment No. 1 [X]
and/or
Registration Statement Under the Investment Company Act of 1940 [ ]
Amendment No. 3 [x]
(Check appropriate box or boxes.)
Empirical Investment Funds - File Nos. 333-40397 and 811-8493
(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)
Registrant's Telephone Number, including Area Code: (305) 535-1006
Kaye Kerr, 1521 Alton Road, Suite 364, Miami Beach, FL 33139
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.,
3500 Carew Tower, 441 Vine Street, Cincinnati, OH 45202
Approximate Date of Proposed Public Offering:
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)
[X] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i) of rule 485
[ ] 75 days after filing pursuant to paragraph (a)(ii) of Rule 485
[ ] on (date) pursuant to paragraph (a)(i) of Rule 485
If appropriate, check the following box:
/_/ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
EMPIRICAL GROWTH FUND
PROSPECTUS August____, 1999
1521 Alton Rd., Suite 364
Miami Beach, Florida 33139
For Information, Shareholder Services and Requests:
(800) 466-2987
The investment objective of the Empirical Growth Fund is to achieve
superior risk-adjusted capital appreciation on long term investment dollars.
The Fund is "no-load," which means that investors incur no sales charges,
commissions or deferred sales charges on the purchase or redemption of their
shares.
As with all mutual funds, the Securities and Exchange Commission has not
determined that the information in this prospectus is accurate or complete, nor
has it approved or disapproved of the Fund's shares. It is a criminal offense to
state otherwise.
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TABLE OF CONTENTS
PAGE
ABOUT THE FUND 3
COSTS OF INVESTING IN THE FUND 5
HOW TO INVEST IN THE FUND 6
HOW TO REDEEM SHARES 8
SHARE PRICE CALCULATION 9
DIVIDENDS AND DISTRIBUTIONS 9
TAXES 9
MANAGEMENT OF THE FUND 9
OTHER INFORMATION ABOUT INVESTMENTS 10
YEAR 2000 ISSUE 10
FINANCIAL HIGHLIGHTS 11
<PAGE>
ABOUT THE FUND
Investment Objective
The investment objective of the Empirical Growth Fund is to achieve superior
risk-adjusted capital appreciation on long term investment dollars.
Principal Strategies
Under normal market conditions, the Fund expects to invest at least 75% of
its net assets in equity securities [of U.S. companies]. 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 sized companies. These companies may include those that can
sustain above average and consistent earnings growth as well as companies that
the Adviser believes have new or innovative products, services or processes
which can enhance prospects for growth in future earnings. The Fund may also
invest in large, seasoned companies that, in the judgment of the Adviser,
possess superior potential returns similar to companies with formative growth
profiles.
The Fund seeks to accomplish its objective by creating a portfolio with
significantly less risk relative to other growth funds or investment strategies.
The Adviser seeks to achieve this by monitoring and decreasing the Fund's
exposure to risks that are associated with the market (also known as a
sensitivity to market movements), particular industries and particular
companies. The Adviser may consider a number of factors in making its investment
decisions, including a company's relative price volatility, price to earnings
ratio, return on equity, return on assets, inventory turnover and cash flow
levels, financial leverage, stability of management and other factors which the
Adviser deems helpful in assessing risk. The Adviser seeks to further limit risk
by diversifying the Fund's investments across a broad range of industries and
companies.
Principal Risks of Investing in the Fund
All investments carry risks to some degree. The principal risks of
investing in the Fund are the stock market risks common to all equity
investments and the company risks associated with each individual investment in
the Fund's portfolio. Stock market risk means that Fund shares might decrease in
value in response to such things as general economic conditions and political
stability. Company risk means that Fund shares might decrease in value in
response to the activities and financial prospects of an individual company in
the Fund's portfolio. The Advisor may not be successful in reducing the Fund's
exposure to risks. You could lose money by investing in the Fund.
In addition, the stocks of medium sized companies are subject to certain
risks including:
- possible dependence on a limited product line, market, financial
resources or management group
- less frequent trading and trading with smaller volume than larger
stocks, which may make it difficult for the Fund to buy or sell the
stocks
- greater fluctuation in value than larger, more established company stocks
The Advisor had not managed assets organized as a mutual fund prior to
forming the Fund and the Fund has a limited operating history. In addition,
Kaye Kerr, the Fund's portfolio manager, is the sole employee of the
Adviser and, as a result, the success of the Fund is entirely dependent on
her.
Is this Fund Right for You?
.
The Fund is intended to be a core equity portfolio for investors with a
long term wealthbuilding horizon. You should invest in the Fund only if you are
willing to accept price fluctuation in your investment and the risks associated
with common stock investment.
<PAGE>
COSTS OF INVESTING IN THE FUND
Shareholder Fees (fees paid directly from your investment)
Sales Load Imposed on Purchases NONE
Sales Load Imposed on Reinvested Dividends NONE
Deferred Sales Load NONE
Redemption Fees1 NONE
Exchange Fees NONE
Annual Fund Operating Expenses (expenses that are deducted from Fund assets) 2
Management Fees 1.70%
Distribution (12b-1) Fees NONE
Other Expenses ____
Total Fund Operating Expenses 1.95%
1 The Fund's Custodian imposes a $13 charge for wire redemptions. 2 Update:
The Adviser's fee is equal to 1.95% of the Fund's average daily net assets up to
and including $200 million, minus the amount by which the Fund's total expenses
(including organizational expenses, but excluding brokerage, taxes, interest and
extraordinary expenses) exceeds 1.95 %. This means that the Fund's total
operating expenses will be 1.95%. Because other expenses are estimated to be
0.25%, the management fee is estimated to be 1.70%.
Example:
The example below is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The example uses the
same assumptions as other mutual fund prospectuses: a $10,000 initial investment
for the time periods indicated, 5% annual total return, constant operating
expenses, and sale of all shares at the end of each time period. Although your
actual expenses may be different, based on these assumptions your costs would
be:
1 year 3 years 5 years 10 years
Your costs: $___ $___ $_____ $______
<PAGE>
HOW TO PURCHASE SHARES
The minimum initial investment in the Fund is $5,000 ($2,000 for IRAs and
custodial accounts and $500 for systematic Investment Plan accounts). The
minimum subsequent investments is $50. These minimums may be waived at the
discretion of the Fund.
