<PAGE>
As filed with the Securities and Exchange Commission on April 20, 1998
Registration Nos. 333-_______;
811-____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
Pre-Effective Amendment No. __ / /
Post-Effective Amendment No. __ / /
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X /
Amendment No. __ / /
BARR ROSENBERG VARIABLE INSURANCE TRUST
(Exact Name of Registrant as Specified in Charter)
c/o Rosenberg Institutional Equity Management,
Four Orinda Way, Building E, Orinda, CA 94563
(Address of Principal Executive Offices) (Zip code)
510-254-6464
(Registrant's Telephone Number, including Area Code)
Name and address
of agent for service: Copies to:
-------------------- ---------
Kenneth Reid J.B. Kittredge, Esq.
Rosenberg Institutional Ropes & Gray
Equity Management One International Place
Four Orinda Way Boston, MA 02110-2624
Building E
Orinda, CA 94563
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
Title of Securities Being Registered: Shares of Beneficial Interest of the Barr
Rosenberg VIT Market Neutral Fund.
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 WITH 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(A),
MAY DETERMINE.
<PAGE>
BARR ROSENBERG VARIABLE INSURANCE TRUST
CROSS-REFERENCE SHEET
Required by Rule 495 Under the Securities Act of 1933
N-1A Item No. Location
- ------------- --------
PART A
Item 1. Cover Page Cover Page
Item 2. Synopsis Fund Expenses
Item 3. Condensed Financial Information Not Applicable
Item 4. General Description of Registrant Description of the Trust
and Ownership of Shares;
Investment Objective and
Policies; Cover Page; and
General Description of
Risks and Fund
Investments
Item 5. Management of the Fund Management of the Trust;
Back Cover
Item 5A. Management's Discussion of Fund
Performance Not Applicable
Item 6. Capital Stock and Other Securities Description of the Trust
and Ownership of Shares;
Distributions;
Shareholder Inquiries;
Taxes; and Back Cover
Item 7. Purchase of Securities Being Offered Purchase of Shares;
Management of the Trust;
Determination of Net
Asset Value; and Back
Cover
Item 8. Redemption or Repurchase Redemption of Shares;
and Determination of Net
Asset Value
Item 9. Pending Legal Proceedings Not Applicable
PART B
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
<PAGE>
N-1A Item No. Location
- ------------- ---------
Item 12. General Information and History Description of the Trust
and Ownership of Shares
Item 13. Investment Objectives and Policies Investment Objective and
Policies; Miscellaneous
Investment Practices; and
Investment Restrictions
Item 14. Management of the Fund Management of the Trust
Item 15. Control Persons and Principal Holders of
Securities Description of the Trust
and Ownership of Shares
Item 16. Investment Advisory and Other Services Investment Advisory and
Other Services;
Management of the Trust
Item 17. Brokerage Allocation and Other Practices Portfolio Transactions
Item 18. Capital Stock and Other Securities Description of the Trust
and Ownership of Shares
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered Determination of Net
Asset Value; See in Part
A, Purchase of Shares;
Redemption of Shares;
Determination of Net
Asset Value
Item 20. Tax Status Income Dividends,
Distributions and Tax
Status
Item 21. Underwriters Not Applicable
Item 22. Calculation of Performance Data Total Return Calculations
Item 23. Financial Statements Not Applicable
PART C
Information to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
-2-
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 20, 1998
BARR ROSENBERG VARIABLE INSURANCE TRUST
BARR ROSENBERG VIT MARKET NEUTRAL FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219
1-925-254-6464
JUNE __, 1998
Barr Rosenberg Variable Insurance Trust (the "Trust") is an open-end
management investment company offering shares of the Barr Rosenberg VIT
Market Neutral Fund (the "Fund") for purchase by separate accounts of
insurance companies. The Fund's investment manager is Rosenberg
Institutional Equity Management (the "Manager").
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY SUCH SECURITIES BE ACCEPTED PRIOR TO THE TIME SUCH REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
The Fund seeks long-term capital appreciation while maintaining minimal
exposure to general equity market risk by taking long positions in stocks
principally traded in the markets of the United States that the Manager has
identified as undervalued and short positions in such stocks that the Manager
has identified as overvalued. For a description of the risks of an investment in
the Fund, see "Investment Objective and Policies," "General Description of Risks
and Fund Investments" and "Description of the Trust and Ownership of Shares."
The Fund seeks a total return greater than the return on 3-month U.S. Treasury
Bills. For a description of the differences between an investment in the Fund
and in 3-month U.S. Treasury Bills, see "Investment Objective and Policies."
This Prospectus concisely describes the information that investors ought to
know before investing in the Fund and should be read in conjunction with the
prospectus for the separate account of the variable annuity or variable life
insurance product that accompanies this prospectus.
A Statement of Additional Information dated June __, 1998 (the
"Statement") is available free of charge by writing to the Trust at 3435
Stelzer Road, Columbus, Ohio 43219 or by telephoning 1-925-254-6464. The
Statement, which contains more detailed information about the Fund, has been
filed with the Securities and Exchange Commission (the "Commission") and is
incorporated by reference into this Prospectus. The Commission maintains a
World Wide Web site at http://www.sec.gov that contains the Statement,
material incorporated by reference into this Prospectus and the Statement,
and other information regarding registrants that file electronically with the
Commission.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT
<PAGE>
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND INVOLVE RISK, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL.
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 ON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
SHARES OF THE FUND ARE PRESENTLY AVAILABLE AND ARE BEING MARKETED
EXCLUSIVELY AS A POOLED FUNDING VEHICLE FOR VARIABLE ANNUITY CONTRACT AND
VARIABLE LIFE INSURANCE SEPARATE ACCOUNTS OF VARIOUS INSURANCE COMPANIES.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
FUND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . .5
GENERAL DESCRIPTION OF RISKS AND FUND INVESTMENTS. . . . . . . . . . . . . .6
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . .8
MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . .9
PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . 18
DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES . . . . . . . . . . . . . 20
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SHAREHOLDER INQUIRIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
<PAGE>
FUND EXPENSES
The estimated annual expenses of the Fund are set forth in the following
table, the form of which is prescribed by federal securities laws and
regulations.
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT SHAREHOLDER OPERATING
FEE (AFTER SERVICE DISTRIBUTION OTHER EXPENSES
WAIVER) FEE FEE EXPENSES (AFTER WAIVER)
<S> <C> <C> <C> <C> <C>
Barr Rosenberg VIT
Market Neutral Fund 1.57% None None 0.43% 2.00%
</TABLE>
The Manager has undertaken to reduce its management fee and bear certain
expenses until further notice in order to limit the total annual operating
expenses (which do not include nonrecurring account fees and extraordinary
expenses) to the percentage of the Fund's total annual operating expenses
listed under Total Fund Operating Expenses above. Absent such undertaking by
the Manager to waive its fee and bear such expenses, the Fund's management
fees would be 1.90% and estimated Total Fund Operating Expenses would be
2.33%. See "Management of the Trust."
4
<PAGE>
EXAMPLE:
<TABLE>
<CAPTION>
YOU WOULD PAY THE FOLLOWING EXPENSES
ON A $1,000 INVESTMENT ASSUMING A 5%
ANNUAL RETURN (WITH OR WITHOUT A
REDEMPTION AT THE END OF EACH TIME PERIOD):
1 YEAR 3 YEARS
<S> <C> <C>
Barr Rosenberg VIT
Market Neutral Fund . . . . . . . $20 $63
</TABLE>
THE PURPOSE OF THIS TABLE IS TO ASSIST YOU IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES OF THE FUND THAT ARE BORNE DIRECTLY OR INDIRECTLY BY HOLDERS
OF SHARES OF THE FUND. THE EXPENSES USED IN THE EXAMPLE AND THE FIVE PERCENT
ANNUAL RETURN (WHICH IS MANDATED BY THE SECURITIES AND EXCHANGE COMMISSION) ARE
NOT REPRESENTATIONS OF PAST OR FUTURE EXPENSES OR PERFORMANCE; ACTUAL EXPENSES
AND/OR PERFORMANCE MAY BE MORE OR LESS THAN THOSE SHOWN.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to seek long-term capital
appreciation while maintaining minimal exposure to general equity market risk.
The Fund seeks a total return greater than the return on 3-month U.S. Treasury
Bills. The Fund attempts to achieve its objective by taking long positions in
stocks principally traded in the markets of the United States that the Manager
has identified as undervalued and short positions in such stocks that the
Manager has identified as overvalued. See "General Description of Risks and Fund
Investments -- Risks of Short Sales" below. By taking long and short positions
in different stocks with similar characteristics, the Fund attempts to cancel
out the effect of general stock market movements on the Fund's performance. The
Manager will determine the size of each long or short position by analyzing the
tradeoff between the attractiveness of each position and its impact on the risk
of the overall portfolio. The Fund seeks to construct a diversified portfolio
that has minimal net exposure to the U.S. equity market generally and near
neutral exposure to specific industries, specific capitalization ranges (e.g.,
large cap, mid cap and small cap) and certain other risk factors.
Although the Fund's investment strategy seeks to minimize the risk
associated with investing in the equity market, an investment in the Fund will
be subject to the risk of poor stock selection by the Manager. For example, the
Manager may not be successful in executing its strategy of taking long positions
in stocks that outperform the market and short positions in stocks that
underperform the market. In addition, the Manager may fail to construct a
portfolio that has minimal exposure to general equity market risk or that has
near neutral exposure to specific industries, specific capitalization rangers
and certain other risk factors. Further, since the Manager will manage both a
long and a short portfolio, an investment in the Fund will involve the risk that
the Manager may make more poor investment decisions than a manager of a typical
stock mutual fund with only a long portfolio. An investment in 3-month U.S.
Treasury Bills is different
5
<PAGE>
from an investment in the Fund because Treasury Bills are backed by the full
faith and credit of the U.S. Government, Treasury Bills have a fixed rate of
return and investors in Treasury Bills do not bear the risk of losing their
investment.
To meet margin requirements, redemptions or pending investments, the Fund
may also temporarily hold a portion of its assets in full faith and credit
obligations of the United States government (e.g., U.S. Treasury Bills) and in
short-term notes, commercial paper or other money market instruments of high
quality (i.e., rated at least "A-2" or "AA" by Standard & Poor's ("S&P") or
Prime 2 or "Aa" by Moody's Investors Service, Inc. ("Moody's")) issued by
companies having an outstanding debt issue rated at least "AA" by S&P or at
least "Aa" by Moody's, or determined by the Manager to be of comparable quality
to any of the foregoing.
The Fund's long and short positions may involve without limit equity
securities of foreign issuers that are principally traded in the markets of the
United States. See "General Description of Risks and Fund Investments -- Special
Considerations of Foreign Investments." The Fund will not invest in equity
securities that are principally traded outside of the United States.
GENERAL DESCRIPTION OF RISKS AND FUND INVESTMENTS
INVESTMENT RISKS. The value of Fund shares may increase or decrease
depending on market, economic, political, regulatory and other conditions
affecting the Fund's portfolio. Investment in shares of the Fund is more
volatile and risky than some other forms of investment. In addition, if the
Manager takes long positions in stocks that underperform the market and short
positions in stocks that outperform the market, then the losses of the Fund may
exceed those of other stock mutual funds.
RISKS OF SHORT SALES. When the Manager anticipates that a security is
overvalued, it may borrow such security from a broker or other institution to
sell it short. The Fund may not always be able to borrow a security, in which
event it will lose the opportunity to potentially benefit from a short sale of a
security that the Manager has identified as overvalued. The Fund will incur a
loss as a result of a short sale if the price of the borrowed security increases
between the date of the short sale and the date on which the Fund replaces such
security. The Fund will realize a gain if the security declines in price
between those dates. There can be no assurance that the Fund will be able to
close out a short position at any particular time or at an acceptable price.
Although the Fund's gain is limited to the amount at which it sold a security
short, its potential loss is limited only by the maximum attainable price of the
security less the price at which the security was sold. Until the Fund replaces
a borrowed security, it will maintain daily a segregated account with its
Custodian containing cash, U.S. Government securities, or other liquid
securities such that the amount deposited in the account plus any amount
deposited with a broker or other custodian as collateral will at least equal the
current market value of the security sold short. Depending on arrangements made
with such broker or custodian, the Fund may not receive any payments (including
interest) on collateral deposited with such broker or custodian. The Fund will
not make
6
<PAGE>
a short sale if, after giving effect to such sale, the market value of all
securities sold exceeds 100% of the value of the Fund's net assets.
SPECIAL CONSIDERATIONS OF FOREIGN INVESTMENTS. Investing in securities of
foreign issuers involves certain risks not typically found in investing in
securities of U.S. issuers. These include risks of adverse change in foreign
economic, political, regulatory and other conditions, and changes in currency
exchange rates, exchange control regulations (including currency blockage),
expropriation of assets or nationalization, imposition of withholding taxes on
dividend or interest payments, and possible difficulty in obtaining and
enforcing judgments against foreign entities. Furthermore, issuers of foreign
securities are subject to different, and often less comprehensive, accounting,
reporting and disclosure requirements than domestic issuers. In certain
countries, legal remedies available to investors may be more limited than those
available with respect to investments in the United States or other countries.
The securities of some foreign issuers may be less liquid and at times more
volatile than securities of comparable U.S. issuers.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements, by
which the Fund purchases a security and obtains a simultaneous commitment from
the seller (a bank or, to the extent permitted by the Investment Company Act of
1940, as amended (the "1940 Act"), a recognized securities dealer) to repurchase
the security at an agreed-upon price and date (usually seven days or less from
the date of original purchase). The resale price is in excess of the purchase
price and reflects an agreed-upon market rate unrelated to the coupon rate on
the purchased security. Such transactions afford the Fund the opportunity to
earn a return on temporarily available cash. Although the underlying security
may be a bill, certificate of indebtedness, note or bond issued by an agency,
authority or instrumentality of the U.S. Government, the obligation of the
seller is not guaranteed by the U.S. Government and there is a risk that the
seller may fail to repurchase the underlying security. In such event, the Fund
would attempt to exercise rights with respect to the underlying security,
including possible disposition in the market. However, the Fund may be subject
to various delays and risks of loss, including possible declines in the value of
the underlying security during the period while the Fund seeks to enforce its
rights thereto and inability to enforce rights and the expenses involved in
attempted enforcement.
LOANS OF PORTFOLIO SECURITIES. The Fund may lend some or all of its
portfolio securities to broker-dealers. Securities loans are made to
broker-dealers pursuant to agreements requiring that loans be continuously
secured by collateral in cash or U.S. Government securities at least equal at
all times to the market value of the securities lent. The borrower pays to the
Fund an amount equal to any dividends or interest received on the securities
lent. When the collateral is cash, the Fund may invest the cash collateral in
interest-bearing, short-term securities. When the collateral is U.S. Government
securities, the Fund usually receives a fee from the borrower. Although voting
rights or rights to consent with respect to the loaned securities pass to the
borrower, the Fund retains the right to call the loans at any time on reasonable
notice, and it will do so in order that the securities may be voted by the Fund
if the holders of such securities are asked to vote upon or consent to matters
materially affecting the investment. The Fund may also call such loans in order
to sell the securities involved. The risks in lending portfolio securities, as
with other
7
<PAGE>
extensions of credit, include possible delay in recovery of the securities or
possible loss of rights in the collateral should the borrower fail financially.
However, such loans will be made only to broker-dealers that are believed by the
Manager to be of relatively high credit standing.
ILLIQUID SECURITIES. The Fund may purchase "illiquid securities," defined
as securities which cannot be sold or disposed of in the ordinary course of
business within seven days at approximately the price at which the Fund has
valued such securities, so long as no more than 15% of the Fund's net assets
would be invested in such illiquid securities after giving effect to a purchase.
Investment in illiquid securities involves the risk that, because of the lack of
consistent market demand for such securities, the Fund may be forced to sell
them at a discount from the last offer price.
PORTFOLIO TURNOVER. Portfolio turnover is not a limiting factor with
respect to investment decisions of the Manager. The rate of the Fund's portfolio
turnover may vary significantly from time to time depending on the volatility of
economic and market conditions. Although the rate of portfolio turnover is
difficult to predict, it is not anticipated that under normal circumstances the
annual portfolio turnover rate of each of the long and short portfolios of the
Fund will exceed 150%. It is, however, impossible to predict portfolio turnover
in future years. High portfolio turnover involves correspondingly greater
brokerage commissions and other transaction costs, which will be borne directly
by the Fund, and could involve realization of capital gains that would be
taxable when distributed to shareholders of such Fund. To the extent portfolio
turnover results in the realization of net short-term capital gains, such gains
ordinarily are taxed to shareholders at ordinary income tax rates.
INVESTMENT OBJECTIVE AND POLICIES. Except as explicitly described
otherwise, the investment objective and policies of the Fund may be changed
without shareholder approval.
PERFORMANCE INFORMATION
Rosenberg Institutional Equity Management also serves as the manager of
other accounts (the "Market Neutral Accounts") that have investment objectives,
policies and strategies that are substantially similar to those of the Fund. The
information below should not be considered a prediction of the future
performance of the Fund. The performance of the Fund may be higher or lower than
the performance of the Market Neutral Accounts. The performance information
shown below is based on a composite of all of the Manager's accounts with
substantially similar investment objectives, policies and strategies and has
been adjusted to give effect to the estimated annualized expenses (without
giving effect to any expense waivers or reimbursements) of the Fund during its
first year of operations. All but one of the Market Neutral Accounts were not
registered under the 1940 Act and therefore were not subject to certain
investment restrictions imposed by the 1940 Act. If those Market Neutral
Accounts had been registered under the 1940 Act, their performance and the
composite performance might have been adversely affected. In addition, the same
Market Neutral Accounts were not subject to Subchapter M of the Internal Revenue
Code. The following table shows the average annual total return for the
one-year, three-year, five-year
8
<PAGE>
and since-inception periods ending March 31, 1998 for a composite of the Market
Neutral Accounts. The following table also shows the average annual total
return on 3-month U.S. Treasury bills for the same periods.
<TABLE>
<CAPTION>
ONE-YEAR THREE-YEAR FIVE-YEAR PERIOD FROM
PERIOD PERIOD PERIOD FEBRUARY 28,
ENDING ENDING ENDING 1989 TO
MARCH 31, 1998 MARCH 31, 1998 MARCH 31, 1998 MARCH 31, 1998
<S> <C> <C> <C> <C>
Market Neutral
Accounts . . . . 8.13% 15.78% 11.25% 7.19%
3-month U.S.
Treasury Bills . 5.23% 5.28% 4.75% 5.35%
</TABLE>
An investment in 3-month U.S. Treasury Bills is different from an
investment in the Fund because Treasury Bills are backed by the full faith and
credit of the U.S. Government, Treasury Bills have a fixed rate of return and
investors in Treasury Bills do not bear the risk of losing their investment.
