January 28, 1998
Securities and Exchange Commission
Division of Investment Management
Washington, D. C. 20549
Attn: Mr. Bruce R. MacNeil
Edgar Branch
Dear Mr. MacNeil:
Re: The Boyle Fund, comprised of one portfolio,
The Boyle Marathon Fund
File No. 333-41565 and 811-8501
This letter contains an explanation of the actions that have
been taken in an effort to respond to the SEC's comment letter dated January 16,
1998.
Comment 1 - - Please disclose in the prospectus what is meant
or implied by the term "marathon" and, if appropriate, disclose investor
suitability.
Response 1 - - We have selected the term "marathon" to imply
investments for the long run; we intend to select investments that will be
positioned for appreciation of capital over a three to five year period. This
Fund would be suitable for investors who have that same time horizon and have a
primary goal of capital appreciation. [This has been added to page 1, line 5 of
the Prospectus.]
Comment 2 - - Please include in the SAI a fundamental policy
regarding the Fund's concentration policy and please disclose that the Fund, by
concentrating in particular industries, may invest 25 percent or more of the
assets in such industries.
Response 2 - - The following sentence has been added to the
Statement of Additional Information at page 20: In addition, it is a fundamental
investment policy of the Fund, which may not be changed without the approval of
a majority of the outstanding voting securities of the Fund, that the Fund will
concentrate in equity securities of companies in the high technology, financial
service, pharmaceutical, and retail fields. The following has been added to page
9 of the Prospectus in the section entitled, "Concentration of Investments:" By
concentrating on such industries, the Fund may invest 25% or more of its assets
in such industries.
Comment 3 - - Please disclose the duplication of fees and
expenses the Fund will incur on that portion of its assets that is invested in
other investment companies.
Response 3 - - on page 9 of the Prospectus, at the end of the
"Diversification of Investments" section, the following will be added: While the
Fund does not presently intend to invest in other investment companies, to the
extent that the Fund does invest in such companies, there will be a duplication
of fees and expenses on that portion of the Fund's assets.
<PAGE>
Comment 4 - - Please confirm that all required information
about year 2000 issues has been included in the Registration Statement.
Response 4 - - There are no Year 2000 issues which would have
an adverse effect on the ability of the Investment Advisor to provide the
services described in the Registration Statement. Accordingly, all required
information about Year 2000 issues has been included in the Registration
Statement.
Comment 5 - - Please confirm in the "How to Purchase Shares"
section that direct purchase orders received by the Transfer Agent after 4:00
p.m., Eastern Time, are confirmed at the day's net asset value next calculated
(i.e., at the close of the next trading day).
Response 5 - - The following has been added to the "How to
Purchase Shares" section: Direct purchase orders received by the Transfer Agent
are confirmed at the net asset value next determined after receipt of such
purchase orders. This means that . . .
Comment 6 - - Please disclose where an investor can obtain
information on brokerage firms that sell Fund shares at below the Minimum.
Response 6 - - All references to lower minimums has been
deleted from the Prospectus. All investors will pay the same minimum no matter
where they buy shares in the Fund.
Comment 7 - - Please file the Custodian Agreement, with the
schedule of fees, in the pre-effective amendment.
Response 7 - - The Custodian Agreement has been filed with the
Exhibits.
Comment 8 - - Please add Martin Luther King Day to the list of
days that the New York Stock Exchange is closed.
Response 8 - - Done.
If you have any questions regarding these responses, please call me at
(415) 923-5855.
Sincerely yours,
Michael J. Boyle
<PAGE>
File Nos. 333-41565
and 811-8501
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. 1____ /X/
Post-Effective Amendment No. _______
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 1______ /X/
(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 to 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
February ___, 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. <We have selected the term "marathon" to imply investments for the long
run; we intend to select investments that will be positioned for appreciation of
capital over a three to five year period. This Fund would be suitable for
investors who have a that same time horizon and have a primary goal of capital
appreciation.> 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. 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 February __, 1998, has
been filed with the Securities and Exchange Commission and is hereby
incorporated by 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) 1-888-88-BOYLE .
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) 1-888-88-BOYLE.
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.
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"), 1301 East Ninth Street, 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.
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.
<PAGE>
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.
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. <While the Fund does
not presently intend to invest in other investment companies, to the extent that
the Fund does invest in such companies, there will be a duplication of fees and
expenses on that portion of the Fund's assets.>
<PAGE>
CONCENTRATION OF INVESTMENTS
The Fund intends to concentrate its investments in the following fields: high
technology; financial services; pharmaceutical, and retail. <By concentrating on
such industries, the Fund may invest 25% or more of its assets in such
industries.> 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.
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.
<PAGE>
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.
HOW TO PURCHASE SHARES
Your initial investment in the Fund must be at least $2,500 (or $2,000 for
IRAs). 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 after 4:00 p.m., Eastern time, are confirmed at the net asset
value next determined after receipt of such purchase orders. This means that>
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, 1301
East Ninth Street, 36th Floor, Cleveland, Ohio 44114. Checks should be made
payable to the "Boyle Marathon Fund." An account application is included in this
Prospectus.
<PAGE>
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 1-888-88-BOYLE) 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, 1301 East Ninth Street,
36th Floor, 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.
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.
<PAGE>
SHAREHOLDER SERVICES
Contact the Transfer Agent (nationwide call toll-free 1-888-88-BOYLE) 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 and "Roth IRAs" 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.
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.
<PAGE>
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.
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.
<PAGE>
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
February __, 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
February __, 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).
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.
<PAGE>
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 dispose of
such securities as soon as practicable 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.
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.
<PAGE>
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.
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.
<PAGE>
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.
<In addition, it is a fundamental investment of the Fund, which
<may not be changed without the approval of a majority of the outstanding voting
<securities of the Fund, that the Fund will concentrate in equity securities if
<companies in the high technology, financial service, pharmaceutical, and retail
fields.>
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.
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.
<PAGE>
PRINCIPAL SECURITY HOLDERS
As of January 27, 1998, all of the outstanding shares of the Fund were
owned by Michael J. and Joanne E. Boyle, 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.
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.
<PAGE>
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, <Martin Luther King 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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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.
FINANCIAL STATEMENT
To The Shareholders and Trustees
The Boyle Fund
We have audited the accompanying statement of assets and liabilities of The
Boyle Fund (comprised of The Boyle Marathon Fund) as of January 30, 1998. This
financial statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statement of assets and liabilities presentation. Our procedures included
confirmation of cash held by the custodian as of January 30, 1998, by
correspondence with the custodian. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of The Boyle
Marathon Fund as of January 30, 1998, in conformity with generally accepted
accounting principles.
/S/ McCurdy & Associates
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
January 30, 1998
<PAGE>
THE BOYLE FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 30, 1998
The Boyle
Marathon Fund
ASSETS:
Cash in Bank $100,000
Organization Costs 16,147
Total Assets 116,147
LIABILITIES:
Note Payable 16,147
Total Liabilities 16,147
NET ASSETS $100,000
NET ASSETS CONSIST OF:
Capital Paid In $100,000
OUTSTANDING SHARES
Unlimited Number of Shares
Authorized Without Par Value 10,000
NET ASSET VALUE PER SHARE $10
OFFERING PRICE PER SHARE $10
See Accountants' Audit Report
THE BOYLE FUND
NOTES TO FINANCIAL STATEMENTS
January 30, 1998
1. ORGANIZATION
The Boyle Fund (the "Trust") is an open-end management invest ment company
organized as a business trust under the laws of the State of Delaware by a
Declaration of Trust dated October 24, 1997. The Declaration of Trust
provides for an unlimited number of authorized shares of beneficial
interest, which may, without shareholder approval, be divided into an
unlimited number of series of such shares, and which presently consist of
one series of shares for The Boyle Marathon Fund.
The Fund uses an independent custodian and transfer agent. No transactions
other than those relating to organizational matters and the sale of 10,000
Shares of The Boyle Marathon Fund have taken place to date.
2. RELATED PARTY TRANSACTIONS
As of January 30, 1998, all of the outstanding shares of the Fund were owned
by Michael J. and Joanne E. Boyle. A share- holder who beneficially owns,
directly or indirectly, more than 25% of the Fund's voting securities may be
deemed a "control person" (as defined in the 1940 Act) of the Fund. Boyle
Management & Research, Inc. is controlled by Michael J. Boyle, the Chairman
of the Fund.
Boyle Management & Research, Inc., the Fund's investment adviser, is
registered as an investment adviser under the Investment Advisers Act of
1940.
<PAGE>
As compensation for Boyle Management & Research, Inc.'s services rendered to
the Fund, such Fund pays a fee, computed and paid monthly, at an annual rate
of 1-1/2% of the Fund's daily net assets. This fee is higher than that paid
by most other investment companies.
3. CAPITAL STOCK AND DISTRIBUTION
At January 30, 1998, an unlimited number of shares were autho rized and paid
in capital amounted to $100,000 for The Boyle Marathon Fund. Transactions in
capital stock were as follows:
Shares Sold:
The Boyle Marathon Fund 10,000
Shares Redeemed:
The Boyle Marathon Fund 0
Net Increase:
The Boyle Marathon Fund 10,000
Shares Outstanding:
The Boyle Marathon Fund 10,000
4. NOTE PAYABLE
Note payable consists of a note payable to Boyle Management & Research, Inc.
at 8% payable monthly for five years for the Fund.
These notes are stated at cost. The Fund does not believe it is practicable
to estimate fair value as the cost to provide such value would exceed the
benefit.
The principle due for the next five years for each Fund.
FYE 1997 $ 1,345
1998 3,229
1999 3,229
2000 3,229
2001 3,229
2002 1,886
$16,147
5. ORGANIZATION COSTS
Organization costs are being amortized on a straight line basis over a
five-year period.
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.
<PAGE>
PART C OTHER INFORMATION - - Financial Statements and Exhibits
(a) Financial Statement - - Balance Sheet of the Fund dated January 30, 1998
(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
* Previously filed.
<PAGE>
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 January 27, 1998, the only holder of securities of the
Fund was Michael J. and Joanne E. Boyle. 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.
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.
<PAGE>
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.
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed below on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco and the State of California on the 27th
of January 1998.
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 January 29, 1998
- - -------------------- Trustee
...............................
Michael J. Boyle
/S/ JOANNE E. BOYLE Chief Financial Officer January 29, 1998
- - ------------------- and Trustee
..............................
Joanne E. Boyle
/S/ JAMES A. HUGHES, JR. Trustee January 29, 1998
- - ------------------------
....................................
James A. Hughes, Jr.
/S/ EDWARD LOFTUS Trustee January 29, 1998
..............................
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
* Previously filed.
<PAGE>
EXHIBIT 8
Custody Agreement with Fifth Third Bank
CUSTODY AGREEMENT
THIS AGREEMENT, is made as of November 17,1997, by and between THE
BOYLE FUND, a business trust organized under the laws of the State of Delaware
(the "Trust"), acting with respect to the Boyle Marathon Fund (the "Fund"),
Boyle Management and Research, Inc., a California corporation (the "Adviser")
and THE FIFTH THIRD BANK, a banking company organized under the laws of the
State of Ohio (the "Custodian").
