Registration No.___-_____
ICA No. ___-_____
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 23, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 |X|
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 |X|
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
(Check Appropriate Box or Boxes)
STOCKJUNGLE.COM TRUST
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
3805 SOUTH CANFIELD AVENUE, SUITE B
CULVER CITY, CALIFORNIA 90232
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(Address of Principal Executive Offices)(Zip Code)
(310) 841-4010
---------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Michael Miola
American Data Services, Inc.
The Hauppauge Corporate Center
150 Motor Parkway
Hauppauge, New York 11788
---------------------------------------
(Name and Address of Agent For Service)
With a copy to:
Thomas R. Westle, Esq.
Spitzer & Feldman P.C.
405 Park Avenue
New York, NY 10022
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE
-----------------------------------------------
(Approximate Date of Proposed Public Offering)
SHARES OF BENEFICIAL INTEREST
-------------------------------------
(Title of Securities Being Registered)
<PAGE>
It is proposed that this filing will become effective (check
appropriate box):
[ ] immediately upon filing pursuant to paragraph (b).
[ ] on (date) pursuant to paragraph (b).
[ ] 60 days after filing pursuant to paragraph (a)(1).
[ ] on (date) pursuant to paragraph (a)(1).
[ ] 75 days after filing pursuant to paragraph (a)(2).
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
<PAGE>
STOCKJUNGLE.COM TRUST
STOCKJUNGLE.COM MARKET LEADERS GROWTH FUND
STOCKJUNGLE.COM FREE S&P 500 INDEX FUND
STOCKJUNGLE.COM PURE PLAY INTERNET FUND
STOCKJUNGLE.COM COMMUNITY INTELLIGENCE FUND
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
ITEM NO. CAPTION IN PROSPECTUS
- -------- ---------------------
1 Front and Back Cover Pages
2 Investment Objectives and Policies
3 Transaction and Operating Expense Table
4 Investment Objectives and Policies
5 Dividends and Distributions; Performance Comparisons
6 Management
7 How to Purchase Shares; How to Redeem Shares; Shareholder Services;
Dividends and Distributions; Valuation of Shares; Tax Status and
General Information
8 Not Applicable
9 Not Applicable
CAPTION IN STATEMENT OF ADDITIONAL INFORMATION
----------------------------------------------
10 Cover Page and Table of Contents
11 Investment Objectives, Policies and Restrictions
12 Directors and Executive Officers
13 Ownership of Common Stock
14 Investment Advisory and Other Services
15 Portfolio Transactions and Allocation of Brokerage
16 Ownership of Common Stock
17 Net Asset Value and Public Offering Price; Redemption of Shares
18 Taxation
19 Investment Advisory and Other Services
20 Performance Comparisons
21 Financial Statements
<PAGE>
STOCKJUNGLE.COM TRUST
STOCKJUNGLE.COM MARKET LEADERS GROWTH FUND
STOCKJUNGLE.COM FREE S&P 500 INDEX FUND
STOCKJUNGLE.COM PURE PLAY INTERNET FUND
STOCKJUNGLE.COM COMMUNITY INTELLIGENCE FUND
PROSPECTUS
_______________, 1999
STOCKJUNGLE.COM MARKET LEADERS GROWTH FUND seeks to provide investors with
long-term capital appreciation by investing in the common stocks of a select
number of U.S. corporations that have consistently demonstrated fundamental
investment value and hold the strongest competitive position in various business
sectors identified by StockJungle.com Investment Advisors, Inc. (the "Adviser").
In addition, the Fund may invest a small but not insignificant portion
(generally between five (5%) and twenty (20%) percent) of its net assets in the
common stock of companies identified by the Adviser as new and emerging leaders
in smaller, but potentially important sectors.
STOCKJUNGLE.COM FREE S&P 500 INDEX FUND seeks to provide investors, at no cost,
investment results equivalent to the total return of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index").
STOCKJUNGLE.COM PURE PLAY INTERNET FUND seeks to provide investors with
long-term capital appreciation by investing in the common stocks of U.S.
Internet companies with the largest market capitalizations.
STOCKJUNGLE.COM COMMUNITY INTELLIGENCE FUND seeks to provide investors with
capital appreciation by investing in a diversified portfolio of common stocks of
U.S. companies with market capitalizations of no less than $100 million which
have been identified to StockJungle.com, Inc., the parent of the Adviser, by
visitors to the StockJungle.com website and are then screened and selected by
the Adviser for investment by the Fund.
Each of the StockJungle.com Funds are designed and created primarily for
investment by on-line investors. Shareholders in the Funds are requested to
consent to the acceptance of all information about the Fund or Funds in which
they invest only through means of electronic delivery.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
1
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
RISK RETURN SUMMARY............................................................3
FEES AND EXPENSES OF EACH FUND.................................................6
STOCKJUNGLE.COM MARKET LEADERS GROWTH FUND.....................................8
STOCKJUNGLE.COM FREE S&P 500 INDEX FUND .......................................9
STOCKJUNGLE.COM PURE PLAY INTERNET FUND.......................................10
STOCKJUNGLE.COM COMMUNITY INTELLIGENCE FUND ..................................11
MAIN RISKS....................................................................12
MANAGEMENT ORGANIZATION AND CAPITAL STRUCTURE.................................16
VALUATION OF SHARES...........................................................18
HOW TO PURCHASE SHARES........................................................18
HOW TO REDEEM SHARES..........................................................20
SHAREHOLDER SERVICES..........................................................22
DIVIDENDS AND DISTRIBUTIONS...................................................23
TAX STATUS....................................................................24
PERFORMANCE INFORMATION.......................................................24
GENERAL INFORMATION...........................................................25
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT..................................25
COUNSEL AND INDEPENDENT AUDITORS..............................................25
FOR MORE INFORMATION..........................................................26
2
<PAGE>
RISK/RETURN SUMMARY
INVESTMENT SUMMARY
1. STOCKJUNGLE.COM MARKET LEADERS GROWTH FUND
------------------------------------------
INVESTMENT OBJECTIVE:
---------------------
- -- The Fund seeks to provide investors with long-term capital
appreciation.
PRINCIPAL INVESTMENT STRATEGY:
------------------------------
- -- Long-term investment in the common stocks of a select number of U.S.
companies that have consistently demonstrated fundamental investment
value and hold the strongest competitive position in various business
sectors as determined by the Adviser. The Fund may also invest in the
common stocks of companies identified by the Adviser as new and
emerging leaders in smaller, but potentially important sectors.
PRINCIPAL INVESTMENT RISKS:
---------------------------
- -- MARKET RISK. The net asset value of this Fund will fluctuate based on
changes in the value of the securities in which the Fund invests.
Market prices of these securities may be adversely affected by an
issuer's having experienced losses or by the lack of earnings or the
issuer's failure to meet the market's expectations with respect to new
products or services, or even by factors wholly unrelated to the value
or condition of the issuer.
- -- EMERGING LEADERS. Although the Fund will focus on investment in the
common stocks of U.S. companies which have established themselves as
leaders in traditionally strong business sectors, the Fund may invest a
small but not insignificant portion (generally between five (5%) and
twenty (20%) percent) of its net assets in the common stocks of
companies identified by the Adviser as new and emerging leaders in
smaller and less developed but potentially important business sectors.
These companies may include issuers with small or mid-sized capital
structures (generally a market cap of $5 billion or less).
Consequently, the Fund may be subject to the additional risks
associated with investment in these companies. The market prices of the
securities of such companies tend to be more volatile than those of
larger companies. Further, these securities tend to trade at a lower
volume than those of larger more established companies. The net asset
value of the Fund will be more susceptible to sudden and significant
losses if the value of these securities declines.
- -- NON-DIVERSIFICATION. This Fund is classified as "non-diversified" under
federal securities laws which means that one-half of the Fund's assets
may be invested in two or more stocks while the other half is spread
out among various investments not exceeding 5% of the Fund's total
assets. As a result of its non-diversified status, the Fund's shares
may be more susceptible to adverse changes in the value of the
securities of a particular company than would be the shares of a
diversified investment company.
3
<PAGE>
2. STOCKJUNGLE.COM FREE S&P 500 INDEX FUND
----------------------------------------
INVESTMENT OBJECTIVE:
---------------------
- -- The Fund seeks to provide investors with a total return equivalent to
that of the S&P 500 Index.
PRINCIPAL INVESTMENT STRATEGY:
------------------------------
- -- Replicate the holdings of the S&P 500 Index.
- -- Provide investors with a total return equivalent to that of the S&P 500
Index by offering the Fund free of all charges to the investor.
PRINCIPAL INVESTMENT RISK:
--------------------------
- -- MARKET RISK. The net asset value of the Fund will fluctuate based on
changes in the value of the individual securities comprising the S&P
500 Index. The U.S. stock markets upon which these securities are
listed are generally susceptible to volatile fluctuations in market
price. Increased volatility of these securities may adversely affect
the value of the Fund's shares and could result in the loss of a
portion of your investment.
3. STOCKJUNGLE.COM PURE PLAY INTERNET FUND
---------------------------------------
- -- The Fund seeks to provide investors with long-term capital
appreciation.
PRINCIPAL INVESTMENT STRATEGY:
------------------------------
- -- Investment in the common stocks of U.S. companies which have the
largest market capitalizations and whose principal business is directly
related to or substantially dependent upon the Internet and/or the
World Wide Web ("WWW").
PRINCIPAL INVESTMENT RISKS:
---------------------------
- -- MARKET VOLATILITY AND SECTOR RISK. The value of this Fund's shares are
susceptible to factors affecting the Internet and WWW business sectors
such as heightened regulatory scrutiny and impending changes in
government policies which may have a material effect on the products
and services of these sectors. Furthermore, securities of companies in
this sector tend to be more volatile than securities of companies in
other industries. Competitive pressures and changing demand may have a
significant effect on the financial condition of Internet companies.
These companies spend heavily on research and development and are
especially sensitive to the risk of product obsolescence.
4
<PAGE>
4. STOCKJUNGLE.COM COMMUNITY INTELLIGENCE FUND
--------------------------------------------
INVESTMENT OBJECTIVE:
---------------------
- -- The Fund seeks to provide investors with capital appreciation.
PRINCIPAL INVESTMENT STRATEGY:
------------------------------
- -- Investment in a diversified portfolio of the common stocks of those
U.S. companies having market capitalizations of no less than $100
million and whose identity has been provided to the parent of the
Adviser by visitors to the StockJungle.com website and then screened
and selected by the Adviser for investment by the Fund.
PRINCIPAL INVESTMENT RISKS:
---------------------------
- -- RELIANCE ON COMMUNITY INTELLIGENCE. The effectiveness of this Fund's
investment strategy is directly contingent upon widespread
participation by visitors to the StockJungle.com website and their
submission of detailed and reasoned analyses which identify bona fide
potential investments for the Fund. There are no assurances that
visitors to the website will participate or provide such detailed and
reasoned analyses or that the Adviser will be able to successfully
screen the information provided and select appropriate securities for
this Fund.
- -- VOLATILITY OF U.S. MARKETS. The net asset value of this Fund can be
expected to fluctuate based on changes in the value of the securities
in which the Fund invests. The U.S. stock market is generally
susceptible to volatile fluctuations in market price. Investments in
equity securities generally are affected by changes in the stock
markets, which fluctuate substantially over time, sometimes suddenly
and sharply. During an overall stock market decline, stock prices of
small- or medium-sized companies (in which the Fund may invest) often
fluctuate more than prices of larger companies.
- -- SHORT SALES TRANSACTIONS. The Adviser will screen each analysis
submitted by visitors to the StockJungle.com website prior to selecting
those which the Adviser believes present bona-fide investment
opportunities. These analysis selected by the Adviser may involve
investment strategies requiring the Adviser to take short positions in
target securities which may or may not include "boxed positions".
Investment via short positions presents the risk that if the stock
markets move against the short position the Fund will be more
susceptible to a sudden and significant decline in the net asset value
of the Fund. The Fund is limited in its investment in futures contracts
effecting short sales to the extent that the aggregate initial futures
margin and premiums may not exceed 10% of the value of the Fund's net
assets.
5
<PAGE>
FEES AND EXPENSES OF THE STOCKJUNGLE.COM FUNDS
The following table describes the fees that you may pay if you buy and hold
shares of each of the Funds:
<TABLE>
<CAPTION>
STOCKJUNGLE.COM
---------------
MARKET FREE PURE PLAY COMMUNITY
LEADERS S&P 500 INTERNET INTELLIGENCE
FUND INDEX FUND FUND
FUND(1)
- -----------------------------------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION FEES
<S> <C> <C> <C> <C>
(PAID DIRECTLY FROM YOUR INVESTMENTS):
Maximum Sales Load Imposed on Purchases None None None None
(as a percentage of the offering price)
Redemption Fee
(for shares held less than 120 days) 2.00% 2.00% 2.00% 2.00%
ESTIMATED ANNUAL FUND
OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS, AS A PERCENTAGE OF NET ASSETS):
1.00% None 1.00% 1.00%
Management Fees(2)
Distribution Fees(2) .__% None .__% .__%
Other Expenses(2) .__% None .__% .__%
Total Estimated Fund Operating Expenses(2) 1.00 % None 1.00% 1.00%
- -----------------------------------------------------------------------------------------------------------
EXAMPLE:
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN EACH
FUND WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS.
THE EXAMPLE ASSUMES THAT YOU INVEST $10,000 IN EACH FUND FOR THE TIME
PERIODS INDICATED AND THEN REDEEM ALL OF YOUR SHARES AT THE END OF THESE
PERIODS. THE EXAMPLE ALSO ASSUMES THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR
AND THAT THE FUND'S OPERATING EXPENSES REMAIN THE SAME. NEITHER THE 5% RATE OF
RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE CONSIDERED INDICATIONS OF PAST OR
FUTURE RETURNS AND EXPENSES. ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER,
BASED ON THESE ASSUMPTIONS YOUR COST WOULD BE:
<FN>
--------
(1) The Adviser receives no Management Fee and is responsible for the
payment of all fees of the StockJungle.com Free S&P 500 Index Fund.
(2) The Adviser's Management Fees with respect to each of the
StockJungle.com Market Leaders Fund, StockJungle.com Pure Play Internet
Fund and StockJungle.com Community Intelligence Fund are "all
inclusive" which means that the Adviser is responsible for the payment
of all of a Fund's other expenses, including the Distribution Fees and
Other Expenses, and, as a result, each Fund's Total Fund Operating
Expenses will not exceed 1% of the Fund's average daily net assets.
</FN>
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
STOCKJUNGLE.COM STOCKJUNGLE.COM STOCKJUNGLE.COM STOCKJUNGLE.COM
MARKET LEADERS FUND FREE S&P 500 INDEX FUND PURE PLAY INTERNET FUND COMMUNITY INTELLIGENCE FUND
- ------------------- ----------------------- ----------------------- ---------------------------
<S> <C> <C> <C>
ONE YEAR $______ ONE YEAR $NONE ONE YEAR $_______ ONE YEAR $__________
------
THREE YEARS $_____ THREE YEARS $NONE THREE YEARS $_______ THREE YEARS $________
-----
YOU WOULD PAY THE FOLLOWING EXPENSES IF YOU DID NOT REDEEM YOUR SHARES:
STOCKJUNGLE.COM STOCKJUNGLE.COM STOCKJUNGLE.COM STOCKJUNGLE.COM
MARKET LEADERS FUND FREE S&P 500 INDEX FUND PURE PLAY INTERNET FUND COMMUNITY INTELLIGENCE FUND
- ------------------- ----------------------- ----------------------- ---------------------------
ONE YEAR $______ ONE YEAR $NONE ONE YEAR $________ ONE YEAR $________
----
THREE YEARS $_____ THREE YEARS $NONE THREE YEARS $______ THREE YEARS $________
-----
</TABLE>
PERFORMANCE
TO DATE, THERE IS NO PRIOR PERFORMANCE FOR ANY FUND.
7
<PAGE>
STOCKJUNGLE.COM MARKET LEADERS GROWTH FUND
Ticker Symbol: ________
INVESTMENT STRATEGY
The StockJungle.com Market Leaders Growth Fund invests substantially
all of its assets but in no event less than 80% of such assets in a
non-diversified portfolio of the common stocks of approximately 15 to 20 U.S.
companies which, in the opinion of the Adviser, have consistently demonstrated
fundamental investment value and hold the strongest competitive position in
their respective business sectors. In addition, the Fund may invest a small but
not insignificant portion (generally between five (5%) and twenty (20%) percent)
of its net assets in the common stocks of companies identified by the Adviser as
new and emerging leaders in smaller, but potentially important sectors. To
achieve its investment objective, the Fund invests primarily in common stocks,
but also may invest in preferred stocks and convertible preferred stocks of such
companies and other equity securities having the characteristics of common
stocks such as Standard & Poor's Depositary Receipts ("SPDRs") and DIAMONDS.
Under adverse market conditions or for liquidity or temporary defensive
purposes, this Fund may invest a significant portion of its net assets in U.S.
Government securities, money market instruments or similar short-term
securities.
The Adviser focuses on the market leaders of core industries which have
consistent operating histories, strong management teams and favorable long-term
growth prospects. The Adviser evaluates and selects the common stocks of
companies on an individual basis in order to identify market leaders which have
consistently demonstrated fundamental investment value. In assessing the
strength of a company's competitive position, the Adviser may consider such
factors as technology leadership, market share, rights to patents and other
intellectual property, strength of management, marketing prowess and product
development capabilities. The Adviser also determines which sectors should be
represented in the Fund's portfolio and will purchase or sell a portfolio
security if the Adviser believes that a particular sector should or should not
be included in the Fund's investments.
This Fund is committed to long-term investment. The Adviser will
utilize a buy and hold approach, generally maintaining its position in the
company's stock without regard to day-to-day fluctuations in the market.
However, the Adviser will frequently re-evaluate portfolio holdings, as it deems
necessary, and will typically sell a stock when the reasons for buying it no
longer apply or when the company begins to show deteriorating fundamentals or
poor relative performance.
PORTFOLIO TURNOVER. The frequency of this Fund's portfolio transactions
will vary from year to year. However, since the Fund's investment policies
emphasize long-term investment in the securities of established companies with
strong competitive positions and whose securities consistently demonstrate
fundamental investment value, the Adviser does not anticipate frequent changes
in investments and the Fund's portfolio turnover rate is expected to be
relatively low. The Adviser expects that the annual portfolio turnover rate for
the StockJungle.com Market Leaders Growth Fund will be approximately 25%.
8
<PAGE>
STOCKJUNGLE.COM FREE S&P 500 INDEX FUND
Ticker Symbol: ________
INVESTMENT STRATEGY
The StockJungle.com Free S&P 500 Index Fund seeks to replicate the
composition and total return of the S&P 500 Index at absolutely no cost to
investors. Under normal market conditions, the Fund invests all of its net
assets in the common stock of the companies which comprise the S&P 500 Index
("S&P 500 Index Securities"). The S&P 500 Index is comprised of the common
stocks of 500 companies representing a significant portion of the market value
of all common stocks publicly traded in the United States and is a widely
recognized unmanaged index of common stock prices. As a result, the Fund is
diversified in terms of industry, size, liquidity and other relevant
characteristics. The Fund will initially, however, invest primarily in SPDRS
until it has sufficient assets (which the Adviser believes is approximately $3
million) to invest its assets directly in S&P 500 Index Securities in
furtherance of its investment objective.
The Adviser employs a passive investment management approach and does
not intend to change the composition of the Fund's equity portfolio based on its
own economic, financial or market analysis. Although the Adviser will attempt to
remain fully invested in the common stock of the companies comprising the S&P
500 Index or SPDRS, under adverse market conditions or for liquidity or
temporary or defensive purposes, the Adviser may invest a significant portion of
the Fund's net assets in U.S. Government securities or short-term money market
instruments.
The Adviser offers this Fund at absolutely no cost to the investor. As
a condition of its no-cost feature, the Adviser requires that, with the
exception of executing purchases and sales of this Fund's shares, every investor
must interface with the Fund exclusively on-line. All Fund reports, statements
and prospectuses must be downloaded or viewed electronically. The investor may
also view Fund trading activity as it occurs in real time. As a result of the
Fund's no-cost feature, the investor has the opportunity to realize a return on
investment equivalent to the return of the S&P 500 Index as opposed to investing
in other S&P Index funds which charge investors for investment management,
brokerage commissions, transaction fees or other costs of investing and which
provide a return adversely affected by such fees and expenses.
PORTFOLIO TURNOVER. The frequency of the Fund's portfolio transactions
will vary from year to year and depend on changes made to the S&P 500 Index.
Historically, the S&P 500 Index has experienced relatively low portfolio
turnover and it is expected that this will continue. Higher portfolio turnover
rates resulting from more actively traded portfolio securities generally result
in higher transaction costs, including brokerage commissions. However, in this
case, the Fund is being offered to the investor at no cost and therefore all
transaction and investment costs will be paid by the Adviser. Therefore, in the
case of the Free S&P 500 Index Fund, higher portfolio turnover will not have any
impact on the investor.
9
<PAGE>
STOCKJUNGLE.COM PURE PLAY INTERNET FUND
Ticker Symbol: ________
The StockJungle.com Pure Play Internet Fund invests, under normal
conditions, at least 80% of its assets in a diversified portfolio of the common
stocks of U.S. Internet companies identified by the Adviser as having the
largest market capitalizations. Internet companies for purposes of investment by
the Fund include companies principally engaged in businesses that design,
develop and/or manufacture hardware and software products and services for the
Internet and the WWW. To achieve its investment objective, the Fund invests
primarily in common stocks, but also may invest in preferred stocks and
convertible preferred stocks of Internet companies and other equity securities
having the characteristics of common stocks such as SPDRs and DIAMONDS. Although
the Fund intends to invest substantially all of its net assets in equity
securities, it may invest up to 20% of its net assets in U.S. Government
securities, high quality money market instruments and repurchase agreements.
Under adverse market conditions or for liquidity or temporary or defensive
purposes, the Fund may invest a significant portion of its net assets in U.S.
Government securities, high quality money market instruments or similar
short-term securities.
The Internet is a world-wide network of computers designed to permit
users to share information and transfer data quickly and easily. The WWW, which
is a means of graphically interfacing with the Internet, is a hyper-text based
publishing medium containing text, graphics, interactive feedback mechanisms and
links within the WWW and to other WWW documents. The Adviser believes that the
Internet is the emerging frontier interlinking computers, telecommunications and
broadcast media. Consequently, there are vast opportunities for continued growth
in demand for components, products, media, services and systems to assist,
facilitate, enhance, store, process, record, reproduce, retrieve and distribute
information, products and services for use by businesses, institutions and
consumers.
The StockJungle.com Pure Play Internet Fund will invest in U.S.
Internet companies based on the size of their market capitalization and their
designation by the Adviser as a "Pure Play Internet" company. The market
capitalization of the companies in which the Fund invests is reevaluated on a
frequent basis as deemed appropriate by the Adviser. Should the Adviser's
evaluation reveal significant changes in market capitalizations among portfolio
companies, the Adviser will seek to adjust the Fund's portfolio accordingly.
The Adviser, in its sole discretion, will determine whether a certain
company is a "Pure Play Internet" company and, accordingly, whether it is
eligible for investment by the Fund. As a general rule, the Fund will be limited
to investing in companies whose principal business is directly related to or
substantially dependent on the Internet and/or WWW and will not invest in
companies which have only a peripheral or secondary business interest in those
sectors.
