SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. _____
Post-Effective Amendment No. _______
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. ______
(Check appropriate box or boxes.)
THE BOYLE FUND
(Exact name of Registrant as Specified in Charter)
2062 JACKSON STREET, SAN FRANCISCO, CALIFORNIA 94109
(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code (415) 923-5855
Michael J. Boyle
Boyle Management and Research, Inc.
2062 Jackson Street, San Francisco, California 94109
(Name and Address of Agent for Service)
Copies of all communications to:
Michael J. Meaney, Esq.
Benesch, Friedlander, Coplan & Aronoff
200 Public Square
Cleveland, Ohio 44114
Approximate date of proposed public offering: As soon as practicable after the
effective date of the Registration Statement. Pursuant to Rule 24F-2 under the
Investment Company Act of 1940, Registrant has elected to register an indefinite
number of shares of beneficial interest. The amount of the registration fee
pursuant to Rule 24f-2 of the Investment Company Act of 1940 is $500. The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section (8), may determine.
<PAGE>
THE BOYLE FUND
Cross Reference Sheet
Pursuant to Rule 481(a)
Under the Securities Act of 1933
PART A
ITEM NO. REGISTRATION STATEMENT CAPTION CAPTION IN PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Prospectus Summary;
Summary of Fund Expenses
3. Condensed Financial Information Not Applicable
4. General Description of Registrant General Information;
Investment Objective,
Policies and Risk
Considerations
5. Management of the Fund Investment Advisory and
Other Services;
General Information
6. Capital Stock and Other Securities Cover Page; General
Information; Dividends
and Distributions; Taxes
7. Purchase of Securities Being Offered How to Purchase Shares;
Calculation of Share Price
8. Redemption or Repurchase How How Redeem Shares
9. Pending Legal Proceedings Not Applicable
<PAGE>
PART B
ITEM NO. CAPTION IN PROSPECTUS REGISTRATION STATEMENT CAPTION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History The Fund
13. Investment Objectives and Policies Investment Objectives,
Policies and Risk
Considerations; Quality
Ratings of Corporate Bonds and
Preferred Stocks; Investment
Restrictions; Securities
Transactions; Portfolio
Turnover
14. Management of the Fund Management of the Trust
15. Control Persons and Principal Principal Security
Holders of Securities Holders
16. Investment Advisory and Other The Investment Adviser;
Services Custodian; Auditors; Maxus
Information Services, Inc.
17. Brokerage Allocation and Other Securities Transactions
Practices
18. Capital Stock and Other Securities The Fund; Management
19. Purchase, Redemption and Pricing Purchase, Redemption,
of Securities Being Offered and Pricing of Shares
20. Tax Status Taxes
21. Underwriters Not Applicable
22. Calculation of Performance Data Historical Performance
Information
23. Financial Statements Financial Statements
PART C
The information to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
<PAGE>
PROSPECTUS
January ___, 1998
THE BOYLE MARATHON FUND
A No-Load Fund
2062 Jackson Street
San Francisco, CA 94109
(415) 923-5855
The Boyle Marathon Fund (the "Fund") is a portfolio of the Boyle Fund (the
"Trust"), a Delaware business trust. The Trust is an open-end management
investment company that is authorized to offer shares of beneficial interest
("shares") in series, with each series representing a distinct fund having its
own investment objectives and policies. At present, the Fund is only one series
authorized by the Trust. The Fund is non-diversified and has the primary
investment objective of long-term growth of capital. Receipt of income is a
secondary objective, as some investments may yield dividends, interest or other
income. The Fund will invest primarily in securities of companies in the high
technology, financial service, pharmaceutical, and retail fields, which are
believed to have potential for capital appreciation. The Fund intends to focus
on companies with headquarters or with large operations in the San
Francisco/Silicon Valley area, however, the Fund does not intend to be limited
to such companies. The Fund may also invest portions of its total assets in
securities that entail special risks, such as foreign securities and securities
of unseasoned issuers. Please see "Investment Objectives, Policies and Risk
Considerations" in this Prospectus for additional information.
As an open-end management investment company, the Fund will offer its shares on
a continuous basis and will redeem its shares upon the demand of a shareholder.
Sales and redemptions will be effected at the net asset value per share next
determined after receipt of a proper order. The investor will pay no sales
charge or redemption fee.
The initial minimum investment in the Fund is $2,500 unless the investment is
made by an Individual Retirement Account ("IRA"), in which case the minimum
initial investment is $2,000. Subsequent investments in the Fund must be at
least $50. Lower minimums are available to investors purchasing shares of the
Fund through certain brokerage firms. Please see "How to Purchase Shares" in
this Prospectus for additional information.
Boyle Management and Research, Inc. will serve as the investment adviser to the
Fund. Boyle Management and Research, Inc. intends to focus its research with the
objective of long-term growth. Please see "Investment Advisory and Others
Services" in this Prospectus for additional information.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. Please retain it for future
reference. A Statement of Additional Information dated January __, 1998, has
been filed with the Securities and Exchange Commission and is hereby
incorporated be reference in its entirety. A copy of the Statement of Additional
Information can be obtained at no charge by calling the number listed below.
For Information or Assistance in Opening an Account, Please Call: Nationwide
(Toll-Free)._______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Investors are advised to read this Prospectus and to
retain it for future reference.
<PAGE>
THE BOYLE MARATHON FUND
Board of Trustees, The Boyle Fund
Michael J. Boyle, Chairman
Joanne E. Boyle
James A. Hughes, Jr.
Edward Loftus
Officers
Michael J. Boyle, President and CEO
Joanne E. Boyle, Vice-President and CFO
Investment Adviser
Boyle Management and Research, Inc.
2062 Jackson Street
San Francisco, CA 94109
Transfer Agent/Administrator
Maxus Information Systems, Inc.
The Tower at Erieview, 36th Floor
1301 East Ninth Street
Cleveland, OH 44114
(Toll-Free) _______________
TABLE OF CONTENTS
Prospectus Summary..................................................6
Summary of Fund Expenses............................................7
Investment Objectives, Policies and Risk Considerations.............7
Investment Advisory and Other Services..............................9
How to Purchase Shares.............................................10
How to Redeem Shares...............................................11
Shareholder Services...............................................11
Dividends and Distributions........................................12
Taxes..............................................................12
Calculation of Share Price.........................................13
Performance Information............................................13
General Information................................................13
No person has been authorized to give any information or to make any
representation with respect to the Fund other than those contained in this
Prospectus, and information or representations not herein contained, if given or
made, must not be relied upon as having been authorized by the Fund. This
prospectus does not constitute an offer to sell or a solicitation of an offer to
buy in any jurisdiction to any person to whom it is unlawful to make such an
offer or solicitation in such jurisdiction.
<PAGE>
PROSPECTUS SUMMARY
INVESTMENT OBJECTIVES AND POLICIES
The Fund's investment objective is long-term capital appreciation. The Fund
intends to invest primarily in securities of companies in the high technology,
financial services, pharmaceutical, and retail fields, which are believed to
have potential for increase in price over a three to five year period of time.
The receipt of income is a secondary objective. The Fund intends to focus on
companies with headquarters or with large operations in the San
Francisco/Silicon Valley area, however, the Fund does not intend to be limited
to such companies.
THE TRUST
The Boyle Fund is a Delaware business trust organized in October 1997, and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company, which will issue its shares
in series, with each series representing a distinct fund having its own
investment objectives and policies. The Board of Trustees to date has authorized
the issuance of shares only in the series constituting the Boyle Marathon Fund
but may authorize additional series in the future without approval of the
shareholders.
RISK FACTORS GENERALLY
An investment in the Fund may be subject to certain risks hereinafter described,
including general risks associated with all securities investments. There can be
no assurance the Fund will be able to achieve its investment objectives. See
"Investment Objectives, Policies and Risk Considerations."
NON-DIVERSIFICATION
The Fund will be operated as a "non-diversified" investment company so that more
than 5% of the Fund's assets may be invested in the securities of any one
issuer. As a result of its non-diversified status, the Fund's shares may be more
susceptible to adverse change in the value of securities of a particular company
than would be the shares of a diversified investment company. The Fund
nevertheless has elected, and intends to qualify, to be treated as a "regulated
investment company" for purposes of the Internal Revenue Code of 1986, as
amended ("the Code") and to meet the Code's separate requirements for portfolio
diversification.
PURCHASES OF SHARES
Shares of the Fund may be purchased at the next determined net asset value per
share (see "Calculation of Share Price"). Shares will be sold without a sales
load, with an initial investment of at least $2,500, or $2,000 for initial
investments by an IRA (see "How to Purchase Shares"). Subsequent investments
must be made in a minimum amount of at least $50, subject to certain exceptions.
Purchases may be made by check or by bank wire. Lower minimums are available to
investors purchasing shares of the Fund through certain brokerage firms.
REDEMPTIONS OF SHARES
Investors will be able to redeem shares at their next determined net asset value
per share by so instructing the Fund's Transfer Agent. See "How to Redeem
Shares."
INVESTMENT ADVISER
The Fund will be managed by Boyle Management and Research, Inc. (the "Investment
Adviser"). The Investment Adviser is paid a monthly management fee at the annual
rate of 1.5% of the Fund's average daily net assets. The Investment Adviser is
also responsible for the provision of administrative services to the Fund, for
which it receives an additional fee. From time to time, the Investment Adviser
may waive all or some of its fees which would have the effect of lowering the
Fund's overall expense ratio and increasing the return to shareholders during
the period such amount is waived or assumed.
TRANSFER AGENT
The Investment Adviser has retained Maxus Information Systems, Inc. (the
"Transfer Agent"), 28601 Chagrin Boulevard, Cleveland, Ohio 44114, to provide
administrative, accounting and pricing, dividend disbursing, shareholder
servicing and transfer agent services. For further information on the Transfer
Agent, see "Investment Advisory and Other Services."
DIVIDENDS
The Fund intends to declare and distribute income dividends and capital gains
distributions as may be required to qualify as a regulated investment company
under the Code. See "Taxes." Currently, the Fund intends to distribute income
and capital gains annually. All dividends and distributions will be reinvested
automatically in shares of the Fund unless the shareholder elects otherwise. See
"Dividends and Distributions."
<PAGE>
SUMMARY OF FUND EXPENSES
The purpose of the tables below is to assist investors in understanding the
various costs and expenses an investor in the Fund will bear directly or
indirectly. There are no sales charges, "loads" or maintenance charges of any
kind imposed on the purchase of shares (see "How to Purchase Shares").
Investor Transaction Expenses
Maximum sales load imposed on purchases........................... None
Maximum sales load imposed on reinvested dividends................ None
Deferred sales load............................................... None
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees.................................................. 1.50%
12b-1 Fees....................................................... None
Other Expenses................................................... 1.10%
-----
Total Fund Operating Expenses.................................... 2.60%
-----
Example
Assuming: (i) a $1,000 investment and (ii) a 5% annual return, an investor would
be charged the following expenses over the periods indicated:
1 Year 3 Years
$27 $84
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN. The percentages expressing Annual Fund Operating Expenses are based on
amounts projected to be incurred during the first fiscal year. Please see
"Investment Advisory and Other Services" for a description of the Fund's
expenses.
INVESTMENT OBJECTIVES, POLICIES AND RISK
CONSIDERATIONS
INVESTMENT OBJECTIVES
The Fund's primary investment objective is long-term growth of capital. Receipt
of income is a secondary objective, as some investments may yield dividends,
interest or other income. The Fund's investment objectives may not be changed
without shareholder approval. Potential investors should be aware that risks
exist in all types of investments and there can be no assurance that the Fund
will be successful in achieving its investment objectives. The Fund's investment
policies are outlined below, and where applicable, factors that may increase the
risk of investing in the Fund have been noted.
INVESTMENT POLICIES
EQUITY SECURITIES
The Fund will invest primarily (i.e., under normal circumstances, at least 65%
of the value of the Fund's total assets) in equity securities of companies in
the high technology, financial service, pharmaceutical, and retail fields which
are believed to have potential for capital appreciation over a three to five
year period Equity securities include common stock, convertible long-term
corporate debt obligations, preferred stock, convertible preferred stock and
warrants. The securities selected will typically be traded on a national
securities exchange, the NASDAQ System or over-the-counter, and may include
securities of both large, well-known companies as well as smaller, less
well-known companies. The Fund intends to focus on companies with headquarters
or with large operations in the San Francisco/Silicon Valley area, however, the
Fund does not intend to be limited to such companies. Investments in such
companies can be more volatile than the broader market.
<PAGE>
The Investment Adviser's analysis of a potential investment will focus on (1)
valuing an enterprise and purchasing securities of the enterprise when that
value exceeds the market price, and (2) recognizing a company that is
well-positioned in a growth market and purchasing securities in the enterprise
when in the opinion of the Investment Adviser there is strong potential that the
market price will appreciate over a three to five year period. The Investment
Adviser intends to focus on the fundamental worth of the companies under
consideration, where fundamental worth is defined as the value of the basic
businesses of the firm, including products, technologies, customer relationships
and other sustainable competitive advantages. Fundamental worth is a reflection
of the value of an enterprise's assets and its earning power, and will be
determined by use of price-earnings ratios and comparison with sales of
comparable assets to independent third party buyers in arms' length
transactions. Balance sheet strength, the ability to generate earnings and
strong competitive positions in high growth markets are the major factors in
appraising an investment. Little weight will be given to current dividend
income. Applicable price-earnings ratios depend on the earnings potential of an
enterprise as determined by the Investment Adviser. For example, an enterprise
that is a relatively high growth company would normally command a higher
price-earnings ratio than lower growth companies because expected future profits
would be higher.
The Fund will invest primarily in equity securities, which by definition entail
risk of loss of capital. Investments in equity securities are subject to
inherent market risks and fluctuation in value due to earnings, economic
conditions and other factors beyond the control of the Investment Adviser.
Securities in the Fund's portfolio may not increase as much as the market as a
whole and some undervalued securities may continue to be undervalued for long
periods of time. Some securities may be inactively traded, i.e., not quoted
daily in the financial press, and thus may not be readily bought or sold.
Although profits in some Fund holdings may be realized quickly, it is not
expected that most investments will appreciate rapidly. The Fund does not
presently intend to invest more than 5% of its net assets in securities of
companies with less than three years of continuous operation or in securities
that are subject to legal or contractual restrictions on resale. Investments in
the equity securities of companies in the high technology and pharmaceutical
fields are subject to the risk that the primary products of the issuer may be
overtaken by newer products or by price cutting by competitors with similar
products, reducing the value of the Fund's holdings. Investments in the equity
securities of retail companies may be subject to the overall economy, consumer
confidence, wage gains, changes in taxes, changes in employment levels, and even
the weather; these risks are inherent in such investments and are beyond the
control of the Investment Adviser. Investments in the equity securities of
financial service companies are subject to the risk of changes in interest rates
and the widely held expectations for such changes; again, these matters are
beyond the control of the Investment Adviser.
The Fund may from time to time invest a substantial portion of its assets in
small capitalization companies. While smaller companies generally have potential
for rapid growth, they often involve higher risks because they lack the
management experience, financial resources, product diversification and
competitive strengths of larger corporations. In addition, in many instances,
the securities of smaller companies are traded only over-the-counter or on a
regional securities exchange, and the frequency and volume of their trading is
substantially less than is typical of larger companies. Therefore, the
securities of smaller companies may be subject to wider price fluctuations. When
making large sales, the Fund may have to sell portfolio holdings at discounts
from quoted prices or may have to make a series of small sales over an extended
period of time.
FOREIGN SECURITIES
The Fund may purchase foreign securities that are listed on a foreign securities
exchange or over-the-counter market, or which are represented by American
Depository Receipts and are listed on a domestic securities exchange or traded
in the United States on over-the-counter markets. While the Fund has no present
intention to invest any significant portion of its assets in foreign securities,
it reserves the right to invest up to 5% of the value of its total assets (at
time of purchase, giving effect thereto) in the securities of foreign issuers
and obligors. Foreign investments may be subject to risks that are not typically
associated with investing in domestic companies. For example, such investment
may be adversely affected by changes in currency rates and exchange control
regulations, future political and economic developments and the possibility of
seizure or nationalization of companies, or the imposition of withholding taxes
on income.
DEBT SECURITIES
The Fund may also invest in debt obligations of corporate issuers, the U.S.
Government, states, municipalities or state or municipal government agencies
that in the opinion of the Investment Adviser offer long-term capital
appreciation possibilities because of the timing of such investments. The Fund
intends that no more than 35% of its total assets will be comprised of such debt
securities. Investments in such debt obligations may result in long-term capital
appreciation because the value of debt obligations varies inversely with
prevailing interest rates. Thus, an investment in debt obligations that are sold
at a time when prevailing interest rates are lower than they were at the time of
investment will normally result in capital appreciation. However, the reverse is
also true, so that if an investment in debt obligations is sold at a time when
prevailing interest rates are higher than they were at the time of investment, a
capital loss will normally be realized. Accordingly, investments in debt
obligations will be made when the Investment Adviser expects that prevailing
interest rates will be falling, and will be sold when the Investment Adviser
expects interest rates to rise.