WITNESSETH:
WHEREAS, the Trust and the Adviser desire that the Securities and cash
of the Fund be held and administered by the Custodian pursuant to this
Agreement; and
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Adviser is registered as an investment adviser under the
1940 Act and provides advisory services to the Trust pursuant to an Investment
Advisory and Management Agreement;
WHEREAS, under the Investment Advisory and Management Agreement, the
Adviser is responsible for retaining and compensating agents to provide
non-advisory services to the Trust; and
WHEREAS, the Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(i) of the 1940 Act;
NOW, THEREFORE, in consideration of the mutual agreements
herein made, the Trust, the Adviser, and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1.1 "Authorized Person" means any Officer or other person duly
authorized by resolution of the Board of Trustees to give Oral Instructions and
Written Instructions on behalf of the Trust and named in Exhibit B hereto or in
such resolutions of the Board of Trustees, certified by an Officer, as may be
received by the Custodian from time to time.
1.2 "Board of Trustees" shall mean the Trustees from time to time
serving under the Trust's Agreement and Declaration of Trust, dated October 17,
1997, as from time to time amended.
1.3 "Book-Entry System" shall mean a federal book-entry system as
provided in Subpart O of Treasury Circular No. 300, 31 CFR 306, in Subpart B of
31 CFR Part 350, or in such book-entry regulations of federal agencies as are
substantially in the form of such Subpart O.
1.4 "Business Day" shall mean any day recognized as a settlement day by
The New York Stock Exchange, Inc. and any other day for which the Fund computes
the net asset value of the Fund.
1.5 "NASD" shall mean The National Association of Securities Dealers,
Inc.
1.6 "Officer" shall mean the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer, or any Assistant Treasurer of
the Trust.
1.7 "Oral Instructions" shall mean instructions orally transmitted to
and accepted by the Custodian because such instructions are: (i) reasonably
believed by the Custodian to have been given by an Authorized Person, (ii)
recorded and kept among the records of the Custodian made in the ordinary course
of business and (iii) orally confirmed by the Custodian. The Trust shall cause
all Oral Instructions to be confirmed by Written Instructions. If such Written
Instructions confirming Oral Instructions are not received by the Custodian
prior to a transaction, it shall in no way affect the validity of the
transaction or the authorization thereof by the Trust. If Oral Instructions vary
from the Written Instructions which purport to confirm them, the Custodian shall
notify the Trust of such variance but such Oral Instructions will govern unless
the Custodian has not yet acted.
<PAGE>
1.8 "Custody Account" shall mean any account in the name of the Trust,
which is provided for in Section 3.2 below.
1.9 "Proper Instructions" shall mean Oral Instructions or Written
Instructions. Proper Instructions may be continuing Written Instructions when
deemed appropriate by both parties.
1.10 "Securities Depository" shall mean The Participants Trust Company
or The Depository Trust Company and (provided that Custodian shall have received
a copy of a resolution of the Board of Trustees, certified by an Officer,
specifically approving the use of such clearing agency as a depository for the
Trust) any other clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities and Exchange Act of 1934 (the
"1934 Act"), which acts as a system for the central handling of Securities where
all Securities of any particular class or series of an issuer deposited within
the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of the Securities.
1.11 "Securities" shall include, without limitation, common and
preferred stocks, bonds, call options, put options, debentures, notes, bank
certificates of deposit, bankers' acceptances, mortgage-backed securities, other
money market instruments or other obligations, and any certificates, receipts,
warrants or other instruments or documents representing rights to receive,
purchase or subscribe for the same, or evidencing or representing any other
rights or interests therein, or any similar property or assets that the
Custodian has the facilities to clear and to service.
1.12 "Shares" shall mean the units of beneficial interest issued by the
Trust.
1.13 "Written Instructions" shall mean (i) written communications
actually received by the Custodian and signed by one or more persons as the
Board of Trustees shall have from time to time authorized, or (ii)
communications by telex or any other such system from a person or persons
reasonably believed by the Custodian to be Authorized, or (iii) communications
transmitted electronically through the Institutional Delivery System (IDS), or
any other similar electronic instruction system acceptable to Custodian and
approved by resolutions of the Board of Trustees, a copy of which, certified by
an Officer, shall have been delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Trust and the Adviser hereby constitute and
appoint the Custodian as custodian of all Securities and cash owned by or in the
possession of the Trust at any time during the period of this Agreement,
provided that such Securities or cash at all times shall be and remain the
property of the Trust.
2.2 Acceptance. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as hereinafter set forth and
in accordance with the 1940 Act as amended. Except as specifically set forth
herein, the Custodian shall have no liability and assumes no responsibly for any
non-compliance by the Trust or a Fund of any laws, rules or regulations.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 Segregation. All Securities and non-cash property held by the
Custodian for the account of the Fund, except Securities maintained in a
Securities Depository or Book-Entry System, shall be physically segregated from
other Securities and non-cash property in the possession of the Custodian and
shall be identified as subject to this Agreement.
3.2 Custody Account. The Custodian shall open and maintain in its trust
department a custody account in the name of each Fund, subject only to draft or
order of the Custodian, in which the Custodian shall enter and carry all
Securities, cash and other assets of the Fund which are delivered to it.
3.3 Appointment of Agents. In its discretion, the Custodian may
appoint, and at any time remove, any domestic bank or trust company, which has
been approved by the Board of Trustees and is qualified to act as a custodian
under the 1940 Act, as sub-custodian to hold Securities and cash of the Funds
and to carry out such other provisions of this Agreement as it may determine,
and may also open and maintain one or more banking accounts with such a bank or
trust company (any such accounts to be in the name of the Custodian and subject
only to its draft or order), provided, however, that the appointment of any such
agent shall not relieve the Custodian of any of its obligations or liabilities
under this Agreement.
3.4 Delivery of Assets to Custodian. The Fund shall deliver, or cause
to be delivered, to the Custodian all of the Fund's Securities, cash and other
assets, including (a) all payments of income, payments of principal and capital
distributions received by the Fund with respect to such Securities, cash or
other assets owned by the Fund at any time during the period of this Agreement,
and (b) all cash received by the Fund for the issuance, at any time during such
period, of Shares. The Custodian shall not be responsible for such Securities,
cash or other assets until actually received by it.
<PAGE>
3.5 Securities Depositories and Book-Entry Systems. The Custodian may
deposit and/or maintain Securities of the Funds in a Securities Depository or in
a Book-Entry System, subject to the following provisions:
(a) Prior to a deposit of Securities of the Funds in any
Securities Depository or Book-Entry System, the Fund shall
deliver to the Custodian a resolution of the Board of
Trustees, certified by an Officer, authorizing and instructing
the Custodian on an on-going basis to deposit in such
Securities Depository or Book-Entry System all Securities
eligible for deposit therein and to make use of such
Securities Depository or Book-Entry System to the extent
possible and practical in connection with its performance
hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of collateral
consisting of Securities. So long as such Securities
Depository or Book-Entry System shall continue to be employed
for the deposit of Securities of the Funds, the Trust shall
annually re-adopt such resolution and deliver a copy thereof,
certified by an Officer, to the Custodian.
(b) Securities of the Fund kept in a Book-Entry System or
Securities Depository shall be kept in an account ("Depository
Account") of the Custodian in such Book-Entry System or
Securities Depository which includes only assets held by the
Custodian as a fiduciary, custodian or otherwise for
customers.
(c) The records of the Custodian and the Custodian's account on
the books of the Book-Entry System and Securities Depository
as the case may be, with respect to Securities of a Fund
maintained in a Book-Entry System or Securities Depository
shall, by book-entry, or otherwise identify such Securities as
belonging to the Fund.
(d) If Securities purchases by the Fund are to be held in a
Book-Entry System or Securities Depository, the Custodian
shall pay for such Securities upon (i) receipt of advice from
the Book-Entry System or Securities Depository that such
Securities have been transferred to the Depository Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account
of the Fund. If Securities sold by the Fund are held in a
Book-Entry System or Securities Depository, the Custodian
shall transfer such Securities upon (i) receipt of advice from
the Book-Entry System or Securities depository that payment
for such Securities has been transferred to the Depository
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account
of the Fund.
(e) Upon request, the Custodian shall provide the Fund with copies
of any report (obtained by the Custodian from a Book-Entry
System or Securities Depository in which Securities of the
Fund is kept) on the internal accounting controls and
procedures for safeguarding Securities deposited in such
Book-Entry System or Securities Depository.
(f) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable to the Trust for any loss or
damage to the Trust resulting (i) from the use of a Book-Entry
System or Securities Depository by reason of any negligence or
willful misconduct on the part of Custodian or any
sub-custodian appointed pursuant to Section 3.3 above or any
of its or their employees, or (ii) from failure of Custodian
or any such sub-custodian to enforce effectively such rights
as it may have against a Book-Entry System or Securities
Depository. At its election, the Trust shall be subrogated to
the rights of the Custodian with respect to any claim against
a Book-Entry System or Securities Depository or any other
person for any loss or damage to the Funds arising from the
use of such Book-Entry System or Securities Depository, if and
to the extent that the Trust has been made whole for any such
loss or damage.
3.6 Disbursement of Moneys from Custody Accounts. Upon receipt of
Proper Instructions, the Custodian shall disburse moneys from a Fund Custody
Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only upon
compliance with Section 4.1 of this Agreement and only (i) in
the case of Securities (other than options on Securities,
futures contracts and options on futures contracts), against
the delivery to the Custodian (or any sub-custodian appointed
pursuant to Section 3.3 above) of such Securities registered
as provided in Section 3.9 below in proper form for transfer,
or if the purchase of such Securities is effected through a
Book-Entry System or Securities Depository, in accordance with
the conditions set forth in Section 3.5 above; (ii) in the
case of options on Securities, against delivery to the
Custodian (or such sub-custodian) of such receipts as are
required by the customs prevailing among dealers in such
options; (iii) in the case of futures contracts and options on
futures contracts, against delivery to the Custodian (or such
sub-custodian) of evidence of title thereto in favor of the
Trust or any nominee referred to in Section 3.9 below; and
(iv) in the case of repurchase or reverse repurchase
agreements entered into between the Trust and a bank which is
a member of the Federal Reserve System or between the Trust
and a primary dealer in U.S. Government securities, against
delivery of the purchased Securities either in certificate
form or through an entry crediting the Custodian's account at
a Book-Entry System or Securities Depository for the account
of the Fund with such Securities;
(b) In connection with the conversion, exchange or surrender, as
set forth in Section 3.7(f) below, of securities owned by the
Fund;
(c) For the payment of any dividends or capital gain distributions
declared by the Fund;
(d) In payment of the redemption price of Shares as provided in
Section 5.1 below;
(e) For the payment of any expense or liability incurred by the
Trust, including but not limited to the following payments for
the account of a Fund: interest; taxes; administration,
investment management, investment advisory, accounting,
auditing, transfer agent, custodian, trustee and legal fees;
and other operating expenses of a Fund; in all cases, whether
or not such expenses are to be in whole or in part capitalized
or treated as deferred expenses;
<PAGE>
(f) For transfer in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD,
relating to compliance with rules of The Options Clearing
Corporation and of any registered national securities exchange
(or of any similar organization or organizations) regarding
escrow or other arrangements in connection with transactions
by the Trust;
(g) For transfer in accordance with the provisions of any
agreement among the Trust, the Custodian, and a futures
commission merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any contract market (or any
similar organization or organizations) regarding account
deposits in connection with transactions by the Trust;
(h) For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution
(including the Custodian), which deposit or account has a term
of one year or less; and
(i) For any other proper purposes, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution of
the Board of Trustees, certified by an Officer, specifying the
amount and purpose of such payment, declaring such purpose to
be a proper corporate purpose, and naming the person or
persons to whom such payment is to be made.
