As Filed With the Securities and Exchange Commission on July 14, 2000
Securities Act File No. 33-80993
Investment Company Act File No. 811-9393
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No.
Post Effective Amendment No. 4 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 7 [X]
(Check appropriate box or boxes)
TRUST FOR INVESTMENT MANAGERS
(Exact Name of Registrant as Specified in Charter)
2020 E. Financial Way, Suite 100
Glendora, CA 91741
(Address of Principal Executive Offices, Including Zip Code)
Registrant's Telephone Number, including Area Code:
(626) 852-1033
Julie Allecta, Esq.
Paul, Hastings, Janofsky & Walker LLP
345 California Street
San Francisco, CA 94104
(Name and Address of Agent for Service)
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It is proposed that this filing will become effective (check appropriate box)
[ ] Immediately upon filing pursuant to paragraph (b)
[ ] On pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On _________________ pursuant to paragraph (a)(1)
[X] 75 days after filing pursuant to paragraph (a)(2)
[ ] On ___________ pursuant to paragraph (a)(2) of Rule 485
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY ANY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
PROSPECTUS SUBJECT TO COMPLETION, DATED JULY 14, 2000
THE PSA MARKET LEADERS FUND,
A SERIES OF TRUST FOR INVESTMENT MANAGERS
The PSA Market Leaders Fund seeks long-term growth of capital. The Fund
will pursue this objective by investing primarily in the common stocks of
large-capitalization domestic companies.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is _______, 2000
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TABLE OF CONTENTS
Risk Return Summary .................................................. 3
Performance Information .............................................. 5
Fees and Expenses .................................................... 5
Investment Advisor ................................................... 6
Shareholder Information .............................................. 8
Pricing of Fund Shares ............................................... 11
Dividends and Distributions .......................................... 12
Tax Consequences ..................................................... 12
Rule 12b-1 Fees ...................................................... 12
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RISK RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT GOAL?
The Fund seeks long-term growth of capital.
Of course, there can be no guarantee that the Fund will achieve its investment
objective. This investment objective may be changed only by approval of the
Fund's shareholders. You will be notified of any other changes that are material
and, if such changes are made, you should consider whether the Fund remains an
appropriate investment for you.
WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?
The Fund emphasizes the purchase of common stocks of large capitalization
domestic companies. The Fund defines large capitalization companies as those
with a minimum mcapitalization of $10 billion.
Under normal circumstances, at least 65% of the Fund's total assets will be
invested in the common stocks of companies that the Advisor believes to be
"market leaders." It is the Advisor's opinion that companies with above-average
or accelerating earnings growth have the potential to produce above-average
rates of return. Companies considered for purchase must occupy, or have the
potential to occupy, industry leadership positions that are expected to be
maintained or enhanced over time. The Advisor identifies industry market leaders
as those companies that have:
* superior growth prospects compared with others companies in the same
industry;
* possession of proprietary technology with the potential to bring about
major changes within an industry; and/or
* leading sales within an industry, or the potential to become a market
leader.
In addition, a company must also possess at least one of the following
characteristics:
* faster earnings growth than its other competitors and the market in
general;
* higher profit margins relative to its other competitors;
* strong cash flow relative to its other competitors; and/or
* a balance sheet with relative low debt and a high return on equity relative
to its other competitors.
The Advisor employs numerous sources of information in its analysis of a
security. These include financial newspapers and magazines, annual reports,
prospectuses, filings with the Securities and Exchange Commission, research
materials prepared by others, company press releases and corporate rating
services. The Advisor, on occasion, may also communicate verbally with corporate
spokespersons.
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The Advisor will consider selling a security in the Fund's portfolio if the
security has reached the price target set by the Advisor or if the Advisor
determines that there has been a deterioration in the expected growth potential
of the security.
The Fund anticipates that it will have a portfolio turnover rate of
approximately 50%. This means that the Advisor will not, under normal
circumstances, purchase and sell securities held in the portfolio in order to
realize short-term gains. It also means that the Fund may have lower transaction
costs than funds with higher portfolio turnover rates.
Under normal market conditions, the Fund will stay fully invested in common
stocks. However, the Fund may temporarily depart from its principal investment
strategies by making short term investments in cash equivalents in response to
adverse market, economic, or political conditions. This may result in the Fund
not achieving its investment objective.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?
As with all mutual funds, there is the risk that you could lose money on your
investment in the Fund. For example, the following risks could affect the value
of your investment:
MANAGEMENT RISK. Management risk means that the value of your investment in the
Fund varies with the success and failure of the Advisor's investment strategies
and the Advisor's research, analysis and security selection decisions. If the
Advisor's investment strategies dnot produce the expected results, your
investment could be diminished or even lost.
MARKET RISK. The value of a share of the Fund--its "net asset value" or "NAV"
depends upon the market value of all of the Fund's investments. The principal
risk of investing in tFund is that the market value of securities held by the
Fund will move up and down. These up adown fluctuations, which can occur rapidly
and unpredictably, may cause the Fund's investments to be worth less than the
price originally paid, or less than it was worth at an earlier time; this in
turn will affect the Fund's net asset value per share. Market risk may affect a
single company, industry, sector of the economy or the market as a whole.
WHO MAY WANT TO INVEST IN THE FUND?
The Fund may be appropriate for investors who:
* Are pursuing a long-term investment horizon
* Want to add an investment in larger capitalization stocks to their equity
portfolio
* Can accept the greater risks of investing in a portfolio with significant
holdings in common stocks
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The Fund may not be appropriate for investors who:
* Need regular income or stability of principal
* Are pursuing a short-term goal
PERFORMANCE INFORMATION
Because the Fund has been in operation for less than a full calendar year, its
total return bar chart and performance table have not been included.
FEES AND EXPENSES
The following table describes the fees and expenses that a shareholder in the
Fund will pay.
SHAREHOLDER FEES
(Fees paid directly from your investment)
Maximum sales charge (load) imposed on purchases................... None
Maximum deferred sales charge (load)............................... None
ANNUAL OPERATING EXPENSES
(Expenses that are deducted from Fund assets)
Management Fees ................................................... 0.85%
Distribution and Service (12b-1) Fees.............................. 0.25%
Other Expenses* ................................................... %
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Total Annual Fund Operating Expenses .............................. %
Fee Reduction and/or Expense Reimbursement........................ ( %)
Net Expenses ...................................................... 1.95%
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* Other expenses are estimated for the first fiscal year of the Fund. The
Advisor has contractually agreed to reduce its fees and/or pay expenses of
the Fund for an indefinite period, but not less than one year, to ensure
that Total Annual Fund Operating Expenses will not exceed 1.95% per year.
The Advisor may be reimbursed for any waiver of its fees or expenses paid
on behalf of the Fund if the Fund's expenses are less than the limit agreed
to by the Fund. The Trustees may terminate this expense reimbursement
arrangement at any time.
EXAMPLE
Use this example to compare the costs of investing in the Fund to those of
investing in other funds. Of course, your actual costs may be higher or lower.
This example assumes that you invest $10,000 in the Fund for the time periods
indicated. The Example also assumes that your investment has a 5% return each
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year, that dividends and distributions are reinvested and that the Fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, under the assumptions, your costs would be:
One Year ......................... $
Three Years ...................... $
INVESTMENT ADVISOR
PSA Financial Advisors, Inc. is the investment advisor to the Fund. The
Advisor's address is 1447 York Road, Suite 400, Lutherville, MD 21093. Founded
in ___, the Advisor provides investment advisory services to individual and
institutional clients with assets under management in excess of $140 million.
The Advisor provides the Fund with advice on buying and selling securities. The
Advisor also furnishes the Fund with office space and certain administrative
services and provides most of the personnel needed by the Fund. For its
services, the Fund pays the Advisor a monthly management fee which is calculated
at the annual rate of 0.85% of the Fund's average daily net assets.
PORTFOLIO MANAGERS
Mr. Roger I. Bair, III, will be Lead Manager of the Fund's portfolio. Mr. Bair,
Vice President and Senior Portfolio Manager of the Advisor, has been associated
with the Advisor since 1995. During this time, Mr. Bair managed individual and
institutional portfolios for the Advisor's private accounts.. Mr. Bair has been
in the financial services industry since 1987. From that time until joining the
Advisor, Mr. Bair has been associated with a regional brokerage firm and has
managed individual and institutional portfolios for an investment advisory firm.
Mr. Thomas Baker, will be Co-Manager of the Fund's portfolio. Mr. Baker, Vice
President and Portfolio Manager of the Advisor, as been associated with the
Advisor since February, 1998. During this time, Mr. Baker functioned as a
portfolio manager, securities analyst and broker. Prior to joining the Advisor,
Mr. Baker was an institutional stock broker with Peremel from ________. Mr.
Baker has been in the investment industry since 1991, having had experience
serving both individual and institutional investors.
EXPENSE LIMITATION AGREEMENT
The Fund is responsible for its own operating expenses. The Advisor has
contractually agreed to reduce its fees and/or pay expenses of the Fund for an
indefinite period to ethat Total Fund Operating Expenses will not exceed 1.95%
of average daily net assets annually. Any reduction in advisory fees or payment
of expenses made by the Advisor are subject to reimbursement by the Fund if
requested by the Advisor in subsequent fiscal years. The Fund must pay its
current ordinary operating expenses before the Advisor is entitled to any
reimbursement of fees and/or expenses. Under the expense limitation provision of
the Investment Advisory Agreement, reimbursements made by the Advisor in the
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Fund's first three years of operation remain eligible freimbursement as follows:
reimbursements incurred in the first and second years of the Fund's operation
are eligible for reimbursement through the end of the Fund's sixth fiscal year;
reimbursements made in the third year of operation are eligible for
reimbursement through the end of the seventh fiscal year. Before the Advisor may
receive any such reimbursement, the Trustees must review and approve it. The
Trustees may terminate this expense reimbursement arrangement at any time.
ADVISOR'S PRIOR INVESTMENT RETURNS
Set forth in the table below are certain performance data provided by the
Advisor relating to its individually managed equity accounts. These accounts had
substantially the same investment objective as the Fund, had the same portfolio
managers, and were managed using substantially similar investment strategies and
techniques as those that will be used in managing the Fund. This performance
data is not that of the Fund and is not indicative of the Fund's future
performance.