The Fund's investments in this area will consist solely of investment grade
securities (rated BBB or higher by Standard & Poor's Ratings Group or Baa or
higher by Moody's Investors Service, Inc., or unrated securities determined by
the Investment Adviser to be of comparable quality). While securities in these
categories are generally accepted as being of investment grade, securities rated
BBB or Baa have speculative characteristics and changes in economic conditions
or other circumstances are more likely to lead to a weakened capacity to pay
principal and interest than is the case with higher grade securities. In the
event a security's rating is reduced below the Fund's minimum requirements, the
Fund will sell the security, subject to market conditions and the Investment
Adviser's assessment of the most opportune time for sale. Please refer to the
Fund's Statement of Additional Information for a description of these ratings.
<PAGE>
FUNDAMENTAL INVESTMENT POLICIES
The Fund has adopted the following fundamental investment policies, which may
not be changed without shareholder approval:
DIVERSIFICATION OF INVESTMENTS
As a non-diversified investment company, the Fund may be subject to greater
risks than diversified companies because of the possible fluctuation in the
values of securities of fewer issuers. However, at the close of each fiscal
quarter at least 50% of the value of the Fund's total assets will be represented
by one or more of the following: (i) cash and cash items, including receivables;
(ii) U.S. Government securities; (iii) securities of other registered investment
companies; and (iv) securities (other than U.S. Government securities and
securities of other regulated investment companies) of any one or more issuers
which meet the following limitations: (a) the Fund will not invest more than 5%
of its total assets in the securities of any such issuer and (b) the entire
amount of the securities of such issuer owned by the Fund will not represent
more than 10% of the outstanding voting securities of such issuer. Additionally,
not more than 25% of the value of the Fund's total assets may be invested in the
securities of any one issuer (other than U.S. Government securities and
securities of other regulated investment companies) or in two or more issuers
which the Fund controls and which are engaged in the same or similar trades or
businesses. The Fund will not invest more than 5% of its total assets in the
securities of any single investment company nor more than 10% of its total
assets in the securities of all other investment companies.
CONCENTRATION OF INVESTMENTS
The Fund intends to concentrate its investments in the following fields: high
technology; financial services; pharmaceutical; and retail. The Fund's focus on
those areas should not be considered as a limitation on investments in other
fields.
BORROWING
The Fund may borrow from banks for temporary or emergency purposes in an
aggregate amount not to exceed 5% of the Fund's total assets. Borrowing
magnifies the potential for gain or loss on the portfolio securities of the Fund
and, therefore, if employed, increases the possibility of fluctuation in the
Fund's net asset value. This is the speculative factor known as leverage. To
reduce the risks of borrowing, the Fund will limit its borrowings as described
above.
OTHER INVESTMENT POLICIES
The Fund proposes to follow certain other investment policies set forth below,
which are not matters of fundamental policy and may be changed at the discretion
of the management of the Fund, without a vote of the shareholders:
COMPANIES WITH LESS THAN THREE-YEARS' CONTINUOUS OPERATION
The Fund may purchase securities of any company with a record of less than
three-years' continuous operation (including that of predecessors) but only to
the extent that such purchase would not cause the Fund's investments in all such
companies to exceed 5% of the value of the Fund's net assets at the time, giving
effect to the purchase. Investments in the securities of such companies often
involve higher risks because the management may lack experience, or the company
may lack the financial resources to compete with larger companies, or the newer
issuer may not have the product diversification needed to stay competitive.
WARRANTS
The Fund may purchase warrants, valued at the lower of cost or market, but only
to the extent that such purchase does not exceed 5% of the Fund's net assets at
the time of purchase. Investments in warrants generally run the same risks as
direct investments in the securities of the issuer plus the additional risk of
the warrant's expiration date.
PORTFOLIO TURNOVER
The Fund will not seek to realize profits by anticipating short-term market
movements. The Fund intends to purchase securities for long-term capital
appreciation. Under ordinary circumstances, securities will be held for more
than one year. While the rate of portfolio turnover will not be a limiting
factor when the Investment Adviser deems changes appropriate, it is anticipated
that given the Fund's investment objective, its annual portfolio turnover
generally will not exceed 40%. Portfolio turnover is calculated by dividing the
lesser of the Fund's purchases or sales of portfolio securities during the
period in question by the monthly average of the value of the Fund's portfolio
securities during that period. Excluded from consideration in the calculation
are all debt securities with remaining maturities of one year or less when
purchased by the Fund.
MONEY MARKET INSTRUMENTS
For defensive purposes, the Fund may temporarily hold all or a portion of its
assets in money market instruments. The money market instruments which the Fund
may own from time to time include U.S. Government obligations having a maturity
of less than one year, commercial paper rated A-1 or better by Standard & Poor's
Ratings Group or Prime-1 or better by Moody's Investors Service, Inc.,
repurchase agreements, shares of money market investment companies, bank debt
instruments (certificates of deposit, time deposits and bankers' acceptances)
and other short-term instruments issued by domestic branches of U.S. financial
institutions that are insured by the Federal Deposit Insurance Corporation and
have assets exceeding $10 billion. Please refer to the Statement of Additional
Information for a description of these ratings.
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
The Trust retains Boyle Management and Research, Inc., 2062 Jackson Street, San
Francisco, California 94109 as its Investment Adviser. Michael J. and Joanne E.
Boyle, who also serve as Trustees of the Trust, control the Investment Adviser.
Mr. and Mrs. Boyle have served as the portfolio managers of the Fund since the
Fund's inception. Prior to his association with the Investment Adviser, Mr.
Boyle was Vice President of Business Development for a division of Harris
Corporation, an information processing and communications company headquartered
in Melbourne, Florida from April 1990 to June 1996; from July 1996 to January
1997, Mr. Boyle served as Senior Counsel for Harris Corporation. Prior to her
association with the Investment Adviser, Mrs. Boyle served as President of Deck
the Walls, a retail business in Melbourne, Florida from August 1983 to October
1997. Michael and Joanne Boyle have no portfolio management experience.
Under an investment advisory contract (the "Advisory Agreement") between the
Trust and the Investment Adviser, the Investment Adviser furnishes advice and
recommendations with respect to the Fund's portfolio of securities and
investments and provides persons satisfactory to the Trust's Board of Trustees
to act as officers and employees of the Trust responsible for the overall
management and administration of the Trust, subject to supervision of the
Trust's Board of Trustees. Such officers and employees as well as certain
trustees of the Trust may be directors, officers or employees of the Investment
Adviser or its affiliates.
All orders for transactions in securities on behalf of the Fund are placed with
broker-dealers selected by the Adviser. The Adviser may select broker-dealers
that provide it with research services and may cause the Fund to pay these
broker-dealers commissions that exceed those that other broker-dealers may have
charged, if it views the commissions as reasonable in relation to the value of
the brokerage and/or research services provided.
Under the Advisory Agreement, the Investment Adviser is responsible for (i) the
compensation of any of the Trust's trustees, officers and employees who are
directors, officers, employees or shareholders of the Investment Adviser, (ii)
compensation of the Investment Adviser's personnel and payment of other expenses
in connection with provision of portfolio management services under the Advisory
Agreement, and (iii) expenses of printing and distributing the Fund's Prospectus
and sales and advertising materials to prospective clients.
For the services provided by the Investment Adviser under the Advisory
Agreement, the Investment Adviser receives from the Fund a management fee equal
to 1.5% per annum of the Fund's average daily net assets. The management fee is
accrued daily in computing the net assets of the Fund for the purpose of
determining the offering and redemption price per share, and is paid to the
Investment Adviser at the end of each month. This fee is greater than that paid
by other investment companies.
FUND ADMINISTRATION
The Trust has entered into a separate contract with the Investment Adviser
wherein the Investment Adviser is responsible for providing administrative and
supervisory services to the Fund (the "Administration Agreement"). Under the
Administration Agreement, the Investment Adviser oversees the maintenance of all
books and records with respect to the Fund's securities transactions and the
Fund's book of accounts in accordance with all applicable federal and state laws
and regulations. The Investment Adviser also arranges for the preservation of
journals, ledgers, corporate documents, brokerage account records and other
records, which are required to be maintained pursuant to the 1940 Act.
Under the Administration Agreement, the Investment Adviser is responsible for
the equipment, staff, office space and facilities necessary to perform its
obligations, including ordinary legal expenses. The Investment Adviser has also
assumed responsibility for payment of all of the Fund's operating expenses
except for brokerage and commission expenses, expenses of the Trustees who are
not officers of the Investment Adviser, annual independent audit expenses of the
Fund, and any extraordinary and non-recurring expenses, all of which will be
borne by the Fund.
Pursuant to an agreement between the Fund and the Investment Adviser,
organizational expenses for the Fund have been advanced by the Investment
Adviser in exchange for restricted shares in the Fund. Such shares can not be
redeemed until the organizational expenses have been repaid. The Fund plans to
repay these expenses over a five-year period beginning in 1998.
For the services rendered by the Investment Adviser under the Administration
Agreement, the Investment Adviser receives a fee at the annual rate of 1% of the
Fund's average daily net assets.
The Investment Adviser has retained Maxus Information Systems, Inc. (the
"Transfer Agent") to serve as the Fund's transfer agent, dividend paying agent
and shareholder service agent, to provide accounting and pricing services to the
Fund, and to assist the Investment Adviser in providing executive,
administrative and regulatory services to the Fund. The Investment Adviser (not
the Fund) pays the Transfer Agent's fees for these services.
<PAGE>
HOW TO PURCHASE SHARES
Your initial investment in the Fund must be at least $2,500 (or $2,000 for
IRAs). Lower minimums are available to investors purchasing shares of the Fund
through certain brokerage firms. Shares of the Fund are sold on a continuous
basis at the net asset value next determined after receipt of a purchase order
by the Fund. Purchase orders received by dealers prior to 4:00 p.m., Eastern
time, on any business day and transmitted to the Transfer Agent by 5:00 p.m.,
Eastern time, that day are confirmed at the net asset value determined as of the
close of the regular session of trading on the New York Stock Exchange on that
day. It is the responsibility of dealers to transmit properly completed orders
so that they will be received by the Transfer Agent by 5:00 p.m., Eastern time.
Dealers may charge a fee for effecting purchase orders. Direct purchase orders
received by the Transfer Agent by 4:00 p.m., Eastern time, are confirmed at that
day's net asset value. Direct investments received by the Transfer Agent after
4:00 p.m., Eastern time, and orders received from dealers after 5:00 p.m.,
Eastern time, are confirmed at the net asset value next determined on the
following business day.
You may open an account and make an initial investment in the Fund by sending a
check and a completed account application form to The Boyle Marathon Fund, P.O.
Box ______, Cleveland, Ohio 44114. Checks should be made payable to the "Boyle
Marathon Fund." An account application is included in this Prospectus.
The Fund mails confirmations of all purchases or redemptions of Fund shares.
Certificates representing shares are not issued. The Fund reserves the rights to
limit the amount of investments and to refuse to sell to any person.
Investors should be aware that the Fund's account application contains
provisions in favor of the Fund and certain of its affiliates, excluding such
entities from certain liabilities (including, among others, losses resulting
from unauthorized shareholder transactions) relating to the various services
made available to investors.
Should an order to purchase shares be canceled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by the
Fund or the Transfer Agent in the transaction.
You may also purchase shares of the Fund by wire. Please telephone the Transfer
Agent (nationwide call toll-free ____________) for instructions. You should be
prepared to give the name in which the account is to be established, the
address, telephone number and taxpayer identification number for the account,
and the name of the bank, which will wire the money.
Your investment will be made at the next determined net asset value after your
wire is received together with the account information indicated above. If the
Fund does not receive timely and complete account information, there may be a
delay in the investment of your money and any accrual of dividends. To make your
initial wire purchase, you are required to mail a completed account application
to the Transfer Agent. Your bank may impose a charge for sending your wire.
There is presently no fee for receipt of wired funds, but the Fund reserves the
right to charge shareholders for this service upon 30-days' prior notice to
shareholders.
You may purchase and add shares to your account ($50 minimum) by mail or by bank
wire. Checks should be sent to The Boyle Marathon Fund, P.O. Box _____,
Cleveland, Ohio 44114. Checks should be made payable to the "Boyle Marathon
Fund." Bank wires should be sent as outlined above. Each additional purchase
request must contain the name of your account and your account number to permit
proper crediting to your account.
HOW TO REDEEM SHARES
You may redeem shares of the Fund on each day that the Fund is open for business
by sending a written request to the Transfer Agent. The request must state the
number of shares or the dollar amount to be redeemed and your account number.
The request must be signed exactly as your name appears on the Fund's account
records. If the shares to be redeemed have a value of $25,000 or more, your
signature must be guaranteed by any eligible guarantor institution, including
banks, brokers and dealers, municipal securities brokers and dealers, government
securities brokers and dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations.
A notary public is not an acceptable guarantor.
Redemption requests may direct that the proceeds be wired directly to your
existing account in any commercial bank or brokerage firm in the United States.
There is currently no charge for processing wire redemptions. However, the Fund
reserves the right, upon 30-days' written notice, to make reasonable charges for
wire redemptions. All charges will be deducted from your account by redemption
of shares in your account. Your bank or brokerage firm may also impose a charge
for processing the wire. In the event that wire transfer of funds is impossible
or impractical, the redemption proceeds will be sent by mail to the designated
account.
You may also redeem shares by placing a wire redemption through a securities
broker or dealer. Unaffiliated broker-dealers may impose a fee on the
shareholder for this service. You will receive the net asset value per share
next determined after receipt by the Fund or the Transfer Agent of your wire
redemption request. It is the responsibility of broker-dealers to properly
transmit wire redemption orders.
<PAGE>
You will receive the net asset value per share next determined after receipt by
the Transfer Agent of your redemption request in the form described above.
Payment is made within seven business days after tender in such form, provided
that payment in redemption of shares purchased by check will be effected only
after the check has been collected, which may take up to fifteen days from the
purchase date. To eliminate this delay, you may purchase shares of the Fund by
certified check or wire.
Because the net asset value of the Fund's shares will fluctuate, the amount that
a shareholder receives upon redemption may be more or less than the amount paid
for the shares.
At the discretion of the Trust or the Transfer Agent, corporate investors and
other associations may be required to furnish an appropriate certification
authorizing redemptions to ensure proper authorization. The Trust reserves the
right to require you to close your account if at any time the value of your
shares is less than $2,000 (based on actual amounts invested, unaffected by
market fluctuations), or such other minimum amount as the Trust may determine
from time to time. After notification to you of the Trust's intention to close
your account, you will be given 60-days to increase the value of your account to
the minimum amount.
The Trust reserves the right to suspend the right of redemption or to postpone
the date of payment for more than seven business days under unusual
circumstances as determined by the Securities and Exchange Commission.
SHAREHOLDER SERVICES
Contact the Transfer Agent (nationwide call toll-free _____________) for
additional information about the shareholder services described below.
TAX-DEFERRED RETIREMENT PLANS
Shares of the Fund are available for purchase in connection with the following
tax-deferred retirement plans:
-- Keogh Plans for self-employed individuals
-- Individual retirement account (IRA) plans for individuals
and their non-employed spouses
-- Qualified pension and profit-sharing plans for employees,
including those profit-sharing plans with a 401(k) provision
-- 403(b)(7) custodial account for employees of public school
systems, hospitals, colleges and other non-profit
organizations meeting certain requirements of the Internal
Revenue Code
DIRECT DEPOSIT PLANS
Shares of the Fund may be purchased through direct deposit plans offered by
certain employers and government agencies. These plans enable a shareholder to
have all or a portion of his or her payroll or Social Security checks
transferred automatically to purchase shares of the Fund.
AUTOMATIC INVESTMENT PLAN
You may make automatic monthly investments in the Fund from your bank, savings
and loan or other depository institution account. The minimum initial and
subsequent investments must be $50 under the plan. The Fund pays the costs
associated with these transfers, but reserves the right, upon 30-days' written
notice, to make reasonable charges for this service. Your depository institution
may impose its own charge for debiting your account, which would reduce your
return from an investment in the Fund.
DIVIDENDS AND DISTRIBUTIONS
The Fund expects to distribute substantially all of its net investment income
and net realized gains, if any, annually. Dividends and distributions are
automatically reinvested in additional shares of the Fund (the Share Option)
unless cash payments are specified on your application or are otherwise
requested by written instructions to the Transfer Agent.
<PAGE>
If you elect to receive dividends in cash and the U.S. Postal Service cannot
deliver your checks or if your checks remain uncashed for six months, your
dividends may be reinvested in your account at the then-current net asset value
and your account will be converted to the Share Option.
TAXES
The following discussion relates solely to the federal income tax treatment of
dividends and distributions by the Fund. Investors should consult their own tax
advisers for further details and for the application of state, local and foreign
tax laws to their particular situations.
The Fund intends to qualify and has elected to be treated as a "regulated
investment company" under Subchapter M of the Code by annually distributing
substantially all of its net investment company taxable income and net capital
gains in dividends to its shareholders and by satisfying certain other
requirements related to the sources of its income and the diversification of its
assets. By so qualifying, the Fund will not be subject to federal income tax or
excise tax based on net income on that part of its investment company taxable
income and net realized short-term and long-term capital gains which it
distributes to its shareholders in accordance with the Code's requirements.