Giving effect to the expense limitation of 2.00% on the expenses of the Fund as
set forth in the "Fund Expenses" section, the average annual total return for
the one-year, three-year, five-year and since-inception periods ending March
31, 1998 for the Market Neutral Accounts would have been 9.03%, 16.74%, 12.18%
and 8.08%, respectively. There have been two enhancements to the Manager's
market neutral strategy since its inception in 1989. First, the Manager
incorporated its Earnings Change Model and Investor Sentiment Model into its
market neutral strategy in October 1992 and April 1993, respectively. See
"Management of the Trust -- The Manager's General Investment Philosophy and
Strategy." The second change to the Manager's market neutral strategy occurred
in July 1995, when the Manager focused its strategy on medium and smaller
capitalization companies. Prior to such date, the Manager had applied its market
neutral strategy to companies across the capitalization spectrum (i.e., large,
medium and small capitalization companies). Throughout both periods, however,
the Manager has maintained long and short positions of approximately the same
dollar amount within a given capitalization sector. The Fund may invest in
stocks of companies of any capitalization to meet risk/return objectives and
liquidity needs. Despite the two enhancements to the Manager's market neutral
strategy since 1989, the Fund will have substantially similar investment
objectives, policies and strategies as the Market Neutral Accounts.
MANAGEMENT OF THE TRUST
The Fund is advised and managed by Rosenberg Institutional Equity
Management (the "Manager"), which provides investment advisory services to a
substantial number of institutional investors and several mutual funds.
KEY PERSONNEL OF THE MANAGER
The biography of each of the General Partners of the Manager is set forth
below. Kenneth Reid is also a Trustee of the Trust.
9
<PAGE>
BARR ROSENBERG. Dr. Rosenberg is Managing General Partner and Chief
Investment Officer of the Manager. As such, he has ultimate responsibility for
the Manager's securities valuation and portfolio optimization systems used to
manage the Fund and for the implementation of the decisions developed therein.
His area of special concentration is the design of the Manager's proprietary
securities valuation model.
Dr. Rosenberg earned a B.A. degree from the University of California,
Berkeley, in 1963. He earned an M.Sc. from the London School of Economics in
1965, and a Ph.D. from Harvard University, Cambridge, Massachusetts, in 1968.
From 1968 until 1983, Dr. Rosenberg was a Professor of Finance, Econometrics,
and Economics at the School of Business Administration at the University of
California, Berkeley. Concurrently, from 1968 until 1974, Dr. Rosenberg worked
as a consultant in applied decision theory in finance, banking and medicine. In
1975, he founded Barr Rosenberg Associates, a financial consulting firm (now
known as BARRA) where he was a managing partner, and later chief scientist.
Dr. Rosenberg, the founder of the Berkeley Program in Finance, is acknowledged
as an expert in the modeling of complex processes with substantial elements of
risk.
MARLIS S. FRITZ. Ms. Fritz is a General Partner of the Manager. She has
primary responsibility for the Manager's new business development and secondary
responsibility for client service.
Ms. Fritz earned a B.S. degree from the University of Michigan, Ann
Arbor, in 1971. After working in life insurance management and sales for
seven years, she entered the investment management business in 1978 as
Marketing Associate with Forstmann-Leff Associates, New York. From 1983 until
1985, she was Vice President, Marketing at Criterion Investment Management
Company, Houston, Texas.
KENNETH REID. Dr. Reid is a General Partner and Director of Research of
the Manager. His work is focused on the design and estimation of the Manager's
valuation models and he has primary responsibility for analyzing the empirical
evidence that validates and supports the day-to-day recommendations of the
Manager's securities valuation models. Patterns of short-term price behavior
discussed by Dr. Reid as part of his Ph.D. dissertation have been refined and
incorporated into the Manager's proprietary valuation and trading systems.
Dr. Reid earned both a B.A. degree (1973) and an M.D.S. (1975) from Georgia
State University, Atlanta. In 1982, he earned a Ph.D. from the University of
California, Berkeley, where he was awarded the American Bankers Association
Fellowship. From 1981 until June 1986, Dr. Reid worked as a consultant at BARRA
in Berkeley, California. His responsibilities included estimating
multiple-factor risk models, designing and evaluating active management
strategies, and serving as an internal consultant on econometric matters in
finance.
GENERAL. There are 42 professional staff members of the Manager and the
Manager's affiliate, Barr Rosenberg Investment Management, Inc., located in
Orinda, California. Included
10
<PAGE>
among the Manager's professional staff are seven individuals with Ph.D.s and
twenty-two individuals with other graduate degrees. Seven members of the staff
have been awarded C.F.A. certificates.
THE OUTSIDE TRUSTEES
William F. Sharpe and Nils H. Hakansson are the Trustees of the Trust who
are not "interested persons" (as defined in the 1940 Act) of the Trust or the
Manager.
Dr. Sharpe is the STANCO 25 Professor of Finance at Stanford University's
Graduate School of Business. He is best known as one of the developers of the
Capital Asset Pricing Model, including the beta and alpha concepts used in risk
analysis and performance measurement. He developed the widely-used binomial
method for the valuation of options and other contingent claims. He also
developed the computer algorithm used in many asset allocation procedures.
Dr. Sharpe has published articles in a number of professional journals. He has
also written six books, including PORTFOLIO THEORY AND CAPITAL MARKETS,
(McGraw-Hill, 1970), ASSET ALLOCATION TOOLS, (Scientific Press, 1987),
FUNDAMENTALS OF INVESTMENTS (with Gordon J. Alexander and Jeffery Bailey,
Prentice-Hall, 1993) and INVESTMENTS (with Gordon J. Alexander and Jeffery
Bailey, Prentice-Hall, 1995). Dr. Sharpe is a past President of the American
Finance Association. He is currently Chairman of Financial Engines Incorporated,
an electronic investment advice company. He has also served as consultant to a
number of corporations and investment organizations. He is also a member of the
Board of Trustees of Smith Breeden Trust, an investment company, and a director
at CATS Software and Stanford Management Company. He received the Nobel Prize in
Economic Sciences in 1990.
Professor Hakansson is the Sylvan C. Coleman Professor of Finance and
Accounting at the Haas School of Business, University of California, Berkeley.
He is a former member of the faculty at UCLA as well as at Yale University. At
Berkeley, he served as Director of the Berkeley Program in Finance (1988-1991)
and as Director of the Professional Accounting Program (1985-1988). Professor
Hakansson is a Certified Public Accountant and spent three years with Arthur
Young & Company prior to receiving his Ph.D. from UCLA in 1966. He has twice
been a Visiting Scholar at Bell Laboratories in New Jersey and was, in 1975, the
Hoover Fellow at the University of New South Wales in Sydney and, in 1982, the
Chevron Fellow at Simon Fraser University in British Columbia. In 1984,
Professor Hakansson was a Special Visiting Professor at the Stockholm School of
Economics, where he was also awarded an honorary doctorate in economics. He is a
past president of the Western Finance Association (1983-1984). Professor
Hakansson has published numerous articles in academic journals and in
professional volumes. Many of his papers address various aspects of asset
allocation procedures as well as topics in securities innovation, information
economics and financial reporting. He has served on the editorial boards of
several professional journals and been a consultant to the RAND Corporation and
a number of investment organizations. Professor Hakansson is a member of the
board of two foundations and a past board member of SuperShare Service
Corporation and of Theatrix
11
<PAGE>
Interactive, Inc. He is also a Fellow of the Accounting Researchers
International Association and a member of the Financial Economists Roundtable.
THE MANAGER'S GENERAL INVESTMENT PHILOSOPHY AND STRATEGY
The Manager attempts to add value relative to a benchmark through a
quantitative stock selection process, and seeks to diversify investment risk
across the holdings in the Fund. In seeking to outperform the Fund's benchmark,
the Manager also attempts to control risk in the Fund's portfolio relative to
the benchmark.
INVESTMENT PHILOSOPHY. The Manager's investment strategy is based on the
belief that stock prices imperfectly reflect the present value of the expected
future earnings of companies, their "fundamental value." The Manager believes
that market prices will converge towards fundamental value over time, and that
therefore, if the Manager can accurately determine fundamental value, and can
apply a disciplined investment process to select those stocks that are currently
undervalued (in the case of purchases) or overvalued (in the case of short
sales), the Manager will outperform the Fund's benchmark over time.
The premise of the Manager's investment philosophy is that there is a link
between the price of a stock and the underlying financial and operational
characteristics of the company. In other words, the price reflects the market's
assessment of how well the company is positioned to generate future earnings
and/or future cash flow. The Manager identifies and purchases those stocks which
are undervalued (i.e., they are currently cheaper than similar stocks with the
same characteristics) and engages in short sales with respect to those stocks
that are overvalued (i.e., they are currently more expensive than similar stocks
with the same characteristics). The Manager believes that the market will
recognize the "better value" and that the mispricing will be corrected as the
stocks in the Fund's portfolios are purchased or sold by other investors.
Determination of the relative valuation of a stock is based upon a
comparison of similar companies. In any group of similar companies, it is the
Manager's view that there are always some that are overvalued, some that are
undervalued, and some that are fairly-valued relative to the average valuation
for the group. These moderate valuation errors are believed to be present in
every sector of the market and can be identified through rigorous quantitative
analysis of fundamental data.
In determining whether or not a stock is attractive, the Manager considers
the company's current estimated fundamental value as determined by the Manager's
proprietary Appraisal Model, the Manager's model for expected earnings, and
analysis of investor sentiment toward the stock. The Manager identifies and
causes the Fund to purchase an undervalued stock and to hold it in the Fund's
portfolio until the market recognizes and corrects for the misvaluation.
Conversely, the Manager identifies and causes the Fund to sell short an
overvalued stock.
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<PAGE>
DECISION PROCESS. The Manager's decision process is a continuum. Its
research function develops Models which analyze the approximately 12,000
securities in the global universe, both fundamentally and technically, and
determines the risk characteristics of the Fund's benchmark. The portfolio
management function optimizes each portfolio's composition, executes trades, and
monitors performance and trading costs.
The essence of the Manager's approach is rigorous attention to important
aspects of the investment process. Factors crucial to successful stock selection
include: (1) accurate and timely data on a large universe of companies;
(2) subtle quantitative descriptors of value and predictors of changes in value;
and (3) insightful definitions of similar businesses. The Manager takes great
care assimilating, checking and structuring the input data on which its Models
rely. The Manager believes that if the data is correct, the recommendations made
by the system will be sound.
STOCK SELECTION. Fundamental valuation of stocks is key to the Manager's
investment process, and the heart of the valuation process lies in the Manager's
proprietary Appraisal Model. Analysis of companies in the United States and
Canada is conducted in a single unified Model. The Appraisal Model discriminates
where the two markets are substantially different, while simultaneously
comparing companies in the two markets according to their degrees of similarity.
European companies and Asian companies (other than Japanese companies) are
analyzed in a nearly global Model, which includes the United States and Canada
as a further basis for comparative valuation, but which excludes Japan. Japanese
companies are analyzed in an independent national Model. The Model incorporates
the various accounting standards which apply in different markets and makes
adjustments to ensure meaningful comparisons.
An important feature of the Appraisal Model is the classification of
companies into one or more of 166 groups of "similar" businesses. Currently, in
the United States, 160 groups are applicable; in Japan, 122 groups are
applicable; and in Europe, 154 groups are applicable. Each company is broken
down into its individual business segments, and each segment is compared with
similar business operations of other companies doing business in the same
geographical market. In most cases, the comparison is extended to include
companies with similar business operations in different markets. Subject to the
availability of data in different markets, the Manager appraises the company's
assets, operating earnings and sales within each business segment, accepting the
market's valuation of that category of business as fair. The Manager then
integrates the segment appraisals into balance sheet, income statement and sales
valuation models for the total company, and simultaneously adjusts the segment
appraisals to include appraisals for variables which are declared only for the
total company, such as taxes, capital structure, and pension funding. The result
is a single valuation for each of the approximately 12,000 companies followed.
The difference between the Manager's appraisal and the market price is
believed to represent an opportunity for profit. For each stock, the Manager
develops "appraisal alphas" (i.e., the expected rate of extraordinary return) by
adjusting for the rate at which the market has corrected for such misvaluations
in the past.
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<PAGE>
A second sphere of analysis is captured by the Manager's proprietary
Earnings Change Model, which analyzes more than 20 variables to predict
individual company earnings over a one-year horizon. The variables are
fundamental and fall into three categories: measures of past profitability,
measures of company operations and consensus earnings forecasts. The Earnings
Change Model is independent of the Appraisal Model and projects the change in a
company's earnings in cents/current price. The value of the projected earnings
change is converted to an "earnings change alpha" by multiplying the projected
change by the market's historical response to changes of that magnitude.
Finally, the Manager's proprietary Investor Sentiment Model quantifies
investor sentiment about features of stocks which influence price but which
are not captured by the Appraisal Model or the Earnings Change Model. This
Model measures company quality by looking at past price patterns and by
predicting the probability of deficient earnings. The Investor Sentiment
Model also captures market enthusiasm towards individual stocks by looking at
broker recommendations and analyst estimates. Investor sentiment alphas are
developed by multiplying the Model's sentiment scores by the market's
historical response to such scores.
Each company's earnings change alpha and investor sentiment alpha are added
to its appraisal alpha to arrive at a total company alpha. Stocks with large
positive total company alphas are candidates for purchase. Stocks with large
negative total company alphas are candidates for short sales.
Before trading, the Manager systematically analyzes the short-term price
behavior of individual stocks to determine the timing of trades. The Investor
Sentiment Model quantifies investor enthusiasm for each stock by analyzing its
short-term performance relative to similar stocks, changes in analyst and broker
opinions about the stock, and earnings surprises. The Manager develops a
"trading alpha" for each stock, which is the Manager's prediction of the
short-term return of a particular stock. This return is calculated by the
Manager's proprietary model by analyzing short-term factors such as trading
volume and price movements. The Manager believes its model, used in this way,
can add value by helping determine the optimal timing of portfolio trades.
OPTIMIZATION. The Manager's portfolio optimization system seeks to
optimize the trade-off between risk and reward relative to a Fund's benchmark.
It exploits the information developed by the Manager's stock selection Models to
maximize return relative to the benchmark, while avoiding a portfolio with
exposure to any other extraneous factors that would distinguish the Fund's
portfolio from the relevant benchmark. The optimizer recommends positions in
companies which in the aggregate constitute the most efficient portfolio. The
optimizer simultaneously considers total company alphas, trading alphas, and
risk and quantifies the expected "net benefit" to the portfolio of each
recommended transaction. No transaction will be executed unless the opportunity
offered by a purchase or sale candidate sufficiently exceeds the potential of an
existing holding to justify the transaction costs. Portfolios are reoptimized
continuously throughout the day, allowing the Manager to respond immediately to
investment opportunities.
14
<PAGE>
TRADING. The Manager's trading system aggregates the recommended
transactions for the Fund and determines the feasibility of each recommendation
in light of the stock's liquidity, the expected transaction costs, and general
market conditions. It relays target price information to a trader for each stock
considered for purchase or sale. Trades are executed through any one of four
trading strategies: traditional brokerage, networks, accommodation, and package
or "basket" trades.
The network arrangements the Manager has developed with Instinet Matching
System (IMS), Portfolio System for Institutional Trading (POSIT), and the
Arizona Stock Exchange (AZX) facilitate large volume trading with little or no
price disturbance and low commission rates.
Accommodative trading (which we also refer to as the Manager's "match
system") allows institutional buyers and sellers of stock to electronically
present the Manager with their "interest" lists each morning. Any matches
between the inventory which the brokers have presented and the Manager's own
recommended trades are signaled to the Manager's traders. Since the broker is
doing agency business and has a client on the other side of the trade, the
Manager expects that the other side will be accommodative in the price. The
Manager's objective in using this match system is to execute most trades on the
Manager's side of the bid/ask spread so as to minimize market impact.
Package trades further allow the Manager to trade large lists of orders
simultaneously using state of the art tools such as the Instinet Real-Time
System, Instinet Order Matching System and Lattice Trading System. Those tools
provide order entry, negotiation and execution capabilities, either directly to
other institutions or electronically to the floor of the exchange. The
advantages of using such systems include speed of execution, low commissions,
anonymity and very low market impact.
The Manager continuously monitors trading costs to determine the impact of
commissions and price disturbance on the Fund's portfolio.
INDIVIDUALS RESPONSIBLE FOR THE FUND
Each of the following General Partners of the Manager holds a greater than
5% interest in the Manager: Marlis S. Fritz and Kenneth Reid. Rosenberg Alpha
L.P., a California limited partnership, is a limited partner of the Manager and
holds a greater than 5% interest in the Manager. Barr M. Rosenberg, the Managing
General Partner of the Manager, and his wife, June Rosenberg, each holds a
greater than 5% general partnership interest in Rosenberg Alpha L.P.
Management of the portfolio of the Fund is overseen by the Manager's
General Partners who are responsible for the design and maintenance of the
Manager's portfolio system, and by a portfolio manager who is responsible for
research and monitoring the Fund's characteristic performance against the
relevant benchmark and for monitoring cash balances.
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<PAGE>
Dr. Rosenberg, Dr. Reid and F. William Jump, Jr., the portfolio manager,
are responsible for the day-to-day management of the Fund's portfolio.
Dr. Rosenberg and Dr. Reid both have been employed by the Manager since 1985.
Mr. Jump has had numerous responsibilities including trading, applications
programming, new product development and portfolio engineering since he joined
the Manager in 1990. He received a B.A. from Swarthmore College in 1977 and a
M.B.A. from The Wharton School, University of Pennsylvania in 1983.
MANAGEMENT CONTRACTS
Under a Management Contract with the Trust on behalf of the Fund, the
Manager selects and reviews the Fund's investments and provides executive and
other personnel for the management of the Trust. Pursuant to the Trust's
Agreement and Declaration of Trust, as amended, the Board of Trustees supervises
the affairs of the Trust as conducted by the Manager. In the event that the
Manager ceases to be the manager of the Fund, the right of the Trust to use the
identifying name "Barr Rosenberg" and/or "Rosenberg" may be withdrawn.
The Fund will pay all other expenses incurred in the operation of the Fund,
including, but not limited to, brokerage commissions and transfer taxes in
connection with the Fund's portfolio transactions, all applicable taxes and
filing fees, the fees and expenses for registration or qualification of its
shares under the federal or state securities laws, the compensation of Trustees
who are not partners, officers or employees of the Manager, interest charges,
expenses of issue or redemption of shares, charges of custodians, auditing and
legal expenses, expenses of determining net asset value of Fund shares, expenses
of reports to shareholders, expenses of meetings of shareholders, expenses of
printing and mailing prospectuses, proxy statements and proxies to existing
shareholders, insurance premiums and professional association dues or
assessments.
In addition, the Fund has agreed to pay the Manager a quarterly management
fee at the annual percentage rate of the Fund's average daily net assets set
forth below. The Manager has voluntarily undertaken to waive some or all of its
management fee and, if necessary, to bear certain expenses of the Fund until
further notice to the extent required to limit the total annual operating
expenses (which do not include nonrecurring account fees and extraordinary
expenses) of the Fund to the percentage of the Fund's average daily net assets
listed in the Expense Limitation column below. The Manager's fee for management
of the Fund is higher than that paid by most other mutual funds although the
Manager believes it is competitive with the fees for similar collective
investment vehicles.