Initial Purchase.
By Mail - You may purchase shares of the Fund by completing and signing the
investment application form which accompanies this Prospectus and mailing it, in
proper form, together with a check made payable to Empirical Growth Fund, and
mailed to: Mutual Shareholder Services, The Tower at Erieview, 36th floor, 1301
East Ninth St., Cleveland, OH 44114. Your purchase of shares of the Fund will be
at the next share price calculated after receipt of your investment.
By Wire - You may also purchase shares of the Fund by wiring federal funds
from your bank, which may charge you a fee for doing so. To wire money, you must
call the Transfer Agent at (800) 466-2987 to set up your account and obtain an
account number. You should be prepared at that time to provide the information
on the application. Then, provide your bank with the following information for
purposes of wiring your investment:
Firstar Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: Empirical Growth Fund
D.D.A. #[_________]
Account Name _________________ (write in shareholder name) For
the Account # ______________ (write in account number)
You must mail a signed application to the Transfer Agent at the above
address in order to complete your initial wire purchase. Wire orders will be
accepted only on a day on which the Fund, Custodian and Transfer Agent are open
for business. A wire purchase will not be considered made until the wired money
is received and the purchase is accepted by the Fund. Any delays that may occur
in wiring money, including delays which may occur in processing by the banks,
are not the responsibility of the Fund or the Transfer Agent. The investor's
bank may charge a fee for the wire transfer of funds.
Subsequent Purchases. You may make additional purchases in the following
manner:
By Check. Send your check, made payable to the Fund, along with the stub
from a previous purchase or sale confirmation, to Mutual Shareholder Services,
The Tower at Erieview, 36th Floor, 1301 East Ninth Street, Cleveland, Ohio
44114.
By Wire. Funds may be wired by following the previously discussed wire
instructions for an initial purchase.
By Telephone. You may purchase additional shares up to an amount equal to 3
times the market value of shares held in the shareholder's account in the Fund
on the preceding day for which payment has been received, by telephoning the
Transfer Agent, Inc., at 800-466-2987 and identifying your account by number. If
you wish to use this privilege, you must complete a Telephone Purchase
Authorization Form which is available from the Transfer Agent. A confirmation
will be mailed [and payment must be received] within 3 business days of date of
purchase. This telephone purchase option may be discontinued without notice.
<PAGE>
Systematic Investment Plan. The Systematic Investment Plan permits you to
purchase shares of the Fund at monthly intervals ($50 minimum per month). If
your bank allows automatic withdrawals, you may purchase shares by transferring
funds from your bank account. The specified amount will be debited from your
bank account, and shares will be purchased once a month, on or about the 15th
day. Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. If you wish to use the
Systematic Investment Plan , call the Transfer Agent at 800 ___-____ to obtain
the appropriate forms. The Systematic Investment Plan does not assure a profit
and does not protect against loss in declining markets.
Other Purchase Information. The Fund may limit the amount of purchases and
refuse to sell to any person.. If your check or wire does not clear, you will be
responsible for any loss incurred by the Fund. If you are already a shareholder,
the Fund can redeem shares from any identically registered account in the Fund
as reimbursement for any loss incurred. You may be prohibited or restricted from
making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value next determined after
your redemption request has been received by the Transfer Agent with the
following information:
the Fund name
your account number
your account name(s)
the account address
the dollar amount or number of shares you wish to redeem.
the signatures of all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered.
At the discretion of the Fund or Mutual Shareholder Services, you may be
required to furnish additional legal documents to insure proper authorization.
You may receive redemption payments in the form of a check or federal wire
transfer. The proceeds of the redemption may be more or less than the purchase
price of your shares, depending on the market value of the Fund's securities at
the time of your redemption. The Fund's Custodian presently charges $13 for each
wire redemption. Any charges for wire redemptions will be deducted from your
account by redemption of shares. If you purchase or redeem shares through a
securities dealer, you may be charged a fee by that institution.
By Mail. You may redeem any part of your account in the Fund at no charge
by mail. Your request should be addressed to: Empirical Investment Funds, c/o
Mutual Shareholder Services, The Tower at Erieview, 36th Floor, 1301 East Ninth
Street, Cleveland, Ohio 44114.
<PAGE>
By Telephone. You may redeem any part of your account in the Fund by
calling the Transfer Agent at (800) 466-2987. You must first complete the
Optional Telephone Redemption and Exchange section of the investment application
to institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The Fund or the Transfer Agent may terminate telephone redemption or
exchange policy at any time. During periods of extreme market activity it is
possible that you may encounter some difficulty in telephoning the Fund,
although neither the Fund nor the Transfer Agent has ever experienced
difficulties in receiving and in a timely fashion responding to telephone
requests for redemptions or exchanges. If you are unable to reach the Fund by
telephone, you may request a redemption or exchange by mail.
Additional Information. If you are not certain of the requirements for a
redemption please call the Transfer Agent at (800) ___-____. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen calendar days. Also, when the New York Stock
Exchange is closed (or when trading is restricted) for any reason other than its
customary weekend or holiday closing or under any emergency circumstances, as
determined by the Securities and Exchange Commission, the Fund may suspend
redemptions or postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund may require you to redeem all of your shares in the Fund on
30 days' written notice if the value of your shares in the Fund is less than
$5,000 due to redemption, or such other minimum amount as the Fund may determine
from time to time. An involuntary redemption constitutes a sale. You should
consult your tax advisor concerning the tax consequences of involuntary
redemptions. You may increase the value of your shares in the Fund to the
minimum amount within the 30 day period. Each share of the Fund is subject to
redemption at any time if the Board of Trustees determines in its sole
discretion that failure to so redeem may have materially adverse consequences to
all or any of the shareholders of the Fund.
SHARE VALUATION
The price you pay for your shares is based on the Fund's net asset value
per share (NAV). The NAV is calculated at the close of trading (normally 4:00
p.m. Eastern time) on each day the New York Stock Exchange is open for business
(the Stock Exchange is closed on weekends, Federal holidays and Good Friday).
