1933 Act Registration No. 333-53683
1940 Act Registration No. 811-8791
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20546
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [2]
Post-Effective Amendment No. ___
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Pre-Effective Amendment No. [2]
Post-Effective Amendment No. ___
STOCKCAR STOCKS MUTUAL FUND, INC.
(Exact name of registrant as specified in Charter)
256 Raceway Drive, Suite 11
Mooresville, North Carolina 28115
(Address of Principle Executive Offices and Zip Code)
704-662-7096
(Registrant's Telephone Number including Area Code)
Terence P. Smith
The Declaration Group
555 North Lane, Suite 6160
Conshohocken, PA 19428
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective as soon as practicable
after this Registration Statement becomes effective.
Calculation of Registration Fee:
The Registrant hereby declares, pursuant to Rule 24f-2 under the Investment
Company Act of 1940, and the Securities Act of 1933, that an indefinite number
of shares of beneficial interest, no par value, is being registered by this
Registration Statement.
The Registrant hereby states that this Registration Statement shall become
effective as of September 15, 1998, in accordance with Section 8(a) of the
Securities Act of 1933 or upon such date as the Commission, acting pursuant to
said Section 8(a), may determine.
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STOCKCAR STOCKS INDEX FUND
CROSS-REFERENCE SHEET
(As required by Rule 495)
Item No. on Form N-1A Caption or Subheading in Prospectus
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or Statement of Additional Information
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PART A - INFORMATION REQUIRED IN PROSPECTUS
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1. Cover Page. Cover Page
2. Synopsis. Investment Objectives and Policies;
The StockCar Stocks Index; Cover Page
3. Condensed Financial Information. Fees and Expenses
4. General Description General Information; Cover Page
of Registrant.
5. Management of the Fund. Management of the Fund; Investment
Adviser
5a. Management's Discussion of Not Applicable
Fund Performance
6. Capital Stock and Other Management of the Fund; Tax
Securities. Considerations; Redeeming Shares
7. Purchase of Securities Being Purchasing Shares; Tax Considerations
Offered.
8. Redemption or Repurchase Redeeming Shares; Tax Considerations
9. Legal Proceedings Not Applicable
PART B. STATEMENT OF ADDITIONAL INFORMATION
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10. Cover Page. Cover Page
11. Table of Contents. Table of Contents
12. General Information and History Not covered in Statement of Additional
Information (covered under Item 4 of
Part A)
13. Investment Objectives and Investment Policies and Restrictions
Policies.
14. Management of the Fund. Investment Adviser; Directors and
Officers
15. Control Persons and Principal Directors and Officers;
Holders of Securities. Investment Adviser
16. Investment Advisory and other Investment Adviser; Custodian;
Services. Transfer Agent; Administration
17. Brokerage Allocation. Portfolio Transactions
18. Capital Stock and Other Capital Stock
Securities.
19. Purchase, Redemption and Pricing Determination of Net Asset Values,
of Securities Being Offered
20. Tax Status. Tax Information
21. Underwriters. Distributor; Transfer Agent
And Transfer Agents
22. Calculations of Performance Data. Performance Information
23. Financial Statements Not Applicable. See item 32 of Part C.
PART C
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Information required to be included in PART C is set forth under the appropriate
Item, so numbered, in PART C of the Registration Statement.
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PROSPECTUS
Dated September 15, 1998
StockCar Stocks Index Fund
256 Raceway Drive, Suite 11
Mooresville, North Carolina 28115
877-223-3863
StockCar Stocks Mutual Fund, Inc.(TM) (the "Company") is a newly organized,
diversified open-end management investment company currently consisting of one
portfolio, The StockCar Stocks Index Fund(TM) (the Fund"). The primary
investment objectives of the Fund are growth of capital and current income. The
Fund attempts to achieve its investment objectives by investing primarily in the
stocks of the companies comprising the StockCar Stocks Index(TM) (the `Index"),
a new, price sensitive index of companies involved in the sponsorship of or
deriving income from NASCAR(R) sanctioned racing events at the Winston Cup
racing level. The Index is calculated and published by the American Stock
Exchange ("AMEX") under the ticker symbol "RCE".
The minimum investment in the Fund is $1,000 for regular accounts and $500 for
retirement accounts. The minimum subsequent investment is $500 for regular
accounts and $50 for retirement accounts. The Fund is a pure No-Load Fund. There
are no 12b-1 marketing fees or other sales charges. This means that 100% of your
initial investment is invested in shares of the Fund.
This Prospectus concisely sets forth the information you should know before you
invest. Please read this Prospectus and keep it for future reference. A
Statement of Additional Information (the "SAI") regarding the Fund, dated
September 15, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated by reference into this Prospectus. You can get a
copy of the SAI at no charge by writing or calling the Fund at the address or
telephone number listed above. The SEC maintains a web site (www.sec.gov) that
contains the Statement of Additional Information and other information regarding
the Fund.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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"NASCAR(R)" is a registered trademark of the National Association of Stock Car
Auto Racing.
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TABLE OF CONTENTS
Fees And Expenses.
Investment Objectives And Policies.
The StockCar Stocks Index(TM).
Risk Factors.
Purchasing Shares.
Redeeming Shares.
Tax Considerations.
Investment Adviser.
Management of the Fund.
General Information.
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FEES AND EXPENSES
Shareholder Transaction Expenses:
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Sales Load Imposed on Purchases. None
Sales Load Imposed on Reinvested Dividends. None
Deferred Sales Load. None
Redemption Fees. 0.5%*
* This fee is only imposed on shares that are held for less than six months. See
"Redeeming Shares" for a fuller explanation of this fee.
Annual Fund Operating Expenses: (as a percentage of net assets)
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The following table sets forth the regular operating expenses that are paid out
of the Fund's average daily assets. These fees are used to pay for services such
as the investment management of the Fund, maintaining shareholder records and
furnishing shareholder statements. This is a new Fund without a prior operating
history, so the following expense figures are estimates. True expenses may be
greater or lower than those shown below.
Annual Fund Operating Expenses (as a percentage of average net assets)
Investment Advisory Fee 0.50%
Operating Services Fee 0.91%
Other Expenses (Estimated) 0.09%
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Total Fund Operating Expenses 1.50%
(after any expense reimbursements) =====
Example of Shareholder Expenses Over Time.
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Based on the fee schedule set forth above, you would pay the following expenses
on a $1,000 investment, assuming (1) a 5% annual rate of return and (2)
redemption at the end of each time period;
One Year Three Years
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$ 25.26 $ 57.41
The above example is intended to help you understand the various costs and
expenses you might incur over time when you invest in the Fund, but you should
be aware that this is only an example of anticipated future expenses. Actual
expenses may be greater or less than those shown. Because the Fund has no
operating history, "Other Expenses" is based on estimated amounts for the Fund's
first fiscal year. Not included in this example is a redemption fee of 0.50%,
which is imposed on shares held for less than six months. Also, the Fund's
Adviser has agreed to waive receipt of its fees and/or assume certain expenses
of the Fund, if it becomes necessary, to help ensure that the Fund's expenses do
not exceed 1.50% annually. If it becomes necessary for the Adviser to waive fees
or assume expenses of the Fund, such actions would have the effect of lowering
the expense
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ratio and increasing the yield to investors. Depending upon the future growth
history of the Fund, the Adviser has estimated that fees and expenses of the
Fund could be as high as 3.5% in the Fund's first fiscal year absent fee waivers
and expense reimbursements.
INVESTMENT OBJECTIVES AND POLICIES
The Fund is a diversified mutual fund whose primary investment objectives are
growth of capital and current income. The Fund seeks to achieve these objectives
by investing primarily in the common stock of companies listed on the Stockcar
Stocks Index(TM) (the "Index"), in approximately the same percentages as each
company represents in the Index. The Index is a new, price sensitive index of
companies involved in the sponsorship of or deriving income from NASCAR(R)
sanctioned racing events at the Winston Cup(R) racing level. The Index presently
is composed of 52 publicly traded companies, representing ten out of thirteen
generally recognized industry sectors and ranging in market capitalization from
approximately $170 million to $300 billion. The Index is composed of both very
large, well established companies with a long history of capital growth and
dividend payments, as well as smaller companies with rapid growth potential.
Accordingly, the diverse composition of the Index lends itself to the
achievement of both capital growth and current income. However, you should be
aware that any investment in common stock entails risk, and there can be no
assurance that the Fund's objectives will be achieved.
Under normal circumstances, the Fund will invest at least 95% of its net assets
in the common stocks of the companies comprising the Index. For temporary
liquidity purposes only, the Fund may, for a period not to exceed thirty days,
invest up to 25% of its assets in other securities, such as United States
Government bills and notes, money market instruments, repurchase agreements, and
cash. The Fund will not invest in such securities for temporary or defensive
purposes. You should be aware that any investment in securities not included in
the Index will cause the performance of the Fund to vary from that of the Index.
THE STOCKCAR STOCKS INDEX(TM)
The StockCar Stocks Index(TM) is a new, unmanaged, Index consisting of publicly
traded companies that are involved in the sponsorship of, or that derive
revenues from, NASCAR(R) sanctioned racing events. "Unmanaged" means that the
Index value will fluctuate with the price movements of the companies comprising
the Index, according to a mathematical formulation, and no outside entity will
exercise any influence or control over such movements. It also means that the
criteria for inclusion of companies in the Index are objective and not subject
to arbitrary change, so that any company that is eligible for inclusion in the
Index must be included, and any company that ceases to qualify for inclusion in
the Index must be deleted. The Index is calculated and published by the AMEX
under the ticker symbol, "RCE". The Index is an equally weighted, price
sensitive Index. This means that all the companies in the Index begin each
calendar year with an equal weighting in the Index, and the Index value moves up
and down based on the price movements of the companies in the Index. During the
course of the year, the relative weighting of each company in the Index will
fluctuate, reflecting its price performance relative to the other companies in
the Index. At the end of each calendar year, the companies included in the Index
are rebalanced to an equal weighting per company, and the entire process begins
again. The AMEX, under a licensing agreement with the Adviser, will calculate
and publish the Index, and will be responsible
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for rebalancing the Index weightings each year and adjusting the Index to
reflect any additions or deletions to the Index.
The Index was created and is owned by the Adviser. The Adviser selects the
companies to be included in or deleted from the Index, based on the criteria
described below, and suggests such changes to the AMEX. The AMEX verifies the
Adviser's suggested changes and, if necessary, adjusts the Index accordingly.
The Index presently is composed of 52 companies, 33 of which are also listed on
the S&P Composite Index of 500 Stocks(R) *(the "S&P 500"). The companies
presently comprising the Index represent ten out of the thirteen generally
recognized industry sectors and range in size from approximately $170 million to
$300 billion in market capitalization. The Adviser maintains a web Site
(www.stockcarstocks.com) which contains a complete listing of all the companies
included in the Index and more information concerning the construction and
maintenance of the Index.
* The S&P Composite Index of 500 Stocks(R) *(the "S&P 500") is a widely
recognized index of companies generally considered to be representative of the
US economy.
INDEX COMPOSITION CRITERIA. In order for a company to be included in the Index,
that company must either be involved in the sponsorship of, or derive revenues
from, NASCAR(R) (the National Association for Stock Car Auto Racing) sanctioned
racing events at the Winston Cup(R) level only. NASCAR(R) is a private national
association which oversees and regulates stock car racing in the United States,
and sets standards and rules for such racing. The Winston Cup(R) Series is one
of several NASCAR(R) racing series, and is considered to be the top level of
stock car racing, due to the size of the prize moneys offered, the expense and
time required of the racing teams and their sponsors, and the prestige and
recognition of the racing series worldwide. There are other NASCAR(R) sanctioned
racing levels, but the Adviser has determined not to include such levels in the
Index because of the more frequent turnover in company involvement at such
levels. Company involvement at the Winston Cup(R) level requires a substantial
investment of time and money, and as a result, the companies that are involved
in the sport at the Winston Cup(R) level tend to stay involved for much longer
time periods.
To qualify for inclusion in the Index, a company must be a sponsor or derive
revenue from NASCAR(R) events at the Winston Cup(R) level. The Adviser has
determined that a company is a sponsor of NASCAR(R), and is therefore eligible
for inclusion in the Index, only if it meets one or more of the following
criteria:
(1) LEAD RACE SPONSORS are those companies identified each year by NASCAR(R) as
the lead company sponsoring one or more of the 32 annual Winston Cup(R)
series races. A list of all Lead Race Sponsors is published annually by
NASCAR(R), usually in December, for the following year's racing.
(2) LEAD CAR SPONSORS are those companies that are the lead sponsor for each of
the approximately 45 cars that participate in the Winston Cup(R) Series.
Lead Car Sponsors generally can be distinguished from other car sponsors
because the Company logo will appear on the hood of the car it sponsors. A
list of all Lead Race Sponsors is published annually by NASCAR(R), usually
in December, for the following year's racing.
(3) MAJOR PRODUCT SPONSORS are those companies that provide critical and
necessary products to the approximately 45 cars and teams that participate
in the Winston Cup(R) Series. The Adviser has
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determined that such critical and necessary products are limited to tires,
gasoline and beverages for the teams.
A company will also qualify for inclusion in the Index if it derives revenues
from NASCAR(R) sanctioned racing events at the Winston Cup(R) Level. The Adviser
has determined that a company derives revenue from NASCAR(R), and is therefore
eligible for inclusion in the Index, only if it meets one or more of the
following criteria:
(1) It is a company that has an ownership interest in one or more of the race
tracks that host the 32 annual Winston Cup(R)races.
(2) It is a company that produces souvenirs or memorabilia for the Winston
Cup(R) Series under a licensing agreement with NASCAR(R).
(3) It is a company that broadcasts Winston Cup(R) Series races on television
or radio under an agreement with NASCAR(R).
There are no minimum limits on the amount or percentage of total company revenue
that must be derived from one of the above-described activities to qualify a
company for inclusion in the Index. However, in order to minimize the risk of
liquidity problems for the Fund in purchasing such otherwise eligible companies,
the Adviser has determined that a company must have at least $25 million in
market capitalization in order to be included in the Index. Presently, no
company included in the Index has a market capitalization of less than $100
million.
Any publicly traded company that meets one of more of the criteria set forth
above, and meets the minimum market capitalization requirements, is eligible for
inclusion in the Index and must be included in the Index not later than the
first calendar quarter after it has become eligible. The Adviser is responsible
for monitoring the marketplace, identifying such eligible companies, and
reporting such companies to the AMEX for inclusion in the Index. Conversely, any
company in the Index that ceases to qualify under any of the above-described
criteria must be removed from the Index at the end of the calendar year in which
the company ceases to qualify, when the Index is rebalanced. The Adviser is
responsible for monitoring the Index companies, identifying any companies that
cease to qualify, and reporting such companies to the AMEX for deletion from the
Index.
As described above, the Fund will attempt to replicate the performance of the
Index by normally investing at least 95% of its net assets in the common stock
of the companies comprising the Index, in approximately the same percentages as
represented by the Index. You should be aware that at the end of each calendar
year, when the Index is rebalanced and/or when companies are added to or deleted
from the Index, the Adviser will also alter the Fund's investments to conform
such investments to the Index composition. Such an investment management
requirement imposes certain risks to the Fund, including the risks of losses or
tax consequences to shareholders as a result of potential realized capital
gains. You should also be aware that, although the Fund will attempt to
replicate the performance of the Index, the Fund will incur certain expenses
that will not be incurred by the Index, including transaction charges.
Accordingly, the performance of the Fund will vary from that of the Index as a
result of such expenses. The Adviser will attempt to maintain a correlation
coefficient of at least .95% in performance between the Index and the Fund. This
means that the Adviser will attempt to replicate at least 95% of the Index's
performance. The
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Adviser will be responsible for tracking such performance, under the supervision
of the Board of Directors of the Company, and the Board will take actions as it
deems appropriate to remedy the lack of correlation should it not be maintained
at the above-described levels. The Adviser has determined that, in order to
fully replicate the performance of the Index, the Fund must have approximately
$25 million in net assets. Until such asset levels are reached, the Adviser will
invest Fund assets in a representative sample of Index securities and such other
permissible securities as the Adviser deems likely to most closely track Index
performance. You should be aware that there is no assurance that the Adviser
will be successful in replicating the performance of the Index during this
period.
A complete listing of the Fund's permissible investments, and the risks and
investment restrictions pertaining to such investments, is as follows;
Common Stocks. The Fund may invest in the common stock of the companies
comprising the Index. Common stock is issued by companies to raise cash for
business purposes and represents a proportionate equity interest in the issuing
companies. Therefore, the Fund participates in the success or failure of any
company in which it holds common stock. The market value of common stock can
fluctuate significantly, reflecting the business performance of the issuing
company, investor perception and general economic or financial market movements.
Smaller companies are especially sensitive to these factors. Despite the risk of
price volatility, however, common stocks historically have offered the greatest
potential for gain on investment, compared to other classes of financial assets.
Further, there are additional risks inherent in the stock car racing business,
and because the Fund will concentrate its investments in companies involved in
that sport, the Fund will be exposed to the risks associated with the sport to a
greater degree than will funds whose investment policies do not require or allow
such concentration., However, the majority of the companies comprising the Index
are large, well-established companies with a long history of growth and
performance and whose product lines and services are only indirectly related to
the stock car racing business, so the risks particular to the stock car racing
business are somewhat reduced. Under normal circumstances, the Fund will invest
at least 95% of its net assets in the common stock of companies comprising the
Index. This is a fundamental policy of the Fund, and may not be changed without
a vote of the majority of the outstanding shares of the Fund. A full listing of
the Fund's fundamental investment policies, as well as those investment policies
which may be changed by the Company's Board of Directors, may be found in the
SAI in the Section entitled, "Investment Policies and Restrictions".
Preferred Stock. The Fund may invest in the preferred stock of the companies
that comprise the Index, when the Adviser believes that such investments will
help the Fund achieve its investment objective of current income without
substantially and negatively affecting the Fund's investment objective of
capital growth. Preferred stock generally pays dividends at a specified rate and
generally has preference over common stock in the payments of dividends and the
liquidation of the issuer's assets. Dividends on preferred stock are generally
payable at the discretion of the issuer's board of directors. Accordingly,
Shareholders may suffer a loss of value if dividends are not paid. The market
prices of preferred stocks are also sensitive to changes in interest rates and
in the issuer's creditworthiness. Accordingly, shareholders may experience a
loss of value due to adverse interest rate movements or a decline in the
issuer's credit rating. Finally, preferred stock is not included in the Index,
so any investment in such stock will cause the performance of the Fund
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to vary from that of the index. For these reasons, the Fund will not invest more
than 5% of its net assets in preferred stock.