PORTFOLIO TURNOVER. The frequency of the Fund's portfolio transactions
will vary from year to year and depend on changes in the market capitalizations
of companies designated by the Adviser as "Pure Play Internet" companies.
Historically, Internet stocks have been subject to higher than normal market
volatility which may result in relatively high portfolio turnover. Higher
portfolio turnover rates resulting from more actively traded portfolio
securities generally result in higher transaction costs, including brokerage
commissions. The StockJungle.com Pure Play Internet Fund expects that its annual
portfolio turnover rate will be approximately 50%.
10
<PAGE>
STOCKJUNGLE.COM COMMUNITY INTELLIGENCE FUND
Ticker Symbol: ______
INVESTMENT STRATEGY
The StockJungle.com Community Intelligence Fund invests in a
diversified portfolio of the common stocks and other equity securities of those
U.S. companies that have been identified to StockJungle.com, Inc., the parent of
the Adviser, by visitors to the StockJungle.com website and are then screened
and selected by the Adviser for investment by the Fund.
StockJungle.com has established a website on the Internet through which
it offers a wide array of products and services. One section of the website has
been designated by StockJungle.com as a community forum in which visitors to the
website can suggest investment opportunities and ideas by posting short written
analyses about companies that they believe would make bona-fide investments.
Participants will be asked to provide the reasons why they believe a particular
company would make a good investment. StockJungle.com will pass information
posted in the community forum on to the Adviser for consideration as possible
investments by this Fund. The Adviser believes that there exists a vast amount
of knowledge and experience among the visitors to StockJungle.com's website and
that by seeking input through this website it will have increased access to a
greater breadth of investment ideas for the Fund's portfolio. The Adviser, in
its sole discretion, then determines whether and to what extent the common stock
of any company identified should be purchased or sold by this Fund.
Under normal market conditions, the Fund invests at least 85% of its
net assets in the securities recommended on the StockJungle.com website and
selected for investment by the Adviser. Investments by the Fund are limited to
shares of equity securities of U.S. companies with market capitalizations of no
less than $100 million. The Fund's portfolio may, from time to time, include
shares of common stocks, preferred stocks and convertible preferred stocks of
the companies identified by participants and other equity securities that have
the characteristics of common stocks such as SPDRs and DIAMONDS. For liquidity
purposes or pending the purchase of investments in accordance with its policies,
the Fund may, from time to time, invest a portion of the Fund's assets in U.S.
Government securities or money market instruments.
PORTFOLIO TURNOVER. The frequency of the Fund's portfolio transactions
will vary from year to year. The Fund's investment policies may lead to frequent
changes in investments and the Fund's portfolio turnover rate may be
significantly higher than that of most other mutual funds. These transactions
may also result in realization of taxable capital gains, much or all of which
are short-term capital gains subject to federal and state taxation as ordinary
income and not eligible for favored long term capital gains tax treatment.
Higher portfolio turnover rates resulting from actively trading portfolio
securities will generally result in higher transaction costs, including
brokerage commissions- relevance. The Adviser expects that the annual portfolio
turnover rate for the StockJungle.com Community Intelligence Fund will be
approximately 100%.
Additional information concerning the investment strategies of each
Fund can be found in the Statement of Additional Information ("SAI").
11
<PAGE>
MAIN RISKS
GENERAL
-------
INVESTING IN MUTUAL FUNDS. All mutual funds carry a certain amount of
risk. You may lose money on your investment in any of the StockJungle.com Funds.
The following describes the primary risks that are common to the StockJungle.com
Funds summarized above as well as risks which are particular to each Fund as a
result of each Fund's specific investment objective and strategies. As all
investment securities are subject to inherent market risks and fluctuations in
value due to earnings, economic and political conditions and other factors, no
Fund can give any assurance that its investment objective will be achieved. In
addition, you should be aware that none of the Funds has any operating history
and the Adviser has no prior experience in serving as an investment adviser to a
mutual fund.
MARKET RISK. The net asset value of each of the Funds will fluctuate
based on changes in the value of its underlying portfolio. The stock market is
generally susceptible to volatile fluctuations in market price. Market prices of
securities in which each Fund invests may be adversely affected by an issuer's
having experienced losses or by the lack of earnings or by the issuer's failure
to meet the market's expectations with respect to new products or services, or
even by factors wholly unrelated to the value or condition of the issuer. The
value of the securities held by each Fund is also subject to the risk that a
specific segment of the stock market does not perform as well as the overall
market. Under any of these circumstances, the value of the Funds' shares and
total return will fluctuate, and your investment may be worth more or less than
your original cost when you redeem your shares.
YEAR 2000 PROBLEM. Virtually all operations of the Funds are computer
reliant. Therefore, each of the Funds could be adversely affected if the
computer systems used by the Adviser, the Fund's other service providers or
persons with whom the Funds transact business do not properly process and
calculate date-related information and data on or after January 1, 2000 ("Year
2000 Problem"). Further, because the Year 2000 Problem can potentially affect
virtually all organizations, the companies or entities in which the Funds invest
could also be adversely affected. Failure to adequately address this issue could
have potentially serious repercussions to each Fund and your investment. The
Adviser is in the process of working with each Fund's service providers to
prepare for the Year 2000 Problem and are taking steps reasonably designed to
address any Year 2000 Problem-related issue. Based on information currently
available, the Adviser does not expect that the Fund will incur significant
operating expenses or be required to incur material costs to be Year 2000
compliant. Although the Adviser does not anticipate that the Year 2000 Problem
will have a material impact on the Adviser's and other service provider's
abilities to provide uninterrupted service to investors, there can be no
assurance that steps taken in preparation for the Year 2000 Problem will be
sufficient to avoid any adverse impact on the Funds or that interaction with
other third-party computer systems which are not prepared for the Year 2000
Problem will not impair their services at that time, or that the Year 2000
Problem will not have an adverse effect on companies whose securities are held
by the Funds or in global markets or economies generally.
INVESTMENT IN NEW AND UNSEASONED COMPANIES. With the exception of the
StockJungle.com Free S&P 500 Index Fund, each Fund may invest, pursuant to an
initial public offering or otherwise, in the equity securities of companies
which are relatively new and unseasoned and in their early stages of development
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where the Adviser believes that the opportunity for rapid growth is above
average. These companies may not be well-known to the investing public or have
significant institutional ownership. They may lack depth of management and may
be unable to internally generate funds necessary for growth or potential
development or to generate such funds through external financing on favorable
terms. In addition, these companies may be developing or marketing new products
or services for which markets are not yet established and may never become
established. Finally, new and unseasoned companies may have relatively small
revenues and limited product lines, markets, or financial resources; their
securities are often traded over-the-counter or on a regional exchange and may
trade less frequently and in more limited volume than those of larger, more
mature companies. When making larger sales, the Fund may have to sell securities
at discounts from quoted prices or may have to make a series of small sales over
an extended period of time. As a result, the market prices of these securities
may be more subject to volatile fluctuations than those of more mature issuers.
Such fluctuations could have an adverse effect on the net asset value of the
Fund and your investment.
OTHER SECURITIES A FUND MIGHT PURCHASE. Under normal market conditions,
each Fund will invest at least 80% of its total assets in equity securities,
consisting of common stocks or securities having the characteristics of common
stocks. If the Adviser believes that market conditions warrant a temporary
defensive posture, or for liquidity purposes, each of the Funds may invest
without limit in high quality, short-term debt securities and money market
instruments. These short-term debt securities and money market instruments
include commercial paper, certificates of deposit, bankers' acceptances, and
U.S. Government securities and repurchase agreements. More information about
these investments is contained in the SAI.
SECURITIES LENDING. Each Fund may lend its portfolio securities to
broker-dealers by entering into lending arrangements or indirectly through
repurchase agreements, amounting to no more than 25% of its assets. Repurchase
transactions will be fully collateralized at all times with cash and/or
short-term debt obligations. These transactions involve some risk to a Fund
engaged in securities lending if the other party should default on its
obligation and the Fund is delayed or prevented from recovering the collateral.
In the event the original seller defaults on its obligation to repurchase, the
Fund will seek to sell the collateral, which could involve costs or delays. To
the extent proceeds from the sale of collateral are less than the repurchase
price, the Fund would suffer a loss.
STOCKJUNGLE.COM MARKET LEADERS GROWTH FUND RISKS
------------------------------------------------
NON-DIVERSIFICATION. The StockJungle.com Market Leaders Growth Fund is
classified as "non-diversified" under federal securities laws which means that
one-half of the Fund's assets may be invested in two or more stocks while the
other half is spread out among various investments not exceeding 5% of the
Fund's total assets. As a result of its non-diversified status, the Fund's
shares may be more susceptible to adverse changes in the value of the securities
of a particular company than would be the shares of a diversified investment
company.
EMERGING LEADERS/RISK OF INVESTMENT IN SMALL AND MID-CAP COMPANIES.
Although the Fund will focus on investment in the common stocks of U.S.
companies which have established themselves as leaders in traditionally strong
business sectors, the Fund may invest a small but not insignificant portion
(generally between five (5%) and twenty (20%) percent) of its net assets in the
common stocks of companies
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identified by the Adviser as new and emerging leaders in smaller and less
developed but potentially important business sectors. These companies may
include issuers with small or mid-sized capital structures (generally a market
cap of $5 billion or less). Consequently, the Fund may be subject to the
additional risks associated with investment in these companies. The market
prices of the securities of such companies tend to be more volatile than those
of larger companies. Further, these securities tend to trade at a lower volume
than those of larger more established companies. The net asset value of the Fund
will be more susceptible to sudden and significant losses if the value of these
securities declines.
STOCKJUNGLE.COM FREE S&P 500 INDEX FUND RISKS
---------------------------------------------
PASSIVE MANAGEMENT OF FUND. With regard to the purchase of S&P 500
Index Securities and the StockJungle.com Free S&P 500 Index Fund's replication
of the holdings of the S&P 500 Index, the Adviser employs a passive investment
management approach and does not change the composition of the portfolio's
equity position based on its own economic, financial or market analysis. The
inclusion of a security in the Fund's portfolio does not reflect an opinion by
the Adviser regarding the particular security's attractiveness as an investment.
In the event that a particular S&P 500 Index Security underperforms or suffers a
sharp decline in market value, the Fund may not liquidate the investment unless
such liquidation is also reflected in the S&P 500 Index. Under these
circumstances, the net asset value of the Fund may decline, negatively impacting
the value of your investment.
USE OF SPDRS. The Fund may invest a substantial portion of its assets
in SPDRs (known as "Spiders") until it has sufficient assets (approximately $3
million) to buy S&P 500 Index Securities in perfect correlation to the S&P 500
Index. SPDRs are based on the S&P 500 Index, a U.S. benchmark for professional
investors. The SPDR Trust is a unit investment trust sponsored by a wholly owned
subsidiary of the American Stock Exchange, Inc. that holds shares of all the
companies in the S&P 500 and closely tracks the price performance and dividend
yield of the Index. SPDRs are subject to risks similar to those of holders of
other diversified stock portfolios including the primary consideration that the
general level of stock prices may decline, and thus the value of SPDRs, because
they represent interests in a broadly based stock portfolio, will also decline.
Furthermore, although the SPDR is designed to provide investment results that
generally correspond to the price and yield performance of the S&P 500 Index,
the SPDR Trust may not be able to exactly replicate the performance of the S&P
500 Index because of SPDR Trust expenses and other factors.
STOCKJUNGLE.COM PURE PLAY INTERNET FUND RISKS
----------------------------------------------
SECTOR RISK. The value of the Pure Play Internet Fund's shares will be
susceptible to factors affecting the Internet and WWW business sectors. These
sectors may be subject to greater governmental regulation than many other
industries and changes in government policies and the need for regulatory
approvals may have a material effect on the products and services of these
sectors. In addition, because of its narrow industry focus, the Fund's
performance is closely tied to, and affected by, these sectors. Companies in an
industry are often faced with the same obstacles, issues or regulatory burdens
and their securities react similarly and move in unison to these and other
market conditions. As a result of these factors, securities in which the Fund
invests are more volatile than securities of companies in other industries.
Competitive pressures and changing demand may have a significant effect on the
financial condition of Internet companies. These companies spend heavily on
research and development and are especially sensitive to the risk of product
obsolescence.
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INVESTMENT IN SMALL AND MID-CAP COMPANIES. Although securities of large
and well-established companies principally engaged in the Internet sector will
be held in the Fund's portfolio, the Fund will also invest in small or mid-cap
companies. Accordingly, the Fund may be subject to the additional risks
associated with investment in companies with small or mid-sized capital
structures (generally a market cap of $5 billion or less). The market prices of
the securities of such companies tend to be more volatile than those of larger
companies. Further, these securities tend to trade at a lower volume than those
of larger more established companies. If the Fund is heavily invested in these
securities, the net asset value of the Fund will be more susceptible to sudden
and significant losses if the value of these securities decline.
STOCKJUNGLE.COM COMMUNITY INTELLIGENCE FUND RISKS
-------------------------------------------------
RELIANCE ON RECOMMENDATIONS. The Adviser will invest in securities
identified to its parent company by visitors to the StockJungle.com website. The
effectiveness of the Fund's investment strategy is contingent upon the ongoing
participation by visitors to this website and the submission of detailed and
reasoned analyses which identify bona-fide potential investments for the Fund.
There are no assurances that the contest will attract either such participation
or detailed financial information that will be useful to the Adviser for
purposes of investing the Fund's assets and the Fund cannot give any assurance
that its investment objective will be achieved.
SHORT SALES. The Adviser will screen each analysis submitted by
visitors to the StockJungle.com website prior to selecting those which the
Adviser believes present bona-fide investment opportunities. These analysis
selected by the Adviser may involve investment strategies requiring the Adviser
to take short positions in target securities which may or may not include "boxed
positions". For example, at times, the Fund may hold short positions in
securities traded in the U.S. markets whose aggregate market value, together
with the market value of any stock index puts, and the market value of any stock
indexes on which short positions in futures contracts are held, approximates the
value of the Fund's net assets, or which is substantially less than the value of
the Fund's net assets, with any balance of the Fund's assets held in some
combination of money market instruments or money market funds. At other times,
the Fund may hold long-term equity positions by purchasing shares of other
equity mutual funds and securities traded in U.S. markets, for example, whose
aggregate market value approximates the Fund's net assets, or which is
substantially less than the value of the Fund's net assets, with the balance of
the Fund's assets invested in fixed income mutual funds, money market
instruments and "boxed positions" in which a short position and a long position
in the same security offset each other, thereby eliminating market risk for
those positions. At still other times, the Fund may hold some long positions and
some short positions, but the aggregate market value of these securities will
typically not exceed the value of the Fund's net assets. Investment via short
positions presents the risk that if the stock markets move against the short
position the Fund will be more susceptible to a sudden and significant decline
in the net asset value of the Fund. The Fund is limited in its investment in
futures contracts to the extent that the aggregate initial futures margin and
premiums may not exceed 10% of the value of the Fund's net assets.
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EXCESSIVE PORTFOLIO TURNOVER. If the Adviser determines that it is
prudent to invest in numerous securities identified to the parent of the Adviser
by visitors to the StockJungle.com website, the Fund may be subject to a
significantly higher portfolio turnover rate than that of most other mutual
funds. The strategies of the Adviser contemplate the possibility of more
frequent trading at the end of each month in order to enter new positions or
modify existing positions in accordance with the Fund's investment policies.
Frequent portfolio turnover may involve significant expenses and costs for the
Fund, including brokerage commissions, dealer markups and other transaction
costs on the sale of securities and reinvestment in other securities. These
transactions may also result in realization of taxable capital gains, much or
all of which will be short-term capital gains subject to federal and state
taxation as ordinary income and not eligible for favored long term capital gains
tax treatment.
MANAGEMENT ORGANIZATION AND CAPITAL STRUCTURE
INVESTMENT ADVISER
StockJungle.com Investment Advisors, Inc. has been retained under an
Investment Advisory Agreement with StockJungle.com Trust (the "Trust") on behalf
of each Fund to serve as each Fund's investment adviser, subject to the
authority of the Board of Trustees. The Adviser is a privately-held investment
advisory and money management company, registered as an investment adviser with
the Securities and Exchange Commission. The Adviser's principal office is
located at 3805 South Canfield Avenue, Suite B, Culver City, California 90232.
The Adviser can also be contacted by telephone at (310) 841-4010.
The Adviser provides each Fund with investment advice and supervises
the Fund's management and investment programs and provides investment advisory
facilities and executive and supervisory personnel for managing the investments
and effecting the portfolio transactions of each Fund. The Adviser also
furnishes, at its own expense, all necessary administrative services, office
space, equipment and clerical personnel for servicing the investments of each
Fund. In addition, the Adviser pays the salaries and fees of all officers of the
Trust who are affiliated with the Adviser.
PORTFOLIO MANAGERS
Each of the Funds is co-managed by Messrs. Michael Witz and Gordon
Gustafson. Michael J. Witz, President of the Adviser and Chairman and CEO of the
Adviser's parent company, StockJungle.com, Inc., joined the Adviser in February
of 1999. In 1998, Mr. Witz was a Senior Analyst at Financial Resources Group,
Inc., the exclusive provider of investment banking services to Inc. Magazine.
Mr. Witz graduated from the University of California, Santa Barbara in 1995.
Gordon Gustafson joined the Adviser as a Senior Financial Analyst in
February, 1999. Mr. Gustafson, who graduated from the University of California,
Los Angeles, in 1993 with a B.A. in Economics, previously worked for Red Planet
as a Production Coordinator and Production Manager from 1996 to 1999.
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MANAGEMENT FEE AND OTHER EXPENSES
Under the Investment Advisory Agreement, the StockJungle.com Market
Leaders Fund, the StockJungle.com Pure Play Internet Fund and the
StockJungle.com Community Intelligence Fund each pay the Adviser monthly in
arrears an annual investment advisory fee equal to 1.0% of the Fund's average
daily net assets. The 1.0% investment advisory fee serves as an all-inclusive
fee out of which the Adviser will be responsible to pay each of these Funds'
operating expenses. Therefore, none of these Funds is required to pay any
expenses such as fees for transfer agency, administrative or shareholder
servicing, legal insurance, audit, and director's fees or operating costs such
as printing, mailing and registration fees. The Adviser does not receive any
management fee for the StockJungle.com Free S&P 500 Index Fund and is
responsible for the payment of all fees and expenses which accrue in connection
with the management and operation of this Fund. See the SAI for a more detailed
discussion of the management fee and other expenses.
ADMINISTRATOR
The Administrator is American Data Services, Inc. ("ADS" or the
"Administrator"), which has its principal office at The Hauppauge Corporate
Center, 150 Motor Parkway, Hauppauge, New York 11788, and is primarily in the
business of providing administrative, fund accounting and stock transfer
services to retail and institutional mutual funds with approximately $6 billion
of total assets through its offices in New York, Denver and Los Angeles.
ADS provides all administrative services necessary for each Fund,
subject to the supervision of the Trust's Board of Trustees.
For the services rendered to each Fund by the Administrator, the
Adviser pays the Administrator, on behalf of each Fund, an annual monthly fee
equal to___% of the daily average net assets of such Fund. The Adviser also pays
the Administrator for any out-of-pocket expenses. In addition, the Administrator
serves as each Fund's transfer agent and performs fund accounting services for
which it is paid separately by the Adviser. For additional information, see
"Custodian, Transfer Agent and Dividend Agent."
DISTRIBUTOR
ADS Distributors, Inc. ("the Distributor"), an affiliate of the
Administrator, has entered into a distribution agreement with the Trust to serve
as the distributor of each Fund's shares. The Distributor will be paid by the
Adviser an annual fee equal to $_______ and will be responsible for the
promotional and advertising expenses related to the distribution of each Fund's
shares and for the printing of each Fund prospectus used in connection with the
distribution and sale of each Fund's shares. The Distributor will use its annual
fees, together with the distribution and service plan fees it receives to pay
these expenses and compensate financial intermediaries for providing
distribution assistance with respect to the sale of each Fund's shares. See
"MANAGEMENT OF FUND" in the SAI.
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VALUATION OF SHARES
Each Fund computes its respective net asset value (or price per share)
on each day the NYSE is open for business. The calculation is made as of the
regular close of the NYSE (currently 4:00 p.m., New York time).
Each Fund's securities for which market quotations are readily
available are valued at market value. Fund securities for which market
quotations are not considered readily available, are stated at fair value on the
basis of valuations furnished by a pricing service approved by the Board of
Trustees, which pricing service determines valuations for normal and
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
Short-term investments held by any of the Funds that mature in sixty
(60) days or less are valued at amortized cost, which approximates market value.
All other securities and assets are valued at their fair value following
procedures approved by the Board of Trustees.
HOW TO PURCHASE SHARES
GENERAL PURCHASE INFORMATION
Shares of each Fund are sold on a continuous basis. The minimum initial
investment for each Fund is $200.00. The maximum investment by any investor in
the Free S&P 500 Index Fund is limited to $10,000. A Fund may waive or reduce
its minimum initial investment from time to time. If funds are received after
the close of business, the purchase will become effective on the next business
day. The purchase price paid for each Fund's shares is the next determined net
asset value of the shares after the order is placed. See "NET ASSET VALUE"
herein.
Additional investments of $100 or more may be made at any time by
purchasing shares of each Fund at net asset value by mailing a check to the
appropriate Fund at the address noted under "PURCHASES BY MAIL" or by wiring
monies to the clearing bank as outlined below from the bank with which the
shareholder has an account and which is a member of the Federal Reserve system
with instructions to transmit federal funds by wire to the appropriate Fund.
Once a shareholder acquires an interest in the StockJungle.com Free S&P 500
Index Fund which is equivalent to $10,000, however, no further purchases in that
Fund will be permitted.
PURCHASES BY TELEPHONE
To open an account by telephone, call (877) 732-7696 to obtain an
account number and instructions. Information, including the appropriate federal
tax identification number, concerning the account will be taken over the phone.
Subject to acceptance by the Transfer Agent, shares of each Fund may be
purchased by wiring immediately available federal funds (subject to the minimum
investment, and in the case of the
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StockJungle.com Free S&P 500 Index Fund, the maximum investment amount) to The
Chase Manhattan Bank from your bank which may charge a fee for doing so (see
instructions below). You should provide your bank with the following information
for purposes of wiring your investment:
The Chase Manhattan Bank
Huntington, New York
ABA# 021000021
Account# _______________
F/B/O [NAME OF FUND]
Shareholder Account #
You are required to mail a signed application to the Transfer Agent at
the address listed below in order to complete your initial wire purchase. Wire
orders will be accepted only on a day on which the Fund whose shares are being
purchased, and the Custodian and the Transfer Agent are open for business. A
wire purchase will not be considered made until the wired money is received by
the Fund. There is presently no fee for the receipt of wired funds, but each
Fund reserves the right to charge shareholders for this service.
PURCHASES BY MAIL
Subject to acceptance by the Transfer Agent, an account may be opened
by completing and signing an account application and mailing it to the
appropriate Fund at the address noted below, together with a check (subject to
the particular Fund's minimum investment, and in the case of the StockJungle.com
Free S&P 500 Index Fund, the maximum investment amount) payable to:
[NAME OF FUND]
c/o American Data Services, Inc.
