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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
KOBRICK INVESTMENT TRUST
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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KOBRICK INVESTMENT TRUST
P.O. Box 9139
Boston, Massachusetts 02266-9139
(888) 523-8631
Notice of Special Meeting
To Be Held June 29, 1999
To the shareholders of Kobrick Growth Fund, Kobrick Capital Fund and
Kobrick Emerging Growth Fund (each, a "Fund" and collectively, the "Funds"),
each a separate diversified series of Kobrick Investment Trust (the "Trust"), an
open-end management company, for a Special Meeting of each Fund to be held on
June 29, 1999:
Notice is hereby given that a Special Meeting (the "Meeting") of
shareholders of each Fund, will be held on June 29, 1999, at 10:00 a.m., Eastern
Daylight Savings, at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., Counsel to the Trust, One Financial Center, 41st Floor, Boston,
Massachusetts 02111. At the Meeting, you and the other shareholders of each
Fund will be asked to consider and vote:
1. To approve a new Investment Management Agreement between each Fund and a
newly formed entity to be called Kobrick Funds LLC ("New Kobrick Adviser")
pursuant to which New Kobrick Adviser will act as adviser with respect to
the assets of each Fund, to become effective upon the acquisition of the
assets of the existing Kobrick Funds LLC (which will be renamed
concurrently with the completion of this transaction) by New Kobrick
Adviser;
2. Ratification of the selection by the Board of Trustees of
PricewaterhouseCoopers LLP as the independent accountants for the Trust for
the fiscal year ending September 30, 1999; and
3. To transact such other business as may properly come before the Meeting or
any adjournments thereof.
Shareholders of record at the close of business on June 1, 1999 are
entitled to notice of, and to vote at, the Meeting. Shareholders of each Fund
will vote separately to approve proposal no. 1, but will vote together with
respect to the approval of proposal no. 2. Please read the accompanying Proxy
Statement. Regardless of whether you plan to attend the Meeting, PLEASE
COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD so that a quorum will
be present and a maximum number of shares may be voted. IF YOU ARE AN INVESTOR
IN MORE THAN ONE FUND, YOU SHOULD FILL OUT A PROXY CARD FOR EACH FUND. If you
attend the Meeting, you may change your vote at that time.
By Order of the Board of Trustees
Frederick R. Kobrick
President
Boston, Massachusetts
June __, 1999
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KOBRICK INVESTMENT TRUST
P.O. Box 9139
Boston, Massachusetts 02266-9139
(888) 523-8631
PROXY STATEMENT
To the shareholders of Kobrick Growth Fund, Kobrick Capital Fund and
Kobrick Emerging Growth Fund (each, a "Fund" and collectively, the "Funds"),
each a separate diversified series of Kobrick Investment Trust (the "Trust"), an
open-end management investment company, for a Special Meeting of shareholders of
each Fund to be held on June 29, 1999:
This Proxy Statement is furnished by the Trust to the shareholders of each
Fund. This Proxy Statement is furnished on behalf of the Trust's Board of
Trustees in connection with each Fund's solicitation of voting instructions for
use at a Special Meeting of Shareholders of each Fund (the "Meeting") to be held
on June 29, 1999 at 10:00 a.m., Eastern Daylight Savings, at the offices of
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Counsel to the Trust, One
Financial Center, 41st Floor, Boston, Massachusetts 02111 for the purposes set
forth below and in the accompanying Notice of Special Meeting. The approximate
mailing date of this Proxy Statement is June __, 1999. At the Meeting, the
shareholders of each Fund will be asked:
1. To approve a new investment advisory agreement between each Fund and a
newly formed entity to be called Kobrick Funds LLC ("New Kobrick
Adviser") pursuant to which New Kobrick Adviser will act as adviser
with respect to the assets of each Fund, to become effective upon the
acquisition of the assets of the existing Kobrick Funds LLC (which
will be renamed concurrently with the completion of this transaction)
("Existing Kobrick Adviser") by New Kobrick Adviser;
2. Ratification of the selection by the Board of Trustees of
PricewaterhouseCoopers LLP as the independent accountants for the
Trust for the fiscal year ending September 30, 1999; and
3. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
Shareholders of each Fund will vote separately to approve proposal no. 1,
but will vote together with the shareholders of all Funds with respect to the
approval of proposal no. 2.
Any voting instructions given to a Fund may be revoked at any time before
the Meeting by notifying the Secretary of the Trust.
The Trust will request broker-dealer firms, custodians, nominees and
fiduciaries to forward proxy materials to the beneficial owners of the shares of
each Fund held of record by
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such persons. Existing Kobrick Adviser, of which New Kobrick Advisor is a wholly
owned subsidiary, may reimburse such broker-dealer firms, custodians, nominees
and fiduciaries for their reasonable expenses incurred in connection with such
proxy solicitation. In addition to the solicitation of proxies by mail, officers
and employees of the Trust, without additional compensation, may solicit proxies
in person or by telephone. The costs associated with such solicitation and the
Meeting will be borne by Existing Kobrick Adviser and not by any Fund or the
Trust. Broker non-votes will not count as votes present at the Meeting.
If sufficient votes are not received by the date of the Meeting, a person
named as proxy may propose one or more adjournments of the Meeting for a period
or periods not more than 120 days in the aggregate to permit further
solicitation of proxies. The persons named as proxies will vote all proxies in
favor of adjournment that voted in favor of proposal no. 1 (or abstained) and
vote against adjournment all proxies that voted against proposal no. 1.
Shareholders of each Fund at the close of business on June 1, 1999 will be
entitled to be present and vote at the Meeting. As of that date, there were:
2,973,606 shares of Kobrick Growth Fund, 5,962,557 shares of Kobrick Capital
Fund and 2,931,473 shares of Kobrick Emerging Growth Fund outstanding and
entitled to vote, representing total net assets of approximately $43,503,900,
$98,739,900 and $44,646,300, respectively.
To the knowledge of the Trust's management, at the close of business on
June 1, 1999 the officers and Trustees of the Trust owned, as a group, less than
1% of the shares of each Fund.