Foreign Securities. The Fund may invest in common stock of foreign issuers which
are publicly traded on U.S. exchanges either directly or in the form of American
Depository Receipts (ADRs), but only if such foreign issuers are included in the
Index. The Fund will only invest in ADRs that are issuer sponsored. Sponsored
ADRs typically are issued by a U.S. bank or Trust company and evidence ownership
of underlying securities issued by a foreign corporation. Investments in foreign
securities involve greater risks compared to domestic investments. Foreign
companies are not subject to the regulatory requirements of U.S. companies and,
as such, there may be less publicly available information about issuers than is
available in the reports and ratings published about companies in the U.S.
Additionally, foreign companies are not subject to uniform accounting, auditing
and financial reporting standards. Dividends and interest on foreign securities
may be subject to foreign withholding taxes. Such taxes may reduce the net
return to shareholders. Although the Fund intends to invest in securities of
foreign issuers domiciled in nations which the Adviser considers as having
stable and friendly governments, there is the possibility of expropriation,
confiscation, taxation, currency blockage or political or social instability
which could affect investments of foreign issuers domiciled in such nations.
Further, there is the risk of loss due to fluctuations in the value of a foreign
corporation's currency relative to the U.S. dollar. Further, if a foreign issuer
is a member of the Index, the Fund will be obligated to invest in such security,
even though the country of the issuer's domicile might not be considered by the
Adviser to be friendly or stable.
Money Market Funds. The Fund may invest in securities issued by other registered
investment companies that invest in short-term debt securities (i.e., money
market funds) to maintain liquidity and for temporary and defensive purposes
only. As a shareholder of another registered investment company, the Fund would
bear its pro rata portion of that company's Advisory fees and other expenses.
Such fees and expenses will be borne indirectly by the Fund's shareholders. The
Fund may invest in such instruments to the extent that such investments do not
exceed 10% of the Fund's net assets and/or 3% of any investment company's
outstanding securities.
Debt Securities. The Fund may invest in U.S. Government debt securities
including Treasury Bills and short term notes, to maintain liquidity, but only
for periods not to exceed thirty days. U.S. Government securities include direct
obligations of the U.S. Government and obligations issued by U.S. Government
agencies and instrumentalities. The market value of such securities fluctuates
in response to interest rates and the creditworthiness of the issuer. In the
case of securities backed by the full faith and credit of the United States
Government, shareholders are only exposed to interest rate risk. The Fund will
not invest more than 25% of its net assets in such securities, and will not
invest in any such security with a maturity in excess of one year.
Repurchase Agreements. The Fund may invest a portion of its assets in repurchase
agreements ("Repos") with broker-dealers, banks and other financial institutions
to maintain liquidity, provided that the Fund's custodian always has possession
of the securities serving as collateral for the Repos or has proper evidence of
book entry receipt of said securities. In a Repo, the Fund purchases securities
subject to the seller's simultaneous agreement to repurchase those securities
from the Fund at a specified time (usually one day) and price. The repurchase
price reflects an agreed-upon
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interest rate during the time of investment. All Repos entered into by the Fund
must be collateralized by U.S. Government Securities, the market values of which
equal or exceed 102% of the principal amount of the money invested by the Fund.
If an institution with whom the Fund has entered into a Repo enters insolvency
proceedings, the resulting delay, if any, in the Fund's ability to liquidate the
securities serving as collateral could cause the Fund some loss if the
securities declined in value prior to liquidation. To minimize the risk of such
loss, the Fund will enter into Repos only with institutions and dealers
considered creditworthy, and will not invest more than 25% of its net assets in
such transactions.
Cash Reserves. The Fund may, to meet liquidity needs, hold up to 25% of its net
assets in cash for periods not to exceed thirty days. The primary risk
associated with such a policy is that the Fund's performance will vary, perhaps
significantly, from the performance of the Index when the Fund holds such a high
percentage of cash reserves.
Options On Equity Securities and the Index. The Fund may enter into options
contracts relating to the equity securities of companies included in the Index,
may write (i.e. sell) covered put and call options on such securities and on the
Index, and may purchase put and call options on such equity securities and on
the Index. Such options can include long-term options with durations of up to
three years. Although not normally anticipated to be widely employed, the Fund
may use futures and options to increase or decrease its exposure to the effects
of changes in security prices, to hedge securities held, to maintain cash
reserves while remaining fully invested, to facilitate trading, to reduce
transaction costs, or to seek higher investment returns when a futures or
options contract is priced more attractively than the underlying security or
index. The Fund may enter into these transactions so long as the value of the
underlying securities on which such options or futures contracts may be written
at any one time does not exceed 100% of the net assets of the Fund, and so long
as the initial margin required to enter into such contracts does not exceed ten
percent (10%)of the Fund's total net assets.
Risk Factors Associated With Futures And Options. The primary risks associated
with the use of options and futures are; (1) imperfect correlation between a
change in the value of the underlying security or index and a change in the
price of the option or futures contract, and (2) the possible lack of a liquid
secondary market for an options or futures contract and the resulting inability
of the Fund to close out the position prior to the maturity date. The risk of
imperfect correlation will be minimized by investing only in those contracts
whose price fluctuations are expected to resemble those of the Fund's underlying
securities. The risk that the Fund will be unable to close out a position will
be minimized by entering into such transactions only on national exchanges and
over-the-counter markets with an active and liquid secondary market.
Restricted And Illiquid Securities. The Fund will not invest more than 15% of
its net assets in securities that the Adviser determines, under the supervision
of the Board of Directors, to be illiquid and/or restricted. Illiquid securities
are generally defined as securities that cannot be liquidated within seven (7)
days at the approximate price at which the Fund has valued the instrument. Also,
the sale of some illiquid and other types of securities may be subject to legal
restrictions. Because illiquid and restricted securities may present a greater
risk of loss than other types of securities, due to their lack of a ready
market, the Fund will not invest in such securities in excess of the limits set
forth above. You should be aware that in the event that more than 15% of
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the Index is comprised of companies considered to be illiquid, the Fund will be
unable to precisely match its investments to the percentages contained in the
Index, and that inability may pose additional risks to the Fund, including the
risk that the performance of the Fund will vary from that of the Index.
When-Issued Securities And Delayed-Delivery Transactions. The Fund may purchase
securities of companies comprising the Index on a when-issued basis, and it may
purchase or sell such securities for delayed-delivery. These transactions occur
when securities are purchased or sold by the Fund with payment and delivery
taking place at some future date. The Fund may enter into such transactions
when, in the Adviser's opinion, doing so may secure an advantageous yield and/or
price to the Fund that might otherwise be unavailable. The Fund has not
established any limit on the percentage of assets it may commit to such
transactions, but to minimize the risks of entering into these transactions, the
Fund will maintain a segregated account with its Custodian consisting of cash,
cash equivalents, U.S. Government Securities or other high-grade liquid debt
securities, denominated in U.S. dollars or non-U.S. currencies, in an amount
equal to the aggregate fair market value of its commitments to such
transactions.
RISK FACTORS
You may lose money by investing in the Fund. Your risk of loss is greater if you
hold your investment for shorter time periods. The Fund may be appropriate for
long-term investors who understand the potential risks and rewards of investing
in common stocks. The value of the Fund's investments will vary from day-to-day,
reflecting changes in market conditions, interest rates and other company,
political, and economic news. Over the short-term, stock prices can fluctuate
dramatically in response to these factors. However, over longer time periods,
stocks, although more volatile, have historically shown greater growth potential
than other investments. Presently, the Index is composed of only 52 companies,
and this limited number of companies may pose additional risks to the Fund. Some
of the companies included in the Index are considered to be smaller companies.
Companies with small market capitalizations can be riskier investments than
larger capitalized companies, due to their lack of experience, product
diversification, cash reserves and lack of management depth. Further, the Fund
has no operating history, and this may pose additional risks. There is risk
involved in the Fund's investment policy of tracking the Index, due to the
potential company turnover which may occur in the Index, the possible addition
of companies to the Index which may not have a long operating history, and the
risks inherent in the stock car auto racing industry. When you sell your Fund
shares, they may be worth more or less than what you paid for them. There is no
assurance that the Fund can achieve its investment objective, since all
investments are inherently subject to market risk.
PURCHASING SHARES
To purchase shares of the Fund, first complete and sign a New Account Purchase
Application and mail it, together with your check for the total purchase price,
to STOCKCAR STOCKS MUTUAL FUND, INC.(TM), C/O DECLARATION SERVICE COMPANY, 555
NORTH LANE, SUITE 6160, CONSHOHOCKEN, PA 19428. Checks are accepted subject to
collection at full face value in United States currency. If your check does not
clear, your purchase will be cancelled and you will be subject to any losses or
fees incurred by the Fund with respect to the transaction.
8
<PAGE>
You will receive a statement showing the number of shares purchased, the net
asset value at which your shares were purchased, and the new balance of Fund
shares owned, each time you purchase shares of the Fund. . The Fund does not
issue stock certificates. All full and fractional shares will be carried on the
books of the Fund.
Shares of the Fund are purchased at the net asset value next computed after the
receipt and acceptance of your purchase order (See, "Determination of Net Asset
Value." in the SAI). The Fund is a pure No-Load Fund. This means that you will
not be charged any sales commissions, ongoing 12b-1 fees, or underwriting
discounts. The minimum initial investment is $1,000, except for Individual
Retirement Accounts (IRAs) where the minimum is $500. Minimum subsequent
purchases for regular accounts are $500 and $50 for IRA accounts. IRA Accounts
are also subject to a transfer fee of $25 and an annual maintenance fee of $12.
The maintenance fee is waived for accounts over $10,000.
You can make systematic investments of as little as $100 per month in the Fund.
Please contact Declaration Service Company, at the address listed above, or call
them at 187RACEFUND (1-877-223-3863) to set up a systematic investment plan.
All applications to purchase shares of the Fund are subject to acceptance by
authorized officers of the Fund and are not binding until accepted. The Fund
reserves the right to reject purchase orders under circumstances or in amounts
considered disadvantageous to existing shareholders. Please see the Sections
entitled "Purchasing and Redeeming Shares" and "Tax Information" for more
information concerning share purchases.
You may direct inquiries concerning the Fund to:
STOCKCAR STOCKS MUTUAL FUNDS, INC.
C/O DECLARATION SERVICE COMPANY
555 NORTH LANE, SUITE 6160
CONSHOHOCKEN, PA 19428
1-877-223-3863
REDEEMING SHARES
You may redeem your shares in the Fund at any time and for any reason. Upon
receipt by the Fund of a redemption request in proper form, your shares of the
Fund will be redeemed at their next determined net asset value. Redemption
requests must be in writing and delivered to the Fund at STOCKCAR STOCKS FUNDS,
INC.(TM), C/O DECLARATION SERVICE COMPANY, 555 NORTH LANE, SUITE 6160,
CONSHOHOCKEN, PA 19428. To be in "proper form," your redemption request must:
1. Specify the number of shares or dollar amount to be redeemed, if less than
all shares are to be redeemed;
2. Be signed by all owners exactly as their names appear on the account;
3. If required, include a signature guarantee from any "eligible guarantor
institution" as defined by the rules under the Securities Exchange Act of
1934. Eligible guarantor institutions include banks, brokers, dealers,
credit unions,
9
<PAGE>
national securities exchanges, registered securities associations, clearing
agencies and savings associations. A notary public is not an eligible
guarantor.
Further documentation, such as copies of corporate resolutions and instruments
of authority may be requested from corporations, administrators, executors,
personal representatives, Directors, or custodians to evidence the authority of
the person or entity making the redemption request.
Signature Guarantees. A signature guarantee is designed to protect you and the
Fund by verifying your signature. SIGNATURE GUARANTEES ARE REQUIRED WHEN: (1)
establishing certain services after the account is opened; (2) requesting
redemptions in excess of $10,000; (3) redeeming or exchanging shares, when
proceeds are: (i) being mailed to an address other than the address of record,
(ii) made payable to other than the registered owner(s); or (4) transferring
shares to another owner.
The redemption price per share is net asset value per share, determined as of
the close of business on the day your redemption order is accepted by the Fund
(See, "Purchasing and Redeeming Shares" in the SAI). If you hold your shares
longer than six months, there is no redemption charge. Otherwise, a fee of 0.50%
of the value of your redeemed shares will be deducted from the proceeds of your
redemption and paid to the Fund. When you redeem your shares, they may be worth
more or less than you paid for them, depending upon the value of the Fund's
portfolio securities at the time of redemption. The Fund charges a transfer fee
of $25 on redemptions of IRA accounts. This fee is in addition to the early
redemption charge of 0.50%.
The Fund is open for business on each day that the New York Stock Exchange
("NYSE") is open. The Fund's share price or net asset value per share ("NAV") is
normally determined as of 4:00 p.m., New York time. The Fund's share price is
calculated by subtracting its liabilities from the closing fair market value of
its total assets and dividing the result by the total number of shares
outstanding on that day. Fund liabilities include accrued expenses and dividends
payable, and its total assets include the market value of the portfolio
securities as well as income accrued but not yet received. Since the Fund
generally does not charge sales or redemption fees, the NAV is the offering
price for shares of the Fund. For shares redeemed prior to being held for at
least six months, the redemption value is the NAV less a service fee equal to
0.50% of the NAV.
If the value of your account falls below $1,000 as a result of previous
redemptions and not market price declines, the Fund may redeem the shares in
your account. However, the Fund will notify you first if such an event occurs,
and you will have 60 days to bring your account balance up to the minimum levels
before the Fund will exercise its option to redeem. Also, in the event your
shares are redeemed by the Fund under such circumstances, you will not be
charged any redemption fees, regardless of the time you have held your shares.
Payment for shares redeemed is made within seven days after receipt by the Fund
of a request for redemption in proper form. If shares are purchased by check and
redeemed by letter within seven business days of purchase, the Fund may hold
redemption proceeds until the purchase check has cleared, provided that the Fund
does not hold such proceeds for more than 15 calendar days. You will also be
subject to a redemption fee of 0.50% of total assets in such a circumstance. The
Fund reserves the right to suspend or postpone redemptions during any period
when (a) trading on any of
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<PAGE>
the major U.S. stock exchanges is restricted, as determined by the Securities
and Exchange Commission, or that the major exchanges are closed for other than
customary weekend and holiday closings, (b) the Commission has by order
permitted such suspension, or (c) an emergency, as determined by the Commission,
exists making disposal of portfolio securities or valuation of net assets of the
Fund not reasonably practicable.
TAX CONSIDERATIONS
The Fund intends to qualify as a regulated investment company under the Internal
Revenue Code so as to be relieved of federal income tax on its capital gains and
net investment income currently distributed to its shareholders. To qualify as a
regulated investment company, the Fund must, among other things, derive at least
90% of its gross income from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock, securities,
or other income derived with respect to its business of investing in such stock
or securities, and distribute substantially all of such income to its
shareholders at least annually.
The Fund intends to distribute to shareholders, at least annually, usually in
September, substantially all net investment income and any net capital gains
realized from sales of the Fund's portfolio securities. Dividends from net
investment income and distributions from any net realized capital gains are
reinvested in additional shares of the Fund unless the shareholder has requested
in writing to have them paid by check.
Dividends from investment income and net short-term capital gains are generally
taxable to you as ordinary income. Distributions of long-term capital gains are
taxable as long-term capital gains regardless of the length of time shares in
the Fund have been held. Distributions are taxable, whether received in cash or
reinvested in shares of the Fund.
You will be advised annually of the source of distributions for federal income
tax purposes.
If you fail to furnish your social security or other tax identification number
or to certify properly that it is correct, the Fund may be required to withhold
federal income tax at the rate of 31% (backup withholding) from your dividend,
capital gain and redemption payments. Dividend and capital gain payments may
also be subject to backup withholding if you fail to certify properly that you
are not subject to backup withholding due to the under-reporting of certain
income.
Taxable distributions generally are included in your gross income for the
taxable year in which they are received. However, dividends declared in October,
November and December and made payable to shareholders of record in such month
will be deemed to have been received on December 31st if paid by the Fund during
the following January.
Distributions by the Fund will result in a reduction in the fair market value of
the Fund's shares. Should a distribution reduce the fair market value below your
cost basis, such distribution would be taxable to you as ordinary income or as a
long-term capital gain, even though, from an investment standpoint, it may
constitute a partial return of capital. In particular, you should be careful to
consider the tax implications of buying shares of the Fund just prior to a
distribution. The price of such shares include the amount of any forthcoming
distribution so that you may receive a return of investment upon distribution
which will, nevertheless, be taxable.
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A redemption of shares is a taxable event and, accordingly, a capital gain or
loss may be recognized. You should consult a tax Adviser regarding the effect of
federal, state, local, and foreign taxes on an investment in the Fund.
MANAGEMENT OF THE FUND
The Company was incorporated in Maryland on May 18, 1998. The Board of Directors
approves all significant agreements between the Company and the persons and
companies that furnish services to the Fund, including agreements with the
Fund's custodian, transfer agent, investment Adviser and administrator. The
day-to-day operations of the Fund are delegated to the Adviser. The Statement of
Additional Information contains background information regarding each of the
Company's Directors and Executive Officers. The Company's Articles of
Incorporation permit the Board of Directors to issue 500,000,000 shares of
common stock. The Board of Directors has the power to designate one or more
classes ("series") of shares of common stock and to classify or reclassify any
unissued shares with respect to such series. Currently the shares of the Fund
are the only class of shares being offered by the Company. Shareholders are
entitled: (i) to one vote per full share; (ii) to such distributions as may be
declared by the Company's Board of Directors out of funds legally available; and
(iii) upon liquidation, to participate ratably in the assets available for
distribution. There are no conversion or sinking fund provisions applicable to
the shares, and the holders have no preemptive rights and may not cumulate their
votes in the election of directors. The shares are redeemable and are fully
transferable. All shares issued and sold by the Fund will be fully paid and
nonassessable.
INVESTMENT ADVISER
MANAGEMENT AGREEMENTS. StockCar Stocks Advisors, LLC (the "Adviser") has entered
into an Investment Advisory Agreement (the "Advisory Agreement") with the Fund
to provide investment management services to the Fund. In addition, the Adviser
has entered into an Operating Services Agreement (the "Services Agreement") with
the Fund to provide virtually all day-to-day operational services to the Fund.
As is further explained below, the combined effect of the Advisory Agreement and
the Services Agreement is to place a cap or ceiling on the Fund's ordinary
operating expenses at 1.41% of daily net asset value of the Fund, excepting
brokerage, interest, taxes, litigation, and other extraordinary expenses. John
P. Allen II is Chief Executive Officer of the Adviser. Robert T. Carter is
Portfolio Manager, and is responsible for all investment decisions relating to
the Fund. Mr. Allen also serves as the President and as a Director of the
Company.
SERVICES AGREEMENT. Under the terms of the Services Agreement, the Adviser,
subject to the supervision of the Board of Directors, will provide day-to-day
operational services to the Fund including, but not limited to, providing or
arranging to provide accounting, administrative, legal (except litigation),
dividend disbursing, transfer agent, registrar, custodial, fund share
distribution, shareholder reporting, sub-accounting and record keeping services.
