1933 Act Registration No. 888-8883
1940 Act Registration No. 333-59149
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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. [4]
Post-Effective Amendment No. ___
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Pre-Effective Amendment No. [4]
Post-Effective Amendment No. ___
THE SHEPHERD STREET FUNDS, INC.
(Exact name of registrant as specified in Charter)
480 Shepherd Street
Winston-Salem, North Carolina 27103
(Address of Principle Executive Offices and Zip Code)
336-768-7230
(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 on October 2, 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.
<PAGE>
THE SHEPHERD STREET EQUITY FUND
CROSS-REFERENCE SHEET
(As required by Rule 495)
ITEM NO. ON FORM N-1A CAPTION OR SUBHEADING IN PROSPECTUS
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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;
Cover Page
3. Condensed Financial Information. Fees and Expenses
4. General Description General Information;
of Registrant. Management of the Fund
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
Securities.
7. Purchase of Securities Being Purchasing Shares; Plan of Distribution;
Offered. Federal Taxes
8. Redemption or Repurchase Redeeming Shares; Plan of Distribution;
Federal Taxes
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; Investment
Holders of Securities. Adviser
16. Investment Advisory and other Investment Adviser; Fund Service
Services. Providers
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 (also covered under Items 7 & 8 of
Part A)
20. Tax Status. Tax Information
21. Underwriters Fund Service Providers
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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<PAGE>
Part A, Part B, and Part C of the Registrant's Registration Statement on Form
N-1A have been previously filed and are incorporated herein by reference. This
filing amends Exhibit 5 to Part C, previously filed on October 1, 1998.
<PAGE>
PART C
OTHER INFORMATION
Item 24 Financial Statements and Exhibits
(a) Financial Statements included in Part B
Independent Auditors Report
Statement of Assets and Liabilities
(b) Exhibits
5. Investment Advisory Agreement with Salem Investment Counselors, Inc.-
Enclosed
<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 2nd day of October, 1998.
The Shepherd Street Funds, Inc.
(Registrant)
By: /s/ David B. Rea, 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
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/s/ William R. Watson* Director October 2, 1998
/s/ Robert T. Beach* Director October 2, 1998
/s/ James T. Broyhill* Director October 2, 1998
/s/ Ralph Stockton* Director October 2, 1998
/s/ Helen C. Haynes* Director October 2, 1998
By David B. Rea as Attorney-In-Fact pursuant to Power of Attorney executed on or
about September 3, 1998.
<PAGE>
EXHIBIT INDEX
Exhibits
5. Investment Advisory Agreement with Salem Investment Counselors, Inc.
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EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
THE SHEPHERD STREET FUNDS, INC.
This Agreement is made and entered into as of the 30th day of September,
1998, by and between the Shepherd Street Funds, Inc., a Maryland corporation
(the "Fund"), and Salem Investment Counselors, Inc., a North Carolina
corporation (hereinafter referred to as "Adviser").
WHEREAS, the Fund is a diversified, open-end management investment company,
registered under the Investment Company Act of 1940, as amended (the "Act"), and
authorized to issue shares representing interests in the Shepherd Street Equity
Fund (the "Portfolio"); and
WHEREAS, Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of asset
management; and
WHEREAS, the Fund desires to retain Adviser to render certain investment
management services to the Fund and Adviser is willing to render such services;
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. OBLIGATIONS OF INVESTMENT ADVISER
(A) SERVICES. Adviser agrees to perform the following services (the
"Services") for the Fund:
(1) manage the investment and reinvestment of the Portfolio's assets;
(2) continuously review, supervise, and administer the investment program
of the Portfolio;
(3) determine, in its discretion, the securities to be purchased, retained
or sold (and implement those decisions);
(4) provide the Fund with records concerning Adviser's activities which
the Fund is required to maintain; and
(5) render regular reports to the Fund's officers and directors concerning
Adviser's discharge of the foregoing responsibilities.
Adviser shall discharge the foregoing responsibilities subject to the
control of the officers and the directors of the Fund and in compliance with
such policies as the directors may from time to time establish, and in
compliance with the objectives, policies, and limitations of the Portfolio set
forth in the Fund's prospectus and statement of additional information, as
amended from time to time, and with all applicable laws and regulations. All
Services to be furnished by Adviser under this Agreement may be furnished
through the medium of any directors, officers or employees of Adviser or through
such other parties as Adviser may determine from time to time.
Adviser agrees, at its own expense or at the expense of one or more of its
affiliates, to render the Services and to provide the office space, furnishings,
equipment and personnel as may be reasonably required in the judgment of the
Board of Directors of the Fund to perform the Services on the terms and for the
compensation provided herein. Adviser shall authorize and permit any of its
officers, directors and employees, who may be elected as directors or officers
of the Fund, to serve in the capacities in which they are elected.
Except to the extent expressly assumed by Adviser herein and except to the
extent required by law to be paid by Adviser, the Fund shall pay all costs and
expenses in connection with its operation and organization.