Dividends and distributions paid to shareholders are generally subject to
federal income tax and may be subject to state and local income tax. Dividends
from net investment income and distributions from any excess of net realized
short-term capital gains over net realized capital losses are currently taxable
to shareholders (other than tax-exempt entities that have not borrowed to
purchase or carry their shares of the Fund) as ordinary income.
In view of the Fund's investment policies, it is expected that dividends
received from domestic and certain foreign corporations will be part of the
Fund's gross income. Distributions by the Fund of such dividends to corporate
shareholders may be eligible for the "70% dividends received" deduction, subject
to the holding period and debt-financing limitations of the Code. However, the
portion of the Fund's gross income attributable to dividends received from
qualifying corporations is largely dependent on the Fund's investment activities
for a particular year and therefore cannot be predicted with certainty. In
addition, for purposes of the dividends received deduction available to
corporations, a capital gain dividend received from a regulated investment
company is not treated as a dividend.
Distributions of net capital gains (i.e., the excess of net long-term capital
gains over net short-term capital losses) by the Fund to its shareholders are
taxable to the recipient shareholders as long-term capital gains, without regard
to the length of time a shareholder has held Fund shares. Redemptions of shares
of the Fund are taxable events on which a shareholder may realize a gain or
loss.
To avoid a 31% federal backup withholding tax requirement on dividends,
distributions and redemption proceeds, individuals and other non-exempt
shareholders must certify their taxpayer identification number to the Fund on
the investment application and provide certain other certifications. A
shareholder may also be subject to backup withholding if the Internal Revenue
Service or a broker notifies the Fund that the number furnished by the
shareholder is subject to backup withholding for previous under-reporting of
interest or dividend income. Amounts withheld by the Fund are applied to the
shareholder's federal income tax liability. In addition, foreign shareholders
may be subject to federal income tax withholding of up to 30% of dividends,
distributions and redemption proceeds from the Fund.
Reports containing appropriate federal income tax information (relating to the
tax status of dividends and capital gain distributions by the Fund) will be
furnished to each shareholder not later than 30 days following the close of the
calendar year during which the payments are made.
The above discussion concerning the taxation of dividends and distributions
received by shareholders is applicable whether a shareholder receives such
payment in cash or reinvests such amount in additional shares of the Fund. Thus,
dividends and distributions, which are taxable as ordinary income or long-term
capital gain, are so taxable whether received in cash or reinvested in
additional shares of the Fund.
Additional information regarding the taxation of the Fund and its shareholders
is contained in the Statement of Additional Information under "Taxes."
CALCULATION OF SHARE PRICE
On each day that the Trust is open for business, the share price (net asset
value) of the Fund's shares is determined as of the close of the regular session
of trading on the New York Stock Exchange, currently 4:00 p.m., Eastern time.
Net asset value is determined on each day the New York Stock Exchange is open
for business and on any other day when there is sufficient trading in the Fund's
investments that its net asset value might be materially affected. The net asset
value per share of the Fund is calculated by dividing the sum of the value of
the securities held by the Fund plus cash or other assets minus all liabilities
(including estimated accrued expenses) by the total number of shares outstanding
of the Fund, rounded to the nearest cent.
<PAGE>
Portfolio securities are valued as follows: (1) securities which are traded on
stock exchanges or are quoted by NASDAQ are valued at the last reported sale
price as of the close of the regular session of trading on the New York Stock
Exchange on the day the securities are being valued, or, if not traded on a
particular day, at the most recent bid price, (2) securities traded in the
over-the-counter market, and which are not quoted by NASDAQ, are valued at the
most recent bid price, as obtained from one or more of the major market makers
for such securities, as of the close of the regular session of trading on the
New York Stock Exchange on the day the securities are being valued, (3)
securities which are traded both in the over-the-counter market and on a stock
exchange are valued according to the broadest and most representative market,
and (4) securities (and other assets) for which market quotations are not
readily available are valued at their fair value as determined in good faith in
accordance with consistently applied procedures established by and under the
general supervision of the Board of Trustees. The net asset value per share of
the Fund will fluctuate with the value of the securities it holds.
PERFORMANCE INFORMATION
The Fund may, from time to time, include figures indicating its total return and
average annual total return in advertisements or reports to shareholders or
prospective investors. Total return is based on the overall or percentage change
in value of a hypothetical investment in the Fund and assume all of the Fund's
dividends and capital gains distributions are reinvested A cumulative total
return reflects the Fund's performance over a stated period of time (for example
one and five year periods or since inception). Average annual total return
reflects the hypothetical annually compounded return that would have produced
the same cumulative total return if the Fund's performance had been constant
over the entire period.
Performance information for the Fund reflects only the performance of a
hypothetical investment in the Fund during the particular time period on which
the calculations are based. Performance information should be considered in
light of the Fund's investment objective and policies, the types and quality of
the Fund's portfolio investments, market conditions during the particular time
period and operating expenses. Such information should not be considered as a
representation of the Fund's future performance. For a further description of
the methods to be used to determine the Fund's average annual total return,
please refer to "Performance Information" in the Statement of Additional
Information. Additional information about the performance of the Fund will be
contained in the Fund's Annual Report to Shareholders, which may be obtained
from the Fund without charge.
GENERAL INFORMATION
Organization and Capital Structure
The Trust was organized in October 1997 as a Delaware business trust and is
authorized to issue an unlimited number of shares of beneficial interest. The
Trust currently has authorized the issuance of only one series of shares, the
Fund. The Board of Trustees may authorize the creation of additional series
without shareholder approval.
All shares, when issued, will be fully paid and non-assessable and will be
redeemable and freely transferable. All shares have equal voting rights. They
can be issued as full or fractional shares. A fractional share has pro rata the
same kind of rights and privileges as a full share. The shares possess no
preemptive or conversion rights.
Each share of the Fund has one vote. The voting rights of shareholders are
non-cumulative, so that holders of more than 50% of the shares can elect all
Trustees being elected. If the Trust authorizes additional series of shares as
separate funds, on issues affecting only a particular fund the shares of the
affected fund will vote as a separate series. An example of such an issue would
be a fundamental investment restriction pertaining to only one series.
The Board of Trustees of the Trust is responsible for managing the business and
affairs of the Fund. The Board exercises all of the rights and responsibilities
required by, or made available under, the Delaware Business trust Act.
SHAREHOLDER MEETINGS AND INQUIRIES
Annual meetings of shareholders will not be held unless called by the
shareholders pursuant to the Delaware Business Trust Act or unless required by
the 1940 Act and the rules and regulations promulgated thereunder. Special
meetings of the shareholders may be held, however, at any time and for any
purpose, (i) if called by the Chairman of the Board of Trustees, (ii) if called
by one or more shareholders holding 10% or more of the shares entitled to vote
on matters presented to the meeting, or (iii) if an annual meeting is not held
within any 13-month period, upon application of any shareholder, a court of
competent jurisdiction may order that such meeting be held. Shareholders may
address any inquiry about the Fund to The Boyle Fund, 2062 Jackson Street, San
Francisco, CA 94109 or by calling 1-415-923-5855.
REPORTS TO SHAREHOLDERS
The Fund will issue semiannual reports, which will include a list of securities
owned by the Fund, and financial statements which, in the case of the annual
report, will be examined and reported upon by the Fund's independent auditors.
<PAGE>
THE BOYLE MARATHON FUND
STATEMENT OF ADDITIONAL INFORMATION
January __, 1998
This Statement of Additional Information is not a Prospectus, but is
to be read in conjunction with the Prospectus of The Boyle Marathon Fund dated
January __, 1998. A copy of the Fund's Prospectus can be obtained by writing the
Fund at 2062 Jackson Street, San Francisco, California 94109, or by calling the
Fund at 1-415-923-5855.
TABLE OF CONTENTS
The Fund......................................................................15
Definitions, Policies and Risk Considerations.................................15
Quality Ratings of Corporate Bonds and Preferred Stocks.......................17
Investment Restrictions.......................................................18
Management of the Trust.......................................................19
Principal Security Holders....................................................19
Investment Advisory and Other Services........................................20
Securities Transactions.......................................................21
Purchase, Redemption and Pricing of Shares....................................21
Performance Information.......................................................22
Taxes.........................................................................23
Custodian.....................................................................24
Auditors......................................................................24
Miscellaneous Information.....................................................24
THE FUND
The Boyle Fund (the "Trust") was organized as a Delaware business trust
in October 1997. The Trust currently offers one series of shares to investors,
The Boyle Marathon Fund (the "Fund").
Each share of the Fund represents an equal proportionate interest in
the assets and liabilities of the Fund with each other share of the Fund and is
entitled to such dividends and distributions out of the income of the Fund as
are declared by the Trustees. The shares do not have cumulative voting rights or
any preemptive or conversion rights, and the Trustees have the authority from
time to time to divide or combine the shares of the Fund into a greater or
lesser number of shares of the Fund so long as the proportionate beneficial
interests in the assets of the Fund are in no way affected. In case of any
liquidation of the Fund, the holders of shares of the Fund will be entitled to
receive as a class a distribution out of the assets, net of the liabilities, of
the Fund. No shareholder is liable to further calls or to assessment by the Fund
without his express consent.
DEFINITIONS, POLICIES AND RISK CONSIDERATIONS
A more detailed discussion of some of the terms used and investment
policies described in the Prospectus (see "Investment Objectives, Policies and
Risk Considerations") appears below:
MAJORITY. As used in the Prospectus and this 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.
COMMERCIAL PAPER. Commercial paper consists of short-term (usually from
one to 270 days) unsecured promissory notes issued by corporations in order to
finance their current operations. The Fund will only invest in commercial paper
rated A-1 by Standard & Poor's Ratings Group ("Standard & Poor's") or Prime-1 by
Moody's Investors Service, Inc. ("Moody's") or unrated paper of issuers who have
outstanding unsecured debt rated AA or better by Standard & Poor's or Aa or
better by Moody's. Certain notes may have floating or variable rates. Variable
and floating rate notes with a demand notice period exceeding seven days will be
subject to the Fund's policy with respect to illiquid investments unless, in the
judgment of the Adviser, such note is liquid.
The rating of Prime-1 is the highest commercial paper rating assigned
by Moody's. Among the factors considered by Moody's in assigning ratings are the
following: valuation of the management of the issuer; economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks which
may be inherent in certain areas; evaluation of the issuer's products in
relation to competition and customer acceptance; liquidity; amount and quality
of long-term debt; trend of earnings over a period of 10 years; financial
strength of the issuer's parent company and the relationships which exist with
the issuer; and recognition by the management of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations. These factors are all considered in determining
whether the commercial paper is rated Prime-1. Issuers of commercial paper rated
A (highest quality) by Standard & Poor's have the following characteristics:
liquidity ratios are adequate to meet cash requirements; long-term senior debt
is rated "A" or better, although in some cases "BBB" credits may be allowed; the
issuer has access to at least two additional channels of borrowing; basic
earnings and cash flow have an upward trend with allowance made for unusual
circumstances; typically, the issuer's industry is well established and the
issuer has a strong position within the industry; and the reliability and
quality of management are unquestioned. The relative strength or weakness of the
above factors determines whether the issuer's commercial paper is rated A-1.
<PAGE>
BANK DEBT INSTRUMENTS. Bank debt instruments in which the Fund may
invest consist of certificates of deposit, bankers' acceptances and time
deposits issued by national banks and state banks, trust companies and mutual
savings banks, or by banks or institutions the accounts of which are insured by
the Federal Deposit Insurance Corporation or the Federal Savings and Loan
Insurance Corporation. Certificates of deposit are negotiable certificates
evidencing the indebtedness of a commercial bank to repay funds deposited with
it for a definite period of time (usually from 14 days to one year) at a stated
or variable interest rate. Bankers' acceptances are credit instruments
evidencing the obligation of a bank to pay a draft which has been drawn on it by
a customer, which instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity. Time deposits are
non-negotiable deposits maintained in a banking institution for a specified
period of time at a stated interest rate. The Fund will not invest in time
deposits maturing in more than seven days if, as a result thereof, more than 5%
of the value of its net assets would be invested in such securities and other
illiquid securities.
REPURCHASE AGREEMENTS. Repurchase agreements are transactions by which
the Fund purchases a security and simultaneously commits to resell that security
to the seller at an agreed upon time and price, thereby determining the yield
during the term of the agreement. In the event of a bankruptcy or other default
by the seller of a repurchase agreement, the Fund could experience both delays
in liquidating the underlying security and losses. To minimize these
possibilities, the Fund intends to enter into repurchase agreements only with
its Custodian, with banks having assets in excess of $10 billion and with
broker-dealers who are recognized as primary dealers in U.S. Government
obligations by the Federal Reserve Bank of New York. Collateral for repurchase
agreements is held in safekeeping in the customer-only account of the Fund's
Custodian at the Federal Reserve Bank. The Fund will not enter into a repurchase
agreement not terminable within seven days if, as a result thereof, more than 5%
of the value of its net assets would be invested in such securities and other
illiquid securities.
Although the securities subject to a repurchase agreement might bear
maturities exceeding one year, settlement for the repurchase would never be more
than one year after the Fund's acquisition of the securities and normally would
be within a shorter period of time. The resale price will be in excess of the
purchase price, reflecting an agreed upon market rate effective for the period
of time the Fund's money will be invested in the securities, and will not be
related to the coupon rate of the purchased security. At the time the Fund
enters into a repurchase agreement, the value of the underlying security,
including accrued interest, will equal or exceed the value of the repurchase
agreement, and, in the case of a repurchase agreement exceeding one day, the
seller will agree that the value of the underlying security, including accrued
interest, will at all times equal or exceed the value of the repurchase
agreement. The collateral securing the seller's obligation must be of a credit
quality at least equal to the Fund's investment criteria for portfolio
securities and will be held by the Custodian or in the Federal Reserve Book
Entry System.
For purposes of the Investment Company Act of 1940, as amended (the
"1940 Act"), a repurchase agreement is deemed to be a loan from the Fund to the
seller subject to the repurchase agreement and is therefore subject to the
Fund's investment restriction applicable to loans. It is not clear whether a
court would consider the securities purchased by the Fund subject to a
repurchase agreement as being owned by the Fund or as being collateral for a
loan by the Fund to the seller. In the event of the commencement of bankruptcy
or insolvency proceedings with respect to the seller of the securities before
repurchase of the security under a repurchase agreement, the Fund may encounter
delay and incur costs before being able to sell the security. Delays may involve
loss of interest or decline in price of the security. If a court characterized
the transaction as a loan and the Fund has not perfected a security interest in
the security, the Fund may be required to return the security to the seller's
estate and be treated as an unsecured creditor of the seller. As an unsecured
creditor, the Fund would be at the risk of losing some or all of the principal
and income involved in the transaction. As with any unsecured debt obligation
purchased for the Fund, the Investment Adviser seeks to minimize the risk of
loss through repurchase agreements by analyzing the creditworthiness of the
obligor, in this case, the seller. Apart from the risk of bankruptcy or
insolvency proceedings, there is also the risk that the seller may fail to
repurchase the security, in which case the Fund may incur a loss if the proceeds
to the Fund of the sale of the security to a third party are less than the
repurchase price. However, if the market value of the securities subject to the
repurchase agreement becomes less than the repurchase price (including
interest), the Fund will direct the seller of the security to deliver additional
securities so that the market value of all securities subject to the repurchase
agreement will equal or exceed the repurchase price. It is possible that the
Fund will be unsuccessful in seeking to enforce the seller's contractual
obligation to deliver additional securities.
MONEY MARKET SECURITIES. The Fund may under certain circumstances
invest a portion of its assets in money market funds. The 1940 Act prohibits the
Fund from investing more than 5% of the value of its total assets in any one
investment company, or more than 10% of the value of its total assets in
investment companies in the aggregate, and also restricts its investment in any
investment company to 3% of the voting securities of such investment company.
Investment in a money market fund involves payment of such fund's pro rated
share of advisory and administrative fees charged by such fund, in addition to
those paid by the Fund.
WARRANTS. The Fund may invest a portion of its assets in warrants. A
warrant gives the holder a right to purchase at any time during a specified
period a predetermined number of shares of common stock at a fixed price. Unlike
convertible debt securities or preferred stock, warrants do not pay a fixed
coupon or dividend. Investments in warrants involve certain risks, including the
possible lack of a liquid market for resale of the warrants, potential price
fluctuations as a result of speculation or other factors, and failure of the
price of the underlying security to reach or have reasonable prospects of
reaching a level at which the warrant can be prudently exercised (in which event
the warrant may expire without being exercised, resulting in a loss of the
Fund's entire investment therein).
<PAGE>
FOREIGN SECURITIES. Subject to the Fund's investment policies and
quality standards, the Fund may invest in the securities of foreign issuers.
Because the Fund may invest in foreign securities, investment in the Fund
involves risks that are different in some respects from an investment in a fund,
which invests only in securities of U.S. domestic issuers. Foreign investments
may be affected favorably or unfavorably by changes in currency rates and
exchange control regulations. There may be less publicly available information
about a foreign company than about a U.S. company, and foreign companies may not
be subject to accounting, auditing and financial reporting standards and
requirements comparable to those applicable to U.S. companies. There may be less
governmental supervision of securities markets, brokers and issuers of
securities. Securities of some foreign companies are less liquid or more
volatile than securities of U.S. companies, and foreign brokerage commissions
and custodian fees are generally higher than in the United States. Settlement
practices may include delays and may differ from those customary in United
States markets. Investments in foreign securities may also be subject to other
risks different from those affecting U.S. investments, including local political
or economic developments, expropriation or nationalization of assets,
restrictions on foreign investment and repatriation of capital, imposition of
withholding taxes on dividend or interest payments, currency blockage (which
would prevent cash from being brought back to the United States), and difficulty
in enforcing legal rights outside the United States.