The NAV is calculated by dividing the value of the Fund's total assets
(including interest and dividends accrued but not yet received) minus
liabilities (including accrued expenses) by the total number of shares
outstanding.
The Fund's assets are generally valued at their market value. If market
prices are not available, or if an event occurs after the close of the trading
market that materially affects the values, assets may be valued at their fair
value.
<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. When you open your
account, you should specify on your application how you want to receive your
distributions.
Distribution of any net long term capital gains realized by the Fund 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.
If you buy shares just before a distribution is declared, you will pay the
full price for the shares and then receive a portion of the price back as a
taxable distribution. The distribution paid to you would generally be included
in your gross income for tax purposes, whether or not you reinvested it. For
this reason, you should carefully consider the tax consequences of buying shares
of the Fund immediately before distributions are made.
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.
MANAGEMENT OF THE FUND
The Fund retains Worldwide Financial Management Associates, Inc., 1521
Alton Rd., Suite 364, Miami Beach, Florida 33139 (the "Adviser") to manage the
Fund's investments. The Fund's portfolio manager is Kaye Kerr. Ms. Kerr, who is
responsible for the day to day management of the fund, is the Managing Director
and President of the Adviser, which she established in October 1996. Ms. Kerr
began her career as an account executive with R.J. Steichen & Co. in Feb. 1994.
In May of that year, Ms. Kerr went to Tuschner & Company where she became a Vice
President. From December, 1995 until June, 1996, she was a credit representative
with Dayton Hudson Corporation, and from June, 1996 until January, 1997, she was
an assistant with the managed asset group of Dain Bosworth, Inc., an investment
banker/brokerage firm. She has also served as a financial adviser and consultant
to many established and ongoing business operations. Prior to her employment
with R.J. Steichen & Co., Ms. Kerr was an an associate with Jubilee Investment
Corp., a business development company. In addition, she has 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.
During the fiscal year ended March 31, 1999 the Fund paid the Adviser a fee
equal to _____% of its average daily net assets The Adviser pays all of the
operating expenses of the Fund except brokerage, taxes, interest and
extraordinary expenses. The Fund pays its organizational expenses. In this
regard, it should be noted that most investment companies pay their own
operating expenses directly, while the Fund's expenses, except those specified
above, are paid by the Adviser.
<PAGE>
OTHER INFORMATION ABOUT INVESTMENTS
Equities. The Fund invests in common stocks (including American Depository
Receipts) and securities that are convertible into common stocks. Convertibility
refers to the ability of the holder of the security to exchange it for another
security, usually debt exchanged for equity. The convertible securities in 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.
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.
Additional Investments. For liquidity, diversity and flexibility, the Fund may
invest the remainder of its net assets in real estate investment trusts,
short-term to intermediate-term corporate and U.S. Government debt securities,
cash, and money market instruments.
Real estate investment trusts ("REITs"). 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. Many REITs are common stocks.
Corporate Debt Securities. Corporate debt securities are bonds or notes
issued by corporations and other business organizations, including business
trusts, in order to finance their credit needs. Corporate debt securities
include commercial paper which consist of short term (usually from 1 to 270
days) unsecured promissory notes issued by corporations in order to finance
their current obligations. The Fund will only invest in corporate debt
securities rated A or better by Standard & Poor's Corporation ("S&P") or Moody's
Investors Services, Inc. ("Moody's"), or if unrated, determined by the Adviser
to be of comparable quality.
U.S. Government Debt Securities. U.S. government obligations include a
variety of securities that are issued or guaranteed by the U.S. Treasury, by
various agencies of the U.S. government or by various instrumentalities that
have been established or sponsored by the U.S. government. U.S. government
obligations may be backed by the credit of the government as a whole or only by
the issuing agency. U.S. Treasury bonds, notes, and bills and some agency
securities, such as those issued by the Federal Housing Administration and the
Government National Mortgage Association (GNMA), are backed by the full faith
and credit of the U.S. government as to payment of principal and interest and
are the highest quality government securities. Other securities issued by U.S.
government agencies or instrumentalities, such as securities issued by the
Federal Home Loan Banks and the Federal Home Loan Mortgage Corporation, are
supported only by the credit of the agency that issued them, and not by the U.S.
government. Securities issued by the Federal Farm Credit System, the Federal
Land Banks, and the Federal National Mortgage Association (FNMA) are supported
by the agency's right to borrow money from the U.S. Treasury under certain
circumstances, but are not backed by the full faith and credit of the U.S.
government.
<PAGE>
Risks
Convertible Securities. While convertible securities generally offer lower
yields than non-convertible debt securities of similar quality, their prices may
reflect changes in the value of the underlying common stocks. Convertible
securities generally entail less risk than the issuer's common stock
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 ADRs 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.
Real estate investment trusts ("REITs"). Some of the risks of equity and
mortgage REITs are that they depend on management skills and are not
diversified. As a result, REITs are subject to the risk of financing either
single projects or any number of projects. REITs depend on heavy cash flow and
may be subject to defaults by borrowers and self-liquidation. Additionally,
equity REITs may be affected by any changes in the value of the underlying
property owned by the trusts. Mortgage REITS may be affected by the quality of
any credit extended.
Corporate Debt Securities. Corporate debt securities rated A or better by
S&P and Moody's generally have adequate to strong protection of principal and
interest payments. In the lower end of these categories, securities are somewhat
more susceptible to the adverse effects of changes in circumstances and economic
conditions. These changes could affect the ability of the issuer to make
payments of principal and interest. In addition to these credit risks, corporate
debt securities are sensitive to fluctuating interest rates. In periods of
rising interest rates the value of a fixed rate security is likely to fall. In
periods of declining interest rates, issuers are more likely to call bonds. If a
bond is called, the Fund will receive its return of principal earlier than
expected and would likely reinvest the proceeds at a lower interest rate, thus
reducing income to the Fund.
U.S. Government Securities. In the case of securities not backed by the
"full faith and credit" of the U.S. government, the Fund must look principally
to the agency issuing or guaranteeing the obligation for ultimate repayment and
may not be able to assert a claim against the U.S. government itself in the
event the agency or instrumentality does not meet its commitments.