(B) BOOKS AND RECORDS. All books and records prepared and maintained by
Adviser for the Fund under this Agreement shall be the property of the Fund and,
upon request therefor, Adviser shall surrender to the Fund such of the books and
records so requested.
2. PORTFOLIO TRANSACTIONS. Adviser is authorized to select the brokers or
dealers that will execute the purchases and sales of portfolio securities for
the Portfolio and is directed to use its best efforts to obtain the best net
results as described in the Fund's prospectus from time to time. Adviser may, in
its discretion, purchase and sell portfolio securities from and to brokers and
dealers who provide the Portfolio with research, analysis, advice and similar
services, and Adviser may pay to these brokers and dealers, in return for
research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, provided that Adviser determines in good faith that
such commission is reasonable in terms either of that particular transaction or
of the overall responsibility of Adviser to the Fund and its other clients and
that the total commission paid by the Fund will be reasonable in relation to the
benefits to the Portfolio over the long-term. Adviser will promptly communicate
to the officers and the directors of the Fund such information relating to
portfolio transactions as they may reasonably request.
3. COMPENSATION OF ADVISER. The Fund will pay to Adviser on the last day of
each month a fee at an annual rate equal to 0.40% of the daily average net asset
value of the Portfolio, such fee to be computed daily based upon the net asset
value of the Portfolio as determined by a valuation made in accordance with the
Fund's procedure for calculating Portfolio net asset value as described in the
Fund's Prospectus and/or Statement of Additional Information. During any period
when the determination of a Portfolio's net asset value is suspended by the
directors of the Fund, the net asset value of a share of that Portfolio as of
the last business day prior to such suspension shall, for the purpose of this
Paragraph 3, be deemed to be net asset value at the close of each succeeding
business day until it is again determined.
4. STATUS OF INVESTMENT ADVISER. The services of Adviser to the Fund are
not to be deemed exclusive, and Adviser shall be free to render similar services
to others so long as its services to the Fund are not impaired thereby. Adviser
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund. Nothing in this
Agreement shall limit or restrict the right of any director, officer or employee
of Adviser, who may also be a director, officer, or employee of the Fund, to
engage in any other business or to devote his or her time and attention in part
to the management or other aspects of any other business, whether of a similar
nature or a dissimilar nature.
5. PERMISSIBLE INTERESTS. Directors, agents, and stockholders of the Fund
are or may be interested in Adviser (or any successor thereof) as directors,
partners, officers, or stockholders, or otherwise, and directors, partners,
officers, agents, and stockholders of Adviser are or may be interested in the
Fund as directors, stockholders or otherwise; and Adviser (or any successor) is
or may be interested in the Fund as a stockholder or otherwise.
6. LIABILITY OF INVESTMENT ADVISER. Adviser assumes no responsibility under
this Agreement other than to render the services called for hereunder in good
faith. Adviser shall not be liable for any error of judgment or for any loss
suffered by the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect to
receipt of compensation for services (in which case any award of damages shall
be limited to the period and the amount set forth in Section 36(b)(3) of the
Investment Company Act of 1940 or a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of, or from reckless
disregard by it of its obligations and duties under, this Agreement.
7. TERM. This Agreement shall remain in effect until no later than
September 30, 2000, and from year to year thereafter provided such continuance
is approved at least annually by (1) the vote of a majority of the Board of
Directors of the Fund or (2) a vote of a "majority" (as that term is defined in
the Investment Company Act of 1940) of the Fund's outstanding securities,
provided that in either event the continuance is also approved by the vote of a
majority of the directors of the Fund who are not parties to this Agreement or
"interested persons" (as defined in the Act) of any such party, which vote must
be cast in person at meeting called for the purpose of voting on such approval;
provided, however, that;
(a) the Fund may, at any time and without the payment of any penalty,
terminate this Agreement upon 60 days written notice to Adviser;
(b) the Agreement shall immediately terminate in the event of its
assignment (within the meaning of the Act and the Rules thereunder);
and
(c) Adviser may terminate this Agreement without payment of penalty on 60
days written notice to the Fund; and
(d) the terms of paragraph 6 of this Agreement shall survive the
termination of this Agreement.
8. NOTICES. Except as otherwise provided in this Agreement, any notice or
other communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Fund: If to the Adviser:
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The Shepherd Street Funds, Inc Salem Investment Counselors, Inc.
480 Shepherd Street 480 Shepherd Street
Winston-Salem, NC 27103 Winston-Salem, NC 27103
Mr. David Rea Mr. Jeffrey Howard
President Vice President
9. AMENDMENTS. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved by vote of the holders of a majority of the Fund's outstanding
voting securities.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and the year first written above.
The Shepherd Street Funds, Inc. Salem Investment Counselors, Inc.
By: _____________________ By: __________________________
David B. Rea Jeffrey C. Howard
President Vice President
ATTEST: ATTEST:
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Secretary Secretary
[Corporate Seal] [Corporate Seal]