3.7 Delivery of Securities from Fund Custody Accounts. Upon receipt of
Proper Instructions, the Custodian shall release and deliver Securities from a
Custody Account but only in the following cases:
(a) Upon the sale of Securities for the account of a Fund but only
against receipt of payment therefor in cash, by certified or
cashiers check or bank credit;
(b) In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of
Section 3.5 above;
(c) To an Offeror's depository agent in connection with tender or
other similar offers for Securities of a Fund; provided that,
in any such case, the cash or other consideration is to be
delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into the
name of the Trust, the Custodian or any sub-custodian
appointed pursuant to Section 3.3 above, or of any nominee or
nominees of any of the foregoing, or (ii) for exchange for a
different number of certificates or other evidence
representing the same aggregate face amount or number of
units; provided that, in any such case, the new Securities are
to be delivered to the Custodian;
(e) To the broker selling Securities, for examination in
accordance with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the issuer of such Securities, or pursuant to
provisions for conversion contained in such Securities, or
pursuant to any deposit agreement, including surrender or
receipt of underlying Securities in connection with the
issuance or cancellation of depository receipts; provided
that, in any such case, the new Securities and cash, if any,
are to be delivered to the Custodian;
(g) Upon receipt of payment therefor pursuant to any repurchase or
reverse repurchase agreement entered into by a Fund;
(h) In the case of warrants, rights or similar Securities, upon
the exercise thereof, provided that, in any such case, the new
Securities and cash, if any, are to be delivered to the
Custodian;
(i) For delivery in connection with any loans of Securities of a
Fund, but only against receipt of such collateral as the Trust
shall have specified to the Custodian in Proper Instructions;
(j) For delivery as security in connection with any borrowings by
the Trust on behalf of a Fund requiring a pledge of assets by
such Fund, but only against receipt by the Custodian of the
amounts borrowed;
(k) Pursuant to any authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Trust or a Fund;
(l) For delivery in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-dealer
registered under the 1934 Act and a member of the NASD,
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange
(or of any similar organization or organizations) regarding
escrow or other arrangements in connection with transactions
by the Trust on behalf of a Fund;
(m) For delivery in accordance with the provisions of any
agreement among the Trust on behalf of a Fund, the Custodian,
and a futures commission merchant registered under the
Commodity Exchange Act, relating to compliance with the rules
of the Commodity Futures Trading Commission and/or any
contract market (or any similar organization or organizations)
regarding account deposits in connection with transactions by
the Trust on behalf of a Fund; or
<PAGE>
(n) For any other proper corporate purposes, but only upon
receipt, in addition to Proper Instructions, of a copy of a
resolution of the Board of Trustees, certified by an Officer,
specifying the Securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the
person or persons to whom delivery of such Securities shall be
made.
3.8 Actions Not Requiring Proper Instructions. Unless otherwise
instructed by the Trust, the Custodian shall with respect to all Securities held
for a Fund;
(a) Subject to Section 7.4 below, collect on a timely basis all
income and other payments to which the Trust is entitled
either by law or pursuant to custom in the securities
business;
(b) Present for payment and, subject to Section 7.4 below, collect
on a timely basis the amount payable upon all Securities which
may mature or be called, redeemed, or retired, or otherwise
become payable;
(c) Endorse for collection, in the name of the Trust, checks,
drafts and other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or
certificates of ownership under the federal income tax laws or
the laws or regulations of any other taxing authority now or
hereafter in effect, and prepare and submit reports to the
Internal Revenue Service ("IRS") and to the Trust at such
time, in such manner and containing such information as is
prescribed by the IRS;
(f) Hold for a Fund, either directly or, with respect to
Securities held therein, through a Book-Entry System or
Securities Depository, all rights and similar securities
issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in
connection with sale, exchange, substitution, purchase,
transfer and other dealings with Securities and assets of the
Fund.
3.9 Registration and Transfer of Securities. All Securities held for a
Fund that are issued or issuable only in bearer form shall be held by the
Custodian in that form, provided that any such Securities shall be held in a
Book-Entry System for the account of the Trust on behalf of a Fund, if eligible
therefor. All other Securities held for a Fund may be registered in the name of
the Trust on behalf of such Fund, the Custodian, or any sub-custodian appointed
pursuant to Section 3.3 above, or in the name of any nominee of any of them, or
in the name of a Book-Entry System, Securities Depository or any nominee of
either thereof; provided, however, that such Securities are held specifically
for the account of the Trust on behalf of a Fund. The Trust shall furnish to the
Custodian appropriate instruments to enable the Custodian to hold or deliver in
proper form for transfer, or to register in the name of any of the nominees
hereinabove referred to or in the name of a Book-Entry System or Securities
Depository, any Securities registered in the name of a Fund.
3.10 Records. (a) The Custodian shall maintain, by Fund, complete and
accurate records with respect to Securities, cash or other property held for the
Trust, including (i) journals or other records of original entry containing an
itemized daily record in detail of all receipts and deliveries of Securities and
all receipts and disbursements of cash; (ii) ledgers (or other records)
reflecting (A) Securities in transfer, (B) Securities in physical possession,
(C) monies and Securities borrowed and monies and Securities loaned (together
with a record of the collateral therefor and substitutions of such collateral),
(D) dividends and interest received, and (E) dividends receivable and interest
accrued; and (iii) canceled checks and bank records related thereto. The
Custodian shall keep such other books and records of the Trust as the Trust
shall reasonably request, or as may be required by the 1940 Act, including, but
not limited to Section 3.1 and Rule 31a-1 and Rule 31a-2 promulgated thereunder.
(b) All such books and records maintained by the Custodian shall (i) be
maintained in a form acceptable to the Trust and in compliance with rules and
regulations of the Securities and Exchange Commission, (ii) be the property of
the Trust and at all times during the regular business hours of the Custodian be
made available upon request for inspection by duly authorized officers,
employees or agents of the Trust and employees or agents of the Securities and
Exchange Commission, and (iii) if required to be maintained by Rule 31a-1 under
the 1940 Act, be preserved for the periods prescribed in Rule 31a-2 under the
1940 Act.
3.11 Fund Reports by Custodian. The Custodian shall furnish the Trust
with a daily activity statement by Fund and a summary of all transfers to or
from the Custody Account on the day following such transfers. At least monthly
and from time to time, the Custodian shall furnish the Trust with a detailed
statement, by Fund, of the Securities and moneys held for the Trust under this
Agreement.
3.12 Other Reports by Custodian. The Custodian shall provide the Trust
with such reports, as the Trust may reasonably request from time to time, on the
internal accounting controls and procedures for safeguarding Securities, which
are employed by the Custodian or any sub-custodian appointed pursuant to Section
3.3 above.
3.13 Proxies and Other Materials. The Custodian shall cause all proxies
if any, relating to Securities which are not registered in the name of a Fund,
to be promptly executed by the registered holder of such Securities, without
indication of the manner in which such proxies are to be voted, and shall
include all other proxy materials, if any, promptly deliver to the Trust such
proxies, all proxy soliciting materials, which should include all other proxy
materials, if any, and all notices to such Securities.
<PAGE>
3.14 Information on Corporate Actions. Custodian will promptly notify
the Trust of corporate actions, limited to those Securities registered in
nominee name and to those Securities held at a Depository or sub-Custodian
acting as agent for Custodian. Custodian will be responsible only if the notice
of such corporate actions is published by the Financial Daily Card Service, J.J.
Kenny Called Bond Service, DTC, or received by first class mail from the agent.
For market announcements not yet received and distributed by Custodian's
services, Trust will inform its custody representative with appropriate
instructions. Custodian will, upon receipt of Trust's response within the
required deadline, affect such action for receipt or payment for the Trust. For
those responses received after the deadline, Custodian will affect such action
for receipt or payment, subject to the limitations of the agent(s) affecting
such actions. Custodian will promptly notify Trust for put options only if the
notice is received by first class mail from the agent. The Trust will provide or
cause to be provided to Custodian with all relevant information contained in the
prospectus for any security which has unique put/option provisions and provide
Custodian with specific tender instructions at least ten business days prior to
the beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 Purchase of Securities. Promptly upon each purchase of Securities
for the Trust, Written Instructions shall be delivered to the Custodian,
specifying (a) the name of the issuer or writer of such Securities, and the
title or other description thereof, (b) the number of shares, principal amount
(and accrued interest, if any) or other units purchased, (c) the date of
purchase and settlement, (d) the purchase price per unit, (e) the total amount
payable upon such purchase, and (f) the name of the person to whom such amount
is payable. The Custodian shall upon receipt of such Securities purchased by a
Fund pay out of the moneys held for the account of such Fund the total amount
specified in such Written Instructions to the person named therein. The
Custodian shall not be under any obligation to pay out moneys to cover the cost
of a purchase of Securities for a Fund, if in the relevant Custody Account there
is insufficient cash available to the Fund for which such purchase was made.
4.2 Liability for Payment in Advance of Receipt of Securities
Purchased. In any and every case where payment for the purchase of Securities
for a Fund is made by the Custodian in advance of receipt for the account of the
Fund of the Securities purchased but in the absence of specific Written or Oral
Instructions to so pay in advance, the Custodian shall be liable to the Fund for
such Securities to the same extent as if the Securities had been received by the
Custodian.
4.3 Sale of Securities. Promptly upon each sale of Securities by a
Fund, Written Instructions shall be delivered to the Custodian, specifying (a)
the name of the issuer or writer of such Securities, and the title or other
description thereof, (b) the number of shares, principal amount (and accrued
interest, if any), or other units sold, (c) the date of sale and settlement (d)
the sale price per unit, (e) the total amount payable upon such sale, and (f)
the person to whom such Securities are to be delivered. Upon receipt of the
total amount payable to the Trust as specified in such Written Instructions, the
Custodian shall deliver such Securities to the person specified in such Written
Instructions. Subject to the foregoing, the Custodian may accept payment in such
form as shall be satisfactory to it, and may deliver Securities and arrange for
payment in accordance with the customs prevailing among dealers in Securities.
4.4 Delivery of Securities Sold. Notwithstanding Section 4.3 above or
any other provision of this Agreement, the Custodian, when instructed to deliver
Securities against payment, shall be entitled, if in accordance with generally
accepted market practice, to deliver such Securities prior to actual receipt of
final payment therefor. In any such case, the Trust shall bear the risk that
final payment for such Securities may not be made or that such Securities may be
returned or otherwise held or disposed of by or through the person to whom they
were delivered, and the Custodian shall have no liability for any of the
foregoing.