<TABLE>
<CAPTION>
EXPENSE
LIMITATION
CONTRACTUAL (AS A % OF
MANAGEMENT FEE (AS AVERAGE
A % OF AVERAGE DAILY DAILY NET
NET ASSETS) ASSETS)
<S> <C> <C>
Barr Rosenberg VIT Market Neutral Fund 1.90% 2.00%
</TABLE>
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<PAGE>
ADMINISTRATOR, TRANSFER AGENT AND CUSTODIAN
BISYS Fund Services (the "Administrator"), a wholly-owned subsidiary of
The BISYS Group, Inc., serves as the Trust's administrator and generally
assists the Trust in all aspects of its administration and operation. As
compensation for its administrative services, the Administrator receives a
monthly fee based upon an annual percentage rate of _____% of the aggregate
average daily net assets of the Trust.
BISYS Fund Services, Inc. (the "Transfer Agent") has entered into an
agreement with the Trust for the provision of transfer agency services and
dividend disbursing services. The principal business address of the Transfer
Agent is 3435 Stelzer Road, Columbus, Ohio 43219.
Custodial Trust Company (the "Custodian") serves as custodian of the assets
of the Fund. The principal address of the Custodian is 101 Carnegie Center,
Princeton, New Jersey 08540.
PURCHASE OF SHARES
Shares of the Fund may only be purchased by a separate account (a "Separate
Account") of an insurance company (a "Participating Insurance Company"). This
Prospectus should be read in conjunction with the prospectus of the separate
account of the specific insurance product which accompanies this Prospectus.
The offering price for shares of the Fund is the net asset value per share
next determined after receipt of a purchase order. See "Determination of Net
Asset Value." The minimum initial investment in the Fund is $1,000 and
the minimum subsequent investment in the Fund is $500.
For purposes of calculating the purchase price of Fund shares, a purchase
order is received by the Trust on the day that it is in "good order" unless it
is rejected by the Trust. For a purchase order of shares to be in "good order"
on a particular day, a check or money order must be received on or before 4:00
p.m., New York Time of that day. If the consideration is received by the Trust
after the deadline, the purchase price of Fund shares will be based upon the
next determination of net asset value of Fund shares.
The Trust reserves the right, in its sole discretion, to suspend the
offering of shares of the Fund or to reject purchase orders when, in the
judgment of the Manager, such suspension or rejection would be in the best
interests of the Trust.
Purchases of the Fund's shares may be made in full or in fractional shares
of the Fund calculated to three decimal places. In the interest of economy and
convenience, certificates for shares will not be issued.
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<PAGE>
REDEMPTION OF SHARES
The value of shares redeemed may be more or less than the original cost of
those shares, depending on the market value of the investment securities held by
the Fund at the time of the redemption. The Trust will redeem its shares at the
net asset value next determined after the request is received in "good order."
See "Determination of Net Asset Value."
If the Manager determines, in its sole discretion, that it would not be in
the best interests of the remaining shareholders of the Fund to make a
redemption payment wholly or partly in cash, the Fund may pay the redemption
price in whole or in part by a distribution in kind of readily marketable
securities held by the Fund in lieu of cash. Securities used to redeem Fund
shares in kind will be valued in accordance with the Fund's procedures for
valuation described under "Determination of Net Asset Value." Securities
distributed by the Fund in kind will be selected by the Manager in light of the
Fund's objective and will not generally represent a PRO RATA distribution of
each security held in the Fund's portfolio. Investors may incur brokerage
charges on the sale of any such securities so received in payment of
redemptions.
The Trust may suspend the right of redemption and may postpone payment for
more than seven days when the New York Stock Exchange is closed for other than
weekends or holidays, or if permitted by the rules of the Securities and
Exchange Commission, during periods when trading on the Exchange is restricted
or during an emergency which makes it impracticable for the Fund to dispose of
its securities or to fairly determine the value of its net assets, or during any
other period permitted by the Securities and Exchange Commission for the
protection of investors.
DETERMINATION OF NET ASSET VALUE
The net asset value of each class of shares of the Fund will be determined
once on each day on which the New York Stock Exchange is open as of 4:00 p.m.,
New York Time. The net asset value per share of the Fund is determined by
dividing the total market value of the Fund's portfolio investments and other
assets, less any applicable liabilities, by the total outstanding shares of the
Fund.
Portfolio securities listed on a securities exchange for which market
quotations are available are valued at the last quoted sale price on each
business day, or, if there is no such reported sale, at the most recent quoted
bid price. Price information on listed securities is generally taken from the
closing price on the exchange where the security is primarily traded. Unlisted
securities for which market quotations are readily available are valued at the
most recent quoted bid price, except that debt obligations with sixty days or
less remaining until maturity may be valued at their amortized cost.
Exchange-traded options on futures are valued at the settlement price as
determined by the appropriate clearing corporation. Futures contracts are valued
by computing the gain or loss by reference to the current settlement price as
determined by the appropriate clearing corporation. Other assets and securities
for which no quotations are readily
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<PAGE>
available are valued at fair value as determined in good faith by the Trustees
of the Trust or by persons acting at their direction.
DISTRIBUTIONS
The Fund intends to pay out as dividends substantially all of its net
investment income (which comes from dividends and any interest it receives from
its investments and net short-term capital gains). The Fund also intends to
distribute substantially all of its net long-term capital gains, if any, after
giving effect to any available capital loss carryover. The Fund's policy is to
declare and pay distributions of its dividends and interest annually although it
may do so more frequently as determined by the Trustees of the Trust. The
Fund's policy is to distribute net short-term capital gains and net long-term
gains annually, although it may do so more frequently as determined by the
Trustees of the Trust to the extent permitted by applicable regulations.
All dividends and/or distributions will be paid out in the form of
additional shares of the Fund at net asset value unless the shareholder elects
to receive cash. Shareholders may make this election by marking the appropriate
box on the Account Application or by writing to the Administrator.
If you elect to receive distributions in cash and checks (1) are returned
and marked as "undeliverable" or (2) remain uncashed for six months, your cash
election will be changed automatically and your future dividend and capital
gains distributions will be reinvested in the Fund at the per share net asset
value determined as of the date of payment of the distribution. In addition,
any undeliverable checks or checks that remain uncashed for six months will be
canceled and will be reinvested in the Fund at the per share net asset value
determined as of the date of cancellation.
TAXES
The Fund intends to qualify each year as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code")
and to meet all other requirements necessary for it to be relieved of federal
income taxes on income and gains it distributes to insurance company separate
accounts. For information concerning federal income tax consequences for the
holders of variable annuity contracts and variable life insurance policies,
contract holders should consult the prospectus of the applicable separate
account.
Internal Revenue Service regulations applicable to variable annuity and
variable life insurance separate accounts generally require that portfolios that
serve as the funding vehicles solely for such separate accounts invest no more
than 55% of the value of their assets in one investment, 70% in two investments,
80% in three investments and 90% in four investments. Alternatively, a
portfolio will be treated as meeting these requirements for any quarter of its
taxable year if, as of the close of such quarter, the portfolio meets the
diversification requirements applicable to regulated investments companies and
no more than 55% of the value of its total
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<PAGE>
assets consists of cash and cash items (including receivables), U.S. government
securities and securities of other regulated investment companies. The Fund
intends to comply with these requirements.
If the Fund's investments are not "adequately diversified" under these
requirements, income with respect to variable contracts invested in the Fund at
any time during the calendar quarter in which the failure occurred could become
currently taxable to the owners of the variable contracts and income for prior
periods with respect to such contracts also could be taxable, most likely in the
year of the failure to achieve the required diversification. Other adverse tax
consequences also could ensue.
Fund investments in foreign securities may be subject to withholding taxes
at the source on dividend or interest payments. In that case, the Fund's yield
on those securities would be decreased.
The foregoing is a general summary of the federal income tax consequences
of investing in the Fund. Please refer to the prospectus for your separate
account and variable contract for information regarding the federal income tax
treatment of variable contracts in general and of distributions to your separate
account in particular. See "Income Dividends, Distributions and Tax Status" in
the Trust's Statement of Additional Information for more information on taxes.
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES
The Trust is designed to serve as a funding vehicle for insurance company
separate accounts associated with variable annuity contracts and variable life
insurance policies. The Trust presently intends to serve as a funding vehicle
for variable annuity contracts and variable life insurance policies offered by
separate accounts of various life insurance companies. You should consult the
prospectus issued by the relevant insurance company for more information about a
separate account.
The Trust is a diversified open-end series management investment company
organized as a Massachusetts business trust under the laws of The Commonwealth
of Massachusetts by an Agreement and Declaration of Trust dated March 1, 1998,
as amended from time to time (the "Declaration of Trust").
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest. Interests in the Fund are
represented by shares of the Fund. The Declaration of Trust also permits the
Trustees, without shareholder approval, to subdivide any series of shares into
various sub-series of shares with such preferences and other rights as the
Trustees may designate. While the Trustees have no current intention to exercise
this power, it is intended to allow them to provide for an equitable allocation
of the impact of any future regulatory requirements which might affect various
classes of shareholders differently. The Trustees may also, without shareholder
approval, establish one or more additional separate portfolios for
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investments in the Trust, terminate a series of the Trust or merge two or more
existing portfolios. Shareholders' investments in such a portfolio would be
evidenced by a separate series of shares.
All shares of the Fund have identical voting rights. Shares are freely
transferable, are entitled to dividends as declared by the Trustees and, in
liquidation of the Fund's portfolio, are entitled to receive the net assets of
such portfolio. The Trust does not generally hold annual meetings of
shareholders and will do so only when required by law. Shareholders holding a
majority of the outstanding shares may remove Trustees by votes cast in person
or by proxy at a meeting of shareholders or by written consent.
The Trust may, in the future, offer shares of the Fund directly to
qualified pension and profit-sharing plans.
Although conflicts of interest may potentially arise from the sale of
the Fund's shares to variable annuity contract-owners and variable life
insurance policy-owners of affiliated and unaffiliated insurance companies,
the Trust currently does not foresee any disadvantages to policy-owners and
contract-owners because the Trust offers its shares to separate accounts of
various insurance companies to serve as the investment medium for their
variable products. Nevertheless, the Trustees intend to monitor events in
order to identify any material irreconcilable conflicts of interest which may
possibly arise, and to determine what action, if any, should be taken in
response to such conflicts. If such a conflict were to occur, one or more
insurance companies' separate accounts might be required to withdraw their
investments in the Fund. This might force the Fund to sell portfolio
securities at disadvantageous prices. In addition, under the President's
1999 Budget Proposal, such a withdrawal may be currently taxable to owners of
variable annuity contracts and variable life insurance policies.
The Declaration of Trust provides for the perpetual existence of the Trust.
The Trust, may, however, be terminated at any time by vote of at least
two-thirds of the outstanding shares of each series of the Trust.
Shareholders could, under certain circumstances, be held personally liable
for the obligations of the Trust. However, the risk of a shareholder incurring
financial loss on account of that liability is considered remote since it may
arise only in very limited circumstances.
OTHER INFORMATION
The Fund's investment performance may from time to time be included in
advertisements about the Fund. Total return for the Fund is measured by
comparing the value of an investment in the Fund at the beginning of the
relevant period to the redemption value of the investment in the Fund at the end
of such period (assuming immediate reinvestment of any dividends or capital
gains distributions). All data are based on the Fund's past investment results
and do not predict future performance. Investment performance, which will vary,
is based on many factors, including market conditions, the composition of the
Fund's portfolio and the Fund's operating expenses. Investment performance also
often reflects the risks associated with the Fund's investment
21
<PAGE>
objective and policies. These factors should be considered when comparing the
Fund's investment results with those of other mutual funds and other investment
vehicles. Quotations of investment performance for any period when an expense
limitation was in effect will be greater than if the limitation had not been in
effect.
Performance information presented for the Fund should not be compared
directly with performance information of other insurance products without taking
into account insurance-related charges and expenses payable with respect to
these insurance products. Insurance-related charges and expenses are not
reflected in the Fund's performance information. As a result of such
insurance-related charges and expenses, an investor's return under the insurance
product would be lower.
SHAREHOLDER INQUIRIES
Shareholders may direct inquiries to the Trust at Barr Rosenberg
Variable Insurance Trust, P.O. Box 182495, Columbus, Ohio 43219-2495.
Shareholder Services
1-925-254-6464
Additional Information about the Manager may be found on the
World Wide Web at http://www.riem.com
Barr Rosenberg Variable Insurance Trust
3435 Stelzer Road
Columbus, Ohio 43219
Manager
Rosenberg Institutional Equity Management
Four Orinda Way, Building E
Orinda, CA 94563
Administrator, Transfer and Dividend Paying Agent
BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219
Custodian of Assets
Custodial Trust Company
101 Carnegie Center
Princeton, NJ 08540
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Independent Accountants
Price Waterhouse LLP
555 California Street
San Francisco, CA 94104
Legal Counsel
Ropes & Gray
One International Place
Boston, MA 02110
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SUBJECT TO COMPLETION, DATED APRIL 20, 1998
BARR ROSENBERG VARIABLE INSURANCE TRUST
BARR ROSENBERG VIT MARKET NEUTRAL FUND
STATEMENT OF ADDITIONAL INFORMATION
JUNE __, 1998
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the prospectus of the Barr
Rosenberg VIT Market Neutral Fund of Barr Rosenberg Variable Insurance Trust
dated June __, 1998 (the "Prospectus") and should be read in conjunction
therewith. A copy of the Prospectus may be obtained from Barr Rosenberg
Variable Insurance Trust, 3435 Stelzer Road, Columbus, Ohio 43219.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . . .3
MISCELLANEOUS INVESTMENT PRACTICES . . . . . . . . . . . . . . . . . . . . . .3
INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS . . . . . . . . . . . . . . . .6
MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . . . . . . . . .9
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
TOTAL RETURN CALCULATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 12
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES . . . . . . . . . . . . . . 14
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . 15
PURCHASE AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
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<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of the Barr Rosenberg VIT Market
Neutral Fund (the "Fund") of Barr Rosenberg Variable Insurance Trust (the
"Trust") are summarized on the front page of the Prospectus and in the text of
the Prospectus under the headings "Investment Objective and Policies" and
"General Description of Risks and Fund Investments."
In addition, the following is an additional description of certain
investments of the Fund.
SHORT SALES. The Fund will seek to realize additional gains through short
sales. Short sales are transactions in which a Fund sells a security it does
not own, in anticipation of a decline in the value of that security relative to
the long positions held by the Fund. To complete such a transaction, the Fund
must borrow the security to make delivery to the buyer. The Fund then is
obligated to replace the security borrowed by purchasing it at the market price
at or prior to the time of replacement. The price at such time may be more or
less than the price at which the security was sold by the Fund. Until the
security is replaced, the Fund is required to repay the lender any dividends or
interest that accrue during the period of the loan. To borrow the security, the
Fund also may be required to pay a premium, which would increase the cost of the
security sold. The net proceeds of the short sale will be retained by the
broker (or by the Fund's custodian in a special custody account), to the extent
necessary to meet margin requirements, until the short position is closed out.
The Fund also will incur transaction costs in effecting short sales.
The Fund will incur a loss as a result of a short sale if the price of the
security increases between the date of the short sale and the date on which the
Fund replaces the borrowed security. The Fund will realize a gain if the
security declines in price between those dates. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of the premium,
dividends, interest or expenses a Fund may be required to pay in connection with
a short sale. There can be no assurance that the Fund will be able to close out
a short position at any particular time or at an acceptable price.
MISCELLANEOUS INVESTMENT PRACTICES
PORTFOLIO TURNOVER. A change in securities held by the Fund is known as
"portfolio turnover" and almost always involves the payment by the Fund of
brokerage commissions or dealer markup and other transaction costs on the sale
of securities as well as on the reinvestment of the proceeds in other
securities. Portfolio turnover is not a limiting factor with respect to
investment decisions. As disclosed in the Prospectus, high portfolio turnover
involves correspondingly greater brokerage commissions and other transaction
costs, which will be borne directly by the Fund. See "Portfolio Transactions."
NOTICE ON SHAREHOLDER APPROVAL. Unless otherwise indicated in the
Prospectus or this Statement of Additional Information, the investment objective
and policies of the Fund may be changed without shareholder approval.
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<PAGE>
INVESTMENT RESTRICTIONS
Without a vote of the majority of the outstanding voting securities of the
Fund, the Trust will not take any of the following actions with respect to the
Fund:
(1) Borrow money in excess of 10% of the value (taken at the lower of
cost or current value) of the Fund's total assets (not including the amount
borrowed) at the time the borrowing is made, and then only from banks as a
temporary measure to facilitate the meeting of redemption requests (not for
leverage) which might otherwise require the untimely disposition of
portfolio investments or for extraordinary or emergency purposes. Such
borrowings will be repaid before any additional investments are purchased.
Short sales and related borrowings of securities are not subject to this
restriction.
(2) Pledge, hypothecate, mortgage or otherwise encumber its assets in
excess of 10% of the Fund's total assets (taken at cost) and then only to
secure borrowings permitted by Restriction 1 above. (For the purposes of
this restriction, collateral arrangements with respect to options, short
sales, stock index, interest rate, currency or other futures, options on
futures contracts and collateral arrangements with respect to initial and
variation margin are not deemed to be a pledge or other encumbrance of
assets. Collateral arrangements with respect to swaps and other
derivatives are also not deemed to be a pledge or other encumbrance of
assets.)
(3) Purchase securities on margin, except such short-term credits as
may be necessary for the clearance of purchases and sales of securities.
(For this purpose, the deposit or payment of initial or variation margin in
connection with futures contracts or related options transactions is not
considered the purchase of a security on margin.)
(4) Make short sales of securities or maintain a short position if,
when added together, more than 100% of the value of the Fund's net assets
would be (i) deposited as collateral for the obligation to replace
securities borrowed to effect short sales, and (ii) allocated to segregated
accounts in connection with short sales. Short sales "against the box" are
not subject to this limitation.
(5) Underwrite securities issued by other persons except to the
extent that, in connection with the disposition of its portfolio
investments, the Fund may be deemed to be an underwriter under federal
securities laws.
(6) Purchase or sell real estate, although it may purchase securities
of issuers which deal in real estate, including securities of real estate
investment trusts, and may purchase securities which are secured by
interests in real estate.
(7) Concentrate more than 25% of the value of its total assets in any
one industry.
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<PAGE>
(8) Invest in securities of other investment companies, except to the
extent permitted by the Investment Company Act of 1940, as amended (the
"1940 Act"), or by an exemptive order issued by the Securities and Exchange
Commission.
(9) Purchase or sell commodities or commodity contracts except that
each of the Funds may purchase and sell stock index and other financial
futures contracts and options thereon.
(10) Make loans, except by purchase of debt obligations or by entering
into repurchase agreements or through the lending of the Fund's portfolio
securities.