The Services Agreement provides that the Adviser pays all fees and expenses
associated with these and other functions, including, but not limited to,
expenses of legal compliance, shareholder communications, and meetings of the
shareholders. For such services, the Fund will pay to the Adviser on the last
day of each month a fee equal to 0.91% of the average net asset value of the
Fund, such fee to be
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<PAGE>
computed daily based upon the net asset value of the Fund. The Adviser has
entered into an Investment Company Services Agreement with Declaration Service
Company to provide Transfer Agent and essentially all administrative services
for the Fund.
Mr. Carter, the Fund's portfolio manager, has over thirty-five years experience
managing funds for registered investment companies and private and institutional
clients. From 1996-1998, Mr. Carter was Head of Private Client Financial and
Advisory Services for McCauley Development Group in Chicago, Illinois. He was a
senior equity and fixed-income portfolio manager for Duff & Phelps Investment
Management in Chicago, Illinois from1989-1996, managing over $300 million in
mutual fund, institutional and private client assets. Mr. Carter has managed
private client, institutional and mutual fund assets since 1960. Mr. Carter is a
Chartered Financial Analyst and a graduate of The College of Wooster.
Pursuant to the terms of the Advisory Agreement, the Adviser manages the
investment of the assets of the Fund in accordance with the Fund's investment
objectives, policies, and restrictions. The Adviser receives from the Fund, as
compensation for its services, a fee, accrued daily and payable monthly, at an
annual rate of 0.50% of the Fund's net assets. The Adviser has voluntarily
agreed to waive its fees and/or assume certain expenses of the Fund, if
necessary, in the event that the Fund's total annual expenses, excluding taxes,
interest and extraordinary litigation expenses, during any of its fiscal years,
exceed 1.5% of its average daily net asset value in such year. The Fund will not
be liable in future years for any fee waivers or expense assumptions made by the
Adviser in previous years. If the Adviser waives fees and/or assumes expenses of
the Fund, such actions will have the effect of lowering the Fund's expense
ratios and increasing the Fund's yield during the time in which the Adviser
undertakes such actions.
Under the Contract, the Adviser furnishes at its own expense office space to the
Company and all necessary office facilities, equipment, and personnel for
managing the assets of the Fund. The Adviser also pays all expenses of marketing
shares of the Fund, placement of securities orders and related bookkeeping.
The Fund pays all expenses incident to its operations and business not
specifically assumed by the Adviser, including expenses relating to custodial,
legal, and auditing charges; printing and mailing of reports and prospectuses to
existing shareholders; taxes and corporate fees; maintaining registration of the
Fund under the Investment Company Act of 1940, and registration of its shares
under the Securities Act of 1933; and qualifying and maintaining qualification
of its shares under the securities laws of certain states.
THE "YEAR 2000 ISSUE": Many existing computer programs use only two digits to
identify a year in their date fields. These programs were designed and developed
without considering the impact of the upcoming change in the century. If not
corrected, many computer applications could fail or create erroneous results by
or at the year 2000. The Fund is a new Fund, and the Adviser is a newly formed
company. All of the computer programs purchased by the Adviser for its own use
or for the use of the Fund are new programs and have been warranted as Year 2000
compliant. Further, the Company has entered into agreements with various third
parties to provide services to the Fund, and as part of those agreements, has
received warranties from each such party that its systems are presently year
2000 compliant, or adequate steps are being undertaken by the party to
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<PAGE>
insure that compliance is met prior to the turn of the century. The Fund will
not enter into any agreement with a party unless such warranties are given.
Accordingly, at the present time, there do not appear to be any materially
adverse consequences to the Fund relating to the Year 2000 issue.
GENERAL INFORMATION
The Fund will not issue stock certificates evidencing shares. Instead, your
account will be credited with the number of shares purchased, relieving you of
responsibility for safekeeping of certificates and the need to deliver them upon
redemption. Written confirmations are issued for all purchases of shares.
You will be provided at least semi-annually with a report showing the Fund's
portfolio and other information and annually after the close of the Fund's
fiscal year, which ends September 31, with a report containing audited financial
statements.
The Fund's average annual total return is computed by determining the average
annual compounded rate of return for a specified period that, if applied to a
hypothetical $1000 initial investment, would produce the redeemable value of
that investment at the end of the period, assuming reinvestment of all dividends
and distributions and with recognition of all recurring charges. The Fund may
also utilize a total return calculation for differing periods computed in the
same manner but without annualizing the total return.
The Fund's "yield" refers to the income generated by an investment in the fund
over a thirty day (or one month) period (which period will be stated). Yield is
computed by dividing the net investment income per share earned during the most
recent calendar month by the maximum offering price per share on the last day of
the month. This income is then "annualized." That is, the mount of income
generated by the investment during that thirty-day period is assumed to be
generated each month over a twelve month period and is shown as a percentage of
the investment.
For purposes of the yield calculation, interest income is computed based on the
yield to maturity of each debt obligation and dividend income is computed based
on the stated dividend rate of each equity security in the Fund's portfolio, and
all recurring charges are recognized.
In reports or other communications to investors, or in advertising material, the
Fund may describe general economic and market conditions affecting the Fund and
may compare its performance with other mutual funds as listed in the rankings
prepared by Lipper Analytical Services, Inc. or similar nationally recognized
rating services and financial publications that monitor mutual fund performance.
The Fund may also, from time to time, compare its performance to the Standard &
Poors Composite Index of 500 Stocks ("S&P 500"), a widely recognized, unmanaged
index of common stock prices.
According to the law of Maryland, under which the Company is incorporated, and
the Company's bylaws, the Company is not required to hold an annual meeting of
shareholders unless required to do so under the Investment Company Act of 1940.
Accordingly, the Company will not hold annual shareholder meetings unless
required to do so under the Act.
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The Company will call a meeting of shareholders for the purpose of voting upon
the removal of a director or directors when requested in writing to do so by
record holders of at least 10% of the Fund's outstanding common shares, and in
connection with such meeting will comply with the provisions of section 16(c) of
the Investment Company Act of 1940 concerning assistance with a record
shareholder communication asking other record shareholders to join in that
request.
The Fund and the Adviser have entered into an Investment Services Agreement,
dated September 15, 1998 with Declaration Services Company ("DSC") wherein DSC
will provide substantially all administrative, accounting and transfer agent
services to the Fund. DSC will be paid for such services by the Adviser.
Declaration Distributors, Inc. ("DDI") has agreed to act as principal
underwriter for the Fund's shares, pursuant to a Distribution Agreement dated
September 15, 1998. The Agreement will expire on September 15, 2000, unless
renewed annually thereafter by the Fund's board of directors voting as a whole
and by a majority of the Fund's "uninterested" directors, as that term is
defined in the Investment Company Act of 1940. Either party to the Distribution
Agreement may terminate the agreement on 60 days written notice, and the
agreement will terminate automatically in the event of its assignment. DDI will
be paid for such services by the Adviser.
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<PAGE>
STOCKCAR STOCKS INDEX FUND(TM)
(A No-Load Fund)
Investment Adviser:
- -------------------
StockCar Stocks Advisers, LLC
256 Raceway Drive, Suite 11
Mooresville, North Carolina 28115
Custodian:
- ----------
CoreStates Bank, N.A.
1339 Chestnut Street
Philadelphia, PA 19101-7618
Distributor:
- ------------
Declaration Distributors, Inc.
555 North Lane, Suite 6160
Conshohocken, PA 19428
Accounting, Transfer and Dividend Disbursing Agent:
- ---------------------------------------------------
Declaration Services Company
555 North Lane, Suite 6160
Conshohocken, PA 19428
Independent Auditors:
- ---------------------
Tait, Weller & Baker
8 Penn Center
Philadelphia, PA 19428
Legal Services:
- ---------------
The Law Offices of David D. Jones, P.C.
555 North Lane, Suite 6160
Conshohocken, PA 19428
No person has been authorized to give any information or to make any
representations other than those contained in this prospectus, the statement of
additional information or the fund's official sales literature in connection
with the offering of shares of the fund, and if given or made, such other
information or representations must not be relied upon as having been authorized
by the fund.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
Dated September 15, 1998
STOCKCAR STOCKS MUTUAL FUND, INC.
256 Raceway Drive
Mooresville, North Carolina 28115
877-223-3863
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the Prospectus of StockCar Stocks Mutual Fund, Inc., dated
September 15, 1998. You may obtain a copy of the Prospectus, free of charge, by
writing to StockCar Stocks Mutual Fund, Inc, c/o Declaration Service Company,
555 North Lane, Conshohocken, PA 19428 or by calling 877-223-3863.
TABLE OF CONTENTS
Investment Policies and Restrictions Custodian
Investment Adviser Transfer Agent
Directors and Officers Administration
Performance Information Distributor
Purchasing and Redeeming Shares Independent Accountants
Tax Information Independent Auditors Report
Portfolio Transactions Financial Statements
<PAGE>
INVESTMENT POLICIES AND RESTRICTIONS
The Fund's investment objectives and the manner in which the Fund pursues its
investment objectives are generally discussed in the prospectus under the
captions "Investment Objectives and Policies" and "Risk Factors.", and all of
that information is incorporated herein by reference.
The Fund is a diversified Fund, meaning that the Fund limits the amount of its
assets invested in any one issuer and/or in any one industry, thereby reducing
the risk of loss incurred by that issuer or industry. The Fund normally will
invest at least 95% of its total net assets in the common stock of Companies
comprising the StockCar Stocks Index(TM). Because the Index is itself highly
diverse, presently consisting of 52 companies representing ten of thirteen
generally recognized industry sectors, the Adviser does not anticipate any
diversification problems resulting from the Fund's investment policy. However,
if the Fund encounters a problem with respect to the diversification of its
investments, or for liquidity purposes, the Fund may invest up to 25% of its net
assets in other securities. The complete list of securities in which the Fund
may invest is listed below, along with any restrictions on such investments,
and, where necessary, a brief discussion of any risks unique to the particular
security.
Common Stocks. The Fund may invest in the common stock of the companies
comprising the Index. Common stock is issued by companies to raise cash for
business purposes and represents a proportionate equity interest in the issuing
companies. Therefore, the Fund participates in the success or failure of any
company in which it holds common stock. The market value of common stock can
fluctuate significantly, reflecting the business performance of the issuing
company, investor perception and general economic or financial market movements.
Smaller companies are especially sensitive to these factors. Despite the risk of
price volatility, however, common stocks historically have offered the greatest
potential for gain on investment, compared to other classes of financial assets.
Further, there are additional risks inherent in the stock car racing business,
and because the Fund will concentrate its investments in companies involved in
that sport, the Fund will be exposed to the risks associated with the sport to a
greater degree than will funds whose investment policies do not require or allow
such concentration., However, the majority of the companies comprising the Index
are large, well-established companies with a long history of growth and
performance and whose product lines and services are only indirectly related to
the stock car racing business, so the risks particular to the stock car racing
business are somewhat reduced. Under normal circumstances, the Fund will invest
at least 95% of its net assets in the common stock of companies comprising the
Index. This is a fundamental policy of the Fund, and may not be changed without
a vote of the majority of the outstanding shares of the Fund. A full listing of
the Fund's fundamental investment policies, as well as those investment policies
which may be changed by the Company's Board of Directors, may be found in the
SAI in the Section entitled, "Investment Policies and Restrictions".
Preferred Stock. The Fund may invest in the preferred stock of the companies
that comprise the Index, when the Adviser believes that such investments will
help the Fund achieve its investment objective of current income without
substantially and negatively affecting the Fund's investment objective of
capital growth. Preferred stock generally pays dividends at a specified rate and
1
<PAGE>
generally has preference over common stock in the payments of dividends and the
liquidation of the issuer's assets. Dividends on preferred stock are generally
payable at the discretion of the issuer's board of directors. Accordingly,
Shareholders may suffer a loss of value if dividends are not paid. The market
prices of preferred stocks are also sensitive to changes in interest rates and
in the issuer's creditworthiness. Accordingly, shareholders may experience a
loss of value due to adverse interest rate movements or a decline in the
issuer's credit rating. Finally, preferred stock is not included in the Index,
so any investment in such stock will cause the performance of the Fund to vary
from that of the index. For these reasons, the Fund will not invest more than 5%
of its net assets in preferred stock.
Foreign Securities. The Fund may invest in securities of foreign issuers which
are publicly traded on U.S. exchanges either directly or in the form of American
Depository Receipts (ADRs), but only if such foreign issuers are included in the
Index. The Fund will only invest in ADRs that are issuer sponsored. Sponsored
ADRs typically are issued by a U.S. bank or Company company and evidence
ownership of underlying securities issued by a foreign corporation. Investments
in foreign securities involve greater risks compared to domestic investments.
Foreign companies are not subject to the regulatory requirements of U.S.
companies and, as such, there may be less publicly available information about
issuers than is available in the reports and ratings published about companies
in the U.S. Additionally, foreign companies are not subject to uniform
accounting, auditing and financial reporting standards. Dividends and interest
on foreign securities may be subject to foreign withholding taxes. Such taxes
may reduce the net return to shareholders. Although the Fund intends to invest
in securities of foreign issuers domiciled in nations which the Adviser
considers as having stable and friendly governments, there is the possibility of
expropriation, confiscation, taxation, currency blockage or political or social
instability which could affect investments of foreign issuers domiciled in such
nations. Further, there is the risk of loss due to fluctuations in the value of
a foreign corporation's currency relative to the U.S. dollar.
Money Market Funds. The Fund may invest in securities issued by other registered
investment companies that invest in short-term debt securities (i.e., money
market fund) to maintain liquidity and for temporary and defensive purposes
only. As a shareholder of another registered investment company, the Fund would
bear its pro rata portion of that company's advisory fees and other expenses.
Such fees and expenses will be borne indirectly by the Fund's shareholders. The
Fund may invest in such instruments to the extent that such investments do not
exceed 10% of the Funds net assets and/or 3% of any investment company's
outstanding securities.
Debt Securities. The Fund may invest in U.S. Government debt securities
including Treasury Bills and short term notes, to maintain liquidity, for
periods not to exceed thirty days. U.S. Government securities include direct
obligations of the U.S. Government and obligations issued by U.S. Government
agencies and instrumentalities. The market value of such securities fluctuates
in response to interest rates and the creditworthiness of the issuer. In the
case of securities backed by the full faith and credit of the United States
Government, shareholders are only exposed to interest rate risk. The Fund will
not invest more than 25% of its net assets in such securities, and will not
invest in any such security with a maturity in excess of one year.
Repurchase Agreements. The Fund may invest a portion of its assets in repurchase
agreements ("Repos") with broker-dealers, banks and other financial institutions
to maintain liquidity, provided
2
<PAGE>
that the Fund's custodian always has possession of the securities serving as
collateral for the Repos or has proper evidence of book entry receipt of said
securities. In a Repo, the Fund purchases securities subject to the seller's
simultaneous agreement to repurchase those securities from the Fund at a
specified time (usually one day) and price. The repurchase price reflects an
agreed-upon interest rate during the time of investment. All Repos entered into
by the Fund must be collateralized by U.S. Government Securities, the market
values of which equal or exceed 102% of the principal amount of the money
invested by the Fund. If an institution with whom the Fund has entered into a
Repo enters insolvency proceedings, the resulting delay, if any, in the Fund's
ability to liquidate the securities serving as collateral could cause the Fund
some loss if the securities declined in value prior to liquidation. To minimize
the risk of such loss, the Fund will enter into Repos only with institutions and
dealers considered creditworthy, and will not invest more than 25% of its net
assets in such transactions, and for periods not to exceed thirty days.
Cash Reserves. The Fund may, to meet liquidity needs, hold up to 25% of its net
assets in cash for periods not to exceed thirty days. The primary risk
associated with such a policy is that the Fund's performance will vary, perhaps
significantly, from the performance of the Index when the Fund holds such a high
percentage of cash reserves.
Futures and Options On Equity Securities and the Index. The Fund may enter into
futures contracts relating to the equity securities of companies included in the
Index, may write (i.e. sell) covered put and call options on such securities and
on the Index, and may purchase put and call options on such equity securities
and on the Index. Such options can include long-term options with durations of
up to three years. Although not normally anticipated to be widely employed, the
Fund may use futures and options to increase or decrease its exposure to the
effects of changes in security prices, to hedge securities held, to maintain
cash reserves while remaining fully invested, to facilitate trading, to reduce
transaction costs, or to seek higher investment returns when a futures or
options contract is priced more attractively than the underlying security or
index. The Fund may enter into these transactions so long as the value of the
underlying securities on which such options or futures contracts may be written
at any one time does not exceed 100% of the net assets of the Fund, and so long
as the initial margin required to enter into such contracts does not exceed ten
percent (10%)of the Fund's total net assets.
Risk Factors Associated With Futures And Options. The primary risks associated
with the use of options and futures are; (1) imperfect correlation between a
change in the value of the underlying security or index and a change in the
price of the option or futures contract, and (2) the possible lack of a liquid
secondary market for an options or futures contract and the resulting inability
of the Fund to close out the position prior to the maturity date. The risk of
imperfect correlation will be minimized by investing only in those contracts
whose price fluctuations are expected to resemble those of the Fund's underlying
securities. The risk that the Fund will be unable to close out a position will
be minimized by entering into such transactions only on national exchanges and
over-the-counter markets with an active and liquid secondary market.
Restricted And Illiquid Securities. The Fund will not invest more than 15% of
its net assets in securities that the Adviser determines, under the supervision
of the Board of Directors, to be illiquid and/or restricted. Illiquid securities
are securities that cannot be liquidated within seven (7) days at the
approximate price at which the Fund has valued the instrument. Also, the sale of
some
3
<PAGE>
illiquid and other types of securities may be subject to legal restrictions.
Because illiquid and restricted securities may present a greater risk of loss
than other types of securities, due to their lack of a ready market, the Fund
will not invest in such securities in excess of the limits set forth above. You
should be aware that in the event that more than 15% of the Index is comprised
of companies considered to be illiquid, the Fund will be unable to precisely
match its investments to the percentages contained in the Index, and that
inability may pose additional risks to the Fund, including the risk that the
performance of the Fund will vary from that of the Index.
When-Issued Securities And Delayed-Delivery Transactions. The Fund may purchase
securities of companies comprising the Index on a when-issued basis, and it may
purchase or sell such securities for delayed-delivery. These transactions occur
when securities are purchased or sold by the Fund with payment and delivery
taking place at some future date. The Fund may enter into such transactions
when, in the Adviser's opinion, doing so may secure an advantageous yield and/or
price to the Fund that might otherwise be unavailable. The Fund has not
established any limit on the percentage of assets it may commit to such
transactions, but to minimize the risks of entering into these transactions, the
Fund will maintain a segregated account with its Custodian consisting of cash,
cash equivalents, U.S. Government Securities or other high-grade liquid debt
securities, denominated in U.S. dollars or non-U.S. currencies, in an amount
equal to the aggregate fair market value of its commitments to such
transactions.