To the knowledge of the Trust's management, before the close of business on
June 1, 1999, the only persons owning beneficially more than 5% of the
outstanding shares of each Fund were as follows:
Name and Address Shares Held and Percent of Class
---------------- --------------------------------
Kobrick Growth Fund
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Cendant Corporation 2,448,936
6 Sylvan Way 82.36%
Parsippany, New Jersey 07054
Kobrick Emerging Growth Fund
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Cendant Corporation 1,941,265
6 Sylvan Way 66.22%
Parsippany, New Jersey 07054
2
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<TABLE>
<S> <C>
Charles Schwab & Company 393,794
Special Custody Account For The 13.43%
Exclusive Benefit of Customers
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 156,791
For The Exclusive Benefit of its 5.35%
Customers
200 Liberty Street
1 World Financial Center
New York, NY 10281-1003
Kobrick Capital Fund
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Cendant Corporation 2,484,217
6 Sylvan Way 41.66%
Parsippany, New Jersey 07054
National Financial Services Corp. 1,005,465
For The Exclusive Benefit of its 16.86%
Customers
200 Liberty Street
1 World Financial Center
New York, NY 10281-1003
Charles Schwab & Company 720,481
Special Custody Account For The 12.08%
Exclusive Benefit of Customers
101 Montgomery Street
San Francisco, CA 94104-4122
NationsBanc Montgomery Securities 508,647
110-78847-18 8.53%
600 Montgomery Street
San Francisco, CA 94111-2702
</TABLE>
Cendant Corporation has expressed its intent to vote all of its shares in
each fund in favor of approving the New Advisory Agreement.
Each Fund's current investment adviser is the existing Kobrick Funds LLC,
101 Federal Street, Boston, Massachusetts 02110. Each Fund's distributor is
Funds Distributor, Inc., 60 State Street, Suite 1300, Boston, Massachusetts
02109. Each Fund's administrator is State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110.
3
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The persons named in the accompanying proxy will vote in each case as
directed in the proxy, but in the absence of such direction, they intend to vote
FOR proposal no. 1 and FOR proposal no. 2, and may vote in their discretion with
respect to other matters not now known to the Board of Trustees that may be
presented to the Meeting.
PROPOSAL NO. 1:
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APPROVAL OR DISAPPROVAL OF INVESTMENT
ADVISORY AGREEMENT BETWEEN
EACH FUND AND THE NEW ADVISER
Background
- ----------
The Meeting has been called primarily for the purpose of considering a new
advisory agreement for each Fund as a result of a proposed transaction (the
"Proposed Transaction") whereby New Kobrick Advisor would acquire substantially
all of the assets, subject to certain liabilities, of Existing Kobrick Adviser,
the current investment adviser of each Fund. New Kobrick Adviser would carry on
the business of Existing Kobrick Adviser under the name Kobrick Funds LLC (New
Kobrick Adviser is hereinafter sometimes referred to as the "Adviser") (Existing
Kobrick Adviser will be renamed concurrently with the completion of this
transaction). The Proposed Transaction represents an ownership change of the
Fund's investment adviser and, as such, has the effect of terminating the
existing Investment Advisory Agreement with respect to each Fund. Accordingly,
shareholders of each Fund are being asked to approve a new Agreement with the
New Kobrick Adviser (the "New Advisory Agreement") with respect to the relevant
Fund. Except for different effective and termination dates, the terms of the New
Advisory Agreement are identical in all material respects to the terms of the
Existing Advisory Agreement. The Trust's Board of Trustees has approved the New
Advisory Agreement, subject to approval by the shareholders of each Fund, to
become effective on the consummation of the Proposed Transaction.
Existing Advisory Agreement
- ---------------------------
Existing Kobrick Adviser currently serves as the adviser for each Fund
under an Investment Advisory Agreement (the "Existing Advisory Agreement") dated
December 22, 1997. The Existing Advisory Agreement provides for its automatic
termination in the event of a legal assignment. A change in ownership of
Existing Kobrick Adviser would, therefore, terminate the Existing Advisory
Agreement. The initial shareholder of the Kobrick Capital Fund and the Kobrick
Emerging Growth Fund approved the Existing Advisory Agreement on December 22,
1997. The Board of Trustees of the Trust, including a majority of the "non-
interested" Trustees, approved the amendment of the Existing Advisory Agreement
to include the Kobrick Growth Fund as of September 1, 1998. Under the Existing
Advisory Agreement, Existing Kobrick Adviser is entitled to receive from each
Fund a monthly advisory fee computed daily at the annual rate of 1.00% of the
average value of the net assets of each Fund as determined at the close of
business each day of the month.
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New Advisory Agreement
- ----------------------
Except for different effective and termination dates, the terms of the New
Advisory Agreement are identical in all material respects to the terms of the
Existing Advisory Agreement. A form of the New Advisory Agreement is attached to
this Proxy Statement as Exhibit A, and the description set forth in this Proxy
Statement of the New Advisory Agreement is qualified in its entirety by
reference to Exhibit A.
Under the New Advisory Agreement, the Adviser will provide certain
investment advisory services to each Fund, including selecting portfolio
securities for investment by the Trust on behalf of the Funds, purchasing and
selling securities of the Funds, and upon making any purchase or sale decision,
placing orders for the execution of such portfolio transactions in accordance
with the terms and provisions of the New Advisory Agreement. In providing
portfolio management services to the Funds, the Adviser shall be subject to such
investment restrictions as are set forth in the Investment Company Act of 1940,
as amended (the "Investment Company Act") and the rules thereunder, the Internal
Revenue Code of 1986, the supervision and control of the Trustees of the Trust,
such specific instructions as the Trustees may adopt and communicate to the
Adviser and the investment objectives, policies and restrictions of the Trust
applicable to the Funds.
As compensation for its services to each Fund under the New Advisory
Agreement, the Adviser will be entitled to receive from the Fund fees calculated
at the same rate as those charged under the Existing Advisory Agreement
described above. The New Advisory Agreement will continue in effect for two
years from its effective date, and from year to year thereafter but only so long
as such continuance is specifically approved at least annually by the vote of a
majority of the Trustees who are not interested persons of the Trust or the
Adviser, cast in person at a meeting called for the purpose of voting on such
approval, and by a vote of the Board of Trustees or of a majority of the
outstanding voting securities of the Funds. The New Advisory Agreement will
provide that it may be terminated with respect to a Fund by either party,
without the payment of any penalty, immediately upon written notice to the other
in the event of a breach of any provision thereof by the party so notified, or
otherwise upon sixty (60) days' written notice to the other.
The Adviser shall employ or provide and compensate the executive,
administrative, secretarial and clerical personnel necessary to provide the
services set forth in the New Advisory Agreement, and shall bear the expense
thereof. The Adviser shall compensate all Trustees, officers and employees of
the Trust who are also shareholders or employees of the Adviser. The Advisor
will pay all expenses incurred in connection with the sale or distribution of
the Funds' shares to the extent such expenses are not assumed by the appropriate
Fund under the Trust's Rule 12b-1 Plan.