P.O. Box 5536
Hauppauge, NY 11788-0132
Payment for the purchase of shares received by mail will be credited to
your account at the net asset value per share next determined after receipt.
Such payment need not be converted into federal funds (monies credited to a
Fund's custodian bank by a Federal Reserve Bank) before acceptance by the Fund's
Transfer Agent. In the event that there are insufficient funds to cover a check,
such prospective investor will be assessed a $15.00 charge.
All purchases of each Fund's shares will be made in full and fractional
shares calculated to three decimal places. No Fund will issue stock certificates
evidencing ownership of its shares.
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HOW TO REDEEM SHARES
GENERAL REDEMPTION INFORMATION
Your shares will be redeemed at the net asset value next determined
after receipt of your instructions in "good order" as explained below. Each
Fund's net asset value will fluctuate on a daily basis.
To redeem your shares, you may either contact the Fund's Administrator
with an oral request or send a written request directly to the Transfer Agent.
This request should contain: the dollar amount or number of shares to be
redeemed, your Fund account number and either a social security or tax
identification number (as applicable). You should sign your request in exactly
the same way the account is registered. If there is more than one owner of the
shares, all owners must sign. A signature guarantee is required for redemptions
over $5,000. Please contact the Transfer Agent or refer to the SAI for more
details.
Shares of each Fund may be redeemed by mail, or, if authorized, by
telephone. The value of shares redeemed may be more or less than the purchase
price, depending on the market value of the investment securities held by each
Fund.
BY MAIL
Each Fund will redeem its shares at the net asset value next determined
after the request is received in "good order." Requests should be addressed to:
StockJungle.com Trust/StockJungle.com Market Leaders Growth Fund,
StockJungle.com Free S&P 500 Index Fund, StockJungle.com Pure Play Internet Fund
or StockJungle.com Community Intelligence Fund, as the case may be, c/o American
Data Services, Inc., P.O.
Box 5536, Hauppauge, NY 11788-0132.
Requests in "good order" must include the following documentation:
(a) a letter of instruction specifying the number of shares or
dollar amount to be redeemed signed by all registered owners
of the shares in the exact names in which they are registered;
(b) any required signature guarantees (see "SIGNATURE GUARANTEES"
below); and
(c) other supporting legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations,
pension and profit sharing plans and other organizations.
SIGNATURE GUARANTEES
To protect your account, each Fund and the Transfer Agent from fraud,
signature guarantees are required to enable a Fund to verify the identity of the
person who has authorized a redemption of $5,000 or more from an account.
Signature guarantees are also required for redemptions when the proceeds are to
be
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sent to someone other than the registered shareholder(s) or the registered
address, and in cases of share transfer requests. Signature guarantees may be
obtained from certain eligible financial institutions, including but not limited
to, the following: banks, trust companies, credit unions, securities brokers and
dealers, savings and loan associations and participants in the Securities
Transfer Association Medallion Program ("STAMP"), the Stock Exchange Medallion
Program ("SEMP") or the New York Stock Exchange Medallion Signature Program
("MSP"). Shareholders may contact each Fund at (877) 732-7696 for further
details.
BY TELEPHONE
If the Telephone Redemption Option has been authorized, you may redeem
your shares by calling the appropriate Fund and requesting that the redemption
proceeds be mailed to the primary registration address or wired per the
authorized instructions. Provided that the Transfer Agent employs reasonable
procedures to confirm that the instructions are genuine, you bear the risk of
loss in the event of unauthorized instructions reasonably believed by the Fund
or its Transfer Agent to be genuine. The procedures employed by the Funds in
connection with transactions initiated by telephone may include tape recording
of telephone instructions and requiring some form of personal identification
prior to acting upon instructions received by telephone.
PAYMENT OF REDEMPTION PROCEEDS
After your shares have been redeemed, proceeds will normally be mailed
within three (3) business days. In no event will payment be made more than seven
(7) days after receipt of your order in "good order", except that payment may be
postponed or the right of redemption suspended for more than seven (7) days
under unusual circumstances, such as when trading is not taking place on the
NYSE. Payment of redemption proceeds may also be delayed if the shares to be
redeemed were purchased by a check drawn on a bank which is not a member of the
Federal Reserve System until such time as the check has cleared the banking
system (normally up to fifteen (15) days from the purchase date).
If the Board of Trustees determines that it would be detrimental to the
best interests of the remaining shareholders of any Fund to make a payment,
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of readily marketable securities held by the
Fund in lieu of cash in conformity with applicable rules of the SEC.
REDEMPTION FEE
Each series of the StockJungle.com Trust is designed for long-term
investors. They are not designed for short-term traders whose frequent purchases
and redemptions can generate substantial cash flow. These cash flows can
unnecessarily disrupt a fund's investment program. Short-term traders often
redeem when the market is most turbulent, thereby forcing the sale of underlying
securities held by a fund at generally the worst possible time as far as
long-term investors are concerned. Additionally, short-term trading drives up a
fund's transactions costs -- measured by both commissions and bid/ask spreads --
which are borne by the remaining long-term investors. Moreover, short-term sales
have tax consequences that would be borne by the remaining shareholders. For
these reasons, the Funds each assess a 2.00% fee on the redemption of shares
held for less than 120 days. No fee is charged for shares held for more than 120
days. Redemption Fees will be paid to the fund to help offset transaction costs.
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The fee does not apply to any shares purchased through reinvested
distributions (dividends and capital gains) or to shares held in retirement
plans (such as 401(k), 403(b), 457, Keogh, profit-sharing plans, and money
purchase Pension Plans). This fee also does not apply to shares held in IRA
accounts.
To calculate Redemption Fees, each Fund will use the first-in,
first-out (FIFO) method to determine the holding period. Under this method, the
date of the redemption will be compared with the earliest purchase date of
shares held in the account. If this holding period is less than 120 days, a
redemption fee will be assessed. In determining the "120 day" provision, the
fund will use the anniversary date of a transaction. Thus, for example, shares
purchased on January 3, 2000, would be subject to a 2% fee if they were redeemed
on or prior to April 28, 2000. Shares redeemed on or after May 1, 2000, the next
business day, would not be subject to any redemption fee.
INVOLUNTARY REDEMPTION
Each Fund reserves the right to redeem your account at any time the net
asset value of the account falls below $200 as the result of a redemption or
exchange request. You will be notified in writing prior to any such involuntary
redemption and will be allowed thirty (30) days to make additional investments
before the redemption is processed.
SHAREHOLDER SERVICES
We offer several shareholder service options listed on the account
application which make your account easier to manage. Please make note of these
options and select the ones that are appropriate for you.
AUTOMATIC INVESTMENT PROGRAM
You may arrange to make additional automated purchases of each Fund's
shares. You can automatically transfer $100 or more per month from your bank,
savings and loan or other financial institution to purchase additional shares.
You should contact the Administrator, your broker-dealer or financial
institution or the Transfer Agent to obtain authorization forms or for
additional information.
TAX-QUALIFIED RETIREMENT PLANS
Each Fund is available for your tax-deferred retirement plan. Call or
write us and request the appropriate forms for:
[ ] Individual Retirement Accounts ("IRAs"), Simple IRAs and Roth IRAs;
[ ] 403(b) plans for employees of public school systems and non-profit
organizations;
[ ] 401(k) Plans; or
[ ] Profit-sharing plans and pension plans for corporations and other
employees.
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You can also transfer your tax-deferred plan to us from another company
or custodian. Call or write the Transfer Agent or the Administrator for a
"REQUEST TO TRANSFER" form.
CONFIRMATION OF TRANSACTIONS AND REPORTING OF OTHER INFORMATION VIA ELECTRONIC
DELIVERY
The Funds each provide electronically delivered confirmations of all of
your purchases or redemptions of each Fund's shares. In addition, you will
receive electronically delivered account statements on a quarterly basis from
the Transfer Agent. You will also receive various IRS forms after the first of
each year detailing important tax information and each Fund will supply
electronically delivered annual and semi-annual reports that list securities
held by that Fund and include its then current financial statements.
Each of the StockJungle.com Trust Funds have been designed and created
primarily for investment by on-line investors. Accordingly, each Fund requires
shareholders to consent to the receipt of all shareholder information about the
Fund electronically in order to reduce the higher costs of paper-based
information delivery. Shareholder information may, from time to time, include,
for purposes of electronic delivery, prospectuses, financial reports,
confirmations and financial statements. Notwithstanding the above, each Fund
reserves the right to deliver paper-based documents in certain circumstances, at
no cost to the investor.
DIVIDENDS AND DISTRIBUTIONS
Each Fund will distribute its net investment income, if any, and net
realized capital gains, if any, annually. Distributions from capital gains are
made after applying any available capital loss carry-overs.
As a shareholder in any of the Funds described above, you can choose
from three distribution options:
-- Reinvest all distributions in additional shares;
-- Receive distributions from net investment income in cash while
reinvesting capital gains distributions, if any, in additional
shares; or
-- Receive all distributions in cash.
You can change your distribution option by notifying the Fund in
writing. If you do not select an option when you open your account, all
distributions will be reinvested in additional shares of the Fund at net asset
value. You will receive a statement via electronic delivery confirming
reinvestment of distributions in additional shares promptly following the end of
each calendar year.
If a check representing a distribution is not cashed within a
specified period, the Transfer Agent will notify you that you have the option of
requesting another check or reinvesting the distribution in one of the
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other Funds. If the Transfer Agent does not receive your election, the
distribution will be reinvested in the Fund in which you were invested at the
then-current net asset value per share. Similarly, if correspondence sent by a
Fund or the Transfer Agent is returned as "undeliverable," all Fund
distributions will automatically be reinvested in the Fund in which you were
invested.
TAX STATUS
Each Fund is treated as a corporation for federal income tax purposes
under the Internal Revenue Code of 1986, as amended. Each Fund intends to
qualify and to elect to be treated as a regulated investment company. If so
qualified, no StockJungle.com Fund will be liable for federal income taxes to
the extent they distribute taxable income to shareholders.
Distributions by the StockJungle.com Funds are generally taxable to
shareholders as ordinary income. Interest income from direct investment by
non-corporate taxpayers in United States Government obligations (but not
repurchase agreements) generally is not subject to state taxation. However, some
states may tax mutual fund dividends attributable to such income.
Any redemption of a Fund's shares is a taxable event that may result
in a capital gain or loss.
For a more detailed discussion of the federal income tax consequences
of investing in shares of any of the StockJungle.com Funds, see "TAXATION" in
the SAI. Before investing in any of these Funds, you should consult your tax
adviser regarding the consequences of your local and state tax laws.
PERFORMANCE INFORMATION
Each Fund's investment performance may, from time to time, be included
in advertisements about such Fund. "Total Return" for the one (1), five (5) and
ten (10) year periods (or for the life of each Fund, if shorter) through the
most recent quarter represents the average annual compounded rate of return on
an investment of $1,000 in each Fund invested at the public offering price.
Total return may also be presented for other periods.
All performance data is based on each Fund's past investment results
and does not predict future performance. Investment performance, which will
vary, is based on many factors, including market conditions, the composition of
each Fund's portfolio and each Fund's operating expenses. Investment performance
also often reflects the risks associated with each Fund's investment objective
and policies. These factors should be considered when comparing the Funds'
investment results to those of other mutual funds and other investment vehicles.
Quotation of investment performance for any period when a fee waiver or expense
limitation was in effect will be greater than if the waiver or limitation had
not been in effect. A Fund's performance may be compared to other mutual funds,
relevant indices and rankings prepared by independent services. See the SAI for
additional information concerning performance.
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GENERAL INFORMATION
GENERAL
StockJungle.com Market Leaders Growth Fund, StockJungle.com Free S&P
500 Fund, StockJungle.com Pure Play Internet Fund, and StockJungle.com Community
Intelligence Fund are each a series of StockJungle.com Trust, a Massachusetts
business trust.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
_______________ serves as Custodian for each Fund's cash and
securities. The Custodian does not assist in, and is not responsible for,
investment decisions involving assets of any of the Funds. American Data
Services, Inc., the Administrator, also acts as each Fund's transfer and
dividend agent. The Adviser pays the Administrator the greater of $______ per
month or $______ per year per account, plus out-of-pocket expenses for rendering
such transfer and dividend agency services.
COUNSEL AND INDEPENDENT AUDITORS
Legal matters in connection with the Trust, including the issuance of
shares of beneficial interest of each Fund, are passed upon by Spitzer & Feldman
P.C., 405 Park Avenue, New York, New York 10022. [NAME/ADDRESS OF ACCOUNTANTS],
have been selected as independent accountants for each Fund.
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FOR MORE INFORMATION
STOCKJUNGLE.COM TRUST
STOCKJUNGLE.COM MARKET LEADERS GROWTH FUND
SEC FILE NUMBER ___-_______
STOCKJUNGLE.COM PURE PLAY INTERNET FUND
SEC FILE NUMBER ___-_______
STOCKJUNGLE.COM FREE S&P 500 INDEX FUND
SEC FILE NUMBER ___-_______
STOCKJUNGLE.COM COMMUNITY INTELLIGENCE FUND
SEC FILE NUMBER ___-_______
More Information on each of these Funds is available free upon request,
including the following:
ANNUAL AND SEMIANNUAL REPORTS
Describes each Fund's performance, lists each Fund's holdings and contains a
letter from each Fund's Investment Adviser discussing recent market conditions,
economic trends and strategies that significantly affect a particular Fund's
performance.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Provides more details about each Fund and its policies. A current SAI is on file
with the Securities and Exchange Commission (SEC) and is incorporated by
reference herein (and is legally considered part of this prospectus).
TO OBTAIN INFORMATION:
BY TELEPHONE:
(877) 732-7696
ON THE INTERNET:
Text only versions of each Fund's documents can be viewed online or downloaded
from:
SECURITIES AND EXCHANGE COMMISSION: HTTP://WWW.SEC.GOV
STOCKJUNGLE.COM, INC. HTTP://WWW.STOCKJUNGLE.COM
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington D.C. (phone at (1) (800) SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC
20549-6009.
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STOCKJUNGLE.COM TRUST
STOCKJUNGLE.COM MARKET LEADERS GROWTH FUND
STOCKJUNGLE.COM FREE S&P 500 INDEX FUND
STOCKJUNGLE.COM PURE PLAY INTERNET FUND
STOCKJUNGLE.COM COMMUNITY INTELLIGENCE FUND
STATEMENT OF ADDITIONAL INFORMATION
_____________, 1999
TABLE OF CONTENTS
PAGE
----
Investment Objective, Policies and Restrictions...............................2
Trustees and Executive Officers..............................................11
Investment Advisory and Other Services.......................................13
Portfolio Transactions and Allocation of Brokerage...........................16
Taxation.....................................................................18
Ownership of Shares..........................................................19
Purchase of Shares...........................................................19
Dividends and Distributions..................................................20
Net Asset Value .............................................................20
Performance Comparisons......................................................20
Redemption of Shares.........................................................23
Counsel and Independent Auditors.............................................24
Other Information............................................................24
This Statement of Additional Information is not a prospectus, and should be read
in conjunction with the Prospectus dated _________, 1999, as may be amended from
time to time, of the StockJungle.com Market Leaders Growth Fund, StockJungle.com
Free S&P 500 Index Fund, StockJungle.com Pure Play Internet Fund and the
StockJungle.com Community Intelligence Fund, individually or collectively, a
"Fund" or the "Funds"), each a series of StockJungle.com Trust (the "Trust").
StockJungle.com Investment Advisors, Inc. (the "Adviser") is the investment
adviser to each Fund.
Each of the Funds is designed and created primarily for investment by on-line
investors. Shareholders in the Funds are requested to consent to the acceptance
of all information about the Fund or Funds in which they invest only through
means of electronic delivery. A copy of the Prospectus for these Funds may be
obtained on-line at HTTP://WWW.STOCKJUNGLE.COM or from each Fund by writing c/o
American Data Services, Inc., The Hauppauge Corporate Center, 150 Motor Parkway,
Hauppauge, New York 11788 or by calling (516) 951-0500.
<PAGE>
INVESTMENT OBJECTIVE, POLICIES, AND RESTRICTIONS
STOCKJUNGLE.COM MARKET LEADERS GROWTH FUND seeks to provide investors
with long-term capital appreciation by investing in the common stocks of a
select number of U.S. corporations that have consistently demonstrated
fundamental investment value and hold the strongest competitive position in
various business sectors identified by the Adviser. In addition, the Fund may
invest a small but not insignificant portion (generally between five (5%) and
twenty (20%) percent) Of its net assets in the common stock of companies
identified by the Adviser as new and emerging leaders in smaller, but
potentially important sectors.
STOCKJUNGLE.COM FREE S&P 500 INDEX FUND seeks to provide investors, at
no cost, investment results equivalent to the total return of the Standard &
Poor's 500 Composite Stock Price Index ("S&P 500 Index").
STOCKJUNGLE.COM PURE PLAY INTERNET FUND seeks to provide investors with
long-term capital appreciation by investing in the common stocks of U.S.
Internet companies with the largest market capitalizations.
STOCKJUNGLE.COM COMMUNITY INTELLIGENCE FUND seeks to provide investors
with capital appreciation by investing in a diversified portfolio of common
stocks of U.S. companies with market capitalizations of no less than $100
million which have been identified to StockJungle.com, Inc., the parent of the
Adviser, by visitors to the StockJungle.com website and are then screened and
selected by the Adviser for investment by the Fund.
The discussion below supplements the information contained in the
Prospectus with respect to the investment policies and primary risks that are
common to each of the Funds as well as risks which are particular to each Fund
as a result of such Fund's specific investment objective and strategies. As all
investment securities are subject to inherent market risks and fluctuations in
value due to earnings, economic and political conditions and other factors, no
Fund can give any assurance that its investment objective will be achieved.
INVESTMENT POLICIES AND ASSOCIATED RISKS
----------------------------------------
Unless otherwise noted, the policies described in this Statement of
Additional Information are not fundamental and may be changed by the Board of
Trustees.
MUTUAL FUNDS AS PART OF AN INVESTMENT PROGRAM. None of the Funds,
individually or collectively, is intended to constitute a balanced or complete
investment program and the net asset value of each Fund's shares will fluctuate
based on the value of the securities held by each Fund. Each of the Funds is
subject to
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the general risks and considerations associated with equity investing as well as
additional risks and restrictions discussed herein.
EQUITY INVESTING. An investment in a Fund should be made with an
understanding of the risks inherent in an investment in equity securities,
including the risk that the general condition of the stock market may
deteriorate. Common stocks are susceptible to general stock market fluctuations
and to volatile increases and decreases in value according to various
unpredictable factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic expansion
or contraction and global or regional political, economic and banking crises. A
decline in the general market value of the equity securities held by any of
these Funds may result in an adverse effect on the value of your investment.
There can be no assurances that the Funds will be able to absorb (without
significant loss of a portion of your investment), the potentially negative
effects of such market decline.
YEAR 2000 PROBLEM. Virtually all operations of the Funds are computer
reliant. Therefore, each of the Funds could be adversely affected if the
computer systems used by the Adviser, the Fund's other service providers or
persons with whom the Funds transact business do not properly process and
calculate date-related information and data on or after January 1, 2000 ("Year
2000 Problem"). Further, because the Year 2000 Problem can potentially affect
virtually all organizations, the companies or entities in which the Funds invest
could also be adversely affected. Failure to adequately address this issue could
have potentially serious repercussions to each Fund and your investment. The
Adviser is in the process of working with each Fund's service providers to
prepare for the Year 2000 Problem and are taking steps reasonably designed to
address any Year 2000 Problem-related issue. Based on information currently
available, the Adviser does not expect that the Fund will incur significant
operating expenses or be required to incur material costs to be Year 2000
compliant. Although the Adviser does not anticipate that the Year 2000 Problem
will have a material impact on the Adviser's and other service provider's
abilities to provide uninterrupted service to investors, there can be no
assurance that steps taken in preparation for the Year 2000 Problem will be
sufficient to avoid any adverse impact on the Funds or that interaction with
other third-party computer systems which are not prepared for the Year 2000
Problem will not impair their services at that time, or that the Year 2000
Problem will not have an adverse effect on companies whose securities are held
by the Funds or in global markets or economies generally.
OTHER SECURITIES A FUND MIGHT PURCHASE. Under normal market conditions,
each Fund will invest at least 80% of its total assets in equity securities,
consisting of common stocks or securities having the characteristics of common
stocks. If the Adviser believes that market conditions warrant a temporary
defensive posture, or for liquidity purposes, each of the Funds may invest
without limit in high quality, short-term debt securities and money market
instruments. These short-term debt securities and money market instruments
include commercial paper, certificates of deposit, bankers' acceptances, and
U.S. Government securities and repurchase agreements. More information about
these investments is contained in the SAI.
INVESTMENT IN NEW AND UNSEASONED COMPANIES. With the exception of the
StockJungle.com Free S&P 500 Index Fund, each Fund may invest, pursuant to an
initial public offering or otherwise, in the equity securities of companies
which are relatively new and unseasoned and in their early stages of development
where the Adviser believes that the opportunity for rapid growth is above
average. These companies may
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not be well-known to the investing public or have significant institutional
ownership. They may lack depth of management and may be unable to internally
generate funds necessary for growth or potential development or to generate such
funds through external financing on favorable terms. In addition, these
companies may be developing or marketing new products or services for which
markets are not yet established and may never become established. Finally, new
and unseasoned companies may have relatively small revenues and limited product
lines, markets, or financial resources; their securities are often traded
over-the-counter or on a regional exchange and may trade less frequently and in
more limited volume than those of larger more mature companies. When making
larger sales, the Fund may have to sell securities at discounts from quoted
prices or may have to make a series of small sales over an extended period of
time. As a result, the market prices of these securities may be more subject to
volatile fluctuations than those of more mature issuers. Such fluctuations could
have an adverse effect on the net asset value of the Fund and your investment.
CONVERTIBLE SECURITIES AND WARRANTS. Each of the StockJungle.com Market
Leaders Fund, the StockJungle.com Pure Play Internet Fund and the
StockJungle.com Community Intelligence 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
gives an investor the opportunity, through its conversion feature, to
participate in the capital appreciation of the issuing company depending 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).
STANDARD & POOR'S DEPOSITARY RECEIPTS AND DIAMONDS
Each Fund may invest in Standard & Poor's Depositary Receipts
("SPDRs"). SPDRs are units of beneficial interest in an investment trust
sponsored by a wholly-owned subsidiary of the American Stock Exchange, Inc. (the
"Exchange") which represent proportionate undivided interests in a portfolio of
securities consisting of substantially all of the common stocks, in
substantially the same weighting, as the component common stocks of the Standard
& Poor's 500 Stock Index (the "S&P 500 Index"). SPDRs are listed on the Exchange
and traded in the secondary market on a per-SPDR basis.
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The StockJungle.com Market Leaders Fund, the StockJungle.com Pure Play
Internet Fund and the StockJungle.com Community Intelligence Fund may each also
invest in DIAMONDS. DIAMONDS are units of beneficial interest in an investment
trust representing proportionate undivided interests in a portfolio of
securities consisting of all the component common stocks of the Dow Jones
Industrial Average (the "DJIA"). DIAMONDS are listed on the Exchange and may be
traded in the secondary market on a per- DIAMONDS basis.