Portfolio Turnover. The Fund has no operating history and therefore has no
reportable portfolio turnover. Higher portfolio turnover rates may result in
higher rates of net realized capital gains to the Fund, thus the portion of the
Fund's distributions constituting taxable gains may increase. In addition,
higher portfolio turnover activity can result in higher brokerage costs to the
Fund. The Fund anticipates that its annual portfolio turnover will be not
greater than 50%.
The complete list of the Fund's investment restrictions is as follows:
The Fund will not:
1. To the extent of 75% of its assets (valued at time of investment), invest
more than 5% of its assets in securities of any one issuer, except in
obligations of the United States Government and its agencies and
instrumentalities;
2. Acquire securities of any one issuer that at the time of investment (a)
represent more than 10% of the voting securities of the issuer or (b) have
a value greater than 10% of the value of the outstanding securities of the
issuer;
3. Borrow money except from banks for temporary or emergency purposes in
amounts not exceeding 5% of the value of the Fund's assets at the time of
borrowing;
4. Underwrite the distribution of securities of other issuers, or acquire
"restricted" securities that, in the event of a resale, might be required
to be registered under the Securities Act of 1933;
5. Make margin purchases or short sales of securities;
4
<PAGE>
6. Invest in companies for the purpose of management or the exercise of
control;
7. Lend money (but this restriction shall not prevent the Fund from investing
in debt securities or repurchase agreements).
8. Acquire or retain any security issued by a company, an officer or director
of which is an officer or director of the Company or an officer, director
or other affiliated person of the Adviser or Distributor.
9. Invest in oil, gas or other mineral exploration or development programs, or
marketable securities of companies engaged in oil, gas or mineral
exploration, unless such companies are members of the Index;
10. Purchase or sell real estate or real estate loans or real estate limited
partnerships, or invest in marketable securities of companies that invest
in real estate or interests in real estate, unless such issuers are members
of the Index.
11. Engage in the writing of put and call options, except that the Fund may
write (i.e. sell) covered put and call options, and may purchase put and
call options, on the equity securities of companies included in the Index
and on the Index itself. The Fund may enter into these transactions so long
as the value of the underlying securities on which such options contracts
may be written at any one time does not exceed 100% of the net assets of
the Fund, and so long as the initial margin required to enter into such
contracts does not exceed ten percent (10%)of the Fund's total net assets.
12. Purchase warrants on securities.
13. Issue senior securities.
14. Invest in commodities or in commodities futures or options.
15. Invest more than 5% of its assets (valued at time of investment) in
securities of issuers that are not included in the StockCar Stocks Index
for any period in excess of thirty days.
Restrictions 1 through 15 listed above are fundamental policies, and may be
changed only with the approval of a "majority of the outstanding voting
securities" of the Fund as defined in the Investment Company Act of 1940.
The Fund has also adopted the following restrictions that may be changed by the
Board of Directors without shareholder approval:
The Fund may not:
a. Invest more than 5% of its net assets (valued at the time of investment) in
preferred stock;
b. Invest more than 15% of its net assets (valued at time of investment) in
securities that are not readily marketable;
5
<PAGE>
c. Acquire securities of other investment companies except (a) by purchase in
the open market, where no commission or profit to a sponsor or dealer
results from such purchase other than the customary broker's commission and
(b) where acquisition results from a dividend or merger, consolidation or
other reorganization.
d. purchase more than 3% of the voting securities of any one investment
company nor invest more than 10% of the Funds assets (valued at time of
investment) in all investment company securities purchased by the Fund;
e. Pledge, mortgage or hypothecate its assets, except for temporary or
emergency purposes and then to an extent not greater than 5% of its total
assets at cost;
f. Invest more than 10% of the Fund's assets (valued at time of investment) in
initial margin deposits of options or futures contracts;
g. Invest more than 25% of its net assets, in the aggregate, in any one or
more of the following investments: cash, money market instruments, debt
securities and/or repurchase agreements, but only for periods not to exceed
thirty days, and only for liquidity purposes.
INVESTMENT ADVISER
Information on the Fund's investment adviser, StockCar Stocks Advisors, LLC, is
set forth in the prospectus under "Investment Adviser," and is incorporated
herein by reference.
The adviser is a North Carolina Limited Liability Company, and was registered as
a registered investment adviser with the Securities and Exchange Commission in
July, 1998. John P. Allen II is the Chief Executive Officer with a 64% interest
in the company. Robert T. Carter is Portfolio Manager. Mr. Carter is principally
responsible for the investment operations of the Fund.
Mr. Carter, the Fund's portfolio manager, has over thirty-five years experience
managing funds for registered investment companies and private and institutional
clients. From 1996-1998, Mr. Carter was Head of Private Client Financial and
Advisory Services for McCauley Development Group in Chicago, Illinois. He was a
senior equity and fixed-income portfolio manager for Duff & Phelps Investment
Management in Chicago, Illinois from1989-1996, managing over $300 million in
mutual fund, institutional and private client assets. Mr. Carter has managed
private client, institutional and mutual fund assets since 1960. Mr. Carter is a
Chartered Financial Analyst and a graduate of The College of Wooster.
The Advisory Agreement provides that the adviser shall not be liable for any
loss suffered by the Fund or its shareholders as a consequence of any act or
omission in connection with services under the Agreement, except by reason of
the adviser's willful misfeasance, bad faith, gross negligence, or reckless
disregard of its obligations and duties under the Advisory Agreement.
The Advisory Agreement expires on September 15, 2000, but may be continued from
year to year so long as its continuance is approved annually (a) by the vote of
a majority of the Directors of the Fund who are not "interested persons" of the
Fund or the adviser cast in person at a meeting called for the purpose of voting
on such approval, and (b) by the Board of Directors as a whole or by the vote of
a majority (as defined in the Investment Company Act of 1940, the "1940 Act") of
the outstanding shares of the Fund. The Agreement will terminate automatically
in the event of its assignment (as defined in the 1940 Act).
6
<PAGE>
DIRECTORS AND OFFICERS
The board of directors has overall responsibility for conduct of the Company's
affairs. The day-to-day operations of the Fund are managed by the Adviser,
subject to the bylaws of the Company and review by the Board of Directors. The
directors of the Company, including those directors who are also officers, are
listed below. The business address of each director is:
256 Raceway Drive, Suite 11
Mooresville, North Carolina 28115
Name, Age, Position Principal Occupation For the
with Fund Last Five Years
- --------------------------------------------------------------------------------
John P. Allen, II (Age 26)* Previously was Vice President of
Director, President of Fund, marketing for NationsBanc Advisers, Inc.
Chief Executive Officer of Adviser from 1994 to 1998. Chief Executive
Officer of StockCar Stocks Advisors,
LLC, the investment Adviser to StockCar
Stocks Index Fund, since May, 1998. BS
from Davidson College.
Kim Torrence (Age 27)* Previously was a broker in the direct
Director, Secretary of Fund sales unit of NationsBanc Investments,
Inc. from 1996 to 1998. President of
StockCar Stocks Advisors, LLC, the
investment Adviser to StockCar Stocks
Index Fund, since May, 1998. BA from
Stetson University, 1993.
Pamela K. Clement (Age 44)* Managing Partner, Piedmont Venture
Director of Fund, Adviser Partners since 1996. Previously was
President, Chief Operating Officer and
Director of Sovereign Advisers,
co-founder, Chairman and Director of New
York based Prime Asset Management Corp.,
and was a senior officer at Smith Barney
and Lehman Brothers. She currently
serves on the Board of Directors of
American Aircarriers Support, Inc.
(NASDAQ: AIRS) and on the boards of a
number of private portfolio companies in
Piedmont's venture fund including
MotorTrax Interactive. MotorTrax
Interactive has licensing agreements
with NASCAR and dozens of top drivers,
including Dale Earnhardt and Jeff
Gordon, to broadcast the live
conversations between drivers and crew
via telephone and the Internet. Pam has
over 23 years experience as a venture
capitalist, Wall Street investment
professional and institutional money
manager.
7
<PAGE>
David M. Furr (Age 40)* An attorney since 1983 practicing with
Director of Fund, Adviser Gray, Layton, Kersh, Solomon, Sigmon,
Furr & Smith, P.A. in Gastonia, North
Carolina, David brings extensive NASCAR
experience and connections, having
represented the sale of Sports Image,
Inc., owned by Dale and Teresa
Earnhardt, to Action Performance
Companies, Inc. (NASDAQ: ACTN). He also
served as general counsel to the NASCAR
licensees MotorTrax Interactive and Wave
Media. David brings extensive Wall
Street contacts, having assisted in the
public offerings of Action Performance
and Wheels Sports Group (NASDAQ: RACN),
and most recently took American
Aircarriers Support, Inc. (NASDAQ: AIRS)
public.
Sean M. Jones (Age 34) Attorney with the law firm Kennedy,
Director Covington, Lobdell & Hickman, L.L.P. in
Charlotte, NC. since 1993. Mr. Jones
specializes in corporate, securities,
mergers and acquisitions. Mr. Jones was
formerly with the firms of Webster &
Sheffield and Haythe & Curley in New
York City.
Scott R. Poole (Age 26) Associate with NationsBank Capital
Director Investors in Charlotte, NC. since 1995.
Mr. Poole works in the principal
investment group which provides risk
capital for growth financings, buyouts,
acquisitions and recapitalizations.
Previously Mr. Poole was a Financial
Analyst with First Union Capital
Partners specializing in private equity
and subordinated debt financing
(1994-95). Graduated university of
Virginia in 1994.
Andrew Miller (Age 28) President of Research Solutions, a
Director quantitative research and consulting
firm specializing in the financial
services industry since 1997. Most
recently he served as an Investment and
Communication Consultant at Putnam
Investments in Boston (1196-97). Prior
to working at Putnam Investments, Mr.
Miller was employed as an Assistant Vice
President of Retirement Services
Marketing at NationsBanc Advisers,
Inc.(1992-96)
8
<PAGE>
Heather Wharton-Flynn (Age 31) Previously worked at the New York
Director offices of Chase Manhattan Bank and
United Bank of Switzerland in the
Institutional Index Management
Department. Ms. Wharton-Flynn also
served as Vice President of marketing
for NationsBanc Advisers, Inc.
(1992-97). Currently is President of
Pentimento, LLC in Charlotte, NC. since
1997.
* Indicates an "interested person" as defined in the Investment Company Act of
1940.
The Corporation was organized as a Maryland Corporation on May 18, 1998 (See the
Sections titled "Management of the Fund" and "General Information" in the Fund's
Prospectus). The table below sets forth the compensation anticipated to be paid
by the Corporation to each of the directors of the Corporation during the fiscal
year ending December 31, 1998.
Name of Director Compensation Pension Annual Total Compensation
from Corp Benefits Benefits Paid to Director
- --------------------------------------------------------------------------------
John P. Allen II $ 0.00 $ 0.00 $ 0.00 $ 0.00
Kim Torrence $ 0.00 $ 0.00 $ 0.00 $ 0.00
Pamela K. Clement $ 0.00 $ 0.00 $ 0.00 $ 0.00
David M. Furr $ 0.00 $ 0.00 $ 0.00 $ 0.00
Sean M. Jones $ 0.00 $ 0.00 $ 0.00 $ 0.00
Scott R Poole $ 0.00 $ 0.00 $ 0.00 $ 0.00
Andrew Miller $ 0.00 $ 0.00 $ 0.00 $ 0.00
Heather Wharton $ 0.00 $ 0.00 $ 0.00 $ 0.00
- -Flynn
The Adviser intends to purchase 10,000 shares of the Fund prior to the effective
date of the Fund's registration and will be deemed initially to control the
Fund.
9
<PAGE>
The Company will call a meeting of shareholders for the purpose of voting upon
the question of removal of a director or directors when requested in writing to
do so by record holders of at least 10% of the Fund's outstanding common shares.
The Corporation's bylaws contain procedures for the removal of directors by its
stockholders. At any meeting of stockholders, duly called and at which a quorum
is present, the stockholders may by the affirmative vote of the holders of a
majority of the votes entitled to be cast thereon, remove any director or
directors from office and may elect a successor or successors to fill any
resulting vacancies for the unexpired terms of the removed directors.
PERFORMANCE INFORMATION
From time to time the Fund may quote total return figures. "Total Return" for a
period is the percentage change in value during the period of an investment in
Fund shares, including the value of shares acquired through reinvestment of all
dividends and capital gains distributions. "Average Annual Total Return" is the
average annual compounded rate of change in value represented by the Total
Return Percentage for the period.
[n]
Average Annual Total Return is computed as follows: P(1+T) = ERV
Where: P = a hypothetical initial investment of $1000]
T = average annual total return
n = number of years
ERV = ending redeemable value of shares at the end of the period
Yield. The Fund may advertise performance in terms of a 30-day yield quotation.
The 30-day yield quotation is computed by dividing the net investment income per
share earned during the period by the maximum offering price per share on the
last day of the period, according to the following formula:
6
Yield = 2[(a-b/cd + 1) - 1]
Where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursement)
c = the average daily number of shares outstanding during the
period that they were entitled to receive dividends
d = the maximum offering price per share on the last day of the
period
The Fund imposes no sales charge and pays no distribution expenses. Income taxes
are not taken into account. The Fund's performance is a function of conditions
in the securities markets, portfolio management, and operating expenses.
Although information such as that shown above is useful in reviewing the Fund's
performance and in providing some basis for comparison with other investment
alternatives, it should not be used for comparison with other investments using
different reinvestment assumptions or time periods.
10
<PAGE>
In sales literature, the Fund's performance may be compared with that of market
indices and other mutual funds. In addition to the above computations, the Fund
might use comparative performance as computed in a ranking determined by Lipper
Analytical Services, Morningstar, Inc., or that of another service.
PURCHASING AND REDEEMING SHARES
Purchases and redemptions are discussed in the Fund's prospectus under the
headings "Purchasing Shares" and "Redeeming Shares." All of that information is
incorporated herein by reference.
Redemptions will be made at net asset value. The Fund's net asset value is
determined on days on which the New York Stock Exchange is open for trading. For
purposes of computing the net asset value of a share of the Fund, securities
traded on security exchanges, or in the over-the-counter market in which
transaction prices are reported, are valued at the last sales price at the time
of valuation or, lacking any reported sales on that day, at the most recent bid
quotations. Securities for which quotations are not available and any other
assets are valued at a fair market value as determined in good faith by the
Adviser, subject to the review and supervision of the board of directors. The
price per share for a purchase order or redemption request is the net asset
value next determined after receipt of the order.
The Fund is open for business on each day that the New York Stock Exchange
("NYSE") is open. The Fund's share price or net asset value per share ("NAV") is
normally determined as of 4:00 p.m., New York time. The Fund's share price is
calculated by subtracting its liabilities from the closing fair market value of
its total assets and dividing the result by the total number of shares
outstanding on that day. Fund liabilities include accrued expenses and dividends
payable, and its total assets include the market value of the portfolio
securities as well as income accrued but not yet received. Since the Fund
generally does not charge sales or redemption fees, the NAV is the offering
price for shares of the Fund. For shares redeemed prior to being held for at
least six months, the redemption value is the NAV less a service fee equal to
0.50% of the NAV.
TAX INFORMATION
The Fund intends to qualify as a regulated investment company under the Internal
Revenue Code so as to be relieved of federal income tax on its capital gains and
net investment income currently distributed to its shareholders. To qualify as a
regulated investment company, the Fund must, among other things, derive at least
90% of its gross income from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock, securities,
or other income derived with respect to its business of investing in such stock
or securities.
If the Fund qualifies as a regulated investment company and distributes at least
90% of its net investment income, the Fund will not be subject to Federal income
tax on the income so distributed. However, the Fund would be subject to
corporate income tax on any undistributed income other than tax-exempt income
from municipal securities.
The Fund intends to distribute to shareholders, at least annually, substantially
all net investment income and any net capital gains realized from sales of the
Fund's portfolio securities. Dividends
11
<PAGE>
from net investment income and distributions from any net realized capital gains
are reinvested in additional shares of the Fund unless the shareholder has
requested in writing to have them paid by check.
Dividends from investment income and net short-term capital gains are generally
taxable to the shareholder as ordinary income. Distributions of long-term
capital gains are taxable as long-term capital gains regardless of the length of
time shares in the Fund have been held. Distributions are taxable, whether
received in cash or reinvested in shares of the Fund.
Each shareholder is advised annually of the source of distributions for federal
income tax purposes. A shareholder who is not subject to federal income tax will
not be required to pay tax on distributions received.
If shares are purchased shortly before a record date for a distribution, the
shareholder will, in effect, receive a return of a portion of his investment,
but the distribution will be taxable to him even if the net asset value of the
shares is reduced below the shareholder's cost. However, for federal income tax
purposes the original cost would continue as the tax basis.
If a shareholder fails to furnish his social security or other tax
identification number or to certify properly that it is correct, the Fund may be
required to withhold federal income tax at the rate of 31% (backup withholding)
from dividend, capital gain and redemption payments to him. Dividend and capital
gain payments may also be subject to backup withholding if the shareholder fails
to certify properly that he is not subject to backup withholding due to the
under-reporting of certain income.
Taxation of the Shareholder. Taxable distributions generally are included in a
shareholder's gross income for the taxable year in which they are received.
However, dividends declared in October, November and December and made payable
to shareholders of record in such month will be deemed to have been received on
December 31st if paid by the Fund during the following January.
Distributions by the Fund will result in a reduction in the fair market value of
the Fund's shares. Should a distribution reduce the fair market value below a
shareholder's cost basis, such distribution would be taxable to the shareholder
as ordinary income or as a long-term capital gain, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares of the Fund just prior to a distribution. The price of such shares
include the amount of any forthcoming distribution so that those investors may
receive a return of investment upon distribution which will, nevertheless, be
taxable to them.
A redemption of shares is a taxable event and, accordingly, a capital gain or
loss may be recognized. Each investor should consult a tax Adviser regarding the
effect of federal, state, local, and foreign taxes on an investment in the Fund.
Dividends. A portion of the Fund's income may qualify for the dividends-received
deduction available to corporate shareholders to the extent that the Fund's
income is derived from qualifying dividends. Because the Fund may earn other
types of income, such as interest, income from securities loans, non-qualifying
dividends, and short-term capital gains, the percentage of dividends
12
<PAGE>
from the Fund that qualifies for the deduction generally will be less than 100%.
The Fund will notify corporate shareholders annually of the percentage of Fund
dividends that qualifies for the dividend received deductions.