4.5 Payment for Securities Sold, etc. In its sole discretion and from
time to time, the Custodian may credit the relevant Custody Account, prior to
actual receipt of final payment thereof, with (i) proceeds from the sale of
Securities which it has been instructed to deliver against payment, (ii)
proceeds from the redemption of Securities or other assets of the Trust, and
(iii) income from cash, Securities or other assets of the Trust. Any such credit
shall be conditional upon actual receipt by Custodian of final payment and may
be reversed if final payment is not actually received in full. The Custodian
may, in its sole discretion and from time to time, permit the Trust to use funds
so credited to its Custody Account in anticipation of actual receipt of final
payment. Any such funds shall be repayable immediately upon demand made by the
Custodian at any time prior to the actual receipt of all final payments in
anticipation of which funds were credited to the Custody Account.
4.6 Advances by Custodian for Settlement. The Custodian may, in its
sole discretion and from time to time, advance funds to the Trust to facilitate
the settlement of a Trust transactions on behalf of a Fund in its Custody
Account. Any such advance shall be repayable immediately upon demand made by
Custodian.
ARTICLE V
REDEMPTION OF TRUST SHARES
Transfer of Funds. From such funds as may be available for the purpose
in the relevant Custody Account, and upon receipt of Proper Instructions
specifying that the funds are required to redeem Shares of a Fund, the Custodian
shall wire each amount specified in such Proper Instructions to or through such
bank as the Trust may designate with respect to such amount in such Proper
Instructions. Upon effecting payment or distribution in accordance with proper
Instruction, the Custodian shall not be under any obligation or have any
responsibility thereafter with respect to any such paying bank.
<PAGE>
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of each Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account,
(a) in accordance with the provisions of any agreement among the
Trust, the Custodian and a broker-dealer registered under the
1934 Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange
(or the Commodity Futures Trading commission or any registered
contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Trust,
(b) for purposes of segregating cash or Securities in connection
with securities options purchased or written by a Fund or in
connection with financial futures contracts (or options
thereon) purchased or sold by a Fund,
(c) which constitute collateral for loans of Securities made by a
Fund,
(d) for purposes of compliance by the Trust with requirements
under the 1940 Act for the maintenance of segregated accounts
by registered investment companies in connection with reverse
repurchase agreements and when-issued, delayed delivery and
firm commitment transactions, and
(e) for other proper corporate purposes, but only upon receipt of,
in addition to Proper Instructions, a certified copy of a
resolution of the Board of Trustees, certified by an Officer,
setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate
purposes.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 Standard of Care. The Custodian shall be held to the exercise of
reasonable care in carrying out its obligations under this Agreement, and shall
be without liability to the Trust for any loss, damage, cost, expense (including
attorneys' fees and disbursements), liability or claim unless such loss,
damages, cost, expense, liability or claim arises from negligence, bad faith or
willful misconduct on its part or on the part of any sub-custodian appointed
pursuant to Section 3.3 above. The Custodian shall be entitled to rely on and
may act upon advice of counsel on all matters, and shall be without liability
for any action reasonably taken or omitted pursuant to such advice. The
Custodian shall promptly notify the Trust of any action taken or omitted by the
Custodian pursuant to advice of counsel. The Custodian shall not be under any
obligation at any time to ascertain whether the Trust is in compliance with the
1940 Act, the regulations thereunder, the provisions of the Trust's charter
documents or by-laws, or its investment objectives and policies as then in
effect.
7.2 Actual Collection Required. The Custodian shall not be liable for,
or considered to be the custodian of, any cash belonging to the Trust or any
money represented by a check, draft or other instrument for the payment of
money, until the Custodian or its agents actually receive such cash or collect
on such instrument.
7.3 No Responsibility for title, etc. So long as and to the extent that
it is in the exercise of reasonable care, the Custodian shall not be responsible
for the title, validity or genuineness of any property or evidence of title
thereto received or delivered by it pursuant to this Agreement.
7.4 Limitation on Duty to Collect. Custodian shall not be required to
enforce collection, by legal means or otherwise, of any money or property due
and payable with respect to Securities held for the Trust if such Securities are
in default or payment is not made after due demand or presentation.
7.5 Reliance Upon Documents and Instructions. The Custodian shall be
entitled to rely upon any certificate, notice or other instrument in writing
received by it and reasonably believed by it to be genuine. The Custodian shall
be entitled to rely upon any Oral Instructions and/or any Written Instructions
actually received by it pursuant to this Agreement.
7.6 Express Duties Only. The Custodian shall have no duties or
obligations whatsoever except such duties and obligations as are specifically
set forth in this Agreement, and no covenant or obligation shall be implied in
this Agreement against the Custodian.
7.7 Cooperation. The Custodian shall cooperate with and supply
necessary information, by the Trust, to the entity or entities appointed by the
Trust to keep the books of account of the Trust and/or compute the value of the
assets of the Trust. The Custodian shall take all such reasonable actions as the
Trust may from time to time request to enable the Trust to obtain, from year to
year, favorable opinions from the Trust's independent accountants with respect
to the Custodian's activities hereunder in connection with (a) the preparation
of the Trust's report on Form N-1A and Form N-SAR and any other reports required
by the Securities and Exchange Commission, and (b) the fulfillment by the Trust
of any other requirements of the Securities and Exchange Commission.
<PAGE>
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification. The Trust shall indemnify and hold harmless the
Custodian and any sub-custodian appointed pursuant to Section 3.3 above, and any
nominee of the Custodian or of such sub-custodian from and against any loss,
damage, cost, expense (including attorneys' fees and disbursements), liability
(including, without limitation, liability arising under the Securities Act of
1933, the 1934 Act, the 1940 Act, and any state or foreign securities and/or
banking laws) or claim arising directly or indirectly (a) from the fact that
Securities are registered in the name of any such nominee, or (b) from any
action or inaction by the Custodian or such sub-custodian (i) at the request or
direction of or in reliance on the advice of the Trust, or (ii) upon Proper
Instructions, or (c) generally, from the performance of its obligations under
this Agreement or any sub-custody agreement with a sub-custodian appointed
pursuant to Section 3.3 above or, in the case of any such sub-custodian, from
the performance of its obligations under such custody agreement, provided that
neither the Custodian nor any such sub-custodian shall be indemnified and held
harmless from and against any such loss, damage, cost, expense, liability or
claim arising from the Custodian's or such sub-custodian's negligence, bad faith
or willful misconduct.
8.2 Indemnity to be Provided. If the Trust requests the Custodian to
take any action with respect to Securities, which may, in the opinion of the
custodian, result in the Custodian or its nominee becoming liable for the
payment of money or incurring liability of some other form, the Custodian shall
not be required to take such action until the Trust shall have provided
indemnity therefor to the Custodian in an amount and form satisfactory to the
Custodian.
ARTICLE IX
FORCE MAJEURE
The Custodian, the Adviser, and the Trust shall not be liable for any
failure or delay in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation, acts of God; earthquakes; fires; floods;
wars; civil or military disturbances; sabotage; strikes; epidemics; riots; power
failures; computer failure and any such circumstances beyond its reasonable
control as may cause interruption, loss or malfunction of utility,
transportation, computer (hardware or software) or telephone communication
service; accidents; labor disputes, acts of civil or military authority;
governmental actions; or inability to obtain labor, material, equipment or
transportation; provided, however, that the Custodian in the event of a failure
or delay shall use its best efforts to ameliorate the effects of any such
failure or delay. Notwithstanding the foregoing, the Custodian shall maintain
sufficient disaster recovery procedures to minimize interruptions.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 Effective Period. This Agreement shall become effective as of the
date first set forth above and shall continue in full force and effect until
terminated as hereinafter provided.
10.2 Termination. Either party hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of the
giving of such notice. If a successor custodian shall have been appointed by the
Board of Trustees, the Custodian shall, upon receipt of a notice of acceptance
by the successor custodian, on such specified date of termination (a) deliver
directly to the successor custodian all Securities (other than Securities held
in a Book-Entry System or Securities Depository) and cash then owned by the
Trust and held by the Custodian as custodian, and (b) transfer any Securities
held in a Book-Entry System or Securities Depository to an account of or for the
benefit of the Trust at the successor custodian, provided that the Adviser will
pay, on behalf of the Trust, to the Custodian all fees, expenses and other
amounts to the payment or reimbursement of which it shall then be entitled. Upon
such delivery and transfer, the Custodian shall be relieved of all obligations
under this Agreement. The Trust may at any time immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by regulatory authorities in the State of Ohio or upon the happening
of a like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction.
10.3 Failure to Appoint Successor Custodian. If a successor custodian
is not designated by the Trust on or before the date of termination specified
pursuant to Section 10.1 above, then the Custodian shall have the right to
deliver to a bank or trust company of its own selection, which is (a) a "Bank"
as defined in the 1940 Act, (b) has aggregate capital, surplus and undivided
profits as shown on its then most recent published report of not less than $25
million, and (c) is doing business in New York, New York, all Securities, cash
and other property held by Custodian under this Agreement and to transfer to an
account of or for the Trust at such bank or trust company all Securities of the
Trust held in a Book-Entry System or Securities Depository. Upon such delivery
and transfer, such bank or trust company shall be the successor custodian under
this Agreement and the Custodian shall be relieved of all obligations under this
Agreement. If, after reasonable inquiry, Custodian cannot find a successor
custodian as contemplated in this Section 10.3, then Custodian shall have the
right to deliver to the Trust all Securities and cash then owned by the Trust
and to transfer any Securities held in a Book-Entry System or Securities
Depository to an account of or for the Trust. Thereafter, the Trust shall be
deemed to be its own custodian with respect to the Trust and the Custodian shall
be relieved of all obligations under this Agreement.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon from
time to time by the parties. The fees and other charges in effect on the date
hereof and applicable to the Funds are set forth in Exhibit B attached hereto.
<PAGE>
ARTICLE XII
LIMITATION OF LIABILITY
The Trust is a business trust organized under Delaware law and under a
Certificate of Trust, to which reference is hereby made a copy of which is on
file at the office of the Secretary of State of Delaware as required by law, and
to any and all amendments thereto so filed or hereafter filed. The obligations
of the Trust entered into in the name of the Trust or on behalf thereof by any
of the Trustees, officers, employees or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, officers,
employees, agents or shareholders of the Trust or the Funds personally, but bind
only the assets of the Trust, and all persons dealing with any of the Funds of
the Trust must look solely to the assets of the Trust belonging to such Fund for
the enforcement of any claims against the Trust.
ARTICLE XIII
NOTICES
Unless otherwise specified herein, all demands, notices, instructions,
and other communications to be given hereunder shall be in writing and shall be
sent or delivered to The receipt at the address set forth after its name herein
below:
To the Trust or Adviser:
Boyle Management and Research, Inc.