(11) Issue senior securities. (For the purpose of this restriction
none of the following is deemed to be a senior security: any pledge or
other encumbrance of assets permitted by restriction (2) above; any
borrowing permitted by restriction (1) above; short sales permitted by
restriction (4) above; any collateral arrangements with respect to short
sales, swaps, options, future contracts and options on future contracts and
with respect to initial and variation margin; and the purchase or sale of
options, future contracts or options on future contracts.)
It is contrary to the present policy of the Fund, which may be changed by
the Trustees of the Trust without shareholder approval, to:
(a) Invest in warrants or rights (other than warrants or rights
acquired by the Fund as a part of a unit or attached to
securities at the time of purchase).
(b) Write, purchase or sell options on particular securities (as
opposed to market indices).
(c) Buy or sell oil, gas or other mineral leases, rights or royalty
contracts.
(d) Make investments for the purpose of exercising control of a
company's management.
(e) Invest in (a) securities which at the time of investment are not
readily marketable and (b) repurchase agreements maturing in more
than seven days if, as a result, more than 15% of the Fund's net
assets (taken at current value) would then be invested in such
securities.
Unless otherwise indicated, all percentage limitations on investments set
forth herein and in the Prospectus will apply at the time of the making of an
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment.
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<PAGE>
The phrase "shareholder approval," as used in the Prospectus and herein,
and the phrase "vote of a majority of the outstanding voting securities," as
used herein, means the affirmative vote of the lesser of (1) more than 50% of
the outstanding shares of the Fund or the Trust, as the case may be, or (2) 67%
or more of the shares of the Fund or the Trust, as the case may be, present at a
meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy.
INCOME DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
The tax status of the Fund and the distributions which it may make are
summarized in the Prospectus under the headings "Distributions" and "Taxes." The
Fund intends to qualify each year as a regulated investment company under the
Internal Revenue Code of 1986, as amended (the "Code"). In order to qualify as
a "regulated investment company" and to qualify for the special tax treatment
accorded regulated investment companies and their shareholders, the Fund must,
among other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to certain securities loans, gains from the sale
or other disposition of securities or foreign currencies or other income
(including but not limited to gains from options, futures or forward contracts)
derived with respect to its business of investing in such securities or
currencies; (b) diversify its holdings so that, at the close of each quarter of
its taxable year, (i) at least 50% of the value of its total assets consists of
cash, cash items, U.S. Government securities, securities of other regulated
investment companies, and other securities limited generally with respect to any
one issuer to not more than 5% of the total assets of the Fund and not more than
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 issuer
(other than U.S. Government securities or securities of other regulated
investment companies); and (c) distribute annually at least 90% of the sum of
its taxable net investment income, its net tax-exempt income (if any), and, the
excess, if any, of net short-term capital gains over net long-term capital
losses for such year. To the extent the Fund qualifies for treatment as a
regulated investment company, the Fund will not be subject to federal income tax
on income paid to its shareholders in the form of dividends or capital gain
distributions.
Section 817(h) of the Code requires that the investments of a segregated
asset account (a "Separate Account") of an insurance company be "adequately
diversified" as provided therein or in accordance with U.S. Treasury Regulations
in order for the account to serve as the basis for variable annuity contracts
("VA contracts") or variable life insurance policies ("VLI policies"). The Fund
intends to comply with applicable requirements so that the Fund's investments
are "adequately diversified" for this purpose. Section 817(h) and the U.S.
Treasury Regulations issued thereunder provide the manner in which a segregated
asset account will treat investments in a regulated investment company for
purposes of the diversification requirements. If the Fund satisfies certain
conditions, a segregated asset account owning shares of the Fund will be treated
as owning multiple investments consisting of the account's proportionate share
of each of the assets of the Fund. The Fund intends to satisfy these conditions
so that the shares of the Fund owned by a segregated asset account of an
insurance company depositor will be treated as
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<PAGE>
multiple investments. If, however, the Fund is not "adequately diversified"
within the meaning of Section 817(h) of the Code, the VA contracts and VLI
policies supported by the Fund would not be treated as annuity or life insurance
contracts, as the case may be, for any period (or subsequent period) during
which the Fund is not "adequately diversified."
As described in the Prospectus under the heading "Distributions," the Fund
intends to pay out substantially all of its ordinary income and net short-term
capital gains, and to distribute substantially all of its net capital gains, if
any, after giving effect to any available capital loss carryover. Net capital
gain is the excess of net gains from assets held for more than one year over net
losses from capital assets held for not more than one year. In order to avoid
an excise tax imposed on certain undistributed income, the Fund must distribute
prior to each calendar year end without regard to the Fund's fiscal year end (i)
98% of the Fund's ordinary income, and (ii) 98% of the Fund's capital gain net
income, if any, realized in the one-year period ending on October 31.
Assuming that the Separate Accounts meet the requirements of Section 817,
distributions from the Fund will not be subject to federal income tax currently
on dividends or distributions from the Fund. Each organization or entity should
review its own circumstances and the federal tax treatment of its income.
To the extent such investments are permissible for the Fund, the Fund's
transactions in options, futures contracts, hedging transactions, forward
contracts and straddles will be subject to special tax rules (including
mark-to-market, constructive sale, straddle, wash sale and short sale rules),
the effect of which may be to accelerate income to the Fund, defer losses to the
Fund, cause adjustments in the holding periods of the Fund's securities and
convert short-term capital losses into long-term capital losses. These rules
could therefore affect the amount, timing and character of distributions to
shareholders.
Investment in an entity that qualifies as a "passive foreign investment
company" under the Code could subject the Fund to a U.S. federal income tax or
other charge on certain "excess distributions" with respect to the investment
and on the proceeds from the disposition of the investment; however, this tax
can be avoided by making an election to mark such investments to market
annually. Other elections may also be available.
THE TAX DISCUSSION SET FORTH ABOVE IS A SUMMARY INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. PLEASE REFER TO THE PROSPECTUS FOR THE SEPARATE
ACCOUNTS AND THE VARIABLE CONTRACT FOR INFORMATION REGARDING THE FEDERAL INCOME
TAX TREATMENT OF VARIABLE CONTRACTS IN GENERAL AND DISTRIBUTIONS TO THE SEPARATE
ACCOUNT IN PARTICULAR. THIS DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR
CAREFUL TAX PLANNING.
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<PAGE>
MANAGEMENT OF THE TRUST
The Trustees and officers of the Trust and their principal occupations
during the past five years are as follows:
Kenneth Reid* (47) General Partner and Director of
President, Trustee Research, Rosenberg Institutional Equity
Management, June 1986 to present.
Marlis S. Fritz (47) General Partner and Director of
Vice President Marketing, Rosenberg Institutional
Equity Management, April 1985 to
present.
Nils H. Hakansson (60) Sylvan C. Coleman Professor of Finance
Trustee and Accounting, Haas School of Business,
University of California, Berkeley, June
1969 to present. Director, Supershare
Services Corporation (investment
management), Los Angeles, California,
November 1989 to 1995.
William F. Sharpe (63) STANCO 25 Professor of Finance, Stanford
Trustee University. Chairman, Financial Engines
Incorporated, Los Altos, California
(electronic investment advice), March
1996 to present.
Po-Len Hew (31) Accounting Manager, Rosenberg
Treasurer Institutional Equity Management, October
1989 to present.
Edward H. Lyman (53) Executive Vice President, Barr Rosenberg
Vice President Investment Management, Inc., and General
Counsel to the Rosenberg Group of
companies, 1990 to present.
Sara Ronan (38) Paralegal, Rosenberg Institutional
Clerk Equity Management, September 1997 to
present; Director of Marketing, MIG
Realty Advisors, January 1996 to
September 1997; Vice President,
Liquidity Financial Advisors, May 1985
to January 1996.
- ---------------------
* Trustees who are "interested persons" (as defined in the 1940 Act) of the
Trust or the Manager.
The mailing address of each of the officers and Trustees is c/o Barr
Rosenberg Variable Insurance Trust, 3435 Stelzer Road, Columbus, OH 43219.
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<PAGE>
The principal occupations of the officers and Trustees for the last five
years have been with the employers as shown above, although in some cases they
have held different positions with such employers.
The Trust pays the Trustees other than those who are interested persons of
the Trust or Manager an annual fee of [$_______] plus [$_______] for each
meeting attended. The Trust does not pay any pension or retirement benefits for
its Trustees. The Trust does not pay any compensation to officers or Trustees
of the Trust other than those Trustees who are not interested persons of the
Trust or Manager.
Messrs. Reid and Lyman and Ms. Fritz and Hew, each being a general partner,
limited partner, officer or employee of the Manager, will each benefit from the
management fees paid by the Trust to the Manager, but receive no direct
compensation from the Trust.
INVESTMENT ADVISORY AND OTHER SERVICES
MANAGEMENT CONTRACT
As disclosed in the Prospectus under the heading "Management of the
Trust," under a management contract (a "Management Contract") between the
Trust, on behalf of the Fund, and Rosenberg Institutional Equity Management
(the "Manager"), subject to the control of the Trustees of the Trust and such
policies as the Trustees may determine, the Manager will furnish continuously
an investment program for the Fund and will make investment decisions on
behalf of the Fund and place all orders for the purchase and sale of
portfolio securities. Subject to the control of the Trustees, the Manager
furnishes office space and equipment, provides certain bookkeeping and
clerical services and pays all salaries, fees and expenses of officers and
Trustees of the Trust who are affiliated with the Manager. As indicated
under "Portfolio Transactions -- Brokerage and Research Services," the Trust's
portfolio transactions may be placed with broker-dealers which furnish the
Manager, at no cost, certain research, statistical and quotation services of
value to the Manager in advising the Trust or its other clients.
As disclosed in the Prospectus, the Fund has agreed to pay the Manager a
quarterly management fee at the annual percentage rate of the Fund's average
daily net assets set forth in the Prospectus. The Manager has informed the
Trust that it will voluntarily waive some or all of its management fees under
the Management Contract and, if necessary, will bear certain expenses of the
Fund until further notice so that the Fund's total annual operating expenses
(including the management fee but not including nonrecurring account fees and
extraordinary expenses) will not exceed the percentage of the Fund's average
daily net assets set forth in the Prospectus. In addition, the Manager's
compensation under the Management Contract is subject to reduction to the extent
that in any year the expenses of the Fund (including investment advisory fees
but excluding taxes, portfolio brokerage commissions and any distribution
expenses paid by a class of shares of the Fund pursuant to a distribution plan
or otherwise) exceed the limits on
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<PAGE>
investment company expenses imposed by any statute or regulatory authority of
any jurisdiction in which shares of the Fund are qualified for offer and sale.
The Management Contract provides that the Manager shall not be subject to
any liability to the Trust or to any shareholder of the Trust in connection with
the performance of its services thereunder in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties thereunder.
The Management Contract will continue in effect for a period of no more
than two years from the date of its execution only so long as its continuance
is approved at least annually by (i) vote, cast in person at a meeting called
for that purpose, of a majority of those Trustees who are not "interested
persons" of the Manager or the Trust, and by (ii) the majority vote of either
the full Board of Trustees or the vote of a majority of the outstanding
shares of the Fund. The Management Contract automatically terminates on
assignment, and is terminable on not more than 60 days' written notice by the
Trust to the Manager.
In addition, the Management Contract may be terminated on not more than 60
days' written notice by the Manager to the Trust.
As disclosed in the Prospectus, the general partners of the Manager are
Barr M. Rosenberg, Marlis S. Fritz and Kenneth Reid. Each of these persons
may be deemed a controlling person of the Manager.
As discussed in this Statement of Additional Information under the heading
"Management of the Trust," Marlis S. Fritz is Vice President of the Trust as
well as a general partner of the Manager; and Kenneth Reid is a Trustee and
President of the Trust as well as a general partner and Director of Research of
the Manager.
ADMINISTRATIVE SERVICES
The Trust has entered into a Fund Administration Agreement with BISYS Fund
Services (the "Administrator") pursuant to which the Administrator provides
certain management and administrative services necessary for the Fund's
operations including: (i) general supervision of the operation of the Fund
including coordination of the services performed by the Fund's investment
adviser, transfer agent, custodian, independent accountants and legal counsel,
regulatory compliance, including the compilation of information for documents
such as reports to, and filings with, the SEC and state securities commissions,
and preparation of proxy statements and shareholder reports for the Fund; (ii)
general supervision relative to the compilation of data required for the
preparation of periodic reports distributed to the Fund's officers and Board of
Trustees; and (iii) furnishing office space and certain facilities required for
conducting the business of the Fund. For these services, the Administrator is
entitled to receive a fee, payable monthly, at the annual rate of ____% of the
average daily net assets of the Trust. The Trust has also entered into a Fund
Accounting Agreement with BISYS Fund Services, Inc.
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<PAGE>
(the "Fund Accountant") pursuant to which the Fund Accountant provides certain
accounting services necessary for the Fund's operations. For these services,
the Fund Accountant is entitled to receive an annual fee of $______.
CUSTODIAL ARRANGEMENTS. Custodial Trust Company ("CTC"), Princeton, NJ 08540,
is the Trust's custodian. As such, CTC holds in safekeeping certificated
securities and cash belonging to the Trust and, in such capacity, is the
registered owner of securities in book-entry form belonging to the Fund. Upon
instruction, CTC receives and delivers cash and securities of the Fund in
connection with Fund transactions and collects all dividends and other
distributions made with respect to Fund portfolio securities.
INDEPENDENT ACCOUNTANTS. The Trust's independent accountants are Price
Waterhouse LLP, 555 California Street, San Francisco, California 94104. Price
Waterhouse LLP conducts an annual audit of the Trust's financial statements,
assists in the preparation of the Trust's federal and state income tax returns
and the Trust's filings with the Securities and Exchange Commission, and
consults with the Trust as to matters of accounting and federal and state income
taxation.
PORTFOLIO TRANSACTIONS
INVESTMENT DECISIONS. The purchase and sale of portfolio securities for
the Fund and for the other investment advisory clients of the Manager are made
by the Manager with a view to achieving each client's investment objective. For
example, a particular security may be purchased or sold on behalf of certain
clients of the Manager even though it could also have been purchased or sold for
other clients at the same time.
Likewise, a particular security may be purchased on behalf of one or more
clients when the Manager is selling the same security on behalf of one or more
other clients. In some instances, therefore, the Manager, acting for one client
may sell indirectly a particular security to another client. It also happens
that two or more clients may simultaneously buy or sell the same security, in
which event purchases or sales are effected prorata on the basis of cash
available or other equitable basis so as to avoid any one account's being
preferred over any other account.
BROKERAGE AND RESEARCH SERVICES. Transactions on stock exchanges and other
agency transactions involve the payment of negotiated brokerage commissions.
Such commissions vary among different brokers. There is generally no stated
commission in the case of securities traded in the over-the-counter markets, but
the price paid for such securities usually includes an undisclosed dealer
commission or mark up. In placing orders for the portfolio transactions of the
Fund, the Manager will seek the best price and execution available, except to
the extent it may be permitted to pay higher brokerage commissions for brokerage
and research services as described below. The determination of what may
constitute best price and execution by a broker-dealer in effecting a securities
transaction involves a number of considerations, including, without limitation,
the overall net economic result to the Fund (involving price paid or received
and any
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<PAGE>
commissions and other costs paid), the efficiency with which the transaction is
effected, the ability to effect the transaction at all where a large block is
involved, availability of the broker to stand ready to execute possibly
difficult transactions in the future and the financial strength and stability of
the broker. Because of such factors, a broker-dealer effecting a transaction
may be paid a commission higher than that charged by another broker-dealer.
Most of the foregoing are judgmental considerations.
Over-the-counter transactions often involve dealers acting for their own
account. It is the Manager's policy to place over-the-counter market orders for
the Fund with primary market makers unless better prices or executions are
available elsewhere.
Although the Manager does not consider the receipt of research services as
a factor in selecting brokers to effect portfolio transactions for the Fund, the
Manager will receive such services from brokers who are expected to handle a
substantial amount of the Fund's portfolio transactions. Research services may
include a wide variety of analyses, reviews and reports on such matters as
economic and political developments, industries, companies, securities and
portfolio strategy. The Manager uses such research in servicing other clients
as well as the Trust.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, as
amended, and subject to such policies as the Trustees of the Trust may
determine, the Manager may pay an unaffiliated broker or dealer that provides
"brokerage and research services" (as defined in the Act) to the Manager an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction.
TOTAL RETURN CALCULATIONS
The Fund computes its average annual total return by determining the
average annual compounded rates of return during specified periods that would
equate the initial amount invested in a particular share class to the ending
redeemable value of such investment in the class, according to the following
formula:
n
P(1 + T) = ERV
Where:
T = Average annual total return
ERV = Ending redeemable value of a hypothetical $1,000 payment made at the
beginning of a period at the end of such period
P = A hypothetical initial payment of $1,000
-12-
<PAGE>
n = Number of years
The calculation of average annual total return assumes that any dividends
and distributions are reinvested immediately, rather than paid to the investor
in cash. The ending redeemable value (variable "ERV" in the formula) is
determined by assuming complete redemption of the hypothetical investment and
the deduction of all nonrecurring charges at the end of the period covered by
the computations.
Unlike bank deposits or other investments that pay a fixed yield or return
for a stated period of time, the return for the Fund will fluctuate from time to
time and does not provide a basis for determining future returns. Average
annual total return is based on many factors, including market conditions, the
composition of the Fund's portfolio and the Fund's operating expenses.
PERFORMANCE COMPARISONS
Investors may judge the performance of the Fund by comparing it to the
performance of other mutual fund portfolios with comparable investment
objectives and policies through various mutual fund or market indices such as
those prepared by Dow Jones & Co., Inc. and Standard & Poor's Corporation and
to data prepared by Lipper Analytical Services, Inc., a widely recognized
independent service which monitors the performance of mutual funds. Comparisons
may also be made to indices or data published in MONEY MAGAZINE, FORBES,
BARRON'S, THE WALL STREET JOURNAL, MORNINGSTAR, INC., IBBOTSON ASSOCIATES,
CDA/WIESENBERGER, THE NEW YORK TIMES, BUSINESS WEEK, U.S.A. TODAY, INSTITUTIONAL
INVESTOR and other periodicals. In addition to performance information, general
information about the Fund that appears in a publication such as those mentioned
above may be included in advertisements, sales literature and reports to
shareholders. The Fund may also include in advertisements and reports to
shareholders information discussing the performance of the Manager in comparison
to other investment advisers and to other institutions.
From time to time, the Trust may include the following types of information
in advertisements, supplemental sales literature and reports to shareholders:
discussions of general economic or financial principles (such as the effects of
inflation, the power of compounding and the benefits of dollar cost averaging);
(2) discussions of general economic trends; (3) presentations of statistical
data to supplement such discussions; (4) descriptions of past or anticipated
portfolio holdings for the Fund; (5) descriptions of investment strategies for
the Fund; (6) descriptions or comparisons of various investment products, which
may or may not include the Fund; (7) comparisons of investment products
(including the Fund) with relevant market or industry indices or other
appropriate benchmarks; (8) discussions of fund rankings or ratings by
recognized rating organizations; and (9) testimonials describing the experience
of persons that have invested in the Fund. The Trust may also include
calculations, such as hypothetical compounding examples, which describe
hypothetical investment results in such communications.