The results shown will differ from those of the Fund because of differences in
brokerage commissions paid, account expenses, including investment advisory fees
(which expenses and fees may be higher for the Fund than for the accounts), the
size of positions taken in relation to account size, diversification of
securities, timing of purchases and sales, timing of cash additions and
withdrawals, the private character of the composite accounts compared with the
public character of the Fund, and the tax-exempt status of account holders
compared with shareholders in the Fund.
These accounts also are not subject to certain investment limitations,
diversification requirements and other restrictions imposed by the Investment
Company Act of 1940 and the Internal Revenue Code, which, if they applied, may
have adversely affected the results shown.
Investors should be aware that the use of different methods of determining
performance could result in different performance results. Investors should not
rely on the following performance data as an indication of future performance of
the Advisor or of the Fund.
AVERAGE ANNUAL TOTAL RETURNS
(FOR PERIOD ENDED JUNE 30, 2000)
Since Inception
ONE YEAR FIVE YEARS ( , 1994)
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PSA Equity Composite
S&P 500 Index*
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* The S&P 500 Index is an unmanaged index generally representative of the
market for the stocks of large-sized U.S. companies.
1. PSA Financial Advisors, Inc. has prepared and presented the above report in
compliance with the Performance Presentation Standards of the Association for
Investment Management and Research (AIMR-PPS(TM)). AIMR has not been involved
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with the preparation or review of this report. AIMR is a non-profit membership
and education organization with more than 60,000 members worldwide that, among
other things, has formulated a set of performance presentation standards for
investment advisers. These AIMR performance presentation standards are intended
to (i) promote full and fair presentations by investment advisers of their
performance results, and (ii) ensure uniformity in reporting so that performance
results of investment advisers are directly comparable. Returns are presented
after the deduction of investment advisory fees, brokerage commissions and
expenses applicable to the PSA Equity Composite. Use of the Fund's expense
structure would have lowered the performance results in the Average Annual Total
Returns in the table above.
2. Investors should note that the Fund will compute and disclose its average
annual total return using the standard formula set forth in SEC rules, which is
different from the AIMR method noted above. Unlike the AIMR performance
presentation standards that link quarterly rates of return, the SEC total return
calculation method calls for computation and disclosure of an average annual
compounded rate of return for one, five and ten year periods or shorter periods
from inception. The calculation provides a rate of return that equates a
hypothetical initial investment of $1,000 to an ending redeemable value.
3. The PSA Equity Composite shown includes all accounts managed by the Advisor
that meet the criteria for inclusion in the composite for each period presented.
SHAREHOLDER INFORMATION
HOW TO BUY SHARES
You may open a Fund account with $1,000 and add to your account at any time with
$100 or more. These minimums will be waived if you open your Fund account
through the Automatic Investment Plan (see "Automatic Investment Plan," below).
The minimum investment requirement may be waived from time to time by the Fund
in certain other circumstances.
You may purchase shares of the Fund by check or wire. All purchases by check
must be in U.S. dollars. Third party checks and cash will not be accepted. A
charge may be imposed if your check does not clear. The Fund is not required to
issue share certificates. The Fund reserves the right to reject any purchase in
whole or in part.
BY CHECK
If you are making an initial investment in the Fund, simply complete the Account
Application included with this Prospectus and mail or overnight deliver (such as
FedEx) it with a check (made payable to "The PSA Market Leaders Fund") to:
The PSA Market Leaders Fund
c/o ICA Fund Services Corp.
4455 East Camelback Rd., Ste 261E
Phoenix, AZ 85018
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If you are making a subsequent purchase, a stub is attached to the account
statement you will receive after each transaction. Detach the stub from the
statement and mail it together with a check made payable to "PSA Growth Fund" to
the Fund in the envelope provided with your statement or to the address noted
above. Your account number should be written on the check.
BY WIRE
If you are making an initial investment in the Fund, before you wire funds, the
Transfer Agent must have a completed Account Application. You can mail or
overnight deliver your Account Application to the Transfer Agent at the above
address. You may also fax the Account Application to the Transfer Agent at (602)
522-8172. Upon receipt of your completed Account Application, the Transfer Agent
will establish an account for you. Once your have faxed your new Account
Application, you may instruct your bank to send the wire. Your bank must iboth
the name of the Fund you are purchasing and your name so that monies can be
correctly applied. Your bank should transmit immediately available funds by wire
to:
Firstar Bank, N.A. Cinti/Trust
ABA Routing #_______________
PSA Growth Fund
DDA #____________
Account name (shareholder name)
Shareholder account number
If you are making a subsequent purchase, your bank should wire funds as
indicated above. IT IS ESSENTIAL THAT YOUR BANK INCLUDE COMPLETE INFORMATION
ABOUT YOUR ACCOUNT IN ALL WIRE INSTRUCTIONS. If you have questions about how to
invest by wire, you may call the Transfer Agent at (800) 576- 8229. Your bank
may charge you a fee for sending a wire to the Fund.
You may buy and sell shares of the Fund through certain brokers (and their
agents) that have made arrangements with the Fund to sell its shares. When you
place your order with such a broker or its authorized agent, your order is
treated as if you had placed it directly with the Fund's Transfer Agent, and you
will pay or receive the next price calculated by the Fund. The broker (or agent)
holds your shares in an omnibus account in the broker's (or agent's) name, and
the broker (or agent) maintains your individual ownership records. The Fund may
pay the broker (or iagent) for maintaining these records as well as providing
other shareholder services. The broker (or its agent) may charge you a fee for
handling your order. The broker (or agent) is rfor processing your order
correctly and promptly, keeping you advised regarding the status of your
individual account, confirming your transactions and ensuring that you receive
copies of tFund's prospectus.
AUTOMATIC INVESTMENT PLAN
For your convenience, the Fund offers an Automatic Investment Plan. Under this
Plan, you authorize the Fund to withdraw from your personal checking account
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each month an amount that you wish to invest, which must be at least $50. If you
wish to enroll in this Plan, complete the appropriate section in the Account
Application. The Fund may terminate or modify this privilege at any time. You
may terminate your participation in the Plan at any time by notifying the
Transfer Agent in writing.
RETIREMENT PLANS
The Fund offers Individual Retirement Account ("IRA") plans. You may obtain
information about opening an IRA account by calling (800) 576-8229. If you wish
to open a Keogh, Section 403(b) or other retirement plan, please contact your
securities dealer.
HOW TO SELL SHARES
You may sell (redeem) your Fund shares on any day the New York Stock E("NYSE")
is open for business either directly to the Fund or through your investment
representative.
You may redeem your shares by simply sending a written request to the Transfer
Agent. You should give your account number and state whether you want all or
some of your shares redeemed. The letter should be signed by all of the
shareholders whose names appear on the account registration. Certain redemptions
require a signature guarantee. Call the Transfer Agent for details. You should
send your redemption request to:
The PSA Market Leaders Fund
c/o ICA Fund Services Corp.
4455 East Camelback Rd., Ste 261E
Phoenix, AZ 85018
If you complete the Redemption by Telephone portion of the Account Application,
you may redeem all or some of your shares by calling the Transfer Agent at (800)
576-8229 bthe close of regular trading on the NYSE. This is normally 4:00 p.m.,
Eastern time. Redemption proceeds will be mailed on the next business day to the
address that appears on the Transfer Agent's records. If you request, redemption
proceeds will be wired on the next business day to the bank account you
designated on the Account Application. The minimum amount that may be wired is
$1,000. Wire charges, if any, will be deducted from your redemption proceeds.
Telephone redemptions cannot be made if you notify the Transfer Agent of a
change of address within 30 days before the redemption request. If you have a
retirement account, you may not redeem shares by telephone.
When you establish telephone privileges, you are authorizing the Fund and its
Transfer Agent to act upon the telephone instructions of the person or persons
you have designated on your Account Application. Redemption proceeds will be
transferred to the bank account you have designated on your Account Application.
Before acting upon an instruction received by telephone, the Fund and the
Transfer Agent will use procedures to confirm that the telephone instructions
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are genuine. These procedures may include recording the telephone call and
asking the caller for a form of personal identification. If the Fund and the
Transfer Agent follow these procedures, they will not be liable for any loss,
expense, or cost arising out of any telephone redemption request that is
reasonably believed to be genuine. This includes any fraudulent or unauthorized
request. The Fund may change, modify or terminate these privileges at any time
upon at least 60 days' notice to shareholders.
You may request telephone redemption privileges after your account is opened
bcalling the Transfer Agent at (800) 576-8229 for instructions.
You may have difficulties in making a telephone redemption during periods of
abnormal market activity. If this occurs, you may make your redemption request
in writing.
Payment of your redemption proceeds will be made promptly, but not later than
seven days after the receipt of your written request in proper form. For
example, your redemption mbe delayed if you do not sign your written request. If
you made your initial investment by wire, payment of your redemption proceeds
for those shares will not be made until one business day after your completed
Account Application is received by the Fund. If you did not purchase your shares
with a certified check or wire, the Fund may delay payment of your redemption
proceeds for up to 15 days from date of purchase or until your check has
cleared, whichever occurs first.
The Fund may redeem the shares in your account if the value of your account is
less than $500 as a result of redemptions you have made. This does not apply to
retirement plan or Uniform Gifts or Transfers to Minors Act accounts. You will
be notified that the value of your account is less than $500 before the Fund
makes an involuntary redemption. You will then have 30 days in which to make an
additional investment to bring the value of your account to at least $before the
Fund takes any action.
The Fund has the right to pay redemption proceeds to you in whole or in part by
adistribution of securities from the Fund's portfolio. It is not expected that
the Fund would do so except in unusual circumstances.
PRICING OF FUND SHARES
The price of the Fund's shares is based on the Fund's net asset value. This is
done by dividing the Fund's assets, minus its liabilities, by the number of
shares outstanding. The Fund's assets are the market value of securities held in
its portfolio, plus any cash and other assets. The Fund's liabilities are fees
and expenses owed by the Fund. The number of Fund shares ois the amount of
shares which have been issued to shareholders. The price you will pay to buy
Fund shares or the amount you will receive when you sell your Fund shares is
based on the net asset value next calculated after your order is received by the
Transfer Agent with complete information and meeting all the requirements
discussed in this Prospectus.