2062 Jackson Street
San Francisco, CA 94109
Attn: Michael J. Boyle
Telephone: (415) 923-5855
Facsimile: (415) 923-5855
To the Custodian:
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attn: Area Manager - Trust Operations
Telephone: (513) 579-5300
Facsimile: (513) 579-4312
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIII. Writing shall include
transmission by or through teletype, facsimile, central processing unit
connection, on-line terminal and magnetic tape.
ARTICLE XIV
MISCELLANEOUS
14.1 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Ohio.
14.2 References to Custodian. The Trust shall not circulate any printed
matter which contains any reference to Custodian without the prior written
approval of Custodian, excepting printed matter contained in the prospectus or
statement of additional information or its registration statement for the Trust
and such other printed matter as merely identifies Custodian as custodian for
the Trust. The Trust shall submit printed matter requiring approval to Custodian
in draft form, allowing sufficient time for review by Custodian and its counsel
prior to any deadline for printing.
14.3 No Waiver. No failure by either party hereto to exercise and no
delay by such party in exercising, any right hereunder shall operate as a waiver
thereof. The exercise by either party hereto of any right hereunder shall not
preclude the exercise of any other right, and the remedies provided herein are
cumulative and not exclusive of any remedies provided at law or in equity.
14.4 Amendments. This Agreement cannot be changed orally and no
amendment to this Agreement shall be effective unless evidenced by an instrument
in writing executed by the parties hereto.
14.5 Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts, each of which
shall be deemed an original but all of which together shall constitute but one
and the same instrument.
14.6 Severability. If any provision of this Agreement shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions shall not be affected or
impaired thereby.
14.7 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that this Agreement shall not be assignable by
either party hereto without the written consent of the other party hereto.
14.8 Headings. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
14.9 Effective Date. The effective date of this Agreement shall be the
date on which clearance from the Securities and Exchange Commission is received
to begin distributing the prospectus. This date is currently anticipated to be
January 17, 1998.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered in its name and on its behalf by its
representatives thereunto duly authorized, all as of the day and year first
above written.
ATTEST: THE BOYLE FUND
/S/ Joanne E. Boyle By: /S/ Michael J. Boyle
Its: Chairman and President
ATTEST: BOYLE MANAGEMENT AND
RESEARCH, INC.
/S/ Joanne E. Boyle By: /S/ Michael J. Boyle
Its: Chairman and CEO
ATTEST: THE FIFTH THIRD BANK
By: /S/ Howard Kaplan
Its: Assistant Vice President
Dated: November 17, 1997
<PAGE>
EXHIBIT A
TO THE CUSTODY AGREEMENT BETWEEN
THE BOYLE FUND, BOYLE MANAGEMENT AND RESEARCH, INC. AND
THE FIFTH THIRD BANK
November 17, 1997
Name of Fund Date
Boyle Marathon Fund November 17, 1997
THE BOYLE FUND
By: /S/ Michael J. Boyle
Its: Chairman and President
BOYLE MANAGEMENT AND
RESEARCH, INC.
By: /S/ Michael J. Boyle
Its: Chairman and CEO
THE FIFTH THIRD BANK
By: /S/ Howard Kaplan
Its: Assistant Vice President
Dated: November 17, 1997
<PAGE>
EXHIBIT B
TO THE CUSTODY AGREEMENT BETWEEN
THE BOYLE FUND, BOYLE MANAGEMENT AND RESEARCH, INC. AND
THE FIFTH THIRD BANK
November 17, 1997
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Trust to Administer each Custody Account.
Name Signature
Michael J. Boyle /S/ Michael J. Boyle
Joanne E. Boyle /S/ Joanne E. Boyle
- - ------------------------------------ ----------------------------------
- - ------------------------------------ ----------------------------------
- - ------------------------------------ ----------------------------------
- - ------------------------------------ ----------------------------------
- - ------------------------------------ ----------------------------------
- - ------------------------------------ ----------------------------------
<PAGE>
EXHIBIT C
TO THE CUSTODY AGREEMENT BETWEEN
THE BOYLE FUND, BOYLE MANAGEMENT AND RESEARCH, INC. AND
THE FIFTH THIRD BANK
November 17, 1997
MUTUAL FUND CUSTODY FEE SCHEDULE
Per Unit Fee
I. BASIC PER ACCOUNT FEE
Annual Asset Based Fees
Less than $25Million $ 1.00 bp
$25 - $100Million $ .75 bp
$100 - $200Million $ .50 bp
Over $200Million $ .25 bp
Minimun $2,400.00
II. SECURITY TRANSACTION FEES
DTC/FED Eligible Trades $ 9.00
Physical $25.00
Amortized Security Trades $25.00
Options $25.00
Mutual Funds $15.00
Foreign - Euroclear & Cedel $50.00
Foreign - Other $ TBD
III. SYSTEMS
Automated Securities Workstation $150.00
$200.00 Initial Setup
Mainframe-to-Mainframe $150.00
$200.00 Initial Setup
ACCESS
Single Account $50.00
Multiple Accounts $100.00
MISCELLANEOUS FEES
Principal & Interest Collection (on amortized securities) $5.00
Per additional issue for repo collateral $5.00
Voluntary Corporate Actions $25.00
Wire Transfers (In/Out) $7.00
Check Requests $6.00
Automated Asset Reconcilation $25.00
Escrow Receipt $5.00
Special Services - per hr. fee $75.00
Overnight Packages $8.00
Other TBD
*A 10% discount will be given for the first year of inception of the fund.
<PAGE>
EXHIBIT 10
Opinion of Counsel Related to the Issuance of Shares
Michael J. Boyle
Attorney-at-Law
2062 Jackson Street
San Francisco, California 94109
Phone/FAX 1-415-923-5855
January 22, 1998
The Boyle Fund
2062 Jackson Street
San Francisco, California 94109
Gentlemen:
I have acted as counsel for the Boyle Fund, a Delaware
business trust (the "Trust"), in connection with the filing by the Trust of a
Registration Statement on Form N-1A pursuant to the Securities Act of 1933 and
the Investment Company Act of 1940 (the "Registration Statement") with respect
to the proposed sale of an indefinite number of a series of shares of the Trust
representing the beneficial interest of shareholders of the Boyle Marathon Fund,
a separate investment portfolio of the Trust (the "shares"). I am also the
President and a Trustee of the Trust.
I have examined and relied upon originals or copies,
certified or otherwise identified to my satisfaction as being true copies, of
all such records of the Trust, all such agreements, certificates of officers of
the Trust, public officials and others, and such other documents, certificates
and other records as I have deemed necessary as a basis for the opinions
expressed in this letter, including, without limitation, the Certificate of
Trust of the Trust (the "Certificate of Trust"), the By-laws of the Trust and
the other records of proceedings of the Trustees and shareholder of the Trust
from the date of formation.
In my examination, I have assumed the genuiness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to me as originals, and the conformity to original documents
of all documents submitted to me as certified or photostatic copies.
I have investigated such questions of law for the purpose of
rendering the opinions expressed in this letter as I have deemed necessary. I
express no opinion in this letter concerning any law other than the law of the
State of Delaware and the federal law of the United States of America.
This opinion is being rendered to you as of the date hereof.
The opinion expressed herein assumes that there is no change in the facts,
circumstances and law in effect on the date of this opinion, particularly as
they relate to Trust authority and the Trust's good standing under Delaware law.
<PAGE>
The Boyle Fund
January, 22, 1998
Page 2
On the basis of the foregoing, and in reliance thereon, I am
of the opinion that the Shares, when issued pursuant to the terms, provisions
and conditions set forth in the Certificate of Trust and in the Registration
Statement, and upon receipt of full authorized consideration therefor in cash,
will be validly issued, fully paid and non-assessable by the Trust.
This opinion is rendered only to the Trust in connection with
the filing of the Registration Statement. I consent to the filing of this
opinion as Exhibit 10 to the Registration Statement and to the filing of this
opinion in conjunction with the filing in any state under the state's securities
or blue sky laws. This letter may not be paraphrased, quoted or summarized, nor
may it be duplicated or reproduced in part.
Respectfully submitted,
/S/ Michael J. Boyle
--------------------
Michael J. Boyle
<PAGE>
EXHIBIT 11
Consent of Independent Public Accountants
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use in this
Pre-effective Amendment No. 1 to the Registration Statement for The Boyle Fund
of all references to our firm included in or made a part of this Amendment.
McCurdy & Associates CPA's, Inc.
January 30, 1998
<PAGE>
EXHIBIT 13
Agreement Relating to Initial Capital
SUBSCRIPTION AGREEMENT
The Boyle Fund
2062 Jackson Street
San Francisco, California 94109
Gentlemen:
The undersigned together hereby subscribe to 10,000 shares of the
The Boyle Marathon Fund and agree to pay the sum of $100,000 in cash.
It is understood that upon acceptance hereof by The Boyle Fund the
shares subscribed for shall be issued to the undersigned as joint owners with
right of survivorship and that said shares shall be deemed to be fully paid
and nonassessable.
The undersigned agrees that the shares are being purchased for
investment with no present intention of reselling or redeeming said shares.
Dated and effective as of this 6th day of December 1997.
/S/ Michael J. Boyle
----------------
Michael J. Boyle
/S/ Joanne E. Boyle
---------------
Joanne E. Boyle
The foregoing subscription is hereby accepted. Dated and effective
as of this 6th day of December 1997.
THE BOYLE FUND
/S/ Michael J. Boyle
By: ______________________________________
Michael J. Boyle, President
<PAGE>
EXHIBIT 14
Prototype Individual Retirement Account
THE BOYLE FUND
INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
The following constitutes an agreement
establishing an Individual Retirement Account (under Section
408(a) of the Internal Revenue Code) between the Depositor and the
Custodian.
ARTICLE I
The Custodian may accept additional cash
contributions on behalf of the Depositor for a tax year of the
Depositor. The total cash contributions are limited to $2,000 for
the tax year unless the contribution is a rollover contribution
described in Section 402 (C) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a
simplified employee pension plan as described in Section 408(k).
Rollover contributions before January 1, 1993, include rollovers
described in Section 402(a)(5), 402(a)(6), 402(a)(7), 403(a)(4),
403(b)(8), 408(d)(3), or an employer contribution to a simplified
employee pension plan as described in Section 408(k).
ARTICLE II
The Depositor's interest in the balance in the
custodial account is nonforfeitable.
ARTICLE III
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled
with other property except in a common trust fund or common investment
fund (within the meaning of Section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of Section 408(m)) except as otherwise permitted by Section
408(m)(3) which provides an exception for certain gold and silver coins
and coins issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary,
the distribution of the Depositor's interest in the custodial
account shall be made in accordance with the following
requirements and shall otherwise comply with Section 408(a)(6) and
Proposed Regulations Section 1.408-8, including the incidental
death benefit provisions of Proposed Regulations Section
1.401(a)(9)-2, the provisions of which are herein incorporated by
reference.
2. Unless otherwise elected by the time distributions are required to
begin to the Depositor under Paragraph 3, or to the surviving
spouse under Paragraph 4, other than in the case of a life
annuity, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Depositor and the
surviving spouse and shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be recalculated.