The Funds will be responsible for the payment of all operating expenses of
the Trust, including fees and expenses incurred by the Trust in connection with
membership in investment company organizations, brokerage fees and commissions,
legal, auditing and accounting expenses, expenses of registering shares under
federal and state securities laws, insurance expenses, taxes or governmental
fees, fees and expenses of the custodian, the transfer,
5
<PAGE>
shareholder service and dividend disbursing agent and the accounting and pricing
agent of the Funds, expenses including clerical expenses of issue, sale,
redemption or repurchase of shares of the Funds, the fees and expenses of
Trustees of the Trust who are not interested persons of the Trust, the cost of
preparing, printing and distributing prospectuses, statements, reports and other
documents to shareholders, expenses of shareholders' meetings and proxy
solicitations, and such extraordinary or non-recurring expenses as may arise,
including litigation to which the Trust may be a party and indemnification of
the Trust's officers and Trustees with respect thereto, or any other expense not
specifically described above incurred in the performance of the Trust's
obligations.
Although the Adviser is not required to do so, the Adviser has agreed to
enter into the same letter agreement with the Trust as the Existing Kobrick
Adviser has with respect to the administration of advisory fees and other
expenses incurred for the account of each of the Funds. The Adviser will agree
that, through at least December 31, 1999, all investment advisory fees will be
an obligation of a Fund only to the extent that such investment advisory fee,
together with other expenses of the Fund, would total not in excess of 1.75% in
the case of the Kobrick Capital Fund and the Kobrick Emerging Growth Fund and
1.40% in the case of the Kobrick Growth Fund of the average net asset value of
the Fund for the period as to which the fee is imposed, on an annualized basis.
The New Advisory Agreement will provide that the Adviser shall not be
liable for any action taken, omitted or suffered to be taken by it in its
reasonable judgment, in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by the New Advisory
Agreement, or in accordance with (or in the absence of) specific directions or
instructions from the Trust, provided, however, that such acts or omissions
shall not have resulted from the Adviser's willful misfeasance, bad faith or
gross negligence, a violation of the standard of care established by and
applicable to the Adviser in its actions under the New Advisory Agreement or
breach of its duty or of its obligations thereunder.
The Proposed Transaction
- ------------------------
New Kobrick Adviser, a Delaware limited liability company of which Nvest
Companies, L.P. ("Nvest") is the sole member, is buying substantially all of the
assets and certain liabilities of Existing Kobrick Adviser. In respect of this
purchase, New Kobrick Adviser and Nvest will make certain payments to Existing
Kobrick Adviser which will be in substantial part contingent on the future
performance of New Kobrick Adviser. For this reason it is not possible to
quantify the total payments to be made by New Kobrick Adviser and/or Nvest to
Existing Kobrick Adviser. Nvest has also agreed to provide certain working
capital to New Kobrick Adviser.
Existing Kobrick Adviser is owned by FAH Company, Inc. ("FAH"), a wholly
owned subsidiary of Cendant Corporation ("Cendant"), and Frederick R. Kobrick, a
Trustee of the Trust and the President of Existing Kobrick Adviser. Frederick R.
Kobrick may have an interest in the payments made by New Kobrick Adviser and
Nvest to Existing Kobrick Adviser, depending upon the total amount of the
payments.
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FAH currently holds all of the Series A Preferred membership units of
Existing Kobrick Adviser as well as a warrant to acquire a controlling interest
in the Class B Common membership units. FAH has agreed to transfer all of its
Series A Preferred membership units and the warrant for a promissory note which
shall be repaid based on amounts payable to Existing Kobrick Adviser by New
Kobrick Adviser and Nvest. The payment of certain of such amounts will depend on
the profitability of New Kobrick Adviser.
Frederick R. Kobrick will enter into a six and one-half year employment
agreement with New Kobrick Adviser, which provides for ongoing salary and
benefits to Frederick R. Kobrick as well as for certain undertakings by
Frederick R. Kobrick to refrain from certain competition with New Kobrick
Adviser and to refrain from soliciting certain clients and employees.
Legal Requirements Under the Investment Company Act
- ---------------------------------------------------
Section 15(f) of the Investment Company Act provides that, when a change in
control of an investment adviser occurs, the investment adviser or any of its
affiliated persons may receive any amount or benefit in connection therewith as
long as two conditions are satisfied. First, no "unfair burden" may be imposed
on the investment company as a result of the transaction relating to the change
of control, or any express or implied terms, conditions or understandings
related thereto. The term "unfair burden," as defined in the Investment Company
Act, includes any arrangement during the two-year period after the change in
control whereby the investment adviser (or predecessor or successor adviser), or
any interested person of any such adviser, receives or is entitled to receive
any compensation, directly or indirectly, from the investment company or its
security holders (other than fees for bona fide investment advisory or other
services) or from any person in connection with the purchase or sale of
securities or other property to, from, or on behalf of the investment company
(other than fees for bona fide principal underwriting services). No such
compensation arrangements are contemplated in the Proposed Transaction. Existing
Kobrick Adviser and Nvest have agreed not to take or recommend any action that
would cause the imposition of an unfair burden on any Fund.
The second condition is that, during the three-year period immediately
following consummation of the transaction, at least 75% of the investment
company's board of trustees must not be "interested persons" (within the meaning
of the Investment Company Act) of the investment adviser or predecessor
investment adviser. Existing Kobrick Adviser and Nvest have agreed to use all
reasonable efforts to meet the second condition.
There are a number of conditions precedent to the closing of the Proposed
Transaction. Such conditions include, among other things, that all regulatory
approvals will have been duly and properly obtained, and that consents required,
including shareholder approval, as contemplated hereunder, will have been
obtained from the Funds as required by applicable law. At the present time it is
anticipated that the closing of the Proposed Transaction will occur on or about
June 30, 1999. If the conditions for the Proposed Transaction are not met and
the Proposed Transaction is not completed, the Existing Advisory Agreement will
remain in effect.
During the fiscal year ended September 30, 1998, Existing Kobrick Adviser
earned advisory fees under the Existing Advisory Agreement in the following
amounts: Kobrick Growth
7
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Fund, which commenced operations September 1, 1998, $856; Kobrick Capital Fund,
which commenced operations December 31, 1997, $250,782; and Kobrick Emerging
Growth Fund, which commenced operations December 31, 1997, $239,480. However,
Existing Kobrick Adviser voluntarily waived fees and/or reimbursed expenses to
each Fund in the amount of $25,606, $137,005 and $137,945, respectively, for
that fiscal year.