A portion of the Fund's dividends derived from certain U.S. Government
obligations may be exempt from state and local taxation. Short-term capital
gains are distributed as dividend income. The Fund will send each shareholder a
notice in January describing the tax status of dividends and capital gain
distributions for the prior year.
Capital Gain Distribution. Long-term capital gains earned by the Fund from the
sale of securities and distributed to shareholders are federally taxable as
long-term capital gains, regardless of the length of time shareholders have held
their shares. If a shareholder receives a long-term capital gain distribution on
shares of the Fund, and such shares are held six months or less and are sold at
a loss, the portion of the loss equal to the amount of the long-term capital
gain distribution will be considered a long-term loss for tax purposes.
Short-term capital gains distributed by the Fund are taxable to shareholders as
dividends, not as capital gains.
PORTFOLIO TRANSACTIONS
The Fund will generally purchase and sell securities without regard to the
length of time the security has been held. Accordingly, it can be expected that
the rate of portfolio turnover may be substantial. The Fund expects that its
annual portfolio turnover rate will not exceed 50% under normal conditions.
However, there can be no assurance that the Fund will not exceed this rate, and
the portfolio turnover rate may vary from year to year.
High portfolio turnover in any year will result in the payment by the Fund of
above-average transaction costs and could result in the payment by shareholders
of above-average amounts of taxes on realized investment gains. Distributions to
shareholders of such investment gains, to the extent they consist of short-term
capital gains, will be considered ordinary income for federal income tax
purposes.
Decisions to buy and sell securities for the Fund are made by the Adviser
subject to review by the Corporation's Board of Directors. In placing purchase
and sale orders for portfolio securities for the Fund, it is the policy of the
Adviser to seek the best execution of orders at the most favorable price. In
selecting brokers to effect portfolio transactions, the determination of what is
expected to result in the best execution at the most favorable price involves a
number of largely judgmental considerations. Among these are the Adviser's
evaluation of the broker's efficiency in executing and clearing transactions.
Over-the-counter securities are generally purchased and sold directly with
principal market makers who retain the difference in their cost in the security
and its selling price. In some instances, the Adviser feels that better prices
are available from non-principal market makers who are paid commissions
directly.
13
<PAGE>
CUSTODIAN
CoreStates Bank, 1345 Chestnut Street, Philadelphia PA 19101, acts as custodian
for the Fund. As such, CoreStates Bank holds all securities and cash of the
Fund, delivers and receives payment for securities sold, receives and pays for
securities purchased, collects income from investments and performs other
duties, all as directed by officers of the Company. CoreStates does not exercise
any supervisory function over management of the Fund, the purchase and sale of
securities or the payment of distributions to shareholders.
TRANSFER AGENT
Declaration Services Company ("DSC") acts as transfer, dividend disbursing, and
shareholder servicing agent for the Fund pursuant to a written agreement with
the Company and the Adviser, dated September 15, 1998 . Under the agreement, DSC
is responsible for administering and performing transfer agent functions,
dividend distribution, shareholder administration, and maintaining necessary
records in accordance with applicable rules and regulations.
For the services to be rendered as transfer agent, The Adviser shall pay
Declaration Service Company an annual fee, paid monthly, based on the average
net assets of the Fund, as determined by valuations made as of the close of each
business day of the month.
ADMINISTRATION
Declaration Service Company also acts as Administrator to the Fund pursuant to a
written agreement with the Company and Adviser, dated September 15, 1998. The
Administrator supervises all aspects of the operations of the Fund except those
performed by the Fund's investment adviser under the Fund's investment advisory
agreement. The Administrator is responsible for:
(a) calculating the Fund's net asset value
(b) preparing and maintaining the books and accounts specified in Rule 31a-1
and 31a-2 of the Investment Company Act of 1940
(c) preparing financial statements contained in reports to stockholders of the
Fund
(d) preparing the Fund's federal and state tax returns
(e) preparing reports and filings with the Securities and Exchange Commission
(f) preparing filings with state Blue Sky authorities
(g) maintaining the Fund's financial accounts and records
For the services to be rendered as Administrator, The Adviser shall pay
Declaration Service Company an annual fee, paid monthly, based on the average
net assets of the Fund, as determined by valuations made as of the close of each
business day of the month.
DISTRIBUTOR
Declaration Distributors, Inc., 555 North Lane, Suite 6160, Conshohocken, PA
19428, will be the principal underwriter of the Fund's shares pursuant to a
written agreement with the Fund dated September 15, 1998. For its services to
the Fund, the Distributor will be paid a monthly fee equal to $20,000 annually.
Until the Fund reaches assets of $25 million, no fees will be paid to the
14
<PAGE>
Distributor. The Distributor is a wholly owned subsidiary of Declaration
Holdings, a Delaware corporation. The Distributor specializes in providing
distribution services to small and medium-sized mutual funds. The Distributor is
affiliated with Declaration Service Company.
INDEPENDENT ACCOUNTANTS
Tait, Weller & Baker, 8 Penn Center, Philadelphia, PA have agreed to act as the
Fund's independent auditors for the first fiscal year.
LEGAL COUNSEL
The Law Offices of David D. Jones, P.C., 555 North Lane, Conshohocken, PA,
19428, has passed on certain legal matters relating to this registration and
acts as legal counsel to the Company.
15
<PAGE>
REPORT OF INDEPENDENT AUDITORS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of
StockCar Stocks Mutual Fund, Inc.
Mooresville, North Carolina
We have audited the accompanying statement of assets and liabilities of The
StockCar Stocks Mutual Fund, Inc. (consisting of the StockCar Stocks Mutual
Fund). This financial statement is the responsibility of the Fund's management.
Our responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit of the statement of
assets and liabilities provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of the
StockCar Stocks Mutual Fund as of September 9, 1998, in conformity with
generally accepted accounting principles.
Philadelphia, Pennsylvania
September 9, 1998
16
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
STOCKCAR STOCKS MUTUAL FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 9, 1998
- --------------------------------------------------------------------------------
ASSETS
Cash $100,000
--------
LIABILITIES --
--------
NET ASSETS $100,000
========
Shares of capital stock outstanding, unlimited amount authorized 6,667
========
Net asset value, offering and redemption price per share $ 15.00
========
At September 9, 1998 the components of net assets were as follows:
Paid-in capital $100,000
========
- --------------------------------------------------------------------------------
*SEE NOTES TO STATEMENT OF ASSETS AND LIABILITIES
STOCKCAR STOCKS MUTUAL FUND
NOTE TO STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 9, 1998
- --------------------------------------------------------------------------------
(1) ORGANIZATION
StockCar Stocks Mutual Fund, Inc. (the "COMPANY"), is registered under the
Investment Company Act of 1940, as amended (the "1940 ACT"), as an open-end
management investment company and is authorized to issue shares of capital
stock. The Company currently offers shares of capital stock in one
portfolio, the StockCar Stocks Mutual Fund.
The Company was organized on May 18, 1998, and between that date and
September 9, 1998, the Company had no operations other than those relating
to organizational matters and the registration of its shares under
applicable securities laws.
- --------------------------------------------------------------------------------
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial Statements included in Part B
Report of Independent Auditors
Statement of Assets and Liabilities
(b) Exhibits
1. Articles of Incorporation
2. Bylaws of Registrant
3. Voting Company Agreements [Not Applicable]
4. Shareholder Rights [See Exhibit 1, Articles of Incorporation, Article
IV]
5. Investment Advisory Agreement
6. Distribution Agreement
7. Bonus, Profit Sharing and other Compensation Plans for Directors [Not
Applicable]
8. Custodian Agreement
9. Operating Services Agreement
9.1 Investment Services Agreement
10. Opinion of Counsel
11. Consent of Independent Auditors
12. Financial Statements omitted from item 23 [Not Applicable]
13. Subscription Agreement
13.1 New Account Application
14. Individual Retirement Account Custodial Agreement
15. Rule 12b-1 Plan of Distribution [Not Applicable]
16. Performance Computation Schedules [Not Applicable]
17. Financial Data Schedule
18. Rule 18f-3 Plan [Not Applicable]
Item 25. Persons Controlled by or under Common Control with Registrant.
- -------- --------------------------------------------------------------
No person is directly or indirectly controlled by, or under common control with
the Registrant. StockCar Stocks Advisors, LLC intends to purchase 10,000 shares
of the Fund prior to the effective ate of the Fund's registration and will be
deemed initially to control the Fund.
Item 26. Number of Holders of Securities.
- -------- --------------------------------
As of the date of filing of this registration statement there were no record
holders of capital stock of registrant. StockCar Stocks Advisors, LLC intends to
purchase 10,000 shares of the Fund prior to the effective ate of the Fund's
registration and will be deemed initially to control the Fund.
Item 27. Indemnification.
- -------- ----------------
Section 2-418 of the General Corporation Law of Maryland authorizes the
registrant to indemnify its directors and officers under specified
circumstances. Section 7 of Article VII of the bylaws of the registrant (exhibit
2 to the registration statement, which is incorporated herein by reference)
provides in effect that the registrant shall provide certain indemnification to
its directors and officers. In accordance with section 17(h) of the Investment
Company Act, this provision of the bylaws shall not protect any person against
any liability to the registrant or its shareholders to which he or she would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.
Item 28. Business and Other Connections of Investment Adviser.
- -------- -----------------------------------------------------
The Adviser is a new company. It has no other business or other connections.
Item 29. Principal Underwriters.
- -------- -----------------------
Declaration Distributors, Inc., 555 North Lane, Suite 6160, Conshohocken, PA
will be the Fund's principal underwriter.
Item 30. Location of Accounts and Records.
- -------- ---------------------------------
Declaration Service Company.
555 North Lane, Suite 6160
Conshohocken, PA
StockCar Stocks Advisers, LLC
256 Raceway Drive, Suite 11
Mooresville, NC 28115
Item 31. Management Services.
- -------- --------------------
Declaration Services Company.
555 North Lane, Suite 6160
Conshohocken, PA
Item 32. Undertakings.
- -------- -------------
The Registrant will file a post effective amendment containing financial
statements which need not be certified, within four to six months from the
effective date of this registration statement.
Registrant undertakes to call a meeting of shareholders for purposes of voting
upon the question of removal of one or more Directors when requested in writing
to do so by the holders of at least 10% of the Company's outstanding shares, and
in connection with such meeting, to comply with the provisions of Section 16(c)
of the Investment Company Act of 1940 relating to shareholder communications.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration to
be signed on its behalf by the undersigned, thereto duly authorized, in the City
of Charlotte and State of North Carolina on the 12th day of September, 1998.
StockCar Stocks Mutual Fund, Inc.
(Registrant)
By: /s/ John P. Allen, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
Name Title Date
/s/ Kim Torrence Director, Secretary September 11, 1998
/s/ Pamela K. Clement Director September 11, 1998
/s/ David M. Furr Director September 11, 1998
/s/ Sean M. Jones Director September 11, 1998
/s/ Scott R. Poole Director September 11, 1998
/s/ Andrew Miller Director September 11, 1998
/s/ Heather Wharton- Director September 11, 1998
Flynn
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Description
- ------- -----------------------
EX-99.B1 Registrant's Articles of Incorporation
EX-99.B2 Registrant's Bylaws
EX-99.B5 Incorporated by reference from Pre-effective Amendment # 1 filed
on or about July 29, 1998.
EX-99.B6 Incorporated by reference from Pre-effective Amendment # 1 filed
on or about July 29, 1998.
EX-99.B8 Custodian Agreement with CoreStates Bank
EX-99.B9 Incorporated by reference from Pre-effective Amendment # 1 filed
on or about July 29, 1998.
EX-99.B9.1 Incorporated by reference from Pre-effective Amendment # 1 filed
on or about July 29, 1998.
EX-99.B10 Opinion of Counsel
EX-99.B11 Consent of Independent Auditors
EX-99.B13 Subscription Agreement
EX-99.B13.1 New Account Application
EX-99.B14 Individual Retirement Account Agreement
EX-99.B17 Financial Data Schedule
- --------------------------------------------------------------------------------
EX-99.B1
ARTICLES OF INCORPORATION
OF
STOCKCAR STOCKS MUTUAL FUND, INC.
FIRST: The undersigned, Vera M. Norris, whose post office address is 11
East Chase St., Baltimore, MD 21202 being at least eighteen years of age, does
hereby form a corporation under the General Laws of the State of Maryland.
SECOND: The name of the corporation (which is hereinafter called the
Corporation) is:
STOCKCAR STOCKS MUTUAL FUND, INC.
THIRD: The purpose or purposes of the corporation shall be: Regulated
Investment Company
FOURTH: The post office address of the principal office of the Corporation
in Maryland is 11 East Chase Street, Baltimore, MD 21202. The name and post
office address of the resident agent is CSC-Lawyers Incorporating Service
Company, at the same address. Said resident agent is a domestic corporation of
the State of Maryland.
FIFTH: The total number of shares of stock which the Corporation has
authority to issue is
Five Hundred Million (500,000,000) at 0.0001 par value
SIXTH: THE NUMBER OF DIRECTORS OF THE Corporation shall be 1 which number
may be increased or decreased pursuant to the by-laws of the Corporation, and so
long as there are less than three (3) stockholders, the number of directors may
be less than three (3) but not less than the number of stockholders, and the
name (s) of the director (s) who shall act until their successors are duly
chosen and qualified is (are):
Terence P. Smith
SEVENTH: the duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, I have signed these Articles of Incorporation on May
18, 1998, and severally acknowledged the same to be my act.
----------------------------
Vera M. Norris, Incorporator
ACTION OF SOLE INCORPORATOR
STOCKCAR STOCKS MUTUAL FUND, INC.
- ---------------------------------
The undersigned, without a meeting, being the sole incorporator of the
Corporation, does hereby elect the person(s) listed below to serve as
director(s) of the corporation until the first annual meeting of shareholders
and until their successors are elected and qualify:
TERENCE P. SMITH
---------------------------
Vera M. Norris
Incorporator
Dated: May 18, 1998
- --------------------------------------------------------------------------------
EX-99.B2
BY-LAWS OF
STOCKCAR STOCKS MUTUAL FUND, INC.
ARTICLE I
Offices
Section 1. Principal Office. The principal office of the Corporation in the
State of Maryland shall be in the City of Baltimore.
Section 2. Other Offices. The Corporation may have such other offices in
such places as the Board of Directors may from time to time determine.
ARTICLE II
Meetings of Shareholders
Section 1. Annual Meeting. Subject to this Article II, an annual meeting of
Shareholders for the election of Directors and the transaction of such other
business as may properly come before the meeting shall be held at such time and
place as the Board of Directors shall select. The Corporation shall not be
required to hold an annual meeting of its Shareholders in any year in which the
election of directors is not required to be acted upon under the Investment
Company Act of 1940.
Section 2. Special Meetings. Special meetings of Shareholders may be called
at any time by the President, the Secretary or by a majority of the Board of
Directors and shall be held at such time and place as may be stated in the
notice of the meeting.
Special meetings of the Shareholders shall be called by the Secretary upon
receipt of written request of the holders of shares entitled to cast not less
than 10% of the votes entitled to be cast at such meeting, provided that (1)
such request shall state the purposes of such meeting and the matters proposed
to be acted on, and (2) the Shareholders requesting such meeting shall have paid
to the Corporation the reasonably estimated cost of preparing and mailing the
notice thereof, which the Secretary shall determine and specify to such
Shareholders. No special meeting shall be called upon the request of
Shareholders to consider any matter which is substantially the same as a matter
voted upon at any special meeting of the Shareholders held during the preceding
12 months, unless requested by the holders of a majority of all shares entitled
to be voted at such meeting.
Section 3. Place of Meetings. Meetings of Shareholders shall be held at a
location within the Continental United States as the Board of Directors may from
time to time determine.
Section 4. Notice of Meetings; Waiver of Notice. Notice of the place, date
and time of the holding of each Shareholders' meeting and, if the meeting is a
special meeting, the purpose or purposes of the meeting, shall be given
personally or by mail, not less that ten (10) nor more that ninety (90) days
before the date of such meeting, to each Shareholder entitled to vote at such
meeting and to each other shareholder entitled to notice of the meeting. Notice
by mail shall be deemed to be duly given when deposited in the United States
mail addressed to the shareholder at his or her address as it appears on the
records of the Corporation, with postage thereon prepaid.
Notice of any meeting of Shareholders shall be deemed waived by any shareholder
who shall attend such meeting in person or by proxy, or who shall, either before
or after the meeting, submit a signed waiver of notice which is filed with the
records of the meeting.
Section 5. Quorum, Adjournment of Meetings. The presence at any
Shareholders' meeting, in person or by proxy, of Shareholders of one third of
the shares of the stock of the Corporation thereat shall be necessary and
sufficient to constitute a quorum for the transaction of business, except for
any matter which, under applicable statutes or regulatory requirements, requires
approval by a separate vote of one or more classes of stock, in which case the
presence in person or by proxy of Shareholders of one third of the shares of
stock of each class required to vote as a class on the matter shall constitute a
quorum. The holders of a majority of shares entitled to vote at the meeting and
present in person or by proxy, whether or not sufficient to constitute a quorum,
or, any officer present entitled to preside or act as Secretary of such meeting,
may adjourn the meeting without determining the date of a new meeting, or
without notice to a date not more than 120 days after the original record date.
Any business that might have been transacted at the meeting originally called
and so adjourned may be transacted at any such subsequent meeting at which a
quorum is present.
Section 6. Organization. At each meeting of the Shareholders, the Chairman
of the Board (if one has been designated by the Board), or in his or her absence
or inability to act, the President, or in the absence or inability to act of the
Chairman of the Board and the President, the Vice President, shall act as
chairman of the meeting; provided, however, that if no such officer is present
or able to act, a chairman of the meeting shall be elected by a majority of the
Shareholders, present in person or by proxy, at the meeting. The Secretary, or
in his or her absence or inability to act, any person appointed by the chairman
of the meeting, shall act as secretary of the meeting and keep the minutes
thereof.
Section 7. Order of Business. The order of business at all meetings of the
Shareholders shall be as determined by the chairman of the meeting.
Section 8. Voting. Except as otherwise provided by statute or the Articles
of Incorporation, each holder of record of shares of stock of the Corporation
having voting power shall be entitled at each meeting of the Shareholders to one
vote for every full share of such stock, with a fractional vote for any
fractional shares, standing in his or her name on the record of Shareholders of
the Corporation as of the record date determined pursuant to Section 9 of this
Article, or if such record date shall not have been so fixed, then at the later
of (i) the close of business on the day on which notice of the meeting is mailed
or (ii) the thirtieth day before the meeting.
Each shareholder entitled to vote at any meeting of Shareholders may authorize
another person or persons to act for him or her by a proxy signed by such
shareholder or his or her attorney-in-fact. No proxy shall be valid after the
expiration of eleven months from the date thereof, unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the shareholder
executing it, except in those cases where such proxy states that it is
irrevocable and where law permits an irrevocable proxy. Except as otherwise
provided by statute, the Articles of Incorporation or these By-Laws, any
corporate action to be taken by vote of the Shareholders shall be authorized by
a majority of the total votes validly cast at a meeting of Shareholders at which
a quorum is present.