The net asset value of the Fund's shares is determined as of the close of the
regular daily trading session on the NYSE. This is normally 4:00 p.m., Eastern
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time. Fund shares will not be priced on days that the NYSE is closed for trading
(including certain U.S. holidays).
DIVIDENDS AND DISTRIBUTIONS
The Fund will make distributions of dividends and capital gains, if any, at
least annually, typically after year end. The Fund will make another
distribution of any additional undistributed capital gains earned during the
12-month period ended October 31 on or about December 31.
All distributions will be reinvested in Fund shares unless you choose one of the
following options: (1) receive dividends in cash while reinvesting capital gain
distributions in additional Fund shares; or (2) receive all distributions in
cash. If you wish to change your distribution option, write to the Transfer
Agent in advance of the payment for the distribution.
TAX CONSEQUENCES
The Fund intends to make distributions of dividends and capital gains. Dividends
are taxable to you as ordinary income. The rate you pay on capital gain
distributions will depend on how long the Fund held the securities that
generated the gains, not on how long you owned your Fund shares. You will be
taxed in the same manner whether you receive your dividends and capital
gdistributions in cash or reinvest them in additional Fund shares.
If you sell your Fund shares, it is considered a taxable event for you.
Depending on the purchase price and the sale price of the shares you sell, you
may have a gain or a loss on the transaction. You are responsible for any tax
liabilities generated by your transaction.
RULE 12b-1 FEES
The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1Act.
This rule allows the Fund to pay distribution fees for the sale and distribution
of its shares and for services provided to shareholders. The plan provides for
the payment of a distribution aservice fee at the annual rate of 0.25% of the
Fund's average daily net assets which are payable to the Advisor, as
Distribution Coordinator. Because these fees are paid out of the Fund's assets
on an on-going basis, over time these fees will increase the cost of your
investment in Fund shares and may cost you more than paying other types of
shares charges.
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THE PSA MARKET LEADERS FUND,
A SERIES OF TRUST FOR INVESTMENT MANAGERS (THE "TRUST")
For investors who want more information about the Fund, the following dis
available free upon request:
STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI provides more detailed
information about the Fund and is incorporated by reference into this
Prospectus.
You can get free copies of the SAI, request other information and discuss your
questions about the Fund by contacting the Fund at:
ICA Fund Services Corp.
4455 East Camelback Road
Suite 261E
Phoenix, AZ 85018
Telephone: 1-800-576-8229
You can review and copy information including the Fund's SAI at the Public
Reference Room of the Securities and Exchange Commission in Washington, D.C. You
can obtain information on the operation of the Public Reference Room by calling
1-202-942-8090. Reports and other information about the Fund are also available:
* Free of charge from the Commission's EDGAR database on the Commission's
Internet website at http://www.sec.gov., or
* For a fee, by writing to the Public Reference Room of the Commission,
Washington, DC 20549-0102, or
* For a fee, by electronic request at the following e-mail address:
[email protected].
(The Trust's SEC Investment Company Act
file number is 811-09393)
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY ANY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY STATE.
STATEMENT OF ADDITIONAL INFORMATION SUBJECT TO COMPLETION, DATED JULY 14, 2000
STATEMENT OF ADDITIONAL INFORMATION
July 14, 2000
THE PSA MARKET LEADERS FUND,
A SERIES OF TRUST FOR INVESTMENT MANAGERS
1447 YORK ROAD, SUITE 400
LUTHERVILLE, MD 21093
1-800-576-8229
This Statement of Additional Information ("SAI") is not a prospectus and it
should be read in conjunction with the Prospectus dated ______, 2000, as may be
revised, of The PSA Market Leaders Fund (the "Fund"), a series of Trust for
Investment Managers (the "Trust"). PSA Financial Advisors, Inc. (the "Advisor")
is the advisor to the Fund. A copy of the Fund's Prospectus is available by
calling the telephone number listed above.
TABLE OF CONTENTS
The Trust ................................................................ B-2
Investment Objective and Policies ........................................ B-2
Investment Restrictions .................................................. B-7
Distributions and Tax Information ........................................ B-9
Trustees and Executive Officers .......................................... B-10
The Fund's Investment Advisor ............................................ B-11
The Fund's Administrator ................................................. B-12
The Fund's Distributor ................................................... B-12
Execution of Portfolio Transactions ...................................... B-13
Portfolio Turnover ....................................................... B-14
Additional Purchase and Redemption Information ........................... B-15
Determination of Share Price ............................................. B-17
Performance Information .................................................. B-17
General Information ...................................................... B-18
Appendix ................................................................. B-20
B-1
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THE TRUST
The Trust for Investment Managers (the "Trust") is an open-end management
investment company organized as a Delaware business trust. The Trust may consist
of various series which represent separate investment portfolios. This SAI
relates only to the Fund.
The Trust is registered with the SEC as a management investment company. Such a
registration does not involve supervision of the management or policies of the
Fund. The Prospectus of the Fund and this SAI omit certain of the information
contained in the Registration Statement filed with the SEC. Copies of such
information may be obtained from the SEC upon payment of the prescribed fee.
INVESTMENT OBJECTIVE AND POLICIES
The Fund has the investment objective of seeking long-term growth of capital.
The Fund is diversified, which under applicable federal law means that as to 75%
of its total assets, not more than 5% may be invested in the securities of a
single issuer and that it may hold no more than 10% of the voting securities of
a single issuer. The following information supplements the discussion of the
Fund's investment objective and policies as set forth in its Prospectus. There
can be no guarantee that the Fund's objective will be attained.
CONVERTIBLE SECURITIES AND WARRANTS. The Fund may invest in convertible
securities and warrants. A convertible security is a fixed-income security (a
debt instrument or a preferred stock) which may be converted at a stated price
within a specified period of time into a certain quantity of the common stock of
the same or a different issuer. Convertible securities are senior to common
stocks in an issuer's capital structure, but are usually subordinated to similar
non-convertible securities. While providing a fixed income stream (generally
higher in yield than the income derivable from common stock but lower than that
afforded by a similar nonconvertible security), a convertible security also
affords an investor the opportunity, through its conversion feature, to
participate in the capital appreciation attendant upon a market price advance in
the convertible security's underlying common stock.
A warrant gives the holder a right to purchase at any time during a specified
period a predetermined number of shares of common stock at a fixed price. Unlike
convertible debt securities or preferred stock, warrants do not pay a fixed
dividend. Investments in warrants involve certain risks, including the possible
lack of a liquid market for resale of the warrants, potential price fluctuations
as a result of speculation or other factors, and failure of the price of the
underlying security to reach or have reasonable prospects of reaching a level at
which the warrant can be prudently exercised (in which event the warrant may
expire without being exercised, resulting in a loss of the Fund's entire
investment therein).
INVESTMENT COMPANIES. The Fund may invest in shares of other investment
companies in pursuit of its investment objective. This may include investment in
money market mutual funds in connection with the Fund's management of daily cash
positions. In addition to the advisory and operational fees the Fund bears
directly in connection with its own operation, the Fund and its shareholders
B-2
<PAGE>
will also bear the pro rata portion of each other investment company's advisory
and operational expenses.
BORROWING. The Fund is authorized to borrow money from time to time for
temporary, extraordinary or emergency purposes or for clearance of transactions
in amounts not to exceed 3 1/3% of the value of its total assets at the time of
such borrowings. The use of borrowing by the Fund involves special risk
considerations that may not be associated with other funds having similar
objectives and policies. Since substantially all of the Fund's assets fluctuate
in value, while the interest obligation resulting from a borrowing will be fixed
by the terms of the Fund's agreement with its lender, the net asset value per
share of the Fund will tend to increase more when its portfolio securities
increase in value and to decrease more when its portfolio assets decrease in
value than would otherwise be the case if the Fund did not borrow funds. In
addition, interest costs on borrowings may fluctuate with changing market rates
of interest and may partially offset or exceed the return earned on borrowed
funds. Under adverse market conditions, the Fund might have to sell portfolio
securities to meet interest or principal payments at a time when fundamental
investment considerations would not favor such sales.
LENDING PORTFOLIO SECURITIES. The Fund may lend its portfolio securities in an
amount not exceeding 33-1/3% of its total assets to financial institutions such
as banks and brokers if the loan is collateralized in accordance with applicable
regulations. Under the present regulatory requirements which govern loans of
portfolio securities, the loan collateral must, on each business day, at least
equal the value of the loaned securities and must consist of cash, letters of
credit of domestic banks or domestic branches of foreign banks, or securities of
the U.S. Government or its agencies. To be acceptable as collateral, letters of
credit must be irrevocable and obligate a bank to pay amounts demanded by the
Fund if the demand meets the terms of the letter. Such terms and the issuing
bank would have to be satisfactory to the Fund. Any loan might be secured by any
one or more of the three types of collateral. The terms of the Fund's loans must
permit the Fund to reacquire loaned securities on three days' notice or in time
to vote on any serious matter and must meet certain tests under the Internal
Revenue Code (the "Code").
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements. Under such
agreements, the seller of the security agrees to repurchase it at a mutually
agreed upon time and price. The repurchase price may be higher than the purchase
price, the difference being income to the Fund, or the purchase and repurchase
prices may be the same, with interest at a stated rate due to the Fund together
with the repurchase price on repurchase. In either case, the income to the Fund
is unrelated to the interest rate on the U.S. Government security itself. Such
repurchase agreements will be made only with banks with assets of $500 million
or more that are insured by the Federal Deposit Insurance Corporation or with
Government securities dealers recognized by the Federal Reserve Board and
registered as broker-dealers with the Securities and Exchange Commission ("SEC")
or exempt from such registration. The Fund will generally enter into repurchase
agreements of short durations, from overnight to one week, although the
underlying securities generally have longer maturities. The Fund may not enter
into a repurchase agreement with more than seven days to maturity if, as a
result, more than 15% of the value of its net assets would be invested in
illiquid securities including such repurchase agreements.