Information on the Adviser and Nvest
- ------------------------------------
Existing Kobrick Adviser, a Delaware limited liability company with offices
at 101 Federal Street, Boston, Massachusetts 02110, is owned as follows:
Frederick R. Kobrick owns all of the Class B Common membership units and FAH
owns all of the nonvoting Class A Preferred membership units and a warrant to
acquire a controlling interest in the Class B Common membership units. Existing
Kobrick Adviser is registered under the Investment Advisers Act of 1940 (the
"Advisers Act"). New Kobrick Adviser, a Delaware limited liability company,
will, as of the closing date of the Proposed Transaction, be registered under
the Advisers Act, have the same address as and employ the same key personnel as
Existing Kobrick Adviser did immediately prior to the closing. The New Advisory
Agreement was approved by the Board of Trustees of the Trust, including a
majority of the non-interested Trustees, at a meeting held for such purpose on
June 1, 1999, and is now being submitted for approval by the shareholders of
each Fund. At such meeting the Board of Trustees of the Trust recommended that
the New Advisory Agreement be submitted to the shareholders of each Fund for
approval.
The Adviser's principal executive officers will be as shown below. The address
of each, as it relates to his duties at the Adviser, is the same as that of the
Adviser.
Name and Position to be held with New Principal Occupation
- ------------------------------------- --------------------
Kobrick Adviser
- ---------------
Frederick R. Kobrick President, CEO and portfolio
President, CEO and Portfolio Manager manager at Existing Kobrick Funds since
1997.
Richard A. Goldman Chief Operating Officer of
Chief Operating Officer Existing Kobrick Funds since 1997.
After the acquisition, New Kobrick Adviser will be a limited liability
company owned by Nvest. Nvest is a limited partnership whose managing general
partner, Nvest Corporation, is owned by a wholly-owned subsidiary of
Metropolitan Life Insurance Company ("MetLife"). MetLife also owns approximately
48% of the partnership interests in Nvest. Nvest has 17 affiliates and divisions
with $133 billion in assets under management, as of March 31, 1999, including
approximately $35 billion of mutual fund assets. These affiliates and divisions
offer a wide array of investment styles and products to institutional and
individual clients. They are: AEW Capital Management; Back Bay Advisors; Capital
Growth Management; Graystone
______________________
/1/ Non-interested trustees are those trustees who are not parties to the New
Advisory Agreement, or interested persons of such parties (such as an officer or
employee of the Fund or Adviser).
8
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Partners; Harris Associates; Jurika & Voyles; Loomis, Sayles & Co.; New England
Funds; Nvest Advisor Services; Nvest Associates; Nvest Retirement Services;
Nvest Services Company; Reich & Tang Capital Management; Reich & Tang Funds;
Snyder Capital Management; Vaughan, Nelson, Scarborough & McCullough; and
Westpeak Investment Advisors.
Trustees' Consideration
- -----------------------
The Board of Trustees of the Trust believes that the terms of the New
Advisory Agreement are fair to, and in the best interest of, the Trust, each
Fund and the shareholders. The Board of Trustees, including all of the non-
interested Trustees, recommends approval by the shareholders of each Fund of the
New Advisory Agreement between the Adviser and each Fund. In making this
recommendation, the Trustees carefully evaluated the experience of the Adviser's
key personnel in portfolio management, the high quality of services the Adviser
is expected to provide to the Funds, and the fair and reasonable compensation
proposed to be paid to the Adviser, and have given careful consideration to all
factors deemed to be relevant to the Funds, including, but not limited to: (1)
the fee and expense ratios of the Funds are reasonable given the quality of
services expected to be provided and the fee and expense ratios of comparable
mutual funds; (2) the favorable performance of the Funds since commencement of
operations; (3) the continuation of the agreement with the Funds concerning a
cap on fees through at least December 31, 1999, (4) Nvest's agreement to provide
certain working capital to the Adviser; (5) the research-intensive nature and
quality of the services expected to be rendered to the Funds by the Adviser; (6)
the above findings were based, in part, on the particular investment objective
and policies of each Fund; (7) the compensation to be payable to the Adviser by
each Fund under the proposed New Advisory Agreement will be at the same rate as
the compensation now payable by such Fund to the Existing Kobrick Adviser under
the Existing Advisory Agreement; (8) the terms of the Existing Advisory
Agreement will be unchanged under the New Advisory Agreement except for
different effective and termination dates; (9) the favorable history,
reputation, qualification and background of the Adviser and Nvest, as well as
the qualifications of their personnel and their respective financial conditions;
(10) the commitment of Existing Kobrick Adviser to pay or reimburse each Fund
for the expenses incurred in connection with the Proposed Transaction; (11) the
benefits expected to be realized as a result of the Adviser's affiliation with
Nvest, including the resources of Nvest that would be available to the Adviser,
such as other distribution channels for the sale of the Funds' shares; and (12)
other factors deemed relevant.
New Kobrick Adviser has advised the Board of Trustees that it expects that
there will be no diminution in the scope and quality of advisory services
provided to the Funds as a result of the Proposed Transaction. Accordingly, the
Board of Trustees believes that each Fund should receive investment advisory
services under the New Advisory Agreement equal or superior to those it
currently receives under the Existing Advisory Agreement, at the same fee
levels.
Recommendation and Required Vote
- --------------------------------
At the Meeting, shareholders of each Fund will vote separately on the
proposed New Advisory Agreement. The Board of Trustees of the Trust recommends
that the shareholders of each Fund approve the New Advisory Agreement. The
affirmative vote of the holders of a
9
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majority of the net asset value of the outstanding shares of each Fund is
required to approve the New Advisory Agreement with respect to such Fund.
"Majority" for this purpose under the Investment Company Act means the lesser of
(i) 67% of the net asset value of the shares represented at the meeting if more
than 50% of such net asset value of the outstanding shares is represented, or
(ii) shares representing more than 50% of such net asset value. Abstentions will
count as votes present at the Meeting. Broker non-votes, however, will not count
as votes present.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT SHAREHOLDERS OF EACH
FUND APPROVE THE NEW ADVISORY AGREEMENT.