BORROWING. The use of borrowing by the Fund involves special risk
considerations that may not be associated with other funds having similar
policies. Since substantially all of the Fund's assets fluctuate in value,
whereas the interest obligation resulting from a borrowing will be fixed by the
terms of the Fund's agreement with its lender, the asset value per share of the
Fund will tend to increase more when its portfolio securities increase in value
and decrease more when its portfolio securities decrease in value than would
otherwise be the case if the Fund did not borrow funds. In addition, interest
costs on borrowings may fluctuate with changing market rates of interest and may
partially offset or exceed the return earned on borrowed funds. Under adverse
market conditions, the Fund might have to sell portfolio securities to meet
interest or principal payments at a time when fundamental investment
considerations would not favor such sales.
ILLIQUID SECURITIES. Historically, illiquid securities have included
securities subject to contractual or legal restrictions on resale because they
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), securities which are otherwise not readily marketable and
securities such as repurchase agreements having a maturity of longer than seven
days. Securities which have not been registered under the Securities Act are
referred to as private placements or restricted securities and are purchased
directly from the issuer or in the secondary market. Mutual funds do not
typically hold a significant amount of these restricted or other illiquid
securities because of the potential for delays on resale and uncertainty in
valuation. Limitations on resale may have an adverse effect on the marketability
of portfolio securities and a mutual fund might be unable to dispose of
restricted securities promptly or at reasonable prices and might thereby
experience difficulty satisfying redemption requirements. A mutual fund might
also have to register such restricted securities in order to dispose of them,
resulting in additional expense and delay. Adverse market conditions could
impede such a public offering of securities.
In recent years, however, a large institutional market has
developed for certain securities that are not registered under the Securities
Act including repurchase agreements, commercial paper, foreign securities,
municipal securities and corporate bonds and notes. Institutional investors
depend on an efficient institutional market in which the unregistered security
can be readily resold or on an issuer's ability to honor a demand for repayment.
The fact that there are contractual or legal restrictions on resale to the
general public or to certain institutions may not be indicative of the liquidity
of such investments. The Board of Trustees may determine that such securities
are not illiquid securities notwithstanding their legal or contractual
restrictions on resale. In all other cases, however, securities subject to
restrictions on resale will be deemed illiquid.
The Fund does not intend presently to invest more than 5% of its net
assets in illiquid securities. In the event that the Fund's investments in
illiquid securities are deemed to exceed 5% of the Fund's net assets due to
changes in the liquidity of securities already held, the Fund will expeditiously
dispose of such securities in order to satisfy the 5% limitation.
QUALITY RATINGS OF CORPORATE BONDS AND PREFERRED STOCKS
The ratings of Moody's and Standard & Poor's for corporate bonds in
which the Fund may invest are as follows:
MOODY'S
Aaa - Bonds that are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa - Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present that
make the long-term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa - Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
<PAGE>
STANDARD & POOR'S
AAA - Bonds rated AAA have the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small degree.
A - Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB - Bonds rated BBB are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories.
The ratings of Moody's and Standard & Poor's for preferred stocks in
which the Fund may invest are as follows:
MOODY'S
aaa - An issue that is rated aaa is considered to be a top- quality
preferred stock. This rating indicates good asset protection and the least risk
of dividend impairment within the universe of preferred stocks.
aa - An issue that is rated aa is considered a high-grade preferred
stock. This rating indicates that there is reasonable assurance that earnings
and asset protection will remain relatively well maintained in the foreseeable
future.
a - An issue which is rated a is considered to be an upper- medium
grade preferred stock. While risks are judged to be somewhat greater than in the
"aaa" and "aa" classifications, earnings and asset protection are, nevertheless,
expected to be maintained at adequate levels.
baa - An issue that is rated baa is considered to be medium grade,
neither highly protected nor poorly secured. Earnings and asset protection
appear adequate at present but may be questionable over any great length of
time.
STANDARD & POOR'S
AAA - This is the highest rating that may be assigned by Standard &
Poor's to a preferred stock issue and indicates an extremely strong capacity to
pay the preferred stock obligations.
AA - A preferred stock issue rated AA also qualifies as a high-quality
fixed-income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated AAA.
A - An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the diverse
effects of changes in circumstances and economic conditions.
BBB - An issue rated BBB is regarded as backed by an adequate capacity
to pay the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the A category.
INVESTMENT RESTRICTIONS
The Fund has adopted the following investment restrictions as
matters of fundamental investment policy, which restrictions may not be changed
without the approval of a majority of the outstanding voting securities of the
Fund. The Fund may not:
1. Underwrite the securities of other issuers, except that the
Fund may, as indicated in the Prospectus, acquire restricted
securities under circumstances where, if such securities are
sold, the Fund might be deemed to be an underwriter for
purposes of the Securities Act of 1933. The Fund does not
intend to invest more than 5% of net assets in restricted
securities.
2. Purchase or sell real estate or interests in real estate, but
the Fund may purchase marketable securities of companies
holding real estate or interests in real estate.
3. Purchase or sell commodities or commodity contracts, including
futures contracts.
<PAGE>
4. Make loans to other persons except (i) by the purchase of a
portion of an issue of publicly distributed bonds, debentures
or other debt securities or privately sold bonds, debentures
or other debt securities immediately convertible into equity
securities, such purchases of privately sold debt securities
not to exceed 5% of the Fund's total assets, and (ii) the
entry into portfolio lending agreements (i.e. loans of
portfolio securities) provided that the value of securities
subject to such lending agreements may not exceed 30% of the
value of the Fund's total assets.
5. Purchase securities on margin, but it may obtain such
short-term credits as may be necessary for the clearance of
purchases and sales of securities.
6. Borrow money from banks except for temporary or emergency (not
leveraging) purposes, including the meeting of redemption
requests that might otherwise require the untimely disposition
of securities, in an aggregate amount not exceeding 5% of the
value of the Fund's total assets at the time any borrowing is
made.
7. Purchase or sell puts and calls on securities.
8. Make short sales of securities.
9. Participate on a joint or joint and several basis in any
securities trading account.
10. Purchase the securities of any other investment company except
in compliance with the 1940 Act.
11. Invest in or hold securities of any issuer if, to the
knowledge of the Fund, those officers and directors of the
Fund or the Investment Adviser (defined below) owning
individually more than 1/2 of 1% of the securities of such
issuer together own more than 5% of the securities of such
issuer.
With respect to the percentages adopted by the Fund as maximum
limitations on the Fund's investment policies and restrictions, an excess above
the fixed percentage will not be a violation of the policy or restriction unless
the excess results immediately and directly from the acquisition of any security
or the action taken.
MANAGEMENT OF THE TRUST
The business of the Trust is managed under the direction of the Board
of Trustees in accordance with the Certificate of Trust, which Certificate of
Trust has been filed with the Securities and Exchange Commission and is
available upon request. Pursuant to the Certificate of Trust, the Trustees shall
elect a Chairman, who shall appoint officers, including a president, and a Chief
Financial Officer. The Board of Trustees retains the power to conduct, operate
and carry on the business of the Trust and has the power to incur and pay any
expenses which, in the opinion of the Board of Trustees, are necessary or
incidental to carry out any of the Trust's purposes. The Trustees, officers,
employees and agents of the Trust, when acting in such capacities, shall not be
subject to any personal liability except for his or her own bad faith, willful
misfeasance, gross negligence or reckless disregard of his or her duties.
Following is a list of the Trustees and executive officers of the Trust and
their current annual compensation from the Trust.
NAME AGE POSITION HELD COMPENSATION
*Michael J. Boyle 50 Trustee/President $0
*Joanne E. Boyle 50 Trustee/Chief Financial Officer $0
James A. Hughes, Jr. 67 Trustee $0
Edward Loftus 31 Trustee $0
Mr. Boyle and Mr. Loftus are first cousins.
* This Trustee is an "interested person" (as defined in section 2(a)(19) of the
1940 Act) by virtue of his affiliation with the Investment Adviser.
The principal occupations of the Trustees and officers of the Fund during the
past five years are set forth below:
MICHAEL J. BOYLE, 2062 Jackson Street, San Francisco, California 94109
is the Founder and has been President of Boyle Management and Research, Inc.
since its founding in October 1997. From April 1990-June1996, Mr. Boyle was the
Vice President of Business Development for a division of Harris Corporation, an
information processing and communication company; from July 1996 to January
1997, Mr. Boyle was Senior Counsel for Harris Corporation. Mr. Boyle was a
consultant from January 1997 to October 1997.
JOANNE E. BOYLE, 2062 Jackson Street, San Francisco, California 94109
is the Co-Founder and has been the Chief Financial Officer of Boyle Management
and Research, Inc. since its founding in October 1997. From August 1983 to
December 1997, she served as President of Deck the Walls, a privately owned
retail store in Melbourne, Florida.
<PAGE>
JAMES A. HUGHES, JR., 1111 Dorset Drive, West Chester, Pennsylvania
19382 is currently a Private Investor; prior to this he served as a Vice
President of ORA of Mt. Laurel, New Jersey, from February 1993 to June 1994; and
prior to this, he served as Vice-President of Manchester, Wilmington, Delaware
from May 1992 to January 1993.
EDWARD LOFTUS, 11038 Cannonade Lane, Parker, Colorado 80134, is
currently the President of the Loftus Insurance Agency, Inc.; he served in this
capacity from January 1995; prior to this, he was a District Manager for Akzo
Nobel, NA from June 1993 to December 1994; prior to this, he was a student at
Notre Dame University from June 1992 to June 1993.
PRINCIPAL SECURITY HOLDERS
As of December __, 1997, all of the outstanding shares
if the Fund were owned by Boyle Management and Research, Inc., 2062
Jackson Street, San Francisco, California 94109. A shareholder who
beneficially owns, directly or indirectly, 25% of the Fund's voting
securities may be deemed a "control person" (as defined in the 1940
Act) of the Fund. Boyle Management and Research, Inc. is controlled by
Michael J. Boyle, Trustee and President of the Trust, and Joanne E.
Boyle, Trustee and Chief Financial Officer of the Trust.
INVESTMENT ADVISORY AND OTHER SERVICES
THE INVESTMENT ADVISER
Boyle Management and Research, Inc., a California corporation, 2062
Jackson Street, San Francisco, California 94109 (the "Investment Adviser"), is
registered as an investment adviser with the Securities and Exchange Commission
under the Investment Advisers Act of 1940. The Investment Adviser is controlled
and wholly owned by Michael J. and Joanne E. Boyle.
The Investment Advisory and Management Agreement (the "Advisory
Agreement") between the Trust and the Investment Adviser was approved by the
Board of Trustees of the Trust, including a majority of the Trustees who were
not a party to the Advisory Agreement or "interested persons" (as defined in the
1940 Act) of a party to the Advisory Agreement, at a Board of Trustees meeting
held on December 6, 1997.
Under the Advisory Agreement, the Investment Adviser (i) manages the
investment operations of the Fund and the composition of its portfolio,
including the purchase, retention and disposition of securities in accordance
with the Fund's investment objective, (ii) provides all statistical, economic
and financial information reasonably required by the Fund and reasonably
available to the Investment Adviser, (iii) provides the Custodian of the Fund's
securities on each business day with a list of trades for that day, and (iv)
provides persons satisfactory to the Trust's Board of Trustees to act as
officers and employees of the Trust.
By its terms, the Advisory Agreement remains in force from year to
year, subject to annual approval by (a) the Board of Trustees or (b) a vote of
the majority of the Fund's outstanding voting securities; provided that in
either event continuance is also approved by a majority of the Trustees who are
not interested persons of the Trust, by a vote cast in person at a meeting
called for the purpose of voting such approval. The Advisory Agreement may be
terminated at any time, on 60 days' written notice, without the payment of any
penalty, by the Board of Trustees, by a vote of the majority of the Fund's
outstanding voting securities, or by the Investment Adviser. The Advisory
Agreement automatically terminates in the event of its assignment, as defined by
the 1940 Act and the rules thereunder.
Pursuant to the Advisory Agreement, the Fund pays to the
Investment Adviser, on a monthly basis, an advisory fee equal to 1.5% per annum
of the Fund's average daily net assets.
The Investment Adviser may act as an investment adviser to other
persons, firms or corporations (including investment companies), and may have
numerous advisory clients in addition to the Fund.
<PAGE>
THE ADMINISTRATION AGREEMENT
The Board of Trustees of the Trust has approved an Administration
Agreement with the Investment Adviser wherein the Investment Adviser is
responsible for the provision of administrative and supervisory services to the
Fund. The Investment Adviser, at its expense, shall supply the Trustees and the
officers of the Fund with all statistical information and reports reasonably
required by it and reasonably available to the Investment Adviser. The
Investment Adviser shall oversee the maintenance of all books and records with
respect to the Fund's security transactions and the Fund's book of account in
accordance with all applicable federal and state laws and regulations. The
Investment Adviser will arrange for the preservation of the records required to
be maintained by the 1940 Act.
Pursuant to the Administration Agreement, the Fund will pay to the
Investment Adviser, on a monthly basis, a fee equal to 1% per annum of the
Fund's average daily net assets.
The Administration Agreement may be terminated by the Trust at any
time, on 60 days' notice to the Investment Adviser, without penalty either (1)
by vote of the Board of Trustees of the Trust, or (2) by vote of a majority of
the outstanding voting securities of the Fund. It may be terminated at any time
by the Investment Adviser on 60 days' written notice to the Trust.
MAXUS INFORMATION SYSTEMS, INC.
Maxus Information Services, Inc. ("Maxus"), The Tower at Erieview,36th
Floor, 1301 East Ninth Street, Cleveland, Ohio 44114, is retained by the
Investment Adviser to maintain the records of each shareholder's account,
process purchases and redemptions of the Fund's shares and act as dividend and
distribution disbursing agent. Maxus also provides administrative services to
the Fund, calculates daily net asset value per share and maintains such books
and records as are necessary to enable Maxus to perform its duties. For the
performance of these services, the Investment Adviser (not the Fund) pays Maxus
a fee which will vary with the number of States in which the Fund elects to do
business; a fee for transfer agency and shareholder services at the annual rate
per shareholder account of the Fund (subject to a minimum fee); and a monthly
fee for accounting and pricing services which will vary according to the Fund's
average net assets during such month (subject to a minimum fee). Maxus is a
wholly owned subsidiary of Resource Management, Inc., an Ohio corporation with
interests primarily in the financial services industry.
SECURITIES TRANSACTIONS
The Investment Adviser furnishes advice and recommendations with
respect to the Fund's portfolio decisions and, subject to the supervision of the
Board of Trustees of the Trust, determines the broker to be used in each
specific transaction. In executing the Fund's portfolio transactions, the
Investment Adviser seeks to obtain the best net results for the Fund, taking
into account such factors as the overall net economic result to the Fund
(involving both price paid or received and any commissions and other costs
paid), the efficiency with which the specific transaction is effected, the
ability to effect the transaction where a large block is involved, the known
practices of brokers and the availability to execute possibly difficult
transactions in the future and the financial strength and stability of the
broker. While the Investment Adviser generally seeks reasonably competitive
commission rates, the Fund does not necessarily pay the lowest commission or
spread available.
The Investment Adviser may direct the Fund's portfolio transactions to
persons or firms because of research and investment services provided by such
persons or firms if the amount of commissions in effecting the transactions is
reasonable in relationship to the value of the investment information provided
by those persons or firms. Such research and investment services are those that
brokerage houses customarily provide to institutional investors and include
statistical and economic data and research reports on particular companies and
industries. These services may be used by the Investment Adviser in connection
with all of its investment activities, and some of the services obtained in
connection with the execution of transactions for the Fund may be used in
managing the Investment Adviser's other investment accounts.
The Fund may deal in some instances in securities that are not listed
on a national securities exchange but are traded in the over-the-counter market.
It may also purchase listed securities through the "third market" (i.e., other
than on the exchanges on which the securities are listed). When transactions are
executed in the over-the-counter market or the third market, the Investment
Adviser will seek to deal with primary market makers and to execute transactions
on the Fund's own behalf, except in those circumstances where, in the opinion of
the Investment Adviser, better prices and executions may be available elsewhere.
The Fund does not allocate brokerage business in return for sales of the Fund's
shares.
Neither the Investment Adviser nor any affiliated person thereof will
participate in commissions paid by the Fund to brokers or dealers or will
receive any reciprocal business, directly or indirectly, as a result of such
commissions. The Fund will not pay mark-ups.
The Board of Trustees reviews periodically the allocation of brokerage
orders to monitor the operation of these policies.
PURCHASE, REDEMPTION AND PRICING OF SHARES
CALCULATION OF SHARE PRICE
The share price (net asset value) of the shares of the Fund is
determined as of the close of the regular session of trading on the New York
Stock Exchange (currently 4:00 p.m., Eastern Time), on each day the Fund is open
for business. Net asset value is determined on every day except Saturdays,
Sundays and the following holidays: New Year's Day, President's Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
Net asset value also may be determined on other days in which there is
sufficient trading in the Fund's portfolio securities that its net asset value
might be materially affected. For a description of the methods used to determine
the share price, see "Calculation of Share Price" in the Prospectus.