-13-
<PAGE>
Such performance examples will be based on an express set of assumptions and are
not indicative of the performance of the Fund.
DESCRIPTION OF THE TRUST AND OWNERSHIP OF SHARES
As more fully described in the Prospectus, the Trust is a diversified
open-end series investment company organized as a Massachusetts business trust.
A copy of the Agreement and Declaration of Trust of the Trust, as amended
(the "Declaration of Trust"), is on file with the Secretary of The Commonwealth
of Massachusetts. The fiscal year of the Trust ends on March 31. The Trust
changed its name to "Barr Rosenberg Variable Insurance Trust" from "Barr
Rosenberg Variable Trust" on March 27, 1998.
Interests in the Trust's portfolios are currently represented by shares
of one series, the Barr Rosenberg VIT Market Neutral Fund, issued pursuant to
the Declaration of Trust. The rights of shareholders and powers of the
Trustees of the Trust with respect to such shares are described in the
Prospectus.
The Declaration of Trust provides for the perpetual existence of the
Trust. The Trust may, however, be terminated at any time by vote of at least
two-thirds of the outstanding shares of the Trust.
VOTING RIGHTS
Shareholders are entitled to one vote for each full share held (with
fractional votes for fractional shares held) and will vote (to the extent
provided herein) in the election of Trustees and the termination of the Trust
and on other matters submitted to the vote of shareholders.
There will normally be no meetings of shareholders for the purpose of
electing Trustees, except that in accordance with the 1940 Act (i) the Trust
will hold a shareholders' meeting for the election of Trustees at such time as
less than a majority of the Trustees holding office have been elected by
shareholders, and (ii) if, as a result of a vacancy in the Board of Trustees,
less than two-thirds of the Trustees holding office have been elected by the
shareholders, that vacancy may only be filled by a vote of the shareholders. In
addition, Trustees may be removed from office by a written consent signed by the
holders of two-thirds of the outstanding shares and filed with the Trust's
custodian or by a vote of the holders of two-thirds of the outstanding shares at
a meeting duly called for the purpose, which meeting shall be held upon the
written request of the holders of not less than 10% of the outstanding shares.
Upon written request by the holders of at least 1% of the outstanding shares
stating that such shareholders wish to communicate with the other shareholders
for the purpose of obtaining the signatures necessary to demand a meeting to
consider removal of a Trustee, the Trust has undertaken to provide a list of
shareholders or to disseminate appropriate materials (at the expense of the
requesting shareholders). Except as set
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<PAGE>
forth above, the Trustees shall continue to hold office and may appoint
successor Trustees. Voting rights are not cumulative.
No amendment may be made to the Declaration of Trust without the
affirmative vote of a majority of the outstanding shares of the Trust except (i)
to change the Trust's name or to cure technical problems in the Declaration of
Trust and (ii) to establish, designate or modify new and existing series,
sub-series or classes of shares of any series of Trust shares or other
provisions relating to Trust shares in response to applicable laws or
regulations.
SHAREHOLDER AND TRUSTEE LIABILITY
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Trust. However, the
Declaration of Trust disclaims shareholder liability for acts or obligations of
the Trust and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by the Trust or
the Trustees. The Declaration of Trust provides for indemnification out of all
the property of the Fund for all loss and expense of any shareholder of that
Fund held personally liable for the obligations of the Trust. Thus, the risk of
a shareholder incurring financial loss on account of shareholder liability is
considered remote since it is limited to circumstances in which the disclaimer
is inoperative and the Fund is unable to meet its obligations.
The Declaration of Trust further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, nothing in
the Declaration of Trust protects a Trustee against any liability to which the
Trustee would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office. The Declaration of Trust also provides for indemnification by the
Trust of the Trustees and the officers of the Trust against liabilities and
expenses reasonably incurred in connection with litigation in which they may be
involved because of their offices with the Trust, except if it is determined in
the manner specified in the Declaration of Trust that such Trustees are liable
to the Trust or its shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties. In addition, the
Manager has agreed to indemnify each Trustee who is not "an interested person"
of the Trust to the maximum extent permitted by the 1940 Act against any
liabilities arising by reason of such Trustee's status as a Trustee of the
Trust.
The officers and trustees of the Trust, as a group, own less than 1% of the
outstanding shares of the Trust.
DETERMINATION OF NET ASSET VALUE
As indicated in the Prospectus, the net asset value of the Fund share is
determined on each day on which the New York Stock Exchange is open for trading.
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<PAGE>
The Trust expects that the days, other than weekend days, that the New York
Stock Exchange will not be open are Independence Day (observed), Labor Day,
Thanksgiving Day Christmas Day, New Year's Day, Martin Luther King, Jr. Day,
Washington's Birthday, Good Friday and Memorial Day.
Portfolio securities listed on a securities exchange for which market
quotations are available are valued at the last quoted sale price on each
business day, or, if there is no such reported sale, at the most recent quoted
bid price. Price information on listed securities is generally taken from the
closing price on the exchange where the security is primarily traded. Unlisted
securities for which market quotations are readily available are valued at the
most recent quoted bid price, except that debt obligations with sixty days or
less remaining until maturity may be valued at their amortized cost.
Exchange-traded options, futures and options on futures are valued at the
settlement price as determined by the appropriate clearing corporation. Other
assets and securities for which no quotations are readily available are valued
at fair value as determined in good faith by the Trustees of the Trust or by
persons acting at their direction.
PURCHASE AND REDEMPTION OF SHARES
The procedures for purchasing shares of the Fund and for determining the
offering price of such shares are described in the Prospectus.
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<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
Not applicable.
(b) Exhibits:
(1)(a) Agreement and Declaration of Trust of the Registrant --
filed herewith;
(1)(b) Amendment No. 1 to Agreement and Declaration of Trust of the
Registrant -- filed herewith;
(2) By-Laws of the Registrant -- filed herewith;
(3) None;
(4) None;
(5) Form of Management Contract between the Registrant on behalf
of its Barr Rosenberg VIT Market Neutral Fund and Rosenberg
Institutional Equity Management -- filed herewith;
(6) None;
(7) None;
(8) (a) Form of Custody Agreement between the Registrant and
Custodial Trust Company -- to be filed by amendment;
(b) Form of Special Custody Account Agreement among the
Registrant, Custodial Trust Company and Bear, Stearns
Securities Corp. -- to be filed by amendment;
(9) (a) Transfer Agency Agreement between the Registant and BISYS
Fund Services, Inc. -- to be filed by amendment;
<PAGE>
(b) Form of Notification of Expense Limitation by Rosenberg
Institutional Equity Management to the Barr Rosenberg VIT
Market Neutral Fund -- filed herewith;
(c) Fund Administration Agreement between the Registrant and
BISYS Fund Services Limited Partnership -- to be filed by
amendment;
(d) Fund Accounting Agreement between the Registrant and BISYS
Fund Services, Inc. -- to be filed by amendment;
(10) Opinion of Ropes & Gray -- to be filed by amendment;
(11) Consent of Price Waterhouse LLP -- to be filed by amendment;
(12) None;
(13) Investment letter regarding initial capital -- to be filed
by amendment;
(14) None;
(15) None;
(16) Not Applicable;
(17) Not Applicable;
(18) Not Applicable;
(19) Power of Attorney of Po-Len Hew -- filed herewith;
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
None.
ITEM 27. INDEMNIFICATION.
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<PAGE>
Article VIII of the Registrant's Agreement and Declaration of Trust reads
as follows (referring to the Registrant as the "Trust"):
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<PAGE>
ARTICLE VIII
Indemnification
SECTION 1. TRUSTEES, OFFICERS, ETC. The Trust shall indemnify each of its
Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise) (hereinafter referred to
as a "Covered Person") against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such Covered Person may be or may have
been threatened, while in office or thereafter, by reason of being or having
been such a Covered Person except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in any such action, suit or
other proceeding to be liable to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office. Expenses,
including counsel fees so incurred by any such Covered Person (but excluding
amounts paid in satisfaction of judgments, in compromise or as fines or
penalties), shall be paid from time to time by the Trust in advance of the final
disposition of any such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Covered Person to repay amounts so paid to
the Trust if it is ultimately determined that indemnification of such expenses
is not authorized under this Article, provided, however, that either (a) such
Covered Person shall have provided appropriate security for such undertaking,
(b) the Trust shall be insured against losses arising from any such advance
payments or (c) either a majority of the disinterested Trustees acting on the
matter (provided that a majority of the disinterested Trustees then in office
act on the matter), or independent legal counsel in a written opinion, shall
have determined, based upon a review of readily available facts (as opposed to a
full trial type inquiry) that there is reason to believe that such Covered
Person will be found entitled to indemnification under this Article.
SECTION 2. COMPROMISE PAYMENT. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise) without an
adjudication by a court, or by any other body before which the proceeding was
brought, that such Covered Person is liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office, indemnification
shall be provided if (a) approved, after notice that it involves such
indemnification, by at least a majority of the disinterested Trustees acting on
the matter (provided that a majority of the disinterested Trustees then in
office act on the matter) upon a determination, based upon a review of readily
available facts (as opposed to a full trial type inquiry) that such Covered
Person is not liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office, or (b) there has been obtained an
opinion in writing of
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<PAGE>
independent legal counsel, based upon a review of readily available facts (as
opposed to a full trial type inquiry) to the effect that such indemnification
would not protect such Person against any liability to the Trust to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office. Any approval pursuant to this Section shall not prevent the
recovery from any Covered Person of any amount paid to such Covered Person in
accordance with this Section as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction to have been
liable to the Trust or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.
SECTION 3. INDEMNIFICATION NOT EXCLUSIVE. The right of indemnification
hereby provided shall not be exclusive of or affect any other rights to which
such Covered Person may be entitled. As used in this Article VIII, the term
"Covered Person" shall include such person's heirs, executors and administrators
and a "disinterested Trustee" is a Trustee who is not an "interested person" of
the Trust as defined in Section 2(a)(19) of the 1940 Act (or who has been
exempted from being an "interested person" by any rule, regulation or order of
the Commission), and against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or similar
grounds is then or has been pending. Nothing contained in this Article shall
affect any rights to indemnification to which personnel of the Trust, other than
Trustees or officers, and other persons may be entitled by contract or otherwise
under law, nor the power of the Trust to purchase and maintain liability
insurance on behalf of any such person; provided, however, that the Trust shall
not purchase or maintain any such liability insurance in contravention of
applicable law, including without limitation the 1940 Act.
SECTION 4. SHAREHOLDERS. In case any Shareholder or former Shareholder
shall be held to be personally liable solely by reason of his or her being or
having been a Shareholder and not because of his or her acts or omissions or for
some other reason, the Shareholder or former Shareholder (or his or her heirs,
executors, administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled to be held harmless from and indemnified against all loss and expense
arising from such liability, but only out of the assets of the particular Series
of Shares of which he or she is or was a Shareholder.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR AND PORTFOLIO
MANAGERS.
Rosenberg Institutional Equity Management (the "Manager") was organized as
a limited partnership under the laws of the State of California in 1985, and is
registered as an investment adviser under the Investment Advisers Act of 1940.
The Manager provides investment advisory services to a substantial number of
institutional investors and to the five series of Barr Rosenberg Series Trust,
an open-end management investment company.
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<PAGE>
Set forth below are the substantial business engagements during at least
the past two fiscal years of each director, officer or partner of the Manager:
Name and Position with Manager Business and Other Connections
- ------------------------------ ------------------------------
Barr M. Rosenberg General Partner, Rosenberg Alpha L.P.
Managing General Partner and Chief (formerly RBR Partners (limited partner
Investment Officer of Manager)), 12 El Sueno, Orinda,
California, December 1984 to present;
Chairman of the Board, Rosenberg
Management Company S.A., 2 Place Winston
Churchill, L-1340 Luxembourg, April 1989
to present; Chairman of the Board,
Rosenberg U.S. Japan Management Company
S.A., 2 Place Winston Churchill, L-1340
Luxembourg, July 1989 to present.
Chairman of the Board, Rosenberg Global
Management Company, S.A., 2 Place
Winston Churchill, L-1340 Luxemburg,
April 1990 to present; Director and
Chairman of the Board, Rosenberg Nomura
Asset Management Company, Ltd., Dai-Ichi
Edobashi Bldg., 1-11-1 Nihonbashi
Chuo-Ku, Tokyo 103, Japan, 1988 to
present; Chairman of the Board and
Director of Barr Rosenberg Investment
Management, Inc., 4 Orinda Way, Orinda,
California, February 1990 to present.
Chairman, Barr Rosenberg European
Management, Ltd., 9A Devonshire Square,
London EC2M 4LY, United Kingdom, March
1990 to present.
Marlis S. Fritz Director, Barr Rosenberg European
General Partner Management Ltd., 9A Devonshire Square,
London EC2M 4LY, United Kingdom, May
1990 to present; Director, Barr
Rosenberg Investment Management, Inc., 4
Orinda Way, Orinda, California, February
1990 to present.
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<PAGE>
Kenneth Reid Director, Barr Rosenberg Investment
General Partner Management, Inc., 4 Orinda Way, Orinda,
and Director of Research California, February 1990 to present.
Po-Len Hew Controller, Rosenberg Institutional
Controller Equity Management, October 1989 to
present,Treasurer, Barr Rosenberg
Investment Management, Inc., May 1994 to
present.
ITEM 29. PRINCIPAL UNDERWRITERS.
Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
The account books and other documents required to be maintained Section
31(a) of the Investment Company Act of 1940, as amended, and the Rules
thereunder will be maintained at the offices of:
1) Barr Rosenberg Variable Insurance Trust
3435 Stelzer Road
Columbus, Ohio 43219
Rule 31a-1 (b)(1),(2),(3), (4), (5), (6), (7), (8), (9), (10), (11)
Rule 31a-2 (a)
2) Rosenberg Institutional Equity Management
Four Orinda Way
Building E
Orinda, CA 94563
Rule 31a-1 (f)
Rule 31a-2 (e)
ITEM 31. MANAGEMENT SERVICES.
None.
ITEM 32. UNDERTAKINGS.
The Registrant undertakes to comply with the last three paragraphs of
Section 16(c) of the Investment Company Act of 1940 as though such provisions of
the Act were applicable to the Trust.
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<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust, as amended, of the
Registrant is on file with the Secretary of The Commonwealth of Massachusetts
and notice is hereby given that this instrument is executed on behalf of the
Registrant by an officer of the Registrant as an officer and not individually
and that the obligations of or arising out of this instrument are not binding
for any of the trustees or shareholders individually but are binding only upon
the assets and property of the Registrant.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Orinda, and the State of California, on the 20th day
of April, 1998.
BARR ROSENBERG VARIABLE INSURANCE TRUST
By: KENNETH REID
--------------------------
Kenneth Reid
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 indicated and on the 20th day of April, 1998.
SIGNATURE TITLE DATE
- --------- ------ ----
KENNETH REID President and Trustee April 20, 1998
- -------------------- (principal executive
Kenneth Reid officer)
PO-LEN HEW Treasurer April 20, 1998
- -------------------- (principal financial
Po-Len Hew and accounting officer)
*By: KENNETH REID
------------------------
Kenneth Reid
Attorney-in-Fact
Date: April 20, 1998
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99.1(a) Agreement and Declaration of
Trust of the Registrant
99.1(b) Amendment No. 1 to Agreement
and Declaration of Trust of
the Registrant
99.2 By-Laws of the Registrant
99.5 Form of Management Contract
between the Registrant on
behalf of its Barr Rosenberg
VIT Market Neutral Fund and
Rosenberg Institutional Equity
Management
99.9(b) Form of Notification of
Expense Limitation by
Rosenberg Institutional Equity
Management to the Barr
Rosenberg VIT Market Neutral
Fund
99.19 Power of Attorney of Po-Len
Hew
<PAGE>
Exhibit 99.1(a)
AGREEMENT AND DECLARATION OF TRUST
OF
BARR ROSENBERG VARIABLE TRUST
THIS AGREEMENT AND DECLARATION OF TRUST made in Boston, Massachusetts this
1st day of March, 1998 by the Trustees hereunder and the holders of shares of
beneficial interest to be issued hereunder as hereinafter provided:
WITNESSETH that
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby direct that this Agreement and
Declaration of Trust be filed with the Secretary of The Commonwealth of
Massachusetts and with the Clerk of every city or town where such association or
trust has a usual place of business, and do hereby declare that they will hold
all cash, securities and other assets, which they may from time to time acquire
in any manner as Trustees hereunder IN TRUST to manage and dispose of the same
upon the following terms and conditions for the pro rata benefit of the holders
from time to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
SECTION 1. This Trust shall be known as Barr Rosenberg Variable Trust, and
the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.
SECTION 2. DEFINITIONS. Whenever used herein, unless otherwise required
by the context or specifically provided
(a) "Trust" refers to the Massachusetts business trust established by this
Agreement and Declaration of Trust, as amended from time to time;
(b) "Trustees" refers to the Trustee of the Trust named in Article IV
hereof or any Trustees elected in accordance with such Article;
(c) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust or in the Trust property belonging to any
Series of the Trust (or in the property belonging to any Series allocable to any
Class of that Series) (as the context may require) shall be divided from time to
time;
<PAGE>
(d) "Shareholder" means a record owner of Shares;
(e) "1940 Act" refers to the Investment Company Act of 1940 and the Rules
and Regulations thereunder, all as amended from time to time;
(f) The terms "Commission" and "principal underwriter" shall have the
meanings given them in the 1940 Act;
(g) "Declaration of Trust" and "this Declaration" shall mean this
Agreement and Declaration of Trust, as amended or restated from time to time;
(h) "By-Laws" shall mean the By-Laws of the Trust, as amended from time to
time;
(i) "Series Company" refers to the form of registered open-end investment
company described in Section 18(f)(2) of the 1940 Act or in any successor
statutory provision;
(j) "Series" refers to Series of Shares established and designated under
or in accordance with the provisions of Article III; and
(k) "Class" refers to any Class of Shares of a Series established and
designated under or in accordance with the provisions of Article III. The
Shares of a Class shall represent a subset of Shares of a Series and the Shares
of each Class, together with the Shares of all other Classes of the same Series,
shall constitute all Shares of that Series.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to provide investors a managed investment
primarily in securities (including options), debt instruments, money market
instruments, commodities, commodity contracts and options thereon and other
instruments and rights of a financial character.