* * * * *
PROPOSAL NO. 2:
---------------
RATIFICATION OF SELECTION OF
INDEPENDENT ACCOUNTANTS
Shareholders are requested to ratify the selection by the Board of Trustees
(including a majority of Trustees who are not "interested persons" of the Trust
as that term is defined in the Investment Company Act) of the firm of
PricewaterhouseCoopers LLP as the independent public accountants for the Trust
for the fiscal year ended September 30, 1999. In addition to normal audit
services, PricewaterhouseCoopers LLP provides services in connection with the
preparation and review of federal and state tax returns for the Trust.
PricewaterhouseCoopers LLP has served as the Trust's independent public
accountants since July, 1998. PricewaterhouseCoopers LLP has advised the Trust
that it has no material direct or indirect financial interest in the Trust or
its affiliates. The Trust's Audit Committee recommended that
PricewaterhouseCoopers LLP be selected as the Trust's independent accountants
for the current fiscal year. The employment of the accountants is conditioned
upon the right of the Trust to terminate such employment by a vote of
shareholders of the Trust forthwith without any penalty. No representative of
the firm of PricewaterhouseCoopers LLP is expected to attend the Meeting. A
plurality of the votes cast at the Meeting, provided a quorum is present, is
needed to ratify the selection of the independent accountants.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE SELECTION
OF PRICEWATERHOUSECOOPERS, LLP.
GENERAL INFORMATION
Other Matters to Come Before the Meeting
- ----------------------------------------
The Trust's management does not know of any matters to be presented at the
Meeting other than those described in this Proxy Statement. If other business
should properly come before the Meeting, the proxyholders will vote thereon in
accordance with their best judgment.
10
<PAGE>
Shareholder Proposals
- ---------------------
The Meeting is a special meeting of shareholders. The Trust is not required
to, nor does it intend to, hold regular annual meetings of its shareholders. If
such a meeting is called, any shareholder who wishes to submit a proposal for
consideration at the meeting should submit the proposal promptly to the Trust.
Any proposal to be considered for submission to shareholders must comply with
Rule 14a-8 under the Securities Exchange Act of 1934.
Reports to Shareholders
- -----------------------
The Trust will furnish, without charge, a copy of the most recent Annual
Report to Shareholders of the Trust, and the most recent Semi-Annual Report
succeeding such Annual Report, if any, on request. Requests for such reports
should be directed to Kobrick Investment Trust, P.O. Box 9139, Boston,
Massachusetts 02266-9139, (888) 523-8631 (toll free).
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED,
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A SELF-
ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
Frederick R. Kobrick
President
Boston, Massachusetts
June __, 1999
EXHIBIT LIST
Exhibit A Form of new Investment Advisory Agreement
11
<PAGE>
PROXY
KOBRICK GROWTH FUND
SPECIAL MEETING OF SHAREHOLDERS
JUNE 29, 1999
SOLICITED ON BEHALF OF
THE BOARD OF TRUSTEES OF
KOBRICK INVESTMENT TRUST
The undersigned hereby appoints Frederick R. Kobrick and Richard A.
Goldman, and each of them, as proxies of the undersigned, each with the power to
appoint his substitute, for the Special Meeting of Shareholders of Kobrick
Growth Fund (the "Fund"), a separate series of Kobrick Investment Trust (the
"Trust"), to be held on June 29, 1999 at the offices of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., Counsel to the Trust, One Financial Center,
41st Floor, Boston, Massachusetts 02111, or at any and all adjournments thereof
(the "Meeting"), to vote, as designated below, all shares of the Fund, held by
the undersigned at the close of business on June 1, 1999. Capitalized terms used
without definition have the meanings given to them in the accompanying Proxy
Statement.
A SIGNED PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS LISTED BELOW UNLESS
YOU HAVE SPECIFIED OTHERWISE. PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
YOU MAY VOTE ONLY IF YOU HELD SHARES IN THE FUND AT THE CLOSE OF BUSINESS ON
JUNE 1, 1999. YOUR SIGNATURE AUTHORIZES THE PROXIES TO VOTE IN THEIR DISCRETION
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING, INCLUDING
WITHOUT LIMITATION ALL MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
1. Approval of the new Investment Advisory Agreement between the Adviser and the
Fund:
(Shareholders of each Fund voting separately)
FOR [_] AGAINST [_] ABSTAIN [_]
2. Ratification of selection of independent accountants:
(Shareholders of all Funds voting together)
FOR [_] AGAINST [_] ABSTAIN [_]
Dated: June ___, 1999
___________________________________
Signature
___________________________________
Entity and Title (if applicable)
___________________________________
Signature (if held jointly)
___________________________________
Entity and Title (if applicable)
Please sign exactly as name or names appear on your shareholder account
statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder should sign.
<PAGE>
PROXY
KOBRICK CAPITAL FUND
SPECIAL MEETING OF SHAREHOLDERS
JUNE 29, 1999
SOLICITED ON BEHALF OF
THE BOARD OF TRUSTEES OF
KOBRICK INVESTMENT TRUST
The undersigned hereby appoints Frederick R. Kobrick and Richard A.
Goldman, and each of them, as proxies of the undersigned, each with the power to
appoint his substitute, for the Special Meeting of Shareholders of Kobrick
Capital Fund (the "Fund"), a separate series of Kobrick Investment Trust (the
"Trust"), to be held on June 29, 1999 at the offices of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., Counsel to the Trust, One Financial Center,
41st Floor, Boston, Massachusetts 02111, or at any and all adjournments thereof
(the "Meeting"), to vote, as designated below, all shares of the Fund, held by
the undersigned at the close of business on June 1, 1999. Capitalized terms used
without definition have the meanings given to them in the accompanying Proxy
Statement.
A SIGNED PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS LISTED BELOW UNLESS
YOU HAVE SPECIFIED OTHERWISE. PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
YOU MAY VOTE ONLY IF YOU HELD SHARES IN THE FUND AT THE CLOSE OF BUSINESS ON
JUNE 1, 1999. YOUR SIGNATURE AUTHORIZES THE PROXIES TO VOTE IN THEIR DISCRETION
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING, INCLUDING
WITHOUT LIMITATION ALL MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
1. Approval of the new Investment Advisory Agreement between the Adviser and the
Fund:
(Shareholders of each Fund voting separately)
FOR [_] AGAINST [_] ABSTAIN [_]
2. Ratification of selection of independent accountants:
(Shareholders of all Funds voting together)
FOR [_] AGAINST [_] ABSTAIN [_]
Dated: June ___, 1999
___________________________________
Signature
___________________________________
Entity and Title (if applicable)
___________________________________
Signature (if held jointly)
___________________________________
Entity and Title (if applicable)
Please sign exactly as name or names appear on your shareholder account
statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder should sign.