B-3
<PAGE>
For purposes of the 1940 Act, a repurchase agreement is deemed to be a loan from
the Fund to the seller of the U.S. Government security subject to the repurchase
agreement. It is not clear whether a court would consider the U.S. Government
security acquired by the Fund subject to a repurchase agreement as being owned
by the Fund or as being collateral for a loan by the Fund to the seller. In the
event of the commencement of bankruptcy or insolvency proceedings with respect
to the seller of the U.S. Government security before its repurchase under a
repurchase agreement, the Fund may encounter delays and incur costs before being
able to sell the security. Delays may involve loss of interest or a decline in
price of the U.S. Government security. If a court characterizes the transaction
as a loan and the Fund has not perfected a security interest in the U.S.
Government security, the Fund may be required to return the security to the
seller's estate and be treated as an unsecured creditor of the seller. As an
unsecured creditor, the Fund would be at the risk of losing some or all of the
principal and income involved in the transaction. As with any unsecured debt
instrument purchased for the Fund, the Advisor seeks to minimize the risk of
loss through repurchase agreements by analyzing the creditworthiness of the
other party, in this case the seller of the U.S. Government security.
Apart from the risk of bankruptcy or insolvency proceedings, there is also the
risk that the seller may fail to repurchase the security. However, the Fund will
always receive as collateral for any repurchase agreement to which it is a party
securities acceptable to it, the market value of which is equal to at least 100%
of the amount invested by the Fund plus accrued interest, and the Fund will make
payment against such securities only upon physical delivery or evidence of book
entry transfer to the account of its Custodian. If the market value of the U.S.
Government security subject to the repurchase agreement becomes less than the
repurchase price (including interest), the Fund will direct the seller of the
U.S. Government security to deliver additional securities so that the market
value of all securities subject to the repurchase agreement will equal or exceed
the repurchase price.
It is possible that the Fund will be unsuccessful in seeking to impose on the
seller a contractual obligation to deliver additional securities.
ILLIQUID SECURITIES. The Fund may not invest more than 15% of the value of its
net assets in securities that at the time of purchase have legal or contractual
restrictions on resale or are otherwise illiquid. The Advisor will monitor the
amount of illiquid securities in the Fund's portfolio, under the supervision of
the Trust's Board of Trustees, to ensure compliance with the Fund's investment
restrictions.
Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933 (the "Securities Act"), securities
which are otherwise not readily marketable and repurchase agreements having a
maturity of longer than seven days. Securities which have not been registered
under the Securities Act are referred to as private placement or restricted
securities and are purchased directly from the issuer or in the secondary
market. Mutual funds do not typically hold a significant amount of these
restricted or other illiquid securities because of the potential for delays on
resale and uncertainty in valuation. Limitations on resale may have an adverse
effect on the marketability of portfolio securities and the Fund might be unable
to sell restricted or other illiquid securities promptly or at reasonable prices
and might thereby experience difficulty satisfying redemption requests within
seven days. The Fund might also have to register such restricted securities in
B-4
<PAGE>
order to sell them, resulting in additional expense and delay. Adverse market
conditions could impede such a public offering of securities.
In recent years, however, a large institutional market has developed for certain
securities that are not registered under the Securities Act, including
repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not reflect the actual liquidity of such
investments. If such securities are subject to purchase by institutional buyers
in accordance with Rule 144A promulgated by the SEC under the Securities Act,
the Trust's Board of Trustees may determine that such securities are not
illiquid securities despite their legal or contractual restrictions on resale.
In all other cases, however, securities subject to restrictions on resale will
be deemed illiquid.
FOREIGN SECURITIES. The Fund may invest up to 5% of its total assets the
securities of foreign issuers in the form of American Depositary Receipts
(ADRs"). ADRs are depositary receipts for foreign securities denominated in U.S.
dollars and traded on U.S. securities markets. These are certificates evidencing
ownership of shares of a foreign-based issuer held in trust by a bank or similar
financial institution. Designed for use in U.S. securities markets, ADRs are
alternatives to the purchase of the underlying securities in their national
market and currencies. ADRs may be purchased through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the underlying security and a depositary, whereas a depositary may
establish an unsponsored facility without participation by the issuer of the
depositary security. Holders of unsponsored depositary receipts generally bear
all the costs of such facilities and the depositary of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts of the deposited securities.
RISKS OF INVESTING IN FOREIGN SECURITIES. Investments in foreign securities
involve certain inherent risks, including the followng:
POLITICAL AND ECONOMIC FACTORS. Individual foreign economies of certain
countries may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency, and diversification and balance of
payments position. The internal politics of some foreign countries may not be as
stable as those of the United States. Governments in some foreign countries also
continue to participate to a significant degree, through ownership interest or
regulation, in their respective economies. Action by these governments could
include restrictions on foreign investment, nationalization, expropriation of
goods or imposition of taxes, and could have a significant effect on market
prices of securities and payment of interest. The economies of many foreign
countries are heavily dependent upon international trade and are affected by the
trade policies and economic conditions of their trading partners. If these
trading partners enacted protectionist trade legislation, it could have a
significant adverse effect upon the securities markets of such countries.
B-5
<PAGE>
CURRENCY FLUCTUATIONS. The Fund will invest only in securities denominated in
U.S. dollars. For this reason, the value of the Fund's assets may not be subject
to risks associated with variations in the value of foreign currencies relative
to the U.S. dollar to the same extent as might otherwise be the case. Changes in
the value of foreign currencies against the U.S. dollar may, however, affect the
value of the assets and/or income of foreign companies whose U.S. dollar
denominated securities are held by the Fund. Such companies may also be affected
significantly by currency restrictions and exchange control regulations enacted
from time to time.
LEGAL AND REGULATORY MATTERS. Certain foreign countries may have less
supervision of securities markets, brokers and issuers of securities, and less
financial information available to issuers, than is available in the United
States.
TAXES. The interest and dividends payable on some of the Fund's foreign
portfolio securities may be subject to foreign withholding taxes, thus reducing
the net amount of income available for distribution to Fund shareholders.
SHORT-TERM INVESTMENTS. The Fund may invest in any of the following securities
and instruments:
CERTIFICATES OF DEPOSIT, BANKERS' ACCEPTANCES AND TIME DEPOSITS. The Fund may
acquire certificates of deposit, bankers' acceptances and time deposits.
Certificates of deposit are negotiable certificates issued against funds
deposited in a commercial bank for a definite period of time and earning a
specified return. Bankers' acceptances are negotiable drafts or bills of
exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning in effect that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Certificates of deposit and bankers' acceptances acquired by the Fund will be
dollar- denominated obligations of domestic banks, savings and loan associations
or financial institutions which, at the time of purchase, have capital, surplus
and undivided profits in excess of $100 million (including assets of both
domestic and foreign branches), based on latest published reports, or less than
$100 million if the principal amount of such bank obligations are fully insured
by the U.S. Government.
In addition to purchasing certificates of deposit and bankers' acceptances, to
the extent permitted under its investment objective and policies stated above
and in its prospectus, the Fund may make interest-bearing time or other
interest-bearing deposits in commercial or savings banks. Time deposits are
non-negotiable deposits maintained at a banking institution for a specified
period of time at a specified interest rate.
COMMERCIAL PAPER AND SHORT-TERM NOTES. The Fund may invest a portion of its
assets in commercial paper and short-term notes. Commercial paper consists of
unsecured promissory notes issued by corporations. Issues of commercial paper
and short-term notes will normally have maturities of less than nine months and
fixed rates of return, although such instruments may have maturities of up to
one year.
Commercial paper and short-term notes will consist of issues rated at the time
of purchase "A-2" or higher by Standard & Poor's Ratings Group, "Prime-1" or
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<PAGE>
"Prime-2" by Moody's Investors Service, Inc., or similarly rated by another
nationally recognized statistical rating organization or, if unrated, will be
determined by the Adviser to be of comparable quality. These rating symbols are
described in the Appendix.
INVESTMENT RESTRICTIONS
The following policies and investment restrictions have been adopted by the Fund
and (unless otherwise noted) are fundamental and cannot be changed without the
affirmative vote of a majority of the Fund's outstanding voting securities as
defined in the 1940 Act.
1. The Fund may not make loans to others, except (a) through the purchase of
debt securities in accordance with its investment objectives and policies, (b)
to the extent the entry into a repurchase agreement is deemed to be a loan.
2. The Fund may not:
(a) Borrow money, except as stated in the Prospectus and this SAI. Any such
borrowing will be made only if immediately thereafter there is an asset coverage
of at least 300% of all borrowings.
(b) Mortgage, pledge or hypothecate any of its assets except in connection
with any such borrowings.
3. The Fund may not purchase securities on margin, participate on a joint or
joint and several basis in any securities trading account, or underwrite
securities. (Does not preclude the Fund from obtaining such short-term credit as
may be necessary for the clearance of purchases and sales of its portfolio
securities).
4. The Fund may not purchase or sell real estate, commodities or commodity
contracts. (As a matter of operating policy, the Board of Trustees may authorize
the Fund in the future to engage in certain activities regarding futures
contracts for bona fide hedging purposes; any such authorization will be
accompanied by appropriate notification to shareholders).
5. The Fund may not issue senior securities, as defined in the 1940 Act, except
that this restriction shall not be deemed to prohibit the Fund from (a) making
any permitted borrowings, mortgages or pledges, or (b) entering into options,
futures, forward or repurchase transactions.
6. The Fund may not invest 25% or more of the market value of its assets in the
securities of companies engaged in any one industry. (Does not apply to
investment in the securities of the U.S. Government, its agencies or
instrumentalities.)
7. With respect to 75% of its assets, the Fund may not invest more than 5% of
its total assets in securities of a single issuer or hold more than 10% of the
voting securities of such issuer. (Does not apply to investment in the
securities of the U.S. Government, its agencies or instrumentalities.)
The Fund observes the following policies, which are not deemed fundamental and
which may be changed without shareholder vote.
B-7
<PAGE>
1. The Fund may not invest in any issuer for purposes of exercising control or
management.
2. The Fund may not invest in securities of other investment companies except as
permitted under the 1940 Act.