SPDRs are designed to provide investment results that generally
correspond to the price and yield performance of the component common stocks of
the S&P 500 Index. DIAMONDS are designed to provide investors with investment
results that generally correspond to the price and yield performance of the
component common stocks of the DJIA. The value of both SPDRs and DIAMONDS are
subject to change as the values of their respective component common stocks
fluctuate according to the volatility of the market. Investments in SPDRs and
DIAMONDS involve certain inherent risks generally associated with investments in
a broadly based portfolio of common stocks, including the risk that the general
level of stock prices may decline, thereby adversely affecting the value of each
unit of SPDRs and/or DIAMONDS invested in by the Funds. Moreover, these Funds'
investment in SPDRs and/or DIAMONDS may not exactly match the performance of a
direct investment in the respective indices to which they are intended to
correspond. For example, replicating and maintaining price and yield performance
of an index may be problematic due to transaction costs and other Fund expenses.
Additionally, the respective investment trusts may not fully replicate the
performance of their respective benchmark indices due to the temporary
unavailability of certain index securities in the secondary market or due to
other extraordinary circumstances such as discrepancies between each of the
investment trusts and the indices with respect to the weighting of securities or
the number of, for example, larger capitalized stocks held by an index and each
of the investment trusts. Under these type circumstances, the value of the SPDRs
or DIAMONDS held by each of the Funds will have a negative impact on the net
asset value of the Funds.
SHORT-TERM INVESTMENTS. While seeking desirable equity mutual fund
investments or common stocks whose price history and expected performance lend
themselves to the Adviser's method for investment or for liquidity or temporary
defensive purposes, each Fund may invest in money market funds and/or money
market instruments consisting of the following:
BANK CERTIFICATES OF DEPOSIT AND BANKERS' ACCEPTANCES. Each 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 any of the Funds
will be dollar-denominated obligations of domestic banks 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.
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<PAGE>
Domestic banks are subject to different governmental regulations with
respect to the amount and types of loans which may be made and interest rates
which may be charged. In addition, the profitability of the banking industry
depends largely upon the availability and cost of funds for the purpose of
financing lending operations under prevailing money market conditions. General
economic conditions as well as exposure to credit losses arising from possible
financial difficulties of borrowers play an important part in the operations of
the banking industry.
As a result of federal and state laws and regulations, domestic banks
are, among other things, required to maintain specified levels of reserves,
limited in the amount which they can loan to a single borrower, and subject to
other regulations designed to promote financial soundness.
GOVERNMENT OBLIGATIONS. Each Fund may invest in U.S. Government
obligations. Such obligations include Treasury bills, certificates of
indebtedness, notes and bonds, and issues of such entities as the Government
National Mortgage Association ("GNMA"), Export-Import Bank of the United States,
Tennessee Valley Authority, Resolution Funding Corporation, Farmers Home
Administration, Federal Home Loan Banks, Federal Intermediate Credit Banks,
Federal Farm Credit Banks, Federal Land Banks, Federal Housing Administration,
Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage
Corporation, and the Student Loan Marketing Association.
Certain of these obligations, such as those of the GNMA, are supported
by the full faith and credit of the U.S. Treasury; others, such as those of the
Export-Import Bank of United States, are supported by the right of the issuer to
borrow from the Treasury; others, such as those of the FNMA, are supported by
the discretionary authority of the U.S. Government to purchase the agency's
obligations; still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the instrumentality. No
assurance can be given that the U.S. Government would provide financial support
to U.S. Government- sponsored instrumentalities if it is not obligated to do so
by law.
SHORT SALES. The StockJungle.com Community Intelligence Fund is
authorized to make short sales of securities it owns or has the right to acquire
at no added cost through conversion or exchange of other securities it owns
(referred to as short sales "against the box") and to make short sales of
securities which it does not currently own or have the right to acquire.
In a short sale that is not "against the box," the Fund sells a
security which it does not own, in anticipation of a decline in the market value
of the security. To complete the sale, the Fund must borrow the security
(generally from the broker through which the short sale is made) in order to
make delivery to the buyer. The Fund is then obligated to replace the security
borrowed by purchasing it at the market price at the time of replacement. The
Fund is said to have a "short position" in the securities sold until it delivers
them to the broker. The period during which the Fund has a short position can
range from one day to more than a year. Until the security is replaced, the
proceeds of the short sale are retained by the broker, and the Fund is required
to pay to the broker a negotiated portion of any dividends or interest which
accrue during the period of the loan. To meet current margin requirements, the
Fund is also required to deposit with the broker additional cash or securities
so that the total deposit with the broker is maintained daily at 150% of
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the current market value of the securities sold short (100% of the current
market value if a security is held in the account that is convertible or
exchangeable into the security sold short within 90 days without restriction
other than the payment of money).
Short sales by the Fund that are not made "against the box" create
opportunities to increase the Fund's return but, at the same time, involve
specific risk considerations and may be considered a speculative technique.
Since the Fund in effect profits from a decline in the price of the securities
sold short without the need to invest the full purchase price of the securities
on the date of the short sale, the Fund's net asset value per share will tend to
increase more when the securities it has sold short decrease in value, and to
decrease more when the securities it has sold short increase in value, than
would otherwise be the case if it had not engaged in such short sales. The
amount of any gain will be decreased, and the amount of any loss increased, by
the amount of any premium, dividends or interest the Fund may be required to pay
in connection with the short sale. Furthermore, under adverse market conditions,
the Fund might have difficulty purchasing securities to meet its short sale
delivery obligations, and might have to sell portfolio securities to raise the
capital necessary to meet its short sale obligations at a time when fundamental
investment considerations would not favor such sales.
If the Fund makes a short sale "against the box," the Fund would not
immediately deliver the securities sold and would not receive the proceeds from
the sale. The seller is said to have a short position in the securities sold
until it delivers the securities sold, at which time it receives the proceeds of
the sale. To secure its obligation to deliver securities sold short, the Fund
will deposit in escrow in a separate account with the Custodian an equal amount
of the securities sold short or securities convertible into or exchangeable for
such securities. The Fund can close out its short position by purchasing and
delivering an equal amount of the securities sold short, rather than by
delivering securities already held by the Fund, because the Fund might want to
continue to receive interest and dividend payments on securities in its
portfolio that are convertible into the securities sold short.
The Fund's decision to make a short sale "against the box" may be a
technique to hedge against market risks when the Adviser believes that the price
of a security may decline, causing a decline in the value of a security owned by
the Fund or a security convertible into or exchangeable for such security. In
such case, any future losses in the Fund's long position would be reduced by a
gain in the short position. The extent to which such gains or losses in the long
position are reduced will depend upon the amount of securities sold short
relative to the amount of the securities the Fund owns, either directly or
indirectly, and, in the case where the Fund owns convertible securities, changes
in the investment values or conversion premiums of such securities.
Short sales transactions may sometimes be executed by borrowing
securities from margin accounts established by the Adviser for this purpose.
Some interest may be charged within these margin accounts as a result of price
fluctuations of boxed positions, even though no leverage is employed, since the
offsetting long and short positions within that boxed position will generally
offset each other's market risk.
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ILLIQUID SECURITIES. No Fund may 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 Adviser will
monitor the amount of illiquid securities in each Fund's portfolio, under the
supervision of the Trust's Board of Trustees, to ensure compliance with each
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 each Fund's portfolio securities and the Funds
might be unable to dispose of restricted or other illiquid securities promptly
or at reasonable prices and might thereby experience difficulty satisfying
redemption requests within seven days. The Funds might also have to register
such restricted securities in order to dispose of them, resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.
In recent years, however, a large institutional market has developed
for certain securities that are not registered under the Securities Act,
including repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not be indicative of the liquidity of such
investments. If such securities are subject to purchase by institutional buyers
in accordance with Rule 144A promulgated by the Commission under the Securities
Act, the Trust's Board of Trustees may determine that such securities are not
illiquid securities notwithstanding their legal or contractual restrictions on
resale. In all other cases, however, securities subject to restrictions on
resale will be deemed illiquid.
RESTRICTED SECURITIES. The SEC Staff currently takes the view that any
delegation by the Board of Trustees of the authority to determine that a
restricted security is readily marketable (as described in the investment
restrictions of the Fund) must be pursuant to written procedures established by
the Board of Trustees. It is the present intention of the Board of Trustees
that, if the Board of Trustees decide to delegate such determinations to the
Adviser or another person, they would do so pursuant to written procedures,
consistent with the Staff's position. Should the Staff modify its position in
the future, the Board of Trustees would consider what action would be
appropriate in light of the Staff's position at that time.
REPURCHASE AGREEMENTS. Each Fund may invest in repurchase agreements. A
repurchase agreement involves the purchase by a Fund of the securities with the
condition that after a stated period of time the original seller will buy back
the same securities at a predetermined price or yield. The Funds' custodian will
hold the securities underlying any repurchase agreement or such securities will
be part of the Federal Reserve Book Entry System. The market value of the
collateral underlying the repurchase agreement will be determined on each
business day. If at any time the market value of a Fund's collateral falls below
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the repurchase price of the repurchase agreement (including any accrued
interest), that Fund will promptly receive additional collateral (so the total
collateral is an amount at least equal to the repurchase price plus accrued
interest).
SECURITIES LOANS. Each Fund may make secured loans of its portfolio
securities, on either a short-term or long-term basis, amounting to not more
than 25% of its total assets, thereby realizing additional income. The risks in
lending portfolio securities, as with other extensions of credit, consist of
possible delay in recovery of the securities or possible loss rights in the
collateral should the borrower fail financially. As a matter of policy,
securities loans are made to broker-dealers pursuant to agreements requiring
that the loans be continuously secured by collateral consisting of cash or
short-term debt obligations at least equal at all times to the value of the
securities on loan, "marked-to-market" daily. The borrower pays to a lender-Fund
an amount equal to any dividends or interest received on securities lent. Each
Fund retains all or a portion of the interest received on investment of the cash
collateral or receives a fee from the borrower. Although voting rights, or
rights to consent, with respect to the loaned securities may pass to the
borrower, each Fund retains the right to call the loans at any time on
reasonable notice, and it will do so to enable that Fund to exercise voting
rights on any matters materially affecting the investment. The Funds may also
call such loans in order to sell the securities.
INVESTMENT RESTRICTIONS
- -----------------------
In addition to the investment objectives and policies set forth in the
Prospectus and in this Statement of Additional Information, the Funds are each
subject to certain fundamental and non-fundamental investment restrictions, as
set forth below. Fundamental investment restrictions may not be changed with
respect to any Fund individually, without the vote of a majority of that Fund's
outstanding shares. Non- fundamental investment restrictions of a Fund may be
changed by the Board of Trustees.
As fundamental investment restrictions, the Funds will not:
1. With the exception of the StockJungle.com Market Leaders Fund,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities), if, as a
result, as to 75% of a Fund's total assets, more than 5% of its net assets would
be invested in the securities of one issuer or the Fund would hold more than 10%
of the outstanding voting securities of any one issuer.
2. Issue any senior securities, as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"), other than in connection with short sales
as described above or as set forth in restriction number 4 below.
3. Borrow amounts in excess of 10% of the cost or 10% of the market value
of its total assets, whichever is less, and then only from a bank and as a
temporary measure for extraordinary or emergency
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purposes. To secure any such borrowing, a Fund may pledge or hypothecate not in
excess of 15% of the value of its total assets.
4. Act as an underwriter of securities of other issuers, except insofar
as the Trust may be technically deemed an underwriter under the federal
securities laws in connection with the disposition of each Fund's portfolio
securities.
5. Purchase or sell real estate or commodities, including oil, gas or
other mineral exploration or developmental programs or commodity futures
contracts. This restriction shall not preclude the Funds from investing in banks
or other financial institutions that have real estate or that buy and sell real
estate.
6. Make loans, in the aggregate, exceeding 25% of any Fund's total assets
or lend any Fund's portfolio securities to broker-dealers if the loans are not
fully collateralized or write call options on securities which are not fully
covered.
7. Invest more than 5% of the value of its total assets in any closed-end
investment company and will not hold more than 3% of the outstanding voting
stock of any other mutual fund.
8. Change the nature of its business so as to cease to be an investment
trust.
9. Purchase or retain securities of any issuer if any officer or trustee
of the Trust or the Adviser owns individually more than one-half (1/2%) percent
of the securities of that issuer, or collectively the officers and trustees of
the Trust and Adviser together own more than 5% of the securities of that
issuer.
10. Purchase from or sell to any officer or trustee of the Trust or its
Adviser any securities other than the shares of common stock of each Fund.
11. Concentrate its investments in any one industry although it may
invest up to 25% of the value of its total assets in a particular industry. This
limitation shall not apply to securities issued or guaranteed by the U.S.
Government
12. On a joint or joint and several basis, participate in any trading
account in securities.
13. Allow its Adviser or officers or trustees of itself or its Adviser to
take long or short positions in shares of a Fund, except that such persons may
purchase shares for their own account for investment purposes only at the price
available to the public at the moment of purchase.
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14. With the exception of the StockJungle.com Market Leaders Fund,
StockJungle.com Community Intelligence Fund and StockJungle.com Pure Play
Internet Fund, cause more than 5% of a Fund's total assets to be invested in the
securities of companies that (including predecessors) have been in continuous
operation for less than three years. This limitation shall not apply to
securities issued or guaranteed by the U.S.
Government.
15. Invest any portion of a Fund's assets in interests in oil, gas or
other mineral exploration or developmental programs.
The Funds are each subject to the following restrictions that are not
fundamental and may therefore be changed by the Board of Trustees without
shareholder approval.
The Funds will not:
1. Acquire securities for the purpose of exercising control over
management.
2. Invest more than 15% of its net assets in illiquid securities.
Unless otherwise indicated, percentage limitations included in the
restrictions apply at the time a Fund enters into a transaction. Accordingly,
any later increase or decrease beyond the specified limitation resulting from a
change in that Fund's net assets will not be considered in determining whether
its has complied with its investment restrictions.
TRUSTEES AND EXECUTIVE OFFICERS
The following table contains information concerning the trustees and
officers of the Trust and their principal occupations during the past five
years. Trustees who are interested persons, as defined by the 1940 Act, are
indicated by asterisk.
NOTE: IDENTITY AND DESCRIPTIONS OF THREE DISINTERESTED DIRECTORS TO COME
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<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE TRUST LAST FIVE YEARS
<S> <C> <C>
*Michael J. Witz (Age 27) President, Secretary, Chairman & CEO of
and Chairman of the StockJungle.com Investment
327 Arnaz Drive Board of Trustees Advisors, Inc., a registered
investment adviser and the
Los Angeles, California 90048 Adviser to the Funds
*Julian Smerkovitz (Age 38) Vice President, Director of StockJungle.com
Treasurer and Trustee Investment Advisors, Inc., a
600 Harbor Street, No. 5 registered investment adviser and
the Adviser to the Funds
Venice, California 90291
</TABLE>
The members of the Audit Committee of the Board of Trustees are Messrs.
______________ and __________________. Mr. ______________ acts as the
chairperson of such committee. The Audit Committee oversees each Fund's
financial reporting process, reviews audit results and recommends annually to
the Trust a firm of independent certified public accountants.
Those Trustees who are officers or employees of the Administrator or
its affiliates receive no remuneration from the Funds. Each disinterested
Trustee receives a fee from each of the Funds for each regular quarterly and
in-person special meeting of the Board of Trustees attended. Members of the
Board who are not affiliated with the Adviser or the Administrator receive an
annual fee of $___________ plus $_____ for each Board meeting attended. Each
Fund will pay a pro rata portion of the Trustees' fees and expenses based on the
net assets of the Fund and the other series of the Trust. In addition, each
Trustee who is not affiliated with the Adviser or the Administrator is
reimbursed for expenses incurred in connection with attending meetings.
The following table sets forth the estimated compensation expected to
be received by each Trustee of the Trust during the fiscal year ending as of
December 31, 1999.
TRUSTEE AGGREGATE ANNUAL ESTIMATED COMPENSATION
FROM THE TRUST
- -------- ---------------------------------------
Michael J. Witz NONE
Julian Smerkovitz NONE
TO COME $__________
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1. There are no family relationships among the trustees, officers and/or
management of the Trust or the Adviser.
INVESTMENT ADVISORY AND OTHER SERVICES
The investment adviser for each of the Funds is StockJungle.com
Investment Advisors, Inc., a Delaware corporation. The Adviser will act as such
pursuant to a written agreement which, after its initial two-year period, must
be annually reapproved by the Board of Trustees. The address of the Adviser is
3805 South Canfield Avenue, Suite B, Culver City, California 90232. The Adviser
can also be contacted by telephone at (310) 841-4010.
CONTROL OF THE ADVISER
The common stock of the Adviser is wholly-owned and controlled by
StockJungle.com, Inc., a Nevada corporation. StockJungle.com, Inc. is the
sponsor of the StockJungle.com website located at HTTP://WWW.STOCKJUNGLE.COM
upon which that company offers a wide variety of products and services intended
for use by investors with access to the Internet. Additional information
regarding these products and services is available on the website.
INVESTMENT ADVISORY AGREEMENT
The Adviser acts as the investment adviser to each Fund under an
Investment Advisory Agreement which has been approved by the Board of Trustees
(including a majority of the Trustees who are not parties to the agreement, or
interested persons of any such party).
The Investment Advisory Agreement will terminate automatically in the
event of its assignment. In addition, the agreement is terminable at any time,
without penalty, by the Board of Trustees of the Trust or by vote of a majority
of the Trust's outstanding voting securities on not more than 60 days' written
notice to the Adviser, and by the Adviser on 60 days' written notice to the
Trust. Unless sooner terminated, the agreement shall continue in effect for more
than two years after its execution only so long as such continuance is
specifically approved at least annually by either the Board of Trustees or by a
vote of a majority of the outstanding shares of the Trust, provided that in
either event such continuance is also approved by a vote of a majority of the
Trustees who are not parties to such agreement, or interested persons of such
parties, cast in person at a meeting called for the purpose of voting on such
approval.
Under the Investment Advisory Agreement, the Adviser provides each Fund
with advice and assistance in the selection and disposition of the Fund's
investments. All investment decisions are subject to review by the Board of
Trustees of the Trust. The Adviser is obligated to pay the salaries and fees of
any affiliates of the Adviser serving as officers of the Trust and/or the Funds.
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The same security may be suitable for each of the Funds or other private
accounts managed by the Adviser. If and when a Fund and two or more accounts
simultaneously purchase or sell the same security, the transactions will be
allocated as to price and amount in accordance with arrangements equitable to
the Fund and account. The simultaneous purchase or sale of the same securities
by a Fund and other accounts may have a detrimental effect on the Fund, as this
may affect the price paid or received by the Fund or the size of the position
obtainable or able to be sold by the Fund.
MANAGEMENT FEE AND OTHER EXPENSES
Under the Investment Advisory Agreement, the StockJungle.com Market
Leaders Fund, the StockJungle.com Pure Play Internet Fund and the
StockJungle.com Community Intelligence Fund will each pay the Adviser monthly in
arrears an annual investment advisory fee equal to 1.0% of the Fund's average
daily net assets. The 1.0% investment advisory fee shall serve as an
all-inclusive fee out of which the Adviser will be responsible to pay each of
these Funds' operating expenses. Therefore, none of these Funds will be required
to pay any expenses such as fees for transfer agency, administrative or
shareholder servicing, legal insurance, audit, and director's fees or operating
costs such as printing, mailing and registration fees. The Adviser will not
receive any management fee for the StockJungle.com Free S&P 500 Index Fund and
will be responsible for the payment of all fees and expenses which accrue in
connection with the management and operation of this Fund.
ADMINISTRATOR
The Administrator for each Fund is American Data Services, Inc. (the
"Administrator"), which has its principal office at The Hauppauge Corporate
Center, 150 Motor Parkway, Hauppauge, New York 11788, and is primarily in the
business of providing administrative, fund accounting and stock transfer
services to retail and institutional mutual funds through its offices in New
York, Denver and Los Angeles.
Pursuant to an Administrative Service Agreement with the Trust on behalf
of each Fund, the Administrator provides all administrative services necessary
for the Funds, subject to the supervision of the Trust's Board of Trustees. The
Administrator may provide persons to serve as officers of each Fund. Such
officers may be trustees, officers or employees of the Administrator or its
affiliates.
The Administrative Service Agreement is terminable by the Board of
Trustees or the Administrator on sixty days' written notice and may be assigned
provided the non-assigning party provides prior written consent. The Agreement
shall remain in effect for two years from the date of its initial approval, and
subject to annual approval of the Board of Trustees for one-year periods
thereafter. The Agreement provides that in the absence of willful misfeasance,
bad faith or gross negligence on the part of the Administrator or reckless
disregard of its obligations thereunder, the Administrator shall not be liable
for any action or failure to act in accordance with its duties thereunder.
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<PAGE>
Under the Administrative Service Agreement, the Administrator provides
all administrative services, including, without limitation: (i) provides
services of persons competent to perform such administrative and clerical
functions as are necessary to provide effective administration of each Fund;
(ii) overseeing the performance of administrative and professional services to
the Fund by others, including each Fund's Custodian; (iii) preparing, but not
paying for, the periodic updating of each Fund's Registration Statement,
Prospectus and Statement of Additional Information in conjunction with each
Fund's counsel, including the printing of such documents for the purpose of
filings with the Securities and Exchange Commission and state securities
administrators, preparing each Fund's tax returns, and preparing reports to each
Fund's shareholders and the Securities and Exchange Commission; (iv) preparing
in conjunction with each Fund's counsel, but not paying for, all filings under
the securities or "Blue Sky" laws of such states or countries as are designated
by the distributor, which may be required to register or qualify, or continue
the registration or qualification, of each Fund and/or its shares under such
laws; (v) preparing notices and agendas for meetings of the Board of Trustees
and minutes of such meetings in all matters required by the 1940 Act to be acted
upon by the Board; and (vi) monitoring daily and periodic compliance with
respect to all requirements and restrictions of the Investment Company Act, the
Internal Revenue Code and the Prospectus.
The Administrator, pursuant to the Accounting Service Agreement, provides
each Fund with all accounting services, including, without limitation: (I) daily
computation of net asset value; (ii) maintenance of security ledgers and books
and records as required by the Investment Company Act; (iii) production of each
Fund's listing of portfolio securities and general ledger reports; (iv)
reconciliation of accounting records; (v) calculation of yield and total return
for each Fund; (vi) maintaining certain books and records described in Rule
31a-1 under the 1940 Act, and reconciling account information and balances among
each Fund's Custodian and Adviser; and (vii) monitoring and evaluating daily
income and expense accruals, and sales and redemptions of shares of each Fund.
ADMINISTRATOR'S FEES
For the administrative services rendered to the Funds by the
Administrator, the Adviser pays the Administrator a monthly fee based on each
Fund's average net assets. The Administrator will also provide certain
accounting-related services to the Funds for which the Adviser will pay a
monthly fee based on the Fund's average net assets, plus any out-of-pocket
expenses for such services. These fees are set forth in the Funds' Prospectus.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
Star Bank, N.A. serves as custodian for each Fund's cash and securities
(the "Custodian"). Pursuant to a Custodian Agreement with the Trust on behalf of
each Fund, it is responsible for maintaining the books and records of each
Fund's portfolio securities and cash. The Custodian does not assist in, and is
not responsible for, investment decisions involving assets of the Funds.