<PAGE>
PROXY
KOBRICK EMERGING GROWTH FUND
SPECIAL MEETING OF SHAREHOLDERS
JUNE 29, 1999
SOLICITED ON BEHALF OF
THE BOARD OF TRUSTEES OF
KOBRICK INVESTMENT TRUST
The undersigned hereby appoints Frederick R. Kobrick and Richard A.
Goldman, and each of them, as proxies of the undersigned, each with the power to
appoint his substitute, for the Special Meeting of Shareholders of Kobrick
Emerging Growth Fund (the "Fund"), a separate series of Kobrick Investment Trust
(the "Trust"), to be held on June 29, 1999 at the offices of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., Counsel to the Trust, One Financial Center,
41st Floor, Boston, Massachusetts 02111, or at any and all adjournments thereof
(the "Meeting"), to vote, as designated below, all shares of the Fund, held by
the undersigned at the close of business on June 1, 1999. Capitalized terms used
without definition have the meanings given to them in the accompanying Proxy
Statement.
A SIGNED PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS LISTED BELOW UNLESS
YOU HAVE SPECIFIED OTHERWISE. PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY.
YOU MAY VOTE ONLY IF YOU HELD SHARES IN THE FUND AT THE CLOSE OF BUSINESS ON
JUNE 1, 1999. YOUR SIGNATURE AUTHORIZES THE PROXIES TO VOTE IN THEIR DISCRETION
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING, INCLUDING
WITHOUT LIMITATION ALL MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
1. Approval of the new Investment Advisory Agreement between the Adviser and the
Fund:
(Shareholders of each Fund voting separately)
FOR [_] AGAINST [_] ABSTAIN [_]
2. Ratification of selection of independent accountants:
(Shareholders of all Funds voting together)
FOR [_] AGAINST [_] ABSTAIN [_]
Dated: June ___, 1999
___________________________________
Signature
___________________________________
Entity and Title (if applicable)
___________________________________
Signature (if held jointly)
___________________________________
Entity and Title (if applicable)
Please sign exactly as name or names appear on your shareholder account
statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder should sign.
<PAGE>
Exhibit A
---------
Kobrick Investment Trust
101 Federal Street
Boston, Massachusetts 02110
June 30, 1999
Kobrick Funds LLC
101 Federal Street
Boston, Massachusetts 02110
Re: Advisory Agreement
Ladies and Gentlemen:
Kobrick Investment Trust (the "Trust") is a diversified open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "Act"), and subject to the rules and regulations promulgated
thereunder. The Trust's shares of beneficial interest are divided into three
separate series, the Kobrick Growth Fund, the Kobrick Capital Fund and the
Kobrick Emerging Growth Fund (the "Funds"). Each such share of a Fund represents
an undivided interest in the assets, subject to the liabilities, allocated to
that Fund. Each Fund has a separate investment objective and separate investment
policies.
1. Appointment as Adviser. The Trust being duly authorized hereby appoints
and employs Kobrick Funds, LLC ("Adviser") as discretionary portfolio manager,
on the terms and conditions set forth herein, of the Funds.
2. Acceptance of Appointment; Standard of Performance. Adviser accepts the
appointment as discretionary portfolio manager and agrees to use its best
professional judgment to make timely investment decisions for the Funds in
accordance with the provisions of this Agreement.
3. Portfolio Management Services of Adviser. Adviser is hereby employed
and authorized to select portfolio securities for investment by the Trust on
behalf of the Funds, to purchase and sell securities of the Funds, and upon
making any purchase or sale decision, to place orders for the execution of such
portfolio transactions in accordance with paragraphs 5 and 6 hereof. In
providing portfolio management services to the Funds, Adviser shall be subject
to such investment restrictions as are set forth in the Act and the rules
thereunder, the Internal Revenue Code of 1986, the supervision and control of
the Trustees of the Trust, such specific instructions as the Trustees may adopt
and communicate to Adviser and the investment objectives, policies and
restrictions of the Trust applicable to the Funds furnished pursuant to
paragraph 4. Adviser is not authorized by the Trust to take any action,
including the purchase or sale of securities for the Funds, in contravention of
any restriction, limitation, objective, policy or instruction described in the
previous sentence. Adviser shall maintain on behalf of the Trust the records
listed in Schedule A hereto (as amended from time to time). At the Trust's
reasonable
<PAGE>
request, Adviser will consult with the Trust with respect to any decision made
by it with respect to the investments of the Funds.
4. Investment Objectives, Policies and Restrictions. The Trust will
provide Adviser with the statement of investment objectives, policies and
restrictions applicable to the Funds as contained in the Trust's registration
statements under the Act and the Securities Act of 1933, and any instructions
adopted by the Trustees supplemental thereto. The Trust will provide Adviser
with such further information concerning the investment objectives, policies and
restrictions applicable thereto as Adviser may from time to time reasonably
request. The Trust retains the right, on written notice to Adviser from the
Trust, to modify any such objectives, policies or restrictions in any manner at
any time.
5. Transaction Procedures. All transactions will be consummated by payment
to or delivery by State Street Bank and Trust Company or any successor custodian
(the "Custodian"), or such depositories or agents as may be designated by the
Custodian in writing, as custodian for the Trust, of all cash and/or securities
due to or from the Funds, and Adviser shall not have possession or custody
thereof. Adviser shall advise Custodian and confirm in writing to the Trust and
to Boston Financial Data Services, Inc., or any other designated agent of the
Trust, all investment orders for the Funds placed by it with brokers and
dealers. Adviser shall issue to the Custodian such instructions as may be
appropriate in connection with the settlement of any transaction initiated by
the Adviser.
6. Allocation of Brokerage. Adviser shall have authority and discretion to
select brokers and dealers to execute portfolio transactions initiated by
Adviser and to select the markets on or in which the transactions will be
executed.
In doing so, the Adviser will give primary consideration to securing the
most favorable price and efficient execution. Consistent with this policy, the
Adviser may consider the financial responsibility, research and investment
information and other services provided by brokers or dealers who may effect or
be a party to any such transaction or other transactions to which other clients
of the Adviser may be a party. It is understood that neither the Trust nor the
Adviser has adopted a formula for allocation of the Trust's investment
transaction business. It is also understood that it is desirable for the Trust
that the Adviser have access to supplemental investment and market research and
security and economic analyses provided by certain brokers who may execute
brokerage transactions at a higher commission to the Trust than may result when
allocating brokerage to other brokers on the basis of seeking the lowest
commission. Therefore, the Adviser is authorized to place orders for the
purchase and sale of securities for the Funds with such certain brokers, subject
to review by the Trust's Trustees from time to time with respect to the extent
and continuation of this practice. It is understood that the services provided
by such brokers may be useful to the Adviser in connection with its services to
other clients.