3. The Fund may not invest, in the aggregate, more than 15% of its net assets in
securities with legal or contractual restrictions on resale, securities which
are not readily marketable and repurchase agreements with more than seven days
to maturity.
4. With respect to fundamental investment restriction 2(a) above, the Fund will
not purchase portfolio securities while outstanding borrowings exceed 5% of its
assets.
If a percentage restriction described in the Prospectus or in this SAI is
adhered to at the time of investment, a subsequent increase or decrease in a
percentage resulting from a change in the values of assets will not constitute a
violation of that restriction, except with respect to borrowing or the purchase
of restricted or illiquid securities.
DISTRIBUTIONS AND TAX INFORMATION
DISTRIBUTIONS. Dividends from net investment income and distributions from net
profits from the sale of securities are generally made annually. Also, the Fund
expects to distribute any undistributed net investment income on or about
December 31 of each year. Any net capital gains realized through the period
ended October 31 of each year will also be distributed by December 31 of each
year.
Each distribution by the Fund is accompanied by a brief explanation of the form
and character of the distribution. In January of each year the Fund will issue
to each shareholder a statement of the federal income tax status of all
distributions.
TAX INFORMATION. Each series of the Trust is treated as a separate entity for
federal income tax purposes. The Fund intends to qualify and elect to be treated
as a "regulated investment company" under Subchapter M of the Code, provided
that it complies with all applicable requirements regarding the source of its
income, diversification of its assets and timing of distributions. It is the
Fund's policy to distribute to its shareholders all of its investment company
taxable income and any net realized capital gains for each fiscal year in a
manner that complies with the d requirements of the Code, so that the Fund will
not be subject to any federal income tax or excise taxes based on net income. To
avoid the excise tax, the Fund must also distribute (or be deemed to have
distributed) by December 31 of each calendar year (i) at least 98% of its
ordinary income for such year, (ii) at least 98% of the excess of its realized
capital gains over its realized capital losses for the one-year period ending on
October 31 during such year and (iii) any amounts from the prior calendar year
that were not distributed and on which the Fund paid no federal excise tax.
B-8
<PAGE>
The Fund's ordinary income generally consists of interest and dividend income,
less expenses. Net realized capital gains for a fiscal period are computed by
taking into account any capital loss carryforward of the Fund.
Distributions of net investment income and net short-term capital gains are
taxable to shareholders as ordinary income. In the case of corporate
shareholders, a portion of the distributions may qualify for the intercorporate
dividends-received deduction to the extent the Portfolio designates the amount
distributed as a qualifying dividend. This designated amount cannot, however,
exceed the aggregate amount of qualifying dividends received by the Portfolio
for its taxable year. The deduction, if any, may be reduced or eliminated if
Portfolio shares held by a corporate investor are treated as debt-financed or
are held for fewer than 46 days.
Any long-term capital gain distributions are taxable to shareholders as
long-term capital gains regardless of the length of time they have held their
shares. Capital gains distributions are not eligible for the dividends-received
deduction referred to in the previous paragraph. Distributions of any ordinary
income and net realized capital gains will be taxable as described above,
whether received in shares or in cash. Shareholders who choose to receive
distributions in the form of additional shares will have a cost basis for
federal income tax purposes in each share so received equal to the net asset
value of a share on the reinvestment date. Distributions are generally taxable
when received. However, distributions declared in October, November or December
to shareholders of record on a date in such a month and paid the following
January are taxable as if received on December 31. Distributions are includable
in alternative minimum taxable income in computing a shareholder's liability for
the alternative minimum tax.
Under the Code, the Fund will be required to report to the Internal Revenue
Service all distributions of ordinary income and capital gains as well as gross
proceeds from the redemption of Portfolio shares, except in the case of exempt
shareholders, which includes most corporations. Pursuant to the backup
withholding provisions of the Code, distributions of any taxable income and
capital gains and proceeds from the redemption of Fund shares may be subject to
withholding of federal income tax at the current maximum federal tax rate of 31
percent in the case of non-exempt shareholders who fail to furnish the Fund with
their taxpayer identification numbers and with required certifications regarding
their status under the federal income tax law. If the backup withholding
provisions are applicable, any such distributions and proceeds, whether taken in
cash or reinvested in additional shares, will be reduced by the amounts required
to be withheld. Corporate and other exempt shareholders should provide the Fund
with their taxpayer identification numbers or certify their exempt status in
order to avoid possible erroneous application of backup withholding. The Fund
reserves the right to refuse to open an account for any person failing to
certify the person's taxpayer identification number.
The Fund will not be subject to corporate income tax in the State of Delaware as
long as its qualifies as regulated investment companies for federal income tax
purposes. Distributions and the transactions referred to in the preceding
paragraphs may be subject to state and local income taxes, and the tax treatment
thereof may differ from the federal income tax treatment.
The foregoing discussion of U.S. federal income tax law relates solely to the
application of that law to U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts and estates. Each shareholder who is not a
B-9
<PAGE>
U.S. person should consider the U.S. and foreign tax consequences of ownership
of shares of the Fund, including the possibility that such a shareholder may be
subject to a U.S. withholding tax at a rate of 30 percent (or at a lower rate
under an applicable income tax treaty) on amounts constituting ordinary income.
In addition, the foregoing discussion of tax law is based on existing provisions
of the Code, existing and proposed regulations thereunder, and current
administrative rulings and court decisions, all of which are subject to change.
Any such charges could affect the validity of this discussion. The discussion
also represents only a general summary of tax law and practice currently
applicable to the Fund and certain shareholders therein, and, as such, is
subject to change. In particular, the consequences of an investment in shares of
the Fund under the laws of any state, local or foreign taxing jurisdictions are
not discussed herein. Each prospective investor should consult his or her own
tax advisor to determine the application of the tax law and practice in his or
her own particular circumstances.
TRUSTEES AND EXECUTIVE OFFICERS
The Trustees of the Trust, who were elected for an indefinite term by the
initial shareholders of the Trust, are responsible for the overall management of
the Trust, including general supervision and review of the investment activities
of the Fund. The Trustees, in turn, elect the officers of the Trust, who are
responsible for administering the day-to-day operations of the Trust and its
separate series. The current Trustees and officers, their affiliations, dates of
birth and principal occupations for the past five years are set forth below.
Unless noted otherwise, each person has held the position listed for a minimum
of five years.
<TABLE>
<CAPTION>
Position(s) Held
Name, Address and Age With Trust Principal Occupation(s) During Past Five Years
--------------------- ---------- ----------------------------------------------
<S> <C> <C>
George J. Rebhan, 7/10/34 Trustee Retired. Formerly, President Hotchkis and Wiley Fund (mutual
1920 Mission St. funds) from 1985 to 1993.
South Pasadena, CA 91030
Ashley T. Rabun 5/10/52 Trustee Founder and Chief Executive Officer, InvestorReach, Inc.
2161 India St. (financial services and marketing and distribution
San Diego, CA 92101 Consulting). Formerly, Partner and Director,
Nicholas-Applegate Capital Management (investment
management) from 1992 to 1996.
James Clayburn LaForce 12/28/28 Trustee Dean Emeritus, John E. Anderson Graduate School of
P.O. Box 1595 Management, University of California, Los Angeles.
San Diego, CA 92101
</TABLE>
B-10
<PAGE>
<TABLE>
<CAPTION>
Position(s) Held
Name, Address and Age With Trust Principal Occupation(s) During Past Five Years
--------------------- ---------- ----------------------------------------------
<S> <C> <C>
Robert H. Wadsworth* 1/25/40 Trustee and President of Investment Company Administration, LLC ("ICA")
4455 Camelback Rd. President (mutual fund administrator and the Trust's Administrator)
Phoenix, AZ 85018 and First Fund Distributors, Inc. (registered broker-dealer
and the Trust's Distributor).
Robert M. Slotky* 6/16/47 Treasurer Senior Vice President, ICA since May 1997. Formerly,
2020 E. Financial Way instructor of accounting at California State
Glendora, CA 91741 University-Northridge (1997); Chief Financial Officer,
Wanger Asset Management L.P. and Treasurer of Acorn
Investment Trust (1992-1996).
</TABLE>
----------
* Indicates an "interested person" of the Trust as defined in the 1940 Act.
Set forth below is the rate of compensation received by the following Trustees
from all portfolios of the Trust. This total amount is allocated among the
portfolios. Disinterested Trustees receive an annual retainer of $7,500. The
Trustees also receive a fee of $750 for any special meeting or committee meeting
attended on a date other than that of a regularly scheduled meeting.
Disinterested trustees are also reimbursed for expenses in connection with each
Board meeting attended. No other compensation or retirement benefits were
received by any Trustee or officer from the portfolios of the Trust.
Name of Trustee Total Annual Compensation
--------------- -------------------------
George J. Rebhan $7,500
Ashley T. Rabun $7,500
James Clayburn LaForce $7,500
As of the date of this SAI, the Trustees and officers of the Trust as a group
did not own more than 1% of the outstanding shares of the Fund.
THE FUND'S INVESTMENT ADVISOR
As stated in the Prospectus, investment advisory services are provided to the
Fund by PSA Financial Advisors, Inc., the Advisor, pursuant to an Investment
Advisory Agreement. (the "Advisory Agreement"). As compensation, the Fund pays
the Advisor a monthly management fee (accrued daily) based upon the average
daily net assets of the Fund at the annual rate of 0.85%.
The Advisory Agreement continues in effect for successive annual periods so long
as such continuation is approved at least annually by the vote of (1) the Board
of Trustees of the Trust (or a majority of the outstanding shares of the Fund,
and (2) a majority of the Trustees who are not interested persons of any party
B-11
<PAGE>
to the Advisory Agreement, in each case cast in person at a meeting called for
the purpose of voting on such approval. The Advisory Agreement may be terminated
at any time, without penalty, by either party to the Advisory Agreement upon
sixty days' written notice and is automatically terminated in the event of its
"assignment," as defined in the 1940 Act.
THE FUND'S ADMINISTRATOR
The Fund has an Administration Agreement with Investment Company Administration,
LLC (the "Administrator"), a corporation owned and controlled in part by Mr.