American Data Services, Inc., the Administrator, also acts as each Fund's
transfer and dividend agent.
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<PAGE>
DISTRIBUTION AGREEMENT
Pursuant to a Distribution Agreement with the Trust on behalf of each
Fund, ADS Distributors, Inc. (the "Distributor") has agreed to act as the
principal underwriter for each Fund in the sale and distribution to the public
of shares of that Fund, either through dealers or otherwise. The Distributor has
agreed to offer such shares for sale at all times when such shares are available
for sale and may lawfully be offered for sale and sold.
PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE
Each Fund's assets are invested by the Adviser in a manner consistent
with its investment objective, policies, and restrictions and with any
instructions the Board of Trustees may issue from time to time. Within this
framework, the Adviser is responsible for making all determinations as to the
purchase and sale of portfolio securities and for taking all steps necessary to
implement securities transactions on behalf of each of the Funds.
U.S. Government securities generally are traded in the over-the-counter
market through broker-dealers. A broker-dealer is a securities firm or bank that
makes a market for securities by offering to buy at one price and sell at a
slightly higher price. The difference between the prices is known as a spread.
In placing orders for the purchase and sale of portfolio securities for
each Fund, the Adviser will use its best efforts to obtain the best possible
price and execution and will otherwise place orders with broker-dealers subject
to and in accordance with any instructions the Board of Trustees may issue from
time to time. The Adviser will select broker-dealers including, the Distributor,
to execute portfolio transactions on behalf of each Fund primarily on the basis
of best price and execution.
When consistent with the objectives of prompt execution and favorable net
price, business may be placed with broker-dealers who furnish investment
research or services to the Adviser. Such research or services include advice,
both directly and in writing, as to the value of securities; the advisability of
investing in, purchasing or selling securities; and the availability of
securities, or purchasers or sellers of securities; as well as analyses and
reports concerning issues, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts. To the extent portfolio
transactions are effected with broker-dealers who furnish research services to
the Adviser, the Adviser receives a benefit, not capable of evaluation in dollar
amounts, without providing any direct monetary benefit to any Fund from these
transactions. The Adviser believes that most research services obtained by it
generally benefit several or all of the investment companies and private
accounts which it manages, as opposed to solely benefitting one specific managed
fund or account.
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Transactions on U.S. stock exchanges, commodities markets and futures
markets and other agency transactions may involve the payment by the Adviser on
behalf of a Fund of negotiated brokerage commissions. Such commissions vary
among different brokers. A particular broker may charge different commissions
according to such factors as the difficulty and size of the transaction.
Transactions in foreign investments often involve the payment of fixed brokerage
commissions, which may be higher than those in the United States. There is
generally no stated commission in the case of securities traded in the
over-the-counter markets, but the price paid by the Adviser usually includes an
undisclosed dealer commission or mark-up. In underwritten offerings, the price
paid by the Adviser on behalf of each Fund includes a disclosed, fixed
commission or discount retained by the underwriter or dealer.
It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive brokerage and research services (as defined in the Securities
Exchange Act of 1934, as amended (the "1934 Act")) from broker-dealers that
execute portfolio transactions for the clients of such advisers and from third
parties with which such broker-dealers have arrangements. Consistent with this
practice, the Adviser may receive brokerage and research services and other
similar services from many broker-dealers with which the Adviser may place a
Fund's portfolio transactions and from third parties with which these
broker-dealers have arrangements. These services include such matters as general
economic and market reviews, industry and company reviews, evaluations of
investments, recommendations as to the purchase and sale of investments,
newspapers, magazines, pricing services, quotation services, news services and
personal computers utilized by the Adviser. Where the services referred to above
are not used exclusively by the Adviser for research purposes, the Adviser,
based upon its own allocations of expected use, bears that portion of the cost
of these services which directly relates to their non-research use. Some of
these services are of value to the Adviser and its affiliates in advising
various of their clients (including the Funds), although not all of these
services are necessarily useful and of value in managing funds. The management
fees received by the Adviser from each Fund, other than the StockJungle.com Free
S&P 500 Fund, are not reduced because the Adviser and its affiliates receive
these services even though the Adviser might otherwise be required to purchase
some of these services for cash. As the Adviser will be responsible for the
payment of all fees and expenses of each Fund, the payment of any commissions or
mark-ups to dealers or underwriters by the Adviser will not have any effect on
the net asset value of a Fund or your investment.
As permitted by Section 28(e) of the 1934 Act, the Adviser may pay a
broker-dealer which provides "brokerage and research services" (as defined in
the 1934 Act) to the Adviser an amount of disclosed commission for effecting
securities transactions on stock exchanges and other transactions for a Fund on
an agency basis in excess of the commission which another broker-dealer would
have charged for effecting that transaction. The Adviser does not currently
intend to make such payments. It is the position of the staff of the Securities
and Exchange Commission that Section 28(e) does not apply to the payment of such
greater commissions in "principal" transactions or in cases where the Adviser is
responsible for the payment of all fees and expenses of a Fund.
Consistent with the Conduct Rules of the National Association of
Securities Dealers, Inc. and subject to seeking the most favorable price and
execution available and such other policies as the Trustees may determine, the
Adviser may consider sales of shares of each Fund as a factor in the selection
of broker-dealers to execute portfolio transactions for the Fund.
17
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TAXATION
Each of the Funds intends to qualify each year as a "regulated investment
trust" under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). By so qualifying, no Fund will incur federal income or state taxes on
its net investment income and on net realized capital gains to the extent
distributed as dividends to shareholders.
Amounts not distributed on a timely basis in accordance with a calendar
year distribution requirement are subject to a nondeductible 4% excise tax at
the fund level. To avoid the tax, each Fund must distribute during each calendar
year an amount equal to the sum of (a) at least 98% of its ordinary income (not
taking into account any capital gains or losses) for the calendar year, (b) at
least 98% of its capital gains in excess of capital losses (adjusted for certain
ordinary losses) for a one-year period generally ending on October 31st of the
calendar year, and (c) all ordinary income and capital gains for previous years
that were not distributed during such years.
Under the Code, dividends derived from interest, and any short-term
capital gains, are taxable to shareholders as ordinary income for federal and
state tax purposes, regardless of whether such dividends are taken in cash or
reinvested in additional shares. Distributions made from each Fund's net
realized long-term capital gains (if any) and designated as capital gain
dividends are taxable to shareholders as long-term capital gains, regardless of
the length of time Fund shares are held. Corporate investors are not eligible
for the dividends-received deduction with respect to distributions derived from
interest on short-or long-term capital gains from any Fund but may be entitled
to such a deduction in respect to distributions attributable to dividends
received by a Fund. A distribution will be treated as paid on December 31st of a
calendar year if it is declared by the Fund in October, November or December of
the year with a record date in such a month and paid by each Fund during January
of the following year. Such distributions will be taxable to shareholders in the
calendar year the distributions are declared, rather than the calendar year in
which the distributions are received.
Distributions paid by each Fund from net long-term capital gains (excess
of long-term capital gains over long-term capital losses), if any, whether
received in cash or reinvested in additional shares, are taxable as long-term
capital gains, regardless of the length of time you have owned shares in the
Fund. Distributions paid by each Fund from net short-term capital gains (excess
of short-term capital gains over short-term capital losses), if any, whether
received in cash or reinvested in additional shares are taxable as ordinary
income. Capital gains distributions are made when any Fund realizes net capital
gains on sales of portfolio securities during the year. Realized capital gains
are not expected to be a significant or predictable part of any Fund's
investment return.
Any redemption of a Fund's shares is a taxable event and may result in a
capital gain or loss. A capital gain or loss may be realized from an ordinary
redemption of shares.
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Dividend distributions, capital gains distributions, and capital gains or
losses from redemptions and exchanges may also be subject to state and local
taxes.
Ordinarily, distributions and redemption proceeds paid to fund
shareholders are not subject to withholding of federal income tax. However, 31%
of each Fund's distributions and redemption proceeds must be withheld if a Fund
shareholder fails to supply the Fund or its agent with such shareholder's
taxpayer identification number or if the Fund shareholder who is otherwise
exempt from withholding fails to properly document such shareholder's status as
an exempt recipient.
The information above is only a summary of some of the tax considerations
generally affecting the Funds and their shareholders. No attempt has been made
to discuss individual tax consequences. To determine whether any of the Funds is
a suitable investment based on his or her tax situation, a prospective investor
may wish to consult a tax advisor.
OWNERSHIP OF SHARES
Each share of each Fund has one vote in the election of Trustees.
Cumulative voting is not authorized for any Fund. This means that the holders of
more than 50% of the shares voting for the election of Trustees can elect 100%
of the Trustees if they choose to do so, and, in that event, the holders of the
remaining shares will be unable to elect any Trustees.
On ___________, 1999, the Adviser invested $25,000 in shares of each
Fund at $10.00 per share, as seed capital. The Adviser will control the Fund
until public shareholders begin investing in each of the Funds thereby diluting
the ownership of Fund shares by the Adviser.
PURCHASE OF SHARES
Shares of the Funds may be purchased at the net asset value per share
next determined after receipt of an order by each Fund's Distributor in proper
form with accompanying check or other bank wire payment arrangements
satisfactory to the Fund. Each Fund's minimum initial investment is $200 (except
for retirement accounts for which the minimum initial investment is $100) and
the minimum subsequent investment is $100.
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DIVIDENDS AND DISTRIBUTIONS
Net investment income, if any, is declared as dividends and paid
annually. Substantially all the realized net capital gains for each Fund, if
any, are also declared and paid on an annual basis. Dividends and distributions
are payable to shareholders of record at the time of declaration.
Distributions from each Fund are automatically reinvested in additional
Fund shares unless the shareholder has elected to have them paid in cash.
The net investment income of each Fund for each business day is
determined immediately prior to the determination of net asset value. Net
investment income for other days is determined at the time net asset value is
determined on the prior business day. See "Purchase of Shares" and "Redemption
of Shares" in the Prospectus.
NET ASSET VALUE
The method for determining each Fund's net asset value is summarized in
the Prospectus in the text following the heading "Valuation of Shares." The net
asset value of each Fund's shares is determined on each day on which the New
York Stock Exchange is open, provided that the net asset value need not be
determined on days when no Fund shares are tendered for redemption and no order
for Fund shares is received. The New York Stock Exchange is not open for
business on the following holidays (or on the nearest Monday or Friday if the
holiday falls on a weekend): New Year's Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
PERFORMANCE COMPARISONS
Total return quoted in advertising and sales literature reflects all
aspects of each Fund's return, including the effect of reinvesting dividends and
capital gain distributions and any change in a Fund's net asset value during the
period.
Each Fund's total return must be displayed in any advertisement
containing the Fund's yield. Total return is the average annual total return for
the 1-, 5- and 10-year period ended on the date of the most recent balance sheet
included in the Statement of Additional Information, computed by finding the
average annual compounded rates of return over 1-, 5- and 10-year periods that
would equate the initial amount invested to the ending redeemable value
according to the following formula:
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P(1 + T)n = ERV
Where:
P = a hypothetical initial investment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical
$1000 payment made at the beginning of the
1-, 5- or 10-year periods at the end of the
1-, 5-or 10-year periods (or fractions
thereof).
Because the Funds have not had a registration in effect for 1, 5 or 10
years, the period during which the registration has been effective shall be
substituted.
Average annual total return is calculated by determining the growth or
decline in value of a hypothetical historical investment in each Fund over a
stated period and then calculating the annual compounded percentage rate that
would have produced the same result if the rate of growth or decline in value
had been constant throughout the period. For example, a cumulative total return
of 100% over 10 years would produce an average annual total return of 7.18%,
which is the steady annual rate that would result in 100% growth on a compounded
basis in 10 years. While average annual total returns are a convenient means of
comparing investment alternatives, investors should realize that the Fund's
performance is not constant over time, but changes from year to year, and that
average annual total returns represent averaged figures as opposed to actual
year-to-year performance.
In addition to average annual total returns, each Fund may quote
unaveraged or cumulative total returns reflecting the simple change in value of
an investment over a stated period. Average annual and cumulative total returns
may be quoted as a percentage or as a dollar amount and may be calculated for a
single investment, a series of investments, or a series of redemptions over any
time period. Performance information may be quoted numerically or in a table,
graph, or similar illustration.
Each Fund's performance may be compared with the performance of other
funds with comparable investment objectives, tracked by fund rating services or
with other indexes of market performance. Sources of economic data that may be
considered in making such comparisons may include, but are not limited to,
rankings of any mutual fund or mutual fund category tracked by Lipper Analytical
Services, Inc. or Morningstar, Inc.; data provided by the Investment Company
Institute; major indexes of stock market
21
<PAGE>
performance; and indexes and historical data supplied by major securities
brokerage or investment advisory firms. The Funds may also each utilize reprints
from newspapers and magazines furnished by third parties to illustrate
historical performance.
The agencies listed below measure performance based on their own criteria
rather than on the standardized performance measures described in the preceding
section.
Lipper Analytical Services, Inc. distributes mutual fund rankings
monthly. The rankings are based on total return performance calculated
by Lipper, generally reflecting changes in net asset value adjusted for
reinvestment of capital gains and income dividends. They do not reflect
deduction of any sales charges. Lipper rankings cover a variety of
performance periods, including year-to-date, 1-year, 5-year, and
10-year performance. Lipper classifies mutual funds by investment
objective and asset category.
Morningstar, Inc. distributes mutual fund ratings twice a month. The
ratings are divided into five groups: highest, above average, neutral,
below average and lowest. They represent the fund's historical
risk/reward ratio relative to other funds in its broad investment class
as determined by Morningstar, Inc. Morningstar ratings cover a variety
of performance periods, including 1-year, 3- year, 5-year, 10-year and
overall performance. The performance factor for the overall rating is a
weighted-average assessment of the fund's 1-year, 3-year, 5-year, and
10-year total return performance (if available) reflecting deduction of
expenses and sales charges. Performance is adjusted using quantitative
techniques to reflect the risk profile of the fund. The ratings are
derived from a purely quantitative system that does not utilize the
subjective criteria customarily employed by rating agencies such as
Standard & Poor's and Moody's Investor Service, Inc.
CDA/Weisenberger's Management Results publishes mutual fund rankings
and is distributed monthly. The rankings are based entirely on total
return calculated by Weisenberger for periods such as year-to-date,
1-year, 3-year, 5-year and 10-year. Mutual funds are ranked in general
categories (e.g., international bond, international equity, municipal
bond, and maximum capital gain). Weisenberger rankings do not reflect
deduction of sales charges or fees.
Independent publications may also evaluate each Fund's performance. The
Funds may from time to time each refer to results published in various
periodicals, including Barrons, Financial World, Forbes, Fortune, Investor's
Business Daily, Kiplinger's Personal Finance Magazine, Money, U.S. News and
World Report and The Wall Street Journal.
22
<PAGE>
REDEMPTION OF SHARES
Redemption of shares, or payment for redemptions, may be suspended at
times (a) when the New York Stock Exchange is closed for other than customary
weekend or holiday closings, (b) when trading on said Exchange is restricted,
(c) when an emergency exists, as a result of which disposal by a Fund of
securities owned by it is not reasonably practicable, or it is not reasonably
practicable for the Fund fairly to determine the value of its net assets, or (d)
during any other period when the Securities and Exchange Commission, by order,
so permits, provided that applicable rules and regulations of the Securities and
Exchange Commission shall govern as to whether the conditions prescribed in (b)
or (c) exist.
Shareholders who purchased shares through a broker-dealer other than
the Distributor may also redeem such shares by written request to the Transfer
Agent which shares are held by the Transfer Agent at the address set forth in
the Prospectus. To be considered in "good order", written requests for
redemption should indicate the dollar amount or number of shares to be redeemed,
refer to the shareholder's Fund account number, including either the social
security or tax identification number. The request should be signed in exactly
the same way the account is registered. If there is more than one owner of the
shares, all owners must sign. If shares to be redeemed have a value of $5,000 or
more or redemption proceeds are to be paid by someone other than the shareholder
at the shareholder's address of record, the signature(s) must be guaranteed by
an "eligible guarantor institution," which includes a commercial bank that is a
member of the Federal Deposit Insurance Corporation, a trust company, a member
firm of a domestic stock exchange, a savings association or a credit union that
is authorized by its charter to provide a signature guarantee. The Transfer
Agent may reject redemption instructions if the guarantor is neither a member of
nor a participant in a signature guarantee program. Signature guarantees by
notaries public are not acceptable. The purpose of a signature guarantee is to
protect shareholders against the possibility of fraud. Further documentation
will be requested from corporations, administrators, executors, personal
representatives, trustees, directors and custodians. Redemption requests given
by facsimile will not be accepted. Unless other instructions are given in proper
form, a check for the proceeds of the redemption will be sent to the
shareholder's address of record.
REDEMPTION FEE
Each series of the StockJungle.com Trust is designed for long-term
investors. They are not designed for short-term traders whose frequent purchases
and redemptions can generate substantial cash flow. These cash flows can
unnecessarily disrupt a fund's investment program. Short-term traders often
redeem when the market is most turbulent, thereby forcing the sale of underlying
securities held by a fund at the worst possible time as far as long-term
investors are concerned. Additionally, short-term trading generally drives up a
fund's transactions costs -- measured by both commissions and bid/ask spreads --
which are borne by the remaining long-term investors. Moreover, short-term sales
have tax consequences that would be borne by the remaining shareholders. For
these reasons, the Funds each assess a 2.00% fee on the redemption of shares
held for less than 120 days. No fee is charged for shares held for more than 120
days. Redemption Fees will be paid to the fund to help offset transaction costs.
23
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The fee does not apply to any shares purchased through reinvested
distributions (dividends and capital gains) or to shares held in retirement
plans (such as 401(k), 403(b), 457, Keogh, profit-sharing plans, and money
purchase Pension Plans). This fee also does not apply to shares held in IRA
accounts.
To calculate Redemption Fees, each Fund will use the first-in,
first-out (FIFO) method to determine the holding period. Under this method, the
date of the redemption will be compared with the earliest purchase date of
shares held in the account. If this holding period is less than 120 days, a
redemption fee will be assessed. In determining the "120 day" provision, the
fund will use the anniversary date of a transaction. Thus, for example, shares
purchased on January 3, 2000, would be subject to a 2% fee if they were redeemed
on or prior to April 28, 2000. Shares redeemed on or after May 1, 2000, the next
business day, would not be subject to any redemption fee.
Share purchases and redemptions are governed by Massachusetts law.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Legal matters in connection with the Trust, including the issuance of
shares of beneficial interest of each Fund, are passed upon by Spitzer & Feldman
P.C., 405 Park Avenue, New York, New York 10022. [NAME/ADDRESS OF ACCOUNTANTS]
has been selected as independent accountants for each of the Funds.
OTHER INFORMATION
The Adviser has been recently registered with the Securities Exchange
Commission (SEC) under the 1940 Act. The Trust has filed a registration
statement under the Securities Act of 1933 and the 1940 Act with respect to the
shares offered. Such registrations do not imply approval or supervision of any
Fund or the Adviser by the SEC.
For further information, please refer to the registration statement and
exhibits on file with the SEC in Washington, D.C. These documents are available
upon payment of a reproduction fee. Statements in the Prospectus and in this
Statement of Additional Information concerning the contents of contracts or
other documents, copies of which are filed as exhibits to the registration
statement, are qualified by reference to such contracts or documents.
24
<PAGE>
FINANCIAL STATEMENTS
NOTE: AUDITED BALANCE SHEET OF THE TRUST TO COME
25
<PAGE>
PART C
ITEM 23. EXHIBITS.
*(1) Amended and Restated Agreement and Declaration of Trust;
*(2) Bylaws of the Trust;
(3) Not Applicable.
**(4) Investment Advisory Agreements.
**(5) Distribution Agreement.
(6) Not Applicable.
**(7) Custody Agreement.
**(8.1) Administrative Service Agreement.
**(8.2) Transfer Agency Agreement.
**(9) Opinion of Spitzer & Feldman P.C. as to the legality of the
securities being registered, including their consent to the
filing thereof and as to the use of their names in the
Prospectus.
**(10) Consent of __________________, independent accountants.
(11) Not Applicable.
**(12) Subscription Letter.
(13) Not Applicable.
**(14) Financial Data Schedule.
(15) Not Applicable.
* Filed herewith
** To be filed by Amendment.
C-i
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ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Not applicable
ITEM 25. INDEMNIFICATION.
(a) In accordance with Section 1 of Chapter 182 of the Massachusetts
General Laws of the Commonwealth of Massachusetts, Sections 6.4 and 6.6
of the Registrant's Amended and Restated Agreement and Declaration of
Trust, respectively, provide as follows:
SECTION 6.4 The Trust shall indemnify (from the assets of the Sub-Trust
or Sub-Trusts in question) each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as
a shareholder, creditor or otherwise (hereinafter referred to as a
"Covered Person")) against all liabilities, including but not limited
to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and expenses, including reasonable accountants' and
counsel fees, incurred by any Covered Person in connection with the
defense or disposition of any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or legislative
body, in which such Covered Person may be or may have been involved as
a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having
been such a Trustee or officer, director or trustee, except with
respect to any matter as to which it has been determined that such
Covered Person had acted with willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of such Covered Person's office (such conduct referred to hereafter as
"Disabling Conduct"). A determination that the Covered Person is
entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought
that the person to be indemnified was not liable by reason of Disabling
Conduct, (ii) dismissal of a court action or an administrative
proceeding against a Covered Person for insufficiency of evidence of
Disabling Conduct, or (iii) a reasonable determination, based upon a
review of the facts, that the indemnitee was not liable by reason of
Disabling Conduct by (a) a vote of a majority of a quorum of Trustees
who are neither "interested persons" of the Trust as defined in section
2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion. Expenses, including
accountants' and counsel fees so incurred by any such Covered Person
(but excluding amounts paid in satisfaction of judgments, in compromise
or as fines or penalties), may be paid from time to time by the
Sub-Trust in question in advance of the final disposition of any such
action, suit or proceeding, provided that the Covered Person shall have
undertaken to repay the amounts so paid to the Sub-Trust in question if
it is ultimately determined that indemnification of such expenses is
not authorized under this Article VI and (i) the Covered Person shall
have provided security for such undertaking, (ii) the Trust shall be
insured against losses arising by reason of any lawful advances, or
(iii) a majority of a quorum of the disinterested Trustees who are not
a party to the proceeding, or an independent legal counsel in a written
opinion, shall have determined, based on a review of readily available
C-ii
<PAGE>
facts (as opposed to a full trial-type inquiry), that there is reason
to believe that the Covered Person ultimately will be found entitled to
indemnification.
SECTION 6.6 The right of indemnification provided by this Article VI
shall not be exclusive of or affect any other rights to which any such
Covered Person may be entitled. As used in this Article VI, "Covered
Person" shall include such person's heirs, executors and
administrators, an "interested Covered Person" is one against whom the
action, suit or other proceeding in question or another action, suit or
other proceeding on the same or similar grounds is then or has been
pending or threatened, and a "disinterested" person is a person against
whom none of such actions, suits or other proceedings or another
action, suit or other proceeding on the same or similar grounds is then
or has been pending or threatened. Nothing contained in this Article
shall affect any rights to indemnification to which personnel of the
Trust, other than Trustees and officers, and other persons may be
entitled by contract or otherwise under law, nor the power of the Trust
to purchase and maintain liability insurance on behalf of any such
person.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
StockJungle.com Investment Advisors, Inc. serves as investment adviser
to each Fund. Set forth below are the names of the directors and
officers of the Adviser:
Michael J. Witz Chairman, Chief Executive Officer and
Director
Brian A. Levy Chief Operating Officer
Julian Smerkovitz Chief Financial Officer and Director
ITEM 27. PRINCIPAL UNDERWRITER.