Temporary Investments. For temporary defensive purposes, the Fund may hold all
or a portion of its assets in money market instruments, securities of other
no-load registered investment companies or repurchase agreements collateralized
by securities of the U.S. government or its agencies. As a result of engaging in
these temporary measures, the Fund may not achieve its investment objective The
Fund may also invest in such instruments at any time to maintain liquidity or
pending selection of investments in accordance with its policies. If the Fund
acquires securities of another investment company, the shareholders of the Fund
will be subject to duplicative management fees.
Investment Objective. The investment objective of the Fund may be changed
without the affirmative vote of a majority of the outstanding shares of the
Fund. Any such change may result in the Fund having an investment objective
different from the objective that you considered appropriate at the time of your
investment in the Fund.
<PAGE>
YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser or the Fund's various service providers do
not properly process and calculate date-related information and data from and
after January 1, 2000. This is commonly known as the "Year 2000 Issue."
The Adviser has taken steps that it believes are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used and
to obtain reasonable assurances that comparable steps are being taken by the
Fund's major service providers. At this time, however, there can be no assurance
that these steps will be sufficient to avoid any adverse impact on the Fund. In
addition, the Adviser cannot make any assurances that the Year 2000 Issue will
not affect the companies in which the Fund invests or worldwide markets and
economies.
FINANCIAL HIGHLIGHTS
The following table is intended to help you better understand the
Fund's financial performance since its inception. Certain information reflects
financial results for a single Fund share. The total returns represent the rate
you would have earned (or lost) on an investment in the Fund, assuming
reinvestment of all dividends and distributions. This information has been
audited by McCurdy & Associates CPA's, Inc., whose report, along with the Fund's
financial statements, are included in the Fund's annual report, which is
available upon request.
For a share outstanding throughout each period.
[insert highlights]
<PAGE>
Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated by reference into this
Prospectus, contains detailed information on Fund policies and operation.
Shareholder reports contain management's discussion of market conditions,
investment strategies and performance results as of the Fund's latest
semi-annual or annual fiscal year end.
Call the Fund at 800-466-2987 to request free copies of the SAI and the
Fund's annual and semi-annual reports, to request other information about the
Fund and to make shareholder inquiries.
You may also obtain information about the Fund (including the SAI and other
reports) from the Securities and Exchange Commission on their Internet site at
http://www.sec.gov or at their Public Reference Room in Washington, D.C. Call
the SEC at 800-SEC-0330 for room hours and operation. You may also obtain Fund
information by sending a written request and duplicating fee to the Public
Reference Section of the SEC, Washington, D.C. 20549-6609.
<PAGE>
Investment Company Act # 811-08493
The Empirical Growth Fund
a series of
Empirical Investment Funds
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information ("SAI") is not a Prospectus. It
should be read in conjunction with the Prospectus of Empirical Growth Fund dated
_________, 1999. This SAI incorporates by reference the financial statements and
independent auditor's report from the Fund's Annual Report to Shareholders for
the fiscal year ended May 31, 1999 ("Annual Report"). A free copy of the
Prospectus and Annual Report can be obtained by writing the Transfer Agent at
The Tower at Erieview, 1301 East Ninth Street, Cleveland, Ohio 44114, or by
calling the Fund at 800-466-2987.
TABLE OF CONTENTS
PAGE
Fund Organization 1
Capital Stock 1
Additional Information About Fund Investments and Risk Considerations 2
Investment Limitations 4
Management of the Fund 4
Investment Adviser 6
Trustees & Officers 7
Portfolio Transactions and Brokerage 7
Other Service Providers 10
Investment Performance 10
Financial Statements 11
5401 6/4/99 3:34 PM
<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 Delaware
law as a business trust under a Declaration of Trust dated September 29, 1997.
The Declaration of Trust permits the Trust to offer separate series ("Series")
of shares. All consideration received by the Trust for shares of any Series and
all assets of such Series belong to that portfolio and would be subject to
liabilities related thereto. There is currently one Series of the Trust: The
Empirical Growth Fund (the "Fund").
CAPITAL STOCK
The Trust has authorized capital of an indefinite number of shares of $.001
par value common stock of all Series in the aggregate. The shares of each Series
have equal rights and privileges with all other shares of the Trust. The Board
of Trustees is authorized to classify unissued shares of the Trust by assigning
them to a Series for issuance. Additional Series may be offered in the future,
but such additional offerings would not affect the interests of current
shareholders in the existing Series.
The assets received by each Series on the sale of shares of such Series and
all income, earnings, profits and proceeds thereof, subject only to the rights
of creditors, are allocated to such Series, and constitute assets of such
Series. The assets of each Series are required to be segregated on the Series'
books of account.
Each share of a Series represents an equal proportionate interest in that
Series 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 Series
as are declared by the Board of Trustees. Upon liquidation of any Series, Series
shareholders are entitled to share pro rata in the net assets belonging to that
Series available for distribution.
Shares of the Fund are fully paid, non-assessable, redeemable and fully
transferable. Shares do not have preemptive rights or subscription rights.
SHAREHOLDER RIGHTS
Any Trustee of the Trust may be removed by vote of the shareholders holding
not less than two-thirds of the outstanding shares of the Trust. The Trust does
not hold annual meetings of shareholders. When matters are submitted to
shareholders for a vote, each shareholder is entitled to one vote for each whole
share he owns and fractional votes for fractional shares he owns. Voting rights
are non-cumulative, which means that holders of a majority of shares can elect
all Trustees of the Trust if they so choose. All shares of the Fund have equal
voting rights and liquidation rights. The Adviser, as of _________, 1999, owns
_____% of the outstanding shares of the Fund. As a result, the Adviser (and Kaye
Kerr, becuase she controls the Adviser) may be deemed to control the Fund. As
the controlling shareholder, she would control the outcome of any proposal
submitted to the shareholders for approval, including changes to the Fund's
fundamental policies or the terms of the management agreement with the Fund's
investment adviser. ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS
<PAGE>
This section contains a more detailed discussion of some of the investments
the Fund may make and some of the techniques it may use, as described in the
Prospectus (see "Objective and Policies").