On occasions when the Adviser deems the purchase or sale of a security to
be in the best interest of the Funds as well as other clients, the Adviser, to
the extent permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities to be sold or purchased in order to
obtain the most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased or sold, as
well as
2
<PAGE>
expenses incurred in the transaction, will be made by the Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Trust and to such other clients.
For each fiscal quarter of the Trust, Adviser shall prepare and render
reports to the Trust's Trustees of the total brokerage business placed and the
manner in which the allocation has been accomplished. Such reports shall set
forth at a minimum the information required to be maintained by Rule 31a-1(b)(9)
under the Act.
7. Proxies. The Trust will vote all proxies solicited by or with respect
to the issuers of securities in which assets of the Funds may be invested from
time to time. At the request of the Trust, Adviser shall provide the Trust with
its recommendations as to the voting of such proxies.
8. Reports to Adviser. The Trust will provide Adviser with such periodic
reports concerning the status of the Funds as Adviser may reasonably request.
9. Fees for Services. For all of the services to be rendered and payments
made as provided in this Agreement, the Kobrick Growth Fund, the Kobrick Capital
Fund and Kobrick Emerging Growth Fund will each pay the Adviser a monthly
advisory fee computed daily at the annual rate of 1.00% of the average of the
values of the net assets of the Fund as determined at the close of each business
day during the month.
10. Allocation of Charges and Expenses. Adviser shall employ or provide and
compensate the executive, administrative, secretarial and clerical personnel
necessary to provide the services set forth herein, and shall bear the expense
thereof. Adviser shall compensate all Trustees, officers and employees of the
Trust who are also shareholders or employees of Adviser. Adviser will pay all
expenses incurred in connection with the sale or distribution of the Funds'
shares to the extent such expenses are not assumed by the appropriate fund under
the Trustees' Distribution Expense Plan.
The Funds will be responsible for the payment of all operating expenses of
the Trust, including fees and expenses incurred by the Trust in connection with
membership in investment company organizations, brokerage fees and commissions,
legal, auditing and accounting expenses, expenses of registering shares under
federal and state securities laws, insurance expenses, taxes or governmental
fees, fees and expenses of the custodian, the transfer, shareholder service and
dividend disbursing agent and the accounting and pricing agent of the Funds,
expenses including clerical expenses of issue, sale, redemption or repurchase of
shares of the Funds, the fees and expenses of Trustees of the Trust who are not
interested persons of the Trust, the cost of preparing, printing and
distributing prospectuses, statements, reports and other documents to
shareholders, expenses of shareholders' meetings and proxy solicitations, and
such extraordinary or non-recurring expenses as may arise, including litigation
to which the Trust may be a party and indemnification of the Trust's officers
and Trustees with respect thereto, or any other expense not specifically
described above incurred in the performance of the Trust's obligations. All
other expenses not expressly assumed by Adviser herein incurred in connection
3
<PAGE>
with the organization, registration of shares and operations of the Funds will
be borne by the Funds.
11. Other Investment Activities of Adviser. The Trust acknowledges that
Adviser or one or more of its affiliates may have investment responsibilities or
render investment advice to or perform other investment advisory services for
other individuals or entities and that Adviser, its affiliates or any of its or
their directors, officers, agents or employees may buy, sell or trade in any
securities for its or their respective accounts ("Affiliated Accounts"). Subject
to the provisions of paragraph 2 hereof, the Trust agrees that Adviser or its
affiliates may give advice or exercise investment responsibility and take such
other action with respect to other Affiliated Accounts which may differ from the
advice given or the timing or nature of action taken with respect to the Funds,
provided that Adviser acts in good faith, and provided further, that it is
Adviser's policy to allocate, within its reasonable discretion, investment
opportunities to the Funds over a period of time on a fair and equitable basis
relative to the Affiliated Accounts, taking into account the investment
objectives and policies of the Funds and any specific investment restrictions
applicable thereto. The Trust acknowledges that one or more of the Affiliated
Accounts may at any time hold, acquire, increase, decrease, dispose of or
otherwise deal with positions in investments in which the Funds may have an
interest from time to time, whether in transactions which involve the Funds or
otherwise. Adviser shall have no obligation to acquire for the Funds a position
in any investment which any Affiliated Account may acquire, and the Trust shall
have no first refusal, co-investment or other rights in respect of any such
investment, either for the Funds or otherwise.
12. Certificate of Authority. The Trust and the Adviser shall furnish to
each other from time to time certified copies of the resolutions of their
Trustees or Board of Directors or executive committees, as the case may be,
evidencing the authority of officers and employees who are authorized to act on
behalf of the Trust, the Funds and/or the Adviser.
13. Limitation of Liability. Adviser shall not be liable for any action
taken, omitted or suffered to be taken by it in its reasonable judgment, in good
faith and believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement, or in accordance with (or in the
absence of) specific directions or instructions from the Trust, provided,
however, that such acts or omissions shall not have resulted from Adviser's
willful misfeasance, bad faith or gross negligence, a violation of the standard
of care established by and applicable to Adviser in its actions under this
Agreement or breach of its duty or of its obligations hereunder. Nothing in this
paragraph 13 shall be construed in a manner inconsistent with Sections 17(h) and
(i) of the Act.
14. Confidentiality. Subject to the duty of Adviser and the Trust to
comply with applicable law, including any demand of any regulatory or taxing
authority having jurisdiction, the parties hereto shall treat as confidential
all information pertaining to the Funds and the actions of Adviser and the Trust
in respect thereof.
15. Assignment. No assignment of this Agreement shall be made by Adviser,
and this Agreement shall terminate automatically in the event of such
assignment. Adviser shall notify the Trust in writing sufficiently in advance of
any proposed change of control, as defined in
4
<PAGE>
Section 2(a)(9) of the Act, as will enable the Trust to consider whether an
assignment will occur, and to take the steps necessary to enter into a new
contract with Adviser.
16. Representation, Warranties and Agreements of the Trust. The Trust
represents, warrants and agrees that:
A. Adviser has been duly appointed by the Trustees of the Trust to
provide investment services to the Funds as contemplated hereby.