(a) The principal underwriter of the Trust's shares currently acts as a
principal underwriter for other investment companies.
(b) The following table contains information with respect to each
director, trustee, officer or partner of each principal underwriter
named in the answer to Item 20:
C-iii
<PAGE>
(1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS* WITH UNDERWRITER WITH REGISTRANT
Michael Miola* Treasurer, Director None
Chairman
*The Hauppauge Corporate Center
150 Motor Parkway
Hauppauge, NY 11788
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The accounts and records of the Trust required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated thereunder are located,
in whole or in part, at the office of the Adviser at 3805 South Canfield Avenue,
Suite B, Culver City, California 90232. The Adviser can also be contacted by
telephone at (310) 841-4010; except transfer agency records which are maintained
at the offices of the Administrator, American Data Services, Inc., The Hauppauge
Corporate Center, 150 Motor Parkway, Hauppauge, New York 11788 and custodial
records which are maintained at the offices of the Custodian, Star Bank, N.A.,
425 Walnut Street, Cincinnati, Ohio 45202.
ITEM 29. MANAGEMENT SERVICES.
Not Applicable
ITEM 30. UNDERTAKINGS.
Not Applicable
C-iv
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of ______________ and State of California, on the __th
day of June, 1999.
STOCKJUNGLE.COM TRUST
By:
------------------------
Michael J. Witz, Trustee
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
/S/ MICHAEL J. WITZ Chairman of the June 23, 1999
- -------------------------- Board of Trustees
Michael J. Witz
/S/ JULIAN SMERKOVITZ Trustee June 23, 1999
- ----------------------
Julian Smerkovitz
The above persons signing as Trustees are all of the current members of
the Trust's Board of Trustees.
BY-LAWS
OF
STOCKJUNGLE.COM TRUST
ARTICLE 1
---------
AGREEMENT AND DECLARATION OF TRUST AND PRINCIPAL OFFICE
-------------------------------------------------------
1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject
to the Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of StockJungle.com Trust, the Massachusetts business
trust established by the Declaration of Trust (the "Trust").
1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust
shall be located in Culver City, California.
ARTICLE 2
---------
MEETINGS OF TRUSTEES
--------------------
2.1 REGULAR MEETINGS. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees.
2.2 SPECIAL MEETINGS. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the Chairman of the Trustees, the President or the Treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the Secretary
or an Assistant Secretary or by the officer of the Trustees calling the meeting.
2.3 NOTICE. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight (48) hours or by telegram at
least twenty-four (24) hours before the meeting addressed to the Trustee at his
or her usual or last known business or residence address or to give notice to
him or her in person or by telephone at least twenty-four (24) hours before the
meeting. Notice of a meeting need not be given to any Trustee if a written
waiver of notice, executed by him or her before or after the meeting, is filed
with the records of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him or her. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
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<PAGE>
2.4 QUORUM. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
2.5 PARTICIPATION BY TELEPHONE. One or more of the Trustees or of any
committee of the Trustees may participate in a meeting thereof by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
ARTICLE 3
---------
OFFICERS
--------
3.1 ENUMERATION; QUALIFICATION. The Trustees may, but are not required
to, elect or appoint officers of the Trust. The officers of the Trust, if
officers are elected or appointed, shall be a Chairman of the Trustees, a
President, a Treasurer, a Secretary, Vice Presidents, and Assistant Treasurers,
Assistant Secretaries and Assistant Vice Presidents, if any, as the Trustees
from time to time may in their discretion elect or as appointed from time to
time pursuant to authority delegated by the Trustees. The Trust may also have
such agents as the Trustees from time to time may in their discretion appoint.
The Chairman of the Trustees shall be a Trustee and may but need not be a
shareholder; and any other officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same person.
3.2 ELECTION. If the Trustees choose to have a Chairman of the
Trustees, a President, a Treasurer, or a Secretary, such officers shall be
elected annually by the Trustees at a meeting held within the first six (6)
months of the Trust's fiscal year. The meeting at which the officers are elected
shall be known as the annual meeting of Trustees. Other officers, if any, may be
elected or appointed by the Trustees at said meeting or at any other time.
Vacancies in any office may be filled at any time.
3.3 TENURE. The Chairman of the Trustees, the President, the Treasurer,
and the Secretary, if elected, shall hold office until the next annual meeting
of the Trustees and until their respective successors are chosen and qualified,
or in each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each other officer shall hold office and each agent shall retain
authority at the pleasure of the Trustees.
3.4 POWERS. Subject to the other provisions of these By-Laws, if
officers are elected or appointed, each officer shall have, in addition to the
duties and powers set forth below in subsections 3.4(a) through 3.4(g) and in
the Declaration of Trust, such duties and powers as are commonly incident to the
office occupied by him or her as if the Trust were organized as a Massachusetts
business corporation and such other duties and powers as the Trustees may from
time to time designate. If no officers are elected or appointed, agents of the
Trust selected by the Trustees may exercise the duties and powers set forth
below in subsections 3.4(a) through 3.4(g)
2
<PAGE>
and in the Declaration of Trust, as well as such duties and powers as are
commonly incident to those offices as if the Trust were organized as a
Massachusetts business corporation and such other duties and powers as the
Trustees may from time to time designate.
(a) CHAIRMAN; PRESIDENT. Unless the Trustees otherwise
provide, the Chairman of the Trustees, or, if there is none, or in the absence
of the Chairman, the President shall preside at all meetings of the shareholders
and of the Trustees. The President shall be the chief executive officer.
(b) VICE PRESIDENT. The Vice President, or if there be more
than one Vice President, the Vice Presidents in the order determined by the
Trustees (or if there be no such determination, then in the order of their
election) shall in the absence of the President or in the event of his inability
or refusal to act, perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President. The Vice Presidents shall perform such other duties and have such
other powers as the Board of Trustees may from time to time prescribe.
(c) TREASURER. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing or
similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the President.
(d) ASSISTANT TREASURER. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers in the order determined by the
Trustees (or if there be no such determination, then in the order of their
election), shall, in the absence of the Treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Board of Trustees may from time to time prescribe.
(e) SECRETARY. The Secretary shall record all proceedings of
the shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the shareholders or Trustees, an assistant
secretary, or if there be none or if he or she is absent, a temporary secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.
(f) ASSISTANT SECRETARY. The Assistant Secretary, or if there
be more than one, the Assistant Secretaries in the order determined by the
Trustees (or if there be no determination, then in the order of their election),
shall, in the absence of the Secretary or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the Secretary and
shall perform such other duties and have such other powers as the Board of
Trustees may from time to time prescribe.
3
<PAGE>
(g) ASSISTANT VICE PRESIDENTS. With respect to each Assistant
Vice President and the Vice President to whom such Assistant Vice President
reports, such Assistant Vice President, or if there be more than one, the
Assistant Vice President reporting to a given Vice President in the order
determined by the Trustees (or if there be no determination, then in the order
of their election), shall, in the absence of such Vice President or in the event
of his inability or refusal to act, perform the duties and exercise the powers
of such Vice President and shall perform such other duties and have such other
powers as the Board of Trustees may from time to time prescribe.
3.5 RESIGNATIONS AND REMOVALS. Any Trustee or officer may resign at any
time by written instrument signed by him or her and delivered to the Chairman,
the President or the Secre tary or to a meeting of the Trustees. Such
resignation shall be effective upon receipt unless specified to be effective at
some other time. The Trustees may remove any officer elected by them with or
without cause. Except to the extent expressly provided in a written agreement
with the Trust, no Trustee or officer resigning and no officer removed shall
have any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such removal.
ARTICLE 4
---------
COMMITTEES
----------
4.1 GENERAL. The Trustees, by vote of a majority of the Trustees then
in office, may elect from their number an Executive Committee or other
committees and may delegate thereto some or all of their powers except those
which by law, by the Declaration of Trust, or by these By-Laws may not be
delegated. Except as the Trustees may otherwise determine, any such committee
may make rules for the conduct of its business, but unless otherwise provided by
the Trustees or in such rules, its business shall be conducted so far as
possible in the same manner as is provided by these By-Laws for the Trustees
themselves. All members of such committees shall hold such offices at the
pleasure of the Trustees. The Trustees may abolish any such committee at any
time. Any committee to which the Trustees delegate any of their powers or duties
shall keep records of its meetings and shall report its action to the Trustees.
The Trustees shall have power to rescind any action of any committee, but no
such rescission shall have retroactive effect.
ARTICLE 5
---------
REPORTS
-------
5.1 GENERAL. The Trustees and officers shall render reports at the time
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
4
<PAGE>
ARTICLE 6
---------
FISCAL YEAR
-----------
6.1 GENERAL. The fiscal year of the Trust shall be fixed by resolution
of the Trustees.
ARTICLE 7
---------
SEAL
----
7.1 GENERAL. The seal of the Trust shall consist of a flat-faced die
with the word "Massachusetts," together with the name of the Trust and the year
of its organization cut or engraved thereon, but, unless otherwise required by
the Trustees, the seal shall not be necessary to be placed on, and its absence
shall not impair the validity of, any document, instrument or other paper
executed and delivered by or on behalf of the Trust.
ARTICLE 8
---------
EXECUTION OF PAPERS
-------------------
8.1 GENERAL. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees may be signed by the
President, any Vice President, the Treasurer, any Assistant Treasurer, Secretary
or any Assistant Secretary, and need not bear the seal of the Trust. The
Chairman of the Board, President, Treasurer or Secretary may determine which
persons have authority to sign any documents on behalf of the Trust and
establish related policies.
ARTICLE 9
---------
ISSUANCE OF SHARE CERTIFICATES
------------------------------
9.1 SHARE CERTIFICATES. In lieu of issuing certificates for shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share
certificates either in limited cases or to all shareholders. In that event, a
shareholder may receive a certificate stating the number of shares owned by him,
in such form as shall be prescribed from time to time by the Trustees. Such
certificate shall be signed by the President or a Vice President and by the
Treasurer or Assistant Treasurer. Such signatures may be facsimiles if the
certificate is signed by
5
<PAGE>
a transfer agent, or by a registrar, other than a Trustee, officer or employee
of the Trust. In case any officer who has signed or whose facsimile signature
has been placed on such certificate shall cease to be such officer before such
certificate is issued, it may be issued by the Trust with the same effect as if
he were such officer at the time of its issue.
9.2 LOSS OF CERTIFICATES. In case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
9.3 ISSUANCE OF NEW CERTIFICATE TO PLEDGEE. The Trustees may in their
discretion, or the Treasurer may pursuant to authority delegated by the
Trustees, institute a policy of enabling a pledgee of shares transferred as
collateral security to obtain a new certificate if the instrument of transfer
substantially describes the debt or duty that is intended to be secured thereby.
Such new certificate shall express on its face that it is held as collateral
security, and the name of the pledgor shall be stated thereon, who alone shall
be liable as a shareholder, and entitled to vote thereon.
9.4 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of shares in the Trust.
ARTICLE 10
----------
DEALINGS WITH TRUSTEES AND OFFICERS
-----------------------------------
10.1 GENERAL. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of shares of the Trust to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may accept subscriptions to
shares or repurchase shares from any firm or company in which any Trustee,
officer or other agent of the Trust may have an interest.
ARTICLE 11
----------
AMENDMENTS TO THE BY-LAWS
-------------------------
11.1 GENERAL. These By-Laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
Adopted: , 1999
6
STOCKJUNGLE.COM TRUST
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
June 11, 1999
<PAGE>
TABLE OF CONTENTS
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ARTICLE I - NAME AND DEFINITIONS..............................................1
Section 1.1 Name and Principal Office..........................1
Section 1.2 Definitions........................................2
(a) "By-Laws"..........................................2
(b) "class"............................................2
(c) "Commission".......................................2
(d) "Declaration of Trust".............................2
(e) "1940 Act".........................................2
(f) "Shareholder"......................................2
(g) "Shares"...........................................2
(h) "Sub-Trust" or "Series"............................2
(i) "Trust"............................................2
(j) "Trustees".........................................2
ARTICLE II - PURPOSE OF TRUST.................................................2
ARTICLE III - THE TRUSTEES....................................................3
Section 3.1 Number, Designation, Election, Term, etc...........3
(a) Trustees...........................................3
(b) Number.............................................3
(c) Election and Term..................................3
(d) Resignation and Retirement.........................3
(e) Removal............................................3
(f) Vacancies..........................................3
(g) Effect of Death, Resignation, etc..................4
(h) No Accounting......................................4
Section 3.2 Powers of Trustees.................................4
(a) Investments........................................5
(b) Disposition of Assets..............................5
(c) Ownership Powers...................................5
(d) Subscription.......................................5
(e) Form of Holding....................................6
(f) Reorganization, etc................................6
(g) Voting Trusts, etc.................................6
(h) Compromise.........................................6
(i) Partnerships, etc..................................6
(j) Borrowing and Security.............................6
(k) Guarantees, etc....................................6
(l) Insurance..........................................6
(i)
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(m) Pensions, etc......................................7
(n) Distribution Plans.................................7
Section 3.3 Certain Contracts..................................7
(a) Advisory...........................................7
(b) Administration.....................................7
(c) Distribution.......................................8
(d) Custodian and Depository...........................8
(e) Transfer and Dividend Disbursing Agency............8
(f) Shareholder Servicing..............................8
(g) Accounting.........................................8
Section 3.4 Payment of Trust Expenses and Compensation
of Trustees........................................9
Section 3.5 Ownership of Assets of the Trust...................9
Section 3.6 Action by Trustees.................................9
ARTICLE IV - SHARES...........................................................10
Section 4.1 Description of Shares..............................10
Section 4.2 Establishment and Designation of Sub-Trusts
and Classes........................................11
(a) Assets Belonging to Sub-Trusts.....................11
(b) Liabilities Belonging to Sub-Trusts................12
(c) Dividends..........................................12
(d) Liquidation........................................13
(e) Voting.............................................13
(f) Redemption by Shareholder..........................14
(g) Redemption by Trust................................14
(h) Net Asset Value....................................14
(i) Transfer...........................................15
(j) Equality...........................................15
(k) Fractions..........................................15
(l) Conversion Rights..................................15
(m) Class Differences..................................15
Section 4.3 Ownership of Shares................................16
Section 4.4 Investments in the Trust...........................16
Section 4.5 No Pre-emptive Rights..............................16
Section 4.6 Status of Shares and Limitation of Personal
Liability..........................................16
Section 4.7 No Appraisal Rights................................16
ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS..........................17
Section 5.1 Voting Powers......................................17
Section 5.2 Meetings...........................................17
Section 5.3 Record Dates.......................................18
Section 5.4 Quorum and Required Vote...........................18
(ii)
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Section 5.5 Action by Written Consent..........................18
Section 5.6 Inspection of Records..............................18
Section 5.7 Additional Provisions..............................19
Section 5.8 Shareholder Communications.........................19
ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION.........................19
Section 6.1 Trustees, Shareholders, etc. Not Personally
Liable; Notice.....................................19
Section 6.2 Trustee's Good Faith Action; Expert Advice; No
Bond or Surety.....................................20
Section 6.3 Indemnification of Shareholders....................20
Section 6.4 Indemnification of Trustees, Officers, etc.........21
Section 6.5 Compromise Payment.................................21
Section 6.6 Indemnification Not Exclusive, etc.................22
Section 6.7 Liability of Third Persons Dealing with Trustees...22
ARTICLE VII - MISCELLANEOUS...................................................22
Section 7.1 Duration and Termination of Trust..................22
Section 7.2 Reorganization.....................................23
Section 7.3 Amendments.........................................23
Section 7.4 Filing of Copies; References; Headings.............23
Section 7.5 Applicable Law.....................................24
Section 7.6 Integration........................................24
Section 7.7 Resident Agent.....................................24
(iii)
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AGREEMENT AND DECLARATION OF TRUST
WHEREAS, the Agreement and Declaration of Trust of StockJungle.com
Trust (the "Trust") was executed and delivered in Boston, Massachusetts on June
11, 1999 and the initial trustee named therein accepted an initial subscription
for, and caused the initial issuance of, shares of beneficial interest of the
Trust and accepted payment therefor as trust property and has subsequently named
the undersigned as the successor initial Trustees and has thereupon resigned
after delivering the trust property to the undersigned as such successor initial
Trustees;
NOW THEREFORE, the undersigned successor initial Trustees, having
accepted their appointments as such, hereby amend and restate said Agreement and
Declaration of Trust to read in its entirety as follows:
AGREEMENT AND DECLARATION OF TRUST made this 11th day of June 1999 by
the Trustees hereunder, and by the holders of shares of beneficial interest to
be issued hereunder as hereinafter provided.
W I T N E S S E T H:
WHEREAS this Trust has been formed to carry on the business of an
investment company; and
WHEREAS this Trust is authorized to issue its shares of beneficial
interest in separate series, each separate series to be a Sub-Trust hereunder,
and to issue classes of Shares of any Sub-Trust or divide Shares of any
Sub-Trust into two or more classes, all in accordance with the provisions
hereinafter set forth; and
WHEREAS the Trustees have agreed to manage all property coming into
their hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust and the Sub-Trusts created
hereunder as hereinafter set forth.
ARTICLE I - NAME AND DEFINITIONS
Section 1.1 NAME AND PRINCIPAL OFFICE. This Trust shall be known as
"StockJungle.com Trust" and the Trustees shall conduct the business of the Trust
under that name or any other name or names as they may from time to time
determine. The principal office of the Trust shall be located at 3805 South
Canfield Avenue, Suite B, Culver City, California 90232 or at such other
location as the Trustees may from time to time determine.
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Section 1.2 DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time;
(b) "class" refers to any class of Shares of any Series or
Sub-Trust established and designated under or in accordance with the provisions
of Article IV;
(c) "Commission" shall have the meaning given it in the 1940 Act;
(d) "Declaration of Trust" shall mean this Master Trust
Agreement, as amended or restated from time to time;
(e) "1940 Act" refers to the Investment Company Act of 1940
and the rules and regulations thereunder, all as amended from time to time;
(f) "Shareholder" means a record owner of Shares;
(g) "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust and each Sub-Trust of the Trust
and/or any class of any Sub-Trust (as the context may require) shall be divided
from time to time;
(h) "Sub-Trust" or "Series" refers to a series of Shares
established and designated under or in accordance with the provisions of Article
IV;
(i) "Trust" refers to the Massachusetts business trust
established by this Declaration of Trust, as amended from time to time,
inclusive of each and every Sub-Trust established hereunder; and
(j) "Trustees" refers to the Trustees of the Trust and of each
Sub-Trust hereunder named herein or elected in accordance with Article III.
ARTICLE II - PURPOSE OF TRUST
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The purpose of the Trust is to operate as an investment company and to
offer Shareholders of the Trust and each Sub-Trust of the Trust one or more
investment programs primarily in securities and debt instruments.
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ARTICLE III - THE TRUSTEES
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Section 3.1 NUMBER, DESIGNATION, ELECTION, TERM, ETC.
(a) TRUSTEES. The initial Trustees hereof and of each Sub-Trust
hereunder shall be Michael J. Witz and Julian Smerkovitz, each of 3805 South
Canfield Avenue, Suite B, Culver City, California 90232.
(b) NUMBER. The Trustees serving as such, whether named above or
hereafter becoming Trustees, may increase or decrease the number of Trustees to
a number other than the number theretofore determined. No decrease in the number
of Trustees shall have the effect of removing any Trustee from office prior to
the expiration of such Trustee's term, but the number of Trustees may be
decreased in conjunction with the removal of a Trustee pursuant to subsection
(e) of this Section 3.1.
(c) ELECTION AND TERM. Trustees in addition to those named herein
may become such by election by Shareholders or the Trustees in office pursuant
to Section 3.1(f). Each Trustee, whether named above or hereafter becoming a
Trustee, shall serve as a Trustee of the Trust and of each Sub-Trust hereunder
during the lifetime of this Trust and until its termination as hereinafter
provided except as such Trustee sooner dies, resigns, retires or is removed.
Subject to Section 16(a) of the 1940 Act, the Trustees may elect their own
successors and may, pursuant to Section 3.1(f) hereof, appoint Trustees to fill
vacancies.
(d) RESIGNATION AND RETIREMENT. Any Trustee may resign or retire
as a Trustee, by written instrument signed by such Trustee and delivered to the
other Trustees or to any officer of the Trust, and such resignation or
retirement shall take effect upon such delivery or upon such later date as is
specified in such instrument and shall be effective as to the Trust and each
Sub-Trust hereunder.
(e) REMOVAL. Any Trustee may be removed with or without cause at
any time: (i) by written instrument, signed by at least two-thirds of the number
of Trustees in office immediately prior to such removal, specifying the date
upon which such removal shall become effective; or (ii) by vote of Shareholders
holding not less than two-thirds of the Shares then outstanding, cast in person
or by proxy at any meeting called for the purpose; or (iii) by a written
declaration signed by Shareholders holding not less than two-thirds of the
Shares then outstanding and filed with the Trust's custodian. Any such removal
shall be effective as to the Trust and each Sub-Trust hereunder.
(f) VACANCIES. Any vacancy or anticipated vacancy resulting from
any reason, including without limitation the death, resignation, retirement,
removal or incapacity of any of the Trustees, or resulting from an increase in
the number of Trustees by the other Trustees may (but so long as there are at
least two remaining Trustees, need not unless required by the 1940 Act) be
filled by a majority of the remaining Trustees, subject to the provisions of
Section 16(a) of the
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1940 Act, through the appointment in writing of such other person as such
remaining Trustees in their discretion shall determine and such appointment
shall be effective upon the written acceptance of the person named therein to
serve as a Trustee and agreement by such person to be bound by the provisions of
this Declaration of Trust, except that any such appointment in anticipation of a
vacancy to occur by reason of retirement, resignation or increase in number of
Trustees to be effective at a later date shall become effective only at or after
the effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee so appointed shall have accepted such
appointment and shall have agreed in writing to be bound by this Declaration of
Trust and the appointment is effective, the Trust estate shall vest in the new
Trustee, together with the continuing Trustees, without any further act or
conveyance.
(g) EFFECT OF DEATH, RESIGNATION, ETC. The death, resignation,
retirement, removal or incapacity of the Trustees, or any one of them, shall not
operate to annul or terminate the Trust or any Sub-Trust hereunder or to revoke
or terminate any existing agency or contract created or entered into pursuant to
the terms of this Declaration of Trust.
(h) NO ACCOUNTING. Except to the extent required by the 1940 Act
or under circumstances which would justify removal for cause, no person ceasing
to be a Trustee as a result of death, resignation, retirement, removal or
incapacity (nor the estate of any such person) shall be required to make an
accounting to the Shareholders or remaining Trustees upon such cessation.