A. Repurchase Agreements. A repurchase agreement is a short-term investment
in which the purchaser (i.e., the Fund) acquires ownership of a U.S. Government
obligation (which may be of any maturity) and the seller agrees to repurchase
the obligation at a future time at a set price, thereby determining the yield
during the purchaser's holding period (usually not more than seven days from the
date of purchase). Any repurchase transaction in which the Fund engages will
require full collateralization of the seller's obligation during the entire term
of the repurchase agreement. In the event of a bankruptcy or other default of
the seller, the Fund could experience both delays in liquidating the underlying
security and losses in value. However, the Fund intends to enter into repurchase
agreements only with the Custodian, other banks with assets of $1 billion or
more and registered securities dealers determined by the Adviser (subject to
review by the Board of Trustees) to be creditworthy. The Adviser monitors the
creditworthiness of the banks and securities dealers with which the Fund engages
in repurchase transactions.
B. American Depository Receipts. American Depository Receipts are
dollar-denominated receipts that are generally issued in registered form by
domestic banks, and represent the deposit with the bank of a security of a
foreign issuer. To the extent that the Fund invests in foreign securities, such
investments may be subject to special risks. For example, there may be less
information publicly available about a foreign company than about a U.S.
company, and foreign companies are not generally subject to accounting, auditing
and financial reporting standards and practices comparable to those in the U.S.
Other risks associated with investments in foreign securities include changes in
restrictions on foreign currency transactions and rates of exchanges, changes in
the administrations or economic and monetary policies of foreign governments,
the imposition of exchange control regulations, the possibility of expropriation
decrees and other adverse foreign governmental action, the imposition of foreign
taxes, less liquid markets, less government supervision of exchanges, brokers
and issuers, difficulty in enforcing contractual obligations, delays in
settlement of securities transactions and greater price volatility. In addition,
investing in foreign securities will generally result in higher commissions than
investing in similar domestic securities.
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been adopted
by the Trust with respect to the Fund and are fundamental ("Fundamental"), i.e.,
they may not be changed without the affirmative vote of a majority of the
outstanding shares of the Fund. As used in the Prospectus and the Statement of
Additional Information, the term "majority" of the outstanding shares of the
Fund means the lesser of (1) 67% or more of the outstanding shares of the Fund
present at a meeting, if the holders of more than 50% of the outstanding shares
of the Fund are present or represented at such meeting; or (2) more than 50% of
the outstanding shares of the Fund. Other investment practices which may be
changed by the Board of Trustees without the approval of shareholders to the
extent permitted by applicable law, regulation or regulatory policy are
considered non-fundamental ("Non-Fundamental").
<PAGE>
1. Borrowing Money. The Fund will not borrow money, except (a) from a bank,
provided that immediately after such borrowing there is an asset coverage of
300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is consistent with or permitted by the Investment
Company Act of 1940, as amended, the rules and regulations promulgated
thereunder or interpretations of the Securities and Exchange Commission or its
staff.
3. Underwriting. The Fund will not act as underwriter of securities issued
by other persons. This limitation is not applicable to the extent that, in
connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total assets
in a particular industry. This limitation is not applicable to investments in
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum limitations
on its investment policies and limitations, an excess above the fixed percentage
will not be a violation of the policy or limitation unless the excess results
immediately and directly from the acquisition of any security or the action
taken. This paragraph does not apply to the borrowing policy set forth in
paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment company,
whether organized as a trust, association or corporation, or a personal holding
company, may be merged or consolidated with or acquired by the Trust, provided
that if such merger, consolidation or acquisition results in an investment in
the securities of any issuer prohibited by said paragraphs, the Trust shall,
within ninety days after the consummation of such merger, consolidation or
acquisition, dispose of all of the securities of such issuer so acquired or such
portion thereof as shall bring the total investment therein within the
limitations imposed by said paragraphs above as of the date of consummation.
<PAGE>
Non-Fundamental. The following limitations have been adopted by the Trust
with respect to the Fund and are Non-Fundamental (see "Investment Restrictions"
above).
i. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. Borrowing. The Fund will not borrow money or enter into reverse
repurchase agreements.
iii. Margin Purchases. The Fund will not purchase securities or evidences
of interest thereon on "margin." This limitation is not applicable to short term
credit obtained by the Fund for the clearance of purchases and sales or
redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv. Short Sales. The Fund will not effect short sales of securities.
v. Options. The Fund will not purchase or sell puts, calls, options or
straddles.
vi. Illiquid Investments. The Fund will not invest in securities for which
there are legal or contractual restrictions on resale and other illiquid
securities.
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 the Fund,
and persons or companies furnishing services to the Fund, including the
Management 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., 300 South Pointe Drive, Suite 4306, Miami Beach, FL 33139.
<PAGE>
Under the terms of the Management Agreement (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the operating expenses of the Fund except brokerage, taxes, interest
and extraordinary expenses. The Fund pays its organizational expenses. As
compensation for its management services and agreement to pay the Fund's
expenses, the Fund is obligated to pay the Adviser a fee, payable monthly, equal
to an annual average rate of 1.95% of its average daily net assets up to and
including $200 million, 1.90% of its average daily net assets from $200 million
up to and including $500 million, 1.85% of its average daily net assets from
$500 million up to and including $1 billion, and 1.80% of its average daily net
assets in excess of $1 billion, minus the amount by which the Fund's total
expenses (including organizational expenses, but excluding brokerage, taxes,
interest and extraordinary expenses) exceeds 1.95%. The Adviser may waive all or
part of its fee, at any time, and at its sole discretion, but such action shall
not obligate the Adviser to waive any fees in the future. For the period from
_________, 1998 (commencement of operations) through May 31, 1999, the Fund paid
fees to the Adviser of $__________.
In order to increase the return to investors, the Adviser may voluntarily
from time to time, waive or reduce its fees on assets held by the Fund, which
would have the effect of lowering the Fund'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 management agreement or
otherwise described in this Prospectus, may be rescinded at any time without
further notice to investors.
The Adviser retains the right to use the name "Empirical" in connection
with another investment company or business enterprise with which the Adviser is
or may become associated. The Trust's right to use the name "Empirical"
automatically ceases ninety days after termination of the Agreement and may be
withdrawn by the Adviser on ninety days written notice.