Wadsworth with offices at 4455 E. Camelback Rd., Ste. 261-E, Phoenix, AZ 85018.
The Administration Agreement provides that the Administrator will prepare and
coordinate reports and other materials supplied to the Trustees; prepare and/or
supervise the preparation and filing of all securities filings, periodic
financial reports, prospectuses, statements of additional information, marketing
materials, tax returns, shareholder reports and other regulatory reports or
filings required of the Fund; prepare all required notice filings necessary to
maintain the Fund's ability to sell shares in all states where the Fund
currently does, or intends to do business; coordinate the preparation, printing
and mailing of all materials (e.g., Annual Reports) required to be sent to
shareholders; coordinate the preparation and payment of Fund related expenses;
monitor and oversee the activities of the Fund's servicing agents (i.e.,
transfer agent, custodian, fund accountants, etc.); review and adjust as
necessary the Fund's daily expense accruals; and perform such additional
services as may be agreed upon by the Fund and the Administrator. For its
services, the Administrator receives a monthly fee at the following annual rate:
Average Net Assets Fee or Fee Rate
------------------ ---------------
Less than $15 million $30,000
$15 to $50 million 0.20%
$50 to $100 million 0.15%
$100 to $150 million 0.10%
Over $150 million 0.05%
THE FUND'S DISTRIBUTOR
First Fund Distributors, Inc., (the "Distributor"), a corporation partially
owned by Mr. Wadsworth, acts as the Fund's principal underwriter in a continuous
public offering of the Fund's shares. After its initial two year term, the
Distribution Agreement between the Fund and the Distributor continues in effect
for periods not exceeding one year if approved at least annually by (I) the
Board of Trustees or the vote of a majority of the outstanding shares of the
Fund (as defined in the 1940 Act) and (ii) a majority of the Trustees who are
not interested persons of any such party, in each case cast in person at a
meeting called for the purpose of voting on such approval. The Distribution
Agreement may be terminated without penalty by the parties thereto upon sixty
days' written notice, and is automatically terminated in the event of its
assignment as defined in the 1940 Act.
The Trust, on behalf of the Fund, has adopted a Distribution Plan in accordance
with Rule 12b-1 (the "Plan") under the 1940 Act that permits the Fund to pay
distribution fees for the sale and distribution of its shares. The Plan provides
that the Fund will pay a fee to the Adviser as Distribution Coordinator at an
annual rate of 0.25% of the Fund's average daily net assets. The Plan provides
for the compensation to the Adviser as Distribution Coordinator regardless of
the Fund's distribution expenses.
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The Plan allows excess distribution expenses to be carried forward by the
Adviser as Distribution Coordinator and resubmitted in a subsequent fiscal year,
provided that (i) distribution expenses cannot be carried forward for more than
three years following initial submission; (ii) the Trustees have made a
determination at the time of initial submission that the distribution expenses
are appropriate to be carried forward and (iii) the Trustees make a further
determination, at the time any distribution expenses which have been carried
forward are submitted for payment, that payment at the time is appropriate,
consistent with the objectives of the Plan and in the current best interests of
shareholders.
Under the Plan, the Trustees will be furnished quarterly with information
detailing the amount of expenses paid under the Plan and the purposes for which
payments were made. The Plan may be terminated at any time by vote of a majority
of the Trustees of the Trust who are not interested persons. Continuation of the
Plan is considered by such Trustees no less frequently than annually.
EXECUTION OF PORTFOLIO TRANSACTIONS
Pursuant to the Advisory Agreement, the Advisor determines which securities are
to be purchased and sold by the Fund and which broker-dealers are eligible to
execute the Fund's portfolio transactions. Purchases and sales of securities in
the over-the-counter market will generally be executed directly with a
"market-maker" unless, in the opinion of the Advisor, a better price and
execution can otherwise be obtained by using a broker for the transaction.
Purchases of portfolio securities for the Fund also may be made directly from
issuers or from underwriters. Where possible, purchase and sale transactions
will be effected through dealers (including banks) which specialize in the types
of securities which the Fund will be holding, unless better executions are
available elsewhere. Dealers and underwriters usually act as principal for their
own accounts. Purchases from underwriters will include a concession paid by the
issuer to the underwriter and purchases from dealers will include the spread
between the bid and the asked price.
If the execution and price offered by more than one dealer or underwriter are
comparable, the order may be allocated to a dealer or underwriter that has
provided research or other services as discussed below.
In placing portfolio transactions, the Advisor will use its reasonable efforts
to choose broker- capable of providing the services necessary to obtain the most
favorable price and execution available. The full range and quality of services
available will be considered in making these determinations, such as the size of
the order, the difficulty of execution, the operational facilities of the firm
involved, the firm's risk in positioning a block of securities, and other
factors. In those instances where it is reasonably determined that more than one
broker-dealer can offer the services needed to obtain the most favorable price
and execution available, consideration may be given to those broker-dealers
which furnish or supply research and statistical information to the Advisor that
it may lawfully and appropriately use in its investment advisory capacities, as
well as provide other services in addition to execution services. The Advisor
considers such information, which is in addition to and not in lieu of the
services required to be performed by it under its Agreement with the Fund, to be
useful in varying degrees, but of indeterminable value. Portfolio transactions
may be placed with broker-dealers who sell shares of the Fund subject to rules
adopted by the National Association of Securities Dealers, Inc.
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While it is the Fund's general policy to seek first to obtain the most favorable
price and execution available in selecting a broker-dealer to execute portfolio
transactions for the Fund, weight is also given to the ability of a
broker-dealer to furnish brokerage and research services to the Fund or to the
Advisor, even if the specific services are not directly useful to the Fund and
may be useful to the Advisor in advising other clients. In negotiating
commissions with a broker or evaluating the spread to be paid to a dealer, the
Fund may therefore pay a higher commission or spread than would be the case if
no weight were given to the furnishing of these supplemental services, provided
that the amount of such commission or spread has been determined in good faith
by the Advisor to be reasonable in relation to the value of the brokerage and/or
research services provided by such broker-dealer. The standard of reasonableness
is to be measured in light of the Advisor's overall responsibilities to the
Fund.
Investment decisions for the Fund are made independently from those of other
client accounts or mutual funds ("Funds") managed or advised by the Advisor.
Nevertheless, it is possible that at times identical securities will be
acceptable for both the Fund and one or more of such client accounts or Funds.
In such event, the position of the Fund and such client account(s) or Funds in
the same issuer may vary and the length of time that each may choose to hold its
investment in the same issuer may likewise vary. However, to the extent any of
these client accounts or Funds seeks to acquire the same security as the Fund at
the same time, the Fund may not be able to acquire as large a portion of such
security as it desires, or it may have to pay a higher price or obtain a lower
yield for such security. Similarly, the Fund may not be able to obtain as high a
price for, or as large an execution of, an order to sell any particular security
at the same time. If one or more of such client accounts or Funds simultaneously
purchases or sells the same security that the Fund is purchasing or selling,
each day's transactions in such security will be allocated between the Fund and
all such client accounts or Funds in a manner deemed equitable by the Advisor,
taking into account the respective sizes of the accounts and the amount being
purchased or sold. It is recognized that in some cases this system could have a
detrimental effect on the price or value of the security insofar as the Fund is
concerned. In other cases, however, it is believed that the ability of the Fund
to participate in volume transactions may produce better executions for the
Fund.
The Fund does not effect securities transactions through brokers in accordance
with any formula, nor does it effect securities transactions through brokers
solely for selling shares of the Fund, although the Fund may consider the sale
of shares as a factor in allocating brokerage. However, as stated above,
broker-dealers who execute brokerage transactions may effect purchase of shares
of the Fund for their customers.
PORTFOLIO TURNOVER
Although the Fund generally will not invest for short-term trading purposes,
portfolio securities may be sold without regard to the length of time they have
been held when, in the opinion of the Advisor, investment considerations warrant
such action. Portfolio turnover rate is calculated by dividing (1) the lesser of
purchases or sales of portfolio securities for the fiscal year by (2) the
monthly average of the value of portfolio securities owned during the fiscal
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year. A 100% turnover rate would occur if all the securities in the Fund's
portfolio, with the exception of securities whose maturities at the time of
acquisition were one year or less, were sold and either repurchased or replaced
within one year. A high rate of portfolio turnover (100% or more) generally
leads to transaction costs and may result in a greater number of taxable
transactions. See "Execution of Portfolio Transactions."
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The information provided below supplements the information contained in the
Fund's Prospectus regarding the purchase and redemption of Fund shares.
HOW TO BUY SHARES. The public offering price of Fund shares is the net asset
value. The Fund receives the net asset value. Shares are purchased at the public
offering price next determined after the Transfer Agent receives your order in
proper form. In most cases, in order to receive that day's public offering
price, the Transfer Agent must receive your order in proper form before the
close of regular trading on the New York Stock Exchange ("NYSE"), normally 4:00
p.m., Eastern time.
The NYSE annually announces the days on which it will not be open for trading.
The most recent announcement indicates that it will not be open on the following
days: New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
However, the NYSE may close on days not included in that announcement.
The Trust reserves the right in its sole discretion (i) to suspend the continued
offering of the Fund's shares, (ii) to reject purchase orders in whole or in
part when in the judgment of the Advisor or the Distributor such rejection is in
the best interest of the Fund, and (iii) to reduce or waive the minimum for
initial and subsequent investments for certain fiduciary accounts or under
circumstances where certain economies can be achieved in sales of the Fund's
shares.
HOW TO SELL SHARES. You can sell your Fund shares any day the NYSE is open for
regular trading. The Fund may require documentation for the sale of shares by a
corporation, partnership, agent or fiduciary, or a surviving joint owner.
Contact the Transfer Agent for details.
SIGNATURE GUARANTEES. If you sell shares having a net asset value of $10,000 a
signature guarantee is required. Certain other transactions, including
redemptions, also require a signature guarantee. Signature guarantees may be
obtained from a bank, broker-dealer, credit union (if authorized under state
law), securities exchange or association, clearing agency or savings
institution. A notary public cannot provide a signature guarantee.