3. The Depositor's entire interest in the custodial account must be,
or begin to be, distributed by the Depositor's required beginning
date, April 1 following the calendar year end in which the
Depositor reaches age 70 1/2. By that date, the Depositor may
elect, in a manner acceptable to the Custodian, to have the
balance in the custodial account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the
Depositor.
(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last
survivor lives of the Depositor and his or her designated
beneficiary.
(d) Equal or substantially equal annual payments over a specified
period that may not be longer than the Depositor's life
expectancy.
(e) Equal or substantially equal annual payments over a specified
period that may not be longer than the joint life and last
survivor expectancy of the Depositor and his or her designated
beneficiary.
4. If the Depositor dies before his or her entire interest is
distributed to him or her, the entire remaining interest will be
distributed as follows:
(a) If the Depositor dies on or after distribution of his or her
interest has begun, distribution must continue to be made in
accordance with Paragraph 3.
(b) If the Depositor dies before distribution of his or her
interest has begun, the entire remaining interest will, at the
election of the Depositor or, if the Depositor has not so
elected, at the election of the beneficiary or beneficiaries,
either
(i) Be distributed by the December 31 of the year containing
the fifth anniversary of the Depositor's death, or
(ii)Be distributed in equal or substantially equal payments
over the life or life expectancy of the designated beneficiary
or beneficiaries starting by December 31 of the year following
the year of the Depositor's death. If, however, the
beneficiary is the Depositor's surviving spouse, then this
distribution is not required to begin before December 31 of
the year in which the Depositor would have turned age 70 1/2.
<PAGE>
(c) Except where distribution in the form of an annuity meeting
the requirements of Section 408(b)(3) and its related
regulations has irrevocably commenced, distributions are
treated as having begun on the Depositor's required beginning
date, even though payments may actually have been made before
that date.
(d) If the Depositor dies before his or her entire interest has
been distributed and if the beneficiary is other than the
surviving spouse, no additional cash contributions or rollover
contributions may be accepted in the account.
5. In the case of a distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum
annual payment for each year, divide the Depositor's entire
interest in the custodial account as of the close of business on
December 31 of the preceding year by the life expectancy of the
Depositor (or the joint life and last survivor expectancy of the
Depositor and the Depositor's designated beneficiary, or the life
expectancy of the designated beneficiary, whichever applies). In
the case of distributions under Paragraph 3, determine the initial
life expectancy (or joint life and last survivor expectancy) using
the attained ages of the Depositor and designed beneficiary as of
their birthdays in the year the Depositor reaches age 701/2. In
the case of a distribution in accordance with Paragraph 4(b)(ii),
determine life expectancy using the attained age of the designated
beneficiary as of the beneficiary's birthday in the year
distributions are required to commence.
6. The owner of two or more individual retirement accounts may use
the "alternative method" described in Notice 88-38, 1988-1 C.B.
524, to satisfy the minimum distribution requirements described
above. This method permits an individual to satisfy these
requirements by taking from one individual retirement account the
amount required to satisfy the requirement for another.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information
necessary for the Custodian to prepare any reports required
under Section 408(i) and Regulations Section 1.408-5 and
1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue
Service and the Depositor prescribed by the Internal Revenue
Service.
ARTICLE VI
Notwithstanding any other articles which may be
added or incorporated, the provisions of Articles I through III
and this sentence will be controlling. Any additional articles
that are not consistent with Section 408(a) and related
regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time
to comply with the provisions of the Code and related regulations.
Other amendments may be made with the consent of the persons whose
signatures appear below.
ARTICLE VIII
1. Investment of Account Assets. (a) All contributions to the custodial
account shall be invested in shares of The Boyle Marathon Fund or, if
available, any other series of THE BOYLE FUND. To the extent that two
or more funds are available for investment, contributions shall be
invested in accordance with the Depositor's investment election.
(b) Each contribution to the custodial account shall identify the
Depositor's account number and be accompanied by a signed
statement directing the investment of that contribution. The
Custodian may return to the Depositor, without liability for
interest thereon, any contribution which is not accompanied by
adequate account identification or an appropriate signed statement
directing investment of that contribution.
(c) Contributions shall be invested in whole and fractional shares at
the price and in the manner such shares are offered to the public.
All distributions received on shares, including both dividends and
capital gains distributions, held in the custodial account shall
be reinvested in like shares. If any distribution of shares may be
received in additional like shares or in cash or other property,
the Custodian shall elect to receive such distribution in
additional like shares.
(d) All shares acquired by the Custodian shall be registered in the
name of the Custodian or its nominee. The Depositor shall be the
beneficial owner of all shares held in the custodial account and
the Custodian shall not vote any such shares, except upon written
direction of the Depositor, timely received, in a form acceptable
to the Custodian. The Custodian agrees to forward to the Depositor
each prospectus, report, notice, proxy and related proxy
soliciting materials applicable to shares held in the custodial
account received by the Custodian.
(e) The Depositor may, at any time, by written notice to the
Custodian, in a form acceptable to the Custodian, redeem any
number of shares held in the custodial account and reinvest the
proceeds in the shares of any other Investment Company upon the
terms and within the limitations imposed by the then current
prospectus of such other Investment Company in which the Depositor
elects to invest. By giving such instructions, the Depositor will
be deemed to have acknowledged receipt of such prospectus. Such
redemptions and reinvestments shall be done at the price and in
the manner such shares are then being redeemed or offered by the
respective Investment Company.
2. Amendment and Termination. (a) Boyle Management and Research, Inc., the
investment advisor for THE BOYLE FUND, may amend the Custodial Account
(including retroactive amendments) by delivering to the Custodian and
to the Depositor written notice of such amendment setting forth the
substance and effective date of the amendment. The Custodian and the
Depositor shall be deemed to have consented to any such amendment not
objected to in writing by the Custodian or Depositor, as applicable,
within thirty (30) days of receipt of the notice, provided that no
amendment shall cause or permit any part of the assets of the custodial
account to be diverted to purposes other than for the exclusive benefit
of the Depositor or his or her beneficiaries.
<PAGE>
(b) The Depositor may terminate the custodial account at any time by
delivering to the Custodian a written notice of such termination.
(c) The custodial account shall automatically terminate upon distribution
to the Depositor or his or her beneficiaries of its entire balance.
(d) The provisions of this Section 2 of Article VIII control over the
provisions of Article VII.
3. Taxes and Custodial Fees. Any income taxes or other taxes levied
or assessed upon or in respect of the assets or income of the
custodial account and any transfer taxes incurred shall be paid
from the custodial account. All administrative expenses incurred
by the Custodian in the performance of its duties, including fees
for legal services rendered to the Custodian in connection with
the custodial account, and the Custodian's compensation shall be
paid from the custodial account, unless otherwise paid by the
Depositor or his or her beneficiaries. Sufficient shares shall be
liquidated from the custodial account to pay such fees and
expenses.
The Custodian's fees are set forth in a schedule provided to the
Depositor. Extraordinary charges resulting from unusual
administrative responsibilities not contemplated by the schedule
will be subject to such additional charges as will reasonably
compensate the Custodian. Fees for refund of excess contributions,
transferring to a successor trustee or custodian, or
redemption/reinvestment of shares will be deducted from the refund
or redemption proceeds and the remaining balance will be remitted
to the Depositor, or reinvested or transferred in accordance with
the Depositor's instructions.
4. Reports and Notices. (a) The Custodian shall keep adequate records of
transactions it is required to perform hereunder. After the close of
each calendar year, the Custodian shall provide to the Depositor or his
or her legal representative a written report or reports reflecting the
transactions effected by it during such year and the assets and
liabilities of the Custodial Account at the close of the year.
(b) All communications or notices shall be deemed to be given upon
receipt by the Custodian at 1301 East Ninth Street, Cleveland, Ohio
44114 or the Depositor at his most recent address shown in
theCustodian's records. The Depositor agrees to advise the Custodian
promptly, in writing, of any change of address.
5. Designation of Beneficiary. The Depositor may designate a beneficiary
or beneficiaries to receive benefits from the custodial account in the
event of the Depositor's death. In the event the Depositor has not
designated a beneficiary, or if all beneficiaries shall predecease the
Depositor, the following persons shall take in the order named:
(a) The spouse of the Depositor;
(b) If the spouse shall predecease the Depositor or if the Depositor
does not have a spouse, then to the Depositor's estate. The
Depositor may also change or revoke any previously made
designation of beneficiary. Any designation or change or
revocation of a designation shall be made by written notice in a
form acceptable to and filed with the Custodian, prior to the
complete distribution of the balance in the custodial account. The
last such designation on file at the time of the Depositor's death
shall govern. If a beneficiary dies after the Depositor, but prior
to receiving his or her entire interest in the custodial account,
the remaining interest in the custodial account shall be paid to
the beneficiary's estate.
6. Multiple Individual Retirement Accounts. In the event the Depositor
maintains more than one individual retirement account (as defined in
Section 408(a)) and elects to satisfy his or her minimum distribution
requirements described in Article IV above by making a distribution
for another individual retirement account in accordance with Paragraph
6 thereof, the Depositor shall be deemed to have elected to calculate
the amount of his or her minimum distribution under this custodial
account in the same manner as under the individual retirement account
from which the distribution is made.
7. Inalienability of Benefits. Neither the benefits provided under this
custodial account nor the assets held therein shall be subject to
alienation, assignment, garnishment, attachment, execution or levy of
any kind and any attempt to cause such benefits or assets to be so
subjected shall not be recognized except to the extent as may be
required by law.
8. Rollover Contributions and Transfers. The Custodian shall have the
right to receive rollover contributions and to receive direct transfers
from other custodians or trustees. All contributions must be made in
cash or check.
9. Conflict in Provisions. To the extent that any provisions of this
Article VIII shall conflict with the provisions of Articles IV, V
and/or VII, the provisions of this Article VIII shall govern.
10. Applicable State Law. This custodial account shall be construed,
administered and enforced according to the laws of the State of Ohio.
11. Resignation or Removal of Custodian. The Custodian may resign at any
time upon thirty (30) days notice in writing to the Investment Company.
Upon such resignation, the Investment Company shall notify the
Depositor, and shall appoint a successor custodian under this
Agreement. The Depositor or the Investment Company at any time may
remove the Custodian upon 30 days written notice to that effect in a
form acceptable to and filed with the Custodian. Such notice must
include designation of a successor custodian. The successor custodian
shall satisfy the requirements of section 408(h) of the Code. Upon
receipt by the Custodian of written acceptance of such appointment by
the successor custodian, the Custodian shall transfer and pay over to
such successor the assets of and records relating to the Custodial
Account. The Custodian is authorized, however, to reserve such sum of
money as it may deem advisable for payment of all its fees,
compensation, costs and expenses, or for payment of any other liability
constituting a charge on or against the assets of the Custodial Account
or on or against the Custodian, and where necessary may liquidate
shares in the Custodial Account for such payments. Any balance of such
reserve remaining after the payment of all such items shall be paid
over to the successor Custodian. The Custodian shall not be liable for
the acts or omissions of any predecessor or successor custodian or
trustee.