If a vote shall be taken on any question other than the election of directors,
which shall be by written ballot, then unless required by statute or these
By-Laws, or determined by the chairman of the meeting to be advisable, any such
vote need not be by ballot. On a vote by ballot, each ballot shall be signed by
the shareholder voting, or by his or her proxy, if there be such proxy, and
shall state the number of shares voted.
Section 9. Fixing of Record Date. The Board of Directors may fix a time not
less that 10 nor more than 90 days prior to the date of any meeting of
Shareholders or prior to the last day on which the consent or dissent of
Shareholders may be effectively expressed for any purpose without a meeting, as
the time as of which Shareholders entitled to notice of and to vote at such a
meeting or whose consent or dissent is required or may be expressed for any
purpose, as the case may be, shall be determined; and all persons who were
holders of record of voting stock at such time and no other shall be entitled to
notice of and to vote at such meeting or to express their consent or dissent, as
the case may be. If no record date has been fixed, the record date for the
determination of Shareholders entitled to notice of or to vote at a meeting of
Shareholders shall be the later of the close of business on the day on which
notice of the meeting is mailed or the thirtieth day before the meeting, or, if
notice is waived by all Shareholders, at the close of business on the tenth day
next preceding the day on which the meeting is held. The Board of Directors may
fix a record date for determining Shareholders entitled to receive payment of a
dividend or distribution, but such date shall be not more that 90 days before
the date on which such payment is made. If no record date has been fixed, the
record date for determining Shareholders entitled to receive dividends or
distributions shall be the close of business on the day on which the resolution
of the Board of Directors declaring the dividend or distribution is adopted, but
the payment shall not be made more than 60 days after the date on which the
resolution is adopted.
Section 10. Consent of Shareholders in Lieu of Meeting. Except as otherwise
provided by statute or the Articles of Incorporation, any action required to be
taken at any meeting of Shareholders, or any action which may be taken at any
meeting of such Shareholders, may be taken without a meeting, without prior
notice and without a vote, if the following are filed with the records of
Shareholders meetings: (i) a unanimous written consent which sets forth the
action and is signed by each shareholder entitled to vote on the matter, and
(ii) a written waiver of any right to dissent signed by each shareholder
entitled to notice of the meeting but not entitled to vote thereat.
ARTICLE III
Board of Directors
Section 1. General Powers. The business and affairs of the Corporation
shall be managed under the direction of the Board of Directors and all powers of
the Corporation may be exercised by or under the authority of the Board of
Directors.
Section 2. Number of Directors. The number of directors shall be fixed from
time to time by resolution of the Board of Directors adopted by a majority of
the Directors then in office; provided, however, that the number of Directors
shall in no event be less that three (3) nor more than fifteen (15) except that
the Corporation may have less than three (3) but not less than one (1) Director
if there is no stock outstanding, and may have a number of Directors no fewer
than the number of Shareholders so long as there are fewer than three (3)
Shareholders. Any vacancy created by an increase in Directors may be filled in
accordance with Section 6 of this Article III. No reduction in the number of
Directors shall have the effect of removing any Director from office prior to
the expiration of his or her term unless such Director is specifically removed
pursuant to Section 5 of this Article III at the time of such decrease.
Directors need not be Shareholders.
Section 3. Election and Term of Directors. Directors shall be elected
annually, by written ballot at the annual meeting of Shareholders or a special
meeting held for that purpose; provided, however, that if no annual meeting of
the Shareholders of the Corporation is required to be held in a particular year
pursuant to Section 1 of Article II of these By-Laws, Directors shall be elected
at the next annual meeting held. The term of office of each Director shall be
from the time of his or her election and qualification until the election of
Directors next succeeding his or her election and until his or her successor
shall have been elected and shall have qualified.
Section 4. Resignation. A director of the Corporation may resign at any
time by giving written notice of his or her resignation to the Board, or the
Chairman of the Board, or the President, or the Secretary. Any such resignation
shall take effect at the time specified therein or, if the time when it shall
become effective shall not be specified therein, immediately upon its receipt;
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 5. Removal of Directors. Any Director of the Corporation may be
removed by the Shareholders by a vote of a majority of the shares entitled to be
cast for the election of Directors.
Section 6. Vacancies. If any vacancies shall occur in the Board of
Directors (i) by reason of death, resignation, removal or otherwise, the
remaining directors shall continue to act, and, subject to the provisions of the
Investment Company Act of 1940, such vacancies (if not previously filled by the
Shareholders) may be filled by a majority of the remaining Directors, although
less than a quorum, and (ii) by reason of an increase in the authorized number
of Directors, such vacancies (if not previously filled by the Shareholders) may
be filled only by a majority vote of the entire Board of Directors.
Section 7. Offices, Records, Places of Meetings. The Directors may have one
or more offices and may keep the books of the Corporation outside the State of
Maryland, and within or without the United States of America, at any office or
offices of the Corporation or at any other place as they may from time to time
by resolution determine; and in the case of meetings of the Board of Directors,
such meetings may be held at any place, within or without the United States of
America, as the Board may from time to time by resolution determine, or as shall
be specified or fixed in the respective notices or waivers of notice thereof.
Section 8. Regular Meetings. The Board of Directors from time to time may
provide by resolution for the holding of regular meetings and fix their time and
place as the Board of Directors may determine. Notice of such regular meetings
need not be in writing, provided that notice of any change in the time or place
of such fixed regular meetings shall be communicated promptly to each Director
not present at the meeting at which such change was made, in the manner provided
in Section 9 of this Article III for notice of special meetings. Members of the
Board of Directors or any committee designated thereby may participate in a
meeting of such Board or committee by telephone conference or other
communications method 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, subject to the requirements of the
Investment Company Act of 1940.
Section 9. Special Meetings. Special meetings of the Board of Directors may
be held at any time or place and for any purpose when called by the President,
the Secretary or two or more of the Directors. Notice of special meetings,
stating the time and place, shall be communicated to each Director personally by
telephone or transmitted to him or her by mail, telegraph, telefax, telex,
cable, e-mail or wireless at least one day before the meeting.
Section 10. Waiver of Notice. No notice of any meeting of the Board of
Directors or a committee of the Board need be given to any Director who is
present at the meeting or who waives notice of such meeting in writing (which
waiver shall be filed with the records of such meeting), either before or after
the time of the meeting.
Section 11. Quorum and Voting. At all meetings of the Board of Directors,
the presence of one third of the entire Board of Directors shall constitute a
quorum unless there are only two or three Directors, in which case two Directors
shall constitute a quorum. If there is only one Director, the sole Director
shall constitute a quorum. At any adjourned meeting at which a quorum was
present, any business may be transacted at a subsequent meeting, at which a
quorum is present, which might have been transacted at the meeting as originally
called.
Section 12. Organization. The Board may, by resolution adopted by a
majority of the entire Board, designate a Chairman of the Board, who shall
preside at each meeting of the Board. In the absence or inability of the
Chairman of the Board to preside at a meeting, the President, or, in his or her
absence or inability to act, another Director chosen by a majority of the
Directors present, shall act as chairman of the meeting and preside thereat. The
Secretary (or, in his or her absence or inability to act, any person appointed
by the Chairman) shall act as secretary of the meeting and keep the minutes
thereof.
Section 13. Written Consent of Directors in Lieu of a Meeting. Subject to
the provisions of the Investment Company Act of 1940, as amended, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting if all members of the Board
or committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of the proceedings of the Board or
committee.
Section 14. Compensation. Directors may receive compensation for services
to the Corporation in their capacities as directors or otherwise in such manner
and in such amounts as may be fixed from time to time by the Board, subject to
any limitations on such compensation as provided in the Investment Company Act
of 1940.
ARTICLE IV
Committees
Section 1. Organization. By resolution adopted by the Board of Directors,
the Board may designate one or more committees, including an Executive
Committee, composed of two or more Directors. The Board of Directors shall elect
the Chairmen of such committees. The Board of Directors shall have the power at
any time to change the members of such committees and to fill vacancies in the
committees. The Board may delegate to these committees any of its powers, except
the power to authorize the issuance of stock, declare a dividend or distribution
on stock, recommend to Shareholders any action requiring shareholder approval,
amend these By-Laws, or approve any merger or share exchange which does not
require shareholder approval. If the Board of Directors has given general
authorization for the issuance of stock, a committee of the Board, in accordance
with a general formula or method specified by the Board by resolution or by
adoption of a stock option or other plan, may fix the terms of stock subject to
classification or reclassification and the terms on which any stock may be
issued, including all terms and conditions required or permitted to be
established or authorized by the Board of Directors.
Section 2. Proceedings and Quorum. In the absence of an appropriate
resolution of the Board of Directors, each committee may adopt such rules and
regulations governing its proceedings, quorum and manner of acting as it shall
deem proper and desirable. In the event any member of any committee is absent
from any meeting, the members thereof present at the meeting, whether or not
they constitute a quorum, may appoint a member of the Board of Directors to act
in the place of such absent member.
ARTICLE V
Officers, Agents and Employees
Section 1. General. The officers of the Corporation shall be a President, a
Secretary and a Treasurer, and may include one or more Vice Presidents,
Assistant Secretaries or Assistant Treasurers, and such other officers as may be
appointed in accordance with the provisions of Section 8 of this Article.
Section 2. Election, Tenure and Qualifications. The officers of the
Corporation, except those appointed as provided in Section 8 of this Article V,
shall be elected by the Board of Directors at its first meeting and thereafter
annually at an annual meeting. If any officers are not chosen at any annual
meeting, such officers may be chosen at any subsequent regular or special
meeting of the Board. Except as otherwise provided in this Article V, each
officer chosen by the Board of Directors shall hold office until the next annual
meeting of the Board of Directors and until his or her successor shall have been
elected and qualified. Any person may hold one or more offices of the
Corporation except the offices of President and Vice President.
Section 3. Removal and Resignation. Whenever in the judgment of the Board
of Directors the best interest of the Corporation will be served thereby, any
officer may be removed from office by the vote of a majority of the members of
the Board of Directors at any regular meeting or at a special meeting called for
such purpose. Any officer may resign his office at any time by delivering a
written resignation to the Board of Directors, the President, the Secretary, or
any Assistant Secretary. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
Section 4. President. The president shall be the chief executive officer of
the Corporation.. Subject to the supervision of the Board of Directors, he or
she shall have general charge of the business, affairs and property of the
Corporation, and general supervision over its officers, employees and agents.
Except as the Board of Directors may otherwise order, he or she may sign in the
name and on behalf of the Corporation all deeds, bonds, contracts, or
agreements. He or she shall exercise such other powers and perform such other
duties as from time to time may be assigned to him or her by the Board of
Directors.
Section 5. Vice president. The Board of Directors may from time to time
elect one or more Vice Presidents who shall have such powers and perform such
duties as from time may be assigned to them by the Board of Directors or the
President. At the request or in the absence or disability of the President, the
Vice President (or, if there are two or more Vice Presidents then the more
senior of such officers present and able to act) may perform all the duties of
the President and, when so acting, shall have all the powers of and be subject
to all the restrictions upon the President. Any Vice President may perform such
duties as the Board of Directors may assign.
Section 6. Treasurer and Assistant Treasurer. The Treasurer shall be the
principal financial and accounting officer of the Corporation and shall have
general charge of the finances and books of account of the Corporation. Except
as otherwise provided by the Board of Directors, he or she shall have general
supervision of the funds and property of the Corporation and of the performance
by the Custodian of its duties with respect thereto. He or she shall render to
the Board of Directors whenever directed by the Board, an account of the
financial condition of the Corporation and of all his or her transactions as
Treasurer; and as soon as possible after the close of each fiscal year, he or
she shall make and submit to the Board of Directors a like report for such
fiscal year. He or she shall perform all acts incidental to the Office of
Treasurer, subject to the control of the Board of Directors.
Any Assistant Treasurer may perform such duties of the Treasurer as the
Treasurer or the Board of Directors may assign, and, in the absence of the
Treasurer, the Assistant Treasurer (or if there are two or more Assistant
Treasurers, then the more senior of such officers present and able to act) may
perform all the duties of the Treasurer.
Section 7. Secretary and Assistant Secretaries. The Secretary shall attend
to the giving and serving of all notices of the Corporation and shall record all
proceedings of the meetings of the Shareholders and Directors in books to be
kept for that purpose. He or she shall keep in safe custody the seal of the
corporation, and shall have charge of the records for the Corporation, including
the stock books and such other books and papers as the Board of Directors may
direct and such books, reports, certificates and other documents required by law
to be kept, all of which shall at all reasonable times be open to inspection by
any Director. He or she shall perform such other duties as appertain to his or
her office or as may be required by the Board of Directors.
Any Assistant Secretary may perform such duties of the Secretary as the
Secretary or the Board of Directors may assign, and, in the absence of the
Secretary, he or she (or if there are two or more Assistant Secretaries, then
the more senior of such officers present and able to act) may perform all the
duties of the Secretary.
Section 8. Subordinate Officers. The Board of Directors from time to time
may appoint such other officers or agents as it may deem advisable, each of whom
shall have such title, hold office for such period, have such authority and
perform such duties as the Board of Directors may determine. The Board of
Directors may from time to time delegate to one or more officers or agents the
power to appoint any such subordinate officers or agents and to prescribe their
rights, terms of office, authorities and duties.
Section 9. Remuneration. The salaries or other compensation of the officers
of the Corporation shall be fixed from time to time by resolution of the Board
of Directors, except that the Board of Directors may by resolution delegate to
any person or group of persons the power to fix the salaries or other
compensation of any subordinate officers or agents appointed in accordance with
the provisions of Section 8 of this Article V.
Section 10. Surety Bonds. The Board of Directors may require any officer or
agent of the Corporation to execute a bond (including, without limitation, any
bond required by the Investment Company Act of 1940, as amended, and the rules
and regulations of the Securities and Exchange Commission) to the Corporation in
such sum and with such surety or sureties as the Board of Directors may
determine, conditioned upon the faithful performance of his or her duties to the
Corporation, including responsibility for negligence and for the accounting of
any of the Corporation's property, funds or securities that may come into his or
her hands.
ARTICLE VI
Indemnification
The Corporation shall indemnify (a) its Directors and officers, whether serving
the Corporation or, at its request, any other entity, to the full extent
required or permitted by (i) Maryland law now or hereafter in force, including
the advance of expenses under the procedures and to the full extent permitted by
law, and (ii) the Investment Company Act of 1940, as amended, and (b) other
employees and agents to such extent as shall be authorized by the Board of
Directors and as permitted by law. The foregoing rights of indemnification shall
not be exclusive of any other rights to which those seeking indemnification may
be entitled. The Board of Directors may take such action as is necessary to
carry out these indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such resolutions or contracts implementing
such provisions or such further indemnification arrangements as may be permitted
by law.
ARTICLE VII
Capital Stock
Section 1. Stock Certificates. The interest of each shareholder of the
Corporation may be evidenced by certificates for shares of stock in such form as
the Board of Directors may from time to time prescribe. The certificates
representing shares of stock shall be signed by or in the name of the
Corporation by the President or a Vice President and countersigned by the
Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer.
Certificates may be sealed with the actual corporate seal or a facsimile of it
or in any other form. Any or all of the signatures of the seal on the
certificate may be manual or facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate shall be issued, it may be issued by the Corporation
with the same effect as if such officer, transfer agent or registrar were still
in office at the date of issue unless written instructions of the Corporation to
the contrary are delivered to such officer, transfer agent or registrar.
Section 2. Stock Ledgers. The stock ledgers of the Corporation, containing
the names and addresses of the Shareholders and the number of shares held by
them respectively, shall be kept at the principal offices of the Corporation or,
if the Corporation employs a transfer agent, at the offices of the transfer
agent of the Corporation.
Section 3. Transfers of Shares. Transfers of shares of stock of the
Corporation shall be made on the stock records of the Corporation only by the
registered holder thereof, or by his or her attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary or with a transfer
agent or transfer clerk, and on surrender of the certificate or certificates, if
issued, for such shares properly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, with such proof of the
authenticity of the signature as the Corporation or its agents may reasonably
require and the payment of all taxes thereon. Except as otherwise provided by
law, the Corporation shall be entitled to recognize the exclusive right of a
person in whose name any share or shares stand on the record of Shareholders as
the owner of such share or shares for all purposes, including, without
limitation, the rights to receive dividends or other distributions, and to vote
as such owner, and the Corporation shall not be bound to recognize any equitable
or legal claim to or interest in any such share or shares on the part of any
other person. The Board may make such additional rules and regulations, not
inconsistent with these By-Laws, as it may deem expedient concerning the issue,
transfer and registration of certificates for shares of stock of the
Corporation.
Section 4. Transfer Agents and Registrars. The Board of Directors may from
time to time appoint or remove transfer agents and/or registrars of transfers of
shares of stock of the Corporation, and it may appoint the same person as both
transfer agent and registrar. Upon any such appointment being made all
certificates representing shares of capital stock thereafter issued shall be
countersigned by one of such transfer agents or by one of such registrars of
transfers or by both and shall not be valid unless so countersigned. If the same
person shall be both transfer agent and registrar, only one countersignature by
such person shall be required.
Section 5. Lost, Destroyed or Mutilated Certificates. The holder of any
certificates representing shares of stock of the Corporation shall immediately
notify the Corporation of any loss, destruction or mutilation of such
certificate, and the Corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it which the owner thereof shall
allege to have been lost or destroyed or which shall have been mutilated, and
the Board may, in its discretion, require such owner or his or her legal
representatives to give to the Corporation a bond in such sum, limited or
unlimited, and in such form and with such surety or sureties, as the Board in
its absolute discretion shall determine, to indemnify the Corporation against
any claim that may be made against it on account of the alleged loss or
destruction of any certificate, or issuance of a new certificate. Anything
herein to the contrary notwithstanding, the Board, in its absolute discretion,
may refuse to issue any such new certificate, except pursuant to legal
proceedings under the laws of the State of Maryland.
ARTICLE VIII
Seal
The seal of the Corporation shall be circular in form and shall bear, in
addition to any other emblem or device approved by the Board of Directors, the
name of the Corporation, the year of its incorporation and the words "Corporate
Seal" and "Maryland." The Board of Directors may otherwise alter the form of the
seal. Said seal may be used by causing it or a facsimile thereof to be impressed
or affixed or in any other manner reproduced. Any Officer or Director of the
Corporation shall have the authority to affix the corporate seal of the
Corporation to any document requiring the same.
ARTICLE IX
Fiscal Year
The fiscal year of the Corporation shall be determined by resolution of the
Board of Directors.