B. The Trust will deliver to Adviser true and complete copies of its then
current prospectuses and statements of additional information as
effective from time to time and such other documents or instruments
governing the investments of the Funds and such other information as
is necessary for Adviser to carry out its obligations under this
Agreement.
C. The Trust is currently in compliance and shall at all times comply
with the requirements imposed upon the Trust by applicable law and
regulations.
17. Representations, Warranties and Agreements of Adviser. Adviser
represents, warrants and agrees that:
A. Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940.
B. Adviser will maintain, keep current and preserve on behalf of the
Trust, in the manner and for the time periods required or permitted by
the Act, the records identified in Schedule A. Adviser agrees that
such records (unless otherwise indicated on Schedule A) are the
property of the Trust, and will be surrendered to the Trust promptly
upon request.
C. Adviser will complete such reports concerning purchases or sales of
securities on behalf of the Funds as the Trust may from time to time
require to ensure compliance with the Act, the Internal Revenue Code
of 1986 and applicable state securities laws.
D. Adviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the Act and will provide the Trust
with a copy of the code of ethics and evidence of its adoption. Within
forty-five (45) days of the end of the last calendar quarter of each
year while this Agreement is in effect, an officer of Adviser shall
certify to the Trust that Adviser has complied with the requirements
of Rule 17j-1 during the previous quarter and that there has been no
violation of the Adviser's code of ethics or, if such a violation has
occurred, that appropriate action was taken in response to such
violation. Upon the written request of the Trust, Adviser shall permit
the Trust, its employees or its agents to examine the reports required
to be made to Adviser by Rule 17j-1(c)(1).
5
<PAGE>
E. Adviser will, promptly after filing with the Securities and Exchange
Commission an amendment to its Form ADV, furnish a copy of such
amendment to the Trust.
F. Upon request of the Trust, Adviser will provide assistance to the
Custodian in the collection of income due or payable to the Funds.
G. Adviser will immediately notify the Trust of the occurrence of any
event which would disqualify Adviser from serving as an investment
adviser of an investment company pursuant to Section 9(a) of the Act
or otherwise.
18. Amendment. This Agreement may be amended at any time, but only by
written agreement between Adviser and the Trust, which amendment, other than
amendments to Schedule A, is subject to the approval of the Trustees and the
shareholders of the Funds in the manner required by the Act and the rules
thereunder, subject to any applicable exemptive order of the Securities and
Exchange Commission modifying the provisions of the Act with respect to approval
of amendments to this Agreement.
19. Effective Date; Term. This Agreement shall become effective on the
date of its execution and shall remain in force for a period of two (2) years
from such date, and from year to year thereafter but only so long as such
continuance is specifically approved at least annually by the vote of a majority
of the Trustees who are not interested persons of the Trust or the Adviser, cast
in person at a meeting called for the purpose of voting on such approval, and by
a vote of the Board of Trustees or of a majority of the outstanding voting
securities of the Funds. The aforesaid requirement that this Agreement may be
continued "annually" shall be construed in a manner consistent with the Act and
the rules and regulations thereunder.
20. Termination. This Agreement may be terminated by either party hereto,
without the payment of any penalty, immediately upon written notice to the other
in the event of a breach of any provision thereof by the party so notified, or
otherwise upon sixty (60) days' written notice to the other, but any such
termination shall not affect the status, obligations or liabilities of any party
hereto to the other.
21. Limitation of Liability. It is expressly agreed that the obligations
of the Trust hereunder shall not be binding upon any of the trustees,
shareholders, nominees, officers, agents or employees of the Trust, personally,
but bind only the trust property of the Trust. The execution and delivery of
this Agreement have been authorized by the trustees of the Trust and signed by
an officer of the Trust, acting as such, and neither such authorization by such
trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust.
22. Use of Names. The names "Kobrick" and "Kobrick Funds" are the property
right of the Adviser. The Adviser and Frederick R. Kobrick may use the names
"Kobrick" and "Kobrick Funds" in other connections and for other purposes,
including without limitation in the name of other investment companies,
corporations or business that it may manage, advise, sponsor or own, or in which
it may have a financial interest. The Trust will discontinue any use
6
<PAGE>
of the names "Kobrick" and "Kobrick Funds" if the Adviser ceases to be employed
as the Trust's portfolio manager.
23. Definitions. As used in paragraphs 15 and 19 of this Agreement, the
terms "assignment," "interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the Act and
the rules and regulations thereunder.
24. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of The Commonwealth of
Massachusetts.
KOBRICK INVESTMENT TRUST
By: __________________________
Title: President
Date: June 30, 1999
ACCEPTANCE
The foregoing Agreement is hereby accepted.
KOBRICK FUNDS LLC
By: __________________________
Title: President
Date: June 30, 1999
7
<PAGE>
SCHEDULE A
RECORDS TO BE MAINTAINED BY THE ADVISER
1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
portfolio purchases or sales, given by the Adviser on behalf of the Funds
for, or in connection with, the purchase or sale of securities, whether
executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modification or
cancellation thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the Trust.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten
(10) days after the end of the quarter, showing specifically the basis or
bases upon which the allocation of orders for the purchase and sale of
portfolio securities to named brokers or dealers was effected, and the
division of brokerage commissions or other compensation on such purchase
and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Trust by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers to:
(a) The Trust;
(b) The Adviser; and,
(c) Any person affiliated with the foregoing persons.
(iii) Any other consideration other than the technical qualifications
of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made available.
<PAGE>
C. Shall describe in detail the application of any general or specific
formula or other determinant used in arriving at such allocation of
purchase and sale orders and such division of brokerage commissions or
other compensation.
D. The name of the person responsible for making the determination of
such allocation and such division of brokerage commissions or other
compensation.
3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of portfolio securities. Where an authorization is made
by a committee or group, a record shall be kept of the names of its members
who participate in the authorization. There shall be retained as part of
this record any memorandum, recommendation or instruction supporting or
authorizing the purchase or sale of portfolio securities and such other
information as is appropriate to support the authorization.*
4. (Rule 31a-1(f)) Such accounts, books and other documents as are required
to be maintained by registered investment advisers by rule adopted under
Section 204 of the Investment Advisers Act of 1940, to the extent such
records are necessary or appropriate to record the Adviser's transactions
with respect to the Funds.
- -------------------------
* Such information might include: the current Form 10-K, annual and
quarterly reports, press releases, reports by analysts and from brokerage
firms (including their recommendation; i.e., buy, sell, hold) or any
internal reports or portfolio adviser reviews.
2