<PAGE>
In valuing the Fund's assets for the purpose of determining net asset
value, readily marketable portfolio securities listed on a national securities
exchange are valued at the last sale price on such exchange on the business day
as of which such value is being determined. If there has been no sale on such
exchange on such day, the security is valued at the closing bid price on such
day. If no bid price is quoted on such exchange on such day, then the security
is valued by such method as the Investment Adviser under the supervision of the
Board of Trustees determines in good faith to reflect its fair value. Readily
marketable securities traded only in the over-the-counter market are valued at
the current bid price. If no bid price is quoted on such day, then the security
is valued by such method as the Investment Adviser under the supervision of the
Board of Trustees determines in good faith to reflect its fair value. All other
assets of the Fund, including restricted securities and securities that are not
readily marketable, are valued in such manner as the Investment Adviser under
the supervision of the Board of Trustees in good faith deems appropriate to
reflect their fair value.
PURCHASE OF SHARES
Orders for shares received by the Fund in proper form prior to the
close of business on the New York Stock Exchange (the "Exchange") on each day
during such periods that the Exchange is open for trading are priced at net
asset value per share computed as of the close of the Exchange at day's end.
Orders received in proper form after the close of the Exchange, or on a day it
is not open for trading, are priced at the close of such Exchange on the next
day on which it is open for trading at the next determined net asset value per
share.
REDEMPTION OF SHARES
The right of redemption may not be suspended or the date of payment
upon redemption postponed for more than seven calendar days after a
shareholder's redemption request is made in accordance with the procedures set
forth in the Prospectus, except for any period during which the Exchange is
closed (other than customary weekend and holiday closing) or during which the
Securities and Exchange Commission determines that trading thereon is
restricted, or for any period during which an emergency (as determined by the
Securities and Exchange Commission) exists as a result of which disposal by the
Fund of securities owned by it is not reasonably practicable or as a result of
which it is not reasonably practicable for the Fund to fairly determine the
value of its net assets, or for such other period as the Securities and Exchange
Commission may by order permit for the protection of security holders of the
Fund.
The Fund will redeem all or any portion of a shareholder's shares of
the Fund when requested in accordance with the procedures set forth in the "How
to Redeem Shares" section of the Prospectus.
REDEMPTION IN KIND
Payment of the net redemption proceeds may be made either in cash or in
portfolio securities (selected in the discretion of the Investment Adviser under
supervision of the Board of Trustees and taken at their value used in
determining the net asset value), or partly in cash and partly in portfolio
securities. However, payments will be made wholly in cash unless the Board of
Trustees believes that economic conditions exist which would make such a
practice detrimental to the best interests of the Fund. If payment for shares
redeemed is made wholly or partly in portfolio securities, brokerage costs may
be incurred by the investor in converting the securities to cash.
PERFORMANCE INFORMATION
The Fund's total returns are based on the overall dollar or percentage
change in value of a hypothetical investment in the Fund, assuming all dividends
and distributions are reinvested. Average annual total return reflects the
hypothetical annually compounded return that would have produced the same
cumulative total return if the Fund's performance had been constant over the
entire period presented. Because average annual total returns tend to smooth out
variations in the Fund's returns, investors should recognize that they are not
the same as actual year-by-year returns.
For the purposes of quoting and comparing the performance of the Fund
to that of other mutual funds and to other relevant market indices in
advertisements, performance will be stated in terms of average annual total
return. Under regulations adopted by the Securities and Exchange Commission,
funds that intend to advertise performance must include average annual total
return quotations calculated according to the following formula:
P (1+T) n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years (1, 5, or 10)
ERV = ending redeemable value of a hypothetical $1,000 payment made
at the beginning of the 1-, 5-, or 10- year period, at the end of
such period (or fractional portion thereof).
Under the foregoing formula, the time periods used in advertising will
be based on rolling calendar quarters, updated to the last day of the most
recent quarter prior to submission of the advertising for publication, and will
cover 1, 5, and 10 year periods of the Fund's existence or shorter periods
dating from the commencement of Fund registration. In calculating the ending
redeemable value, all dividends and distributions by the Fund are assumed to
have been reinvested at net asset value as described in the Prospectus on the
reinvestment dates during the period. Additionally, redemption of shares is
assumed to occur at the end of each applicable time period.
<PAGE>
The foregoing information should be considered in light of the Fund's
investment objectives and policies, as well as the risks incurred in the Fund's
investment practices. Future results will be affected by the future composition
of the Fund's portfolio, as well as by changes in the general level of interest
rates, and general economic and other market conditions.
The Fund may also advertise total return (a "nonstandardized
quotation") which is calculated differently from average annual total return. A
nonstandardized quotation of total return may be a cumulative return which
measures the percentage change in the value of an account between the beginning
and end of a period, assuming no activity in the account other than reinvestment
of dividends and capital gains distributions.
A nonstandardized quotation may also indicate average annual compounded
rates of return over periods other than those specified for average annual total
return. A nonstandardized quotation of total return will always be accompanied
by the Fund's average annual total return as described above.
The performance quotations described above are based on historical
earnings and are not intended to indicate future performance.
To help investors better evaluate how an investment in the Fund might
satisfy their investment objective, advertisements regarding the Fund may
discuss various measures of Fund performance, including current performance
ratings and/or rankings appearing in financial magazines, newspapers and
publications which track mutual fund performance. Advertisements may also
compare performance (using the calculation methods set forth in the Prospectus)
to performance as reported by other investments, indices and averages. When
advertising current ratings or rankings, the Fund may use the following
publications or indices to discuss or compare Fund performance:
Lipper Mutual Fund Performance Analysis measures total return and
average current yield for the mutual fund industry and ranks individual mutual
fund performance over specified time periods assuming reinvestment of all
distributions, exclusive of sales loads. The Fund may provide comparative
performance information appearing in the Small Company Growth Funds category. In
addition, the Fund may use comparative performance information of relevant
indices, including the S&P 500 Index, the Dow Jones Industrial Average, the
Russell 2000 Index, the NASDAQ Composite Index and the Value Line Composite
Index. The S&P 500 Index is an unmanaged index of 500 stocks, the purpose of
which is to portray the pattern of common stock price movement. The Dow Jones
Industrial Average is a measurement of general market price movement for 30
widely held stocks listed on the New York Stock Exchange. The Russell 2000
Index, representing approximately 11% of the U.S. equity market, is an unmanaged
index comprised of the 2,000 smallest U.S. domiciled publicly-traded common
stocks in the Russell 3000 Index (an unmanaged index of the 3,000 largest U.S.
domiciled publicly-traded common stocks by market capitalization representing
approximately 98% of the U.S. publicly-traded equity market). The NASDAQ
Composite Index is an unmanaged index which averages the trading prices of more
than 3,000 domestic over-the-counter companies. The Value Line Composite Index
is an unmanaged index comprised of approximately 1,700 stocks, the purpose of
which is to portray the pattern of common stock price movement.
In assessing such comparisons of performance an investor should keep in
mind that the composition of the investments in the reported indices and
averages is not identical to the Fund's portfolio, that the averages are
generally unmanaged and that the items included in the calculations of such
averages may not be identical to the formula used by the Fund to calculate its
performance. In addition, there can be no assurance that the Fund will continue
this performance as compared to such other averages.
TAXES
The Fund has elected, and intends to qualify annually, for the special
tax treatment afforded a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). To qualify as a
regulated investment company, the Fund must, among other things, (a) derive in
each taxable year at least 90% of its gross income from dividend, interest,
payments with respect to securities loans, and gains from the sale or other
disposition of stock, securities or foreign currencies, or other income
(including gains from options, futures and forward contracts) derived with
respect to its business of investing in such stock, securities or currencies;
(b) derive in each taxable year less than 30% of its gross income from the sale
or other disposition of certain assets held less than three months, namely (1)
stocks or securities, (2) options, futures or forward contracts (other than
those on foreign currencies), and (3) foreign currencies (or options, futures
and forward contracts on foreign currencies) not directly related to the
business of investing in stocks and securities; (c) diversify its holdings so
that, at the end of each quarter of the taxable year, (i) at least 50% of the
market value of the Fund's assets is represented by cash, U.S. Government
securities, the securities of other regulated investment companies, and other
securities, with such other securities of any one issuer limited for the
purposes of this calculation to an amount not greater than 5% of the value of
the Fund's total assets and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its total assets is invested
in the securities of any one issuer (other than U.S. Government securities or
the securities of other regulated investment companies) or in two or more
issuers which the Fund controls and which are engaged in the same or similar
trades or businesses; and (d) distribute at least 90% of its investment company
taxable income (which includes dividends, interest and net short-term capital
gains in excess of any net long-term capital losses) each taxable year.
<PAGE>
As a regulated investment company, the Fund will not be subject to U.S.
Federal income tax on its investment company taxable income and net capital
gains (any long-term capital gains in excess of the sum of net short-term
capital losses and capital loss carryovers available from the eight prior
years), if any, that it distributes to shareholders. The Fund intends to
distribute annually to its shareholders substantially all of its investment
company taxable income and any net capital gains. In addition, amounts not
distributed by the Fund on a timely basis in accordance with a calendar year
distribution requirement are subject to a nondeductible 4% excise tax. To avoid
the tax, the Fund must distribute during each calendar year an amount equal to
the sum of (1) at least 98% of its ordinary income (with adjustment) and its net
capital gain (not taking into account any capital gains or losses from sales and
exchanges) for the calendar year and (2) at least 98% of its capital gains in
excess of its capital losses (and adjusted for certain ordinary losses) for the
12 month period ending on October 31 of the calendar year, and (3) all ordinary
income and capital gains for previous years that were not distributed during
such years. In order to avoid application of the excise tax, the Fund intends to
make distributions in accordance with these distribution requirements.
Corporate shareholders should be aware that availability of the
dividends received deduction is subject to certain restrictions. For example,
the deduction is not available if Fund shares are deemed to have been held for
less than 46 days and is reduced to the extent such shares are treated as
debt-financed under the Code. Dividends, including the portions thereof
qualifying for the dividends received deduction, are includible in the tax base
on which the federal alternative minimum tax is computed. Dividends of
sufficient aggregate amount received during a prescribed period of time and
qualifying for the dividends received deduction may be treated as "extraordinary
dividends" under the Code, resulting in a reduction in a corporate shareholder's
federal tax basis in its Fund shares.
The Fund may invest as much as5% of its net assets in securities of
foreign companies and may therefore be liable for foreign withholding and other
taxes, which will reduce the amount available for distribution to shareholders.
Tax conventions between the United States and various other countries may reduce
or eliminate such taxes. A foreign tax credit or deduction is generally allowed
for foreign taxes paid or deemed to be paid. A regulated investment company may
elect to have the foreign tax credit or deduction claimed by the shareholders
rather than the company if certain requirements are met, including the
requirement that more than 50% of the value of the company's total assets at the
end of the taxable year consist of securities in foreign corporations. Because
the Fund does not anticipate investment in securities of foreign corporations to
this extent, the Fund will likely not be able to make this election and foreign
tax credits will be allowed only to reduce the Fund's tax liability, if any.
The Fund may also be subject to special rules under the Code that apply
to income derived from stock issued by a "passive foreign investment company"
(or PFIC), which might subject the Fund to a non-deductible federal income tax.
The Fund may be able to avoid this tax by electing to be taxed on its share of
the PFIC's income (whether or not such income is actually distributed by the
PFIC). The Fund will endeavor to limit its exposure to the PFIC tax by investing
in PFICs only where the election to be taxed currently will be made. Because it
is not always possible to identify a foreign issuer as a PFIC before an
investment is made, however, the Fund may incur the PFIC tax in some instances.
Under the Code, upon disposition of securities denominated in a foreign
currency, gains or losses attributable to fluctuations in the value of the
foreign currency between the date of acquisition of the securities and the date
of disposition are treated as ordinary gain or loss. These gains or losses
referred to under the Code as "Section 988" gains or losses, may increase or
decrease the amount of the Fund's investment company taxable income.
Any dividend or distribution received shortly after a share purchase
will have the effect of reducing the net asset value of such shares by the
amount of such dividend or distribution. Such dividend or distribution is fully
taxable. Accordingly, prior to purchasing shares of the Fund, an investor should
carefully consider the amount of dividends or capital gains distributions, which
are expected to be or have been announced.
Generally, the Code's rules regarding the determination and character
of gain or loss on the sale of a capital asset apply to a sale, redemption or
repurchase of shares of the Fund that are held by the shareholder as capital
assets. However, if a shareholder sells shares of the Fund which he has held for
less than six months and on which he has received distributions of capital
gains, any loss on the sale or exchange of such shares must be treated as
long-term capital loss to the extent of such distributions. Any loss realized on
the sale of shares of the Fund will be disallowed by the "wash sale" rules to
the extent the shares sold are replaced (including through the receipt of
additional shares through reinvested dividends) within a period of time
beginning 30 days before and ending 30 days after the shares are sold. In such a
case, the basis of the shares acquired will be adjusted to reflect the
disallowed loss.
Provided that the Fund qualifies as a regulated investment company
under the Code, it will not be liable for California corporate taxes, other than
a minimum franchise tax, if all of its income is distributed to shareholders for
each taxable year.
The above discussion and the related discussion in the Prospectus are
not intended to be complete discussions of all applicable federal tax
consequences of an investment in the Fund. No law firm has expressed an opinion
in respect thereof. Nonresident aliens and foreign persons are subject to
different tax rules, and may be subject to withholding of up to 30% on certain
payments received from the Fund. Shareholders are advised to consult with their
own tax advisors concerning the application of foreign, federal, state and local
taxes to an investment in the Fund.
CUSTODIAN
Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263, has
been retained to act as Custodian for the Fund's investments. Fifth Third Bank
acts as the Fund's depository, safekeeps its portfolio securities, collects all
income and other payments with respect thereto, disburses funds as instructed
and maintains records in connection with its duties.
AUDITORS
The firm of McCurdy & Associates CPA's, Inc. 27955 Clemens Road,
Westlake, Ohio 44145 has been selected as independent auditors for the Fund.
McCurdy & Associates will perform an annual audit of the Fund's financial
statements and will advise the Fund as to certain accounting and tax matters.
<PAGE>
MISCELLANEOUS INFORMATION
This Statement of Additional Information and the Prospectus do
not contain all the information included in the Trust's registration statement
filed with the Securities and Exchange Commission under the Securities Act with
respect to the securities offered hereby, certain portions of which have been
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission. The registration statement, including the exhibits filed therewith,
may be examined at the offices of the Securities and Exchange Commission in
Washington, D.C.
Statements contained herein and in the Prospectus as to the
contents of any contract or other documents referred to are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other documents filed as an exhibit to the registration statement, each such
statement being qualified in all respects by such reference.
PART C OTHER INFORMATION - - Financial Statements and Exhibits
(a) Financial Statement - - Balance Sheet of the Fund dated
December __, 1997*
(b) Exhibits
(1) Certificate of Trust
(2) By-Laws
(3) Inapplicable
(4) Inapplicable
(5) Advisory Agreement - Boyle Management and Research, Inc.
(6) Inapplicable
(7) Inapplicable
(8) Custody Agreement with Fifth Third Bank*
(9) Administration Agreement with Boyle Management and Research,
Inc.
(10) Opinion and Consent of Counsel relating to Issuance of Shares*
(11) Consent of Independent Public Accountants*
(12) Inapplicable
(13) Agreement Relating to Initial Capital *
(14) Prototype Individual Retirement Account*
(15) Inapplicable
(16) Inapplicable
(17) Financial Data Schedule for Electronic Filers*
(18) Inapplicable
* To be filed by Amendment
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT.
No person is directly or indirectly controlled by or under
common control with the Registrant.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
As of December __, 1997, the only holder of securities of the
Fund was Boyle Management and Research, Inc., which is Controlled by Michael J.
Boyle, Trustee and President of the Trust and Joanne E. Boyle, Trustee and
Chief Financial Officer of the Trust.
<PAGE>
ITEM 27. INDEMNIFICATION.
Under section 3817(a) of the Delaware Business trust Act, a
Delaware Business trust has the power to indemnify and hold
harmless any trustee, beneficial owner or other person from
and against any and all claims and demands whatsoever.
Reference is made to Article V of the Certificate of Trust of
The Boyle Fund (the "Trust")(Exhibit 1) pursuant to which no
trustee, officer, employee or agent of the Trust shall be
subject to any personal liability to the maximum extent
permitted by law.
Further, reference is also made to Section 11.1 the By-Laws of
the Trust (Exhibit 2), which provides that the Trust shall
indemnify each of its trustees, officers, employees and agents
against all liabilities and expenses reasonably incurred by
him or her in connection with the defense or disposition of
any actions, suits or other proceedings by reason of his or
her being or having been a trustee, officer, employee or
agent, except with respect to any matter as to which he or she
shall have been adjudicated to have acted in or with bad
faith, willful misfeasance, gross negligence or reckless
disregard of his or her duties. The Trust will comply with
Section 17(h) of the Investment Company Act of 1940, as
amended (the "1940 Act") and 1940 Act Releases number 7221
(June 9, 1972) and number 11330 (September 2, 1980).