DELIVERY OF REDEMPTION PROCEEDS. Payments to shareholders for shares of the Fund
redeemed directly from the Fund will be made as promptly as possible but no
later than seven days after receipt by the Fund's Transfer Agent of the written
request in proper form, with the appropriate documentation as stated in the
Prospectus, except that the Fund may suspend the right of redemption or postpone
the date of payment during any period when (a) trading on the NYSE is restricted
as determined by the SEC or the NYSE is closed for other than weekends and
holidays; (b) an emergency exists as determined by the SEC making disposal of
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<PAGE>
portfolio securities or valuation of net assets of the Fund not reasonably
practicable; or (c) for such other period as the SEC may permit for the
protection of the Fund's shareholders. Under unusual circumstances, the Fund may
suspend redemptions, or postpone payment for more than seven days, but only as
authorized by SEC rules.
The value of shares on redemption or repurchase may be more or less than the
investor's cost, depending upon the market value of the Fund's portfolio
securities at the time of redemption or repurchase.
Telephone redemptions. Shareholders must have selected telephone transactions
privileges on the Account Application when opening a Fund account. Upon receipt
of any instructions or inquiries by telephone from a shareholder or, if held in
a joint account, from either party, or from any person claiming to be the
shareholder, the Fund or its agent is authorized, without notifying the
shareholder or joint account parties, to carry out the instructions or to
respond to the inquiries, consistent with the service options chosen by the
shareholder or joint shareholders in his or their latest Account Application or
other written request for services, including purchasing or redeeming shares of
the Fund and depositing and withdrawing monies from the bank account specified
in the Bank Account Registration section of the shareholder's latest Account
Application or as otherwise properly specified to the Fund in writing.
The Transfer Agent will employ these and other reasonable procedures to confirm
that instructions communicated by telephone are genuine; if it fails to employ
reasonable procedures, the Fund and the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. If these procedures are
followed, an investor agrees, however, that to the extent permitted by
applicable law, neither the Fund nor its agents will be liable for any loss,
liability, cost or expense arising out of any redemption request, including any
fraudulent or unauthorized request. For information, consult the Transfer Agent.
During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Transfer Agent by telephone. In this event,
you may wish to submit a written redemption request, as described in the
Prospectus. The Telephone Redemption Privilege may be modified or terminated
without notice.
Redemptions-in-kind. The Trust has filed an election under SEC Rule 18f-1
committing to pay in cash all redemptions by a shareholder of record up to
amounts specified by the rule (in excess of the lesser of (i) $250,000 or (ii)
1% of the Fund's assets). The Fund has reserved the right to pay the redemption
price of its shares in excess of the amounts specified by the rule, either
totally or partially, by a distribution in kind of portfolio securities (instead
of cash). The securities so distributed would be valued at the same amount as
that assigned to them in calculating the net asset value for the shares being
sold. If a shareholder receives a distribution in kind, the shareholder could
incur brokerage or other charges in converting the securities to cash.
Automatic Investment Plan. As discussed in the Prospectus, the Fund provides an
Automatic Investment Plan for the convenience of investors who wish to purchase
shares of the Fund on a regular basis. All record keeping and custodial costs of
the Automatic Investment Plan are paid by the Fund. The market value of the
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Fund's shares is subject to fluctuation, so before undertaking any plan for
systematic investment, the investor should keep in mind that this plan does not
assure a profit nor protect against depreciation in declining markets.
DETERMINATION OF SHARE PRICE
As noted in the Prospectus, the net asset value and offering price of shares of
the Fund will be determined once daily as of the close of public trading on the
NYSE (normally 4:00 p.m., Eastern time) on each day that the NYSE is open for
trading. The Fund does not expect to determine the net asset value of its shares
on any day when the NYSE is not open for trading even if there is sufficient
trading in its portfolio securities on such days to materially affect the net
asset value per share. However, the net asset value of the Fund's shares may be
determined on days the NYSE is closed or at times other than 4:00 p.m. if the
Board of Trustees decides it is necessary.
In valuing the Fund's assets for calculating net asset value, readily marketable
portfolio securities listed on a national securities exchange or on NASDAQ are
valued at the last sale price on the business day as of which such value is
being determined. If there has been no sale on such exchange or on NASDAQ on
such day, the security is valued at the closing bid price on such day. Readily
marketable securities traded only in the over-the-counter market and not on
NASDAQ are valued at the current or last bid price. If no bid is quoted on such
day, the security is valued by such method as the Board of Trustees of the Trust
shall determine in good faith to reflect the security's fair value. All other
assets of the Fund are valued in such manner as the Board of Trustees in good
faith deems appropriate to reflect their fair value.
The net asset value per share of the Fund is calculated as follows: all
liabilities incurred or accrued are deducted from the valuation of total assets
which includes accrued but undistributed income; the resulting net assets are
divided by the number of shares of the Fund outstanding at the time of the
valuation and the result (adjusted to the nearest cent) is the net asset value
per share.
PERFORMANCE INFORMATION
From time to time, the Fund may state its total return in advertisements and
investor communications. Total return may be stated for any relevant period as
specified in the advertisement or communication. Any statements of total return
will be accompanied by
information on the Fund's average annual compounded rate of return for the most
recent one, five and ten year periods, or shorter periods from inception,
through the most recent calendar quarter. The Fund may also advertise aggregate
and average total return information over different periods of time.
The Fund's total return may be compared to relevant indices, including Standard
& Poor's 500 Composite Stock Index and indices published by Lipper Analytical
Services, Inc. From time to time, evaluations of the Fund's performance by
independent sources may also be used in advertisements and in information
furnished to present or prospective investors in the Fund.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any period should
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<PAGE>
not be considered as a representation of what an investment may earn or what an
investor's total return may be in any future period.
The Fund's average annual compounded rate of return is determined by reference
to a hypothetical $1,000 investment that includes capital appreciation and
depreciation for the stated period, according to the following formula:
n
P(1+T) = ERV
Where: P = a hypothetical initial purchase order of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000 purchase at
the end of the period
Aggregate total return is calculated in a similar manner, except that the
results are not annualized. Each calculation assumes that all dividends and
distributions are reinvested at net asset value on the reinvestment dates during
the period.
GENERAL INFORMATION
Investors in the Fund will be informed of the Fund's progress through periodic
reports. Financial statements certified by independent public accountants will
be submitted to shareholders at least annually.
Firstar Institutional Custody Services, located at 425 Walnut St., Cincinnati,
Ohio 45201 acts as Custodian of the securities and other assets of the Fund. ICA
Fund Services Corp., 4455 East Camelback Rd., Ste. 261-E, Phoenix, AZ 85018,
acts as the Fund's transfer and shareholder service agent. The Custodian and
Transfer Agent do not participate in decisions relating to the purchase and sale
of securities by the Fund.
__________________________________________, are the independent auditors for the
Fund.
Paul, Hastings, Janofsky & Walker LLP, 345 California Street, 29th Floor, San
Francisco, California 94104, are legal counsel to the Fund.
The Trust was organized as a Delaware business trust on April 27, 1999. The
Agreement and Declaration of Trust permits the Board of Trustees to issue an
limited number of full and fractional shares of beneficial interest, without par
value, which may be issued in any number of series. The Board of Trustees may
from time to time issue other series, the assets and liabilities of which will
be separate and distinct from any other series.
Shares issued by the Fund have no preemptive, conversion, or subscription
rights. Shareholders have equal and exclusive rights as to dividends and
distributions as declared by the Fund and to the net assets of the Fund upon
liquidation or dissolution. The Fund, as a separate series of the Trust, votes
separately on matters affecting only the Fund (e.g., approval of the Advisory
Agreement); all series of the Trust vote as a single class on matters affecting
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all series jointly or the Trust as a whole (e.g., election or removal of
Trustees). Voting rights are not cumulative, so that the holders of more than
50% of the shares voting in any election of Trustees can, if they so choose,
elect all of the Trustees. While the Trust is not required and does not intend
to hold annual meetings of shareholders, such meetings may be called by the
Trustees in their discretion, or upon demand by the holders of 10% or more of
the outstanding shares of the Trust, for the purpose of electing or removing
Trustees.
The Boards of the Trust, the Advisor and the Distributor have adopted Codes of
Ethics under Rule 17j-1 of the 1940 Act. These Codes permit, subject to certain
conditions, personnel of the Advisor and Distributor to invest in securities
that may be purchased or held by the Fund.
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<PAGE>
APPENDIX
COMMERCIAL PAPER RATINGS
MOODY'S INVESTORS SERVICE, INC.
Prime-1--Issuers (or related supporting institutions) rated "Prime-1" have
a superior ability for repayment of senior short-term debt obligations.
"Prime-1" repayment ability will often be evidenced by many of the following
characteristics: leading market positions in w industries, high rates of return
on funds employed, conservative capitalization structures with moderate reliance
on debt and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well-established access
to a range of financial markets and assured sources of alternate liquidity.
Prime-2--Issuers (or related supporting institutions) rated "Prime-2" have
a strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternative liquidity is maintained.
STANDARD & POOR'S RATINGS GROUP
A-1--This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1".
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TRUST FOR INVESTMENT MANAGERS
PART C
Item 23. Exhibits.
(1) Agreement and Declaration of Trust (1)
(2) By-Laws (1)
(3) Specimen Share Certificate (2)
(4) Form of Investment Advisory Agreement
(5) Form of Distribution Agreement
(6) Not applicable
(7) Form of Custodian Agreement (2)
(8) (a) Form of Administration Agreement (2)
(b) Form of Fund Accounting Service Agreement
(c) Form of Transfer Agency and Service Agreement
(d) Form of Expense Reimbursement Agreement
(9) Form of opinion of Counsel
(10) Powers of Attorney (3)
(11) Not applicable
(12) Not applicable
(13) Form of Distribution Plan
(14) Not applicable
(15) Not applicable
(16) (a) Code of Ethics-Trust for Investment Managers
(b) Code of Ethics-First Funds Distributors
----------
(1) Incorporated by reference from Registrant's initial Registration Statement
on Form N-1A (File No. 333-80993) filed on June 18, 1999.
(2) Incorporated by reference from Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File No. 333-80993) filed
on September 17, 1999.