Section 3.2 POWERS OF TRUSTEES. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. The Trustees in all instances
shall act as principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do any and all
acts and to make and execute any and all contracts and instruments that they may
consider necessary or appropriate in connection with the management of the
Trust. The Trustees shall not be bound or limited by present or future laws or
customs with regard to investment by trustees or fiduciaries, but shall have
full authority and absolute power and control over the assets of the Trust and
the business of the Trust to the same extent as if the Trustees were the sole
owners of the assets of the Trust and the business in their own right, including
such authority, power and control to do all acts and things as they, in their
uncontrolled discretion, shall deem proper to accomplish the purposes of this
Trust. Without limiting the foregoing, the Trustees may adopt By-Laws not
inconsistent with this Declaration of Trust providing for the conduct of the
business and affairs of the Trust and may amend and repeal them to the extent
that such By-Laws do not reserve that right to the Shareholders; they may sue or
be sued in the name of the Trust; they may from time to time in accordance with
the provisions of Section 4.1 hereof establish Sub-Trusts, each such Sub-Trust
to operate as a separate and distinct investment medium and with separately
defined investment objectives and policies and distinct investment purposes;
they may from time to time in accordance with the provisions of Section 4.1
hereof establish classes of Shares of any Series or Sub-Trust or divide the
Shares of any Series or Sub-Trust into classes; they may as they consider
appropriate elect and remove officers and appoint and terminate agents and
consultants and hire and terminate
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employees, any one or more of the foregoing of whom may be a Trustee, and may
provide for the compensation of all of the foregoing; they may appoint from
their own number, and terminate, any one or more committees consisting of two or
more Trustees, including without implied limitation an executive committee,
which may, when the Trustees are not in session and subject to the 1940 Act,
exercise some or all of the power and authority of the Trustees as the Trustees
may determine; in accordance with Section 3.3 they may employ one or more
advisers, administrators, depositories and custodians and may authorize any
depository or custodian to employ subcustodians or agents and to deposit all or
any part of such assets in a system or systems for the central handling of
securities and debt instruments, retain transfer, dividend, accounting or
Shareholder servicing agents or any of the foregoing, provide for the
distribution of Shares by the Trust through one or more distributors, principal
underwriters or otherwise, and set record dates or times for the determination
of Shareholders or various of them with respect to various matters; they may
compensate or provide for the compensation of the Trustees, officers, advisers,
administrators, custodians, other agents, consultants and employees of the Trust
or the Trustees on such terms as they deem appropriate; and in general they may
delegate to any officer of the Trust, to any committee of the Trustees and to
any employee, adviser, administrator, distributor, depository, custodian,
transfer and dividend disbursing agent, or any other agent or consultant of the
Trust such authority, powers, functions and duties as they consider desirable or
appropriate for the conduct of the business and affairs of the Trust, including
without implied limitation, the power and authority to act in the name of the
Trust and any Sub-Trust and of the Trustees, to sign documents and to act as
attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with
the 1940 Act or other applicable law, the Trustees shall have power and
authority for and on behalf of the Trust and each separate Sub-Trust established
hereunder:
(a) INVESTMENTS. To invest and reinvest cash and other
property, and to hold cash or other property uninvested without in any event
being bound or limited by any present or future law or custom in regard to
investments by trustees;
(b) DISPOSITION OF ASSETS. To sell, exchange, lend, pledge,
mortgage, hypothecate, write options on and lease any or all of the assets of
the Trust;
(c) OWNERSHIP POWERS. To vote or give assent, or exercise any
rights of ownership, with respect to stock or other securities, debt instruments
or property; and to execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such person or
persons such power and discretion with relation to securities, debt instruments
or property as the Trustees shall deem proper;
(d) SUBSCRIPTION. To exercise powers and rights of
subscription or otherwise which in any manner arise out of ownership of
securities or debt instruments;
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(e) FORM OF HOLDING. To hold any security, debt instrument or
property in a form not indicating any trust, whether in bearer, unregistered or
other negotiable form, or in the name of the Trustees or of the Trust or of any
Sub-Trust or in the name of a custodian, subcustodian or other depository or a
nominee or nominees or otherwise;
(f) REORGANIZATION, ETC. To consent to or participate in any
plan for the reorganization, consolidation or merger of any corporation or
issuer, any security or debt instrument of which is or was held in the Trust; to
consent to any contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect to any
security or debt instrument held in the Trust;
(g) VOTING TRUSTS, ETC. To join with other holders of any
securities or debt instruments in acting through a committee, depositary, voting
trustee or otherwise, and in that connection to deposit any security or debt
instrument with, or transfer any security or debt instrument to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security or debt instrument (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to agree to
pay, and to pay, such portion of the expenses and compensation of such
committee, depositary or trustee as the Trustees shall deem proper;
(h) COMPROMISE. To compromise, arbitrate or otherwise adjust
claims in favor of or against the Trust or any Sub-Trust or any matter in
controversy, including but not limited to claims for taxes;
(i) PARTNERSHIPS, ETC. To enter into joint ventures, general
or limited partnerships and any other combinations or associations;
(j) BORROWING AND SECURITY. To borrow funds and to mortgage
and pledge the assets of the Trust or any part thereof to secure obligations
arising in connection with such borrowing;
(k) GUARANTEES, ETC. To endorse or guarantee the payment of
any notes or other obligations of any person; to make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof; and to mortgage
and pledge the Trust property or any part thereof to secure any of or all such
obligations;
(l) INSURANCE. To purchase and pay for entirely out of Trust
property such insurance and/or bonding as they may deem necessary or appropriate
for the conduct of the business, including, without limitation, insurance
policies insuring the assets of the Trust and payment of distributions and
principal on its portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents, consultants, investment
advisers, managers, administrators, distributors, principal underwriters, or
independent contractors, or any thereof (or any person connected therewith), of
the Trust individually against all claims and
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liabilities of every nature arising by reason of holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such person in any such capacity, including any action
taken or omitted that may be determined to constitute negligence, whether or not
the Trust would have the power to indemnify such person against such liability;
and
(m) PENSIONS, ETC. To pay pensions for faithful service, as
deemed appropriate by the Trustees, and to adopt, establish and carry out
pension, profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust.
(n) DISTRIBUTION PLANS. To adopt on behalf of the Trust or any
Sub-Trust with respect to any class thereof a plan of distribution and related
agreements thereto pursuant to the terms of Rule 12b-1 of the 1940 Act and to
make payments from the assets of the Trust or the relevant Sub-Trust or
Sub-Trusts pursuant to said Rule 12b-1 Plan.
Section 3.3 CERTAIN CONTRACTS. Subject to compliance with the
provisions of the 1940 Act, but notwithstanding any limitations of present and
future law or custom in regard to delegation of powers by trustees generally,
the Trustees may, at any time and from time to time and without limiting the
generality of their powers and authority otherwise set forth herein, enter into
one or more contracts with any one or more corporations, trusts, associations,
partnerships, limited partnerships, other type of organizations, or individuals
(a "Contracting Party"), to provide for the performance and assumption of some
or all of the following services, duties and responsibilities to, for or on
behalf of the Trust and/or any Sub-Trust, and/or the Trustees, and to provide
for the performance and assumption of such other services, duties and
responsibilities in addition to those set forth below as the Trustees may
determine appropriate:
(a) ADVISORY. Subject to the general supervision of the
Trustees and in conformity with the stated policy of the Trustees with respect
to the investments of the Trust or of the assets belonging to any Sub-Trust of
the Trust (as that phrase is defined in subsection (a) of Section 4.2), to
manage such investments and assets, make investment decisions with respect
thereto, and to place purchase and sale orders for portfolio transactions
relating to such investments and assets;
(b) ADMINISTRATION. Subject to the general supervision of the
Trustees and in conformity with any policies of the Trustees with respect to the
operations of the Trust and each Sub-Trust (including each class thereof), to
supervise all or any part of the operations of the Trust and each Sub-Trust, and
to provide all or any part of the administrative and clerical personnel, office
space and office equipment and services appropriate for the efficient
administration and operations of the Trust and each Sub-Trust;
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(c) DISTRIBUTION. To distribute the Shares of the Trust and
each Sub-Trust (including any classes thereof), to the principal underwriter of
such Shares, and/or to act as agent of the Trust and each Sub-Trust in the sale
of Shares and the acceptance or rejection of orders for the purchase of Shares;
(d) CUSTODIAN AND DEPOSITORY. To act as depository for and to
maintain custody of the property of the Trust and each Sub-Trust and accounting
records in connection therewith;
(e) TRANSFER AND DIVIDEND DISBURSING AGENCY. To maintain
records of the ownership of outstanding Shares, the issuance and redemption and
the transfer thereof, and to disburse any dividends declared by the Trustees and
in accordance with the policies of the Trustees and/or the instructions of any
particular Shareholder to reinvest any such dividends;
(f) SHAREHOLDER SERVICING. To provide service with respect to
the relationship of the Trust and its Shareholders, records with respect to
Shareholders and their Shares, and similar matters; and
(g) ACCOUNTING. To handle all or any part of the accounting
responsibilities, whether with respect to the Trust's properties, Shareholders
or otherwise.
The same person may be the Contracting Party for some or all of the
services, duties and responsibilities to, for and of the Trust and/or the
Trustees, and the contracts with respect thereto may contain such terms
interpretive of or in addition to the delineation of the services, duties and
responsibilities provided for, including provisions that are not inconsistent
with the 1940 Act relating to the standard of duty of and the rights to
indemnification of the Contracting Party and others, as the Trustees may
determine. Nothing herein shall preclude, prevent or limit the Trust or a
Contracting Party from entering into sub-contractual arrangements relating to
any of the matters referred to in Sections 3.3(a) through (g) hereof.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any Contracting
Party, or of or for any parent or affiliate of any Contracting Party or that the
Contracting Party or any parent or affiliate thereof is a Shareholder or has an
interest in the Trust or any Sub-Trust, or that
(ii) any Contracting Party may have a contract providing for
the rendering of any similar services to one or more other corporations, trusts,
associations, partnerships, limited partnerships or other organizations, or have
other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust or any
Sub-Trust and/or the Trustees or disqualify any
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Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust, any Sub-Trust or
its Shareholders, provided that in the case of any relationship or interest
referred to in the preceding clause (i) on the part of any Trustee or officer of
the Trust either (x) the material facts as to such relationship or interest have
been disclosed to or are known by the Trustees not having any such relationship
or interest and the contract involved is approved in good faith by a majority of
such Trustees not having any such relationship or interest (even though such
unrelated or disinterested Trustees are less than a quorum of all of the
Trustees), (y) the material facts as to such relationship or interest and as to
the contract have been disclosed to or are known by the Shareholders entitled to
vote thereon and the contract involved is specifically approved in good faith by
vote of the Shareholders, or (z) the specific contract involved is fair to the
Trust as of the time it is authorized, approved or ratified by the Trustees or
by the Shareholders.
Section 3.4 PAYMENT OF TRUST EXPENSES AND COMPENSATION OF TRUSTEES. The
Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust or any Sub-Trust, or partly out of principal and partly out
of income, and to charge or allocate the same to, between or among such one or
more of the Sub-Trusts and/or one or more classes of Shares thereof that may be
established and designated pursuant to Article IV, as the Trustees deem fair,
all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with the Trust, any Sub-Trust and/or any class of Shares thereof, or
in connection with the management thereof, including, but not limited to, the
Trustees' compensation and such expenses and charges for the services of the
Trust's officers, employees, investment adviser, administrator, distributor,
principal underwriter, auditor, counsel, depository, custodian, transfer agent,
dividend disbursing agent, accounting agent, Shareholder servicing agent, and
such other agents, consultants, and independent contractors and such other
expenses and charges as the Trustees may deem necessary or proper to incur.
Without limiting the generality of any other provision hereof, the Trustees
shall be entitled to reasonable compensation from the Trust for their services
as Trustees and may fix the amount of such compensation.
Section 3.5 OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the
assets of the Trust and of each Sub-Trust shall at all times be considered as
vested in the Trustees.
Section 3.6 ACTION BY TRUSTEES. Except as otherwise provided by the
1940 Act or other applicable law, this Declaration of Trust or the By-Laws, any
action to be taken by the Trustees on behalf of or with respect to the Trust or
any Sub-Trust or class thereof may be taken by a majority of the Trustees
present at a meeting of Trustees (a quorum, consisting of at least one-half of
the Trustees then in office, being present), within or without Massachusetts,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time, and participation by such means
shall constitute presence in person at a meeting, or by written consents of a
majority of the Trustees then in office (or such larger or different number as
may be required by the 1940 Act or other applicable law).
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ARTICLE IV - SHARES
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Section 4.1 DESCRIPTION OF SHARES. The beneficial interest in the Trust
shall be divided into Shares, all with $.001 par value, but the Trustees shall
have the authority from time to time to issue Shares in one or more Series (each
of which Series of Shares shall represent the beneficial interest in a separate
and distinct Sub-Trust of the Trust, including without limitation each Sub-Trust
specifically established and designated in Section 4.2), as they deem necessary
or desirable. For all purposes under this Declaration of Trust or otherwise,
including, without implied limitation, (i) with respect to the rights of
creditors and (ii) for purposes of interpreting the relevant rights of each
Sub-Trust and the Shareholders of each Sub-Trust, each Sub-Trust established
hereunder shall be deemed to be a separate trust. The Trustees shall have
exclusive power without the requirement of Shareholder approval to establish and
designate such separate and distinct Sub-Trusts, and to fix and determine the
relative rights and preferences as between the shares of the separate Sub-Trusts
as to right of redemption and the price, terms and manner of redemption, special
and relative rights as to dividends and other distributions and on liquidation,
sinking or purchase fund provisions, conversion rights, and conditions under
which the several Sub-Trusts shall have separate voting rights or no voting
rights.
In addition, the Trustees shall have exclusive power, without the
requirement of Shareholder approval, to issue classes of Shares of any Sub-Trust
or divide the Shares of any Sub-Trust into classes, each class having such
different dividend, liquidation, voting and other rights as the Trustees may
determine, and may establish and designate the specific classes of Shares of
each Sub-Trust. The fact that a Sub-Trust shall have initially been established
and designated without any specific establishment or designation of classes
(I.E., that all Shares of such Sub-Trust are initially of a single class), or
that a Sub-Trust shall have more than one established and designated class,
shall not limit the authority of the Trustees to establish and designate
separate classes, or one or more additional classes, of said Sub-Trust without
approval of the holders of the initial class thereof, or previously established
and designated class or classes thereof.
The number of authorized Shares and the number of Shares of each
Sub-Trust or class thereof that may be issued is unlimited, and the Trustees may
issue Shares of any Sub-Trust or class thereof for such consideration and on
such terms as they may determine (or for no consideration if pursuant to a Share
dividend or split-up), all without action or approval of the Shareholders. All
Shares when so issued on the terms determined by the Trustees shall be fully
paid and non-assessable (but may be subject to mandatory contribution back to
the Trust as provided in subsection (g) of Section 4.2). The Trustees may
classify or reclassify any unissued Shares or any Shares previously issued and
reacquired of any Sub-Trust or class thereof into one or more Sub-Trusts or
classes thereof that may be established and designated from time to time. The
Trustees may hold as treasury Shares, reissue for such consideration and on such
terms as they may determine, or cancel, at their discretion from time to time,
any Shares of any Sub-Trust or class thereof reacquired by the Trust.
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The Trustees may from time to time close the transfer books or
establish record dates and times for the purposes of determining the holders of
Shares entitled to be treated as such, to the extent provided or referred to in
Section 5.3.
The establishment and designation of any Sub-Trust or of any class of
Shares of any Sub-Trust in addition to those established and designated in
Section 4.2 shall be effective (i) upon the execution by a majority of the then
Trustees of an instrument setting forth such establishment and designation of
the relative rights and preferences of the Shares of such Sub-Trust or class,
(ii) upon the execution of an instrument in writing by an officer of the Trust
pursuant to the vote of a majority of the Trustees, or (iii) as otherwise
provided in either such instrument. At any time that there are no Shares
outstanding of any particular Sub-Trust or class previously established and
designated, the Trustees may by an instrument executed by a majority of their
number (or by an instrument executed by an officer of the Trust pursuant to the
vote of a majority of the Trustees) abolish that Sub-Trust or class and the
establishment and designation thereof. Each instrument establishing and
designating any Sub-Trust shall have the status of an amendment to this
Declaration of Trust.
Any Trustee, officer or other agent of the Trust, and any organization
in which any such person is interested may acquire, own, hold and dispose of
Shares of any Sub-Trust (including any classes thereof) of the Trust to the same
extent as if such person were not a Trustee, officer or other agent of the
Trust; and the Trust may issue and sell or cause to be issued and sold and may
purchase Shares of any Sub-Trust (including any classes thereof) from any such
person or any such organization subject only to the general limitations,
restrictions or other provisions applicable to the sale or purchase of Shares of
such Sub-Trust (including any classes thereof) generally.
Section 4.2 ESTABLISHMENT AND DESIGNATION OF SUB-TRUSTS AND CLASSES.
Without limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby establish
and designate four (4) Sub-Trusts: (i) StockJungle.com Market Leaders Fund, (ii)
StockJungle.com Free S&P 500 Index Fund, (iii) StockJungle.com Pure Play
Internet Fund and (iv) StockJungle.com Community Intelligence Fund, each of
which shall have a single class of Shares. The Shares of such Sub-Trust and any
Shares of any further Sub-Trust that may from time to time be established and
designated by the Trustees shall (unless the Trustees otherwise determine with
respect to some further Sub-Trust at the time of establishing and designating
the same) have the following relative rights and preferences:
(a) ASSETS BELONGING TO SUB-TRUSTS. All consideration received
by the Trust for the issue or sale of Shares of a particular Sub-Trust or any
classes thereof, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall be held by the Trustees in trust for the
benefit of the holders of Shares of that Sub-Trust or class thereof and shall
irrevocably belong to that Sub-Trust (and be allocable to any classes thereof)
for all purposes, and shall be so recorded upon the books of account of the
Trust.
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Such consideration, assets, income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, together with any General Items (as
hereinafter defined) allocated to that Sub-Trust as provided in the following
sentence, are herein referred to as "assets belonging to" that Sub-Trust (and
allocable to any classes thereof). In the event that there are any assets,
income, earnings, profits, and proceeds thereof, funds, or payments which are
not readily identifiable as belonging to any particular Sub-Trust (collectively
"General Items"), the Trustees shall allocate such General Items to and among
any one or more of the Sub-Trusts established and designated from time to time
in such manner and on such basis as they, in their sole discretion, deem fair
and equitable; and any General Items so allocated to a particular Sub-Trust
shall belong to that Sub-Trust (and be allocable to any classes thereof). Each
such allocation by the Trustees shall be conclusive and binding upon the holders
of all Shares of all Sub-Trusts (including any classes thereof) for all
purposes.
(b) LIABILITIES BELONGING TO SUB-TRUSTS. The assets belonging
to each particular Sub-Trust shall be charged with the liabilities in respect of
that Sub-Trust and all expenses, costs, charges and reserves belonging to that
Sub-Trust, and any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular
Sub-Trust shall be allocated and charged by the Trustees to and among any one or
more of the Sub-Trusts established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem fair and
equitable. In addition, the liabilities in respect of a particular class of
Shares of a particular Sub-Trust and all expenses, costs, charges and reserves
belonging to that class of Shares, and any general liabilities, expenses, costs,
charges or reserves of that particular Sub-Trust which are not readily
identifiable as belonging to any particular class of Shares of that Sub-Trust
shall be allocated and charged by the Trustees to and among any one or more of
the classes of Shares of that Sub-Trust established and designated from time to
time in such manner and on such basis as the Trustees in their sole discretion
deem fair and equitable. The liabilities, expenses, costs, charges and reserves
allocated and so charged to a Sub-Trust or class thereof are herein referred to
as "liabilities belonging to" that Sub-Trust or class thereof. Each allocation
of liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders, creditors and any other persons
dealing with the Trust or any Sub-Trust (including any classes thereof) for all
purposes. Any creditor of any Sub-Trust may look only to the assets of that
Sub-Trust to satisfy such creditor's debt.
The Trustees shall have full discretion, to the extent not inconsistent
with the 1940 Act, to determine which items shall be treated as income and which
items as capital; and each such determination and allocation shall be conclusive
and binding upon the Shareholders.
(c) DIVIDENDS. Dividends and distributions on Shares of a
particular Sub-Trust or any class thereof may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise pursuant to a standing
resolution or resolutions adopted only once or with such frequency as the
Trustees may determine, to the holders of Shares of that Sub-Trust or class,
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from such of the income and capital gains, accrued or realized, from the assets
belonging to that Sub-Trust, or in the case of a class, belonging to that
Sub-Trust and allocable to that class, as the Trustees may determine, after
providing for actual and accrued liabilities belonging to that Sub-Trust or
class. All dividends and distributions on Shares of a particular Sub-Trust or
class thereof shall be distributed pro rata to the holders of Shares of that
Sub-Trust or class in proportion to the number of Shares of that Sub-Trust or
class held by such holders at the date and time of record established for the
payment of such dividends or distributions, except that in connection with any
dividend or distribution program or procedure the Trustees may determine that no
dividend or distribution shall be payable on Shares as to which the
Shareholder's purchase order and/or payment have not been received by the time
or times established by the Trustees under such program or procedure. Such
dividends and distributions may be made in cash or Shares of that Sub-Trust or
class or a combination thereof as determined by the Trustees or pursuant to any
program that the Trustees may have in effect at the time for the election by
each Shareholder of the mode of the making of such dividend or distribution to
that Shareholder. Any such dividend or distribution paid in Shares will be paid
at the net asset value thereof as determined in accordance with subsection (h)
of Section 4.2.
The Trustees shall have full discretion to determine which items shall
be treated as income and which items as capital; and each such determination and
allocation shall be conclusive and binding upon the Shareholders.
(d) LIQUIDATION. In the event of the liquidation or
dissolution of the Trust, the holders of Shares of each Sub-Trust or any class
thereof that has been established and designated shall be entitled to receive,
when and as declared by the Trustees, the excess of the assets belonging to that
Sub-Trust, or in the case of a class, belonging to that Sub-Trust and allocable
to that class, over the liabilities belonging to that Sub-Trust or class. The
assets so distributable to the holders of Shares of any particular Sub-Trust or
class thereof shall be distributed among such holders in proportion to the
number of Shares of that Sub-Trust or class thereof held by them and recorded on
the books of the Trust. The liquidation of any particular Sub-Trust or class
thereof may be authorized at any time by vote of a majority of the Trustees then
in office.
(e) VOTING. On each matter submitted to a vote of the
Shareholders, each holder of a whole Share shall be entitled to one vote for
each dollar of net asset value standing in such Shareholder's name on the books
of the Trust irrespective of the Series thereof or class thereof and all Shares
of all Series and classes thereof shall vote together as a single class;
provided, however, that as to any matter (i) with respect to which a separate
vote of one or more Series or classes thereof is required by the 1940 Act or the
provisions of the writing establishing and designating the Sub-Trust or class,
such requirements as to a separate vote by such Series or class thereof shall
apply in lieu of all Shares of all Series and classes thereof voting together;
and (ii) as to any matter which affects the interests of one or more particular
Series or classes thereof, only the holders of Shares of the one or more
affected Series or classes shall be entitled to vote, and each such Series or
class shall vote as a separate class.