ARTICLE III
Shares
SECTION 1. DIVISION OF BENEFICIAL INTEREST. The beneficial interest in
the Trust shall at all times be divided into an unlimited number of Shares,
without par value. Subject to the provisions of Section 6 of this Article III,
each Share shall have the voting rights as provided in Article V hereof, and
holders of the Shares of any Series or Class shall be entitled to receive
dividends, when and as declared with respect thereto in the manner provided in
Article VI, Section 1 hereof. No Share shall have any priority or preference
over any other Share of the same Series and Class with respect to dividends or
distributions upon termination of the Trust or of such Series or Class made
pursuant to Article IX, Section 4 hereof. Unless the
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<PAGE>
Trustees have authorized the issuance of Shares of a Series in two or more
Classes, all dividends and distributions shall be made ratably among all
Shareholders of a particular Series from the assets belonging to such Series
according to the number of Shares of such Series held of record by such
Shareholders on the record date for any dividend or on the date of termination,
as the case may be. The Trustees may from time to time divide or combine the
Shares of any particular Series or Class into a greater or lesser number of
Shares of that Series or Class without thereby changing the proportionate
beneficial interest of the Shares of that Series or Class in the assets
belonging to that Series (or allocable to the Shares of that Class) or in any
way affecting the rights of Shares of any other Series or Class.
SECTION 2. OWNERSHIP OF SHARES. The ownership of Shares shall be recorded
on the books of the Trust or a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Series and Class.
No certificates certifying the ownership of Shares shall be issued except as the
Trustees may otherwise determine from time to time. The Trustees may make such
rules as they consider appropriate for the transfer of Shares of each Series and
Class and similar matters. The record books of the Trust as kept by the Trust
or any transfer or similar agent, as the case may be, shall be conclusive as to
who are the Shareholders of each Series and Class and as to the number of Shares
of each Series and Class held from time to time by each.
SECTION 3. INVESTMENTS IN THE TRUST. The Trustees shall accept
investments in the Trust from such persons and on such terms and for such
consideration as they from time to time authorize.
SECTION 4. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. Shares
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the same nor entitle the representative of
any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but entitles such representative
only to the rights of said deceased Shareholder under this Trust. Ownership of
Shares shall not entitle the Shareholder to any title in or to the whole or any
part of the Trust property or right to call for a partition or division of the
same or for an accounting, nor shall the ownership of Shares constitute the
Shareholders partners of each other. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholders, nor except as specifically provided herein to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
SECTION 5. POWER OF TRUSTEES TO CHANGE PROVISIONS RELATING TO SHARES.
Notwithstanding any other provisions of this Declaration of Trust and without
limiting the power of the Trustees to amend the Declaration of Trust as provided
elsewhere herein, the
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<PAGE>
Trustees shall have the power to amend this Declaration of Trust, at any time
and from time to time, in such manner as the Trustees may determine in their
sole discretion, without the need for Shareholder action, so as to add to,
delete, replace or otherwise modify any provisions relating to the Shares
contained in this Declaration of Trust for the purpose of (i) responding to or
complying with any regulations, orders, rulings or interpretations of any
governmental agency or any laws, now or hereafter applicable to the Trust, or
(ii) designating and establishing Series or Classes in addition to the Series
and Classes established in Section 6 of this Article III; provided that before
adopting any such amendment in clause (i) without Shareholder approval the
Trustees shall determine that it is consistent with the fair and equitable
treatment of all Shareholders. The establishment and designation of any Series
or Class of Shares in addition to the Series and Classes established and
designated in Section 6 of this Article III shall be effective upon the
execution by a majority of the then Trustees of an amendment to this Declaration
of Trust, taking the form of a complete restatement or otherwise, setting forth
such establishment and designation and the relative rights and preferences of
such Series or Class, or as otherwise provided in such instrument.
Without limiting the generality of the foregoing, the Trustees may, for the
above-stated purposes, amend the Declaration of Trust to:
(a) create one or more Series or Classes of Shares (with respect to or in
addition to any Series or Classes already existing or otherwise) with such
rights and preferences and such eligibility requirements for investment therein
as the Trustees shall determine, and reclassify any or all outstanding Shares as
shares of particular Series or Classes in accordance with such eligibility
requirements;
(b) amend any of the provisions set forth in paragraphs (a) through (j) of
Section 6 of this Article III;
(c) combine one or more Series or Classes of Shares into a single Series
or Class on such terms and conditions as the Trustees shall determine;
(d) change or eliminate any eligibility requirements for investment in
Shares of any Series or Class, including without limitation the power to provide
for the issue of Shares of any Series or Class in connection with any merger or
consolidation of the Trust with another trust or company or any acquisition by
the Trust of part or all of the assets of another trust or company;
(e) change the designation of any Series or Class of Shares;
(f) change the method of allocating dividends among the various Series and
Classes of Shares;
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<PAGE>
(g) allocate any specific assets or liabilities of the Trust or any
specific items of income or expense of the Trust to one or more Series or
Classes of Shares;
(h) specifically allocate assets to any or all Series or Classes of Shares
or create one or more additional Series or Classes of Shares which are preferred
over all other Series or Classes of Shares in respect of assets specifically
allocated thereto or any dividends paid by the Trust with respect to any net
income, however determined, earned from the investment and reinvestment of any
assets so allocated or otherwise and provide for any special voting or other
rights with respect to such Series or Classes; or
(i) divide one or more Series of Shares into one or more Classes on such
terms and conditions as the Trustees may determine.
SECTION 6. RIGHTS AND PREFERENCES OF SERIES. Shares of each Series
established pursuant to Section 5 shall have the following relative rights and
preferences:
(a) ASSETS BELONGING TO SERIES. All consideration received by the Trust
for the issue or sale of Shares of a particular Series, together with all assets
in which such consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof from whatever source derived, including, without
limitation, any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to that Series for
all purposes, subject only to the rights of creditors, and shall be so recorded
upon the books of account of the Trust. Such consideration, assets, income,
earnings, profits and proceeds thereof, from whatever source derived, including,
without limitation, any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as "assets
belonging to" that Series. In the event that there are any assets, income,
earnings, profits and proceeds thereof, funds or payments which are not readily
identifiable as belonging to any particular Series (collectively "General
Assets"), the Trustees shall allocate such General Assets to, between or among
any one or more of the Series established and designated from time to time in
such manner and on such basis as they, in their sole discretion, deem fair and
equitable, and any General Asset so allocated to a particular Series shall
belong to that Series. Each such allocation by the Trustees shall be conclusive
and binding upon the Shareholders of all Series for all purposes.
(b) LIABILITIES BELONGING TO SERIES. The assets belonging to each
particular Series shall be charged solely with the liabilities of the Trust in
respect to that Series, expenses, costs, charges and reserves attributable to
that Series, and any general liabilities of the Trust which are not readily
identifiable as belonging to any particular Series but which are allocated and
charged by the Trustees to and among any one or more of the Series established
and designated from time to time in a manner and on such basis as the Trustees
in their sole discretion deem fair and equitable. The liabilities, expenses,
costs, charges, and reserves so
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<PAGE>
charged to a Series are herein referred to as "liabilities belonging to" that
Series. Each allocation of liabilities, expenses, costs, charges and reserves
by the Trustees shall be conclusive and binding upon the shareholders of all
Series for all purposes.
(c) DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS, AND REPURCHASES.
Notwithstanding any other provisions of this Declaration, including, without
limitation, Article VI, no dividend or distribution (including, without
limitation, any distribution paid upon termination of the Trust or of any Series
or Class) with respect to, nor any redemption or repurchase of, the Shares of
any Series shall be effected by the Trust other than from the assets belonging
to such Series, nor shall any Shareholder of any particular Series otherwise
have any right or claim against the assets belonging to any other Series except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series.
(d) VOTING. Notwithstanding any of the other provisions of this
Declaration, including, without limitation, Section 1 of Article V, the
Shareholders of any particular Series or Class shall not be entitled to vote on
any matters as to which such Series or Class is not affected except as otherwise
required by the 1940 Act or other applicable law. On any matter submitted to a
vote of Shareholders, all Shares of the Trust then entitled to vote shall be
voted by individual Series, unless otherwise required by the 1940 Act or other
applicable law.
(e) EQUALITY. All the Shares of each particular Class of a Series shall
represent an equal proportionate interest in the assets and liabilities
belonging to that Series allocable to that Class and all Shares of each
particular Series shall represent an equal proportionate interest in the assets
belonging to that Series (subject to the liabilities belonging to that Series),
and each Share of any particular Series shall be equal to each other Share of
that Series.
(f) FRACTIONS. Any fractional Share of a Series or Class shall carry
proportionately all the rights and obligations of a whole share of that Series
or Class, including rights with respect to voting, receipt of dividends and
distributions, redemption of Shares and termination of the Trust.
(g) EXCHANGE PRIVILEGE. The Trustees shall have the authority to provide
that the holders of Shares of any Series or Class shall have the right to
exchange said Shares for Shares of one or more other Series or Classes of Shares
in accordance with such requirements and procedures as may be established by the
Trustees.
(h) COMBINATION OF SERIES OR CLASSES. The Trustees shall have the
authority, without the approval of the Shareholders of any Series or Class
unless otherwise required by applicable law, to combine the assets and
liabilities belonging to any two or more Series or Classes into assets and
liabilities belonging to a single Series or Class.
(i) ELIMINATION OF SERIES OR CLASSES. At any time that there are no
Shares outstanding of any particular Series or Class previously established and
designated, the
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Trustees may amend this Declaration of Trust to abolish that Series or Class and
to rescind the establishment and designation thereof, such amendment to be
effected in the manner provided in Section 5 of this Article III.
(j) ASSETS AND LIABILITIES ALLOCABLE TO A CLASS. The assets and
liabilities belonging to a Series shall be fully allocated among all the Classes
of that Series. For purposes of determining the assets and liabilities
belonging to a Series which are allocable to a Class of that Series, subject to
the provisions of paragraph (g) of Section 5 of this Article III, the provisions
of paragraphs (a) and (b) of this Section 6 shall apply, MUTATIS MUTANDIS, as if
each Class were a Series.
SECTION 7. INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former Shareholder shall be held to be personally liable solely by reason of his
or her being or having been a Shareholder of the Trust or of a particular Series
and not because of his or her acts or omissions or for some other reason, the
Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled out of
the assets of the Series of which he is a Shareholder or former Shareholder to
be held harmless from and indemnified against all loss and expense arising from
such liability.
SECTION 8. NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive or
other right to subscribe to any additional Shares or other securities issued by
the Trust.
SECTION 9. DERIVATIVE CLAIMS. No Shareholder shall have the right to
bring or maintain any court action, proceeding or claim on behalf of this Trust
or any Series without first making demand on the Trustees requesting the
Trustees to bring or maintain such action, proceeding or claim. Such demand
shall be excused only when the plaintiff makes a specific showing that
irreparable injury to the Trust or Series would otherwise result. Such demand
shall be mailed to the Clerk of the Trust at the Trust's principal office and
shall set forth in reasonable detail the nature of the proposed court action,
proceeding or claim and the essential facts relied upon by the Shareholder to
support the allegations made in the demand. The Trustees shall consider such
demand within 45 days of its receipt by the Trust. In their sole discretion,
the Trustees may submit the matter to a vote of Shareholders of the Trust or
Series, as appropriate. Any decision by the Trustees to bring, maintain or
settle (or not to bring, maintain or settle) such court action, proceeding or
claim, or to submit the matter to a vote of Shareholders shall be made by the
Trustees in their business judgment and shall be binding upon the Shareholders.
Any decision by the Trustees to bring or maintain a court action, proceeding or
suit on behalf of the Trust or a Series shall be subject to the right of the
Shareholders under Article V, Section 1 hereof to vote on whether or not such
court action, proceeding or suit should or should not be brought or maintained.
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ARTICLE IV
The Trustees
SECTION 1. ELECTION AND TENURE. The initial Trustee shall be Dean
Hamilton. The Trustees may fix the number of Trustees, fill vacancies in the
Trustees, including vacancies arising from an increase in the number of
Trustees, or remove Trustees with or without cause. Each Trustee shall serve
during the continued lifetime of the Trust until he dies, resigns or is removed,
or, if sooner, until the next meeting of Shareholders called for the purpose of
electing Trustees and until the election and qualification of his successor.
Any Trustee may resign at any time by written instrument signed by him and
delivered to any officer of the Trust or to a meeting of the Trustees. Such
resignation shall be effective upon receipt unless specified to be effective at
some other time. Except to the extent expressly provided in a written agreement
with the Trust, no Trustee resigning and no Trustee removed shall have any right
to any compensation for any period following his resignation or removal, or any
right to damages on account of such removal. The Shareholders may fix the
number of Trustees and elect Trustees at any meeting of Shareholders called by
the Trustees for that purpose.
SECTION 2. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The death,
declination, resignation, retirement, removal or incapacity of the Trustees, or
any of them, shall not operate to annul the Trust or to revoke any existing
agency created pursuant to the terms of this Declaration of Trust.
SECTION 3. POWERS. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the Trustees, and they
shall have all powers necessary or convenient to carry out that responsibility
including the power to engage in securities transactions of all kinds on behalf
of the Trust. Without limiting the foregoing, the Trustees may adopt By-Laws
not inconsistent with this Declaration of Trust providing for the regulation and
management of the affairs of the Trust and may amend and repeal them to the
extent that such By-Laws do not reserve that right to the Shareholders; they may
fill vacancies in or remove from their number (including any vacancies created
by an increase in the number of Trustees); they may remove from their number
with or without cause; they may elect and remove such officers and appoint and
terminate such agents as they consider appropriate; they may appoint from their
own number and terminate one or more committees consisting of two or more
Trustees which may exercise the powers and authority of the Trustees to the
extent that the Trustees determine; they may employ one or more custodians of
the assets of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a system or
systems for the central handling of securities or with a Federal Reserve Bank;
they may retain a transfer agent or a shareholder servicing agent, or both; they
may provide for the distribution of Shares by the Trust, through one or more
principal underwriters or otherwise; they may set record dates for the
determination of Shareholders with respect to various matters; and in general
they may delegate such authority as they consider desirable to any officer of
the Trust, to any committee of the Trustees and to any agent or employee of the
Trust or to any such custodian or underwriter.
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Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or
write options with respect to or otherwise deal in any property rights relating
to any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in its own name or
in the name of a custodian or subcustodian or a nominee or nominees or
otherwise;
(f) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;
(g) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;
(h) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(i) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;
(j) To borrow funds or other property;
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(k) To endorse or guarantee the payment of any notes or other obligations
of any person; to make contracts of guaranty or suretyship, or otherwise assume
liability for payment thereof;
(l) To purchase and pay for entirely out of Trust property such insurance
as they may deem necessary or appropriate for the conduct of the business,
including without limitation, insurance policies insuring the assets of the
Trust and payment of distributions and principal on its portfolio investments,
and insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers, principal underwriters, or independent contractors
of the Trust individually against all claims and liabilities of every nature
arising by reason of holding, being or having held any such office or position,
or by reason of any action alleged to have been taken or omitted by any such
person as Trustee, officer, employee, agent, investment adviser, principal
underwriter, or independent contractor, including any action taken or omitted
that may be determined to constitute negligence, whether or not the Trust would
have the power to indemnify such person against liability;
(m) To pay pensions as deemed appropriate by the Trustees and to adopt,
establish and carry out pension, profit-sharing, share bonus, share purchase,
savings, thrift and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and annuity contracts as
a means of providing such retirement and other benefits, for any or all of the
Trustees, officers, employees and agents of the Trust;
(n) To enter into forward commitments, futures contracts and swap
contracts and to buy and sell options on futures contracts or swap contracts and
to buy and or to enter into transactions with respect to any other securities or
derivative instruments; and
(o) To engage in any other lawful act or activity in which corporations
organized under the Massachusetts Business Corporation Act may engage.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by trustees. The Trustees shall
not be required to obtain any court order to deal with any assets of the Trust
or take any other action hereunder.
SECTION 4. PAYMENT OF EXPENSES BY THE TRUST. The Trustees are authorized
to pay or cause to be paid out of the principal or income of the Trust, or
partly out of principal and partly out of income, as they deem fair, all
expenses, fees, charges, taxes and liabilities incurred or arising in connection
with the Trust, or in connection with the management thereof, including but not
limited to, the Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, investment adviser or manager,
principal underwriter, auditor, counsel, custodian, transfer agent, shareholder
servicing agent, and such other agents or independent contractors and such other
expenses and charges as the Trustees may deem necessary or proper to incur.
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SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any particular Series or Class, to pay directly, in advance
or arrears, for charges of the Trust's custodian or transfer, shareholder
servicing or similar agent, an amount fixed from time to time by the Trustees,
by setting off such charges due from such Shareholder from declared but unpaid
dividends owed such Shareholder and/or by reducing the number of Shares in the
account of such Shareholder by that number of full and/or fractional Shares
which represents the outstanding amount of such charges due from such
Shareholder.
SECTION 6. OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the assets
of the Trust shall at all times be considered as vested in the Trustees.
SECTION 7. ADVISORY, MANAGEMENT AND DISTRIBUTION CONTRACTS. Subject to
such requirements and restrictions as may be set forth in the By-Laws, the
Trustees may, at any time and from time to time, contract for exclusive or
nonexclusive advisory and/or management services for the Trust or for any Series
with Rosenberg Institutional Equity Management or any other partnership,
corporation, trust, association or other organization (the "Manager"); and any
such contract may contain such other terms as the Trustees may determine,
including without limitation, authority for a Manager to determine from time to
time without prior consultation with the Trustees what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
the Trust shall be held uninvested and to make changes in the Trust's
investments. The Trustees may also, at any time and from time to time, contract
with Barr Rosenberg Funds Distributor, Inc. or any other partnership,
corporation, trust, association or other organization, appointing it exclusive
or nonexclusive distributor, principal underwriter or placement agent for the
Shares, every such contract to comply with such requirements and restrictions as
may be set forth in the By-Laws; and any such contract may contain such other
terms as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter, placement agent, distributor or affiliate
or agent of or for any partnership, corporation, trust, association, or
other organization, or of or for any parent or affiliate of any
organization, with which an advisory or management contract, or principal
underwriter's or distributor's contract, or placement agreement, or
transfer, shareholder servicing or other agency contract may have been or
may hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the Trust, or
that
(ii) any partnership, corporation, trust, association or other
organization with which an advisory or management contract or principal
underwriter's or distributor's contract, or placement agreement, or
transfer, shareholder servicing or
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other agency contract may have been or may hereafter be made also has an
advisory or management contract, or principal underwriter's or
distributor's contract, or transfer, shareholder servicing or other agency
contract with one or more other corporations, trusts, associations, or
other organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing
the same or create any liability or accountability to the Trust or its
Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
SECTION 1. VOTING POWERS. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Article IV, Section 1, (ii) with
respect to any amendment of this Declaration of Trust to the extent and as
provided in Article IX, Section 8, (iii) to the same extent as the stockholders
of a Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders, (iv) with
respect to the termination of the Trust or any Series or Class to the extent and
as provided in Article IX, Section 4, and (v) with respect to such additional
matters relating to the Trust as may be required by this Declaration of Trust,
the By-Laws or any registration of the Trust with the Commission (or any
successor agency) or any state, or as the Trustees may consider necessary or
desirable. Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them.