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of the Trust pursuant to the
foregoing, the Trust has been advised that in the opinion of
the Securities and Exchange Commission, such indemnification
is against public policy and therefore may be unenforceable.
In the event that a claim for indemnification (except insofar
as it provides for the payment by the Trust of expenses
incurred or paid by a trustee, officer or controlling person
in the successful defense of any action, suit or proceeding)
is asserted against the Trust by such trustee, officer or
controlling person and the Securities and Exchange Commission
is still of the same opinion, the Trust will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by
it is against public policy as expressed in the Securities Act
of 1933 and will be governed by the final adjudication of such
issue.
Indemnification provisions exist in the Investment Advisory
and Management Agreement, Administration Agreement and
Custodian Agreement which agree to indemnify the parties the
agreements for all actions related to their official duties
except for actions taken in bad faith, gross negligence, or
willful misfeasance, or willful disregard of his or her
duties.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT
ADVISER
(a) Michael J. Boyle was a self employed consultant from
January 1997 to October 1997; prior to that, Mr. Boyle was Senior Counsel with
Harris Corporation, an electronics and communication company headquartered in
Melbourne, Florida from July 1996 to January 1997; prior to that, Mr. Boyle was
a Vice-President of Business Development for an operating division of Harris
Corporation from April 1990 to June 1996.
(b) Joanne E. Boyle was President of Deck the Walls, a
privately owned retail store in Melbourne, Florida from August 1983 to December
1997.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) Inapplicable
(b) Inapplicable
(c) Inapplicable
ITEM 30. 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 its offices located at 2062 Jackson Street, San
Francisco, California 94109, at the offices of the
Registrant's Transfer Agent located at The Tower at Erieview,
36th Floor, 1301 East Ninth Street, Cleveland, Ohio 44114, and
at the offices of the Custodian at 38 Fountain Square Plaza,
Cincinnati, Ohio 45263.
<PAGE>
ITEM 31. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A AND B.
Inapplicable
ITEM 32. UNDERTAKINGS.
(a) Inapplicable
(b) The Registrant undertakes to file a
post-effective amendment, using reasonably
current financial statements, which need not
be certified, within four to six months from
the effective date of the Registrant's
Registration Statement under the Securities
Act of 1933.
(c) The Registrant undertakes that, if so
requested, it will furnish each person to
whom a prospectus is delivered with a copy of
Registrant's latest annual report to
shareholders without charge.
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 below on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco and the State of California on the 6th
of December 1997.
THE BOYLE FUND
By: /S/ Michael J. Boyle
--------------------
Michael J. Boyle, President
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.
SIGNATURE TITLE DATE
/S/ MICHAEL J. BOYLE President and December 6, 1997
- --------------------
............................... Trustee
Michael J. Boyle
/S/ JOANNE E. BOYLE Chief Financial Officer December 6, 1997
- -------------------
............................... and Trustee
Joanne E. Boyle
/S/ JAMES A. HUGHES, JR. Trustee December 6, 1997
- ------------------------
...............................
James A. Hughes, Jr.
/S/ EDWARD LOFTUS Trustee December 6, 1997
..............................
Edward Loftus
<PAGE>
INDEX TO EXHIBITS
(1) Certificate of Trust
(2) By-Laws of the Trust
(3) Inapplicable
(4) Inapplicable
(5) Advisory Agreement with Boyle Management and Research, Inc.
(6) Inapplicable
(7) Inapplicable
(8) Custody Agreement with Fifth Third Bank *
(9) Administration Agreement with Boyle Management and Research,
Inc.
(10) Opinion and Consent of Counsel relating to issuance of
shares *
(11) Consent of Independent Public Accountants*
(12) Inapplicable
(13) Agreement Relating to Initial Capital *
(14) Prototype Individual Retirement Account*
(15) Inapplicable
(16) Inapplicable
(17) Financial Data Schedule*
(18) Inapplicable
* To be filed by Amendment
<PAGE>
Exhibit 1
STATE OF DELAWARE
CERTIFICATE OF TRUST
This Certificate of Trust is filed in accordance with the
provisions of the Delaware Business Trust Act (12 Del. C. Section 3801 et seq.)
and sets forth the following:
ARTICLE I
The name of the Trust is The BOYLE FUND (which is hereinafter
called the "Trust"). The effective date of the Trust shall be the date of filing
with the Delaware Secretary of State. The period of existence is perpetual.
ARTICLE II
The name and business address of the Registered Agent is Leo J.
Boyle, Esq., 5197 W. Woodmill Drive #26, Wilmington, Delaware 19808.
ARTICLE III
The Trust is formed for the following purpose or purposes:
(a) To conduct, operate and carry on the business of an open-end
management investment company registered as such with the Securities and
Exchange Commission pursuant to the Investment Company Act of 1940, as amended;
and
(b) To exercise and enjoy all powers, rights, and privileges granted
to and conferred upon Trusts by the Delaware Business Trust Law, now or
hereafter in force.
The foregoing clauses shall be construed as powers as well as objects
and purposes.
.
ARTICLE IV
(1) The total number of shares, which the Trust has authority to issue, is
unlimited. The Board of Trustees of the Trust shall have full power and
authority to create and establish and to classify or to reclassify, as the case
may be, any Shares of the Trust in separate and distinct series ("Series") and
classes of Series ("Classes"). The Shares of said Series or Classes of stock
shall have such preferences, rights, voting powers, restrictions, limitations as
to dividends, qualifications, and terms and conditions of redemption as shall be
fixed and determined from time to time by the Board of Trustees. The
establishment of any Series or Class shall be effective upon the adoption of a
resolution by the Board of Trustees setting forth such establishment and
designation and the relative rights and preferences of the Shares of such Series
or Class. At any time that there are no Shares outstanding of any particular
Series or Class previously established and designated, the Trustees may abolish
that Series or Class and the establishment and designation thereof.
(2) The Board of Trustees is hereby expressly granted authority to increase or
decrease the number of Shares of any Series or Class, but the number of Shares
of any Series or Class shall not be decreased by the Board of Trustees below the
number of Shares thereof then outstanding, and, from time to time to designate
or redesignate the name of any Class or Series whether or not Shares of such
Class or Series are outstanding. All Shares of any Series or Class when properly
issued in accordance with these Articles of the Certificate of Trust shall be
fully paid and nonassessable.
<PAGE>
(3) The Board of Trustees is hereby authorized to issue and sell from time to
time Shares of the Trust for cash or securities or other property as the Board
of Trustees may deem advisable in the manner and to the extent now or hereafter
permitted by law provided, however, that the consideration per share (exclusive
of any selling commission) to be received by the Trust upon the issuance or sale
of any Shares of its capital stock shall not be less than the net asset value
per share of such capital stock determined as hereinafter provided. No such
Shares, whether now or hereafter authorized, shall be required to be first
offered to the then existing shareholders and no stockholder shall have any
preemptive right to purchase or subscribe to any unissued shares of the Trust's
capital stock or for any additional shares whether now or hereafter authorized.
(4) At all meetings of shareholders, each holder of Shares shall be entitled
to one vote for each Share standing in the holder's name on the books of the
Trust on the date fixed in accordance with the By-Laws for determination of
shareholders entitled to vote thereat; provided, however, that when required by
the Investment Company Act of 1940, as amended, or rules thereunder or when the
Board of Trustees has determined that the matter affects only the interest of
one Series or Class, matters may be submitted to a vote of the holders of Shares
of a particular Series or Class, and each holder of Shares thereof shall be
entitled to votes equal to the Shares of the Series or Class standing in the
holder's name on the books of the Trust. The presence in person or by proxy of
the holders of one-third (1/3) of the Shares outstanding and entitled to vote
shall constitute a quorum at any meeting of the shareholders except where a
matter is to be voted on by a Series or Class, one-third of the Shares of that
Series or Class outstanding and entitled to vote shall constitute a quorum for
the transaction of business by that Series or Class.
(5) Each holder of Shares shall be entitled at such times as may be permitted
by the Trust to require the Trust to redeem any or all of the holder's Shares at
a redemption price per share equal to the net asset value per share less such
charges as are determined by the Board of Trustees, at such time as the Board of
Trustees shall have prescribed by resolution. The Board of Trustees may specify
conditions, prices, places and manner and form of payment of redemption, and may
specify requirements for the proper form or forms of requests for redemption.
The Board of Trustees may postpone payment of the redemption price and may
suspend the right of the holders of Shares to require the Trust to redeem Shares
during any period or at any time when and to the extent permissible under the
Investment Company Act of 1940, as amended.
(6) The Board of Trustees may cause the Trust to redeem at current net asset
value all Shares owned or held by any one stockholder having an aggregate
current net asset value of any amount. Such redemptions shall be effected in
accordance with such procedures as the Board of Trustees may adopt. Upon such
redemption of Shares, the Trust shall promptly cause payment of the full
redemption price to be made to the holder of Shares so redeemed.
(7) Dividends and distributions on Shares may be declared, calculated, and
paid with such frequency and in such form, manner, and amount as the Board of
Trustees may from time to time determine.
(8) Net asset value, as used herein, shall be determined on such days and at
such times and by such methods as the Board of Trustees shall determine, subject
to the Investment Company Act of 1940,as amended, and the applicable rules and
regulations promulgated thereunder. Such determination may be made on a
Series-by-Series basis or made or adjusted on a Class-by-Class basis, as
appropriate.
<PAGE>
ARTICLE V
(1) To the maximum extent permitted by applicable law (including Delaware law
and the Investment Company Act of 1940,as amended) as currently in effect or as
may hereafter be amended:
(a) No trustee or officer of the Trust shall be liable to the Trust or its
shareholders for monetary damages; and
(b) The Trust shall indemnify and advance expenses as provided in the
By-Laws to its present and past Trustees, officers, employees and
agents, and persons who are serving or have served at the request of
the Trust as a trustee, officer, employee or agent.
(2) The Trust may purchase and maintain insurance on behalf of any person who
is or was a trustee, officer, employee or agent of the Trust, is or was serving
at the request of the Trust as a trustee, officer, employee or agent against any
liability asserted against him or her and incurred by him or her in any such
capacity or arising out of his or her status as such, whether or not the Trust
would have the power to indemnify him or her against such liability.
(3) Any repeal or modification of this Article by the shareholders of the
Trust, or adoption or modification of any other provision of the Certificate of
Trust or By-Laws inconsistent with this Article V shall be prospective only, to
the extent that such repeal or modification would, if applied retrospectively,
adversely affect any limitation on the liability of any trustee or officer of
the Trust or indemnification available to any person covered by these provisions
with respect to any act or omission which occurred prior to such repeal,
modification or adoption.
ARTICLE VI
(1) All powers and authority of the Trust shall be vested in and exercised by
the Board of Trustees except as otherwise provided by statute, these Articles,
or the By-Laws of the Trust. The number of Trustees shall never be less than the
number prescribed by Delaware law.
(2) Michael J. Boyle and Joanne E. Boyle shall act as Trustees until
successors are duly chosen and qualified.
(3) Subject to the provisions of this Certificate of Trust and the provisions
of the Investment Company Act of 1940, as amended, any trustee, officer or
employee, may be pecuniarily interested in any contract or transaction of the
Trust, and in the absence fraud, no contract or other transaction shall be
thereby affected or invalidated, provided that the facts shall be disclosed or
shall have been known to the Board of Trustees or a majority thereof. Further,
any trustee of the Trust who is so interested may be counted in determining the
existence of a quorum at any meeting of the Board of Trustees which shall
authorize any such contract or transaction and may vote thereat on any such
contract or transaction.
(4) The Trust reserves the right to enter into, from time to time, investment
advisory and administration agreements providing for the management and
supervision of the investments of the Trust, the furnishing of advice to the
Trust with respect to the desirability of investing in, purchasing or selling
securities or other property and the furnishing of clerical and administrative
services (including custody, transfer, accounting, legal, audit, distribution,
etc.) to the Trust. Such agreements shall contain such other terms, provisions
and conditions as the Board of Trustees may deem advisable and as are permitted
by the Investment Company Act of 1940,as amended.
IN WITNESS WHEREOF, the undersigned has adopted and signed this
Certificate of Trust on this 17th day of October, 1997 and hereby acknowledges
the same to be his or her act and that to the best of his or her knowledge,
information and belief, all matters and facts stated herein are true in all
material respects.
/S/MICHAEL J. BOYLE /S/JOANNE E. BOYLE
---------------- ---------------
Michael J. Boyle Joanne E. Boyle
<PAGE>
Exhibit 2
BY-LAWS
OF
THE BOYLE FUND
A DELAWARE BUSINESS TRUST
October 15, 1997
<PAGE>
BY-LAWS
TABLE OF CONTENTS
ARTICLE I - NAME OF TRUST AND LOCATION OF OFFICES..............................3
Section 1.01. Name...................................................3
Section 1.02. Principal Offices......................................3
ARTICLE II - SHAREHOLDERS......................................................3
Section 2.01. Annual Meetings........................................3
Section 2.02. Special Meetings.......................................3
Section 2.03. Notice of Meetings.....................................3
Section 2.04. Quorum and Adjournment of Meetings.....................3
Section 2.05. Voting and Inspectors..................................4
Section 2.06. Validity of Proxies....................................4
Section 2.07. Shares Ledger and List of Shareholders.................4
ARTICLE III - BOARD OF TRUSTEES................................................4
Section 3.01. General Powers.........................................4
Section 3.02. Power to Issue and Sell Shares.........................4
Section 3.03. Power to Declare Dividends.............................4
Section 3.04. Number and Term of Trustees............................5
Section 3.05. Vacancies and Newly Created Trusteeships...............5
Section 3.06. Removal................................................5
Section 3.07. Regular Meetings.......................................5
Section 3.08. Special Meetings.......................................5
Section 3.09. Quorum and Voting......................................5
Section 3.10 Compensation of Trustees................................5
ARTICLE IV - COMMITTEES........................................................6
Section 4.01. Organization...........................................6
Section 4.02. Powers of the Executive Committee......................6
Section 4.03. Powers of Other Committees of the Board of Trustees....6
ARTICLE V - OFFICERS...........................................................6
Section 5.01. Chairman of the Board..................................6
Section 5.02. Subordinate Officers...................................6
Section 5.03. Remuneration...........................................6
Section 5.04. Surety Bonds...........................................6
ARTICLE VI - EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES....................7
Section 6.01. General................................................7
Section 6.02. Checks, Notes, Drafts, Etc.............................7
Section 6.03. Voting of Securities...................................7
ARTICLE VII - CAPITAL SHARES...................................................7
Section 7.01. Certificates of Shares.................................7
Section 7.02. Transfer of Shares ....................................7
ARTICLE VIII - CONFLICT OF INTEREST TRANSACTIONS...............................7
Section 8.01. Validity of Contract or Transactions...................7
ARTICLE IX - FISCAL YEAR AND ACCOUNTANT........................................8
Section 9.01. Fiscal Year............................................8
Section 9.02. Accountant.............................................8
<PAGE>
ARTICLE X - CUSTODY OF SECURITIES..............................................8
Section 10.01. Employment of a Custodian....................................8
Section 10.02. Provisions of Custodian Contract.............................8
Section 10.03. Other Arrangements...........................................8
ARTICLE XI - INDEMNIFICATION AND INSURANCE.....................................8
Section 11.01. Indemnification of Officers, Trustees, Employees and Agents...8
Section 11.02. Insurance of Officers, Trustees, Employees and Agents.........9
Section 11.03. Amendment.....................................................9
ARTICLE XII - AMENDMENTS......................................................10
Section 12.01. General.....................................................10
Section 12.02. By Shareholders Only........................................10
<PAGE>
BY-LAWS
OF
THE BOYLE FUND
(A DELAWARE BUSINESS TRUST)
ARTICLE I
NAME OF TRUST AND LOCATION OF OFFICES
Section 1.01. Name. The name of the Trust is The Boyle Fund.
Section 1.02. Principal Offices. The principal office of the Trust shall be
located in San Francisco, California. The Trust may establish and maintain
offices and places of business as the Board of Trustees may, from time to time,
determine.
ARTICLE II
SHAREHOLDERS
Section 2.01. Annual Meetings. There shall be no Shareholders' meetings for the
election of Trustees and the transaction of other proper business except as
required by law or as hereinafter provided.
Section 2.02. Special Meetings. Special meetings of Shareholders may be called
at any time by the chairman of the Board and shall be held at such time and
place as may be stated in the notice of the meeting.
Unless otherwise required by law, special meetings of the Shareholders shall be
called upon the written request of the holders of shares entitled to not less
than 25 percent of all the votes entitled to be cast at such meeting, provided
that (a) such request shall state the purposes of such meeting and the matters
proposed to be acted on, and (b) the Shareholders requesting such meeting shall
have paid to the Trust the reasonably estimated cost of preparing and mailing
the notice thereof. No special meeting need be called upon the request of
Shareholders to consider any matter which is substantially the same as a matter
voted upon at any special meeting of the Shareholders held during the preceding
twelve months, unless requested by the holders of a majority of all shares
entitled to be voted at such meeting.