12. Limitation on Custodian Responsibility. The Custodian will not under
any circumstances be responsible for the timing, purpose or propriety
of any contribution or of any distribution made hereunder, nor shall
the Custodian incur any liability or responsibility for any tax imposed
on account of any such contribution or distribution. Further, the
Custodian shall not incur any liability or responsibility in taking or
omitting to take any action based on any notice, election, or
instruction or any written instrument believed by the Custodian to be
genuine and to have been properly executed. The Custodian shall be
under no duty of inquiry with respect to any such notice, election,
instruction, or written instrument, but in its discretion may request
any tax waivers, proof of signatures or other evidence which it
reasonably deems necessary for its protection. The Depositor and the
successors of the Depositor including any executor or administrator of
the Depositor shall, to the extent permitted by law, indemnify the
Custodian and its successors and assigns against any and all claims,
actions or liabilities of the Custodian to the Depositor or the
successors or beneficiaries of the Depositor whatsoever (including
without limitation all reasonable expenses incurred in defending
against or settlement of such claims, actions or liabilities) which may
arise in connection with this Agreement or the Custodial Account,
except those due to the Custodian's own bad faith, gross negligence or
willful misconduct. The Custodian shall not be under any duty to take
any action not specified in this Agreement, unless the Depositor shall
furnish it with instructions in proper form and such instructions shall
have been specifically agreed to by the Custodian, or to defend or
engage in any suit with respect hereto unless it shall have first
agreed in writing to do so and shall have been fully indemnified to its
satisfaction.
<PAGE>
THE BOYLE FUND
INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT
Please read the following information together
with the Individual Retirement Account Custodial Agreement and the
Prospectus for the fund you select for investment of your IRA
contributions.
You may revoke this account any time within seven
calendar days after it is established by mailing or delivering a
written request for revocation to: THE BOYLE FUND, 1301 East Ninth
Street, Cleveland, Ohio 44114. If your revocation is mailed, the
date of the postmark (or the date of certification if sent by
certified or registered mail) will be considered your revocation
date. Upon proper revocation, you will receive a full refund of
your initial contribution, without any adjustments for items such
as administrative fees or fluctuations in market value.
(a) General. Your IRA is a custodial account created for your exclusive
benefit, and Fifth Third Bank serves as custodian. Your interest in the
account is nonforfeitable.
(b) Investments. Contributions made to your IRA will be invested in the
Boyle Marathon Fund or, if available, another series of the Boyle Fund.
The Investment Adviser is Boyle Management and Research, Inc. No part of your
account may be invested in life insurance contracts; further, the assets of your
account may not be commingled with other property.
(c) Eligibility. Employees and self-employed individuals are eligible to
contribute to an IRA. Employers may also contribute to
employer-sponsored IRAs established for the benefit of their employees.
You may also establish an IRA to receive rollover contributions and
transfers from another IRA custodian or trustee or from certain other
retirement plans.
(d) Time of Contribution. You may make regular contributions to your IRA
any time up to and including the due date for filing your tax return
for the year, not including extensions. You may continue to make
regular contributions to your IRA up to (but not including) the
calendar year in which you reach 70-1/2. Employer contributions to a
SEP - IRA plan may be continued after you attain age 70-1/2. Rollover
contributions and transfers may be made at any time, including after
you reach age 70-1/2.
(e) Amount of Contribution. You may make annual regular contributions to an
IRA in any amount up to 100% of your compensation for the year or
$2,000, whichever is less. Qualifying rollover contributions and
transfers are not subject to this limitation. In addition, if you are
married and file a joint return, you may make contributions to your
spouse's IRA. However, the maximum amount contributed to both your own
and to your spouse's IRA may not exceed 100% of your combined
compensation or $4,000, whichever is less. Moreover, the annual
contribution to either your account or your spouse's account may not
exceed $2,000. Note that a different rule for spousal IRAs applied for
tax years beginning before January 1, 1997.
(f) Rollovers and Transfers. You are allowed to "roll over" a distribution
or transfer your assets from one individual retirement account to
another without any tax liability. Rollovers between IRAs may be made
once per year and must be accomplished within 60 days after the
distribution. Also, under certain conditions, you may roll over (tax
free) all or a portion of a distribution received from a qualified plan
or tax-sheltered annuity in which you participate or in which your
deceased spouse participated. However, strict limitations apply to such
rollovers, and you should seek competent advice in order to comply with
all of the rules governing rollovers.
Most distributions from qualified retirement plans will be subject to a
20% withholding requirement. The 20% withholding can be avoided by
directly transferring the amount of the distribution to an individual
retirement account or to certain other types of retirement plans. You
should receive more information regarding these new withholding rules
and whether your distribution can be transferred to an IRA from the
plan administrator prior to receiving your distribution.
(g) Tax Deductibility of Annual Contributions. Although you may make an IRA
contribution within the limitations described above, all or a portion
of your contribution may be nondeductible. No deduction is allowed for
a rollover contribution or transfer. If you are not married and are not
an "active participant" in an employer-sponsored retirement plan, you
may make a fully deductible IRA contribution in any amount up to $2,000
or 100% of your compensation for the year, whichever is less. The same
limits apply if you are married and file a joint return with your
spouse and neither you nor your spouse is an "active participant" in an
employer-sponsored retirement plan.
An employer-sponsored retirement plan includes any of the following
types of retirement plans:
a qualified pension, profit-sharing, or stock bonus plan established
in accordance with IRC 401(a) or 401(k),
a Simplified Employee Pension Plan (SEP)
(IRC 408(k)),
a deferred compensation plan maintained by a governmental unit or
agency,
tax-sheltered annuities and custodial
accounts (IRC 403(b) and 403(b)(7)),
a qualified annuity plan under IRC Section 403(a).
a Savings Incentive Match Plan for Employees of Small Employers
(SIMPLE Plan).
<PAGE>
Generally, you are considered an "active
participant" in a defined contribution plan if an employer
contribution or forfeiture was credited to your account during the
year. You are considered an "active participant" in a defined
benefit plan if you are eligible to participate in a plan, even
though you elect not to participate. You are also treated as an
"active participant" if you make a voluntary or mandatory
contribution to any type of plan, even if your employer makes no
contribution to the plan.
If you (or your spouse, if filing a joint tax
return) are covered by an employer-sponsored retirement plan, your
IRA contribution is fully deductible if your adjusted gross income
(or combined income if you file a joint tax return) does not
exceed certain limits. For this purpose, your adjusted gross
income (1) is determined without regard to the exclusions from
income arising under Sections 135 (exclusion of certain savings
bond interest), 137 (exclusion of certain employer provided
adoption expenses) and 911 (certain exclusions applicable to U.S.
citizens or residents living abroad) of the Code, (2) is not
reduced for any deduction that you may be entitled to for IRA
contributions, and (3) takes into account the passive loss
limitations under Section 469 of the Code and any taxable benefits
under the Social Security Act and Railroad Retirement Act as
determined in accordance with Section 86 of the Code.
If you (or your spouse, if filing a joint tax
return) are covered by an employer-sponsored retirement plan, the
deduction for your IRA contribution is reduced proportionately for
adjusted gross income which exceeds the applicable dollar amount.
The applicable dollar amount for an individual is $25,000 and
$40,000 for married couples filing a joint tax return. The
applicable dollar limit for married individuals filing separate
returns if $0. If your adjusted gross income exceeds the
applicable dollar amount by $10,000 or less, you may make a
deductible IRA contribution. The deductible amount, however, will
be less than $2,000.
To determine the amount of your deductible contribution, use the following
calculations:
1) Subtract the applicable dollar amount from your adjusted gross income.
If the result is $10,000 or more, you can only make a nondeductible
contribution to your IRA.
2) Divide the above figure by $10,000, and multiply that percentage by
$2,000.
3) Subtract the dollar amount (result from #2 above) from $2,000 to
determine the amount which is deductible.
If the deduction limit is not a multiple of $10
then it should be rounded up to the next $10. There is a $200
minimum floor on the deduction limit if your adjusted gross income
does not exceed $35,000 (for a single taxpayer), $50,000 (for
married taxpayers filing jointly) or $10,000 (for a married
taxpayer filing separately).
Even if your income exceeds the limits described
above, you may make a contribution to your IRA up to the
contribution limitations described in Section 5 above. To the
extent that your contribution exceeds the deductible limits, it
will be nondeductible. However, earnings on all IRA contributions
are tax deferred until distribution.
(h) Excess Contributions. Contributions which exceed the allowable maximum
for federal income tax purposes are treated as excess contributions. A
nondeductible penalty tax of 6% of the excess amount contributed will
be added to your income tax for each year in which the excess
contribution remains in your account.
(i) Correction of Excess Contribution. If you make a contribution in excess
of your allowable maximum, you may correct the excess contribution and
avoid the 6% penalty tax for that year by withdrawing the excess
contribution and its earnings on or before the date, including
extensions, for filing your tax return for the tax year for which the
contribution was made. Any earnings on the withdrawn excess
contribution will be taxable in the year the excess contribution was
made and may be subject to a 10% early distribution penalty tax if you
are under age 59 1/2. In addition, in certain cases an excess
contribution may be withdrawn after the time for filing your tax
return. Finally, excess contributions for one year may be carried
forward and applied against the contribution limitation in succeeding
years.
(j) Simplified Employee Pension Plan. An IRA may also be used in connection
with a Simplified Employee Pension Plan established by your employer
(or by you if you are self-employed). In addition, if your SEP Plan as
in effect on December 31, 1996 permitted salary reduction
contributions, you may elect to have your employer make salary
reduction contributions. Several limitations on the amount that may be
contributed apply. First, salary reduction contributions (for plans
that are eligible) may not exceed $9,500 per year (certain lower limits
may apply for highly compensated employees). The $9,500 limit applies
for 1997 and is adjusted periodically for cost of living increases.
Second, the combination of all contributions for any year (including
employer contributions and, if your SEP Plan is eligible, salary
reduction contributions) cannot exceed 15 percent of compensation
(disregarding for this purpose compensation in excess of $160,000 per
year). The $160,000 compensation limit applies for 1997 and is adjusted
periodically for cost of living increases. A number of special rules
apply to SEP Plans, including a requirement that contributions
generally be made on behalf of all employees of the employer (including
for this purpose a sole proprietorship or partnership) who satisfy
certain minimum participation requirements. It is your responsibility
and that of your employer to see that contributions in excess of normal
IRA limits are made under and in accordance with a valid SEP Plan.
<PAGE>
(k) Savings and Incentive Match Plan for Employees of Small
Employers ("SIMPLE"). An IRA may also be used in
connection with a SIMPLE Plan established by your employer (or by
you if you are self-employed). Under a SIMPLE Plan, you may elect
to have your employer make salary reduction contributions of up to
$6,000 per year to your SIMPLE IRA. The $6,000 limit applies for
1997 and is adjusted periodically for cost of living increases. In
addition, your employer will contribute certain amounts to your
SIMPLE IRA, either as a matching contribution to those
participants who make salary reduction contributions or as a
non-elective contribution to all eligible participants whether or
not making salary reduction contributions. A number of special
rules apply to SIMPLE Plans, including (1) a SIMPLE Plan generally
is available only to employers with fewer than 100 employees, (2)
contributions must be made on behalf of all employees of the
employer (other than bargaining unit employees) who satisfy
certain minimum participation requirements, (3) contributions are
made to a special SIMPLE IRA that is separate and apart from your
other IRAs, (4) if you withdraw from your SIMPLE IRA during the 2
year period during which you first began participation in the
SIMPLE Plan, the early distribution excise tax (if otherwise
applicable) is increased to 25 percent; and (5) during this two
year period, any amount withdrawn may be rolled over tax-free only
into another SIMPLE IRA (and not to a "regular" IRA). It is your
responsibility and that of your employer to see that contributions
in excess of normal IRA limits are made under and in accordance
with a valid SIMPLE Plan.