A proxy purporting to be executed by or on behalf of a Shareholder shall be
deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger. At any time when no Shares of
a Series or Class are outstanding, the Trustees may exercise all rights of
Shareholders of that Series or Class with respect to matters affecting that
Series or Class and may with respect to that Series or Class take any action
required by law, this Declaration of Trust or the By-Laws to be taken by the
Shareholders.
SECTION 2. VOTING POWER AND MEETINGS. Meetings of the Shareholders may be
called by the Trustees for the purpose of electing Trustees as provided in
Article IV, Section 1 and for such other purposes as may be prescribed by law,
by this Declaration of Trust or by the By-Laws. Meetings of the Shareholders
may also be called by the Trustees from time to time for the purpose of taking
action upon any other matter deemed by the Trustees to be necessary or
desirable. A meeting of Shareholders may be held at any place designated by the
Trustees. Written notice of any meeting of Shareholders shall be given or
caused to be given by the Trustees by mailing such notice at least seven days
before such meeting, postage prepaid,
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stating the time and place of the meeting, to each Shareholder at the
Shareholder's address as it appears on the records of the Trust. Whenever
notice of a meeting is required to be given to a Shareholder under this
Declaration of Trust or the By-Laws, a written waiver thereof, executed before
or after the meeting by such Shareholder or his attorney thereunto authorized
and filed with the records of the meeting, shall be deemed equivalent to such
notice.
SECTION 3. QUORUM AND REQUIRED VOTE. Except when a larger quorum is
required by law, by the By-Laws or by this Declaration of Trust, 10% of the
Shares entitled to vote shall constitute a quorum at a Shareholders' meeting.
When any one or more Series or Class is to vote as a single class separate from
any other Shares which are to vote on the same matters as a separate class or
classes, 10% of the Shares of each such class entitled to vote shall constitute
a quorum at a Shareholder's meeting of that class. Any meeting of Shareholders
may be adjourned from time to time by a majority of the votes properly cast upon
the question, whether or not a quorum is present, and the meeting may be held as
adjourned within a reasonable time after the date set for the original meeting
without further notice. When a quorum is present at any meeting, a majority of
the Shares voted shall decide any questions and a plurality shall elect a
Trustee, except when a larger vote is required by any provision of this
Declaration of Trust or the By-Laws or by law. If any question on which the
Shareholders are entitled to vote would adversely affect (as defined in Rule
18f-2 under the 1940 Act) the rights of any Series or Class of Shares, the vote
of a majority (or such larger vote as is required as aforesaid) of the Shares of
such Series or Class which are entitled to vote, voting separately, shall be
required to decide such question.
SECTION 4. ACTION BY WRITTEN CONSENT. Any action taken by Shareholders
may be taken without a meeting if Shareholders holding a majority of the Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by any express provision of this Declaration of Trust or by the
By-Laws) and/or holding a majority (or such larger proportion as aforesaid) of
the Shares of any Series or Class entitled to vote separately on the matter
consent to the action in writing and such written consents are filed with the
records of the meetings of Shareholders. Such consent shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
SECTION 5. RECORD DATES. For the purpose of determining the Shareholders
of any Series or Class who are entitled to vote or act at any meeting or any
adjournment thereof, the Trustees may from time to time fix a time as the record
date for determining the Shareholders of such Series or Class having the right
to notice of and to vote at such a meeting and any adjournment thereof, and in
such case only Shareholders of record on such record date shall have such right,
notwithstanding any transfer of Shares on the books of the Trust after the
record date. For the purpose of determining the Shareholders of any Series or
Class who are entitled to receive payment of any dividend or of any other
distribution, the Trustees may from time to time fix a date, which shall be
before the date for the payment of such dividend or such other payment, as the
record date for determining the Shareholders of such Series or Class having the
right to receive such dividend or distribution. Without fixing a record date
the
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Trustees may for voting and/or distribution purposes close the register or
transfer books for one or more Series or Class for all or any part of the period
between a record date and a meeting of shareholders or the payment of a
distribution. Nothing in this section shall be construed as precluding the
Trustees from setting different record dates for different Series or Classes.
SECTION 6. ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI
Net Income, Distributions, and Redemptions and Repurchases
SECTION 1. DISTRIBUTIONS OF NET INCOME. The Trustees may each year, or
more frequently if they so determine in their sole discretion, distribute to the
Shareholders of each Series or Class, in shares of that Series or Class, cash or
otherwise, some or all of the net income attributable to the assets belonging to
such Series or Class, and may from time to time distribute to the Shareholders
of each Series or Class, in shares of that Series or Class, cash or otherwise,
after providing for actual and accrued expenses and liabilities of such Series
or Class, such additional amounts as they may authorize, but only from the
assets belonging to such Series (or allocable to such Class). All dividends and
distributions on Shares of a particular Series or Class shall be distributed pro
rata to the holders of that Series or Class in proportion to the number of
Shares of that Series or Class held by such holders and recorded on the books of
the Trust at the date and time of record established for that payment of such
dividends or distributions.
The manner of determining net income, income, asset values, capital gains,
expenses, liabilities and reserves of any Series or Class may from time to time
be altered as necessary or desirable in the judgment of the Trustees to conform
such manner of determination to any other method prescribed or permitted by
applicable law. Net income shall be determined by the Trustees or by such
person as they may authorize at the times and in the manner determined by the
Trustees from time to time. Determinations of net income of any Series or Class
and determinations of income, asset values, capital gains, expenses, and
liabilities made by the Trustees, or by such person as they may authorize, in
good faith, shall be binding on all parties concerned. The foregoing sentence
shall not be construed to protect any Trustee, officer or agent of the Trust
against any liability to the Trust or its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
If, for any reason, the net income of any Series or Class determined at any
time is a negative amount, in the discretion of the Trustees the pro rata share
of such negative amount allocable to each Shareholder of such Series or Class
may constitute a liability of such Shareholder to that Series or Class which
shall be paid out of such Shareholder's account at such times and in such manner
as the Trustees may from time to time determine (x) out of the
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accrued dividend account of such Shareholder, (y) by reducing the number of
Shares of that Series or Class in the account of such Shareholder, or (z)
otherwise.
SECTION 2. REDEMPTIONS AND REPURCHASES. The Trust shall purchase such
Shares as are offered by any Shareholder for redemption, upon the presentation
of a proper instrument of transfer together with a request directed to the Trust
or a person designated by the Trust that the Trust purchase such Shares or in
accordance with such other procedures for redemption as the Trustees may from
time to time authorize; and the Trust will pay therefor the net asset value
thereof, as determined in accordance with the By-Laws, the 1940 Act and the
rules of the Commission. Payment for said Shares shall be made by the Trust to
the Shareholder within seven days after the date on which the request is made or
in accordance with such other procedures, consistent with the 1940 Act and the
rules of the Commission, as the Trustees may from time to time authorize. The
obligation set forth in this Section 2 is subject to the provision that in the
event that at any time the New York Stock Exchange (the "Exchange") is closed
for other than weekends or holidays, or if permitted by the rules of the
Commission during periods when trading on the Exchange is restricted or during
any emergency which makes it impracticable for the Trust to dispose of the
investments of the applicable Series or to determine fairly the value of the net
assets belonging to such Series or during any other period permitted by order of
the Commission for the protection of investors, such obligations may be
suspended or postponed by the Trustees. The Trust may also purchase or
repurchase Shares at a price not exceeding the net asset value of such Shares in
effect when the purchase or repurchase or any contract to purchase or repurchase
is made.
The redemption price may in any case or cases be paid wholly or partly in
kind if the Trustees determine that such payment is advisable in the interests
of the remaining Shareholders of the Series or Class the Shares of which are
being redeemed. In making any such payment wholly or partly in kind, the Trust
shall, so far as may be practicable, deliver assets which approximate the
diversification of all of the assets belonging at the time to the Series or
Class the Shares of which are being redeemed. Subject to the foregoing, the
fair value, selection and quantity of securities or other property so paid or
delivered as all or part of the redemption price may be determined by or under
authority of the Trustees. In no case shall the Trust be liable for any delay
of any corporation or other person in transferring securities selected for
delivery as all or part of any payment in kind.
SECTION 3. REDEMPTIONS AT THE OPTION OF THE TRUST. The Trust shall have
the right at its option and at any time to redeem Shares of any Shareholder at
the net asset value thereof as described in Section 2 of this Article VI: (i) if
at such time such Shareholder owns Shares of any Series or Class having an
aggregate net asset value of less than an amount determined from time to time by
the Trustees; or (ii) to the extent that such Shareholder owns Shares equal to
or in excess of a percentage determined from time to time by the Trustees of the
outstanding Shares of the Trust or of any Series or Class.
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ARTICLE VII
Compensation and Limitation of Liability of Trustees
SECTION 1. COMPENSATION. The Trustees as such shall be entitled to
reasonable compensation from the Trust; they may fix the amount of their
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
SECTION 2. LIMITATION OF LIABILITY. The Trustees shall not be responsible
or liable in any event for any neglect or wrong-doing of any officer, agent,
employee, Manager or principal underwriter of the Trust, nor shall any Trustee
be responsible for the act or omission of any other Trustee, but nothing herein
contained shall protect any Trustee against any liability to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever issued, executed or done by or on behalf of
the Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed or done only in or with
respect to their or his capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
ARTICLE VIII
Indemnification
SECTION 1. TRUSTEES, OFFICERS, ETC. The Trust shall indemnify each of its
Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise) (hereinafter referred to
as a "Covered Person") against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such Covered Person may be or may have
been threatened, while in office or thereafter, by reason of being or having
been such a Covered Person except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in any such action, suit or
other proceeding to be liable to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office. Expenses,
including counsel fees so incurred by any such Covered Person (but excluding
amounts paid in satisfaction of judgments, in compromise or as fines or
penalties), shall be paid from time to time by the Trust in advance of the final
disposition of any such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Covered Person to repay amounts so paid to
the Trust if it is ultimately determined that
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indemnification of such expenses is not authorized under this Article, provided,
however, that either (a) such Covered Person shall have provided appropriate
security for such undertaking, (b) the Trust shall be insured against losses
arising from any such advance payments or (c) either a majority of the
disinterested Trustees acting on the matter (provided that a majority of the
disinterested Trustees then in office act on the matter), or independent legal
counsel in a written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a full trial type inquiry) that there is
reason to believe that such Covered Person will be found entitled to
indemnification under this Article.
SECTION 2. COMPROMISE PAYMENT. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise) without an
adjudication by a court, or by any other body before which the proceeding was
brought, that such Covered Person is liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office, indemnification
shall be provided if (a) approved, after notice that it involves such
indemnification, by at least a majority of the disinterested Trustees acting on
the matter (provided that a majority of the disinterested Trustees then in
office act on the matter) upon a determination, based upon a review of readily
available facts (as opposed to a full trial type inquiry) that such Covered
Person is not liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office, or (b) there has been obtained an
opinion in writing of independent legal counsel, based upon a review of readily
available facts (as opposed to a full trial type inquiry) to the effect that
such indemnification would not protect such Person against any liability to the
Trust to which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office. Any approval pursuant to this Section shall not
prevent the recovery from any Covered Person of any amount paid to such Covered
Person in accordance with this Section as indemnification if such Covered Person
is subsequently adjudicated by a court of competent jurisdiction to have been
liable to the Trust or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.
SECTION 3. INDEMNIFICATION NOT EXCLUSIVE. The right of indemnification
hereby provided shall not be exclusive of or affect any other rights to which
such Covered Person may be entitled. As used in this Article VIII, the term
"Covered Person" shall include such person's heirs, executors and administrators
and a "disinterested Trustee" is a Trustee who is not an "interested person" of
the Trust as defined in Section 2(a)(19) of the 1940 Act (or who has been
exempted from being an "interested person" by any rule, regulation or order of
the Commission), and against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or similar
grounds is then or has been pending. Nothing contained in this Article shall
affect any rights to indemnification to which personnel of the Trust, other than
Trustees or officers, and other persons may be entitled by contract or otherwise
under law, nor the power of the Trust to purchase and maintain liability
insurance
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<PAGE>
on behalf of any such person; provided, however, that the Trust shall not
purchase or maintain any such liability insurance in contravention of applicable
law, including without limitation the 1940 Act.
SECTION 4. SHAREHOLDERS. In case any Shareholder or former Shareholder
shall be held to be personally liable solely by reason of his or her being or
having been a Shareholder and not because of his or her acts or omissions or for
some other reason, the Shareholder or former Shareholder (or his or her heirs,
executors, administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled to be held harmless from and indemnified against all loss and expense
arising from such liability, but only out of the assets of the particular Series
of Shares of which he or she is or was a Shareholder.
ARTICLE IX
Miscellaneous
SECTION 1. TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE.
All persons extending credit to, contracting with or having any claim against
the Trust or any Series shall look only to the assets of the Trust or to the
assets of that particular Series for payment under such credit, contract or
claim; and neither Shareholders nor the Trustees, nor any of the Trust's
officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Nothing in this Declaration of Trust shall protect
any Trustee against any liability to which such Trustee would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued on behalf of the Trust by the Trustees, by any officers or officer or
otherwise shall give notice that this Declaration of Trust is on file with the
Secretary of The Commonwealth of Massachusetts and shall recite that the same
was executed or made by or on behalf of the Trust or by them as Trustee or
Trustees or as officer or officers or otherwise and not individually and that
the obligations of such instrument are not binding upon any of them or the
shareholders individually but are binding only upon the assets and property of
the Trust or upon the assets belonging to the Series for the benefit of which
the Trustees have caused the note, bond, contract, instrument, certificate or
undertaking to be made or issued, and may contain such further recital as he or
they may deem appropriate, but the omission of any such recital shall not
operate to bind any Trustee or Trustees or officer or officers or Shareholders
or any other person individually.
SECTION 2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY.
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. A Trustee shall be liable for his or her own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office
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<PAGE>
of Trustee, and for nothing else, and shall not be liable for errors of judgment
or mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust,
and shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is required.
SECTION 3. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
SECTION 4. TERMINATION OF TRUST OR SERIES OR CLASS. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by vote of at least 66 2/3% of the Shares of each
Series entitled to vote and voting separately by Series or by the Trustees by
written notice to the Shareholders. Any Series may be terminated at any time by
vote of at least 66 2/3% of the Shares of that Series or by the Trustees by
written notice to the Shareholders of that Series. Any Class may be separately
terminated at any time by vote of at least a majority of the Shares of that
Class present and voting on the question (a quorum being present) or by the
Trustees by written notice to the Shareholders of that Class.
Upon termination of the Trust (or any Series or Class, as the case may be),
after paying or otherwise providing for all charges, taxes, expenses and
liabilities belonging, severally, to each Series or allocable to each Class (or
the applicable Series or Class, as the case may be), whether due or accrued or
anticipated as may be determined by the Trustees, the Trust shall in accordance
with such procedures as the Trustees consider appropriate reduce the remaining
assets belonging, severally, to each Series or allocable to each Class (or the
applicable Series or Class, as the case may be), to distributable form in cash
or shares or other securities, or any combination thereof, and distribute the
proceeds belonging to each Series or allocable to each Class (or the applicable
Series or Class, as the case may be), to the Shareholders of that Series or
Class, as a Series or Class, ratably according to the number of Shares of that
Series or Class held by the several Shareholders on the date of termination.
SECTION 5. MERGER AND CONSOLIDATION. The Trustees may cause the Trust to
be merged into or consolidated with another trust or company or its shares
exchanged under or pursuant to any state or federal statute, if any, or
otherwise to the extent permitted by law, if such merger or consolidation or
share exchange has been authorized by vote of a majority of the outstanding
Shares, as such phrase is defined in the 1940 Act; provided that in all respects
not governed by statute or applicable law, the Trustees shall have power to
prescribe the procedure necessary or appropriate to accomplish a merger,
consolidation or share exchange.
SECTION 6. FILING OF COPIES, REFERENCES, HEADINGS. The original or a copy
of this instrument and of each amendment hereto shall be kept at the office of
the Trust where it may
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be inspected by any Shareholder. A copy of this instrument and of each
amendment hereto shall be filed by the Trust with the Secretary of The
Commonwealth of Massachusetts and with any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer of the Trust as to whether or not any such
amendments have been made and as to any matters in connection with the Trust
hereunder; and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or of
any such amendments. In this instrument and in any such amendment, references
to this instrument, and all expressions like "herein," "hereof" and "hereunder"
shall be deemed to refer to this instrument as amended or affected by any such
amendments. Headings are placed herein for convenience of reference only and
shall not be taken as a part hereof or control or affect the meaning,
construction or effect of this instrument. This instrument may be executed in
any number of counterparts each of which shall be deemed an original.
SECTION 7. APPLICABLE LAW. This Declaration of Trust is made in The
Commonwealth of Massachusetts, and it is created under and is to be governed by
and construed and administered according to the laws of said Commonwealth. The
Trust shall be of the type commonly called a Massachusetts business trust, and
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust.
SECTION 8. AMENDMENTS. This Declaration of Trust may be amended at any
time by an instrument in writing signed by a majority of the then Trustees when
authorized so to do by vote of a majority of the Shares entitled to vote, except
that amendments described in Article III, Section 5 hereof or having the purpose
of changing the name of the Trust or of supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or inconsistent
provision contained herein shall not require authorization by Shareholder vote.
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<PAGE>
IN WITNESS WHEREOF, the initial Trustee as aforesaid does hereto set his
hand as of the date first written above.
/s/ Dean Hamilton
---------------------------------
Dean Hamilton
Initial Trustee
<PAGE>
COMMONWEALTH OF MASSACHUSETTS )
) ss.
COUNTY OF SUFFOLK )
Then personally appeared before me Dean Hamilton who acknowledged the
foregoing instrument to be his free act and deed.
March 1, 1998 /s/ James H. Carey, Jr.
-----------------------------
Notary Public
My commission expires: July 27, 2001
<PAGE>
Exhibit 99.1(b)
BARR ROSENBERG VARIABLE TRUST
AMENDMENT NO. 1 TO
AGREEMENT AND DECLARATION OF TRUST
The undersigned, being the sole Trustee of Barr Rosenberg Variable Trust, a
Massachusetts business trust created and existing under an Agreement and
Declaration of Trust dated March 1, 1998, as amended, a copy of which is on file
in the Office of the Secretary of The Commonwealth of Massachusetts (the
"Trust"), wishing to amend the Agreement and Declaration of Trust, does hereby
direct that this Amendment No. 1 be filed with the Secretary of The Commonwealth
of Massachusetts and does hereby consent to and adopt the following amendment to
such Agreement and Declaration of Trust:
1. Article I Section 1 of the Agreement and Declaration of Trust is
amended to read in its entirety as follows:
SECTION 1. This Trust shall be known as Barr Rosenberg Variable Insurance
Trust, and the Trustees shall conduct the business of the Trust under that name
or any other name as they may from time to time determine.
The foregoing amendment shall become effective as of the time it is filed
with the Secretary of State of The Commonwealth of Massachusetts.
<PAGE>
IN WITNESS WHEREOF, the undersigned sole Trustee as aforesaid does hereto
set his hand this 27th day of March, 1998.