(3) Incorporated by reference from Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File No. 333-80993) filed
on October 13, 1999.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
<PAGE>
ITEM 25. INDEMNIFICATION
Article VI of Registrant's By-Laws states as follows:
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a Trustee, officer, employee or
other agent of this Trust or is or was serving at the request of this Trust as a
Trustee, director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise or was a
Trustee, director, officer, employee or agent of a foreign or domestic
corporation which was a predecessor of another enterprise at the request of such
predecessor entity; "proceeding" means any threatened, pending or completed
action or proceeding, whether civil, criminal, administrative or investigative;
and "expenses" includes without limitation attorney's fees and any expenses of
establishing a right to indemnification under this Article.
Section 2. ACTIONS OTHER THAN BY TRUST. This Trust shall indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of this Trust) by reason of
the fact that such person is or was an agent of this Trust, against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with such proceeding, if it is determined that person acted in
good faith and reasonably believed:
(a) in the case of conduct in his official capacity as a Trustee of the
Trust, that his conduct was in the Trust's best interests, and
(b) in all other cases, that his conduct was at least not opposed to the
Trust's best interests, and
(c) in the case of a criminal proceeding, that he had no reasonable cause
to believe the conduct of that person was unlawful.
The termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not of
itself create a presumption that the person did not act in good faith and in a
manner which the person reasonably believed tbe in the best interests of this
Trust or that the person had reasonable cause to believe that the person's
conduct was unlawful.
Section 3. ACTIONS BY THE TRUST. This Trust shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action by or in the right of this Trust to procure a judgment in
its favor by reason of the fact that that person is or was an agent of this
Trust, against expenses actually and reasonably incurred by that person in
connection with the defense or settlement of that action if that person acted in
good faith, in a manner that person believed to be in the best interests of this
Trust and with such care, including reasonable inquiry, as an ordinarily prudent
person in a like position would use under similar circumstances.
<PAGE>
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to
the contrary contained herein, there shall be no right to indemnification for
any liability arising by reason of willful misfeasance, bad faith, gross
negligence, or the reckless disregard of the duties involved in the conduct of
the agent's office with this Trust.
No indemnification shall be made under Sections 2 or 3 of this Article:
(a) In respect of any claim, issue, or matter as to which that person
shave been adjudged to be liable on the basis that personal benefit
was improperly received by him, whether or not the benefit resulted
from an action taken in the person's official capacity; or
(b) In respect of any claim, issue or matter as to which that person shall
have been adjudged to be liable in the performance of that person's
duty to tTrust, unless and only to the extent that the court in which
that action was bshall determine upon application that in view of all
the circumstances of the case, that person was not liable by reason of
the disabling conduct set forth in the preceding paragraph and is
fairly and reasonably entitled to indemnity for the expenses which the
court shall determine; or
(c) of amounts paid in settling or otherwise disposing of a threatened or
pending action, with or without court approval, or of expenses
incurred in defending a threatened or pending action which is settled
or otherwise disposed of without court approval, unless the required
approval set forth in Section 6 of this Article is obtained.
Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an aof this
Trust has been successful on the merits in defense of any proceeding referred to
in Sections 2 or 3 of this Article or in defense of any claim, issue or matter
therein, before the court or other body before whom the proceeding was brought,
the agent shall be indemnified against expenses actually and reasonably incurred
by the agent in connection therewith, provided that the Board of Trustees,
including a majority who are disinterested, non-party Trustees, also determines
that based upon a review of the facts, the agent was not liable by reason of the
disabling conduct referred to in Section 4 of this Article.
Section 6. REQUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by this Trust only
if authorized in the specific case on a determination that indemnification of
the agent is proper in tcircumstances because the agent has met the applicable
standard of conduct set forth in Sections 2 or 3 of this Article and is not
prohibited from indemnification because of the disabling conduct set forth in
Section 4 of this Article, by:
(a) A majority vote of a quorum consisting of Trustees who are not parties
to the proceeding and are not interested persons of the Trust (as
defined ithe Investment Company Act of 1940); or
(b) A written opinion by an independent legal counsel.
<PAGE>
Section 7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this Trust before the final disposition of the
proceeding ua written undertaking by or on behalf of the agent, to repay the
amount of the advance if it is ultimately determined that he or she is not
entitled to indemnification, together with at lone of the following as a
condition to the advance: (i)security for the undertaking; or (ii) the existence
of insurance protecting the Trust against losses arising by reason of any lawful
advances; or (iii) a determination by a majority of a quorum of Trustees who are
not parties to the proceeding and are not interested persons of the Trust, or by
an independent legal counsel in a written opinion, based on a review of readily
available facts that there is reason to believe that tagent ultimately will be
found entitled to indemnification. Determinations and authorizations of payments
under this Section must be made in the manner specified in Section 6 of this
Article for determining that the indemnification is permissible.
Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than Trustees
and officers of this Trust or any subsidiary hereof may be entitled by contract
or otherwise.
Section 9. LIMITATIONS. No indemnification or advance shall be made under
this Article, except as provided in Sections 5 or 6 in any circumstances where
it appears:
(a) that it would be inconsistent with a provision of the Agreement and
Declaration of Trust of the Trust, a resolution of the shareholders,
or an agreement in effect at the time of accrual of the alleged cause
of action asserted in the proceeding in which the expenses were
incurred or other amounts were paid which prohibits or otherwise
limits indemnification; or
(b) that it would be inconsistent with any condition expressly imposed ba
court in approving a settlement.
Section 10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees of this Trust to purchase such insurance, this Trust shall
purchase and maintain insurance on behalf of any agent of this Trust against any
liability asserted against or incurred by the agent in such capacity or arising
out of the agent's status as such, but only to the extent that this Trust would
have the power to indemnify the agent against that liability uthe provisions of
this Article and the Agreement and Declaration of Trust of the Trust.
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article dnot apply
to any proceeding against any Trustee, investment manager or other fiduciary of
an employee benefit plan in that person's capacity as such, even though that
person may also be an agent of this Trust as defined in Section 1 of this
Article. Nothing contained in this Article shall limit any right to
indemnification to which such a Trustee, investment manager, or other fiduciary
may be entitled by contract or otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article.
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 ("Securities Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in connection with the successful defense
of any action, suit or proceeding) is asserted against the Registrant by such
director, officer or controlling person in connection with the shares being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
With respect to the Investment Adviser, the response to this item is
incorporated by reference to the Adviser's Form ADV, as amended, File No.
801-702.
ITEM 27. PRINCIPAL UNDERWRITERS.
(a) The Registrant's principal underwriter also acts as principal
underwriter for the following investment companies:
Advisors Series Trust
Brandes Investment Trust
Fleming Mutual Fund Group
Fremont Mutual Funds
Guinness Flight Investment Funds
Jurika & Voyles Fund Group
Kayne Anderson Mutual Funds
Masters' Select Investment Trust
O'Shaughnessy Funds, Inc.
PIC Investment Trust
Purisima Funds
Rainier Investment Management Mutual Funds
RNC Mutual Fund Group
Professionally Managed Portfolios
<PAGE>
(b) The following information is furnished with respect to the officers
and directors of First Fund Distributors, Inc.:
Position and Offices Position and
Name and Principal With Principal Offices With
Business Address Underwriter Registrant
---------------- ----------- ----------
Robert H. Wadsworth President and Trustee
4455 E. Camelback Road Treasurer
Suite 261E
Phoenix, AZ 85018
Eric M. Banhazl Vice President None
2020 E. Financial Way
Glendora, CA 91741
Steven J. Paggioli Vice President and None
915 Broadway Secretary
New York, New York 10010
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the rules promulgated thereunder are in the possession the Registrant's
custodian and transfer agent, except t records relating to portfolio
transactions and the basic organizational and Trust documents of the Registrant
(see Subsections (2) (iii). (4), (5), (6), (7), (9), (10) and (11) of Rule
31a-1(b)), which, with respect to portfolio transactions are kept by the Fund's
Advisor at its address set forth in the prospectus and statement of additional
information and with respect to trust documents by its administrator at 2020 E.
Financial Way, Suite 100, Glendora, CA 91741.
ITEM 29. MANAGEMENT SERVICES.
There are no management-related service contracts not discussed in Parts A
and B.
ITEM 30. UNDERTAKINGS
The registrant undertakes:
(a) To furnish each person to whom a Prospectus is delivered a copy of
Registrant's latest annual report to shareholders, upon request and
without charge.
(b) If requested to do so by the holders of at least 10% of the Trust's
outstanding shares, to call a meeting of shareholders for the purposes
of voting upon the question of removal of a director and assist in
communications with other shareholders.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant has duly caused this amendment to this
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Phoenix in the State of Arizona on July 14,
2000.
TRUST FOR INVESTMENT MANAGERS
By /s/ Robert H. Wadsworth
-------------------------------------
Robert H. Wadsworth
President
Pursuant to the requirements of the Securities Act of 1933, this amendment to
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
/s/ Robert H. Wadsworth Trustee July 14, 2000
---------------------------
Robert H. Wadsworth
/s/ Robert M. Slotky Principal July 14, 2000
--------------------------- Financial
Robert M. Slotky Officer
George J. Rebhan* Trustee July 14, 2000
---------------------------
George T. Rebhan
Ashley T. Rabun* Trustee July 14, 2000
---------------------------
Ashley T. Rabun
James Clayburn Laforce* Trustee July 14, 2000
---------------------------
James Clayburn LaForce
* By: /s/ Robert H. Wadsworth
---------------------------
Robert H. Wadsworth, Attorney-in-Fact under powers of
attorney as filed with Post-Effective Amendment No. 1 to the
Registration Statement filed on October 13, 1999
<PAGE>
EXHIBITS
Exhibit No. Description
----------- -----------
99B.4 Advisory Agreement
99B.5 Distribution Agreement
99B.8.B Fund Accounting Service Agreement
99B.8.C Transfer Agency and Service Agreement
99B.8.D Expense Reimbursement Agreement
99B.9 Form of Opinion Letter
99B.13 12b-1 Plan
99B.16.A Code of Ethics - Trust for Investment Managers
99B.16.B Code of Ethics - First Fund Distributors