(l) Form of Distributions. Distributions may be made in any one of three
methods:
(a) a lump-sum distribution,
(b) installments over a period not extending beyond your life
expectancy (as determined by actuarial tables), or
(c) installments over a period not extending beyond the joint life
expectancy of you and your designated beneficiary (as determined
by actuarial tables).
You may also use your account balance to purchase an annuity
contract, in which case your custodial account will terminate.
(m) Latest Time to Withdraw. You must begin receiving the assets in your
account no later than April 1 following the calendar year in which you
reach age 70-1/2 (your "required beginning date"). In general, the
minimum amount that must be distributed each year is equal to the
amount obtained by dividing the balance in your IRA on the last day of
the prior year (or the last day of the year prior to the year in which
you attain age 70-1/2) by your life expectancy, the joint life
expectancy of you and your beneficiary, or the specified payment term,
whichever is applicable. A federal tax penalty may be imposed against
you if the required minimum distribution is not made for the year you
reach age 70-1/2 and for each year thereafter. The penalty is equal to
50% of the amount by which the actual distribution is less than the
required minimum.
Unless you or your spouse elects otherwise, your life expectancy and/or
the life expectancy of your spouse will be recalculated annually. An
election not to recalculate life expectancy(ies) is irrevocable and
will apply to all subsequent years. The life expectancy of a nonspouse
beneficiary may not be recalculated.
If you have two or more IRAs, you may satisfy the minimum distribution
requirements by receiving a distribution from one of your IRAs in an
amount sufficient to satisfy the minimum distribution requirements for
your other IRAs. You must still calculate the required minimum
distribution separately for each IRA, but then such amounts may be
totalled and the total distribution taken from one or more of your
individual IRAs.
Distribution from your IRA must satisfy the special "incidental death
benefit" rules of the Internal Revenue Code. These provisions set forth
certain limitations on the joint life expectancy of you and your
beneficiary. If your beneficiary is not your spouse, your beneficiary
will be generally considered to be no more than 10 years younger than
you for the purpose of calculating the minimum amount that must be
distributed.
(n) Distribution of Account Assets After Death. If you die before receiving
the balance of your account, distribution of your remaining account
balance is subject to several special rules. If you die on or after
your required beginning date, distribution must continue in a method at
least as rapid as under the method of distribution in effect at your
death. If you die before your required beginning date, your remaining
interest will, at the election of your beneficiary or beneficiaries,
(i) be distributed by December 31 of the year in which occurs the fifth
anniversary of your death, or (ii) commence to be distributed by
December 31 of the year following your death over a period not
exceeding the life or life expectancy of your designated beneficiary or
beneficiaries.
Two additional distribution options are available if your spouse is the
beneficiary: (i) payments to your spouse may commence as late as
December 31 of the year you would have attained age 70-1/2 and be
distributed over a period not exceeding the life or life expectancy of
your spouse, or (ii) your spouse can simply elect to treat your IRA as
his or her own, in which case distributions will be required to
commence by April 1 following the calendar year in which your spouse
attains age 70-1/2.
(o) Tax Treatment of Distributions. Amounts distributed to you are
generally included in your gross income in the taxable year you receive
them and are taxable as ordinary income. To the extent, however, that
any part of a distribution constitutes a return of your nondeductible
contributions, it will not be included in your income. The amount of
any distribution excludable from income is the portion that bears the
same ratio as your aggregate nondeductible contributions bear to the
balance of your IRA at the end of the year (calculated after adding
back distributions during the year). For this purpose, all of your IRAs
are treated as single IRA. Furthermore, all distributions from an IRA
during a taxable year are to be treated as one distribution. The
aggregate amount of distributions excludable from income for all years
cannot exceed the aggregate nondeductible contributions for all
calendar years.
No distribution to you or anyone else from your account can qualify for
capital gains treatment under the federal income tax laws. Similarly,
you are not entitled to the special five- or ten-year averaging rule
for lump-sum distributions available to persons receiving distributions
from certain other types of retirement plans. All distributions are
taxed to the recipient as ordinary income except the portion of a
distribution which represents a return of nondeductible contributions.
The tax on excess distributions (but not the additional estate tax
payable with respect to excess accumulations) under Section 4980A of
the Code does not apply with respect to distributions made in 1997,
1998 and 1999.
Any distribution which is properly rolled over will not be included in
your gross income.
(p) Early Distributions. Distributions from your IRA made before age 59-1/2
will be subject to a 10% nondeductible penalty tax unless the
distribution is a return of nondeductible contributions or is made
because of your death, disability, as part of a series of substantially
equal periodic payments over your life expectancy or the joint life
expectancy of you and your beneficiary, or the distribution is made for
medical expenses in excess of 7.5% of adjusted gross income, is made
for reimbursement of medical premiums while you are unemployed, or is
an exempt withdrawal of an excess contribution. The penalty tax may
also be avoided if the distribution is rolled over to another
individual retirement account. See paragraph 11 above for special rules
applicable to distributions from a SIMPLE IRA.
<PAGE>
(q) Qualification of Plan. Your Individual Retirement Account
Plan has been approved as to form by the Internal
Revenue Service. The Internal Revenue Service approval is a
determination only as to the form of the Plan and does not
represent a determination of the merits of the Plan as adopted by
you. You may obtain further information with respect to your
Individual Retirement Account from any district office of the
Internal Revenue Service.
(r) Prohibited Transactions. If you engage in a "prohibited transaction,"
as defined in section 4975 of the Internal Revenue Code, your account
will be disqualified, and the entire balance in your account will be
treated as if distributed to you and will be taxable to you as ordinary
income. Examples of prohibited transactions are:
(a) the sale, exchange, or leasing of any property between you and your
account,
(b) the lending of money or other extensions of credit between you and
your account,
(c) the furnishing of goods, services, or facilities between you and
your account.
If you are under age 59-1/2, you may also be
subject to the 10% penalty tax on early distributions.
(s) Penalty for Pledging Account. If you use (pledge) all or part of your
IRA as security for a loan, then the portion so pledged will be treated
as if distributed to you and will be taxable to you as ordinary income
during the year in which you make such pledge. The 10% penalty tax on
early distributions may also apply.
(t) Reporting for Tax Purposes. Deductible contributions to your IRA may be
claimed as a deduction on your IRS Form 1040 for the taxable year
contributed. If any nondeductible contributions are made by you during
a tax year, such amounts must be reported on Form 8606 and attached to
your Federal Income Tax Return for the year contributed. If you report
a nondeductible contribution to your IRA and do not make the
contribution, you will be subject to a $100 penalty for each
overstatement unless a reasonable cause is shown for not contributing.
Other reporting will be required by you in the event that special taxes
or penalties described herein are due. You must also file IRS Form 5329
with the IRS for each taxable year in which the contribution limits are
exceeded, a premature distribution takes place, or less than the
required minimum amount is distributed from your IRA.
(u) Allocation of Earnings. The method of computing and allocating annual
earnings is set forth in Article VIII, Section 1 of the Individual
Retirement Account Custodial Agreement. The growth in value of your IRA
is neither guaranteed or projected.
(v) Income Tax Withholding. You must indicate on distribution requests
whether or not federal income taxes should be withheld. Redemption
request not indicating an election not to have federal income tax
withheld will be subject to withholding.
(w) Other Information. Information about the shares of each mutual fund
available for investment by your IRA must be furnished to you in the
form of a prospectus governed by rules of the Securities and Exchange
Commission. Please refer to the prospectus for detailed information
concerning your mutual fund. You may obtain further information
concerning IRAs from any District Office of the Internal Revenue
Service.
Fees and other expenses of maintaining your account may be charged to
you or your account. The Custodian's current fee schedule is included
as part of these materials.
<PAGE>
THE BOYLE FUND
IRA Application
Mail completed Application to:
THE BOYLE FUND
1301 East Ninth Street
Cleveland, Ohio 44114
1. Account Name Daytime Phone Number ( )
Holder
Address
City/State/Zip
Birthdate Social Security Number
2. Beneficiary Name Daytime Phone Number ( )
Designation*
Address
City/State/Zip
Birthdate Social Security Number
If no beneficiary is named, in the event of your death your IRA will
be payable to your estate.
3. Type of IRA [ ] Individual Retirement Account
(Check One) For Tax Year 19___.
[ ] Spousal Account.
(If electing this option be sure to complete
Section 1 showing your spouse as the account
holder.)
For Tax Year 19___.
[ ] SEP Account (IRS Form 5305-SEP is required
with your Application).
For Tax Year 19___.
[ ] SIMPLE Account (IRS Form 5304 SIMPLE is
required with your application.)
[ ] Rollover Account (You had physical receipt of
assets for less than 60 days or you have
authorized a direct rollover from a qualified
plan). If Rollover Account, please specify the
type of account held by previous custodian
below.
[ ] IRA to IRA
[ ] Employer Sponsored Plan to IRA
[ ] Transfer Account - Check this box if assets
are a direct transfer from current IRA
custodian (you will not have personal receipt
of assets) and complete an IRA Transfer Form.
<PAGE>
4. Your Investment Instructions I understand that
my account will be invested in the Boyle Marathon
Fund.
5. Acknowledgement and Signature
I adopt THE BOYLE FUND IRA, appointing Fifth
Third Bank to act as Custodian and to perform
administrative services. I have received and read
the prospectus for the Fund in which I am making
my contribution, and have read and understand the
IRA Custodial Agreement and Disclosure Statement.
I certify under penalties of perjury that my
Social Security Number (above) is correct and
that I am of legal age. I understand that the
Custodian will charge fees that are shown in the
Disclosure Statement (or any update thereto) and
they may be separately billed or collected by
redeeming sufficient shares from my Fund account
balance. I will supply the Internal Revenue
Service with information as to any taxable year
as required unless filed by the Custodian.
I have read, accept and incorporate the Custodial
Agreement and Disclosure Statement herein, by
reference. I appoint Fifth Third Bank or its
successors, as Custodian of the account(s).
Your Signature Date
Fifth Third Bank
Authorized Signature Date
Appointment of Custodian accepted:
Fifth Third Bank
<PAGE>
EXHIBIT 17
Financial Data Schedule
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JAN-30-1998
<INVESTMENTS-AT-COST> 100000
<INVESTMENTS-AT-VALUE> 100000
<RECEIVABLES> 0
<ASSETS-OTHER> 16147
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 116147
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16147
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 100000
<SHARES-COMMON-STOCK> 10000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 100000
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 100000
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