/s/ Dean Hamilton
-----------------------------
Dean Hamilton
<PAGE>
Exhibit 99.2
BY-LAWS
OF
BARR ROSENBERG VARIABLE TRUST
ARTICLE 1
Agreement and Declaration of Trust
and Principal Office
1.1. AGREEMENT AND DECLARATION OF TRUST. These By-laws shall be subject
to the Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of Barr Rosenberg Variable Trust (the "Trust"), the
Massachusetts business trust established by the Declaration of Trust.
1.2. PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust
shall be located at such place within or without The Commonwealth of
Massachusetts as the Trustees may determine from time to time.
ARTICLE 2
Meetings of Trustees
2.1. REGULAR MEETINGS. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees.
2.2. SPECIAL MEETINGS. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the Chairman of the Board, if any, the President or the Treasurer or by two or
more Trustees, sufficient notice thereof being given to each Trustee by the
Clerk or an Assistant Clerk or by the officer or the Trustees calling the
meeting.
2.3. NOTICE. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram, telex
or telecopy or other electronic facsimile transmission method at least
twenty-four hours before the meeting addressed to the Trustee at his or her
usual or last known business or residence address or to give notice to him or
her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him or
her. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
<PAGE>
2.4. QUORUM. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from
time to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
2.5. ACTION BY VOTE. When a quorum is present at any meeting, a majority
of Trustees present may take any action, except when a larger vote is expressly
required by law, by the Declaration of Trust or by these By-laws.
2.6. ACTION BY WRITING. Except as required by law, any action required or
permitted to be taken at any meeting of the Trustees may be taken without a
meeting if a majority of the Trustees (or such larger proportion thereof as
shall be required by any express provision of the Declaration of Trust or these
By-laws) consent to the action in writing and such written consents are filed
with the records of the meetings of Trustees. Such consent shall be treated for
all purposes as a vote taken at a meeting of Trustees.
2.7. PRESENCE THROUGH COMMUNICATIONS EQUIPMENT. Except as required by
law, the Trustees may participate in a meeting of Trustees by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting.
ARTICLE 3
Officers
3.1. ENUMERATION; QUALIFICATION. The officers of the Trust shall be a
President, a Treasurer, a Clerk, and such other officers, if any, as the
Trustees from time to time may in their discretion elect. The Trust may also
have such agents as the Trustees from time to time may in their discretion
appoint. The Chairman of the Board, if one is elected, shall be a Trustee and
may but need not be a Shareholder; and any other officer may but need not be a
Trustee or a Shareholder. Any two or more offices may be held by the same
person.
3.2. ELECTION AND TENURE. The President, the Treasurer, the Clerk and
such other officers as the Trustees from time to time may in their discretion
elect shall each be elected by the Trustees to serve until his or her successor
is elected or qualified, or until he or she sooner dies, resigns, is removed or
becomes disqualified. Each officer shall hold office and each agent shall
retain authority at the pleasure of the Trustees.
3.3. POWERS. Subject to the provisions of these By-laws, each officer
shall have, in addition to the duties and powers set forth herein and in the
Declaration of Trust, such duties and powers as are commonly incident to the
office occupied by him or her as if the Trust were organized as a Massachusetts
business corporation and such other duties and powers as the Trustees may from
time to time designate.
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<PAGE>
3.4. PRESIDENT AND VICE PRESIDENTS. The President shall have the duties
and powers specified in these By-laws and shall have such other duties and
powers as may be determined by the Trustees. Any Vice Presidents shall have
such duties and powers as shall be designated from time to time by the Trustees.
3.5. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of the Trust
shall be the Chairman of the Board, the President or such other officer as is
designated by the Trustees and shall, subject to the control of the Trustees,
have general charge and supervision of the business of the Trust and, except as
the Trustees shall otherwise determine, preside at all meetings of the
shareholders and of the Trustees. If no such designation is made, the President
shall be the Chief Executive Officer.
3.6. CHAIRMAN OF THE BOARD. If a Chairman of the Board of Trustees is
elected, he or she shall have the duties and powers specified in these By-laws
and shall have such other duties and powers as may be determined by the
Trustees.
3.7. TREASURER. The Treasurer shall be the chief financial officer and
accounting officer of the Trust, and shall, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing or
similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the President.
3.8. CLERK. The Clerk shall record all proceedings of the Shareholders
and the Trustees in books to be kept therefor, which books or a copy thereof
shall be kept at the principal office of the Trust. In the absence of the Clerk
from any meeting of the Shareholders or Trustees, an assistant clerk or, if
there be none or if he or she is absent, a temporary clerk chosen at such
meeting shall record the proceedings thereof in the aforesaid books.
3.9. RESIGNATIONS AND REMOVALS. Any officer may resign at any time by
written instrument signed by him or her and delivered to the Chairman, the
President or the Clerk or to a meeting of the Trustees. Such resignation shall
be effective upon receipt unless specified to be effective at some other time.
The Trustees may remove any officer with or without cause. Except to the extent
expressly provided in a written agreement with the Trust, no officer resigning
and no officer removed shall have any right to any compensation for any period
following his or her resignation or removal, or any right to damages on account
of such removal.
ARTICLE 4
Committees
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<PAGE>
4.1. QUORUM; VOTING. A majority of the members of any Committee of the
Trustees shall constitute a quorum for the transaction of business, and any
action of such a Committee may be taken at a meeting by a vote of a majority of
the members present (a quorum being present) or evidenced by one or more
writings signed by such a majority. Members of a Committee may participate in a
meeting of such Committee by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall constitute presence in person at a meeting.
ARTICLE 5
Reports
5.1. GENERAL. The Trustees and officers shall render reports at the time
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
ARTICLE 6
Fiscal Year
6.1. GENERAL. Except as from time to time otherwise provided by the
Trustees, the initial fiscal year of the Trust shall end on such date as is
determined in advance or in arrears by the Treasurer, and subsequent fiscal
years shall end on such date in subsequent years.
ARTICLE 7
Seal
7.1. GENERAL. The Trust shall have no seal.
ARTICLE 8
Execution of Papers
8.1. GENERAL. Except as the Trustees may generally or in particular cases
authorize the execution thereof in some other manner, all checks, deeds, leases,
contracts, notes, drafts and other obligations made by the Trustees shall be
signed by the Chairman, if any, the President, any Vice President or the
Treasurer or any of such other officers or agents as shall be designated for
that purpose by a vote of the Trustees.
ARTICLE 9
Share Certificates
9.1. SHARE CERTIFICATES. No certificates certifying the ownership of
Shares shall be issued except as the Trustees may otherwise authorize. In the
event that the Trustees authorize
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the issuance of Share certificates, subject to the provisions of Section 9.3,
each Shareholder shall be entitled to a certificate stating the number of Shares
and the series or class owned by him or her, in such form as shall be prescribed
from time to time by the Trustees. Such certificates shall be signed by the
President or any Vice-President and by the Treasurer or any Assistant Treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a Trustee, officer or employee of the
Trust. In case any officer who has signed or whose facsimile signature has been
placed on such certificate shall cease to be such officer before such
certificate is issued, it may be issued by the Trust with the same effect as if
he or she were such officer at the time of its issue.
In lieu of issuing certificates for Shares, the Trustees or the transfer
agent may either issue receipts therefor or may keep accounts upon the books of
the Trust for the record holders of such Shares, who shall in either case be
deemed, for all purposes hereunder, to be the holders of certificates for such
Shares as if they had accepted such certificates and shall be held to have
expressly assented and agreed to the terms hereof.
9.2. LOSS OF CERTIFICATES. In case of the alleged loss or destruction or
the mutilation of a Share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
9.3. DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any
time discontinue the issuance of Share certificates and may, by written notice
to each Shareholder, require the surrender of Share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the
ownership of Shares in the Trust.
ARTICLE 10
Provisions Relating to the Conduct of the Trust's Business
10.1. DETERMINATION OF NET ASSET VALUE PER SHARE. Net asset value per
Share of each series or class of Shares of the Trust shall be determined at the
times and in the manner specified from time to time by the Trustees.
ARTICLE 11
Amendments to the By-laws
11.1. GENERAL. These By-laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
Dated: March 1, 1998
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<PAGE>
Exhibit 99.5
MANAGEMENT CONTRACT
Management Contract executed as of June ___, 1998 between Barr Rosenberg
Variable Insurance Trust, a Massachusetts business trust (the "Trust"), on
behalf of its Barr Rosenberg VIT Market Neutral Fund (the "Fund"), and Rosenberg
Institutional Equity Management, a California limited partnership (the
"Manager").
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO THE TRUST.
(a) Subject always to the control of the Trustees of the Trust and to such
policies as the Trustees may determine, the Manager will, at its expense, (i)
furnish continuously an investment program for the Fund and make investment
decisions on behalf of the Fund and place all orders for the purchase and sale
of its portfolio securities and (ii) furnish office space and equipment, provide
bookkeeping and clerical services (excluding determination of net asset value,
shareholder accounting services and the fund accounting services for the Fund
being supplied by BISYS Fund Services) and pay all salaries, fees and expenses
of officers and Trustees of the Trust who are affiliated with the Manager. In
the performance of its duties, the Manager will comply with the provisions of
the Agreement and Declaration of Trust and By-laws of the Trust, each as amended
from time to time, and the Fund's stated investment objective, policies and
restrictions.
(b) In placing orders for the portfolio transactions of the Fund, the
Manager will seek the best price and execution available, except to the extent
it may be permitted to pay higher brokerage commissions for brokerage and
research services as described below. In using its best efforts to obtain for
the Fund the most favorable price and execution available, the Manager shall
consider all factors it deems relevant, including, without limitation, the
overall net economic result to the Fund (involving price paid or received and
any commissions and other costs paid), the efficiency with which the transaction
is effected, the ability to effect the transaction at all where a large block is
involved, availability of the broker to stand ready to execute possibly
difficult transactions in the future and financial strength and stability of the
broker. Subject to such policies as the Trustees may determine, the Manager
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Contract or otherwise solely by reason of its having caused the
Fund to pay a broker or dealer that provides brokerage and research services to
the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Manager determines in good
faith that such amount of commission was reasonable in relation to the value of
the
<PAGE>
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Manager's overall
responsibilities with respect to the Trust and to other clients of the Manager
as to which the Manager exercises investment discretion.
(c) The Manager shall not be obligated under this agreement to pay any
expenses of or for the Trust or of or for the Fund not expressly assumed by the
Manager pursuant to this Section 1 other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a partner, shareholder, director, officer or
employee of, or be otherwise interested in, the Manager, and in any person
controlled by or under common control with the Manager, and that the Manager and
any person controlled by or under common control with the Manager may have an
interest in the Trust. It is also understood that the Manager and persons
controlled by or under common control with the Manager have and may have
advisory, management service, distribution or other contracts with other
organizations and persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's services
rendered, for the facilities furnished and for the expenses borne by the Manager
pursuant to Section 1, a fee, computed and paid quarterly at the annual rate of
1.90% of the Fund's average daily net asset value. Such average daily net asset
value of the Fund shall be determined by taking an average of all of the
determinations of such net asset value during such quarter at the close of
business on each business day during such quarter while this Contract is in
effect. Such fee shall be payable for each quarter within five (5) business
days after the end of such quarter.
In the event that expenses of the Fund (including investment advisory fees
but excluding taxes, portfolio brokerage commissions and any distribution
expenses paid by the Fund pursuant to a distribution plan or otherwise) for any
fiscal year should exceed the expense limitation on investment company expenses
imposed by any statute or regulatory authority of any jurisdiction in which
shares of the Fund are qualified for offer and sale, the compensation due the
Manager for such fiscal year shall be reduced by the amount of such excess by
reduction or refund thereof. In the event that the expenses of the Fund exceed
any expense limitation that the Manager may, by written notice to the Trust,
voluntarily declare to be effective with respect to the Fund, subject to such
terms and conditions as the Manager may prescribe in such notice, the
compensation due the Manager shall be reduced, and, if necessary, the Manager
shall bear the Fund's expenses to the extent required by such expense
limitation.
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If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment is approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a majority of
the Trustees of the Trust who are not interested persons of the Trust or of the
Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall remain
in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this Contract by
not more than sixty days' written notice delivered or mailed by registered
mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust by majority vote or the
shareholders by the affirmative vote of a majority of the outstanding
shares of the Fund, and (ii) a majority of the Trustees of the Trust who
are not interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval, do
not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close of
business on the second anniversary of its execution, or upon the expiration
of one year from the effective date of the last such continuance, whichever
is later; provided, however, that if the continuance of this Contract is
submitted to the shareholders of the Fund for their approval and such
shareholders fail to approve such continuance of this Contract as provided
herein, the Manager may continue to serve hereunder in a manner consistent
with the Investment Company Act of 1940 and the rules and regulations
thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be without
the payment of any penalty.
-3-
<PAGE>
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" of the Fund means the affirmative vote, at a duly called
and held meeting of shareholders, (a) of the holders of 67% or more of the
shares of the Fund present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares of the Fund
entitled to vote at such meeting are present in person or by proxy, or (b) of
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "control", "interested person"
and "assignment" shall have their respective meanings defined in the Investment
Company Act of 1940 and the rules and regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act; and the phrase "specifically approve at least annually" shall be
construed in a manner consistent with the Investment Company Act of 1940 and the
rules and regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. THE NAMES "ROSENBERG" OR "BARR ROSENBERG".
The Manager owns the right to use the names "Rosenberg" or "Barr Rosenberg"
in connection with investment-related services or products, and such names may
be used by the Trust only with the consent of the Manager. The Manager consents
to the use by the Trust of the name "Barr Rosenberg Variable Insurance Trust" or
any other name embodying the names "Rosenberg" or "Barr Rosenberg", in such
forms as the Manager shall in writing approve, but only on condition and so long
as (i) this Contract shall remain in full force and (ii) the Trust shall fully
perform, fulfill and comply with all provisions of this Contract expressed
herein to be performed, fulfilled or complied with by it. No such name shall be
used by the Trust at any time or in any place or for any purposes or under any
conditions except as in this section provided. The foregoing authorization by
the Manager to the Trust to use the names "Rosenberg" or "Barr Rosenberg" as
part of a business or name is not exclusive of the right of the Manager itself
to use, or to authorize others to use, said name; the Trust acknowledges and
agrees that as between the Manager and the Trust, the Manager has the exclusive
right so to use, or to authorize others to use, said names; and the Trust
agrees, on behalf of the Fund, to take such action as may reasonably be
requested by the Manager to give full effect to the provisions of this section
(including, without limitation, consenting to such use of said names). Without
limiting the generality of the foregoing, the Trust agrees that, upon any
termination of
-4-
<PAGE>
this Contract by either party or upon the violation of any of its provisions by
the Trust, the Trust will, at the request of the Manager made within six months
after the Manager has knowledge of such termination or violation, use its best
efforts to change the name of the Trust so as to eliminate all reference, if
any, to the names "Rosenberg" or "Barr Rosenberg" and will not thereafter
transact any business in a name containing the names "Rosenberg" or "Barr
Rosenberg" in any form or combination whatsoever, or designate itself as the
same entity as or successor to an entity of such name, or otherwise use the
names "Rosenberg" or "Barr Rosenberg" or any other reference to the Manager.
Such covenants on the part of the Trust shall be binding upon it, its trustees,
officers, stockholders, creditors and all other persons claiming under or
through it.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust, as amended,
is on file with the Secretary of The Commonwealth of Massachusetts, and notice
is hereby given that this instrument is executed on behalf of the Trustees of
the Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of the Fund.
-5-
<PAGE>
IN WITNESS WHEREOF, Barr Rosenberg Variable Insurance Trust, on behalf of
its Barr Rosenberg VIT Market Neutral Fund, and Rosenberg Institutional Equity
Management have each caused this instrument to be signed in duplicate on its
behalf by its duly authorized representative, all as of the day and year first
above written.
BARR ROSENBERG VARIABLE INSURANCE TRUST, on behalf
of its Barr Rosenberg VIT Market Neutral Fund
By
-----------------------------
Title:
ROSENBERG INSTITUTIONAL EQUITY
MANAGEMENT
By
-----------------------------
Title: General Partner
-6-
<PAGE>
Exhibit 99.9(b)
NOTIFICATION OF
EXPENSE LIMITATION
NOTIFICATION made this __ day of June, 1998 by Rosenberg Institutional
Equity Management, a California limited partnership (the "Adviser"), to Barr
Rosenberg Variable Insurance Trust, a Massachusetts business trust (the
"Trust"), and its Barr Rosenberg VIT Market Neutral Fund (the "Fund").
WITNESSETH:
WHEREAS, the Adviser serves as investment adviser for the Fund;
WHEREAS, on or about June __, 1998, the Fund will offer shares that will be
subject to various fees and expenses; and
WHEREAS, the Adviser believes it would benefit from a high sales volume of
shares of the Fund in that such a volume would maximize the Adviser's fee as
investment adviser to the Fund; and
WHEREAS, the Adviser has undertaken to furnish certain services and, as
necessary, to voluntarily bear a portion of the costs thereof and/or reimburse
certain expenses so as to enable the Fund to offer competitive returns with
respect to investments in shares of the Fund.
NOW THEREFORE, pursuant to Section 3 of the Management Contract between the
Adviser and the Trust on behalf of the Fund (the "Management Contract"), the
Adviser hereby notifies the Trust that the Adviser shall, until further notice,
voluntarily reduce its compensation due under the Management Contract and, if
necessary, bear certain expenses of the Fund to the extent required to limit the
expenses of the shares of the Fund to the following annual percentage of the
Fund's average daily net asset value:
Total Fund Operating Expenses
applicable after waiver
-----------------------
Barr Rosenberg VIT Market Neutral Fund 2.00%
<PAGE>
IN WITNESS WHEREOF, the Adviser has executed this Notification of Expense
Limitation on the day and year first above written.
ROSENBERG INSTITUTIONAL EQUITY MANAGEMENT
By:
---------------------------------------
Title:
The foregoing is hereby accepted:
BARR ROSENBERG VARIABLE
INSURANCE TRUST, on behalf of its
Barr Rosenberg VIT Market Neutral Fund
By:
---------------------------------------
Title:
<PAGE>
Exhibit 99.19
POWER OF ATTORNEY
The undersigned hereby constitutes Kenneth Reid her true and lawful
attorney, with full power to sign for her, in her name and in the capacity
indicated below, any and all registration statements of Barr Rosenberg Variable
Insurance Trust, a Massachusetts business trust, under the Securities Act of
1933 or the Investment Company Act of 1940, and generally to do all things in
her name and in her behalf to enable Barr Rosenberg Variable Insurance Trust to
comply with the provisions of the Securities Act of 1933, the Investment Company
Act of 1940, and all requirements and regulations of the Securities and Exchange
Commission, hereby ratifying and confirming her signature as it may be signed by
her said attorney to any and all registration statements and amendments thereto.
Witness my hand this 30th day of March, 1998.
/s/ Po-Len Hew
---------------------------------
Po-Len Hew
Treasurer, Principal
Financial and Accounting
Officer