The Adviser (not the Fund) may pay certain financial institutions (which
may include banks, brokers, securities dealers and other industry professionals)
a "servicing fee" for performing certain administrative functions for Fund
shareholders to the extent these institutions are allowed to do so by applicable
statute, rule or regulation.
The Adviser may make payments to banks or other financial institutions that
provide shareholder services and administer shareholder accounts. The
GlassSteagall Act prohibits banks from engaging in the business of underwriting,
selling or distributing securities. Although the scope of this prohibition under
the Glass-Steagall Act has not been clearly defined by the courts or appropriate
regulatory agencies, management of the Fund believes that the Glass- Steagall
Act should not preclude a bank from providing such services. However, state
securities laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law. If a bank were prohibited from
continuing to perform all or a part of such services, management of the Fund
believes that there would be no material impact on the Fund or its shareholders.
Banks may charge their customers fees for offering these services to the extent
permitted by applicable regulatory authorities, and the overall return to those
shareholders availing themselves of the bank services will be lower than to
those shareholders who do not. The Fund may from time to time purchase
securities issued by banks which provide such services; however, in selecting
investments for the Fund, no preference will be shown for such securities.
<PAGE>
TRUSTEES AND OFFICERS
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 the Fund,
and persons or companies furnishing services to the Fund. The names of the
Trustees and executive officers of the Trust are shown below. Each Trustee who
is an "interested person" of the Trust, a defined in the Investment Company Act
of 1940, is indicated by an asterisk.
Name, Age & Address Position Principal Occupations During Past 5 Years
*Kaye Kerr President President and Trustee of Worldwide
Age: 28 Financial Management Associates, Inc., the
1521 Alton Rd., Treasurer Fund's Advisor; Managed Asset Group
Suite 364 Assistant at Dain Bosworth, Inc., an
Miami Beach, FL Trustee investment banker/brokerage firm, from
33139 1996 to 1997; Credit Representative at
Dayton Hudson Corp., a retail operator,
from 1995 to 1996; Vice President and
Account Executive at Tuschner & Company,
Inc., an investment banker/brokerage firm,
from 1994 to 1995; Account Executive at
R.J. Steichen & Co., an investment
banker/brokerage firm, from February, 1994
to June, 1994; New Business Development
Associate at Jubilee Investment Corp., a
business development company, from 1993 to
1994.
Reza Jalali Bidgoli Trustee President of Sabet Investment Corp., a
real estateholding company, since 1987.
Age: 35
- --------------
- ----------------
David A. Shea III Trustee President of Shea Architects since 1978;
Partner of Genesis Architects from 1995 to
Age: 52 1998.
100 N. Sixth
St., Suite 650C
Minneapolis, MN
55403
Diana Sosa- Secretary Vice President of Hotels Ocean Drive,
Gonzalez Inc., a development corporation;
Age: 35 Department Manager with the Federal
436 Ocean Drive Reserve Bank of Atlanta.
Miami Beach, FL
33139
Trustee fees are Trust expenses and each series of the Trust is responsible
for a portion of the Trustee fees. The following table gives the Trustees'
compensation for the fiscal year of the Trust ended May 31, 1999.
Name Total Compensation from Trust
(the Trust is not in a Fund Complex)
Kaye Kerr $0
Reza Jalali Bidgoli $_______
David A. Shea III $____
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust, the
Adviser is responsible for the Fund's portfolio decisions and the placing of the
Fund's portfolio transactions. In placing portfolio transactions, the Adviser
seeks the best qualitative execution for the Fund, taking into account such
factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received. Consistent with
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc., and subject to its obligation of seeking best qualitative execution, the
Adviser may give consideration to sales of shares of the Fund as a factor in the
selection of brokers and dealers to execute portfolio transactions.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion. [Disclose any directed
brokerage.]
Research services include supplemental research, securities and economic
analyses, statistical services and information with respect to the availability
of securities or purchasers or sellers of securities and analyses of reports
concerning performance of accounts. The research services and other information
furnished by brokers through whom the Fund effects securities transactions may
also be used by the Adviser in servicing all of its accounts. Similarly,
research and information provided by brokers or dealers serving other clients
may be useful to the Adviser in connection with its services to the Fund.
Although research services and other information are useful to the Fund and the
Adviser, it is not possible to place a dollar value on the research and other
information received. It is the opinion of the Board of Trustees and the Adviser
that the review and study of the research and other information will not reduce
the overall cost to the Adviser of performing its duties to the Fund under the
Agreement.
Over-the-counter transactions will be placed either directly with principal
market makers or with broker-dealers, if the same or a better price, including
commissions and executions, is available. Fixed income securities are normally
purchased directly from the issuer, an underwriter or a market maker. Purchases
include a concession paid by the issuer to the underwriter and the purchase
price paid to a market maker may include the spread between the bid and asked
prices.
<PAGE>
To the extent that the Trust and another of the Adviser's clients seek to
acquire the same security at about the same time, the Trust may not be able to
acquire as large a position in such security as it desires or it may have to pay
a higher price for the security. Similarly, the Trust may not be able to obtain
as large an execution of an order to sell or as high a price for any particular
portfolio security if the other client desires to sell the same portfolio
security at the same time. On the other hand, if the same securities are bought
or sold at the same time by more than one client, the resulting participation in
volume transactions could produce better executions for the Trust. In the event
that more than one client wants to purchase or sell the same security on a given
date, the purchases and sales will normally be made by random client selection.
For the period ______, 1998 (commencement of operations) through May 31, 1999,
the Fund paid brokerage commissions of $____________.
OTHER SERVICE PROVIDERS
Transfer Agent. Maxus Information Systems, Inc. (dba Mutual Shareholder
Services), 1301 East 9th Street, Suite 3600, Cleveland, Ohio 44114 (the
"Transfer Agent") serves as the transfer agent and dividend disbursing agent
pursuant to the terms of the Transfer Agency Agreement. Services provided
include (but are not limited to): maintaining records of shareholders; 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.