ARTICLE X
Depositories and Custodians
Section 1. Depositories. The funds of the Corporation shall be deposited
with such banks or other depositories as the Board of Directors of the
Corporation may from time to time determine.
Section 2. Custodians. All securities and other investments shall be
deposited in the safe keeping of such banks or other companies as the Board of
Directors of the Corporation may from time to time determine. Every arrangement
entered into with any bank or other company for the safe keeping of the
securities and investments of the Corporation shall contain provisions complying
with the Investment Company Act of 1940, as amended, and the general rules and
regulations thereunder.
ARTICLE XI
Execution of Instruments
Section 1. Checks, Notes, Drafts, etc. Checks, notes, drafts, acceptances,
bills of exchange and other orders or obligations for the payment of money shall
be signed by such officer or officers or person or persons as the Board or these
By-Laws provide.
Section 2. Sale or Transfer of Securities. Stock certificates, bonds or
other securities owned by the Corporation may be held on behalf of the
Corporation by a Custodian selected by the Board of Directors, and may be
transferred or otherwise disposed of only as allowed pursuant to these By-Laws
and pursuant to authorization by the Board; and when so authorized to be held on
behalf of the Corporation or sold, transferred or otherwise disposed of, may be
transferred from the name of the Corporation by the signature of the President,
any Vice President or the Treasurer, or pursuant to any procedure approved by
the Board of Directors, subject to applicable law.
ARTICLE XII
Independent Public Accountants
The Corporation shall employ an independent public accountant or a firm of
independent public accountants as its accountants to examine the accounts of the
Corporation and to sign and certify financial statements filed by the
Corporation.
ARTICLE XIII
Amendments
These By-Laws or any of them may be amended, altered or repealed at any regular
meeting of the Shareholders or at any special meeting of the Shareholders at
which a quorum is present or represented, provided that notice of the proposed
amendment, alteration or repeal be contained in the notice of such special
meeting. These By-Laws may also be amended, altered or repealed by the
affirmative vote of a majority of the Board of Directors, except any particular
By-Law which is specified as not subject to alteration or repeal by the Board of
Directors, subject to the requirements of the Investment Company Act of 1940, as
amended.
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EX-99.B8
CUSTODIAN AGREEMENT
STOCKCAR STOCKS MUTUAL FUND, INC.
THIS AGREEMENT, dated as of the 15th day of September, 1998 is by an
between StockCar Stocks Mutual Fund, Inc. (the "Company"), a corporation duly
organized under the laws of the state of Maryland, StockCar Stocks Advisers,
LLC, a limited liability company organized under the laws of the state of North
Carolina (the "Adviser"), and CoreStates Bank, N.A. (the "Bank")
WHEREAS, the Company and the Adviser have entered into an Operating
Services Agreement wherein the Adviser is obligated to provide, or arrange to
provide, certain services to the Company, including custodial services, and;
WHEREAS, the Adviser desires to appoint the Bank to act as Custodian of the
Company's portfolio securities, cash and other property from time to time
deposited with or collected by the Bank for the Company, and the Company
consents to such appointment, and;
WHEREAS, the Bank is qualified and authorized to act as Custodian for the
Company and the separate series thereof (each a "Fund", and collectively, the
"Funds"), and is willing to act in such capacity upon the terms and conditions
herein set forth;
NOW THERFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto, intending to be legally bound, do hereby agree as
follows:
SECTION 1. The terms defined in this Section 1, wherever used in this Agreement,
or in any amendment or supplement hereto, shall have the meanings herein
specified unless the context otherwise requires.
CUSTODIAN: The term Custodian shall mean the Bank in its capacity as Custodian
under this Agreement.
DEPOSITORY: The term depository means any depository service which acts as a
system for the central handling of securities where all securities of any
particular class or series of an issuer deposited within the system are treated
as fungible and may be transferred by bookkeeping entry without physical
delivery.
PROPER INSTRUCTIONS: For purposes of this Agreement, the Custodian shall be
deemed to have Proper Instructions upon receipt of written (including
instructions received by means of computer terminals or facsimile
transmissions), telephone or telegraphic instructions from a person or persons
authorized from time to time by the Directors of the Company to give the
particular class of instructions. Telephone or telegraphic instructions shall be
confirmed in writing by such persons as said Directors shall have from time to
time authorized to give the particular instructions without awaiting receipt of
written confirmation, and the Custodian shall not be liable for the Company's
failure to confirm such instructions in writing.
SECURITIES: The term securities means stocks, bonds, rights, warrants and all
other negotiable or non-negotiable paper issued in certificated or book-entry
form commonly known as "Securities" in banking custom or practice.
SHAREHOLDER: The term Shareholder shall mean the registered owner from time to
time of the Shares of the Company in accordance with the registry records
maintained by the Company or any agent on the Company's behalf.
SECTION 2. The Adviser hereby appoints the Custodian as Custodian of the
Company's cash, Securities and other property, to be held by the Custodian as
provided in this Agreement. The Custodian hereby accepts such appointment
subject to the terms and conditions hereinafter provided. The Bank shall open a
separate custodial account in the name of the Company on the books and records
of the Bank to hold the Securities of the Company deposited with, transferred to
or collected by the Bank for the account of each Fund of the Company, and a
separate cash account to which the Bank shall credit monies received by the Bank
for the account of or from each Fund of the Company. Such cash shall be
segregated from the assets of any and all other accounts of the Company and
shall be and remain the sole property of the Company.
SECTION 3. The Company shall from time to time file with the Custodian a
certified copy of each resolution of its Board of Directors authorizing certain
person or persons to give Proper Instructions and specifying the class of
instructions that may be given by each person to the Custodian under this
Agreement, together with certified signatures of such persons authorized to
sign, which shall constitute conclusive evidence of the authority of the
officers and signatories designated therein to act, and shall be considered in
full force and effect with the Custodian fully protected in acting in reliance
thereon until it receives written notice to the contrary; provided, however,
that if the certifying officer is authorized to give Proper Instructions, the
certification shall be also signed by a second officer of the Company.
SECTION 4. The Company will cause to be deposited with the Custodian hereunder
the applicable net asset value of the Shares sold from time to time whether
representing initial issue, other stock or reinvestments of dividends and/or
distributions payable to Shareholders.
SECTION 5. The Bank, acting as agent for the Company, is authorized, directed
and instructed, subject to the further provisions of this Agreement:
(a) to hold Securities issued only on bearer from in bearer form
(b) to register in the name of the nominee of the Bank, the Bank's
Depositories, or sub-custodians, (I) Securities issued only in
registered form, and (ii) Securities issued in both bearer and
registered form, which are freely interchangeable without penalty;
(c) to deposit any securities which are eligible foe deposit (I) with any
domestic or foreign Depository on such terms and conditions as such
Depository may require, including provisions for limitation or
exclusion of liability on the part of the Depository; and (ii) with
any sub-custodian which the Bank uses, including any subsidiary or
affiliate of the Bank;
(d) (i) to credit for the account of the Company all proceeds received
and payable on or in respect of the assets maintained hereunder.
(ii) to debit the account of the Company for the cost of acquiring
Securities the Bank has received for the Company, against
delivery of such Securities to the Bank;
(iii)to present for payment Securities and other obligations
(including coupons) upon maturity, when called foe redemption,
and when income payments are due, and
(iv) to make exchanges of Securities which, in the Bank's opinion, are
purely ministerial as, for example, the exchange of Securities in
temporary for Securities in definitive form or the mandatory
exchange of certificates;
(e) to forward to the Company, and/or any other person designated by the
Company, all proxies and proxy materials received by the Bank in
connection with Securities held in the Company's account, which have
been registered in the name of the Bank's nominee , or being held by
any Depository, or sub-custodian, on behalf of the Bank;
(f) to sell any fractional interest of any Securities which the Bank has
received resulting from any stock dividend, stock split, distribution,
exchange, conversion or similar activity;
(g) to release the Company's name, address and aggregate share position to
the issuers of any domestic Securities in the account of the Company,
provided any such information to any issuer;
(h) to endorse and collect all checks, drafts or other orders for the
payment of money received by the Bank for the account of or from the
Company;
(i) at the direction of the Company, to enroll designated Securities
belonging to the Company and held hereunder in a program for the
automatic reinvestment of all income and capital gains distributions
on those Securities in new shares (an "Automatic Reinvestment
Program"), or instruct any Depository holding such Securities to
enroll those Securities in an Automatic Reinvestment Program;
(j) At the direction of the Company, to receive, deliver and transfer
Securities and make payments and collections of monies in connection
therewith, enter purchase and sale orders and perform any other acts
incidental or necessary to the performance of the above acts with
brokers, dealer or similar agents selected by the Company, including
any broker, dealer or similar agent affiliated with the Bank, for the
account and risk of the Company in accordance with accepted industry
practice in the relevant market, provided, however, if it so
determined that any certificated Securities transferred to a
Depository or sub-custodian, the Bank, or the Banks nominee, the
Bank's sole responsibility for such Securities under this Agreement
shall be to safekeep the Securities in accordance with Section 11
hereof; and
(k) to notify the Company and/or any other person designated by the
Company upon receipt of notice by the Bank of any call for redemption,
render offer, subscription, rights, merger, consolidation,
reorganization or recapitalization which (I) appears in The Wall
Street Journal (New York edition), The Standard & Poor's Called Bond
Record for Preferred Stocks, Financial Daily Called Bond Service, The
Kenny Services, any official notifications from The Depository Trust
Company and such other publications or services to which the Bank may
from time to time subscribe, (ii) requires the Bank to act in response
thereto and (iii) pertain to Securities belonging to the Company and
held hereunder which have been registered in the name of the Bank's
nominee or are being held by a Depository or sub-custodian on behalf
of the Bank. Notwithstanding anything contained herein to the
contrary, the Company shall have the sole responsibility for
monitoring the applicable dates on which Securities with put option
features must be exercised. All solicitation fees payable to the Bank
unless expressly agreed to the contrary in writing by the Bank.
Notwithstanding anything in this Section to the contrary, the Bank is authorized
to hold Securities for the Company which have transfer limitations imposed upon
them by the Securities Act of 1933, as amended , or represent shares of mutual
funds (I) in the name of the Company, (ii) in the name of the Bank's nominee, or
(iii) with any Depository or sub-custodian
SECTION 6. The Custodian's compensation shall be as set forth in Schedule A
hereto attached, or as shall be set forth in amendments to such schedule
approved by the Company and the Adviser and to the extent such compensation
relates to services provided hereunder to such Fund. All expenses and taxes
payable with respect to the Securities in the account of the Company including,
without limitation, commission charges on purchases and sales and the amount of
any loss or liability for stockholders' assessments or otherwise, claimed or
asserted against the Bank's nominee by reason of any registration hereunder
shall be charged to the Adviser.
SECTION 7. In connection with its functions under this Agreement, the Custodian
shall:
(a) render to the Company a daily report of all monies received or paid on
behalf of the Company; and
(b) create, maintain, and retain all records relating to its activities
and obligations under this Agreement in such manner as will meet the
obligations of the Company with respect to the Custodian's activities
in accordance with generally accepted accounting principles. All
records maintained by the Custodian in connection with the performance
of its duties under this Agreement will remain the property of the
Company, and in the event of termination of this Agreement, will be
relinquished to the Company.
SECTION 8. Any Securities deposited with any Depository or with any
sub-custodian will be represented in accounts in the name of the Bank which
include only property held by the Bank as Custodian for customers in which the
Bank acts in a fiduciary or agency capacity.
Should any Securities which are forwarded to the Bank by the Company, and which
are subsequently deposited to the Bank's account in any Depository or with any
sub-custodian, or which the Company may arrange to deposit in the Bank's account
in any Depository or with any sub-custodian, not be deemed acceptable for
deposit by such Depository or sub-custodian, for any reason, and as a result
thereof there is a short position in the account of the Bank with the Depository
for such Security, the Company agrees to furnish the Bank immediately with like
Securities in acceptable form.
SECTION 9. The Company represents and warrants that: (i) it has the legal right,
power and authority to execute, deliver and perform this Agreement and to carry
out all of the transactions contemplated hereby; (ii) it has obtained all
necessary authorizations; (iii) the execution, delivery and performance of this
Agreement and the carrying out of any of the transactions contemplated and
performance of this Agreement and the carrying out of any of the transactions
contemplated hereby will not be in conflict with, result in a breach of or
constitute a default under any agreement or other instrument to which the
Company is a party of which is otherwise known to the Company; (iv) it does not
require the consent of approval of any governmental agency or instrumentality,
except any such consents and approvals which the Company has obtained; (v) the
execution and delivery of this Agreement by the Company will not violate any
law, regulation, charter, by-law, order of any court or governmental agency or
judgement applicable to the Company; and (vi) all persons executing this
Agreement on behalf of the Company are duly authorized to do so.
In the event any of the foregoing representation should become untrue, incorrect
or misleading, the Company agrees to notify the Bank immediately in writing
thereof.
The Adviser represents and warrants that: (I) it has the legal right, power and
authority to execute, deliver and perform this Agreement and to carry out all of
the transactions contemplated hereby; (ii) it has obtained all necessary
authorizations; (iii) the execution, delivery and performance of this Agreement
and the carrying out of any of the transactions contemplated and performance of
this Agreement and the carrying out of any of the transactions contemplated
hereby will not be in conflict with, result in a breach of or constitute a
default under any agreement or other instrument to which the Adviser is a party
of which is otherwise known to the Adviser; (iv) it does not require the consent
of approval of any governmental agency or instrumentality, except any such
consents and approvals which the Adviser has obtained; (v) the execution and
delivery of this Agreement by the Adviser will not violate any law, regulation,
charter, by-law, order of any court of governmental agency or judgement
applicable to the Adviser; and (vi) all persons executing this Agreement on
behalf of the Adviser are duly authorized to do so.
In the event any of the foregoing representation should become untrue, incorrect
or misleading, the Adviser agrees to notify the Bank immediately in writing
thereof.
SECTION 10. The Bank represents and warrants that: (I) it has the legal right,
power and authority to execute, deliver and perform this Agreement and to carry
out all of the transactions contemplated hereby; (ii) it has obtained all
necessary authorizations; (iii) the execution, delivery and performance of this
Agreement and the carrying out of any of the transactions contemplated hereby
will not be in conflict with, result in a breach of or constitute a default
under any agreement or other instrument to which the Bank is a party or which is
otherwise known to the Bank; (iv) it does not require the consent or approval of
any governmental agency or instrumentality, except any such consents or
approvals which the Bank has obtained; (v) the execution and delivery of this
Agreement by the Bank will not violate any law, regulation, charter, by-law,
order of any court or governmental agency or judgement applicable to the Bank;
and (vi) all persons executing this Agreement on behalf of the Bank and carrying
out the transactions contemplated hereby on behalf of the Bank are duly
authorized to do so. In the event that any of the foregoing representations
should become untrue, incorrect or misleading, the Bank agrees to notify the
Company and the Adviser immediately in writing thereof.
SECTION 11. All cash and Securities held by the Bank hereunder shall be kept
with the care exercised as to the Bank's own similar property. The Bank may at
its option insure itself against loss from any cause but shall be under no
obligation to insure for the benefit of the Company.
SECTION 12. No liability of any kind shall by attached to or incurred by the
Custodian by reason of its custody of the Company's assets held by it from time
to time under this Agreement, or otherwise by reason of its position as
Custodian hereunder except only for its own negligence, bad faith, or willful
misconduct in the performance of its duties as specifically set forth in the
this Agreement. Without limiting the generality of the foregoing sentence, the
Custodian:
(a) may rely upon the advice of counsel for the Company; and for any
action taken or suffered in good faith based upon such advice or
statements the Custodian shall not be liable to anyone;
(b) shall not be liable for anything done or suffered to be done in good
faith in accordance with any request or advice of, or based upon
information furnished by, the Company or its authorized officers or
agents;
(c) is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Company, or Proper Instructions, to the effect that a
resolution in the form submitted has been duly adopted by its Board of
Directors or by the Shareholders, as conclusive evidence that such
resolution has been duly adopted and is in full force and effect; and
(d) may rely and shall be protected in acting upon any signature, written
(including telegraph or other mechanical) instructions, request,
letter of transmittal, certificate, opinion of counsel, statement,
instrument, report, notice, consent, order, or other paper or document
reasonably believed by it to b genuine and to have been signed,
forwarded or presented by the purchaser, Company or other proper party
or parties.
SECTION 13. The Company, its successors and assigns do hereby fully indemnify
and hold harmless the Custodian its successors and assigns, from any and all
loss, liability, claims, demand, actions, suits and expenses of any nature as
the same may arise from the failure of the Company to comply with any law, rule,
regulation, or order of the United States, any state or any other jurisdiction,
governmental authority, body, or board relating to the sale, registration,
qualification of units of beneficial interest in the Company, or from the
failure of the Company to perform any duty or obligation under this Agreement.
Upon written request of the Custodian, the Company shall assume the entire
defense of any claim subject to the foregoing indemnity, or the joint defense
with the Custodian of such claim, as the Custodian shall request. The
indemnities and defense provisions of this Section 13 shall indefinitely survive
termination of this Agreement.
SECTION 14. This Agreement may be amended from time to time without notice to or
approval of the Shareholders by a supplemental agreement executed by the
Company, the Adviser and the Bank amending and supplementing this Agreement in
the manner mutually agreed.
SECTION 15. Either the Company or the Custodian may give one-hundred and twenty
days' (120) written notice to the other of the termination of this Agreement,
such termination to take effect at the time specified in the notice. In case
such notice of termination is given either by the Company or by the Custodian,
the Directors of the Company shall, by resolution duly adopted, promptly appoint
a successor Custodian, (the "Successor Custodian") which Successor Custodian
shall be a bank or a Trust company in good standing, with legal capacity to
accept custody of the cash and Securities of a mutual fund. Upon receipt of
Proper Instructions, the Custodian shall deliver such cash and Securities as it
may then be holding hereunder directly as above provided, the Custodian then
acting shall continue to act as Custodian under this Agreement.
Every Successor Custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its predecessor
Custodian. The Custodian ceasing to act shall nevertheless, upon request of the
Company and the Successor Custodian and upon payment of its charges and
disbursements, execute and instrument in form approved by its counsel
transferring to the Successor Custodian all the predecessor Custodian's rights,
duties, obligations and custody.
Subject to the provisions of Section 21 hereof, in case the Custodian shall
consolidate with or merge into any other corporation, the corporation remaining
after or resulting from such consolidation or merger shall ipso facto without
the execution or filing of any papers or other documents, succeed to and be
substituted for the Custodian with like effect as though originally named as
such, provided, however, in every case that said Successor corporation maintains
the qualifications set out in Section 17(f) of the Investment Company Act of
1940, as amended.
SECTION 16. This Agreement shall take effect when assets of the Company are
first delivered to the Custodian.