Section 2.03. Notice of Meetings. The chairman shall cause notice of the place,
date and hour and, in the case of a special meeting or as otherwise required by
law, the purpose or purposes for which the meeting is called, to be served
personally or to be mailed, postage prepaid, not less than 10 nor more than 90
days before the date of the meeting, to each Shareholder entitled to vote at
such meeting at his address as it appears on the records of the Trust at the
time of such mailing. Notice shall be deemed to be given when deposited in the
United States mail. Irregularities in the notice of any meeting to, or the
nonreceipt of any such notice by, any of the Shareholders shall not invalidate
any action otherwise properly taken by or at any such meeting.
Section 2.04. Quorum and Adjournment of Meetings. The presence at any
Shareholders' meeting, in person or by proxy, of Shareholders entitled to cast
one-third of all votes entitled to be cast thereat shall be necessary and
sufficient to constitute a quorum for the transaction of business, provided that
with respect to any matter to be voted upon separately by any Series or class of
shares, a quorum shall consist of the holders of one-third of the shares of that
Series or class outstanding and entitled to vote on the matter. In the absence
of a quorum, the Shareholders present in person or by proxy or, if no
shareholder entitled to vote is present in person or by proxy, any officer
present entitled to preside may adjourn the meeting without determining the date
of the new meeting or from time to time without further notice to a date not
more than 120 days after the original record date. Any business that might have
been transacted at the meeting originally called may be transacted at any such
adjourned meeting at which a quorum is present.
<PAGE>
Section 2.05. Voting and Inspectors. At every Shareholders' meeting, each
shareholder shall be entitled to one vote for each share and a fractional vote
for each fraction of a share of shares of the Trust validly issued and
outstanding and standing in his name on the books of the Trust on the record
date either in person or by proxy appointed by instrument in writing subscribed
by such shareholder or his duly authorized attorney, except that no shares held
by the Trust shall be entitled to a vote; provided, however, that (a) as to any
matter with respect to which a separate vote of any series is required by the
Investment Company Act of 1940, as amended, or by the Delaware law, such
requirement as to a separate vote by that series shall apply; (b) in the event
that the separate vote requirements referred to in (a) above apply with respect
to one or more series, then, subject to (c) below, the shares of all other such
one or more series shall vote as a single series; and (c) as to any matter which
affects the interest of only a particular series, only the holders of shares of
the one or more affected series shall be entitled to vote.
Except as otherwise specifically provided in the Certificate of Trust or the
By-laws or as required by provisions of the Investment Company Act of 1940, as
amended, all matters shall be decided by a vote of the majority of the votes
validly cast at a meeting at which a quorum is present. At any meeting at which
there is an election of Trustees, the chairman of the meeting may appoint two
inspectors of election who shall first subscribe an oath or affirmation to
execute faithfully the duties of inspectors at such election with strict
impartiality and according to the best of their ability, and shall, after the
election, make a certificate of the result of the vote taken.
Section 2.06. Validity of Proxies. The right to vote by proxy shall exist only
if the instrument authorizing such proxy to act shall have been signed by the
shareholder or by his duly authorized attorney. If the chairman of the meeting
has appointed inspectors of election, such inspectors shall decide all such
questions.
Section 2.07. Shares Ledger and List of Shareholders. It shall be the duty of
the Trust to cause an original or duplicate shares ledger containing the names
and addresses of all the Shareholders and the number of shares held by them,
respectively, to be maintained at the office of the Trust's transfer agent.
ARTICLE III
BOARD OF TRUSTEES
Section 3.01. General Powers. Except as otherwise provided by law, the property,
business and affairs of the Trust shall be managed under the direction of and
all the powers of the Trust shall be exercised by or under authority of its
Board of Trustees.
Section 3.02. Power to Issue and Sell Shares. The Board of Trustees may from
time to time issue and sell or cause to be issued and sold any of the Trust's
authorized shares to such persons and for such consideration as the Board of
Trustees shall deem advisable, subject to the provisions of the Certificate of
Trust.
Section 3.03. Power to Declare Dividends. The Board of Trustees, from time to
time as they may deem advisable, may declare and pay dividends in shares, cash
or other property of the Trust, out of any source available for dividends, to
the Shareholders according to their respective rights and interests in
accordance with the provisions of the Certificate of Trust. The Board of
Trustees may prescribe from time to time that dividends declared may be payable
at the election of any of the Shareholders either in cash or in shares of the
Trust, provided that the sum of the cash dividend actually paid to any
shareholder and the asset value of the shares received (determined as of such
time as the Board of Trustees shall have prescribed, pursuant to the Certificate
of Trust, with respect to shares sold on the date of such election) shall not
exceed the full amount of cash to which the shareholder would be entitled if he
elected to receive only cash. The Board of Trustees shall cause to be
accompanied by a written statement any dividend payment wholly or partly from
any source other than:
(a) the Trust's accumulated undistributed net income (determined in
accordance with good accounting practice and the rules and regulations
of the Securities and Exchange Commission then in effect) and not
including profits or losses realized upon the sale of securities or
other properties; or
(b) the Trust's net income so determined for the current or preceding
fiscal year.
<PAGE>
Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Securities and
Exchange Commission may prescribe.
Section 3.04. Number and Term of Trustees. Except for the initial Board of
Trustees, the Board of Trustees shall consist of not fewer than three nor more
than fifteen Trustees, as specified by a resolution of a majority of the entire
Board of Trustees and at least 40%of the Board of Trustees shall not be an
"interested person" of the Trust, as that term is defined in the Investment
Company Act of 1940, as amended. Each Trustee shall hold office until his
successor is elected and qualified or until his death, resignation or removal..
Section 3.05. Vacancies and Newly Created Trusteeships. If any vacancies shall
in the Board of Trustees by reason of death, resignation, removal or otherwise,
or if the authorized number of Trustees shall be increased, the Trustees then in
office shall continue to act, and such vacancies (if not previously filled by
the Shareholders) may be filled by a majority of the Trustees then in office,
although less than a quorum, except that a newly created Trusteeship may be
filled only by a majority vote of the entire Board of Trustees; provided,
however, that immediately after filling such vacancy, at least two-thirds (2/3)
of the Trustees then holding office shall have been elected to such office by
the Shareholders of the Trust.
Section 3.06. Removal. At any Shareholders' meeting duly called, provided a
quorum is present, the Shareholders may remove any Trustee from office (either
with or without cause) by the affirmative vote of a majority of all votes
represented at the meeting, and at the same meeting a duly qualified successor
or successors may be elected to fill any resulting vacancies by a plurality of
the votes validly cast. The chairman may remove any Trustee who is not in
attendance at two consecutive Board meetings.
Section 3.07. Regular Meetings. The meeting of the Board of Trustees for
choosing officers and transacting other proper business, and all other meetings,
shall be held at such time and place as the Board may determine and as provided
by resolution.
Section 3.08. Special Meetings. Special meetings of the Board of Trustees shall
be held whenever called by the chairman of the Board at the time and place
specified in the respective notice of such meetings.
Section 3.09. Quorum and Voting. At all meetings of the Board of Trustees, the
presence of one-half of the number of Trustees then in office shall constitute a
quorum for the transaction of business, provided that there shall be present at
least two Trustees. In the absence of a quorum, a majority of the Trustees
present may adjourn the meeting, from time to time, until a quorum shall be
present. The action of a majority of the Trustees present at a meeting at which
a quorum is present shall be the action of the Board of Trustees, unless
concurrence of a greater proportion is required for such action by law, by the
Certificate of Trust or by these By-laws. In all matters where there is a tie
vote, the chairman shall break the tie.
Section 3.10. Compensation of Trustees. Trustees may receive such compensation
for their services as may from time to time be determined by resolution of the
Board of Trustees.
ARTICLE IV
COMMITTEES
Section 4.01. Organization. By resolution adopted by the Board of Trustees, the
Board may designate one or more committees of the Board of Trustees, including
an Executive Committee, each consisting of at least two Trustees. Each member of
a committee shall be a Trustee and shall hold committee membership at the
pleasure of the Board. The chairman of the Board, if any, shall be a member of
the Executive Committee. The Board of Trustees shall have the power at any time
to change the members of such committees and to fill vacancies in the
committees.
<PAGE>
Section 4.02. Powers of the Executive Committee. Unless otherwise provided by
resolution of the Board of Trustees, when the Board of Trustees is not in
session the Executive Committee shall have and may exercise all powers of the
Board of Trustees in the management of the business and affairs of the Trust
that may lawfully be exercised by an Executive Committee except the power to
declare a dividend or distribution on shares, authorize the issuance of shares,
recommend to Shareholders any action requiring Shareholders' approval, amend
these By-laws, approve any merger or share exchange which does not require
shareholder approval or approve or terminate any contract with an "investment
adviser" or "principal underwriter," as those terms are defined in the
Investment Company Act of 1940, as amended, or to take any other action required
by the Investment Company Act of 1940, as amended, to be taken by the Board of
Trustees. Notwithstanding the above, such Executive Committee may make such
dividend calculations and payments as are consistent with applicable law.
Section 4.03. Powers of Other Committees of the Board of Trustees. To the extent
provided by resolution of the Board, other committees of the Board of Trustees
shall have and may exercise any of the powers that may lawfully be granted to
the Executive Committee.
ARTICLE V
OFFICERS
Section 5.01. Chairman of the Board. The chairman of the Board shall be the
senior officer of the Trust, shall preside at all Shareholders' meetings and at
all meetings of the Board of Trustees and shall be ex officio a member of all
committees of the Board of Trustees. He shall have such other powers and perform
such other duties as may be assigned to him from time to time by the Board of
Trustees.
Section 5.02. Subordinate Officers. The chairman of the Board from time to time
may appoint such other officers or agents as he may deem advisable, each of whom
shall have such title, hold office for such period, have such authority and
perform such duties as the Board of Trustees may determine. The chairman of the
Board from time to time may delegate to one or more officers or agents the power
to appoint any such subordinate officers or agents and to prescribe their
respective rights, terms of office, authorities and duties. Any officer or agent
appointed in accordance with the provisions of this Section 5.02 may be removed,
either with or without cause, by any officer upon whom such power of removal
shall have been conferred by the Board of Trustees.
Section 5.03. Remuneration. The salaries or other compensation of the officers
of the Trust shall be fixed from time to time by resolution of the Board of
Trustees, except that the Board of Trustees may by resolution delegate to any
person or group of persons the power to fix the salaries or other compensation
of any subordinate officers or agents appointed in accordance with the
provisions of Section 5.02 hereof.
Section 5.04. Surety Bonds. The Board of Trustees may require any officer or
agent of the Trust to execute a bond (including, without limitation, any bond
required by the Investment Company Act of 1940, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder) to
the Trust in such sum and with such surety or sureties as the Board of Trustees
may determine, conditioned upon the faithful performance of his or her duties to
the Trust, including responsibility for negligence and for the accounting of any
of the Trust's property, funds or securities that may come into his hands.
<PAGE>
ARTICLE VI
EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES
Section 6.01. General. Subject to the provisions of Sections 5.01, 6.02, and
7.03 hereof, all deeds, documents, transfers, contracts, agreements and other
instruments requiring execution by the Trust shall be signed by the chairman or
other person as the Board of Trustees may otherwise, from time to time,
authorize. Any such authorization may be general or confined to specific
instances.
Section 6.02. Checks, Notes, Drafts, Etc. So long as the Trust shall employ a
custodian to keep custody of the cash and securities of the Trust, the custodian
may sign all checks and drafts for the payment of money by the Trust in the name
of the Trust. Except as otherwise authorized by the Board of Trustees, all
requisitions or orders for the assignment of securities standing in the name of
the custodian or its nominee, or for the execution of powers to transfer the
same, shall be signed in the name of the Trust by the chairman or other person
authorized by the Board of Trustees. Promissory notes, checks or drafts payable
to the Trust may be endorsed only to the order of the custodian or its nominee
by the chairman or other person authorized by the Board of Trustees.
Section 6.03. Voting of Securities. Unless otherwise ordered by the Board of
Trustees, the chairman or other person authorized by the Board of Trustees shall
have full power and authority on behalf of the Trust to attend and to act and to
vote, or in the name of the Trust to execute proxies to vote, at any meeting of
Shareholders of any company in which the Trust may hold shares. At any such
meeting such officer shall possess and may exercise (in person or by proxy) any
and all rights, powers and privileges incident to the ownership of such shares.
ARTICLE VII
CAPITAL SHARES
Section 7.01. Certificates of Shares. Certificates of shares shall not evidence
the interest of each shareholder of the Trust. The interest of each shareholder
of the Trust shall be kept in the books and records of the Trust. The name and
address of each person owning shares, the number of such shares and the date of
issuance shall be entered upon the shares ledger of the Trust at the time of
issuance. Every share exchanged, surrendered for redemption or otherwise
returned to the Trust shall also be entered upon the shares ledger of the Trust.
Section 7.02. Transfer of Shares. Shares of the Trust shall be transferable on
the books of the Trust by the holder of record thereof (in person or by his duly
authorized attorney or legal representative) (a) if accompanied by proper
instruments of assignment and transfer, with such proof of the authenticity of
the signature as the Trust or its agents may reasonably require, or (b) as
otherwise prescribed by the Board of Trustees. The Trust shall be entitled to
treat the holder of record of any share of shares as the absolute owner thereof
for all purposes, and accordingly shall not be bound to recognize any legal,
equitable or other claim or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by law.
ARTICLE VIII
CONFLICT OF INTEREST TRANSACTIONS
Section 8.01. Validity of Contract or Transactions. In the event that any
officer or Trustee of the Trust shall have any interest, direct or indirect, in
any other firm, association or trust as officer, employee, Trustee or
shareholder, no transaction or contract made by the Trust with any such other
firm, association or trust shall be valid unless such interest shall have been
disclosed or made known to all of the Trustees or to a majority of the Trustees
and such transaction or contract shall have been approved by a majority of a
quorum of Trustees, which majority shall consist of Trustees not having any such
interest or a majority of the Trustees in office, including Trustees having such
an interest.
<PAGE>
ARTICLE IX
FISCAL YEAR AND ACCOUNTANT
Section 9.01. Fiscal Year. The fiscal year of the Trust shall, unless otherwise
ordered by the Board of Trustees, be twelve calendar months ending on the 31st
day of December.
Section 9.02. Accountant. The Trust shall employ an independent public
accountant or a firm of independent public accountants as its accountant to
examine the accounts of the Trust and to sign and certify financial statements
filed by the Trust. The accountant's certificates and reports shall be addressed
both to the Board of Trustees and to the Shareholders. A majority of the members
of the Board of Trustees who are not "interested persons" (as defined in the
Investment Company Act of 1940, as amended) of the Trust shall select the
accountant at any meeting held within 90 days before or after the beginning of
the fiscal year of the Trust or before the annual Shareholders' meeting (if any)
in that year.
ARTICLE X
CUSTODY OF SECURITIES
Section 10.01. Employment of a Custodian. Unless otherwise required by law or
the Certificate of Trust, all securities and cash owned by the Trust from time
to time shall be deposited with and held by a custodian or subcustodian
qualified to act as such in accordance with the requirements of the Investment
Company Act of 1940, as amended.
Section 10.02. Provisions of Custodian Contract. The Board of Trustees shall
cause to be delivered to the custodian all securities owned by the Trust or to
which it may become entitled, and shall order the same to be delivered by the
custodian only in completion of a sale, exchange, transfer, pledge, or other
disposition thereof, all as the Board of Trustees may generally or from time to
time require to approve or to a successor custodian; and the Board of Trustees
shall cause all funds owned by the Trust or to which it may become entitled to
be paid to the custodian, and shall order the same disbursed only for investment
against delivery of the securities acquired, or in payment of expenses,
including management compensation, and liabilities of the Trust, including
distributions to shareholders, or to a successor custodian.
Section 10.03. Other Arrangements. The Trust may make such other arrangements
for the custody of its assets (including deposit arrangements) as may be
required by any applicable law, rule or regulation.
ARTICLE XI
INDEMNIFICATION AND INSURANCE
Section 11.01. Indemnification of Officers, Trustees, Employees and Agents. In
accordance with applicable law, including the Investment Company Act of 1940, as
amended, and Delaware Business Trust law, the Trust shall indemnify each person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative ("Proceeding"), by reason of the fact that he or
she is or was a Trustee, officer, employee, or agent of the Trust, or is or was
serving at the request of the Trust as a Trustee, officer, employee, partner,
trustee or agent of another trust, partnership, joint venture, trust, or other
enterprise, against all reasonable expenses (including attorneys' fees) actually
incurred, and judgments, fines, penalties and amounts paid in settlement in
connection with such Proceeding to the maximum extent permitted by law, now
existing or hereafter adopted. Notwithstanding the foregoing, the following
provisions shall apply with respect to indemnification of the Trust's Trustees,
officers, and investment manager (as defined in the Investment Company Act of
1940, as amended):
<PAGE>
(a) Whether or not there is an adjudication of liability in such
Proceeding, the Trust shall not indemnify any such person for any
liability arising by reason of such person's willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved
in the conduct of his or her office or under any contract or agreement
with the Trust ("disabling conduct").