Administration. The Trust and Mutual Shareholder Services have entered into
an Accounting Services and Administration Agreement pursuant to which Mutual
Shareholder Services provides accounting and administrative services to the
Fund. Services furnished by Mutual Shareholder Services include, among others:
maintaining and preserving the records of the Fund, including financial and
corporate reports; computing net asset value, dividends, performance data and
financial information regarding the Fund; preparing reports; assisting with 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; preparing compliance reports; providing routine
accounting services; and providing office facilities and clerical support as
well as providing general oversight of other service providers. For its
administrative and fund accounting services, Mutual Shareholder Services
received from the Adviser $225 for the period ______, 1998 (commencement of
operations) through May 31, 1999.
Custodian. Firstar Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202,
is Custodian of the Fund's investments. As Custodian, Firstar Bank, N.A. acts
as the Fund's depository, safekeeps its portfolio securities, collects all
income and other payments with respect thereof, disburses funds at the Fund's
request and maintains records in connection with its duties.
Distributor. Maxus Securities Corporation, 1301 East 9th Street, Suite
3600, Cleveland, Ohio 44114, is an agent for distribution of shares of the Fund
in certain states. The distributor is obligated to sell the shares of the Fund
on a best efforts basis only against purchase orders for the shares. Shares of
the Fund are offered to the public on a continuous basis.
Independent Accountants. The firm of McCurdy & Associates, CPA's, 27955
Clemens Road, Westlake, Ohio 44145, has been selected as independent public
accountants for the Trust for the fiscal year ending May 31, 2000. McCurdy &
Associates performs an annual audit of the Fund's financial statements and
provides financial, tax and accounting consulting services
<PAGE>
INVESTMENT PERFORMANCE
The Fund may periodically advertise "average annual total return." "Average
annual total return," as defined by the Securities and Exchange Commission, is
computed by finding the average annual compounded rates of return (over the one
and five year periods and the period from initial public offering through the
end of the Fund's most recent fiscal year) that would equate the initial amount
invested to the ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period. The Fund's average annual total
return for the period ______, 1998 (commencement of operations) through May 31,
1999 was ____%.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Russell Midcap Index.
<PAGE>
In addition, the performance of the Fund may be compared to other groups of
mutual funds tracked by any widely used independent research firm which ranks
mutual funds by overall performance, investment objectives and assets, such as
Lipper Analytical Services, Inc. or Morningstar, Inc. The objectives, policies,
limitations and expenses of other mutual funds in a group may not be the same as
those of the Fund. Performance rankings and ratings reported periodically in
national financial publications such as Barron's and Fortune also may be used.
FINANCIAL STATEMENTS
The financial statements and independent auditors' report required to be
included in this Statement of Additional Information are incorporated herein by
reference to the Trust's Annual Report to Shareholders for the fiscal year ended
May 31, 1999. The Funds will provide the Annual Report without charge at written
request or request by telephone
[to be supplied]
<PAGE>
Empirical Investment Funds
PART C. OTHER INFORMATION
Item 23. For the Empirical Growth Fund.
Exhibits
(a) Articles of Incorporation.
(i) Copy of Registrant's Amended and Restated Declaration of
Trust, which was filed as an exhibit to Registrant's
Registration Statement, is hereby incorporated by reference.
(ii) Copy of Amendment to Registrant's Amended and Restated
Declaration of Trust is filed herewith.
(b) By-Laws. Copy of Registrant's Amended By-Laws are filed
herewith.
(c) Instruments Defining Rights of Security Holders - None.
(d) Investment Advisory Contracts. Copy of Registrant's
Management Agreement with its Adviser, Worldwide
Financial Management Associates, Inc., which was filed as
an Exhibit to Registrant's Pre-Effective Amendment No. 2, is
hereby incorporated by reference.
(e) Underwriting Contracts. Copy of Registrant's Underwriting
Agreement with Maxus Securities Corporation, which was
filed as an Exhibit to Registrant's Pre-Effective Amendment
No. 2, is hereby incorporated by reference.
(f) Bonus or Profit Sharing Contracts. Bonus, Profit
Sharing, Pension or Similar Contracts for the benefit of
Directors or Officers - None.
(g) Custodian Agreements. Copy of Registrant's Custody
Agreement with Firstar Bank, N.A., which was filed as an
Exhibit to Registrant's Pre-Effective Amendment No. 2, is
hereby incorporated by reference.
(h) Other Material Contracts - None.
(i) Legal Opinion
(i) Opinion of Richards, Layton & Finger, L.P.A., which was
filed as an Exhibit to Registrant's Pre-Effective Amendment
No. 2, is hereby incorporated by reference.
(ii) Consent of Richards, Layton & Finger P.A. is filed
herewith.
(j) Other Opinions. Consent of McCurdy & Associates CPA's, Inc.
is filed herewith.
(k) Omitted Financial Statements. Financial Statements Omitted
from Item 23 - None.
<PAGE>
(l) Initial Capital Agreements. Copy of Letter of Initial
Stockholders, which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 2, is hereby
incorporated by reference.
(m) Rule 12b-1 Plan. 12b-1 Distribution Expense Plan - None.
(n) Financial Data Schedule - None.
(o) Rule 18f-3 Plan - None.
(p) (i) Power of Attorney for Registrant and Certificate with
respect thereto, which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 2, is hereby
incorporated by reference.
(ii)Powers of Attorney for Trustees and Officers, which was
filed as an Exhibit to Registrant's Pre-Effective Amendment
No. 2, is hereby incorporated by reference.
Item 24. Persons Controlled by or Under Common Control with the Registrant
As of June 1, 1999, Worldwide Financial Management Associates,
Inc., a Florida Corporation and the Fund's Adviser, owned a majority
of the outstanding shares of the Fund. As sole shareholder of the
Adviser, Kaye Kerr may be deemed to control the Registrant and the
Adviser.
Item 25. Indemnification
(a) Article VII of Registrant's Amended and Restated Declaration
of Trust and Article VI of Registrant's Amended ByLaws provide for
indemnification of officers and Trustees as follows:
Article VII of Registrant's Amended and Restated Declaration of
Trust:
Section 2. Indemnification and Limitation of
Liability. The Trustees shall not be responsible or
liable in any event for any neglect or wrongdoing 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.
<PAGE>
Article VI of Registrant's Amended By-Laws:
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 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.