SECTION 17. This Agreement may be executed in two or more counterparts, each of
which when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
SECTION 18. A copy of the Articles of Incorporation of the Company is on file
with the Secretary of State of Maryland, and notice is hereby given that this
instrument is executed on behalf of the Company only, and that the obligations
of this instrument are not binding upon any of the Directors, officers or
Shareholders of the Company individually, but binding only upon the assets and
property of the Company. No Fund of the Company shall be liable for the
obligations of any other Fund of the Company.
SECTION 19. The Custodian shall create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Company under the Investment Company Act of 1940, as amended,
with particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder, applicable Federal and state tax laws and any other law or
administrative rules or procedures which may be applicable to the Company.
Subject to security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian, the books and
records of the Custodian pertaining to this Agreement shall be open to
inspection and audit at any reasonable times by officers of, attorneys for, and
auditors employed by, the Company.
SECTION 20. Any sub-custodian appointed hereunder shall be qualified under
Section 17(f) of the 1940 act and will perform its duties in accordance with the
requirements of this Agreement.
SECTION 21. Nothing contained in this Agreement is intended to or shall require
the Custodian in any capacity hereunder to perform any functions or duties on
any holiday or other day of special observance on which the Custodian is closed.
Functions or duties normally scheduled to be performed on such days shall be
performed on, and as of, the next business day the Custodian is open.
SECTION 22. This Agreement shall extent to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Company without the written consent of
the Custodian, or by the Custodian without the written consent of the Company,
authorized or approved by a resolution of its Board of Directors.
SECTION 23. All communications (other that Proper Instructions which are to be
furnished hereunder to either party, or under any amendment hereto, shall be
sent by mail to the address listed below, provided that in the event that the
Bank, in its sole discretion, shall determine that an emergency exists, the Bank
may use such other means of communication as the Bank deems advisable.
To the Company: StockCar Stocks Mutual Fund, Inc.
256 Raceway Drive, Suite 11
Mooresville, NC 28115
To the Adviser: StockCar Stocks Advisors, LLC
256 Raceway Drive, Suite 11
Mooresville, NC 28115
To the Bank: CoreStates Bank N.A.
530 Walnut St.
Philadelphia, PA 19101-7618
SECTION 24. This Agreement, and any amendments hereto, shall be governed,
construed, and interpreted in accordance with the laws of The Commonwealth of
Pennsylvania applicable to agreements made and to be performed entirely within
such Commonwealth.
SECTION 25. Fees and expenses
As compensation for its services under this Agreement, the Custodian may retain
those fees which are specified in its published or otherwise generally
applicable fee schedule in effect at the time its services are being rendered.
The Company recognizes that this schedule might be changed from time to time
with prior notice to the Company.
MUTUAL FUND CUSTODY ADMINISTRATIVE FEES
1.0 basis points on the first $2.5 billion
.75 basis points on the next $2.5 billion
.50 basis points on the next $5.0 billion
.40 basis points on the remainder
MINIMUM ANNUAL FEE: $3,500
TRANSACTION FEES
$ 4.00 per trade and maturity through Depository Trust Company via DepLink
$10.00 per trade and maturity through Depository Trust Company via non DepLink
$10.00 per trade and maturity clearing book entry through Federal Reserve
$30.00 per transaction for GIC contracts/Physical Securities
$10.00 per trade and maturity clearing through Participants Trust Company
$ 4.00 paydowns on mortgage-backed securities
$ 5.50 Fed wire charge on Repo collateral in/out
$ 5.50/$7.50 other wired transfers in/out
$ 5.50 dividend reinvestment
$ 2.50 Fed charge for sale/return of collateral
$ 8.00 future contracts
$15.00 options
IN WITNESS WHEREOF, The Company, the Adviser and the Custodian have caused this
Agreement to be signed by their respective officers as of the day and year first
above written.
STOCKCAR STOCKS STOCKCAR STOCKS
MUTUAL FUND, INC. ADVISERS, LLC
- ----------------------- ----------------------
By: John P. Allen II By: John P. Allen II
President Chief Executive Officer
CORESTATES BANK N.A.
- -----------------------
Paul T. Cahill
Vice President
- --------------------------------------------------------------------------------
EX-99.B10
The Law Offices of David D. Jones, P.C.
555 North Lane, Suite 6160
Conshohocken, PA 19428
610-834-9158 (phone)
610-832-8128 (fax)
[email protected] (e-mail)
StockCar Stocks Mutual Fund, Inc. September 8, 1998
256 Raceway Drive, Suite 11
Mooresville, NC 28115
Dear Sirs:
As counsel to StockCar Stocks Mutual Fund, Inc. (the "Company"), a corporation
organized under the laws of the State of Maryland, I have been asked to render
my opinion with respect to the issuance of an indefinite number of shares of
beneficial interest of the Company (the "Shares") representing proportionate
interests in the StockCar Stocks Index Fund (the "Fund"). The Shares of the Fund
are a series of the Company consisting of one class of shares, the No-Load
Class, all as more fully described in the Prospectus and Statement of Additional
Information contained in the Registration Statement on Form N-1A, to which this
opinion is an exhibit, as filed with the Securities and Exchange Commission.
I have examined the Company's Articles of Incorporation, dated May 18, 1998, the
Prospectus and Statement of Additional Information contained in the Registration
Statement, and such other documents, records and certificates as deemed
necessary for the purposes of this opinion.
Based on the foregoing, I am of the opinion that the Shares, when issued,
delivered and paid for in accordance with the terms of the Prospectus and
Statement of Additional Information, will be legally issued, fully paid, and
non-assessable by the Company.
Very Truly Yours,
David D. Jones
Attorney & Counselor at Law
- --------------------------------------------------------------------------------
EX-99.B11
Consent of Independent Auditors
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the references to our firm in the Pre-Effective Amendment to the
Registration Statement on Form N-1A of the StockCar Stocks Mutual Fund, Inc. and
to the use of our report dated September 9, 1998 on the statement of assets and
liabilities of the StockCar Stocks Mutual Fund ("FUND"). Such statement of
assets and liabilities appears in the Fund's Statement of Additional
Information.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 9, 1998
- --------------------------------------------------------------------------------
EX-99.B13
SUBSCRIPTION AGREEMENT
StockCar Stocks Mutual Fund, Inc.
256 Raceway Drive, Suite 11
Mooresville, NC
Gentlemen:
The undersigned ("Subscriber") hereby subscribes for and agrees to acquire
from StockCar Stocks Mutual Fund, Inc., a corporation incorporated under the
laws of the State of Maryland (the "Corporation"), the number of shares of
$.0001 par value Common stock of The StockCar Stocks Index Fund (the "Shares")
of the Corporation shown below in consideration of a cash contribution of
$100,000 ($15.00 per share).
Subscriber hereby represents and warrants to the Corporation that:
(a) Subscriber hereby acknowledges and agrees that the shares will be issued in
reliance upon the exemption from registration contained in Section 4(2) of the
Securities Act of 1933 (the "Securities Act"), and that such Shares will or may
also be issued in reliance upon the exemptions from registration contained in
relevant sections of the Maryland Securities Act and/or comparable exemptions
contained in the securities laws of other jurisdictions to the extent
applicable, and that the transfer of such shares may be restricted or limited as
a condition to the availability of such exemptions.
(b) The shares are being purchased for investment for the account of the
undersigned and without the intent of participating directly or indirectly in a
distribution of such Shares, and the Shares will not be transferred except in a
transaction that is in compliance with any and all applicable securities laws.
(c) Subscriber has been supplied with, or has had access to, all information,
including financial statements and other financial information, of the
Corporation, to which a reasonable investor would attach significance in making
investment decisions, and has had the opportunity to ask questions of, and
receive answers from, knowledgeable individuals concerning the Corporation and
the Shares.
(d) Subscriber understands that no registration statement or prospectus with
respect to the corporation or the shares is yet effective, and Subscriber has
made his own inquiry and analysis with respect to the Corporation and the
shares.
(e) Subscriber personally, or together with his purchaser representative, has
such knowledge and experience in financial and business matters to be capable of
evaluating the merits and risks of an investment in the Corporation and the
Shares.
(f) Subscriber is financially able to bear the economic risk of this investment,
can afford to hold the shares for an indefinite period and can afford a complete
loss of this investment
Dated as of the 10th day of September, 1998
SHARES OF
THE STOCKCAR STOCKS INDEX FUND SUBSCRIBED PURCHASE AMOUNT
6,667 $100,000
SUBSCRIBED BY:
STOCKCAR STOCKS INVESTMENT ADVISERS, LLC
- -------------------------------------
John P. Allen II
President
ACCEPTED BY:
STOCKCAR STOCKS MUTUAL FUND, INC.
- -------------------------------------
John P. Allen II
President
- --------------------------------------------------------------------------------
EX-99.B13.1
New Account Application
"Invest in the companies
that invest in your sport" [sm]
1.87.RACE.FUND
www.stockcarstocks.com
Please do not use this form for retirement PO Box 844
plans. Request a separate application. Cohshohocken, PA 19428
- --------------------------------------------------------------------------------
1. Register Your Account (Choose A, B, C, or D)
- --------------------------------------------------------------------------------
A. [ ] Individual or [ ] Joint Tenants
Owner Name
________________________________________________________________________________
Social Security Number ___-__-____
and (if any)
Joint Owner Name
___________________________________________________________________________
(Joint Tenancy assumed unless otherwise specified)
B. [ ] Gift to a Minor Custodian's Name
___________________________________________________________________________
Minor's Name ______________________________________________________________
Minor's Social Security Number ___-__-____
Custodian's State of Residence ___________
[ ] Trust Trustee's Name ______________________________________________________
Name of Trust
___________________________________________________________________________
Date of Agreement _________________________________________________________
[ ] Corporation [ ] Partnership or [ ] Other type of Organization
Entity name
___________________________________________________________________________
Social Security Number ___-__ ____ Taxpayer ID Number ___-__-____
(If Sole Proprietor)
Corporations, Trusts and Partnerships
require completion of the Resolution
Section at the end of this form.
- --------------------------------------------------------------------------------
2. Please tell us where to mail reports and statements.
- --------------------------------------------------------------------------------
Address
___________________________________________________________________________
City State Zip
___________________________________________________________________________
Telephone Number ____-____-______ US Citizen: [ ] Yes [ ] No
- --------------------------------------------------------------------------------
3. Your Investment
- --------------------------------------------------------------------------------
Please make checks payable to StockCar Stocks Mutual Fund ($1,000 minimum)
[ ] Check enlcosed $_____________ [ ] Wired from Bank $_____________
Date ____________
Wire Number __________________
- --------------------------------------------------------------------------------
4. Dividend and Capital Gain Payment Options
- --------------------------------------------------------------------------------
(If no choice is made, dividends and capital gains will be reinvested.)
Income Dividends [ ] reinvested [ ] paid in cash
Capital Gains Distributions [ ] reinvested [ ] paid in cash
- --------------------------------------------------------------------------------
5. Telephone/Mail Redemptions
- --------------------------------------------------------------------------------
You may redeem shares from your account simply by calling Declaration
Service Company. Unless the bex is checked, the Telephone Mail Redemption
Service will not be established.
[ ] I want Telephone/Mail Redemption Service
- --------------------------------------------------------------------------------
6. Wire Redemptions
- --------------------------------------------------------------------------------
I/We authorize Declaration Service
Company to honor the request to be
authentic for wire redemptions proceeds
to bank/broker indicated.
Bank Name ________________________________________________________________
Address __________________________________________________________________
Account Number _________________________________
Bank Telephone Number _______-_______-___________
o A signature guarantee will be required if your bank registration does not
match you StockCar Stocks Mutual Fund account registrations. Please review
the rules of signature guarantees in the Prospectus.
- --------------------------------------------------------------------------------
7. StockCar Stocks Mutual Fund Automatic Investment Plan. A voided check must
be attached.
- --------------------------------------------------------------------------------
Bank Name ________________________________________________________________
City, State, and Zip in which bank is located _____________________________
Bank Transit/ABA Number __________________ Account Number _______________
(nine digits)
Select Monthly deposit (minimum $100) amount and day:
$__________ Amount of Deposit
[ ] 1st of the month (or next business day)
[ ] 15th of the month (or next business day)
- --------------------------------------------------------------------------------
8. Signature
- --------------------------------------------------------------------------------
Please sign application, enclose your check and mail to:
StockCar Stocks Mutual Fund
PO Box 844
Conshohocken, PA 19428-0844
I/We have full authority to purchase shares in the
StockCar Stocks Mutual Fund, and have received and
read a current Prospectus, agree to its terms and
understand that by signing below (a) I/we hereby
ratify all instructions given on this account and
agree that neither the Fund nor Declaration
Service Company will be liable for any loss, cost
or expense for acting upon such instructions (by
telephone or writing) believed by it to be genuine
and accordance with the procedures described in
the Prospectus, and (b) as required by Federal
Law, I/We certify under Penalties of Perjury (1)
that the Social Security or Taxpayer
Identification Number provided herein is correct
and (2) that the IRS has never notified me/us that
I/we are subject to backup withholding. (Note: if
part (2) of this sentence is not true in your
case, please strike out that part before signing.)
Owner/Custodian __________________________________________________
Date __________________
Joint Owner (if any) _____________________________________________
Date ___________________
Corporate Officers or Trustees (Please complete certification.)
Signature ________________________________________________________
Date ___________________
Title ___________________________________________
Signature ________________________________________________________
Date ___________________
Title ___________________________________________
- --------------------------------------------------------------------------------
Complete the certification below only if you are a corporation, partnership,
trust, or other organization.
- --------------------------------------------------------------------------------
Please retain a copy of this document for your files. Any modification of
the information contained in this section will require an Amendment to this
Application Form.
I hereby certify:
i) that I am the duly qualified ____________________ Corporate Seal of
_______________________ a ____________ duly organized and existing
under the laws of ___________ OR
ii) that __________________________________________________ is (are) the
currently acting trustee(s) / partner(s) of ___________.
That all actions by shareholders, directors, trustees, partners, and other
bodies necessary to execute the Purchase Application and establish an
account StockCar Stocks Mutual Fund have been taken, and further
That the following officer(s) or trustee(s) are, and until further notice
to StockCar Stocks Mutual Fund will be, duly authorized and empowered to
purchase, sell, assign, transfer and withdraw securities and funds from the
account established hereby.
Name Title Signature
_________________________ ________________________ ________________________
_________________________ ________________________ ________________________
Signature of certifying officer __________________________________________
Date _________________
- --------------------------------------------------------------------------------
EX-99.B14
Individual Retirement Account Agreement
"Invest in the companies
that invest in your sport" [sm]
1.87.RACE.FUND
www.stockcarstocks.com
This application will open: PO Box 844
TRADITIONAL IRA Cohshohocken, PA 19428
ROTH IRA
- --------------------------------------------------------------------------------
9. Participant Information
- --------------------------------------------------------------------------------
Name ______________________________________________________________________
Address ___________________________________________________________________
City _______________________________________ State ________ Zip ________
Home Phone #: ____-____-_______ Work Phone #: ____-____-______
Social Security Number ___-__-____ Date of Birth _______
US Citizen? Yes [ ] No [ ]
- --------------------------------------------------------------------------------
10. Account Information
- --------------------------------------------------------------------------------
Custodian: First Union National Bank
Sponsor of Plan: StockCar Stocks Mutual Fund
Initial Contribution $_____________ (Check type of IRA below. Only one box
may be checked.)
Traditional IRA
[ ] Traditional IRA for tax year __________
[ ] Rollover / Direct Rollover
[ ] Transfer from another Traditional IRA
Roth IRA
[ ] Regular Roth IRA for tax year ___________
[ ] Rollover Conversion Roth IRA
[ ] Contribution Conversion of $_____________
plus earnings of $_______________ for tax
year ____________
[ ] Transfer from another Roth IRA
[ ] Rollover from another Roth IRA
- --------------------------------------------------------------------------------
11. Beneficiary(ies) Designation
- --------------------------------------------------------------------------------
[ ] Primary [ ] Contingent ______________________ ____-___-______
Name Social Security Number
_______________________________________________________________________
Address
___________________________________________ ________________%
Relationship Share
[ ] Primary [ ] Contingent ______________________ ____-___-______
Name Social Security Number
_______________________________________________________________________
Address
___________________________________________ ________________%
Relationship Share
[ ] Primary [ ] Contingent ______________________ ____-___-______
Name Social Security Number
_______________________________________________________________________
Address
___________________________________________ ________________%
Relationship Share
In the event of my death, the balance in
the account shall be paid to the Primary
Beneficiaries who survive me in equal
shares (or in specified shares, if
indicated). If the Primary or Contingent
Beneficiary box is not checked for the
beneficiary, the beneficiary will be
deemed to be a Primary Beneficiary. If
none of the Primary Beneficiaries
survive me, the balance in the account
shall be paid to the Contingent
Beneficiaries who survive me in equal
shares (or in the specified shares, if
indicated).
- --------------------------------------------------------------------------------
12. Consent of Spouse
- --------------------------------------------------------------------------------
I consent to the above Beneficiary Designation.
Signature of Spouse: ___________________________________________ Date:
_______________ (Note: Consent of the Participant's Spouse may be required
in a community property or marital property state to effectively designate
a beneficiary other than or in addition to the Participant's Spouse.)
Disclaimer for Community and Property States: The Participant's Spouse may
have a property interest in the account and the right to dispose of the
interest by will. Therefore, the custodian disclaims any warranty as to the
effectiveness of the Participant's beneficiary designation or as to the
ownership of the account after the death of the Participants' Spouse. For
additional information, please consult your legal advisor.
- --------------------------------------------------------------------------------
13. Signatures
- --------------------------------------------------------------------------------
Under penalties of perjury, I certify that the above information (including
my social security number) is correct. I hereby agree to participate in the
Individual Retirement Custodial Account offered by the Custodian. I
acknowledge receipt of a copy of the plan document under which this Roth
Individual Retirement Account is established, a copy of this Adoption
Agreement, and a copy of the Disclosure Statement with respect to this Roth
Individual Retirement Account. I direct that all benefits upon my death be
paid as indicated above. In the event that this is a rollover contribution,
the undersigned hereby irrevocably elects, pursuant to the requirements of
Section 1.402(a)(5)-1T of the IRA regulations, to treat this contribution
as a rollover contribution.
Participant Signature: ____________________________________________________
Date: ______________
Signature of Custodian: ___________________________________________________
Date: ______________
EX-99.B17
Financial Data Schedule
The Company was established on May 18, 1998 and commenced offering shares of the
Fund on October 1, 1998. The Fund is a newly created fund, and as such, has not
yet developed an operating history. Financial Statements of the Fund will be
included in the Statement of Additional Information as they become available and
as required by law, [unless previously provided, in which event the Company will
promptly provide another copy, free of charge, upon request to: Declaration
Service Company, P.O. Box 844, Conshohocken, Pennsylvania 19428-0844.