(b) The Trust shall not indemnify any such person unless:
(1) the court or other body before which the Proceeding was
brought (a) dismisses the Proceeding for insufficiency of
evidence of any disabling conduct, or (b) reaches a final
decision on the merits that such person was not liable by
reason of disabling conduct; or
(2) absent such a decision, a reasonable determination is
made, based upon a review of the facts, by (a) the vote of a
majority of a quorum of the Trustees of the Trust who are
neither interested persons of the Trust as defined in the
Investment Company Act of 1940, as amended, nor parties to the
Proceeding, or (b) if such quorum is not obtainable, or even
if obtainable, if a majority of a quorum of Trustees described
above so directs, based upon a written opinion by independent
legal counsel, that such person was not liable by reason of
disabling conduct.
(c) Reasonable expenses (including attorneys' fees) incurred in
defending a Proceeding involving any such person will be paid by the
Trust in advance of the final disposition thereof upon an undertaking
by such person to repay such expenses unless it is ultimately
determined that he or she is entitled to indemnification, if:
(1) such person shall provide adequate security for his or her
undertaking;
(2) the Trust shall be insured against losses arising by
reason of such advance; or
(3) a majority of a quorum of the Trustees of the Trust who
are neither interested persons of the Trust as defined in the
Investment Company Act of 1940, as amended, nor parties to the
Proceeding, or independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts,
that there is reason to believe that such person will be found
to be entitled to indemnification.
<PAGE>
Section 11.02. Insurance of Officers, Trustees, Employees and Agents. The Trust
may purchase and maintain insurance or other sources of reimbursement to the
extent permitted by law on behalf of any person who is or was a Trustee,
officer, employee or agent of the Trust, or is or was serving at the request of
the Trust as a Trustee, officer, employee, partner, trustee or agent of another
trust, partnership, joint venture, trust or other enterprise against any
liability asserted against him or her and incurred by him or her in or arising
out of his position.
Section 11.03. Amendment. No amendment, alteration or repeal of this Article or
the adoption, alteration or amendment of any other provisions to the Certificate
of Trust or By-laws inconsistent with this Article shall adversely affect any
right or protection of any person under this Article with respect to any act or
failure to act which occurred prior to such amendment, alteration, repeal or
adoption.
ARTICLE XII
AMENDMENTS
Section 12.01. General. Except as provided in Section 12.02 of this Article XII
and subject to the provisions concerning shareholder voting in Article II
hereof, all By-laws of the Trust, whether adopted by the Board of Trustees or
the Shareholders, shall be subject to amendment, alteration or repeal, and new
By-laws may be made by the affirmative vote of either: (a) the holders of record
of a majority of the outstanding shares of shares of the Trust entitled to vote,
at any meeting, the notice or waiver of notice of which shall have specified or
summarized the proposed amendment, alteration, repeal or new By-law; or (b) a
majority of Trustees.
Section 12.02. By Shareholders Only. No amendment of any section of these
By-laws shall be made except by the Shareholders of the Trust if the By-laws
provide that such section may not be amended, altered or repealed except by the
Shareholders. From and after the issuance of any shares of the capital shares of
the Trust no amendment, alteration or repeal of this Article XII shall be made
except by the Shareholders of the Trust.
Exhibit 5
THE BOYLE FUND
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This Investment Advisory and Management Agreement ("Agreement"), is made and
entered into on December 6, 1997 by and between The Boyle Fund, a Delaware
business trust (the "Fund") and Boyle Management and Research, Inc., (the
"Adviser"), a California corporation, each having its principal place of
business at 2062 Jackson Street, San Francisco, California 94109.
WHEREAS, the Fund, an open-end, non-diversified investment company registered
under the Investment Company Act of 1940 (the "1940 Act"), wishes to retain the
Adviser to provide investment advisory and management services to the Fund; and
WHEREAS, the Adviser is willing to furnish such services on the terms and
conditions hereinafter set forth;
<PAGE>
NOW, THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed as follows:
1. The Fund hereby appoints the Adviser to manage the investment and
reinvestment of assets of the Boyle Marathon Fund and any other portfolio of the
Fund, which may be hereafter designated as a separate series for the period and
on the terms set forth in this Agreement. The Adviser accepts such appointment
and agrees to render the services herein set forth, for the compensation herein
provided.
2. The Fund shall at all times inform the Adviser as to the securities owned by
it, the funds available or to become available for investment by it, and
generally as to the condition of its affairs. It shall furnish the Adviser with
such other documents and information with regard to its affairs as the Adviser
may from time to time reasonably request.
3. Subject to the direction and control of the Fund's Board of Trustees, the
Adviser shall regularly provide the Fund with investment research, advice,
management and supervision and shall furnish a continuous investment program for
the Fund's portfolio of securities consistent with the Fund's investment
objective, policies, and limitations as stated in the Fund's current Prospectus
and Statement of Additional Information. The Adviser shall determine from time
to time what securities will be purchased, retained or sold by the Fund, and
shall implement those decisions, all subject to the provisions of the Fund's
Certificate of Trust, the 1940 Act, the applicable rules and regulations of the
Securities and Exchange Commission, and other applicable federal and state laws,
as well as the investment objectives, policies, and limitations of the Fund. In
placing orders for the Fund with brokers and dealers with respect to the
execution of the Fund's securities transactions, the Adviser shall attempt to
obtain the best net results. In doing so, the Adviser may consider such factors
which it deems relevant to the Fund's best interest, such as price, the size of
the transaction, the nature of the market for the security, the amount of the
commission, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer involved and the quality of service
rendered by the broker-dealer in other transactions. The Adviser shall have the
discretionary authority to utilize certain broker-dealers even though it may
result in the payment by the Fund of an amount of commission for effecting a
securities transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, providing,
however, that the Adviser had determined that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by the broker-dealer effecting the transaction. In no instance will
portfolio securities be purchased from or sold to the Adviser or any affiliated
person thereof except in accordance with the rules and regulations promulgated
by the Securities and Exchange Commission pursuant to the 1940 Act. The Adviser
shall also provide advice and recommendations with respect to other aspects of
management and supervision as may be directed by the Board of Trustees of the
Fund, provided that in no event shall the Adviser be responsible for any expense
occasioned by the performance of such functions.
4. The Adviser is responsible for (1) compensation of any of the Fund's
trustees, officers and employees who are interested persons of the Adviser and
(2) compensation of the Adviser's personnel and other expenses incurred in
connection with the provisions of portfolio management services under this
Agreement. Other than as herein specifically indicated, the Adviser shall not be
responsible for the Fund's expenses. Specifically, the Adviser will not be
responsible, except to the extent of the reasonable compensation of employees of
the Fund whose services may be used by the Adviser hereunder, for any of the
following expenses of the Fund, which expenses shall be borne by the Fund: legal
and audit expenses, organization expenses; interest; taxes; governmental fees;
fees, voluntary assessments and other expenses incurred in connection with
membership in investment company organizations; the cost (including brokerage
commissions or charges, if any) of securities purchased or sold by the Fund and
any losses incurred in connection therewith; fees of custodian, transfer agents,
registrars or other agents; distribution fees; expenses of preparing share
certificates; expenses relating to the redemption or purchase of the Fund's
shares; expenses of registering and qualifying Fund shares for sale under
applicable federal and state law and maintaining such registrations and
qualification; expenses of preparing, setting in print, printing and
distributing prospectuses, proxy statements, reports, notices and dividends to
Fund shareholders; cost of stationery; costs of shareholders and other meetings
of the Fund; compensation and expenses of the independent trustees of the Fund;
and the Fund's pro rata portion of premiums of any fidelity bond and other
insurance covering the Fund and its officers and trustees.
<PAGE>
5. No trustee, officer or employee of the Fund shall receive from the Fund any
salary or other compensation as such trustee, officer or employee while he is at
the same time a director, officer or employee of the Adviser or any affiliated
company of the Adviser. This paragraph shall not apply to trustees, executive
committee members, consultants and other persons who are not regular members of
the Adviser's or any affiliated company's staff.
6. As compensation for the services performed by the Adviser, the Fund shall pay
the Adviser, as promptly as possible after the last day of each month, a fee,
accrued each calendar day (including weekends and holidays) at the rate of 1.5
per annum of the daily net assets of the Fund. The daily net assets of the Funds
shall be computed as of the time of the regular close of business of the New
York Stock Exchange, or such other time as may be determined by the Board of
Trustees of the Fund. Any of such payments as to which the Adviser may so
request shall be accompanied by a report of the Fund prepared either by the Fund
or by a reputable firm of independent accountants which shall show the amount
properly payable to the Adviser under this Agreement and the detailed
computation thereof.
7. The Adviser assumes no responsibility under this Agreement other than to
render the services called for hereunder in good faith, and shall not be
responsible for any action of the Board of Trustees of the Fund in the following
or declining to follow any advice or recommendation of the Adviser; provided
that nothing in this Agreement shall protect the Adviser against any liability
to the Fund or its stockholders to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
hereunder.
8. The Adviser shall be an independent contractor and shall have no authority to
act for or represent the Fund in its investment commitments unless otherwise
provided. No agreement, bid, offer, commitment, contract or other engagement
entered into by the Adviser whether on behalf of the Adviser or whether
purporting to have been entered unto on behalf of the Fund shall be binding upon
the Fund, and all acts authorized to be done by the Adviser under this Agreement
shall be done by it as an independent contractor and not as an agent.
9. Nothing in this Agreement shall limit or restrict the right of any director,
officer, or employee of the Adviser who may also be a trustee, officer, or
employee of the Fund, to engage in any other business or to devote his time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature, nor to limit or restrict the
right of the Adviser to engage in any other business or to render services of
any kind, including investment advisory and management services, to any other
corporation, firm, individual or association.
10. As used in this Agreement, the terms "assignment," "interested person," and
"majority of the outstanding voting securities" shall have the meanings given to
them by Section 2(a) of the 1940 Act, subject to such exemptions as may be
granted by the Securities and Exchange Commission by any rule, regulation or
order.
11. This Agreement shall terminate automatically in the event of its assignment
by the Adviser and shall not be assignable by the Fund without the consent of
the Adviser. This Agreement may also be terminated at any time, without the
payment of penalty, by the Fund or by the Adviser on sixty (60) days' written
notice addressed to the other party at its principal place of business.
12. This Agreement shall become effective on the date hereof and shall continue
in effect for two years and from year to year thereafter only so long as
specifically approved annually (1) by vote of a majority of the trustees of the
Fund who are not parties to this Agreement or interested persons of such, cast
in person at a meeting called for that purpose, and (2) either by vote of the
holders of a majority of the outstanding voting securities of the Fund or by a
majority vote of the Fund's Board of Trustees.
<PAGE>
13. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no materials amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the Fund's outstanding voting
securities.
14. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and sealed by their officers thereunto duly authorized on the day and
year first above written.
Attest: THE BOYLE FUND
By: __________________
Michael J. Boyle
Its: Chairman
Attest: Boyle Management and Research, Inc.
By: ____________________
Joanne E. Boyle
Its: President
<PAGE>
Exhibit 9
THE BOYLE FUND
ADMINISTRATION AGREEMENT
This Administration Agreement is made this 6th day of December 1997, by
and between THE BOYLE FUND, a Delaware business trust (the "Fund"), and Boyle
Management and Research, Inc., a California corporation (the "Administrator").
WITNESSETH:
WHEREAS, the Fund is engaged in business as a non-diversified, open-end
management investment company and is to be registered as such under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Administrator is engaged in the business of rendering
administrative and supervisory services to investment companies; and
WHEREAS, the Fund desires to retain the Administrator to render
supervisory and corporate administrative services to the Fund in the manner and
on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the terms and
provisions hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to administer the affairs of the Fund subject to the direction of
the Board of Trustees and the officers of the Fund, for the period and on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees during such period to render the services and to assume the
obligations herein set forth for the compensation herein provided. The
Administrator shall for all purposes herein be deemed to be an independent
contractor and, except as expressly provided or authorized (whether herein or
otherwise), shall have no authority to act for or represent the Fund in any way
or otherwise be deemed an agent of the Fund.
2. OBLIGATIONS OF THE ADMINISTRATOR. The Administrator, at its expense,
shall supply the Board of Trustees and officers of the Fund with all statistical
information and reports reasonably required by it and reasonably available to
the Administrator and furnish the Fund with office facilities, including space,
furniture and equipment and all personnel reasonably necessary for the operation
of the Fund. The Administrator shall oversee the maintenance of all books and
records with respect to the Fund's securities transactions and the Fund's book
of account in accordance with all applicable federal and state laws and
regulations. In compliance with the requirements of Rule 31a-3 under the Act,
the Administrator hereby agrees that any records, which it maintains for the
Fund, are the property of the Fund and further agrees to surrender promptly to
the Fund any of such records upon the Fund's request. The Administrator further
agrees to arrange for the preservation of the records required to be maintained
by Rule 31a-1 under the Act for the periods prescribed by Rule 31a-2 under the
Act.
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3. EXPENSES OF THE FUND. The Administrator assumes and shall pay for
maintaining its staff and personnel, and shall at its own expense provide the
equipment, office space and facilities necessary to perform its obligations
under this Agreement. In addition, the Administrator assumes and shall pay the
following expenses of the Fund: insurance, taxes, expenses for legal services,
costs of printing proxies, stock certificates and prospectuses (except to the
extent paid by the investment adviser pursuant to the Investment Advisory and
Management Agreement by and between the parties hereto dated December 6, 1997),
the insurance required by Section 17(g) of the Act, charges of a custodian for
safekeeping of the Fund's securities, Securities and Exchange Commission fees,
expense of registering the shares of the Fund under Federal and state securities
laws, fees and expenses of trustees who are not interested persons of the Fund,
accounting and pricing costs (including the daily calculation of net asset
value), interest, litigation and other extraordinary or non-recurring expenses,
and other expenses properly payable to the Fund. The Administrator does not
assume and will not be responsible for the expenses of the Fund related to
annual audit and for expenses related to brokerage commissions; brokerage and
audit expenses may be paid by the Administrator but the Fund will reimburse the
Administrator for such expenses.
4. COMPENSATION. As compensation for the services rendered, the
facilities furnished and the expenses assumed by the Administrator, the Fund
shall pay to the Administrator at the end of each calendar month a fee at the
annual rate of 1.0% of the Fund's average daily net assets as determined and
computed in accordance with the description of the method of determination of
net asset value contained in the Fund's Prospectus and Statement of Additional
Information.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
to the Fund hereunder are not to be deemed exclusive and the Administrator shall
be free to render similar services to others. Subject to, and in accordance with
the Certificate of Trust and By-Laws of the Fund and Section 10(a) of the Act,
it is understood that trustees, officers, agents and beneficial holders of the
Fund are or may be "interested persons" (as defined in the Act) of the
Administrator or its affiliates, and that directors, officers, agents or
shareholders of the Administrator or its affiliates are or may be "interested
persons" of the Fund as beneficial holders or otherwise.
6. LIABILITIES OF THE ADMINISTRATOR. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Administrator, the Administrator shall not
be liable to the Fund or to any beneficial holder of the Fund for any act or
omission in the course of, or in connection with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale of any
security.
7. RENEWAL. The term of this Agreement shall commence on the date hereof
and shall continue in effect until December 6, 1999 and is renewable thereafter
for successive one year periods if such continuance is approved at least
annually by (i) the Fund's Board of Trustees, or by a vote of the holders of a
majority of the outstanding voting securities of the Fund, and (ii) a vote of a
majority of the Trustees who are not parties to the Agreement or "interested
persons" (as defined in the Act) of any such party cast in person at a meeting
called for the purpose of voting on such approval.
8. TERMINATION. This Agreement (i) may be terminated at any time
without the payment of any penalty either by vote of the Board of Trustees of
the Fund, or by vote of a majority of the outstanding voting securities of the
Fund, or on 60 days written notice to the Administrator and (ii) may be
terminated at any time by the Administrator on 60 days written notice to the
Fund.
9. AMENDMENTS. This Agreement may be amended by the parties only if
such amendment is specifically approved by (i) the Board of Trustees of the
Fund, or by a vote of the holders of a majority of the outstanding voting
securities of the Fund, and (ii) a vote of a majority of those trustees of the
Fund who are not parties to this Agreement or interested persons of any such
party cast in person at a meeting called for the purpose of voting on such
approval.
10. NOTICES. Any and all notices or other communications required or
permitted under this Agreement shall be in writing and shall be deemed
sufficient when mailed by United States certified mail, return receipt
requested, or delivered in person against receipt to the party to whom it is to
be given, at the address of such party set forth below:
If to the Administrator:
Boyle Management and Research, Inc.
2062 Jackson Street
San Francisco, CA 94109
<PAGE>
If to the Fund:
The Boyle Fund
2062 Jackson Street
San Francisco, CA 94109
or to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 11.
11. SEVERABILITY. If any provision of this Agreement is invalid,
illegal or unenforceable, the balance of this Agreement shall remain in full
force and effect and this Agreement shall be construed in all respects as if
such invalid, illegal or unenforceable provision were omitted.
12. HEADINGS. Any paragraph headings in this Agreement are for
convenience of reference only, and shall be given no effect in the construction
and interpretation of this Agreement or any provisions thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first written above,
THE BOYLE FUND
By: ___________________
Michael J. Boyle
Chairman and CEO
Boyle Management and Research, Inc.
By: ___________________
Joanne E. Boyle, President
<PAGE>