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(f) REDEMPTION BY SHAREHOLDER. Each holder of Shares of a
particular Sub-Trust or any class thereof shall have the right at such times as
may be permitted by the Trust to require the Trust to redeem all or any part of
such holder's Shares of that Sub-Trust or class thereof at a redemption price
equal to the net asset value per Share of that Sub-Trust or class thereof next
determined in accordance with subsection (h) of this Section 4.2 after the
Shares are properly tendered for redemption, subject to any contingent deferred
sales charge, redemption charge or other charge in effect at the time of
redemption. Payment of the redemption price shall be in cash; provided, however,
that if the Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or undesirable, the
Trust may, subject to the requirements of the 1940 Act, make payment wholly or
partly in securities or other assets belonging to the Sub-Trust of which the
Shares being redeemed are part at the value of such securities or assets used in
such determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of Shares of any
Sub-Trust or class thereof to require the Trust to redeem Shares of that
Sub-Trust during any period or at any time when and to the extent permissible
under the 1940 Act.
(g) REDEMPTION BY TRUST. Each Share of each Sub-Trust or class
thereof that has been established and designated is subject to redemption by the
Trust at the redemption price which would be applicable if such Share was then
being redeemed by the Shareholder pursuant to subsection (f) of this Section
4.2: (i) at any time, if the Trustees determine in their sole discretion and by
majority vote that failure to so redeem may have materially adverse consequences
to the Trust or any Sub-Trust or to the holders of the Shares of the Trust or
any Sub-Trust thereof or class thereof, or (ii) upon such other conditions as
may from time to time be determined by the Trustees and set forth in the then
current Prospectus of the Trust. Upon such redemption the holders of the Shares
so redeemed shall have no further right with respect thereto other than to
receive payment of such redemption price.
(h) NET ASSET VALUE. The net asset value per Share of any
Sub-Trust shall be (i) in the case of a Sub-Trust whose Shares are not divided
into classes, the quotient obtained by dividing the value of the net assets of
that Sub-Trust (being the value of the assets belonging to that Sub-Trust less
the liabilities belonging to that Sub-Trust) by the total number of Shares of
that Sub-Trust outstanding, and (ii) in the case of a class of Shares of a
Sub-Trust whose Shares are divided into classes, the quotient obtained by
dividing the value of the net assets of that Sub-Trust allocable to such class
(being the value of the assets belonging to that Sub-Trust allocable to such
class less the liabilities belonging to such class) by the total number of
Shares of such class outstanding; all determined in accordance with the methods
and procedures, including without limitation those with respect to rounding,
established by the Trustees from time to time.
The Trustees may determine to maintain the net asset value per Share of
any Sub-Trust at a designated constant dollar amount and in connection therewith
may adopt procedures not inconsistent with the 1940 Act for the continuing
declarations of income attributable to that
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Sub-Trust as dividends payable in additional Shares of that Sub-Trust at the
designated constant dollar amount and for the handling of any losses
attributable to that Sub-Trust. Such procedures may provide that in the event of
any loss each Shareholder shall be deemed to have contributed to the capital of
the Trust attributable to that Sub-Trust such Shareholder's pro rata portion of
the total number of Shares required to be canceled in order to permit the net
asset value per Share of that Sub-Trust to be maintained, after reflecting such
loss, at the designated constant dollar amount. Each Shareholder of the Trust
shall be deemed to have agreed, by making an investment in any Sub-Trust with
respect to which the Trustees shall have adopted any such procedure, to make the
contribution referred to in the preceding sentence in the event of any such
loss.
(i) TRANSFER. All Shares of each particular Sub-Trust or class
thereof shall be transferable, but transfers of Shares of a particular Sub-Trust
or class thereof will be recorded on the Share transfer records of the Trust
applicable to that Sub-Trust or class only at such times as Shareholders shall
have the right to require the Trust to redeem Shares of that Sub-Trust or class
and at such other times as may be permitted by the Trustees.
(j) EQUALITY. Except as provided herein or in the instrument
designating and establishing any class of Shares or any Sub-Trust, all Shares of
each particular Sub-Trust or class thereof shall represent an equal
proportionate interest in the assets belonging to that Sub-Trust, or in the case
of a class, belonging to that Sub-Trust and allocable to that class, subject to
the liabilities belonging to that Sub-Trust or class, and each Share of any
particular Sub-Trust or class shall be equal to each other Share of that
Sub-Trust or class; but the provisions of this sentence shall not restrict any
distinctions permissible under subsection (c) of this Section 4.2 that may exist
with respect to dividends and distributions on Shares of the same Sub-Trust or
class. The Trustees may from time to time divide or combine the Shares of any
particular Sub-Trust or class into a greater or lesser number of Shares of that
Sub-Trust or class without thereby changing the proportionate beneficial
interest in the assets belonging to that Sub-Trust or class or in any way
affecting the rights of Shares of any other Sub-Trust or class.
(k) FRACTIONS. Any fractional Share of any Sub-Trust or class,
if any such fractional Share is outstanding, shall carry proportionately all the
rights and obligations of a whole Share of that Sub-Trust or class, including
rights and obligations with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the Trust.
(l) CONVERSION RIGHTS. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to provide
that holders of Shares of any Sub-Trust or class thereof shall have the right to
convert said Shares into Shares of one or more other Sub-Trust or class thereof
in accordance with such requirements and procedures as may be established by the
Trustees.
(m) CLASS DIFFERENCES. The relative rights and preferences of
the classes of any Sub-Trust may differ in such other respects as the Trustees
may determine to be appropriate in their sole discretion, provided that such
differences are set forth in the instrument establishing and
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designating such classes and executed by a majority of the Trustees (or by an
instrument executed by an officer of the Trust pursuant to a vote of a majority
of the Trustees).
Section 4.3 OWNERSHIP OF SHARES. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for the
Trust, which books shall be maintained separately for the Shares of each
Sub-Trust and each class thereof that has been established and designated. No
certificates certifying the ownership of Shares need be issued except as the
Trustees may otherwise determine from time to time. The Trustees may make such
rules as they consider appropriate for the issuance of Share certificates, the
use of facsimile signatures, the transfer of Shares and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar agent,
as the case may be, shall be conclusive as to who are the Shareholders and as to
the number of Shares of each Sub-Trust and class thereof held from time to time
by each such Shareholder.
Section 4.4 INVESTMENTS IN THE TRUST. The Trustees may accept or reject
investments in the Trust and each Sub-Trust from such persons and on such terms
and for such consideration, not inconsistent with the provisions of the 1940
Act, as they from time to time authorize or determine. The Trustees may
authorize any distributor, principal underwriter, custodian, transfer agent or
other person to accept orders for the purchase of Shares that conform to such
authorized terms and to reject any purchase orders for Shares whether or not
conforming to such authorized terms.
Section 4.5 NO PRE-EMPTIVE RIGHTS. Shareholders shall have no
pre-emptive or other right to subscribe to any additional Shares or other
securities issued by the Trust or any Sub-Trust.
Section 4.6 STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance of
the Trust shall not operate to terminate the Trust or any Sub-Trust thereof nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust. Ownership of Shares shall
not entitle the Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or division of the same or for
an accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder, nor except
as specifically provided herein to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay.
Section 4.7 NO APPRAISAL RIGHTS. Shareholders shall have no right to
demand payment for their shares or to any other rights of dissenting
shareholders in the event the Trust participates in any transaction which would
give rise to appraisal or dissenters' rights by a shareholder of a
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corporation organized under Chapter 156B of the General Laws of The Commonwealth
of Massachusetts, or otherwise.
ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS
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Section 5.1 VOTING POWERS. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Section 3.1,
(ii) with respect to any contract with a Contracting Party as provided in
Section 3.3 as to which Shareholder approval is required by the 1940 Act, (iii)
with respect to any termination or reorganization of the Trust to the extent and
as provided in Sections 7.1 and 7.2, (iv) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Section 7.3, (v) to the
same extent as the stockholders of a Massachusetts business corporation as to
whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or any Sub-Trust thereof or the Shareholders of the Trust (provided, however,
that a Shareholder of a particular Sub-Trust shall not be entitled to a
derivative or class action on behalf of any other Sub-Trust (or Shareholder of
any other Sub-Trust)) and (vi) with respect to such additional matters relating
to the Trust as may be required by the 1940 Act, this Declaration of Trust, the
By-Laws or any registration of the Trust with the Commission (or any successor
agency) or any state, or as the Trustees may consider necessary or desirable.
There shall be no cumulative voting in the election of Trustees. Shares may be
voted in person or by proxy. Proxies may be given by or on behalf of a
shareholder orally or in writing or pursuant to any computerized, telephonic, or
mechanical data gathering process. A proxy with respect to Shares held in the
name of two or more persons shall be valid if executed or otherwise given by or
on behalf of any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed or otherwise given by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise
and the burden of proving invalidity shall rest on the challenger. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and may take
any action required by law, this Declaration of Trust or the By-Laws to be taken
by Shareholders.
Section 5.2 MEETINGS. No annual or regular meeting of Shareholders is
required. Special meetings of Shareholders may be called by the Trustees from
time to time for the purpose of taking action upon any matter requiring the vote
or authority of the Shareholders as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given or caused to be given by the Trustees by
mailing such notice at least seven (7) days before such meeting, postage
prepaid, stating the time, place and purpose of the meeting, to each Shareholder
at the Shareholder's address as it appears on the records of the Trust. The
Trustees shall promptly call and give notice of a meeting of Shareholders for
the purpose of voting upon removal of any Trustee of the Trust when requested to
do so in writing by Shareholders holding not less than 10% of the Shares then
outstanding. If the Trustees shall fail to call or give notice of any meeting of
Shareholders for a period of 30 days after written application by Shareholders
holding at least 10% of the Shares then outstanding
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requesting a meeting be called for any other purpose requiring action by the
Shareholders as provided herein or in the By-Laws, then Shareholders holding at
least 10% of the Shares then outstanding may call and give notice of such
meeting, and thereupon the meeting shall be held in the manner provided for
herein in case of call thereof by the Trustees.
Section 5.3 RECORD DATES. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date and time not more
than 90 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or to be treated as a Shareholder of record
for purposes of such other action, even though such Shareholder has since that
date and time disposed of such Shareholder's Shares, and no Shareholder becoming
such after that date and time shall be so entitled to vote at such meeting or
any adjournment thereof or to be treated as a Shareholder of record for purposes
of such other action.
Section 5.4 QUORUM AND REQUIRED VOTE. Except as otherwise provided by
the 1940 Act or other applicable law, thirty percent of the Shares entitled to
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, but any lesser number shall be sufficient for adjournments. Any meeting
of shareholders, whether or not a quorum is present, may be adjourned for any
lawful purpose provided that no meeting shall be adjourned for more than six (6)
months beyond the originally scheduled meeting date. Any adjourned session or
sessions may be held, within a reasonable time after the date set for the
original meeting without the necessity of further notice. A majority of the
Shares voted at a meeting of which a quorum is present shall decide any
questions and a plurality shall elect a Trustee, except when a different vote is
required or permitted by any provision of the 1940 Act or other applicable law
or by this Declaration of Trust or the By-Laws.
Section 5.5 ACTION BY WRITTEN CONSENT. Subject to the provisions of the
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such larger proportion thereof as shall be required by the 1940 Act or by
any express provision of this Declaration of Trust or the By-Laws) consent to
the action in writing and such written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
Section 5.6 INSPECTION OF RECORDS. The records of the Trust shall be
open to inspection by Shareholders for any lawful purpose reasonably related to
a Shareholder's interest as a
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Shareholder. The Trustees may from time to time establish reasonable standards
including standards governing what information and documents are to be
furnished, at what time and location and at whose expense with respect to
Shareholder inspection of Trust records to the same extent as is permitted
stockholders of a Massachusetts business corporation under the Massachusetts
Business Corporation Law.
Section 5.7 ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
Section 5.8 SHAREHOLDER COMMUNICATIONS. Whenever ten or more
Shareholders of record who have been such for at least six (6) months preceding
the date of application, and who hold in the aggregate either Shares having a
net asset value of at least $25,000 or at least 1% of the outstanding Shares,
whichever is less, shall apply to the Trustees in writing, stating that they
wish to communicate with other Shareholders with a view to obtaining signatures
to a request for a Shareholder meeting and accompanied by a form of
communication and request which they wish to transmit, the Trustees shall within
five (5) business days after receipt of such application either (i) afford to
such applicants access to a list of the names and addresses of all Shareholders
as recorded on the books of the Trust or Sub-Trust, as applicable; or (ii)
inform such applicants as to the approximate number of Shareholders of record,
and the approximate cost of mailing to them the proposed communication and form
of request.
If the Trustees elect to follow the course specified in clause (ii)
above, the Trustees, upon the written request of such applicants, accompanied by
a tender of the material to be mailed and of the reasonable expenses of mailing,
shall, with reasonable promptness, mail such material to all Shareholders of
record at their addresses as recorded on the books, unless within five (5)
business days after such tender the Trustees shall mail to such applicants and
file with the Commission, together with a copy of the material to be mailed, a
written statement signed by at least a majority of the Trustees to the effect
that in their opinion either such material contains untrue statements of fact or
omits to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the basis
of such opinion. The Trustees shall thereafter comply with any order entered by
the Commission and the requirements of the 1940 Act and the Securities Exchange
Act of 1934, as amended.
ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION
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Section 6.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE.
All persons extending credit to, contracting with or having any claim against
the Trust shall look only to the assets of the Sub-Trust with which such person
dealt for payment under such credit, contract or claim; and neither the
Shareholders of any Sub-Trust nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, nor any other Sub-Trust
shall be personally liable therefor. Every note, bond, contract, instrument,
certificate or undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust, any Sub-Trust
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or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only by or for the Trust (or
the Sub-Trust) or the Trustees and not personally. Nothing in this Declaration
of Trust shall protect any Trustee or officer against any liability to the Trust
or the Shareholders to which such Trustee or officer would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee or of
such officer.
Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts and shall recite to the effect that the same was executed or made
by or on behalf of the Trust or by them as Trustees or Trustee or as officers or
officer and not individually and that the obligations of such instrument are not
binding upon any of them or the Shareholders individually but are binding only
upon the assets and property of the Trust, or the particular Sub-Trust in
question, as the case may be, but the omission thereof shall not operate to bind
any Trustees or Trustee or officers or officer or Shareholders or Shareholder
individually.
Section 6.2 TRUSTEE'S GOOD FAITH ACTION; EXPERT ADVICE; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretion hereunder
shall be binding upon everyone interested. A Trustee shall be liable for such
Trustee's own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. Subject to the foregoing, (a) the Trustees shall not be responsible
or liable in any event for any neglect or wrongdoing of any officer, agent,
employee, consultant, adviser, administrator, distributor or principal
underwriter, custodian or transfer, dividend disbursing, Shareholder servicing
or accounting agent of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee; (b) the Trustees may take advice of
counsel or other experts with respect to the meaning and operation of this
Declaration of Trust and their duties as Trustees, and shall be under no
liability for any act or omission in accordance with such advice or for failing
to follow such advice; and (c) in discharging their duties, the Trustees, when
acting in good faith, shall be entitled to rely upon the books of account of the
Trust and upon written reports made to the Trustees by any officer appointed by
them, any independent public accountant, and (with respect to the subject matter
of the contract involved) any officer, partner or responsible employee of a
Contracting Party appointed by the Trustees pursuant to Section 3.3. The
Trustees as such shall not be required to give any bond or surety or any other
security for the performance of their duties.
Section 6.3 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder
(or former Shareholder) of any Sub-Trust of the Trust shall be charged or held
to be personally liable for any obligation or liability of the Trust solely by
reason of being or having been a Shareholder and not because of such
Shareholder's acts or omissions or for some other reason, said Sub-Trust (upon
proper and timely request by the Shareholder) shall assume the defense against
such charge and satisfy any judgment thereon, and the Shareholder or former
Shareholder (or such Shareholder's
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heirs, executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets of said Sub-Trust estate to be held harmless
from and indemnified against all loss and expense arising from such liability.
Section 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. The Trust shall
indemnify (from the assets of the Sub-Trust or Sub-Trusts in question) each of
its Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise (hereinafter referred to as
a "Covered Person")) against all liabilities, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and expenses, including reasonable accountants' and counsel fees,
incurred by any Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, in which such Covered Person may be
or may have been involved as a party or otherwise or with which such person may
be or may have been threatened, while in office or thereafter, by reason of
being or having been such a Trustee or officer, director or trustee, except with
respect to any matter as to which it has been determined that such Covered
Person had acted with willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office (such conduct referred to hereafter as "Disabling Conduct"). A
determination that the Covered Person is entitled to indemnification may be made
by (i) a final decision on the merits by a court or other body before whom the
proceeding was brought that the person to be indemnified was not liable by
reason of Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for insufficiency of evidence
of Disabling Conduct, or (iii) a reasonable determination, based upon a review
of the facts, that the indemnitee was not liable by reason of Disabling Conduct
by (a) a vote of a majority of a quorum of Trustees who are neither "interested
persons" of the Trust as defined in section 2(a)(19) of the 1940 Act nor parties
to the proceeding, or (b) an independent legal counsel in a written opinion.
Expenses, including accountants' and counsel fees so incurred by any such
Covered Person (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), may be paid from time to time by the
Sub-Trust in question in advance of the final disposition of any such action,
suit or proceeding, provided that the Covered Person shall have undertaken to
repay the amounts so paid to the Sub-Trust in question if it is ultimately
determined that indemnification of such expenses is not authorized under this
Article VI and (i) the Covered Person shall have provided security for such
undertaking, (ii) the Trust shall be insured against losses arising by reason of
any lawful advances, or (iii) a majority of a quorum of the disinterested
Trustees who are not a party to the proceeding, or an independent legal counsel
in a written opinion, shall have determined, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is reason
to believe that the Covered Person ultimately will be found entitled to
indemnification.
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Section 6.5 COMPROMISE PAYMENT. As to any matter disposed of by a
compromise payment by any such Covered Person referred to in Section 6.4,
pursuant to a consent decree or otherwise, no such indemnification either for
said payment or for any other expenses shall be provided unless such
indemnification shall be approved (a) by a majority of the disinterested
Trustees who are not parties to the proceeding or (b) by an independent legal
counsel in a written opinion. Approval by the Trustees pursuant to clause (a) or
by independent legal counsel pursuant to clause (b) shall not prevent the
recovery from any Covered Person of any amount paid to such Covered Person in
accordance with any of such clauses as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction to have been
liable to the Trust or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.
Section 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators, an "interested Covered Person" is one against whom the
action, suit or other proceeding in question or another action, suit or other
proceeding on the same or similar grounds is then or has been pending or
threatened, and a "disinterested" person is a person against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending or threatened.
Nothing contained in this Article shall affect any rights to indemnification to
which personnel of the Trust, other than Trustees and officers, and other
persons may be entitled by contract or otherwise under law, nor the power of the
Trust to purchase and maintain liability insurance on behalf of any such person.
Section 6.7 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE VII - MISCELLANEOUS
---------------------------
Section 7.1 DURATION AND TERMINATION OF TRUST. Unless terminated as
provided herein, the Trust shall continue without limitation of time and,
without limiting the generality of the foregoing, no change, alteration or
modification with respect to any Sub-Trust or class thereof shall operate to
terminate the Trust. The Trust may be terminated at any time by a majority of
the Trustees then in office subject to a favorable vote of a majority of the
outstanding voting securities, as defined in the 1940 Act.
Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall, in accordance with such procedures
as the Trustees consider appropriate, reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders in conformity with the
provisions of subsection (d) of Section 4.2.
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Section 7.2 REORGANIZATION. The Trust, or any one or more Sub-Trusts,
may, either as the successor, survivor, or non-survivor, (1) consolidate or
merge with one or more other trusts, sub-trusts, partnerships, associations or
corporations organized under the laws of The Commonwealth of Massachusetts or
any other state of the United States, to form a consolidated or merged trust,
partnership, limited liability company, association or corporation under the
laws of which any one of the constituent entities is organized with the Trust to
be the survivor or non-survivor of such consolidation or merger, or (2) transfer
a substantial portion of its assets to one or more other trusts, sub-trusts,
partnerships, limited liability companies, associations or corporations
organized under the laws of The Commonwealth of Massachusetts or any other state
of the United States, or have one or more such trusts, sub-trusts, partnerships,
limited liability companies, associations or corporations transfer a substantial
portion of its assets to it, any such consolidation, merger or transfer to be
upon such terms and conditions as are specified in an agreement and plan of
reorganization authorized and approved by the Trustees and entered into by the
Trust, or one or more Sub-Trusts as the case may be, in connection therewith.
Any such consolidation, merger or transfer may be authorized at any time by vote
of a majority of the Trustees then in office.
Section 7.3 AMENDMENTS. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of Shareholders) may be amended at any time, so long as such
amendment does not materially adversely affect the rights of any Shareholder
with respect to which such amendment is or purports to be applicable and so long
as such amendment is not in contravention of applicable law, including the 1940
Act, by an instrument in writing signed by a majority of the then Trustees (or
by an officer of the Trust pursuant to the vote of a majority of such Trustees).
Any amendment to this Declaration of Trust that materially adversely affects the
rights of Shareholders may be adopted at any time by an instrument in writing
signed by a majority of the then Trustees (or by an officer of the Trust
pursuant to a vote of a majority of such Trustees) when authorized to do so by
the vote in accordance with subsection (e) of Section 4.2 of Shareholders as
specified in Section 5.4 hereof. Subject to the foregoing, any such amendment
shall be effective as of any prior or future time as provided in the instrument
containing the terms of such amendment or, if there is no provision therein with
respect to effectiveness, upon the execution of such instrument and of a
certificate (which may be a part of such instrument) executed by a Trustee or
officer of the Trust to the effect that such amendment has been duly adopted.
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Section 7.4 FILING OF COPIES; REFERENCES; HEADINGS. The original or a
copy of this instrument and of each amendment hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. Anyone dealing with
the Trust may rely on a certificate by an officer of the Trust as to whether or
not any such amendments have been made, as to the identities of the Trustees and
officers, and as to any matters in connection with the Trust hereunder; and,
with the same effect as if it were the original, may rely on a copy certified by
an officer of the Trust to be a copy of this instrument or of any such
amendments. In this instrument and in any such amendment, references to this
instrument, and all expressions like "herein," "hereof" and "hereunder" shall be
deemed to refer to this instrument as a whole as the same may be amended or
affected by any such amendments. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original.
Section 7.5 APPLICABLE LAW. This Declaration of Trust is made in The
Commonwealth of Massachusetts, and it is created under and is to be governed by
and construed and administered according to the laws of said Commonwealth. The
Trust shall be of the type referred to in Section 1 of Chapter 182 of the
Massachusetts General Laws and of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
Section 7.6 INTEGRATION. This Declaration of Trust constitutes the
entire agreement among the parties hereto pertaining to the subject matter
hereof and supersedes all prior agreements and understandings pertaining
thereto.
Section 7.7 RESIDENT AGENT. CT Corporation System, 2 Oliver Street,
Boston, Massachusetts 02109 is hereby designated as the resident agent of the
Trust in Massachusetts. The Trustees may change the designated resident agent in
Massachusetts from time to time.
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IN WITNESS WHEREOF, each of the undersigned hereunto has set his hands
and seal for himself and his assigns, as of the day and year first above
written.
Michael J. Witz
3805 South Canfield Avenue, Suite B
Culver City, California 90232
Julian Smerkovitz
3805 South Canfield Avenue, Suite B
Culver City, California 90232
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