(b) The Registrant may maintain a standard mutual fund and
investment advisory professional and directors and officers
liability policy. The policy, if maintained, would provide
coverage to the Registrant, its Trustees and officers, and could
cover its Adviser, among others. Coverage under the policy would
include losses by reason of any act, error, omission,
misstatement, misleading statement, neglect or breach of duty.
<PAGE>
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of the Registrant pursuant to the
provisions of Delaware law and the Amended and Restated
Declaration of the Registrant or the Amended By-Laws of the
Registrant, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnifications against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a 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 Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the act and will be governed by the final
adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
(a) Worldwide Financial Management Associates, Inc., 1521
Alton Rd., Suite 364, Miami Beach, FL 33139 ("Worldwide"), adviser
to Empirical Investment Funds, is a registered investment adviser.
(1) Worldwide has engaged in no other business during
the past two fiscal years.
(2) The following list sets forth other
substantial business activities of the directors
and officers of Worldwide during the past two years:
(i) Kaye Kerr, President of Worldwide, was a
Managed Asset Group Assistant for Dain Bosworth,
Inc. from 1996-1997.
<PAGE>
Item 27. Principal Underwriters
(a) Maxus Securities Corp., the Registrant's underwriter,
acts as underwriter for Maxus Income Fund, Maxus Ohio Heartland
Fund, Maxus Aggressive Value Fund, Maxus Equity Fund and Maxus
Laureate Fund, The Tower at Erieview, 36th Floor, 1301 East Ninth
Street, Cleveland, Ohio 44114, and Jhaveri Value Fund, 18820 High
Parkway, Cleveland, Ohio 44116.
(b) The following list sets forth the business address, and
positions with the Underwriter and Registrant, of each director
and officer of the Underwriter.
(1) Richard A. Barone, 1301 East Ninth Street,
Cleveland, Ohio 44122.
(a) President, Treasurer and a Director of Maxus Securities
Corp.
(b) No positions with the Registrant.
(2) Robert W. Curtin, 1301 East Ninth Street, Cleveland, Ohio
44122.
(a) Secretary and a Director of Maxus Securities Corp.
(b) No positions with the Registrant.
(3) Robert F. Pincus, 1301 East Ninth Street, Cleveland, Ohio
44122.
(a) Vice President and Director of Maxus Securities Corp.
(b) No positions with the Registrant.
Item 28. Location of Accounts and Records
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder will be maintained by the Registrant at 1521
Alton Rd., Suite 364, Miami Beach, FL 33139 and/or by the Registrant's
Custodian, Firstar Bank, N.A., 425 Walnut Street, Cincinnati, Ohio
45202, and/or transfer and shareholder service agent, Maxus
Information Systems, Inc., 1301 East Ninth Street, Cleveland, Ohio
44122.
Item 29. Management Services Not Discussed in Parts A or B
None.
Item 30. Undertakings
None
<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, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on the 23rd day of June,
1999.
Empirical Investment Funds
By: /s/
Donald S. Mendelsohn,
Attorney-in-fact
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 dates indicated.
Kaye Kerr* *By: /s/___________________
President, Treasurer and Trustee Donald S. Mendelsohn,
Attorney-in-fact
David A. Shea, III* June 23, 1999
Trustee
- ----------------
Reza Jalali Bidgoli
Trustee
<PAGE>
EXHIBIT INDEX
1. Copy of Amendment to Registrant's Amended and Restated
Declaration of Trust EX-99.B1
2. Copy of Registrant's Amended By-Laws EX-99.B2
3. Consent of McCurdy & Associates CPA's, Inc. EX-99.B10
4. Consent of Richards, Layton & Finger P.A. EX-99.B11
<PAGE>
Empirical Investment Funds
Amendment No. 1 to Amended and Restated
Declaration of Trust
Pursuant to Article VIII, Section 4 of the Amended and Restated Declaration
of Trust of Empirical Investment Funds, and effective upon the execution of this
document, the undersigned, being a majority of the Trustees of the Trust, hereby
amend the Amended and Restated Declaration of Trust by replacing Article III,
Section 4 in its entirely with the following:
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 by the 1940 Act; or (ii) such restatement or
amendment is found by a majority of the Trustees, in their sole
discretion and by resolution, to adversely affect the rights of any
shareholder with respect to which such amendment is or purports to be
applicable. Any such restatement and/or amendment hereto shall be
effective immediately upon execution and approval or upon such future
date as may be stated therein. 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.
This document may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
Date: 5-18-98 By: /s/ Kaye Anderson-Kerr
Date: 5-28-98 By: /s/ Reza Jalaili
Bidgoli
Date: By:
<PAGE>
AMENDED 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.
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.
<PAGE>
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.
<PAGE>
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.
(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.
<PAGE>
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.
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.
<PAGE>
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 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.
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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 pro-hibited 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.
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.
<PAGE>
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.
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.
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.
<PAGE>
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,
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. 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.
<PAGE>
[LETTERHEAD OF MCCURDY & ASSOCIATES]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to all references to
our firm included in or made a part of this Post-Effective Amendment No. 1 to
the Registration Statement of the Empirical Investment Funds.
/s/
- -----------------------------
McCurdy & Associates CPA's, Inc.
June 18, 1999
<PAGE>
[letterhead of Richards Layton & Finger]
June 23, 1999
Empirical Investment Funds
Suite 364
1521 Alton Road
Miami Beach, Florida 33139
Re: Worldwide Financial Management Associates, Inc. and Empirical
Investment Funds - Offering of Securities
Ladies and Gentlemen:
Reference is made to our opinion dated as of April 27, 1998, attached
hereto (the "Opinion"), as special Delaware counsel for Worldwide Financial
Management Associates, Inc., and for Empirical Investment Funds, in connection
with the transactions described therein. We hereby consent to your relying upon
the Opinion as of its date as if it were addressed to you on the date thereof.
We hereby give you our consent to incorporate by reference the legal opinion
into post-effective Amendment No. 1 to your registration statement (the
"Amendment"). We note that the Opinion speaks as of its date, and only with
respect to the laws, rules and regulations thereunder in effect as of such date,
and we have not undertaken to update the Opinion in any respect. In giving the
foregoing consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ Richards Layton & Finger
GCK/ks
